Thursday, March 02, 2006

Retail Sales Disappoint

Morning News of Note:
  • GOOG: As Google Matures, Investors Take Closer Look at Its Risks There is one thing about Google Inc. that investors seem to agree on: Its stock has entered a new era, in which shareholders are looking beyond the Web-search giant's stunning growth and raising questions about its business risks and tight-lipped approach to strategy and earnings. But that is where the agreement ends, as the divergent bets placed by investors like Chad Brand and David Gordon show. (Full Story) WSJ
  • CBS: HOWARD STERN'S DEFECTION to Sirius Satellite Radio was a blow to CBS Corp. But CBS' chief financial officer is broadcasting support for the television-and-radio company recently spun off from media giant Viacom. On Monday, a day before CBS filed a lawsuit against Stern for breach of contract, CFO Fredric G. Reynolds plunked down about $990,000 to acquire 40,000 CBS shares in the open market, according to a form filed with the Securities and Exchange Commission this afternoon. (Full Story) BARRONS
  • YHOO: Yahoo Says It Is Backing Away From TV-Style Web Shows After proclaiming grand plans to bring elaborately produced sitcoms, talk shows and other television-style programs to the Internet, the head of Yahoo's Media Group said yesterday that he was sharply scaling back those efforts. He said the group would shift its focus to content acquired from other media companies or submitted by users. The executive, Lloyd Braun, the former chairman of ABC Entertainment, was the subject of speculation in recent weeks that he was leaving Yahoo over differences with its chief executive, Terry S. Semel. (Full Story) NY Times
  • AAPL: AppleInsider says it has learned that AAPL may be in the intermediate stages of developing an iTunes movie download service that would offer full length feature films to iTunes customers. The article claims that a survey distributed this week through Coyote Insight, a market research firm, asked that participants answer a series of questions related to a potential "iTunes movie service" that would provide on-demand access to movies that could be downloaded to a computer or iPod
  • Mad Money Summary: Jim Cramer began last night's show by advocating a Buy for Rite Aid (RAD). Typically, he does not like Rite Aid because it is not a best-of-breed company. Rite Aid is a $3 stock, but when you spot value, you buy worst-of-breed. The value comes from the bull market in pharmacies. The reason is Medicaid Part D. Then Cramer discussed China, saying to make money go where the money is. To profit on China's economic expansion and development, buy American companies that profit off Chinese trends and tendencies. One example is Las Vegas Sands (LVS), one of the first casinos to reach Macau, where gambling is very popular. One third of Las Vegas Sands' profits come from Macau. Then Cramer discussed what he believes is a hot sector, pipe. Cramer's top pick in the pipe sector was PW Eagle (PWEI). iRobot (IRBT) co-founder and CEO Colin Angle then joined Cramer to discuss the the company. Cramer said he believes this stock has done its penance and he would buy iRobot. In the Lightning Round, Cramer was bullish on Ameritrade (AMTD), Valueclick (VCLK), Monsanto (MON), Adobe (ADBE), Diageo (DEO), American Science and Engineering (ASEI), Texas Roadhouse (TXRH), Goldcorp (GG), Southern Copper (PCU), Isis (ISIS), Broadcom (BRCM), Aspen Tech (AZPN), AU Optronics (AUO) and Haliburton (HAL), and was bearish on Novavex (NVAX), Autodesk (ADSK), Brown-Forman (BFB), Fieldstone (FICC), Newmont Mining (NEM) and Internet Initiative of Japan (IIJI).

Market Comments: Retail sales were somewhat disappointing. (My next post will highlight some of the individual reports) This is pressuring consumer stocks quite a bit. Most other sectors are mixed in early trading. The overall market is down so far, with the Nazz down less than the SPX. So the outperformance we have seen for the Nasdaq recently is continuing.

Crude oil is trading around $62.50, which is helping energy stocks stay firm. Bond yields are up a bit at 4.61%. If you look at the chart of the 10-year Treasury like you would a stock, it looks like it wants to break higher. It's 52-week high is 4.69%, so there may be some resistance there. And the 10-year hasn't seen 5% since mid-2002.

GOOG holds its analyst meeting today, so look for another day where the media focuses all of its attention on that company.

long GOOG


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