TGIF

Morning News of Note:

• NGG KSE: U.K.'s National Grid Offers $7.3 Billion for KeySpan British utility National Grid PLC emerged as the leading bidder in the $7 billion auction for New York utility and natural-gas distributor KeySpan Corp., people familiar with the matter said. It is still possible a rival bidder could emerge with a sweetened offer, these people said, but for now National Grid appeared in the best position to clinch a deal (Full Story) WSJ
• Fund Flows: equity funds rptd inflows $9.9bln, ex ETF inflows $3.2bln; ETF flows: XLE $2bln, SPY $1.1bln, IVV $1.1bln, IWM $806m, XLF $461m, DIA ($468m), KBE ($113m); taxable bond funds rptd net outflows ($581m), ex ETFs $217m, inv grade funds rptd inflows $239m, HY funds rptd outflows ($31m); money mkt funds rptd inflows $25.284bln, lgst inflows since 12/7/05 -- AMG Data
• GOOG: Google-GOOG auction system pushes revenue higher-BusinessWeek Google accounts for 99% of its revenue from advertising. Using innovations in online advertising help the company earn about 30% more revenue per advertising impression than rival Yahoo. Yahoo (YHOO) and Microsoft (MSFT) are both now trying to emulate Google's approach for auctioning advertising space. Google has put out three versions of its Adwords Select program, and while even the third try is flawed, it is still "a grand slam." Salar Kamangar, VP of product management for Google, said, "Third time's a charm."
• Blood Substitute: FDA, Northfield Face Inquiry Over Study of Blood Substitute Chairman of Senate Panel Opens Probe Questioning Methods and Disclosures The chairman of the U.S. Senate Finance Committee has begun an inquiry into how federal health regulators and Northfield Laboratories Inc. handled a clinical study of a blood substitute used in hundreds of hemorrhaging trauma patients around the U.S. Sen. Charles E. Grassley (R., Iowa), who has actively challenged the Food and Drug Administration's performance in recent years, raised questions about the conduct of the 720-patient trauma study in a draft of a letter being sent to acting FDA Commissioner Andrew C. von Eschenbach (Full Story) WSJ
• BIIB ELN: Tricky FDA Debate: Should a Risky Drug Be Approved Again? Next month, Food and Drug Administration advisers will take up one of the most difficult questions the agency ever faces: Should a promising drug that carries a known and deadly side effect still be allowed on the market? Tysabri was seen as a life-changing drug for the nation's 400,000 multiple-sclerosis patients and a potential blockbuster for its makers, Biogen Idec Inc. and Elan Corp. (Full Story) WSJ

Market Comments: The headline durable goods report looked terrible (-10.2%), but it was due to a large dropoff in aircraft orders. Excluding the volatile transportation industry, durable goods actually rose.

There was some news of an explosion in Saudi Arabia near an oil facility, which has spooked the commodities market. Crude prices are up over $1 ($61.75), and the energy stocks are getting a bounce.

Financial stocks are also higher across the board. The BKX index looks good after its recent breakout. WFC is quietly making a new, all-time high, but no one is talking about it. The other sectors are mostly mixed, but its still early.

long GOOG, KSE, WFC