Trading for the Masses

How to make money with unwanted mattresses

Modern Girl

The Fed Rate Cut Aftermath

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Surface vs. Deep Reasoning in Technical Analysis

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Good Friday

More Existentialist Conversations with Strippers: The Afternoon Shift

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The Facebook of Wall Street’s Future

Mortgage Tsar? ARe you frickin kidding me?

Actionable short call alert!

An Interview with Alan Greenspan

Where’s the Discussion on the Long Bond smack down and interest rates hitting new highs today? Something isn’t jiving . . . I just can’t put my hands on it at this point. Dollar and Long Bond seperating from Stocks. Lucy you got some splaining to do . . .

I had internet problems the last 5 hours of the am, so my day has been scratched. I should have stayed in the home office, taking the kids to school and had a leisurely walk with the wife. So, now that the internet appears back up. I am going to take the suggestion of the broadband gods and take the rest of the day to regroup and make it a long weekend. Long Michigan over the Hurons in the battle over Washtenaw Ave tomorrow.

The Jobs numbers were good and the market was pent up and ready to go. So no news was bad as far as we saw it over here. Market took most of the move up before the jobs report. We are up 3 pts from the premarket highs. Let’s see where they take them

Bond Watch: Game Day
The market is soft heading into the much anticipated jobs report. Those positions that needed squaring have been squared & the fresh selling pressure likely reflects sentiment leaning toward a decent payrolls number. Either way trade is going to be released from the spell of this report soon. The 2-10-yr yield spread is banging around 53.5 as little incentive exists for curve surfers to catch a wave before the big one hits. Bond prices in the EuroZone are mixed to lower as the good vibe from yesterday’s dovish ECB meeting gives way to today’s data risk. In Japan, bonds prices are bucking the trend & moving tentatively higher on softer equities & relative value after selling off much of the week. Treasuries will need a pretty badreport today to sustain current price levels. At 100K, consensus does not favor that outcome while ADP at 58K (not including public sector) is closer but still not going to suffice. Somewhere below 50K will be needed to get prices back on the uptrack. Revisions, both to last month & benchmark may hold the key to divining the trend in payrolls. The risk is to a sizable downward revision to previous data & therein bonds may derive some strength or at least some support on a good headline number. The unemployment rate & hourly earnings are also important elements that will shape the contours of this report. The dollar remains glued to tight ranges as most currencies (with the exception of the Canadian loonie which just flew to fresh 31-yr highs on strong jobs data) await the US numbers. Spot gold is down at 736.79 (-1.20) while crude oil is a little lower at 81.29 (-0.15). Beyond payrolls the day has Fed gov Kohn (9:10) & consumer credit (15). The financial markets close early ahead on Mon holiday. The euro is at 1.4130 & the yen is at 116.4900 while the 10-yr is -05/32nds yielding 4.529%.

Average Hourly Earnings y/y +4.1% vs +3.9% consensus
Average Weekly Hours 33.vs 33.8 consensus
Change in Manufacturing Payrolls -18K vs -10K consensus
Nonfarm Payrolls 110K vs 100K consensus, prior revised to 89 from -4
Economic Perspective: Unemployment Rate 4.7% vs 4.7% consensus
Average Hourly Earnings m/m 0.4% vs +0.3% consensus

Gapping up: BHIP +25.4%, ORS +19.8%, GSI +10.8%, CRDC +11.5%, ATS +8.8%, OXGN +6.0%, PTR +5.8%, RCH +5.3%, CHNR +5.0%, LDK +4.5%, BOBJ +3.9%, RIMM +3.4%… Gapping down: KONG -7.0%, CLWR -6.8%, TLAB -6.0%, EMMS -5.7%, ARAY -4.6%, LWSN -4.5%, NBR -3.3%, WM -2.2%, TKS -2.0%, ALU -1.9%, SSTR -1.7%, ACGY -1.4%

WM Washington Mutual says Q3 net income impacted by market and credit environments (35.28 )
Co announces that a weakening housing market and disruptions in the secondary market through the end of the third qtr will result in a decline in net income of approximately 75% from the prior year qtr, subject to the finalization of third-quarter 2007 results. The expected decline in third qtr net income results principally from the following items that are reported on a pre-tax basis: 1) the third-qtr loan loss provision will be approximately $975 mln, which exceeds net charge-offs for the quarter by approximately $550 mln. The provision reflects ongoing weakness in the housing market, primarily as it affects subprime and home equity loans, as well as growth in the co’s loan portfolio; 2) downward adjustments of approximately $150 mln, related to approximately $17 bln in held-for-sale mortgage loans that were transferred to the co’s investment portfolio due to secondary market conditions; 3) net losses of approximately $150 mln in the co’s trading securities portfolio, including market valuation adjustments on capital markets assets, retained interests on credit cards and other residual interests; and, 4) impairment losses of approximately $110 mln on investment grade mortgage-backed securities in the co’s available for sale portfolio. The co continues to have the liquidity and capital necessary to grow the its businesses and support its current dividend, as it continues to execute its long-term strategic plans.

