Gapping up: HEPH +41.7%, TBUS +20.8%, GAI +16.6%, RCH +15.7%, CHNR +14.0%, CTCT +8.5%, GRRF +8.0%, ASTI +7.0%, WX +6.5%, LDK +6.5%, TSTC +6.4%, HIHO +6.3%, ATHN +5.7%, EFUT +5.7%, SPF +5.1%, ISIS +4.8%, HMY +4.0%, CDS +3.7%… Gapping down: PPCO -31.1%, NTRI -22.6%, RNIN -20.9%, ISLN -17.7%, WTSLA -14.3%, CRNT -5.9%, HANS -4.8%, SMOD -4.1%, SSRX -2.3%.
Insider trading disclosed in filings after the close yesterday
Buyers: Maguire Properties (MPG 26.69) Chairman bought 194K shares at $26.89… South Texas Oil (STXX.OB 9.45) 10% Owner Longview Fund bought 17K shares at $8.70… Copart (CPRT 34.44) Director bought 32,500 shares at $34.25 - $34.68… Ashworth (ASHW 6.1 
10% Owner Parche bought 28,119 shares at $6.16… New Frontier Media (NOOF 6.20) Director bought 2,970 shares at $6.74… Environmental Power (EPG 5.10) 10% Owner Quercus Trust bought 189,700 shares at $5.25… Carl Icahn discloses 13.2% stake in BEA Systems (BEAS 13.94) in SC 13D/A, up from 11.1%… Sellers: Range Resources (RRC 42.20) CEO sold 25K shares at $42.05… Universal Display (UEIC 17.20) Director sold 37,300 shares at $17.68… GameStop (GME 56.61) Director sold 10K shares at $57.01… Copart (CPRT 34.44) Director sold 110,861 shares at $34.25… Pennsylvania Real Estate Investment Trust (PEI 39.87) Director sold 45,500 shares at $38.99… Magnetek (MAG 5.1 10% Owner Riley Investment Mgmt sold 2,067,800 shares at $4.99… LSB Industries (LXU 21.9 10% Owner Jayhawk Institutional Partners sold 334,400 shares at $22.88.
NTRI Nutrisystem downgraded to Hold at Kaufman- tgt cut to $40 from $90 (47.57 ) -Update-
Kaufman downgrades NTRI to Hold from Buy and cuts their tgt to $40 from $90 following preliminary Q3 shortfall. The firm says this was the first time that NTRI missed guidance. The firm says they had under-appreciated the competitive impact of Alli, whose target market coincides significantly with that of NTRI. While the stock looks cheap after the aftermarket pullback, they believe it is difficult to forecast 2008 in light of the Alli threat.
LEND Accredited Home Lenders: Lone Star says expects to close the tender offer for the common stock of Accredited by currently scheduled expiration on Oct 5 (11.70 )
Lone Star Fund, through its affiliate Lone Star U.S. Acquisitions, reported that it expects to close the tender offer for the common stock of LEND by the currently scheduled expiration on Oct 5 at 12:00 midnight, New York City time, assuming that more than 50% of Accredited’s outstanding shares have been tendered by the Deadline… If more than 50% of the outstanding shares of the co have been tendered by the Deadline, payment for tendered shares will be made on the third business day thereafter, October 11. Payment for any shares not tendered by the Deadline will be made only following the merger between the Company and a Lone Star affiliate.
DISH EchoStar: Wedbush sees merit to speculation that CEO Ergen may finally be a seller (48.94 )
Wedbush notes the spin-off announcement is being perceived as signal from the marketplace of a potential sale. It’s not surprising that the market is questioning DISH’s true motivations for the spin-off, since transparency has never really been an EchoStar focal point. With competition rising and satellite television quickly maturing, they believe CEO Ergen should strongly consider being a seller. The timing of the spin-off and AT&T’s decision on its distribution partner are two factors that could delay a merger announcement. Consequently, firm does not believe a deal is imminent, though they believe the probability of a transaction is now more likely than not.
