Trading for the Masses

We have covered half our EUR/USD short from 1.3706 earlier today, here @ 1.3652 for a cool 54 pips. We have moved the stops down to 1.3685 on the 2nd half and will look for 1.36 area to cover remaining half. A very nice trade indeed as the markets are getting crushed in the night session all over. Should be an exciting open as the SPX will be touching the 200 dma if we are to open down. Subprime contained my arse!!

Party on Wayne. Nighty Nite!!

Today the the dip buyers were smacked down right off the open and continued all day. We were held guilty in that camp on the YM futures mid day and took some small losses in the YM m arket today. WE went home short EURUSD and our stops will keep us profitable in the trade. We took out new lows across the bow on the lows, which usually leads to lower opens. Let’s put it this way, I would not try to catch this knife yet. The Dow 200 dma is sitting @ 12800 which is now a short 400 pts from our close today. July is in the books and we will be back tomorrow for more fun!!

Sector Spotlight

Jim Cramer Says “Plow Over the Inland Empire” We Have Too Many Homes

Hedgefund loses %50 in June and July, Sowood

Hedge Fund Manager John Devaney Puts Assets Up For Sale Amid Tough Times.

Pascal’s Wager

American Home Mortgage Halts Trading Pending News: Market Cap Down $221+ Million Over the Weekend. SoCal Still in Wonderland.

10 Stupid Things We Say To Ease The Pain of a Market Meltdown

50 Greatest Rock Drummers

Recession probability index rises to 26.2%

Michigan, Notre Dame agree to 20-year contract extension

Subprime pain spreads into office market

Debt Kid

The World at Night

The SPX:VIX Ratio, the Mean Reversion Magnet, and Fun With Numbers

Illya Nyzhnyk, chess champion @ 10

Copycat Investors

Importance of Volume

Chapman Capital Discloses 9.9% Stake in Packeteer (PKTR), Demands Sale

Hockey Stocks in the Summer

Another American Record in the Mile, by UM runner Webb

New Details on Pat Tillman’s Death

Top 10 Most Expensive States For Mortgage Closing Costs For 2007

Pretty slow out there, the markets opened up, sold off hard, retraced the sell off up and the volatility has been nice, but we have not been in the best flows today. We have made money in the futures, but nothing spectacular, just grinding it out there today. We will trade very small again today as the moves seem tight and not worth much at this point. Stocks have us unexcited and we have done no stock trades today. So be it, the market gives you what it does. We will be getting short EUR/USD here @ 1.3708 with stops over 1.3765 risking 57 pips. Here’s the chart analysis.

Another big gap up on PCE inflation numbers being tame and perceived earnings strength. We expect volatility to continue to offer us some fantastic trading opportunities and we are looking forward to this bounce continuing so we may re launch our shorts a tad higher. Join us over at our premium traders room and hit em hard today.

S&P futures vs fair value: +13.4. Nasdaq futures vs fair value: +21.0.
June personal income rose 0.4% (consensus 0.5%) while personal spending rose 0.1% (consensus 0.1%). The more closely watched core-PCE deflator rose just 0.1% (consensus 0.2%), which assuages inflation concerns as the year-over-year rate stays at 1.9% and within the Fed’s “comfort zone.” The Employment Cost Index checked in at 0.9%, matching economists’ forecasts. The futures market has held relatively steady but they were strengthening ahead of the tame inflation data and point to an even stronger start for stocks.

PCE Deflator y/y +2.3% vs +2.3% consensus
Personal Income +0.4% vs +0.5% consensus
Personal Spending +0.1% vs +0.1% consensus
PCE Core y/y +1.9% vs +1.9% consensus
Q2 Employment Cost Index 0.9% vs. +0.9% Consensus
PCE Core m/m +0.1% vs +0.2% consensus

Gapping up: OLED +88.0%, HW +22.8%, UA +17.8%, MALL +17.3%, SUNW 10.6%, WEN +9.5%, CBG +9.5%, DJ + 8.1%, RYAAY +7.6%, ONNN +6.7%, GM +6.7%, GPCB +6.2%, MR +5.9%, MOS +5.2%… Gapping down: DXPE -16.5%, IVAC -15.3%, HMA -10.2%, SUNH -9.4%, SIMO -9.1%, ALU -8.6%, MTG -7.6%, SOFO -6.7%

Insider trading disclosed in filings out after the close yesterday
Buyers: Amicus Therapeutics (FOLD 11.74) Director and 10% Owner bought 17,800 shares for $11.40… UnionBanCal (UB 55.93) CEO bought 2K shares for $56.45… Deluxe (DLX 37.87) CEO bought 1,975 shares for $37.72… Zenith National Insurance (ZNT 40.80) Officer bought 3K shares for $40.90… Kilroy Realty (KRC 63.10) Director bought 1K shares for $63.07… Mack Cali Realty (CLI 39.35) Director bought 10K shares for $39.59… KB Home (KBH 31.59) Officer bought 1K shares for $31.16… Schulman (SHLM 22.4 Director Barrington Capital Group bought 88,546 shares for $22.85… Lamar Advertising (LAMR 59.0 10% Owner SPO Advisory bought 233K shares for $58.13 and 11K shares for $58.50. Sellers: Adams Respiratory Therapeutics (ARXT 37.20) Director sold 23,880 shares at $41.28… Corning (GLW 24.33) Officer sold 35K shares at $24.23… Crane (CR 46.40) Officer sold 10K shares at $47.00; Director sold 16,100 shares at $47.37… Pepsi (PEP 65.90) Chairman sold 122,303 shares at $67.25… Phoenix Technologies (PTEC 11.47) 10% Owner Special Situations Funds sold 102,841 shares at $11.38… VistaCare (VSTA 9.39) 10% Owner Endowment Capital Group sold 35,132 shares at $9.55… Premier Exhibitions (PRXI 16.61) Director sold 10K shares at $16.73.

Poniard Pharmaceuticals (PARD) announces the initiation of a Phase 2 trial of intravenous picoplatin in combination with docetaxel (Taxotere) and prednisone in patients with metastatic hormone-refractory prostate cancer… Laureate Pharma, a partner co of Safeguard Scientifics (SFE), announces that it has entered into a cGMP contract manufacturing agreement with Enobia Pharma, a biotechnology co actively engaged in the development of enzyme replacement therapy for the treatment of hypophosphatasia… Entergy Nuclear (ETR) has signed a project development agreement with GE-Hitachi Nuclear Energy (GE) that includes a major, advanced reactor components order. Proceeding with the order now will ensure timely delivery of schedule-critical parts should Entergy decide to build a new nuclear unit… Gilat Satellite Networks (GILT) announces that its wholly-owned subsidiary, Spacenet, has been awarded two new contract extensions… Alternative Technology announces the co is deploying Packeteer’s (PKTR) PacketShaper appliances across its organization.

Bond Watch : Leaking Lower
The market was brushed back overnight as globally bonds were sold with investors dipping their collective toes back into the risk waters. With bond prices hitting lofty levels recently & equities looking well bid the market will not need to look far for reasons to take profits off the table, particularly with month-end position squaring adding to flows. The 2-10-yr yield spread tapered in to 21.4 as curve trade gears up for a busy week of data. Bond prices in the EuroZone were ushered lower with help from firm inflation & retail sales data, while Japan bucked the trend with bond prices higher after soft data. For the first time in several sessions treasuries will have some work to do as data returns to the calendar & the flight to quality dries up. While most of the data are of middling value to trade, PCE inflation provides the greatest bang for its buck. An upside surprise would likely inflict the most damage while only modest support will be tapped from a soft report. In all, the bonds may wander through the data with only passing interest as trade works out month-end flows & credit squeeze headlines. Tight ranges have prevailed on the buck with the euro holding just above 1.3700 & the yen weakening above 119.2000. Spot gold is up at 668.02 (+3.02) while crude oil jumped to 77.45 (+0.62).