Insider Trading
Buyers: Levitt (LEV 2.91) 10% Owner Prescott Group Capital Mgmt bought 103,379 shares at $2.00… Iteris (ITI 2.24) CEO bought 7,062 shares at $2.27… IMAX (IMAX 4.56) 10% Owner bought 80K shares at $4.47… Imergent (IIG 23.97) 10% Owner S. Mihaylo bought 304,300 shares at $23.40… Sellers: Landec (LNDC 15.35) Chairman sold 50K shares at $15.75… CEVA (CEVA 9.50) 10% Owner Special Situations Funds sold 50K shares at $9.17… LB Foster (FSTR 47.13) 10% Owner Tontine Management sold 92,600 shares at $45.97… Omega Protein (OME 9.72) 10% Owner Special Situations Funds sold 140,698 shares at $9.40… Cal-Maine Foods (CALM 26.34) Officer sold 18,041 shares at $26.37… Range Resources (RRC 42.93) Officer sold 50K shares at $42.97… GeoEye (GEOY 25.74) 10% Owner Harbinger Capital Partners Master Fund sold 231,593 shares at $26.60… J. Crew Group (JCG 43.4 10% Owner Texas Pacific Group sold 4.0 mln shares at $44.11… Constellation Energy Partners (CEP 35.60) 10% Owner Lehman Bros. sold 29K shares at $37.17

AMD Advanced Micro: RGxx graphics gaining momentum; 55 nm shrink to keep it going - Nollenberger (13.35 )
Nollenberger is incrementally more constructive on AMD shares following positive data points related to current (65nm) graphics products and expectations for the next-generation (55nm) ramp. In particular, they believe that AMD’s blended ASPs and gross margins will benefit from 1) solid market traction of 65nm-based R6xx in 3Q coupled with 2) the impending launch of 55nm parts in November. In addition, firm believes that AMD is planning to significantly increase unit volumes of its 55nm-based GPUs in 4Q, driven by robust OEM orders. As such, firm is optimistic that graphics will likely soften the operating loss that AMD is expected to experience in upcoming quarters.

China Mobile, China Netcom plan A-Share IPOs next year, according to source - DJ
DJ reports two Chinese telecommunications operators that are already listed in Hong Kong are planning to list yuan-denominated A shares in mainland China next year, a person familiar with the situation said Friday. China Mobile (CHL), China’s largest mobile operator by subscribers, has mandated China International Capital to handle its initial public offering, the person said. China Netcom Group (CN), the smaller of China’s two fixed-line operators after China Telecom, has appointed CICC, Huatai Securities and UBS to underwrite its listing, the person added. The two operators had planned earlier this year to raise between $300 mln and $400 mln each in A-share IPOs, but the amounts to be raised will depend on mkt conditions at the time of their listing, the person said. He said the timing of the deals has yet to be decided as it will depend on when rules covering the listing of non-mainland-registered cos are issued.

Filings, Offerings, Pricings and IPOs
Filings: Baker Hughes (BHI) files for a $2 bln mixed shelf offering… IPOs: China Digital TV (STV), a provider of conditional access systems to the P.R.C’s digital television market, prices its 12 mln ADS IPO at $16/ADS, above the forecast range of $13-$15 (which was raised on Wed from an earlier $11-$13 forecast)… MAP Pharmaceuticals (MAPP), a co that uses their inhalation technologies to enhance the therapeutic benefits and commercial attractiveness of proven drugs, prices its 5 mln share ADS IPO at $12/ADS.

HANS Hansen Natural downgraded to Hold at Stifel (62.92 )
Stifel downgrades HANS to Hold from Buy given the significant shareprice appreciation since the beginning of 2007 (up 86.8%, vs the S&P up 8.8%) and since reporting 2Q results on August 8 (up 51.3%, versus the S&P up 4.5%). The firm says there are no changes to their EPS estimates.