Bond Watch: Snaking Lower
The market is a little offered with only modest movement overnight ahead of central bank meetings overseas & payrolls tomorrow. The BOE & ECB kept rates unchanged but globally bond prices have remained supported by dovish policy sentiment & softer Euro data. Yesterday’s inline ISM & accompanying prices paid spike gave treasuries a ride to the downside & now look a little exposed. The 2-10-yr yield spread coiled in to 52.7 as steepeners were unwound on diminishing expectations of a Fed rate cut at the end of Oct. Bond prices in the EuroZone were better despite the ECB holding policy rates steady. Most eyes will be on pres Trichet’s post-meeting press conference for clarity. In Japan, bond prices were dented after playing catch up to US markets. The 2-week run higher in treasuries prices looks to be coming to a close as technical support is under duress this morning. A significant move is not expected though as trade will be held in check by data risk tomorrow. Today has some middling data with jobless claims grabbing interest only in as much as it has not confirmed last months decline in payrolls. The buck is off against the euro, but the common currency remains well below recent highs as all the rate news & speculation filter through. The dollar is slightly lower on the yen. Gold continues its drop off with spot now 725.81 (-2.09), while crude is also slipping running 79.52 (-0.40). Data up are initial jobless claims (8:30) & factory orders (10) Fed-speak has started with Mishkin & Dallas’ pres late in the session. The euro is at 1.4113 & the yen is at 116.5400 while the 10-yr is unchanged at 4.559%
CMTL Comtech Telecom receives $15.7 mln of movement tracking system orders (54.81 )
Co announces that its Maryland-based subsidiary, Comtech Mobile Datacom, has received orders totaling $15.7 mln under its Movement Tracking System, or M.T.S. contract, with the U.S. Army. The orders are for the supply of M.T.S. systems which feature CMTL’s Model MT-2012 mobile satellite transceivers integrated with both ruggedized and control station computers, miscellaneous hardware, installation kits, satellite network bandwidth, satellite network operations, program management, and technical support services.
WEN Wendy’s reports Q3 same store sales at US company restaurants +0.2%, US franchise restaurants +1.3% (35.02
Focus Media Holding (FMCN) announces that the Nasdaq Listing Qualifications Panel has notified the co that it has regained compliance with the continued listing standards of the Nasdaq… Informatica (INFA) announces that the Informatica PowerCenter data integration platform is an integral part of the new H.P. Enterprise Risk Management solution… Rural/Metro (RURL), announces that in accordance with NASDAQ procedures, it has received a staff determination letter indicating the co does not currently comply with the timely regulatory filing requirement under Marketplace Rule 4310(c)(14)… ViaSat (VSAT) announes that it received a $18.3 mln (with options to $20.9 mln) ID/IQ contract from the U.S. Air Force in support of continued development of the Joint Communication Simulator… Computer Sciences Corporation (CSC) announces that it is one of 16 firms selected by the Centers for Medicare and Medicaid Services to provide information technology services for its Enterprise Systems Development program. CSC estimates the total potential value of its portion of the contract, which will be derived from bidding and winning competitive delivery orders, to be $200 mln.
NITE Knight Trading: Partners of Deephaven Capital Mgmt are moving to separate themselves from co - NY Post (12.24 )
NY Post reports the partners of hedge fund giant Deephaven Capital Mgmt are moving to separate themselves from the co by exercising an option that allows them to buy a big stake of the co they founded, The Post has learned. “Deephaven’s senior mgmt is continuing to prepare to potentially acquire a significant stake in Deephaven by exercising our previously announced option to acquire 49% of the co’s equity from Knight Capital Group in the coming months,” the co’s CEO Colin Smith wrote in a letter delivered to investors last month. Under the terms of the option, Deephaven will enter into a new revenue sharing arrangement with Knight that gives the trading co half of the co’s first $60 mln in pretax earnings and 25% after that. Under the agreement, Smith and his partners have agreed not to sell Minneapolis-based Deephaven for less than $450 mln without getting the consent of Knight first.
NTAP Network Appliance downgraded to Above Average at Caris- tgt cut to $28 from $35 (26.33 )
Caris downgrades NTAP to Above Average from Buy and cuts their tgt to $28from $35 to reflect weak channel checks so far in FQ2, their concern about a weaker than expected ramp of the new FAS 2000 in light of Dot Hill’s negative preannouncement, and weakness in the financial vertical. The firm thinks shares of NTAP will weaken before strengthening in early 2008.
