Thursday, July 27, 2006

Home Sales Still Weakening

(this post was delayed due to Blogger technical issues)

Morning News of Note:

  • Gapping Up
    Gapping up on strong earnings/guidance: AKAM +20% (also multiple upgrades), SIMG +20% (also Stanford upgrade), BOBJ +14% (also Credit Suisse and First Albany upgrades), GSIC +12% (also upgrades from Bear Stearns and Morgan Stanley), WLV +36%, WFR +10.4%, RAIL +10%, TSCM +8%, QLTI +8%, SYMC +7.2%, BVN +6%, LIFC +5.9%, LVLT +5.8%, TMS +5.4%, ITRI +4.6%, TLAB +4.6%, CYMI +3.6% (also BofA upgrade), DCX +3.5%, BSX +2.6%, CMCSA +2.2%, BP +2.2%, ROK +2.2% (also AG Edwards and FBR upgrades), PTRY +2.1%, NETL +1.9%... Other News: IMAX +6.6% (Sony joins in bidding for co - Globe and Mail), BTRX +5.7%, IPAS +5%, RSD.A +3%, GLW +2.1% (bounces after 14.5% drop yesterday), CHK +2.1% (JP Morgan upgrade), SAP +2% (in sympathy with BOBJ), CONR +2% (prices offering), BRCM +2%... Under $3: NYER +7.7% (reports sales).
  • Gapping Down
    Gapping down on disappointing earnings/guidance: PLUG -21%, NVT -19%, PLXS -19%, AET -15% (also Bear Stearns downgrade), BBI -13%, BIDU -13%, PMTI -13%, ISRG -10%, AMKR -9.5% (also to review stock option practices), SMSI -8%, XMSR -7.3%, KLIC -7%, PENN -6.4%, ARRS -5.5%, DOW -5.5%, KOMG -5%, AZN -4.8%, TKP -4.7%, PRST -4.6%, TLAB -4.6%, HET -4.5%, CELG -3.8%, HZO -2.7%, ALA -2.7%, NEM -1.5%, RCL -1.3%... Other News: SNY -4.1% (Plavix deal under criminal probe, also BMY -3%), UNH -3.6%, NBIX -2.9% (lays off sales force)... Under $3: DRRA -24% (reports Q2).
  • GOOG Google lags Yahoo, Baidu in Chinese search - InfoWorld (385.50 )
    InfoWorld reports GOOG may dominate the mkt for search-engine advertising in the U.S. and other countries, but the co lagged far behind its main rivals in China during the first quarter of 2006, said mkt analyst Analysys Intl. In terms of rev, GOOG ranked third among search engines in China with a 13.2% share of the mkt. (BIDU) ranked first with 43.9% of the mkt, Analysys said in a report. Yahoo China (YHOO), which is operated by, had the second-largest share of the mkt, with a 21.1% share.'s (SOHU) search engine came in fourth, with 9.2% of the mkt.
  • WFR MEMC Elec: Delivers solid 2Q06 results - UBS (28.89 )
    UBS notes that WFR reports 2Q06 sales of $371 mln and proforma EPS of $0.45, beating both ests. Firm says co reported the 2Q06 semiconductor wafer pricing was up "mid" single digits q/q and will be up at similiar levels next quarter. Firm is raising ests on improving fundamentals. Firm notes that WFR guided 3Q06 tp $389 mln, which is higher than the pre-call consensus of $386 mln and now expects Y06 revs of EPS to be $1.5 bln and $1.80-$2.00 repectively. Firms new ests are $1.90 with Y07 EPS of $2.47 (consensus $1.71 and $2.13 respectively).
  • Cramer's 'Mad Money' Recap -
    On Wendesday's edition, Jim mentioned that ActiveIdentity (ACTI) could be bought by Symantec (SYMC). He also believes Tibco (TIBX) and BEA Systems (BEAS) could be absorbed by buyers since there is a gap in middleware, according to Citigroup. In fact, he notes Hewlett (HPQ), SAP (SAP) or Oracle (ORCL) as buyers of one or both.

    Market Comments: The market has gotten off to a good start, and so far has been able to hang on to those gains. There are plenty of stocks gapping down on earnings reports, as I have mentioned repeatedly.

    Bond yields are lower again (5.03%). New Home Sales fell 3%, and also came in below expectations, showing a further softening in the housing market. I think this makes it more likely that the Fed will not raise rates in August, unless they want to risk a hard landing in the housing market.

    Natural gas inventories showed a slight decline in the most recent data, versus expectations of a build in inventories. This is helping the natural gas stocks in the energy group.

    long GOOG, net lon g WFR


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