TIVO TiVo: Market sentiment on patent case likely to wax then wane - FBR (7.09 )
Friedman Billings notes TIVO in the past month has risen 23% from post-F2Q lows, driven by sentiment around this week’s appeals court hearing in TiVo’s patent infringement trial against EchoStar (DISH). Firm ests the $100 mlm+ in added market capitalization is reasonably fair relative to TiVo’s patent opportunity; firm firmly believes a TIVO victory here will not lead to new settlements or payments from other operators or vendors. Other reasons to be more constructive include the potential for more international distribution agreements beyond its deal with Australia’s Seven Networks, the launch of TiVo-To-Go and multi-room features on its high-definition (HD) set-top boxes, and the possibility of a progressive movie download service.

GOOG Google: Tgt details (579.03 ) -Update-
Bear Stearns set a new $700 price target for year-end 2008. The firm has updated their model to reflect a more thorough fundamental look at Google’s online search drivers, YouTube’s potential revenue contribution, and Google’s efforts in radio and print advertising.

CVC Cablevision: Investor Mario Gabelli may go to court over buyout - NY Post (34.43 -0.1
NY Post reports veteran investor Mario Gabelli, upset over what he considers to be a low-ball bid for the co by the Dolan family, may go to court to try to get a sweeter price for his stake in the Long Island cable co. Gabelli said the buyout proposed by the Dolans - worth $36.26 a share - is at least $15 a share short based on the value of Cablevision’s assets, which include the New York Knicks, New York Rangers and Madison Square Garden, in addition to its cable-TV business. “Part of us says take the money and run because of what the world’s going through with regard to the [lending-market] crisis,” Gabelli told The Post. “But it could be worth $65 to $70 a share in five years.” Gabelli, whose investment co Gamco has an 8.3% stake in Cablevision, said he has yet to decide whether he will vote in favor of the buyout at a special shareholder meeting scheduled for Oct. 24. If he decides to vote down the deal, Gabelli said his next option to consider would be getting an independent appraisal of his stake. Under Delaware law, Gabelli and other investors could dissent from accepting the Dolans’ offer, and request a judge to determine the value of the shares.

MAR Marriott: Sell-off belies strong 2008 outlook, tgt lowered to $51 at FBR (42.28 )
Friedman Billings notes shares of MAR traded down 4.6% following the co’s 3Q07 earnings release due to mgmt’s tempered EPS guidance for 4Q07 and 2008. In 2008, mgmt guided to an EPS range between $2.10 and $2.25, below the $2.30 consensus. The revised outlook largely reflects the sale of six of its 13 owned hotels during 3Q, a strategy that enhances its asset-light business model. Firm believes the sell-off in the shares is overdone and shares will likely rebound when the dust settles. Firm notes MAR’s encouraging top-line outlook bodes well for the rest of the lodging space.

BSC Bear Stearns: Prosecutors begin a probe of funds - WSJ (127.61 )
WSJ reports federal prosecutors have launched a criminal investigation into two mortgage-related hedge funds at the co that collapsed during the summer, according to people familiar with the matter. The U.S. attorney in Brooklyn made a request to Bear Stearns for information related to the hedge funds, whose failure cost investors $1.6 bln, said these people. The probe is in the early stages, the people added, and has not generated subpoenas. One former federal prosecutor turned defense attorney who isn’t involved in the Bear case said criminal probes into the trading practices of hedge funds are rare and cases are difficult to prove.

GM General Motors: Buyout talks loom for GM, UAW - WSJ (37.32 )
WSJ reports with a tentative labor deal being voted upon by workers, GM and the United Auto Workers are considering their next big move: a buyout package that could be offered to tens of thousands of employees. GM and the UAW are separately considering options for offering early-retirement and buyout packages to higher-wage workers and replacing them with newer ones at lower pay levels, according to people familiar with the matter. Buyouts are important under the tentative agreement because they could allow GM to have as much as one-third of its UAW work force under what is known as a second-tier wage-and-benefit plan that pays about half the traditional UAW-GM compensation package. Buyouts or early-retirement offers are likely to be similar to those offered by GM in March 2006, when the co offered its then-113,000-member hourly work force packages ranging from $35,000 to $140,000, people familiar with the negotiations said. The offers went out to every GM-UAW member.