JNPR Juniper Networks: Poise to deliever a strong Sept quarter - Stifel (35.78 )
Stifel notes their checks show that JNPR should comfortably beat their Sept quarter rev/EPS ests of $705 mln/$0.21 which are roughly in-line with Street ests of $709 mln for rev and $0.21 for EPS. Firm’s checks indicate that JNPR’s business on the service provider front did extremely well with strong momentum at AT&T, Google and Yahoo! In terms of products, in addition to the MX-960, firm believes that the T-series router had a particularly good quarter. They also received positive feedback from industry contacts on the co’s enterprise business. Firm believes that JNPR’s SSL VPN business was particularly robust during the quarter.
Wachovia lowers their KKR Financial (KFN 16.83) Q307 EPS estimate from $0.00 to -$3.12, their 2007 estimate to -$0.80 from $1.90 and their 2008 estimate to $2.09 from $2.10. The large deviation to their prior estimate can largely be attributed to the write-off of the ABCP conduits (-$2.72 per share) which they previously had not modeled for EPS purposes. Due to a reduced earnings outlook and the elimination of the REIT payout requirement, the firm believes it is likely that the co will reduce its dividend. While the dividend reduction may receive negative press, they believe it will allow the co to retain more cash flow to invest in its core corporate loans and securities business… ThinkEquity lowers their estimates for FBR Capital Markets (FBCM 13.21) below consensus, based on weaker-than-expected capital-raising activity for 3Q. While they believe that FBCM’s pipeline remains relatively solid and broad-based-which could benefit future results-credit market turmoil and equity market volatility likely delayed capital-raising activity during the quarter. They remain attracted to FBCM’s leading position in the 144A market but believe that near-term investment banking revenue could remain subdued. Firm cuts their tgt to $16 from $20.
ISIS ISIS Pharm reports positive results of Phase 2 study of ISIS 301012 in Heterozygous FH patients (15.75 )
Co announces new results from its Phase 2 clinical trial of ISIS 301012 in patients with heterozygous familial hypercholesterolemia on stable maximally tolerated lipid-lowering therapies presented in a poster session today at the Drugs Affecting Lipid Metabolism XVI International Symposium. Median baseline LDL-C levels for the dose cohorts ranged from 159 - 204 mg/dL. ISIS 301012 add-on treatment produced potent, dose-dependent, prolonged reductions in all atherogenic lipids, and results were consistent with those reported for patients with routine high cholesterol. Furthermore, this study confirmed that ISIS 301012 treatment results in meaningful reductions in Lp, another important predictor of cardiovascular disease. These reductions and accompanying improvements in other atherogenic lipid levels were all relative to baseline levels which already reflected the impact of ongoing maximally tolerated lipid-lowering therapies. ISIS 301012 was well tolerated in the study. There were no Serious Adverse Events in the study, and the most common Adverse Event was transient, painless erythema at the site of injection. There was no effect on liver synthetic function as indicated by changes in bilirubin and albumin levels and prothrombin time.
ALK Alaska Air reports September traffic (24.71 )
Co announces September passenger traffic for its subsidiaries, Alaska Airlines and Horizon Air. Alaska’s September traffic increased 1.7% to 1.427 bln revenue passenger miles from 1.403 billion flown a year earlier. Capacity during September was 1.988 bln available seat miles, 4.2% higher than the 1.907 bln in Sept 2006… Horizon’s Sept traffic increased 9.2% to 238.6 mln RPMs from 218.5 mln flown a year earlier. Capacity during September was 334.6 mln ASMs, 10.9% higher than the 301.6 mln in Sept 2006.
SHLD Sears Hldg: Investor Ackman purchases 5 mln shares - Bloomberg (138.28 )
Bloomberg reports William Ackman purchased 5 mln shares of the co, the department-store chain he prevented last year from buying its Sears Canada unit. Ackman, the 41-year-old president of Pershing Square Capital Mgmt in New York, disclosed the purchase in an e-mail to Bloomberg News. He didn’t say why he bought the shares.
