Thursday, April 27, 2006

Bernanke Saves the Day

Morning News of Note:
  • UVN: Televisa to Join U.S. Group That Will Vie for Univision Mexican broadcaster Grupo Televisa SA is structuring a bid with a group of U.S. private-equity investors for Spanish-language broadcaster Univision Communications Inc. in which it will limit its own stake to 25%, amid a recent Washington backlash against foreign control of firms in sensitive industries, said people familiar with the situation. Televisa had hoped to quickly gain full control of Los Angeles-based Univision, which put itself up for sale, and had considered a variety of ways to do so, including having its chairman, Emilio Azcarraga, obtain U.S. citizenship, said these people. (Full Story) WSJ
  • Rate Hikes: Bernanke Won't Hint At Ending Rise in Rates Federal Reserve Chairman Ben S. Bernanke is going to disappoint a lot of listeners when he addresses Congress today and provides no guidance on when the central bank will stop raising interest rates to keep inflation under control. Financial market analysts and investors have longed for such a signal and thought they saw it last week when a summary of Fed officials' last policymaking meeting in March suggested they might be done after lifting their benchmark short-term rate once more in May. (Full Story) Washington Post
  • AAPL: Aperture future in question as Apple axes bulk of team Apple recently asked the engineering team behind its Aperture photo editing and management software to leave, Think Secret has learned. The move, which resulted in the departure of several engineers while others were transferred to different projects inside Apple, raises questions about the future of Aperture, Apple's most heavily criticized and bug-ridden software release in recent years. (Full Story) Think Secret
  • Oil Tax Breaks: Second Thoughts in Congress on Oil Tax Breaks As anxiety spread in Congress on Wednesday over soaring oil prices, lawmakers in both parties said they were ready to take a tough look at oil and gas incentives they passed as recently as eight months ago. Citing record industry profits and huge executive pay packages, the top Republican and top Democrat on the Senate Finance Committee asked the Internal Revenue Service to turn over tax returns for the nation's 15 biggest oil and gas companies. (Full Story) NY Times
  • TRLG: Co announces it has increased its intl distribution with the appointment of a distributor for Hong Kong, Macau and mainland China. Bright Unity International, a private co based in Hong Kong, has been selected to be the co's exclusive distributor for that territory
  • Mad Money Summary: Cramer opened his show by discussing ethanol and how it can make mad money. He said that you should look at Agco (AG) and Gehl (GEHL), two companies that thresh, separate and clean corn. Both should get a lot of attention because of ethanol. Then Cramer discussed the nuclear energy sector. He said we are in a nuclear bull market, and suggested buying BHP Billiton (BHP), Cameco (CCJ), Shaw Group (SGR), FirstEnergy (FE) and American Ecology (ECOL). Cramer then looked at "an exciting biotech company," Coley Pharmaceutical (COLY), which he said is worth buying incrementally starting now. In the "Lightning Round," Cramer was bullish on Level 3 (LVLT), WellPoint (WLP), Brush (BW), Dynegy (DYN), Brocade (BRCD), Openwave (OPWV), Broadcom (BRCM), Nabors (NBR), Coach (COH), Halliburton (HAL), Bank of America (BAC), Progenics (PGNX), Chevron (CVX), Occidental Petroleum (OXY), Phelps Dodge (PD), Southern Copper (PCU) and Conexant (CNXT), and was bearish on Pioneer Drilling (PDC), Vitesse (VTSS), Murphy Oil (MUR), EuroZinc Mining (EZM) and CBOT Holdings (BOT).

Market Comments: Wow, talk about a crazy first hour of trading. The market opened extremely weak this morning, and it looked like most groups were breaking down. The catalyst was China's central bank raising rates for the first time in 12 years. That had stock markets across the globe moving lower.

But when the text of Bernanke's testimony was released this morning, it contained a comment that said that the Fed may pause even ir risks aren't balanced. That caused yields on the 10-year to drop 4 basis points from 5.12% to 5.08%, and it caused stocks to quickly bottom and turn higher.

It remains to be seen if this quick rebound will stick for the remainder of the day, but the bulls are cetainly breathing a sigh of relief. Interestingly, the SPX came down and kissed its 50-day support just before bouncing higher.

Biotechs are getting a big bounce this morning, while energy stocks remain under pressure.


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