Due for a Bounce

Morning News of Note:

• ADI ASML: Chip Companies Left to Their Own Devices HERE'S HOPING CONSUMERS keep buying iPods. Despite many predictions that corporate information-technology departments will start buying like it's 1999 again, consumer purchases may continue to be the bright spot for both electronics and the chips that drive them. The Semiconductor Industry Association last week said worldwide sales of microprocessors rose 6.8% in 2005, to $227.5 billion. (Full Story) BARRONS
• UVN TWX NWS: Univision Considers Going on the Block Univision Communications, the Spanish-language media company, is considering a plan to put itself up for sale, people briefed on the proposal said last night. An auction for Univision, which is worth nearly $10 billion, could set off a scramble among the country's media giants — the News Corporation, Time Warner and CBS — as they vie for a slice of the lucrative and growing Spanish-language market. (Full Story) NY Times
• MOT: Using Your Cellphone as a Credit Card U.S. Is Catching Up to Asia In Adding New Services; Overcoming Security Concerns Taking a service that is growing in Asia, Motorola Inc. is planning to launch a system that will allow people to purchase products simply by waving a cellphone with an embedded chip over scanners at the cash register. The U.S. has been late to this game. Companies in Asia have already introduced cellphones that can do everything from buying groceries to purchasing movie tickets. Tokyo commuters can now board trains by waving their phones over a sensor in turnstiles. (Full Story) WSJ
• GOOG: 'Net Neutrality' Debate Heats Up at Senate Hearing Google Inc. and other Internet companies pressed Congress for a law that would bar telecommunications networks from charging more for some services and controlling what consumers can obtain on the Internet. At the same hearing yesterday, representatives of the telephone and cable-television companies told the Senate Commerce Committee that present regulations are sufficient and that with new fees they could upgrade their networks to deliver a wealth of movies, games and music. (Full Story) WSJ
• Mad Money Summary: Jim Cramer opened his show last night discussing options trading. Although he believes it is "a serious way to make money on Wall Street," he says it is risky, likening it to a game of Russian roulette. He says one way to make money on the popularity of the practice is to invest in optionsXpress Holdings (OXPS), one of the few online options trading brokerages. Cramer then discussed racinos, or combined racetracks and casinos, where the gambling is usually limited to slot machines. He believes they are the wave of the future, and says one way to play them is to invest in International Game Technology (IGT), which owns 70% of the slot machine market. MarketWatch columnist Herb Greenberg then joined Cramer on stage and debated the merits of Portfolio Recovery Associates (PRAA), which Cramer likes. Greenberg is worried about the company because they are in the business of buying, collecting and managing portfolios of defaulted loans. Greenberg then said he liked ABX Air (ABXA), an airline stock, to which Cramer said is "television suicide," although he gave the stock one-and-a-half thumbs up. Cramer then discussed Vivendi (V), which he said could make viewers a lot of money if they beat the analysts to it. In the Lightning Round, Cramer was bullish on CNXT, SLB, AAUK, MYOG, WLT, ED, ALKS, WFMI, MC and SNE, and was bearish on ESLR, YRCW, BXC, BIDU, UAUA, NWRE and OATS

Market Comments: The market is finally bouncing this morning, although energy stocks remain under pressure. Ditto some of the leaders I've mentioned recently like ISRG and GOOG. Those stocks continue to decline, reflecting that the market is leery right now of very high multiple (P/E) stocks.

Oil has fallen to below $63, which is still very supportive of strong earnings for most energy stocks. But the trend right now is lower, so we don't want to fight it. The weather has also been warm, but cold snaps can occur at any time.

Let's see if this bounce has any momentum. There has been some technical damage to the indexes, so I would expect any bounce to find resistance and then retest lower levels.

long TWX