Democrats propose mortgage aid - WSJ
WSJ reports expressing concern that turmoil in the mortgage markets will get worse, the chairman of a House committee overseeing the banking industry said Fannie Mae and Freddie Mac should be allowed to do more now to ease the credit crunch. House Financial Services Committee Chairman Barney Frank said he would support a temporary increase in the portfolios held by the two mortgage giants. Just two weeks ago he said such a change should come only as part of broader regulatory reform for the govt-sponsored enterprises. But Mr. Frank said any change must be limited and temporary, and he said there was still a need for broader regulatory reform for the co. The changes might allow Fannie Mae (FNM) and Freddie Mac (FRE) to increase their portfolios by 10%, or almost $150 bln, for one year.
ECB leaves key rate unchanged at 4.0%, as expected
AMAT Applied Materials: Shipment to TF solar customers on track - FBR (20.81 )
Friedman Billings notes that recent conversations with AMAT’s thin film solar module customers suggest AMAT remains on track with equipment shipments, installation, and debugging. The first line at Moser Baer is expected to provide AMAT with a set of specs to be used to qualify other lines at Moser Baer and other customers. Thus, if AMAT were to continue to execute, frm expects it to start recognizing revs by the April quarter, earlier than the Street expects. Firm believes rev recognition at Moser Baer will set in motion a domino effect as rev opportunities could accelerate, thus providing AMAT with $320 mln-plus of TF solar rev in CY08. Also, such rev recognition legitimizes AMAT as not only a solar play, but also as one that could potentially accelerate the move towards the grid parity, thus warranting AMAT multiple expansion.
CFC Countrywide ordered to submit stock option data - LA Times (20.11 ) -Update-
LA Times reports the co has been ordered to provide confidential information about the inner workings of its stock-granting practices to a police pension fund that claims the lender doled out executive stock rights at “unusually suspicious and lucrative times.” The ruling, issued late Tuesday in Delaware Chancery Court, demands that Calabasas-based Countrywide turn over “minutes, notes, presentations, slides” and other materials regarding stock options granted to Countrywide officers or executives. The ruling was made in response to a suit from the Louisiana Municipal Police Employees’ Retirement System, an investor in the publicly traded co. The court also ordered Countrywide to give the retirement plan any information that Countrywide may have produced for the SEC, the NYSE and the DoJ, in connection with any investigation into Countrywide’s stock option grants.
STZ Constellation Brands beats by $0.01, beats on revs; guides FY08 EPS in-line (24.62 )
Reports Q2 (Aug) earnings of $0.33 per share, $0.01 better than the Reuters Estimates consensus of $0.32; revenues fell 37.0% year/year to $892.6 mln vs the $859.9 mln consensus. Co issues in-line guidance for FY08, sees EPS of $1.34-1.42, on a comparable basis, vs. $1.39 consensus; co sees low single-digit growth in organic net sales.
NTRI Nutrisystem downgraded to Buy at Broadpoint Capital- tgt cut to $50 from $75 (47.57 ) -Update-
Broadpoint Capital downgrades NTRI to Buy from Strong Buy and cut their tgt to $50 from $75 following the co’s preannouncement. The firm says they thought NTRI’s display of 3Q:07 guidance at a late September conference amounted to a reiteration. They also heard consistently from channel checks that the diet drug Alli was not having a material impact on alternative weight loss methods. The firm finds it hard to reconcile what the channel told them and what NTRI preannounced.
Filings: Molina Healthcare (MOH) files for a $150 mln convertible notes offering, pursuant to an effective registration statement… Duke Energy (DUK) files for a mixed shelf offering… Offering: American Campus Communities (ACC) announces a 3.5 mln share common stock, pursuant to an effective registration statement… Steel Dynamics (STLD) announces a $500 mln bedt securities offering, in a transaction that is exempt from the registration requirements… Pricings: Solera (SLH 18.92) prices an 18.13 mln share common stock offering at $18.75/share… Aircastle (AYR 31.75) prices a 10 mln share common stock follow on offering at $31.75/share… FTI Consulting (FCN 51.49) prices a 4.2 mln share common stock offering at $50/share.