IMCL Imclone beats by $0.06; reports world-wide Eurbitux sales below street expectation (33.45 )
Reports Q2 (Jun) earnings of $0.36 per share, $0.06 better than the Reuters Estimates consensus of $0.30; revenues rose 0.4% year/year to $150.4 mln vs the $146.3 mln consensus. Co reports Eurbitux U.S. sales of $162.1 mln vs $176 mln street expectation; Eurbitux E.U. $157.2 mln vs $149 mln street expectation; Eurbitux W.W. $319.2 mln vs $325 mln street expectation.

MRO Marathon Oil beats by $0.12, ex items (57.00 )
Reports Q2 (Jun) earnings of $2.25 per share, excluding non-recurring items, $0.12 better than the Reuters Estimates consensus of $2.13; revenues fell 7.7% year/year to $16.89 bln. See 08:00 comment for acquisition news.

DD DuPont accelerates completion of its $5 bln share repurchase plan (47.05 )
Co announces that it entered into a structured stock repurchase agreement with a large financial institution in which the co made an upfront payment of $1.1 bln. The financial institution agreed to deliver a certain number of shares based on the volume-weighted average price, less a specified discount at the end of the contract period. The contract is expected to settle no later than Sept. 28, 2007. The co will finance the purchase with short- term borrowings. Co announced the $5 bln stock repurchase plan in October 2005. As of June 30, 2007, the co had repurchased $3.9 bln, or approximately 90 mln shares. Co previously stated it expected to complete the share repurchase plan by the end of 2007.

HOLX Hologic misses by 3 cents (53.71 )
Reports Q3 (Jun) earnings of $0.45 per share, $0.03 worse than the Reuters Estimates consensus of $0.48; revenues rose 60.0% year/year to $191.5 mln vs the $188.7 mln consensus.

Goldman Sachs’ Abby Joseph Cohen on CNBC says they don’t see an economic recession, and valuation is not at all stretched in the equity mkt, as the S&P is trading at a P/E of less than 16x. Says they’ve been talking about a rotation in the mkts away from housing and the consumer, toward capital spending by U.S. companies, and those co’s that do business outside the U.S. that are benefiting improved economic tone in Europe and other places.

MTG MGIC Investment: Liquidity brings down C-Bass; tgt cut to $43 - FBR (45.44 ) -Update-
Friedman Billings notes last night MTG reported that its investment in C-BASS could be fully impaired as a result of margin calls at the joint venture. At $516 mln, firm ests the impact to MTG’s book value, assuming full impairment, to be $4.10 per share, bringing tangible book value to $49.58. They are lowering their Y08 EPS est, from $5.50 to $4.25. Firm cuts their tgt from $55 to $43, to reflect the impaired book value and their lowered earnings ests.

Allis-Chalmers Energy (ALY) announces that it recently acquired two cos which have expanded its directional drilling capabilities. Coker Directional and Diggar Tools were purchased for an aggregate purchase price of approx $15 mln… The Topps Company (TOPP) announces that the special meeting of TOPP stockholders to consider and vote on the proposed merger agreement with The Tornante Company and Madison Dearborn Partners has been rescheduled for August 30, 2007 at 2:00 PM, local time… Xenonics Holdings (XNN) announces that it has entered into an agreement with Home Shopping Groupfor a national TV direct marketing campaign for XNNs’ patented SuperVision digital low-light viewing system… Royale Energy (ROYL) has successfully tested the Park 9-2 well in the Lonestar gas field of Colusa County, CA. All of the pipeline easements have been obtained and construction will be completed this week. The co anticipates pipeline connection and production to commence by next week… Javelin Pharmaceuticals (JAV) announces dosing of the first patient in a Phase 3 clinical study of PMI-150 at the Beth Israel Deaconess Medical Center, a teaching hospital of Harvard Medical School.

IACI InterActive misses by $0.02 (30.36 )
Reports Q2 (Jun) earnings of $0.31 per share, excluding non-recurring items, $0.02 worse than the Reuters Estimates consensus of $0.33; revenues rose 5.6% year/year to $1.51 bln vs the $1.59 bln consensus. CEO said, “While we expected this quarter to be difficult, we did not anticipate the softness in domestic ticketing volumes which impacted Ticketmaster. We are not satisfied with these results - whether driven by market conditions or our own hand - and are taking every appropriate action to have the back half of the year reflect a demarcation point to a 2008 more reflective of our ambition.”

ADP Automatic Data misses by $0.01, guides FY08 EPS, revs above consensus (46.07 )
Reports Q4 (Jun) earnings of $0.35 per share, $0.01 worse than the Reuters Estimates consensus of $0.36; revenues rose 13.3% year/year to $2 bln vs the $1.95 bln consensus. Co issues upside guidance for FY08, sees EPS to grow 18-21%, equates to $2.12-2.18 vs. $2.15 consensus; sees FY08 rev growth of 12%, equates to $8.736 bln vs. $8.6 bln consensus.

WMI Waste Mgt beats by $0.04; guides FY07 EPS above consensus (37.49 )
Reports Q2 (Jun) earnings of $0.56 per share, $0.04 better than the Reuters Estimates consensus of $0.52; revenues fell 1.5% year/year to $3.36 bln vs the $3.41 bln consensus. Co issues upside guidance for FY07, sees EPS of $2.07-2.11 vs. $2.06 consensus, prior guidance $2.03-2.07.

UA Under Armour beats by $0.08, beats on revs; raises Y07 outlook (55.18 )
Reports Q2 (Jun) earnings of $0.11 per share, $0.08 better than the Reuters Estimates consensus of $0.03; revenues rose 50.6% year/year to $120.5 mln vs the $105.5 mln consensus. Gross margin for the quarter increased to 49.0% compared to 47.8% in the prior year due to a combination of factors including the previously disclosed shift of certain customer incentives to selling, general and administrative expenses, which were recorded as discounts in the prior year. Co raised guidance for FY07, sees FY07 revs of $580-590 mln vs. $583.30 mln consensus (previous guidance was $560-580 mln); sees annual income from operations in the range of $79-81 mln, previously expected $74.5-77.5 mln.

MMM 3M: Quarterly earnings and outlook surpass ests; removed from Focus List - McAdams Wright Ragen (90.18 )
McAdams Wright Ragen is removing MMM for the Focus List due to price appreciation, viewing the shares as fairly valued at these levels. In the near term, firm feels there is a chance the MMM shares could move into mid-$90s due to the underlying strength in current business fundamentals. Yet, at these valuations, firm also feels the odds of a downside disappointment have grown, accompanying the increase in bottom line forecasts and related expectations.

