More Goldilocks Data

Morning News of Note:

• GOOG BLS T VZ: Phone Companies Set Off A Battle Over Internet Fees Content Providers May Face Charges for Fast Access; Billing the Consumer Twice?...Large phone companies, setting the stage for a big battle ahead, hope to start charging Google Inc., Vonage Holdings Corp. and other Internet content providers for high-quality delivery of music, movies and the like over their telecommunications networks. BellSouth Corp. said it is in early talks with Internet movie companies and at least one gaming company with the aim of striking agreements on fees to guarantee fast content delivery over the Internet. Movielink LLC, a joint-venture of five major movie studios that offers movies to consumers over the Internet, said it has discussed the issue with BellSouth. Meanwhile, AT&T Corp. executives have expressed support for charging companies to ensure that their content gets priority delivery, and Verizon Communications Inc. Chief Executive Ivan Seidenberg yesterday said he might favor reaching deals with companies to do the same. "We have to make sure they don't sit on our network and chew up our capacity," Mr. Seidenberg told reporters. The phone companies envision a system whereby Internet companies would agree to pay a fee for their content to receive priority treatment as it moves across increasingly crowded networks. Those that don't pay the fee would find their transactions with Internet users -- for games, movies and software downloads, for example -- moving across networks at the normal but comparatively slower pace. Consumers could benefit through faster access to content from companies that agree to pay the fees. (Full Story) WSJ
• Oil & Gas at the Pump: Oil May Rise Next Week on Gasoline Use, Survey Shows...Crude oil may rise next week in New York as demand for gasoline increases, draining inventories, a Bloomberg survey shows. Twenty of 38 analysts surveyed, or 53 percent, said prices would rise. Twelve, or 32 percent, forecast prices would fall and six expected little change. Last week, the survey forecast prices would be little changed. U.S. gasoline inventories in the week ended Dec. 30 were 1.7 percent below the five-year average, the Energy Department said. Demand for the fuel was the highest for the last week of December for at least 15 years, the data showed. Crude-oil stockpiles fell as refineries increased operating rates. (Full Story) Bloomberg
• SBUX: 'Fill 'Er Up -- With Latte' Will Starbucks's Embrace Of Drive-Through Service Undercut Its Hipster Image?...As the company that popularized the $4 cup of coffee pushes beyond its urban roots to caffeine freaks in the suburbs and rural America, a big question is brewing: Can the upscale Starbucks image -- painstakingly cultivated with strong coffee, soft chairs and hipster music -- survive the drive-through window? Starbucks Corp. is building hundreds of new Starbucks cafés this year with drive-through windows, a fast-food industry innovation pioneered by McDonald's Corp. decades ago. To many car-bound customers, it's an innovation whose time has come. "I wouldn't have stopped at Starbucks if it wasn't a drive-through," said Dan Fachner, president of the Icee Co., a convenience-store beverage supplier, who had just picked up a "Grande" black coffee at an Ontario, Calif., Starbucks not far from his office. But other customers aren't enthusiastic. Laura Kanter, a 41-year-old legal recruiter in downtown Chicago, says she goes to Starbucks to sit down and talk with friends over coffee. A drive-through window, she says, "takes away from them being coffee-shoppy." (Full Story) WSJ
• FUND FLOWS: equity funds rptd inflwos $1.5bln, ex ETF inflows $550m; ETF flows: XLE inflows $1.369bln, IVV inflows $299m, XLF inflows $129m, VTI inflows $128m, DIA finlows $125m, IWM outflows ($777m), SPY outflows ($433m); taxable bond funds rptd outflows ($151m), MBS fund ouflows ($236m); money mkt funds rptd inflows $2.189bln -- AMG Data

Market Comments: The market loved the payrolls report (108k vs. 200k consensus) because it was not too hot, not too cold. The headline figure looks a bit weak, but last month's figures were revised higher. So net-net, it shows the economy is humming along nicely, while not overheating.

BBY guides higher after saying that holiday sales, including gift cards and Interenet sales, were strong. That has the stock up big, while most other retailers are still under selling pressure, as they have been for weeks.

Oil is spiking back up to $64, but so far that is not hurting the market. And Goldman is raising estimates on GOOG and YHOO.