Credit Suisse assumes coverage and raises their sector rating on the Fertilizer group to Overweight from Underweight
Credit Suisse believes that the demographic issues driving the global agricultural economy will mute the normal cycle volatility on both the supply and the demand side of the business, for the next two decades. From that perspective, they view the fertilizer stocks as having among the best fundamentals not only among basic materials groups, but across the broader industrial sectors. The firm is assuming coverage of the Fertilizer group, and raising their sector weighting to Overweight from Underweight. The firm says corn-based ethanol-driven demand should be strong for most of the next decade. The firm also says the Asian food super-cycle, on the other hand, is here to stay, and has its own momentum, which should allow it to transcend the ups and downs of China’s GDP. The firm assumes coverage of The Mosaic (MOS) and Agrium (AGU) with Outperforms and $66, and $66 tgts respectively. The firm also assumes coverage of Potash (POT) and CF Industries (CF) with Neutrals and $116 and $71 tgts respectively.
Northern Rock lures State Street, RAB after plunge in shares - Bloomberg
Bloomberg reports Northern Rock has lured investors State Street Global Advisors, RAB Capital and Artemis Investment Mgmt. The three investors have a combined 9.6% stake worth 62 mln pounds ($126 mln) based on yesterday’s closing price, regulatory filings and data compiled by Bloomberg show.
LDK LDK Solar: Credit Suisse discusses yesterday’s move; thinks a knee jerk reaction that results in a pull back in China based ADRs may be misplaced (51.65 ) -Update-
Credit Suisse notes that LDK was down ~25% yesterday on investors concern on inventories. They think a knee jerk reaction that results in a pull back in China based ADRs may be misplaced and could create buying opportunities. Firm notes that LDK’s biggest customers include STP, SOLF and CSIQ; company has signed agreements with 3 other non-US listed customers as well recently. LDK purchases wire-saws from H.C.T. (now part of AMAT) and Meyer Burger (recall M.B. had announced a big contract with TSL yesterday). Firm reits positive stance on SPWR, FSLR — quality names.
NTRI Nutrisystem: Substantial miss in Q3; ads not working - CIBC (47.57 )
CIBC notes NTRI pre-announced Q3 results that fell significantly short of plan. Firm notes new customer adds actually declined YoY while customer acquisition costs were significantly higher. Firm has been anticipating significant impact from weight-loss drug alli (GSK) in 3Q. It indeed appears to be a major source of pressure for NTRI. Firm notes there is no conf call and more color will be available when NTRI reports final 3Q results on Oct 23. Firm says it appears that customers were not responding to NTRI’s marketing, and the co significantly pulled back on advertising in August and September.
BCSI Blue Coat: FQ2 checks; business on track - WR Hambrecht (82.92 )
WR Hambrecht says their recent round of checks suggest that business is on track. The firm says they believe the co continues to experience improving success in the Wide Area Data Services market with its MACH5 initiative. Firm says BCSI has become a meaningful player in the W.D.S space, joining a small club of players competing over what is commonly viewed as a very large opportunity. Moving forward, they believe the co is well positioned to grow its share of the expanding market while benefiting from continued strength in its core Proxy SG and web filtering business.
CFC Countrywide: Tough market conditions expected to weigh on earnings; tgt cut to $20 - FBR (20.11 )
Friedman Billings says after analyzing the potential impact of the liquidity crisis in financial markets on CFC’s 3Q07 earnings, firm is lowering their 3Q07 EPS est from breakeven to a loss of $3.00 and are adjusting their tgt to $20 from $22. Firm now believes that the impact on earnings from the disruption in the non-agency mortgage market is higher than they previously anticipated, but still remains difficult to determine. Firm believes significant mark-to-market adjustments of loans held in the pipeline and reduced gain-on-sale margins will result in negative earnings during 3Q07. Firm believes the housing market will not stabilize until late ‘08 or early ‘09, and they would be cautious on the mortgage names until that time period.
CBH Commerce Bancorp: Competing bid unlikely, trade into Signature Bank - FBR (38.84 )
Friedman Billings remains convinced that there is little likelihood of a competing, higher bid for CBH. Firm recommends investors trade out of CBH and buy Signature Bank (SBNY). Firm notes CBH trades at a 3.09% discount to the $40.04 value implied by the takeout consideration of $10.50 cash plus 0.4142 shares of Toronto Dominion Financial Group (TD). Firm expects that SBNY will grow operating EPS by 20.5% in 2007 and 24.4% in 2008, well justifying the premium earnings multiples of this rare commercial banking growth story.