GM General Motors beats by $1.21; Allison deal expected to close in Q3 (32.61 )
Reports Q2 (Jun) earnings of $2.29 per share, excluding special items, $1.21 better than the Reuters Estimates consensus of $1.08; revenues rose 2.3% year/year to $45.9 bln vs the $45.04 bln consensus. “As we head into the second half of the year, we’re optimistic about continued growth prospects in key emerging markets. In the U.S., the economy and auto market outlook remains challenging, but we’ll continue our future product and technology investments, while staying focused on growing our revenue and improving our cost competitiveness. We look forward to the U.A.W. negotiations as an opportunity to continue to address issues that are important to the company, the union and our employees… We’re pleased that GMAC returned to profitability in the second quarter, with significantly better results than the first quarter. GMAC’s auto financing and insurance businesses continues to post strong results while the company continues to progress in addressing the challenging conditions in the residential mortgage market.” As announced in June 2007, the sale of the Allison Transmission business will further bolster GM’s liquidity, with proceeds of approx $5.6 bln. The sale is expected to close in the third quarter 2007.

IMB IndyMac Banc reports Q2 results; does not issue guidance due to current uncertainties (21.69 )
Co reports Q2 EPS of $0.60 vs $0.56 Reuters consensus; revs declined 21% YoY to $297.8 mln vs $279.98 mln Reuters consensus. “Conditions in the secondary markets, which had stabilized throughout the second quarter, have worsened in recent weeks due in large part to widely publicized issues with subprime-related hedge funds and other secondary market participants, including rating agencies… While our MBR margins did rebound during the quarter, the capital markets remain volatile and less liquid. Importantly, Indymac has substantial capital and funding resources to manage through these challenging times. Eventually, we believe investor demand will return to take advantage of the higher credit quality of new production, increased credit support resulting from rating agency model changes and attractive mortgage spreads that exist today. During this time, our thrift structure and the GSEs continue to provide Indymac substantial liquidity for our loan production… We anticipate that the second half of 2007 and 2008 will continue to be challenging for the mortgage and housing markets and for Indymac… We expect competitive pricing pressures on our MBR margins to continue. In addition, we expect that the current, temporary volatility and reduced liquidity in the secondary markets will adversely impact secondary market execution, putting further pressure on MBR margins, although we expect this negative impact to abate once the secondary market stabilizes. While our recent guideline tightening has improved the quality of our loan production, additional deterioration in the housing market could further increase our credit costs… Notwithstanding the current tough market conditions, we are confident we will be able to navigate through the industry storms and expect to remain solidly profitable during this cyclical downturn in our business. We are also optimistic about the long-term profit and growth prospects for both the mortgage industry and Indymac and are confident that our hybrid thrift/mortgage banking business model and related strategies, and our execution relative to our competitors, will position us favorably when the markets do recover. However, given the significant current uncertainties in the housing and mortgage markets and, in particular, in the secondary market, we feel it is prudent to temporarily refrain from our normal practice of providing quantitative guidance.”

NMX NYMEX beats by $0.02 (124.25 )
Reports Q2 (Jun) earnings of $0.60 per share, excluding non-recurring items, $0.02 better than the Reuters Estimates consensus of $0.58; revenues rose 33.6% year/year to $163.6 mln vs the $164.3 mln consensus.

COH Coach beats by a penny, beats on revs; updates Y08 guidance (47.87 )
Reports Q4 (Jun) earnings of $0.42 per share, $0.01 better than the Reuters Estimates consensus of $0.41; revenues rose 29.9% year/year to $652 mln vs the $643.7 mln consensus. Co issues mixed guidance for Q1, sees EPS of $0.39 vs. $0.41 consensus; sees Q1 revs of $655 mln vs. $643.84 mln consensus. Co issues upside guidance for FY08, sees EPS of $2.06 vs. $2.04 consensus; sees FY08 revs of $3.160 bln vs. $3.14 bln consensus

GPI Group 1 Auto beats by $0.05, reaffirms Y07 EPS guidance (35.08 )
Reports Q2 (Jun) earnings of $1.03 per share, ex items, $0.05 better than the Reuters Estimates consensus of $0.98; revenues rose 7.9% year/year to $1.68 bln vs the $1.66 bln consensus. Co issues in-line guidance for FY07, reaffirms EPS of $3.75-4.05 vs. $3.82 consensus.

Upgrades: Credit Suisse upgrades Varian Semiconductor (VSEA 45.24) to Neutral from Underperform and raises their tgt to $46 from $41 saying while their memory margin concerns played out as expected through earnings, orders are shaping up better in Q4 as NAND 200mm conversion is providing a second wind to orders…. Lehman upgrades ABM Industries (ABM 23.35) to Overweight from Equal Weight… RBC upgrades Morton Restaurant (MRT 17.72) to Outperform from Sector Perform… UBS upgrades Bank Stocks to Overweight from Equal Weight adds Bank of America (BAC 47.70) to their Strategic stock list… Susquehanna upgrades Gymboree (GYMB 39.45) to Positive from Neutral… CIBC upgrades Cameco Corp (CCJ 40.00) to Outperform from Sector Perform following earnings and based on valuation. Downgrades: Credit Suisse downgrades Unilever (UL 31.3 to Underperform from Neutral… UBS downgrades Energy Transfers Partners (ETP 53.8 to Reduce from Neutral. Miscellaneous: Merrill Lynch initiates Akamai Technologies (AKAM 36.11) with a Neutral… Piper Jaffray initiates Gibraltar Steel (ROCK 19.80) with a Market Perform… Piper initiates LKQ Corp (LKQX 28.4 with an Outperform and a $36 tgt… RBC initiates Warren Resources (WRES 10.91) with an Outperform… ThinkEquity initiates AeroGrow International (AERO 7.76) with a Buy and a $9.50 tgt saying they think that proprietary technology protects the co from competition, and replaceable seed kits allow for a recurring revenue model. New distribution channels could lead to strong growth in the near future… ThinkEquity initiates Nutrition 21 (NXXI 1.51) with a Buy and a $2.25 tgt saying the co has a number of clinically proven nutritional supplements that tgt the rapidly growing markets of those affected by obesity and diabetes. The firm says the acquisition of Iceland Health provides a popular new product as well as a new level of marketing expertise..

WSJ reports the FCC is poised to adopt rules for a major sale of radio spectrum, a move that could alter the cellular-phone industry. The auction, estimated to raise $15 bln for the govt and likely to be held early next year, involves the sale of 62 megahertz of spectrum to the commercial wireless industry. Most of the spectrum is being vacated as television broadcasters switch to digital television signals from the current analog format, freeing up a particularly choice swath of the airwaves. Under the FCC’s tentative proposal, cos purchasing one large part of the airwaves would have to provide service to all handheld devices to be attached to the networks they eventually construct. This could dramatically change the competition in the U.S. cellphone industry. FCC Chairman Kevin Martin has wrestled with how to balance the competing interests of potential newcomers to the wireless broadband market like Google (GOOG) against those of incumbent service providers like Verizon Communications (VZ) and AT&T (T). Much of the debate has been focused on the upper band of 32 megahertz of spectrum. If last-minute adjustments to the plan aren’t made, FCC staff and analysts expect it will be broken into three pieces. Two 11-megahertz chunks with large regional licenses will be sold to one bidder thereby creating a national footprint… Other cos mentioned include PCS and AT.

