Early Weakness

Morning News of Note:

• Piracy: Music Industry to Target CD, DVD Pirates After years of suing Internet users for downloading songs illegally, the music industry is targeting pirates in 12 cities who copy CDs and DVDs for sale at street corners, flea markets, family-run shops and even mainstream record stores. Executives identified the cities as Atlanta; Austin, Texas; Chicago; Dallas; Houston; Los Angeles; Miami; New York; Philadelphia; Providence, R.I.; San Diego and San Francisco (Full Story) Washington Post
• MSFT YHOO GOOG: A Microsoft, Yahoo Tie-Up? One faction within Microsoft Corp. is promoting a bold strategy in the company's battle with Google Inc: Join forces with Yahoo Inc. That would be a major departure for Microsoft, the software maker that is legendary for toiling on its own until it captures a new market. (Full Story) WSJ
• EBAY: Skype to Roll Out New Software Skype, the Internet-calling unit of eBay Inc., will introduce the latest version of its new software, packed with improvements, and it will preview a new feature which lets as many as 100 people participate in a live, moderated conversation, an effort to attract more small business users and consumers. The Luxembourg-based subsidiary of Internet auctioneer eBay will release a test version of its new software which lets anyone with an Internet connection make free voice and video calls around the world. (Full Story) WSJ
• AAPL: Apple boss Steve Jobs won a resounding victory over the record industry this week as the company extended contracts for iTunes that will allow Apple to keep intact the standard 99 cents per-tune price. The four major record companies - Warner Music Group, EMI, Universal Music and SonyBMG - had all been pushing for variable pricing. Executives had sought the ability to charge more for certain popular songs, and less for others. The Post first reported on the imminent defeat for the record labels about two weeks ago. An Apple spokesperson confirmed that contracts had been reached, but declined to reveal terms. An industry source said the deals with the labels were for one year. - AAPL
• Mad Money Summary: Cramer opened his show discussing Black & Decker (BDK), which is about to unveil a new line of cordless tools which he believes could push the stock to $100 from its close price yesterday of $92.30. Then Cramer discussed Celgene (CELG), which just reported a blow-out quarter. The company also may be a takeover target. Cramer then invited MarketWatch columnist Herb Greenberg onto the show, and the two debated Intuitive Surgical (ISRG) and Atheros Communications (ATHR). The two men agreed that Intuitive had a great quarter, but did not agree on the valuation of Atheros. Greenberg feels Atheros is "expensive by every metric," which Cramer said was dead wrong. Cramer then suggested a cable play in the wake of Comcast's (CMCSA) latest quarter, NTL Holdings (NTLI), which he believes deserves to go much higher to be valued wit Comcast, Time Warner (TWX) and Cablevision (CVC). In the "Lightning Round," Cramer was bullish on DuPont (DD), Eastman Chemical (EMN), Dow Chemical (DOW), Goldcorp (GG), Wachovia (WB), Commerce Bank (CBH), Wells Fargo (WFC), Sasol (SSL), BHP Billiton (BHP), Energy Partner (EPL), @Road (ARDI), Saks (SKS), SunOpta (STKL), Depomed (DEPO), Nektar Therapeutics (NKTR), West Pharmaceutical (WST), Washington Mutual (WM) and Countrywide Financial (CFC), and was bearish on NYSE Group (NYX), Quantum Fuel Systems Technologies Worldwide (QTWW), Ballard Power (BLDP), Evergreen Solar (ESLR), Stillwater Mining (SWC), Nasdaq Stock Market (NDAQ) and MB Financial (MBFI).

Market Comments: The market has opened under pressure this morning. Bond yields are back up at 5.14%, which may be a headwind. Commodities are trading mostly higher as well.

Big-cap earnings reports this morning from PG and TWX have done nothing to help those stocks. I admit I am surprised by the reaction in PG, which I think is doing fine and the selling is overdone. I am also surprised by GRMN. No doubt it was a strong quarter, but the stock is getting up into valuation levels where is has historically become a risky hold.

Biotechs are getting a small bounce, for what feels like the first time in my lifetime, while health insurance stocks are under pressure due to terrible results from Cigna (CI). All in all, tough market.

long GOOG, PG, TWX