FDO Family Dollar beats by $0.01, misses on revs; guides Q1 EPS above consensus; guides FY08 EPS in-line (27.44 )
Reports Q4 (Aug) earnings of $0.26 per share, $0.01 better than the Reuters Estimates consensus of $0.25; revenues rose 3.4% year/year to the previously reported $1.63 bln vs the $1.65 bln consensus. Co issues upside guidance for Q1, sees EPS of $0.43-0.47 vs. $0.42 consensus; co sees revs up 7-9% and comparable store sales up 0-2%. Co issues in-line guidance for FY08, sees EPS of $1.74-1.85 vs. $1.81 consensus; co sees total revs up 4-6% yr/yr, which equates to $7.11-7.24 bln vs $7.20 bln consensus; co sees comparable store sales up 1-3%.
Upgrades: Suntrust upgrades Abaxis (ABAX 23.56) to Buy from Neutral with a $28 tgt saying greater comfort on near-term concerns, an impending inflection point for the medical business and near-term catalysts approaching (additional CLIA submissions and waivers, greater traction from medical distributors), the firm believes Abaxis warrants a valuation on par with that of its peers. Miscellaneous: Merriman initiates Silicom Ltd. (SILC 23.45) with a Neutral, based on valuation yet believe the co is a well-positioned network adapter card supplier into rapidly growing end markets such as WAN optimization… Morgan Stanley initiates U.S Steel (X 107.36) with an Underweight with a $76 tgt… Morgan Stanley initiates AK Steel (AKS 42.5 with an Equal Weight tgt $33… Morgan Stanley initiates Nucor (NUE 57.15) with an Overweight and a $58 tgt… CIBC initiates IT Outsourcing stocks saying they believe investors are overly discounting a growth slowdown for the sector. While the industry clearly faces many hurdles, they believe fundamental secular trends in the IT Services sector continue to favor Indian offshoring firms. The firm initiates Cognizant Tech (CTSH 82.42) with an Outperform and a $100 tgt, and Infosys Tech (INFY 50.53) with an Outperform and a $60 tgt.
HEPH Hollis-Eden Pharm announced new preclinical data demonstrated that HE3235 significantly inhibited tumor growth (2.04 )Co reports data reported this week in an oral presentation at the 4th International Conference on Tumor Progression & Therapeutic Resistance, held October 4-5, 2007 in Philadelphia, Pennsylvania, demonstrated that HE3235 significantly inhibited tumor growth in a preclinical model of hormone-independent prostate cancer utilizing human tumor cells. Hormone independent tumors are associated with late-stage prostate cancer, a condition for which there currently is no effective treatment. Additionally, mechanism of action data were presented showing that HE3235 lowers the expression of the anti-apoptotic gene BCL2 and induces apoptosis (cell death) in LNCaP cells. Furthermore, the induction of apoptosis appears to be independent of endogenous hormones that may induce tumor cell proliferation. These data suggest that the activity of HE3235 is due, at least in part, to its ability to kill tumor cells. The findings reported this week suggest that if successfully developed, HE3235 may offer benefit in late-stage prostate cancer, the second leading cause of death in men in the United States today.
ONXX Onyx Pharma announces CEO plans to retire next year (43.29 )
Co announces that Hollings Renton, the co’s CEO, plans to retire next year. Renton will remain chairman of the board of directors. As a result of his decision, the company is initiating a search for a successor. The company also announced the promotion of Laura Brege to the newly created position of executive vice president & chief operating officer and Randy Kelley to senior vice president of sales and marketing.