MTG MGIC Investment: C-BASS issues response to liquidity challenge (45.44 )
C-BASS, an affiliate of MTG and Radian Group (RDN) issued the following statement in response to the announcements made last night by MGIC and Radian regarding the liquidity challenges faced by C-BASS. “While nothing fundamentally has changed at C-BASS, like many other firms in the industry, the current severe state of disruption in the credit markets has caused C-BASS to be subject to an unprecedented amount of margin calls from our lenders. The frequency and magnitude of these calls have adversely affected our liquidity. To address this, C-BASS is in advanced discussions with a number of investors to provide increased liquidity and is exploring all options to mitigate the liquidity risk in this difficult market. At the beginning of 2007, we had $302 mln of liquidity, representing greater than 30% of our capital of $926 mln. During the first 6 months of 2007, a very tumultuous time in the subprime mortgage market, C-BASS’ disciplined liquidity strategy enabled the company to meet $290 mln in lender margin calls. During the first 24 days of July alone, C-BASS met an additional $260 mln of margin calls, representing greater than a 20% decline in the lender’s value. We believe that nothing justifies this substantial amount of margin calls received in such a short period of time, particularly as there has been no change in the underlying fundamentals of our portfolio…”

Bear, Lehman, Merrill, Goldman traded as junk, derivatives show - Bloomberg.com
Bloomberg.com reports bonds of U.S. investment banks lost about $1.5 bln of their face value this month as the risk of owning the securities increased the most since at least Oct ‘04, according to Merrill indexes. Prices of credit-default swaps based on the debt imply that their credit ratings are below investment grade, data compiled by Moody’s Investors Service show. The highest level of defaults in 10 years on subprime mortgages and a $33 bln pile-up of unsold bonds and loans for funding acquisitions are driving investors away from debt of the securities cos. Concerns about credit quality may get worse because banks promised to provide $300 bln in debt for leveraged buyouts announced this year. (BSC, LEH, MER, GS)

Upgrades: Bear Stearns upgrades Gannett (GCI 48.14) to Outperform from Peer Perform… Citigroup upgrades Celanese (CE 36.57) to Buy from Hold… Lehman Bros. upgrades Pearson (PSO 16.00) to Equal-weight from Underweight… UBS upgrades Exelon (EXC 69.52) to Buy from Neutral… JP Morgan upgrades Ship Finance (SFL 26.16) to Overweight from Neutral… Merrill Lynch upgrades Pearson (PSO 16.00) to Buy from Neutral. Downgrades: Jefferies downgrades Optium (OPTM 13.05) to Hold from Buy and lowers their tgt to $12 from $21, following the co’s pre-announced shortfall of its Q407 sales… Bear Stearns downgrades MGIC (MTG 45.44) to Peer Perform from Outperform… Bear Stearns downgrades Invitrogen (IVGN 72.16) to Peer Perform from Outperform… Bear Stearns downgrades Kyphon (KYPH 66.0 to Peer Perform from Outperform… Citigroup downgrades RadioShack (RSH 25.55) to Sell from Hold… Piper Jaffray downgrades Intevac (IVAC 19.47) to Market Perform from Outperform… JP Morgan downgrades Double Hull Tankers (DHT 18.12) to Neutral from Overweight. Miscellaneous: Stifel Nicolaus resumes Hartford Financial Services (HIG 92.96) with a Hold, as they believe it will be difficult to grow EPS much in the P&C segment as HIG begins to meander through the start of a down cycle with limited, if any, premium growth… Susquehanna initiates Herman Miller (MLHR 30.85) with a Positive.

RCII Rent-A-Center misses by $0.02; issues Q3, Y07 guidance (24.12 )
Reports Q2 (Jun) earnings of $0.58 per share, $0.02 worse than the Reuters Estimates consensus of $0.60; revenues rose 24.1% year/year to $724.2 mln vs the $728.8 mln consensus. Co issues guidance for Q3, sees Q3 EPS of $0.30-0.36 vs $0.46 consensus; revs of $695-710 mln vs. $696.25 mln consensus. Co issues guidance for FY07, sees FY07 EPS of $2.06-2.14 vs $2.31 consensus; sees revs of $2.905-2.935 bln vs. $2.93 bln consensus.

HUN Huntsman misses by a penny (25.58 )
Reports Q2 (Jun) earnings of $0.33 per share, excluding non-recurring items, $0.01 worse than the Reuters Estimates consensus of $0.34; revenues rose 5.4% year/year to $2.52 bln vs the $2.79 bln consensus.

BEAV BE Aerospace beats by $0.02; raises guidance for FY07 by $0.02; guides FY08 above consensus (42.85 )
Reports Q2 (Jun) earnings of $0.39 per share, excluding non-recurring items, $0.02 better than the Reuters Estimates consensus of $0.37; revenues rose 46.7% year/year to $398.2 mln vs the $387 mln consensus. Co raises guidance for FY07, to EPS of $1.57 from $1.55 vs. $1.59 consensus. Co issues upside guidance for FY08, sees EPS of $2.25 vs. $2.17 consensus; sees FY08 revs of $2.0 bln vs. $1.91 bln consensus.

PMI PMI Group misses by $0.20 (37.27 )
Reports Q2 (Jun) earnings of $0.95 per share, $0.20 worse than the Reuters Estimates consensus of $1.15; revenues rose 12.0% year/year to $335.4 mln vs the $333.1 mln consensus. The decline in net income for the second quarter of 2007 was primarily due to a $58.7 million increase in loss reserves and higher claims paid in U.S. Mortgage Insurance Operations, partially offset by increases in net income from International Operations and Financial Guaranty.

Upgrades: McAdams Wright Ragen upgrades Monaco Coach (MNC 13.53) to Buy from Hold and sets a $17 tgt, as they believe under the proper sales conditions, the co should be able to earn $1.50/share and garner both higher P/E and P/B multiples as margins expand and returns on capital increase… Friedman Billings upgrades Gymboree (GYMB 39.45) to Outperform from Market Perform and raises their tgt to $47 from $43, following the co’s announcement of a share buyback plan and raised Q207 EPS guidance… Wachovia upgrades FPL Group (FPL 57.79) to Outperform from Market Perform, following Q207 EPS that exceeded firm and consensus estimates… Jefferies upgrades Knology (KNOL 14.40) to Buy from Hold and maintains their $20 tgt, based on valuation… UBS upgrades Verizon (VZ 41.51) to Buy from Neutral. Downgrades: Baird downgrades Franklin Electric (FELE 50.11) to Underperform from Neutral and lowers their tgt to $45 from $48, following Q207 EPS that was below firm and consensus estimates… Piper Jaffray downgrades Builders FirstSource (BLDR 15.14) to Market Perform from Outperform… Merrill Lynch downgrades Weyerhaeuser (WY 73.3 to Neutral from Buy… JP Morgan downgrades Novatel Wireless (NVTL 23.30) to Underweight from Neutral.

Sensex ends up 290pts at 15,551- The Business-Standard.com
The Business-Standard.com reports the Sensex opened with a positive gap of 98 points at 15,359 on the back of positive global cues. The index rallied nearly 200 points ahead of the announcement of the Credit Policy quarterly review. A 50bps hike in Cash Reserve Ratio saw the index tumble into the negative zone to a low of 15,225. The index, however, soon bounced back as the markets cherished the fact that all key banking rates were left unchanged in the policy review. Aggressive buying towards the end saw the index zoom to a high of 15,569 - up 344 points from the day’s low. The Sensex finally ended with a smart gain of 290 points at 15,551.

Asian stocks advance; have best monthly streak in 20 yrs - Bloomberg.com
Bloomberg.com reports Asian stocks rose as higher earnings from Olympus and Hang Seng Bank helped the region’s benchmark post its longest monthly winning streak in 20 years. Taiwan’s Taiex Index jumped 2.4%, Asia’s biggest gain. Hong Kong’s Hang Seng Index rose 2%. Japan’s Nikkei 225 Stock Average slipped 0.2%while the Topix index was little changed with most Japanese shares gaining. Measures in New Zealand and Thailand fell.

