Thursday, January 12, 2006

Trade Deficit Declines

Morning News of Note:
  • BSX JNJ GDT: Boston Scientific May Raise Guidant Bid After J&J Boston Scientific Corp. may sweeten its buyout offer for Guidant Corp. after Johnson & Johnson added more cash to its bid for the troubled cardiac-device maker. Boston Scientific vowed to pursue its plan to pay $25 billion after Guidant accepted an increased J&J bid of $23.2 billion. Johnson & Johnson added $4 a share in cash, increasing its offer to $68.06 a share. (Full Story) Bloomberg
  • NFLX: FTC fights terms of Netflix settlement The U.S. Federal Trade Commission has blasted Netflix, saying the company has tried to turn a class-action settlement into a marketing opportunity. The agency filed an amicus brief last week asking a San Francisco judge to reject or restructure the terms of the settlement, which Netflix proposed in October after facing charges that it broke customers' service agreements. (Full Story) CNET
  • SBUX: Starbucks Plans to Make Debut in Movie Business Chain Will Promote Films, Sell DVDs Alongside Lattes; Ads on Coffee-Cup Sleeves Starbucks Corp., having conquered the coffee business and staked a claim in music, is setting its sights on Hollywood. The Seattle-based coffee-shop chain is expected to announce today a sweeping promotional deal for a coming film, "Akeelah and the Bee," that marks its opening foray into the movie business. (Full Story) WSJ
  • 2006 Drug Outlook: Five New Drugs May Ease Pharma's Pain BIG PHARMA STILL HAS SOME big plans for 2006 -- even though 2005 had the second-lowest number of new drug approvals in 15 years, and this year could be the worst ever for patent expirations. Still, this could be one of the best years for new drugs awaiting the green light from the U.S. Food and Drug Administration, which approved just 19 drugs in 2005, according to Merrill Lynch. (Full Story) BARRONS
  • Mad Money Summary: Jim Cramer introduced his newest biotech picks last night on his show; they are ZymoGenetics (ZGEN), Myogen (MYOG), Alkermes (ALKS), Neurocrine Biosciences (NBIX) and Progenics (PGNX). Cramer believes there will be a lot of press coverage for ZymoGenetics' blood-clotting treatment and he believes it will be approved by 2007. Cramer said that while shares of Myogen were up 30% in 2005, he still believes they can go to $40 and even to $50 in a takeover. CBS'S (CBS) CEO Les Moonves joined Cramer on his show last night to discuss his company. Cramer believes that shares of CBS are cheap and Mr. Moonves said, with content being king, his company will be able to deliver decent revenue with the newly signed deals with Google (GOOG) and Verizon (VZ). The deals with Google and Verizon mean that viewers will pay to have the content delivered to them and CBS will be able to make money through subscriptions, ads and video-on-demand. Cramer said that the third world is one of the hottest markets right now, but hard to invest in. Cramer said that there is one way to make money in Mozambique and that is through Petroleo Brasileiro (PBR) and Rio Doce (RIO). Cramer answered calls to try and help investors with bad unhealthy investments. Jill-Marie said that she bought Ameritrade (AMTD) for a trade but also owned E*Trade Financial (ET) and Charles Schwab (SCH), Cramer recommended diversification and that she should do some selling. Russell said that he owned shares of Cendant (CD) even though Cramer was bearish on the shares; Cramer recommended that Russell sell his shares of Cendant. Teresa said that she owned Home Depot (HD) and Lowe's (LOW), but wanted to trim her positions. Cramer said that he would "ring the register" on shares of Home Depot and stick with Lowe's.

Market Comments: The market opened soft again this morning. So far this year, each down open has found dip buyers to support the market by the close. Will today be #8 for the Nasdaq? Some of the chip stocks look very extended, given their near parabolic rise.

The trade deficit actually narrowed last month, falling 5.8% to $64.2 billion, as the price of crude oil eased, exports grew and the deficit with China declined for the first time in seven months.

Worries over Iran are keeping oil prices and energy stocks higher this morning, even as the price of natural gas is declining. Bond yields remain low at 4.43%.

long JNJ


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