Wednesday, January 18, 2006

Ugly Open

Morning News of Note:
  • AAPL: Beating the Buzz Earnings season can pose a challenge to fast-growing companies: Even if their sales and profits top analysts' estimates, if they don't beat the still-higher "whisper numbers" that have been circulating on Wall Street, their shares can slip. At Apple Computer, which reports results today, this problem is taken a step further: If it doesn't deliver on the splashy new products that people are buzzing about -- its "whisper ware" -- then it risks disappointing investors. (Full Story) WSJ
  • WMT: Wal-Mart Trains Sights On India's Retail Market U.S. Chain Lobbies For Chance to Sell To Huge Population Wal-Mart Stores Inc. is knocking at the door of India, whose billion-person economy is largely untouched by modern retailing but might soon let foreign competitors into the sector. India's prime minister and finance minister recently suggested that movement toward opening the country's retail markets would begin over the next six months. (Full Story) WSJ
  • C: Citigroup Plans Electronic Trading Citigroup Inc. plans to launch its own electronic stock-trading network, a move that could siphon some trading volume from the New York Stock Exchange and Nasdaq Stock Market Inc. The venture, expected to be rolled out this spring, follows Citigroup's acquisition last week of OnTrade Inc., an electronic communications network, also known as an ECN. OnTrade had been operated by closely held NexTrade Holdings Inc., Clearwater, Fla. (Full Story) WSJ
  • Bulls/Bears: Bulls 57.3 vs 56.8, Bears 22.9 vs 22.1, correction 19.8 vs 21.1
  • Mad Money Summary: Cramer said that sometimes the market makes a mistake and that the heavily owned Israeli stock Teva Pharmaceutical (TEVA) is one of them. He said that shares are down due to the medical condition of Israeli Prime Minister Ariel Sharon. Cramer said that Teva Pharma is about to complete its acquisition of Ivax (IVX) that will increase the company's exposure to America and that business is solid as well. Cramer said another international play is Hutchison Whampoa (HUWHY), but he recommends buying the shares in Hong Kong. Cramer said that Hutchison Whampoa is a play on the company's exposure to ports as he believes that that is the best way to play China and globalization. Cramer also invited Doug Kass of Seabreeze Partners to join him on his "Mad Money" show to discuss his article on; Granville, Cramer and the Second Coming. The article compared Jim Cramer to Joe Granville a big stock guru that faded away in the mid-1980's. Kass said that while Granville was a "one-trick pony," Cramer had the goods to back up his call due to his past accomplishments at Goldman Sachs (GS). Kass said what worried him was how investors followed Cramer's word zealously and how this may not be preparing some investors for a decline in the market.

Market Comments: The markets opened under heavy selling pressure this morning. Japan's market had been down a lot also before the US. Last night's earnings from INTC, YHOO, and IBM were a trifecta of disappointment. While IBM is trading up this morning, YHOO and INTC are both down 10%+. The analysts are falling over themselves to downgrade INTC.

Surprisingly, the whole market isn't falling apart. I see more than a handful of retailers, industrials, and healthcare stocks that are bucking the weakness.

There are plenty of big earnings reports out tonight, including AMD, AAPL, and EBAY. It is still too early to say if last nights reports set the tone for the rest of this earnings season, or if it will get better going forward.

long C, INTC, WMT


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