U.K. stocks advance, paced by GlaxoSmithKline, Lloyds TSB, BHP - Bloomberg.com
Bloomberg.com reports U.K. stocks rose for the first time in six sessions. GlaxoSmithKline paced the advance after a panel of U.S. advisers said the company’s diabetes pill Avandia should stay on the market with new heart-attack warnings. The benchmark FTSE 100 Index jumped 75.60, or 1.2%, to 6,281.70 at 8:38 a.m. in London. Ireland’s ISEQ Index rose 1.9 percent to 8,409.13.

The Wall Street Journal reports Nelson Peltz said his Triarc Cos., the parent of the Arby’s, is willing to offer $37 to $41 a share to buy Wendy’s Int’l (WEN), but the investor is balking at Wendy’s request to sign a confidentiality agreement as part of the sale exploration process. Yesterday, Mr. Peltz sent Wendy’s Chairman James Pickett a letter pressing the board committee considering the Wendy’s sale to accept a confidentiality agreement that is more favorable to Mr. Peltz, who is chairman of Triarc and chief executive of Trian Fund Management, a large Wendy’s shareholder. Mr. Peltz has previously said Triarc is interested in exploring a bid for Wendy’s. Yesterday’s letter marks the first time he has given any indication of what Triarc might pay. And his pushback on the confidentiality agreement hints he may pursue a less friendly purchase or other type of shake-up at the chain if Wendy’s directors won’t negotiate with him on his preferred terms. The price range indicated by Mr. Peltz would value Wendy’s at $3.2 bln to $3.6 bln. In yesterday’s letter, Mr. Peltz pointed out that the price Triarc is willing to offer represents a premium of 10% to 22% over Friday’s closing price for Wendy’s shares and a premium of 15% to 28% over the closing price of Wendy’s stock on the day before the company announced the strategic review. He wrote Triarc may be prepared to increase that valuation depending on the results of the co’s due diligence. While Mr. Peltz’s public disclosure of his potential bid price could shore up investor optimism in a deal, the fact the two sides can’t agree on a confidentiality agreement shows that they have a long way to go before reaching a sale agreement.

The Wall Street Journal reports News Corp. (NWS) and Dow Jones (DJ) edged closer to a final agreement on the sale of the publisher to News Corp., as Dow Jones negotiated on an unusual deal for the co to cover advisory fees for its majority owners, the Bancrofts, in exchange for some holdout family members supporting the deal. The talks capped a day in which some family advisers and Dow Jones board members scrambled to line up enough votes to ensure the sale. A 5 p.m. deadline set by the family came and went amid apparent brinksmanship in both camps. The late-night proposal under discussion was for the Dow Jones board to create a fund to cover payments to firms advising Bancroft family members, including Merrill Lynch and the law firms Hemenway & Barnes and Wachtell, Lipton, Rosen & Katz. News Corp. would assume these liabilities if it bought Dow Jones. The fees could total at least $30 mln, according to people familiar with the situation. Dow Jones is expected to argue that the Bancrofts deserve help with their advisory fees because their trusts are so complicated. Common shareholders don’t face many of these fees. The money would be paid only if at least one of two key holdout shareholders agreed to the deal: Christopher Bancroft and a group of trusts managed by Denver law firm Holme Roberts & Owen. With at least one of these shareholders in agreement — more likely the Denver trusts — News Corp. would have enough support from the Bancroft family to seal the deal. Late Monday, however, neither of the shareholders had agreed.

China GrenTech (GRRF) announces that the secondary offering by two of its pre-IPO private equity investors of a total of 3,296,114 ADSs was priced at $9.65 per ADS… Technip (TKP) has been awarded by Sonatrach a front-end engineering design contract for an ethane extraction project located in Arzew, Algeria… Star Buffet (STRZ) announces that it has entered into a strategic alliance with 4B’s Restaurants. In accordance with terms of the strategic alliance, Star Buffet will acquire certain 4B’s restaurants… Micrus Endovascular (MEND) announces that it has signed a letter of intent to acquire the rights to a revascularization technology for the treatment of ischemic stroke from ReVasc Technologies. The proposed transaction will include an initial $1.0 mln cash payment, future development milestone payments and an undisclosed royalty on potential future products sales.

‘Mad Money’ Recap: Lightning Round cont. - TheStreet.com
Cramer was bearish on Whirlpool (WHR).

‘Mad Money’ Recap: Lightning Round - TheStreet.com
Cramer was bullish on Caterpillar (CAT), Level 3 Communications (LVLT), Allscripts Healthcare Solutions (MDRX), Cheesecake Factory (CAKE), Johnson Controls (JCI), Amylin Pharmaceuticals (AMLN), Amgen (AMGN), Ladish (LDSH), Sun Microsystems (SUNW), Ryerson (RYI), Reliance Steel (RS), Google (GOOG), XTO Energy (XTO) and Continental Resources (CLR).

Cramer’s ‘Mad Money’ Recap - TheStreet.com
On Monday’s edition, Jim names Celgene (CELG), Kellogg (K), Schlumberger (SLB), Medco Health Solutions (MHS) and Kimberly-Clark (KMB) as his diversified portfolio during a bear market. He notes these would underperform if the Fed cuts rates.

Basia Balut, very nice voice, her name reminds me of Borat

We’re Doomed

Severe Technical Damage

S&P 500 10-Day A/D Line: Extreme Oversold Readings

No signs of Capitulation in my book either. . . .

Where bond investors find a haven from rising rates

I am also the Janitor

The Russians are Coming

Credit Market Tremors

Is it obvious now? There is no such thing as containment.

Mao Zedong Paintballed in Fuzhou?

Winner of the ‘What Are You Smoking?’ Award…

The $80 Tip and a Trio of Crazy Asian Ladies

AAPL earnings

Total Solar Eclipse Map (2001-2025)

Jim Cramer Track Record on NYSE Euronext (NYX)

We have taken big moves on the long side of the ER2 and YM today and have stood aside in stock land as nothing really appealed to us here. The AD line has been decent but nothing spectacular with AD line here @ 1618. We will be back if we find anything else of interest later.

Bulls in control on the open as we tested the bottoms a few times and put in some higher lows on the future indices a few times this am. The AD is firming up and stocks are starting to head upwards today. Welcome to the end of the month mark ups!!

Gapping up: RCCC +38.3%, GPCB +16.8%, TMY +12.9%, VVUS +10.0%, CYTR +9.8%, IR +7.5%, HRT +6.3%, HOKU +4.3%… Gapping down: AHM -42.9%, VCLK -15.4%, RSH -3.8%, CSG -3.5%, ELN -3.3%.

Barron’s reports Amazon’s (AMZN) p/e multiple suggest investors’ enthusiasm has gotten ahead of the co’s growth potential, leaving the shares ripe for a markdown. Late last week Amazon traded for 78x analysts’ earnings estimates of $1.07 a share for 2007, and 56x ‘08 estimates of $1.51. Even if the co achieves this anticipated 41% jump in earnings next year, it’s hard to justify such a premium to its growth rate, especially when Internet peers such as eBay (EBAY), which trades at about 21x 2008 earnings estimates on EPS growth of 16%, boast higher net operating margins. “On a lot of items, Amazon is not making much margin,” says Darren Chervitz, director of research at the Jacob Internet Fund, which owns eBay shares but not Amazon. Says a fund manager who’s short Amazon and prefers anonymity, “We actually think you could see 50% downside from here — a big move, but keep in mind the stock was just there not more than six months ago.” Although Amazon has bolstered its margins in the past year, “Wall Street has extrapolated that improvement for the next five years…[and] we really do believe there is a brutal natural limit to their margin,” this manager says. “As we start to get a tiny bit closer to it, there is going to be a lot of heartache and disappointment.” The operating margins needed over time to maintain the current stock price are “unobtainable,” says Mark Mahaney, an analyst at Citigroup Global Markets. International third-party sales growth will be offset by modestly declining U.S. gross margins, and core expenses — marketing and fulfilling orders, including the cost of shipping — could vary greatly, Mahaney says. The article concludes by stating that if gross margins slip just a bit in coming quarters, the stock is likely to drop.

