Blue Chips Deliver Solid Earnings

Morning News of Note:

• Gapping Up
  Gapping up on strong earnings/guidance: AMTD +6.5%, PPDI +5.7%, FCX +3.6%, FRX +2.5%, SCHW +2.4%, UTX +1.6%, PHG +1.4%, KO +1%... Other News: NTAP +5.7% (affirms guidance; up in sympathy: XRTX +3.3%), BDCO +8.5% (bounces after 15% drop yesterday), CRXL +3.8% (halts vaccine development, but does not impact co's guidance), PALM +3.7% (Bear Stearns upgrade), NVDA +3.6% (Amtech upgrade), WDC +3% (Kaufman upgrade), TIE +2% (Barron's Online mention), NBR +1.7% (Cramer bullish on Mad Money, says stock is cheap), ITT +1.7% (Merrill upgrade), NOK +1.5% (traded higher in Europe), MT +1.6% (minimum tender offer for Arcelor shares has been met), USO +1.3%, AAPL +1% (Second-gen iPod nano on tap for August - ThinkSecret)... Mining stocks are strong on big qtr from FCX: AUY +3.2%, SLV +2.5%, GLD +1.6%, GFI +1.1%, RTP +1%... Under $3: AIS +14% (announces it's developing a new device for Teva).
• Gapping Down
  CNC -29% (guides sharply lower; Deutsche initiates at Hold), ENT -12% (slashes payout by 33%), SANM -12% (guides lower), NBIX -6.7% (reports Q2 results, loss widens), INVX -3.7% (reports MarQ), TGT -3.6% (lowers July sales forecast; AG Edwards downgrade), MICC -2.8%, RMBS -2.5% (Ruling suggests award in patent case could be lowered - WSJ; also WR Hambrecht downgrade), LTXX -2% (FBR downgrade), ICE -1.9% (prices offering), MEDI -1.7% (says FDA wants more info on flu vaccine), RCL -1.5% (orders another luxury ship), BRCM -1.4% (Amtech downgrade), TXN -1.3% (FBR downgrade), TS -1.2% (Argentina stocks are weak on mideast violence)... Under $3: MGIC -9% (profit taking after 65% move yesterday), EAG -6% (reports MayQ).
• JNJ Johnson & Johnson beats by a penny (60.91 )
  Reports Q2 (Jun) earnings of $0.98 per share, excluding non-recurring items, $0.01 better than the Reuters Estimates consensus of $0.97; revenues rose 4.7% year/year to $13.36 bln vs the $13.29 bln consensus.
• AAPL Apple Computer: Second-gen iPod nano on tap for August - ThinkSecret (52.37 )
  ThinkSecret reports the co will roll out the second generation of its iPod nano music player at its Worldwide Developers Conference, insiders tell Think Secret. The new nano is said to be very similar to the co's current offering but will feature increased capacity and be available in multiple colors, some of which will feature a metal alloy enclosure. Exact capacities are not known, but reasonable speculation suggests the line will top out at 6GB or 8GB. Separate rumblings suggest that the co has procured a large number of 40GB and 80GB 1.8-inch hard drives for use in an updated 5G iPod. While it's not known when an exact announcement regarding the higher capacity iPods might take place, the new models are not expected at WWDC.
• UTX United Tech beats by a penny, ex items; raises FY06 guidance (57.96 )
  Reports Q2 (Jun) earnings of $1.02 per share, excluding non-recurring items, $0.01 better than the Reuters Estimates consensus of $1.01; revenues rose 10.0% year/year to $12.26 bln vs the $11.85 bln consensus. Co raises guidance for FY06, to EPS of $3.55-3.65 from $3.50-3.60 vs. $3.62 consensus; sees FY06 revs of $46-47 bln vs. $46.15 bln consensus.
• TGT Target lowers its July same-store sales forecast - WSJ (47.55 )
  WSJ reports according to a recorded message late yesterday, the co now says it expects July sales at stores open more than a year to rise 3% to 4%, below its earlier forecast of a 4% to 6% rise. Last July, the co's same-store sales climbed 5%. Same-store sales are one of the best measures of a retailer's underlying health. The co didn't say why its sales have slipped. The retailer has so far avoided the tough environment caused by higher fuel prices and interest rates, in part because of its higher-income clientele.
• Cramer's 'Mad Money' Recap - TheStreet.com
  On Monday's edition, Jim notes that in terms of sector, Nabors (NBR) doesn't have much going for it. However, compared with other companies in its sector, it is cheap. He thinks their oil exposure is a plus, and the future of natural gas doesn't look that bad either, he said. He also mentions that Lowe's (LOW) is cheaper than Home Depot (HD) in terms of margins, management and its opportunity to expand. Finally, he believes investors should stay away from DuPont (DD), citing that General Electric's (GE) plastic division is weak. GE's infrastructure business is doing well, he believes that people should buy ABB (ABB). However, he recommended buying ABB in three days, and not before then. Playing on General Electric's earnings, Cramer also said CIT Group (CIT), Boeing (BA), Whirlpool (WHR) and Varian Medical Systems (VAR) are good buys. In addition, General Electric's wind-power business is getting stronger, and for this there are two pure plays, Cramer said: Vesta (VWSYF) and Gamesa (GCTAF). However, because General Electric reported slowing medical equipment demand in China, Cramer advised selling China Medical Technologies (CMED).

Market Comments: The market has opened on an up note, despite oil trading higher and bond yields moving higher (5.12%) as well. The core PPI report came in in-line with expectations.

Solid earnings reports from JNJ, NCC, UTX, WFC, etc. may be helping a bit. TGT lowered its sales forecast, and that is weighing heavily on the retail complex.

Most of the sectors are mixed so far. I am also not hearing much of anything out of the middle east, so maybe it can take a backseat today and let the market lift a little.

long AAPL, JNJ, UTX, WFC