Music industry wins song-download case - Reuters
Reuters reports a jury has handed a victory to the music recording industry, which had claimed a Minnesota woman infringed song copyrights by using online media to illegally download and distribute music, according to court documents. Media reports described the case as the first such file-sharing lawsuit brought by the music industry to go to trial. The cos included EMI Group’s Capitol Records, Sony BMG Music Entertainment (SNE), Arista Records, Interscope Records, Warner Bros Records (WMG) and UMG Recordings.

GS Goldman Sachs to launch bid for Simplex, according to sources - Reuters (225.95 )
Reuters reports Goldman Sachs plans to bid for all shares in Tokyo-based property investor Simplex Investment Advisors, sources familiar with the deal told Reuters. Nikko Cordial, Simplex’s top shareholder, is expected to agree to Goldman’s offer, the sources said.

SLM SLM: Three big shareholders back co - NY Post (49.45 )
NY Post reports the co’s boss, Albert Lord, has received some surprising support as he battles billionaire financier J. Christopher Flowers over the $25 bln takeover of the nation’s largest student loan co. At least three big shareholders, including the co’s largest holder on record, have indicated that they stand behind Lord in his effort to block Flowers from cutting the takeover price they agreed to in April. Despite major investors’ support for Lord, many of Sallie’s other shareholders would rather see him complete a deal at a slightly reduced price than have Flowers walk away. “This letter raises the risk that a deal won’t get done because it emboldens an already-tough negotiator like Al Lord to hold his line,” said one Sallie shareholder. Flowers, along with JPMorgan Chase and Bank of America, argue they no longer have to live up to their original deal because new legislation reducing the federal subsidy paid to student lenders threatens to hurt Sallie’s business. In its letter, QVT, one of the three larger shareholders, picks apart Flowers’ arguments that a material change has occurred in Sallie’s business. The $10 bln hedge fund also claims Flowers may be reluctant to pay its share of the $900 mln break-up fee, which would give Sallie the upper hand in negotiations. “We believe that the J.C. Flowers-led consortium’s attempt to renegotiate the acquisition of Sallie Mae represents a situation in which the buyer is extraordinarily poorly placed to demand a reduction in the purchase price,” QVT said. Flowers’ lower offer, which expires on Oct. 9, was rejected by Sallie’s board of directors earlier this week, sources said.

TLAB Tellabs: Color on Q3 preannouncement (9.58 )
Baird notes that TLAB provided preliminary Q3 revenue and EPS well below estimates. They believe North American wireless spending in Q3 was ahead of expectations for certain equipment categories, indicating a capex shift away from the 55. The firm says TLAB’s current depressed results again brings into question the growth/(decline) outlook for cross-connects and the rate of technology substitution for more Ethernet/pseudowire pure play solutions. They expect takeout speculation regarding Ericsson, Nokia Siemens, and Nortel will persist, but TLAB’s Q3 financial performance likely reduces the price these potential acquirers may be willing to pay… Broadpoint says that ross margin took a hit. The sharp decline to 31%-32% was due to weak sales of the high-margin 5500 cross connects in the product mix, highlighting the continued importance of this highly profitable business, but it is lumpy and on a secular decline as carriers reach the end of their 3G deployments. Sector weakness aside, they believe the challenge ahead for TLAB is to substitute its legacy business with new product sales in the face of intense competitive and pricing pressures. Given the poor visibility, the firm remains on the sidelines.

GOOG Google tgt raised to $650 from $575 at Nollenberger (579.03 )
Nollenberger raises their tgt on GOOG to $650 from $575 saying according to their checks, European paid search spending was exceptionally strong in 3Q, up more than 10% Q/Q. The firm says while 3Q is a seasonally weak quarter for online advertising in the United States, it tends to be strong in Europe due to heavy travel bookings in July and August. Firm says comscore data suggests that U.S. searches on Google properties rose 8% sequentially as Google continued to gain share. With a slight increase in monetization, they believe U.S. revenue could be up as much as 10% sequentially.

RIMM Research In Motion: Color on qtr (100.54 )
Deutsche Bank notes that RIMM reported Q2 rev of $1.37 bln and PF EPS of $0.50, in line with their estimates and consensus of $1.36 bln and $0.50. While RIM continues to benefit from product cycle momentum, they believe this is fully priced in. They say RIMM has given further commentary on their consumer strategy, raising the intriguing possibility of a Blackberry synchronizing calendars and media content among family members. While they think this holds potential, details remain hazy, and until solidified RIMM remains heavily levered to upgrades of existing products… Credit Suisse expects RIMM to continue to benefit from rapid smartphone market growth and improving international traction; however, they remain concerned that an increasing consumer presence will pressure device margins over time as RIMM expands beyond the high-end mkt. While net add guidance was below expectations, they say it appears to be conservative as weekly additions in Sept were almost on pace to meet guidance and they would expect to see a pick-up in consumer demand in Nov. Given increasingly aggressive pricing from international operators and an expanded relationship with Verizon, the firm believes visibility remains strong near-term.