‘Mad Money’ Recap: Lightning Round cont. - TheStreet.com
Cramer was bearish on Manitowoc (MTW) and Alcoa (AA).

‘Mad Money’ Recap: Lightning Round - TheStreet.com
Cramer was bullish on Woodward Governor (WGOV), Caterpillar (CAT), Sears Holdings (SHLD), Toyota Motor (TM) and Macy’s (M).

‘Mad Money’ Recap - TheStreet.com
On Friday’s edition, Jim names Boeing (BA) and Lockheed Martin (LMT) as two stocks that should go to $120. Boeing’s new planes carry more people and don’t use as much fuel. Plus, the global aerospace cycle has nothing to do with the economy, Cramer said. Furthermore, Boeing doesn’t see an end in sight in demand for its energy-efficient planes, and neither does Cramer. If the market opens up on Monday, he said he wouldn’t buy the stock. Finally, Cramer said he thinks Adobe (ADBE) is a buy. He believes that Adobe’s third and fourth quarters should be the first to benefit from the co’s new Creative Suite 3, the “best software” for publishing.

Scientific Games (SGMS) announces it has been awarded a three-year contract as the primary vendor to supply instant tickets and related services to the Rhode Island Lottery. The contract is expected to generate approximately $4 mln over the 3-yr term, and includes options to extend for an additional three yrs… Phoenix Technologies (PTEC) announces that MiTAC Technology has selected Phoenix SecureCore as the firmware foundation for its next-generation notebook series… Medivation (MDVN) announces treatment of the first patient in its Phase 2 trial of Dimebon to treat Huntington’s disease… K2 Inc (KTO) announces that it and the City of Roseville Employees’ Retirement System, on behalf of itself and all others similarly situated, agreed to a settlement in principle of the pending litigation in the Superior Court of the State of California brought by the City of Roseville Employees’ Retirement System relating to the pending acquisition of K2 by Jarden… Lipid Sciences (LIPD) reports that enrollment is complete for two-thirds, or 20 out of a total target of 30 patients, in the co’s safety and feasibility clinical trial of HDL Selective Delipidation at the Washington Hospital Center in Washington, D.C.

AHM American Home Mortgage: Downgrade details (10.47 ) -Update-
RBC downgraded AHM to Sector Perform from Outperform and cuts their tgt to $14 from $20 as AHM announces a delay in 2Q07 dividend payments in an effort to preserve liquidity. Firm notes the recent deterioration in global credit markets has resulted in a significant contraction in the value of AHM’s residual interests in securitizations and its less than AAA-rated MBS. As a consequence, firm expects a $4-5 per share hit to book value over the next two quarters. They think the co has sufficient liquidity to endure margin calls on repo debt being used to fund these assets, but acknowledge that liquidity is a mounting concern.

MA MasterCard Inc. (MA): Expecting above consensus 2Q07 results; shelter from the sub-prime storm? - Caylon (154.03 )
Caylon expects that MA will report 2Q07 EPS of $1.39/share (+85% y/y and +$0.08 vs. consensus) on an operating basis before the market opens on Wednesday, August 1st. Firm expects MA should benefit from continued strong spending volumes and billed business growth. They say, despite the stress in certain segments of the mortgage market (i.e. consumer lending risk), consumer spending remains robust and stable.

Japanese Prime Minister “will not stand down” - BBC
BBC.com reports that Japanese Prime Minister Shinzo Abe has reiterated his intention to remain in office, a day after suffering a crushing defeat in upper house polls. Abe told a news conference that he took the result “very seriously” and pledged a reshuffle of his Cabinet. In Sunday’s polls, Abe’s Liberal Democratic Party-led ruling coalition fell far short of the 64 seats it needed to retain its majority in the upper house. The opposition Democratic Party of Japan made huge gains, becoming the largest party in the upper house for the first time in history. The ruling coalition still has a sizeable majority in the more powerful lower house, which chooses the prime minister. (EWJ)

The market is seeing a modest continuation of last week’s theme, namely risk aversion as subprime rears its head again but from across the pond helping fuel a bid in global sovereign bonds while corporates suffer risk re-appraisal. The 2-10-yr yield spread is pushing wider at 26.0 with curve trade leaning steeper ahead of a busy week of data, just not today. Bond prices in the EuroZone are conflicted as an expected hawkish ECB meets putting downward pressure on the current flight to quality bid. In Japan, bond prices are weak ahead of a 10-yr auction. Treasuries will be running on fumes from last week’s bid today as data & the Fed are absent. Trade will be eyeing equities & headlines to carry a bid with a recovery in the former likely to inflict some corrective price action. The dollar is weaker on the majors after showing signs of life last week as the euro gets a little boost out of policy talk & the yen still gets fueled via unwinds, but at a slower pace. The gold has taken a sudden nosedive even as the buck losses ground with spot now 660.74 (-0.47) from an early 663.08. Crude is also off some on corrective action with the front month now 76.64 (-0.38). There is no data or Fed-speak on the calendar. The euro is at 1.3665 & the yen is at 118.2800 while the 10-yr yield is at 4.757%

Dollar falls against Yen, Euro as corporate bond risk surges - Bloomberg
Bloomberg.com reports that the dollar fell against the yen and euro as a gauge of corporate bond risk rose, fueling speculation losses on securities backed by subprime mortgages will worsen… The risk of owning corporate bonds surged by a record as losses on U.S. subprime mortgages at Germany’s IKB Deutsche Industriebank AG triggered concerns of global market contagion… Investors are fleeing corporate credit in the fastest selloff in seven years, Barclays Capital said today. The rout that began in mid-June when two Bear Stearns hedge funds almost collapsed spread worldwide as Blackstone stepped in last week to support Sydney-based Basis Capital Fund Management and ABN Amro Holding’s co-owned Absolute Capital Group froze investor accounts.

VCLK ValueClick misses on top and bottom line; issues downside Q3 guidance, lowers FY07 guidance (26.01 )
Reports Q2 (Jun) earnings of $0.17 per share, $0.01 worse than the Reuters Estimates consensus of $0.18; revenues rose 14.4% year/year to $148.7 mln vs the $158.9 mln consensus. Co issues downside guidance for Q3, sees EPS of $0.16-0.17 vs. $0.19 consensus; sees Q3 revs of $155-165 mln vs. $164.36 mln consensus. Co lowers guidance for FY07, sees EPS of $0.74-0.76 vs. $0.81 consensus; sees FY07 revs of $645-660 mln vs. $666.39 mln consensus. Revenue and adjusted-EBITDA(1) were below the co’s previously-issued guidance. The quarter’s results were negatively impacted by the Company’s promotion-based business. ValueClick also announced that its board of directors has increased the authorization of its stock repurchase program to $100 mln.

