Monday Morning Musings

Morning News of Note:

• Gapping Up
  Gapping up on strong earnings/guidance: PETS +9.3%, SLAB +8.5%, UAUA +6% (guidance only), SGP +5.1%, MRK +2%, TIE +1.9%... Other News: CRME +34% (announces positive Phase 2 clinical data), NG +30% (ABX to make $14.50 bid to acquire NG), ATYT +18% (to be acquired by AMD; up in sympathy: NVDA +6.1%), NSIT +9% (bounces after 11% drop on Friday), LBIX +6.3%, ERS +5.6%, IOTN +5.1% (signs R&D agreement with Army), NCOG +5% (to be acquired), HCA +4.2% (to merge with private equity consortium), BIDU +4.1% (HPQ computers to pre-load Baidu search service), XMSR +4% (hires new C.O.O.), ELN +3.8% (co announces that Tysabri had returned to the US and European mkts), AZN +3.2% (gets FDA approval for its inhaler - WSJ), DELL +3% (Citigroup upgrade), MOT +2.5% (accelerates stock buyback), CHRT +2.2% (Citigroup upgrade), CSR +2.2% (JP Morgan upgrade), AAUK +2.1%, BP +2%, NOK +1.5% (N73 begins shipping), RMBS +1.3% (recovers a bit after 32% decline last week), CAT +1.3% (to build plant in China), YHOO +1%... Under $3: RDCM +11% (reports Q2).
• Gapping Down
  AMD -3.7% (to acquire ATYT), BCGI -13% (profit taking after 109% move on Friday on settlement of lawsuit), COT -10% (light volume 2,000 shares), BDCO -4.4% (light volume 1,200 shares), SAPE -3.7% (negative comments from Goldman), HAL -1.8% (extends last week's slide after announcing delay of KBR IPO; also Merrill, Calyon downgrades), BOBJ -1.4% (extends recent weakness), NVS -1% (cancer drug carries heart risk - WSJ), X -1% (Bear Stearns downgrade), Mining/gold stocks are weak on possible MidEast cease-fire: NXG -2.7%, GLD -1.6%, GG -1.5%, BGO -1.4%.
• WFR MEMC Elec: 2Q06 preview; semiconductor wafer prices likely to remain solid through 2H06 (27.21 ) -Update-
  UBS says that WFR directed 200mm wafers originally planned for Japanese customers to other customers who were willing to pay higher prices. Firm also found spot price of WFR's polysilicon remain
• AMD AMD to acquire ATI Technologies (18.26 )
  Co and ATI (ATYT 16.56) announce plans to join forces in a transaction valued at approx $5.4 bln. Under the terms of the transaction, AMD will acquire all of the outstanding common shares of ATI for a combination of $4.2 bln in cash and 57 mln shares of AMD common stock, based on the number of shares of ATI common stock outstanding on July 21, 2006.

Market Comments: The market is opening on a strong note, following some strong earnings reports (MRK, BLS) and renewed M&A activity (AMD, HCA).

Of course, you know how skeptical I am of strong opens, so we will just have to wait and see how the market weathers the inevitable midday swoon.

Bond yields are down slightly (5.03%), as are oil, gold, and most commodities. The dollar is up slightly.

Most sectors are trading higher so far. This week will be another busy week of earnings reports. I will do my best to keep you up to speed. Hope you're well rested.

long WFR