Upgrades: Piper Jaffray upgrades LifeCell (LIFC 39.13) to Outperform from Market Perform… J.P Morgan upgrades Fiserv (FISV 55.00) to Overweight from Neutral. Downgrades: Citigroup downgrades Silicon Laboratories (SLAB 42.85) to Hold from Buy… BMO Capital initiates Apple (AAPL 157.92) with an Outperform and a $182 tgt… Bear Stearns downgrades Cooper (COO 52.12) to Underperform from Peer Perform… Lazard downgrades Nutrisystem (NTRI 47.57) to Hold from Buy following the co’s pre-announcement of lower than expected 3Q revenues and EPS. The firm says while the co previously tempered its outlook for 2H07 as a result of competitive headwinds following the launch of diet drug Alli, they believe that the weaker-than-expected results warrant a more cautious view in the near term… Jefferies downgrades Endo Pharma (ENDP 30.47) to Hold from Buy and cuts their tgt to $31 from $37 saying the potential for a generic version of Opana ER arriving as early as 2010, and the possibility of a similar threat against Lidoderm, worsens Endo’s outlook, which is already reeling from a couple of pipeline failures
Upgrades: Caris assumes Broadcom (BRCM 36.26) and upgrades to Buy from Above Average and raises their tgt to $44 from $35, as checks suggest that BRCM has been investing in areas with high growth potential, and that these investments will begin to pay dividends starting in early ‘08… JP Morgan upgrades Norsk Hydro (NHY 41.72) to Overweight from Neutral… HSBC upgrades Rite Aid (RAD 4.45) to Neutral from Underweight… JP Morgan upgrades Mylan Labs (MYL 16.87) to Overweight from Neutral… JP Morgan upgrades Panera Bread (PNRA 46.57) to Overweight from Neutral… UBS upgrades Ciena (CIEN 45.22) to Neutral from Sell… UBS upgrades Sherwin-Williams (SHW 64.47) to Buy from Neutral… UBS upgrades Standard Pacific (SPF 6.2 to Neutral from Sell. Downgrades: Canaccord downgrades Business Objects (BOBJ 46.77) to Hold from Buy and maintains their $50 tgt, based on valuation… Bernstein downgrades SAP (SAP 58.63) to Market Perform from Outperform… JP Morgan downgrades Charlotte Russe (CHIC 15.94) to Neutral from Overweight… UBS downgrades Koppers (KOP 37.72) to Neutral from Buy… JP Morgan downgrades Aventine Renewable Energy (AVR 9.12) to Neutral from Overweight… JP Morgan downgrades BioFuel Energy (BIOF 4.61) to Neutral from Overweight… JP Morgan downgrades Wet Seal (WTSLA 3.99) to Neutral from Overweight… RBC downgrades Isilon Systems (ISLN 7.00) to Sector Perform from Outperform… J.P Morgan downgrades Esterline Tech (ESL 57.40) to Neutral from Buy.
MAR Marriott beats by $0.01, beats on revs; guides Q4 EPS below consensus; guides FY08 EPS in-line (44.32 )
Reports Q3 (Sep) earnings of $0.31 per share, $0.01 better than the Reuters Estimates consensus of $0.30; revenues rose 11.2% year/year to $3 bln vs the $2.85 bln consensus. Co issues downside guidance for Q4, sees EPS of $0.61-0.63 vs. $0.68 consensus; co sees Q4 total fee revs of approx $445-455 mln, sees timeshare sales and services revs -14-17%. Co issues in-line guidance for FY08, sees EPS of $2.10-2.25 vs. $2.30 consensus; co sees total fee revs of $1.54-1.57 bln.
Hong Kong’s stocks post biggest two-day drop in seven weeks - Bloomberg.com
Hong Kong’s stocks fell, driving the Hang Seng Index to its biggest two-day drop in seven weeks, on concern the rally that’s made them the world’s best performers since mid-August was overdone. China Mobile Ltd. led the decline… The Hang Seng Index slid 505.96, or 1.8 percent, to close at 26,973.98, extending its drop in the past two sessions to 4.4 percent. That was the measure’s steepest two-day slide since the period ended Aug. 17
European bank stocks, BNP advance; BHP, Rio Tinto decline - Bloomberg.com
European bank stocks rose for a fourth day as investors speculated the worst of the credit turmoil is over. BNP Paribas SA and Royal Bank of Scotland Group Plc paced the gains… National benchmarks advanced in 10 of the 18 western European markets. The U.K.’s FTSE 100 added 0.9%. Germany’s DAX lost 0.2%, and France’s CAC 40 increased 0.3%. The Stoxx 50 gained 0.3%, while the Euro Stoxx 50, a measure for the euro region, climbed less than 0.1%.
Sensex down 90pts - The Business Standard
The Business Standard reports the Sensex is now down 90 points at 17,757. Out of 2,795 stocks traded so far, 1,642 have declined, 1,096 have advanced and 57 are unchanged.