MNST Monster Worldwide “is simply not for sale,” CEO says - Bloomberg (37.90 )

CROX Crocs to acquire Bite Footwear for $1.75 mln (55.81 )
Co announced that it has entered into a definitive agreement to acquire the Bite Footwear brand for $1.75 million in cash, plus a potential earn-out of up to $1.75 million based on Bite hitting certain earnings targets over a three-year period. Bite Footwear business is performance shoe and sports sandals. Since its founding in 1996, Bite has introduced a number of products including the first sports sandal with a removable insole, the first bio-mechanically correct footwear for fishing, and the first dedicated disc golf shoes. The company markets and sells its footwear worldwide.

AHM American Home Mortgage tgt cut to $3 from $15 at Friedman Billings (10.47 ) -Update-
Friedman Billings cuts their tgt on AHM to $3 from $15 to reflect the uncertainty of the unprecedented liquidity events in the overall market and issues specific to AHM’s REIT structure. The firm notes on July 27, after the market close, AHM announced that it will delay payment of its dividend on its common stock and anticipates delaying payment of its dividends on its preferred stock in order to preserve liquidity. The firm believes the stock will experience significant pressure as the liquidity problems announced on Friday will put in question the co’s long term viability.

BofA boosts their recommended equity allocation by +5% to 60% in wake of last week’s stock market “drubbing”
BofA is boosting their recommended equity allocation by +5% to 60% in the wake of last week’s stock market drubbing, which pulled the S&P 500 down -4.9% and cut its YTD gain to +3.9% including dividends. To fund the purchase, they reduce their bond weighting by -5% to 15%, and continue to believe that bond positions should be protected against rising inflation expectations. Firm’s allocation to cash and absolute-return alternative investments remains unchanged at 25% of the portfolio. Firm believes small stock indexes like the Russell 2000 may enjoy a “beta-bounce” if the market snaps back as they expect, but would use strength there to reduce exposure to smaller stocks, and continue to favor the large capitalization indexes such as the S&P 500, S&P 100, or Russell Top 50

Filings: Allied Nevada Gold (ANV) files for a 7.89 mln share common stock offering by selling shareholders… Eagle Rock Energy (EROC) files for a 14.8 mln share common unit offering by selling unitholders… Lexicon Pharma (LXRX) files for a 7.65 mln share common stock offering by selling shareholders.

SNE Sony could struggle if yen strengthens - FT (53.04 )
Financial Times reports Sony, whose profits are very sensitive to the movement of the yen, is 80% hedged against currency risk for the next quarter, but exposed to sharp movements after that, according to Nobuyuki Oneda, CFO. In an interview with the Financial Times, Mr Oneda said that the Japanese electronics group owed Y26 bln ($219 mln) or about 40%, of its net profits in the June quarter to the weaker-than-expected yen. But if the Japanese currency started moving in the other direction, it would cost the group Y6 bln a year for each Y1 appreciation, he said. Sony has stuck to seemingly conservative assumptions of the yen at Y117 to the dollar. However in recent weeks, the yen has begun to strengthen as intl mkt turmoil forces the unwinding of some yen carry trades.

WSJ reports after years of booming commodity prices, energy cos have pristine balance sheets, exceptional credit ratings and gargantuan free cash flows as they continue to enjoy near-record oil and natural-gas prices. A good place to find growth amid the broader-mkt credit-crunch storm? Not really. High energy prices have meant big profits for this sector, and that has accounted for roughly one-third of the mkt’s earnings growth in the past two years. But rising costs, increased intl taxes and a dearth of good exploration opportunities are shrinking margins. There is a growing sentiment that the energy sector’s profits, while remaining strong, won’t grow much from here. A major reason for the shifting sentiment is that while rising commodity prices over the past few years have boosted earnings and stock prices, the large publicly traded energy cos have struggled to increase daily production of oil and natural gas. Moreover, rising costs have nibbled away at margins. The bright spot for large oil cos over the past two quarters has been their refining operations. Even here, though, there are ominous signs… Cos mentioned include OXY, COP, XOM, MUR, MRO.

Upgrades: BB&T upgrades Acuity (AYI 58.46) to Buy from Hold, based on valuation… Morgan Stanely upgrades France Telecom (FTE 26.50) to Overweight from Equal Weight. Downgrades: RBC downgrades American Home Mortgage (AHM 10.47) to Sector Perform from Outperform… ThinkEquity downgrades Kyphon (KYPH 66.60) to Accumulate from Buy and raises their tgt to $71 from $58 saying Kyphon is worth more to Medtronic than to anyone else, and they do not expect a competitive offer… JMP downgrades American Home Mortgage (AHM 10.47) to Underperform from Market Perform with an $8 tgt following dividend cut and saying they believe that 3Q07 will be the make or break quarter for AHM in terms of its survival as an independent public co. The firm says at this point, the company’s survival as an independent company depends on liquidity management and the flexibility of its various warehouse and repo lenders… Susquehanna downgrades The Children’s Place (PLCE 36.65) to Neutral from Positive… Friedman Billings downgrades Massey Energy (MEE 21.75) to Underperform from Market Perform and cuts their tgt to $24 from $27 following earnings and given the fact that the co has essentially limited its upside for the next two years without being able to hedge the cost effectively, they believe that the co will have declining EBITDA and cash flow for the next two years unless MET coal is even higher than their newly increased estimates or it makes accretive acquisitions.

WSJ reports when the U.S. govt goes to court this week to try to block Whole Foods Market’s (WFMI) planned purchase of Wild Oats Markets, the judge will wrestle with this question: Which of John Mackey’s arguments is most convincing? The FTC contends Whole Foods and Wild Oats operate in a distinct mkt for premium natural and organic groceries and the $565 mln deal would curtail competition and raise prices in that segment. To make its case, the agency is relying on comments by Mr. Mackey, the chief executive of Whole Foods, which suggest he considers his co’s playing field different than that of typical grocers. “Safeway and other conventional retailers will keep doing their thing — trying to be all things to all people,” Mr. Mackey has said, according to the FTC. “They can’t really effectively focus on Whole Foods’ [clientele].” But Mr. Mackey has said Whole Foods faces competition from the conventional supermarket giants, which increasingly hawk natural and organic foods. How the judge ultimately defines the natural-foods mkt is central to the outcome of the antitrust case. The FTC is seeking a preliminary injunction to squelch the merger. A two-day hearing starts tomorrow in federal court in Washington, D.C.

Bloomberg.com reports that China ordered banks to set aside larger reserves for the sixth time this year to curb lending and investment after the economy grew at the fastest pace since 1994. Lenders must put aside 12% of deposits as reserves, starting Aug. 15, up from 11.5%, the People’s Bank of China said today on its Web site. China is trying to stop the flood of cash from record trade surpluses from fueling inflation, asset bubbles and overcapacity in manufacturing. Consumer prices rose the most in 33 months in June, factory and property investment has surged, and the key stock index has more than doubled this year. “The problem in China is excess liquidity,” said Tim Condon, head of research for Asia at ING Groep NV in Singapore. “We can expect steady increases in interest rates and the reserve requirements.” The announcement came nine days after increases to lending and deposit rates. It also followed the 5:30 p.m. close of trading of the yuan. The currency fell 0.07 percent to 7.5674 against the dollar today after gaining 0.15 percent last week. The world’s fourth-largest economy expanded 11.9% in the second quarter from a year earlier. China exported $112.5 bln more than it imported in the first six months, an increase of 84 percent from a year earlier. The increase in the reserve ratio will help to strengthen control of liquidity in the banking system and slow loan growth, the People’s Bank of China said in a statement today.

