Friday, April 21, 2006

Google Friday

Morning News of Note:
  • GM: GM Is on Pace to Amass $32 Billion, A Big, Fat Cushion to Stay Afloat On The specter of a bankruptcy filing is haunting General Motors Corp.'s stock and bonds. The evidence can be seen in the derivatives market, where investors can buy insurance against corporate default. Right now, the instruments that convey that insurance signal a 50% probability that GM will file for bankruptcy protection within five years, according to J.P. Morgan Chase & Co. (Full Story) WSJ
  • EBAY GOOG MSFT YHOO: EBay Talks to Microsoft, Yahoo About a Common Foe: Google EBay Inc. is talking to both Yahoo Inc. and Microsoft Corp. to determine whether one of them might be a worthy ally against a common threat: Google Inc. After years of working closely with the search giant, eBay last year became alarmed as Google started assaulting its turf in multiple ways. (Full Story) WSJ
  • LUV: Southwest Airlines preparing to launch cross-border flights-FT: Yesterday Southwest Airlines (LUV) announced preparations to launch cross-border flights with partner ATA Airlines, although Southwest CEO Gary Kelly said the domestic market would remain the focus of the company for the next two years. He said the ATA deal, which will fly to Hawaii and Mexico and is also examining transatlantic flights, has helped prepare the company's reservation system for international flights.
  • PLAY: PortalPlayer could be in play-BusinessWeek: Apple's (AAPL) decision not to use PortalPlayer's (PLAY) chips in the forthcoming iPod Nano caused PortalPlayer's stock to drop $9.46, or 42% of its value, in a single day. This drop in value could make PortalPlayer an acquisition target. Potential acquirers include Texas Instruments (TXN), Broadcom (BRCM) and Marvell Technology (MRVL), says Stanford Financial Group analyst Christopher Chaney.
  • Mad Money Summary: Cramer opening his show by looking at Scientific Games (SGMS), a gaming firm that is involved in lotteries, which he says are "Reverse Robin Hoods" because they rob the poor to give to the rich. Cramer doesn't like lotteries, but he likes owning gaming companies, which are profitable. Then Cramer turned his attention to a "confusing company," Emcore (EMKR), which has four businesses. He says despite being difficult to judge, it is a good company and can make you money because it has legs. Cramer then looked at Freescale Semiconductor (FSL). He says the stock used to be ignored by Wall Street, but since it just reported a blowout quarter, it will now get some serious attention and the stock will go up. In the "Lightning Round," Cramer was bullish on New Corp (NWS), Ciena (CIEN), BE Aerospace (BEAV), Schering-Plough (SGP), Agilent (A), Goldman Sachs (GS), Advance Micro (AMD), Canadian National Railway (CNI), Cooper Industries (CBE), Coldwater Creek (CWTR), and Billiton (BHP), and was bearish on Chico's FAS (CHS), Stats ChipPAC (STTS), Altera (ALTR), Southern Copper (PCU) and Cooper Tire & Rubber (CTB).

Market Comments: The earnings land mines continue. Google (GOOG) knocked the cover off of the ball, reported a great quarter and the stock is up $33 this morning. But F5 (FFIV) reported a not-so-hot quarter and it's stock is down nearly $9 on the disappointment. Ouch. Broadcom (BRCM) was pretty good, I thought, but it's stock is off nearly $2 as well.

eBay (EBAY) is selling off for a second day, and that combined with the semiconductor complex weakness is holding back the Nasdaq so far. The SPX is up, led by energy and materials stocks.

BJ Services (BJS) is finally playing catch-up in the oil patch. You'll remember I pounded the table on that one when it was wallowing in the low $30s.

Today is Day 4 from that big rally/accumulation day on Tuesday. So this is the first day we can start looking for a follow-through confirmation rally. Stay tuned.

long GOOG