Quick News Summary

Morning News of Note:

• Gapping Up
  FLOW +6.1% (reports AprQ; beats by $0.06), MT +3.3% (to raise steel prices in S Africa), PALM +1.2% (announces collaboration with VOD and MSFT), TOMO +4.2% (recovers a bit after recent sell-off), GSS +3.6%, BDCO +2.9%, CHAP +1.5% (reports MayQ), VLO +1.1% (Mad Money mention), AMH +1.1% (guides in-line), PEP +1.1% (reports Q2, raises guidance), USO +1%... Under $3: VEGF +20% (FDA lifts hold on study), DOVP +9%, EZM +4% (Cramer mentioned on Mad Money).
• Gapping Down
  Gapping lower on disappointing earnings: TKLC -17% (also multiple downgrades), SAP -7.5% (down in sympathy: ORCL -2.7%, BOBJ -1.6%), PII -5.1%... Gapping lower on disappointing guidance: SNTO -48%, CREE -27% (also ThinkEquity downgrade), MFLX -25%... SAP report is dragging down tech generally: SNDK -1.6%, MOT -1.6%, MRVL -1.5%, YHOO -1.4%, VOD -2%, JDSU -3.7%... Other News: NSTK -27% (FDA rejects generic version of Novartis' Miacalcin), JNY -5.4% (Merrill downgrade), DASTY -5.4%, FORD -3% (profit taking after recent move), HANS -2.9% (same), TEVA -2.7% (announces tentative approval of generic Lotrel), TIE -2.2%, BHP -1.8%, WMT -1.6% (Merrill downgrade)... Under $3: CDV -4.1% (files 10-K).
• Banks in Japan gear for a boom - WSJ
  WSJ reports investment banks in Japan are gearing up for a boom in bond issuance, as cos rush to borrow in order to lock in interest rates while they still are extremely low. Investment banks also are preparing for a surge in bond trading and debt-advisory work, as the country adjusts to rising interest rates after a decade of languor in its financial mkts and economy. The Bank of Japan is widely expected to nudge up the rate banks charge each other for overnight loans, a benchmark lending rate, to 0.25% from zero, where rates have stood for five years.
• PEP PepsiCo beats by $0.03, beats on revs, ups FY06 guidance (61.10 )
  Reports Q2 (Jun) earnings of $0.80 per share, $0.03 better than the Reuters Estimates consensus of $0.77; revenues rose 11.7% year/year to $8.6 bln vs the $8.48 bln consensus. Co issues in-line guidance for FY06, sees EPS of at least $2.95, up from previous guidance of at least $2.93, vs. $2.96 consensus. Co sees share repurchases of approximately $3 bln FY06.
• Cramer's 'Mad Money' Recap - TheStreet.com
  On Wednesday's edition, Jim discusses stocks that have the ability to raise prices. In the commercial real estate sector, he names Equity Office Properties Trust (EOP) and Vornado Realty Trust (VNO). In the aerospace market, he mentions Boeing (BA). In the refining sector, he suggests Valero (VLO) as the best in the group and notes they control the market's capacity with 95%. Air Products (APD) has pricing power in the global hydrogen market. For specialty materials, he names Brush Enginered Materials (BW). In biotech, he prefers Genentech (DNA) and Celegene (CELG). For defense sector picks, he says Lockheed Martin (LMT) and General Dynamcis (GD) are the best plays. Kirby (KEX) is the top pick in the barge business. Since oil rigs are in short suply, Cramer named Transocean (RIG) as his top pricing-power pick. With minerals, BHP Billiton (BHP) and EuroZinc Mining (EZM) are the top two in that sector.
• Update on Israel/Lebanon conflict from Sky News
  Sky News reports Kofi Annan, UN Secretary-General, is sending a three-person team to urge all parties to exercise restraint and help stop deadly cross-border clashes. Meanwhile, Israeli aircraft bombed a Lebanese military airbase near the Syrian border, witnesses said. The facility at Riyaq, in Lebanon's eastern Bekaa Valley, is used by the country's two dozen helicopters - it has no fixed-wing jets. There was no word on casualties after the raid, part of Israeli reprisals for the capture of two Israeli soldiers by Hizbollah guerrillas. Hizbollah guerrillas have threatened to attack the major Israeli port of Haifa if Israel strikes the Lebanese capital Beirut again. Earlier Israel intensified its attacks in Lebanon with airstrikes on the country's only intl airport and the Hizbollah TV station. In northern Israel, thousands of civilians spent the night in underground shelters as Hizbollah fired rockets across the border.

long PEP