Upgrades: Citigroup upgrades Ingersoll-Rand (IR 48.14) to Buy from Hold… J.P Morgan upgrades Petrohawk (HK 14.09) to Overweight from Neutral… JP Morgan upgrades Knight Transportation (KNX 17.44) to Overweight from Neutral… Lehman upgrades MGM Mirage (MGM 71.40) to Overweight from Equal-Weight and raises their tgt to $82 from $72, saying it believes the stock has at least 14% upside potential and doesn’t need the presence of M&A or private equity investment to get there… J.P Morgan upgrades Danaher (DHR 73.66) to Overweight from Neutral… J.P Morgan upgrades NiSource (NI 19.23) to Neutral from Underweight… J.P Morgan upgrades Coca-Cola FEMSA (KOF 43.35) to Neutral from Underweight… J.P Morgan upgrades Performance Food Group (PFGC 28.46) to Overweight from Neutral. Downgrades: Merriman downgrades bebe stores (BEBE 14.54) to Neutral from Buy, as they are taking a more cautious outlook on their estimates for FY08 and aren’t expecting significant earnings improvement until 2H08… Baird downgrades Ingersoll-Rand (IR 48.14) to Neutral from Outperform and lowers their tgt to $54 from $60, following Q2 EPS that met firm and consensus estimates and based on restructuring expenses and modestly lower Climate Control margin assumptions.

Upgrades: JMP Securities upgrades Motorola (MOT 16.95) to Market Perform from Underperform, based on valuation… Baird upgrades Mine Safety Appliances (MSA 41.14) to Outperform from Neutral and raises their tgt to $49 from $44, as they believe an improving funding environment, an impending standards change in SCBAs that should spark orders, a higher backlog/production rate in ACHs, and valuation all support their upgrade… Jefferies upgrades Empire District Electric (EDE 22.54) to Buy from Hold and maintains their $24 tgt, based on valuation following the co’s release of Q207 earnings… UBS upgrades Orient-Express Hotels (OEH 46.00) to Buy from Neutral… UBS upgrades Southwest Gas (SWX 29.26) to Buy from Neutral… UBS upgrades Strategic Hotels and Resorts (BEE 20.27) to Buy from Neutral… UBS upgrades Hersha Hospitality Trust (HT 10.20) to Buy from Neutral… UBS upgrades DiamondRock (DRH 16.50) to Buy from Neutral… JP Morgan upgrades Norfolk Southern (NSC 52.34) to Overweight from Neutral… BofA upgrades Evergreen Solar (ESLR 8.17) to Neutral from Sell… BofA upgrades Sepracor (SEPR 27.29) to Buy from Neutral… Bear Stearns upgrades Sovereign Bancorp (SOV 19.44) to Peer Perform from Underperform… Citigroup upgrades Veeco Instruments (VECO 17.45) to Buy from Hold.

European mining stocks advance, led by BHP; Postbank slides -Bloomberg.com
Bloomberg.com reports European mining stocks rose the most in a week, led by BHP Billiton Ltd. and Rio Tinto Group, as metal prices advanced. Benchmarks in the region were little changed. National benchmarks fell in nine of the 17 western European markets that were open. The U.K.’s FTSE 100 and France’s CAC 40 slid 0.1%. Germany’s DAX slipped 0.2%. The Stoxx 50 and the Euro Stoxx 50, a measure for the euro region, both declined 0.2%.

Asian stocks rebound, led by JFE Holdings; Macquarie slides - Bloomberg.com
Bloomberg.com reports Asian stocks rebounded from a one- month low after higher profits at JFE Holdings and Nippon Steel offset concern U.S. housing investment is dropping. Japan’s Topix index climbed 0.4%, while the Nikkei 225 Stock Average closed little changed at 17,289.30. Benchmarks gained across the region except for Taiwan, New Zealand, Malaysia and Philippines. Pakistan’s key measure was little changed. Thailand’s market is closed for a holiday today.

Sensex ends up 26pts at 15,261 - The Business-Standard.com
The Business-Standard.com reports the Sensex opened with a positive gap of 43 points at 15,278, but soon slipped owing to nervousness in early trades following a steep fall on Friday. The index tumbled to a low of 15,135 -down 143 points from the day’s open. Aggressive buying in select stocks like Hindustan Unilever, SBI and cement shares helped the index rebound into positive zone. The buying momentum was so strong in mid-noon trades that the index rallied to a high of 15,452 -up 317 points from the day’s low. Intra-day profit-taking, lateron, saw the index pare most of its gains. The Sensex finally ended with a marginal gain of 26 points at 15,261.

The NY Post reports Cedar Fair Entertainment (FUN) has has entered into quick-moving talks with investment firm Destiny Capital Solutions about a $4.1 bln takeover. The Post broke the news three weeks ago that Cedar Fair was reaching out to private-equity firms to gauge their interest in a buyout on the condition that the co’s management team remained in place. That’s a caveat Destiny Capital is willing to accept, with a spokesman for the firm saying that it has agreed to keep Cedar Fair chief executive Richard Kinzel and other managers in place for a period of time, should a deal be reached. While the talks with Destiny Capital are at an early stage and could break down, and while other bidders could emerge, the spokesman said the two sides have had constructive negotiations since first making contact two weeks ago. The deal Destiny Capital proposed calls for paying $4.1 bln, or a 20% premium over Cedar Fair’s current market value, to acquire all of the theme-park operator’s shares. The firm also said it plans to commit at least $500 mln, and as much as $800 mln, to upgrade Cedar Fair’s 12 amusement parks, six water parks and six hotels.

The Wall Street Journal reports ABN Amro (ABN) Monday said it no longer recommends a takeover bid from Barclays (BCS), meaning the bank and a European consortium will compete to buy ABN without the advantage of a recommendation from ABN’s boards. ABN Amro said it had made changes to its merger protocol agreed with Barclays and is now free to discuss the competing offer. A spokesman for ABN Amro cited “a clear gap in valuations” between the two proposed bids. “We’ve shared with Barclays over the weekend that we were to change the merger protocol, and they have not walked away from the discussions,” the spokesman said. The consortium’s offer values ABN at EUR 71.97 bln ($98.17 bln), higher than Barclays’s proposed offer of EUR 65.65 bln. A critical next step is the Fortis shareholder vote a week from today on the consortium’s bid and Fortis’s financing plans, including a EUR 13 bln rights issue. A thumbs down would be a serious setback for the consortium. Barclays said Monday it would waive the precondition and make it instead a condition to the completion of its revised offer. Barclays Chief Executive John Varley said in a statement: “We recognize that, at the current time, it is difficult for the Boards of ABN AMRO to make a clear recommendation to their shareholders. However, we are pleased to have their continuing support, and we are confident that our revised offer delivers the value, stakeholder benefits and certainty that will allow the boards to support a recommendation in due course.”

AHM American Home Mortgage delays payment of quarterly common stock and Series A & B preferred stock dividends (10.47 )
Co announces that its Board has decided to delay payment of its quarterly cash dividend of $0.70 on the common stock and anticipates delaying payment of its quarterly cash dividends on its Series A Cumulative Redeemable Preferred Stock and Series B Cumulative Redeemable Preferred Stock in order to preserve liquidity until it obtains a better understanding of the impact that current market conditions in the mortgage industry and the broader credit market will have on the co’s balance sheet and overall liquidity. Co says the disruption in the credit markets in the past few weeks has been unprecedented in the Company’s experience and has caused major write-downs of its loan and security portfolios and consequently has caused significant margin calls with respect to its credit facilities.