FCX Freeport-McMoRan profiled in New America section of IBD (108.29 +0.76)
IBD reports the co’s acquisition of rival Phelps Dodge in March marked a major turning point for the mining co. The purchase made Freeport the world’s largest publicly traded copper co and created a powerful force in the mining industry. It brought together Freeport’s Grasberg mining complex, the world’s largest copper and gold mine in terms of reserves, with Phelps Dodge’s 14 mines in operation or under development in North America, South America and Africa. “No question this was a good move,” said analyst Bill Selesky of Argus Research. “It was a home run from the beginning.” For its part, Freeport’s management team is considered one of the best out there, Selesky says. Freeport had leveraged up its balance sheet in making the deal, but it has been quickly paying off the debt it took on to complete the buy, analyst Amir Arif of Friedman, Billings, Ramsey says. A lot of copper production goes overseas, which is where the growth is coming from, adds Selesky. Analysts polled by Thomson Financial expect full-year earnings to rise 21% to $8.26 a share, and 16% in 2008.

Upgrades: Credit Suisse upgrades Varian Semiconductor Equipment Associates (VSEA 46.85) to Outperform from Neutral and raises their tgt to $56 from $46 saying checks suggest PLAD, a new (high margin) product for VSEA, is seeing stronger momentum in CY07 — which provides an improved offset, perhaps overlooked by investors…. Jefferies upgrades BearingPoint (BE 4.60) to Hold from Underperform and cuts their tgt to $5.00 from $5.50 given the material pullback in price. Downgrades: Credit Suisse downgrades Business Objects (BOBJ 47.56) to Neutral from Outperform based on valuation. Miscellaneous: J.P Morgan initiates Ashford Hospitality Trust (AHT 10.43) with a Neutral… Oppenheimer initiates TechTarget (TTGT 17.41) with a Neutral and a $17 tgt saying they see limited upside to TTGT’s valuation from current levels.

Upgrades: Bear Stearns upgrades Life Sciences stocks to Overweight from Market Weight and upgrades Bruker BioSciences (BRKR 8.60) to Outperform from Peer Perform… UBS upgrades Janus Capital (JNS 30.46) to Neutral from Sell. Downgrades: SunTrust downgrades Signature Bank (SBNY 37.55) to Neutral from Buy, based on valuation… Bear Stearns downgrades Clearwire (CLWR 23.61) to Peer Perform from Outperform… Bear Stearns downgrades Electronic Arts (ERTS 58.41) to Peer Perform from Outperform… UBS downgrades T.Rowe Price (TROW 56.64) to Neutral from Buy… Susquehanna downgrades KongZhong (KONG 8.39) to Negative from Neutral… Susquehanna downgrades Hurray Holding (HRAY 5.33) to Neutral from Positive… Wachovia downgrades Monster Worldwide (MNST 35.81) to Market Perform from Outperform saying recent channel checks suggest the N.A. Careers segment may be having transition issues in the sales force (in addition to a cloudier macro picture/competition), which could further pressure earnings. Miscellaneous: BofA initiates Alexion Pharma (ALXN 68.31) with a Buy… Bear Stearns sets their Google (GOOG 579.03) 2008 tgt at $700… Jefferies initiates Concur Technologies (CNQR 33.51) with a Buy and sets a $40 tgt, based on a large addressable market, rapid ROI which makes Concur’s model highly attractive for its customers and forecast model subscription revenue to rise at a 44% CAGR from FY07 through FY09E… Lehman initiates Freedom Acquisition (FRH 11.73) with an Overweight.

GOL Gol Intelligent Airlines lowers Y07 guidance (23.33 ) -Update-
Co sees Y07 EPS of R$1.60-$2.10, compared to previous guidance of R$3.00-R$3.50. Co sees Y07 revs of R$5.2-R$5.4 bln, compared to previous guidance of R$5.5-R$5.7 bln. Co revises guidance due to flight network alterations and higher fuel prices.

YHOO Yahoo! should split, sell company, Bernstein says- Bloomberg.com (27.15 )
Bloomberg.com is reporting Yahoo! Inc. executives should consider breaking up or selling the company, which runs the most-visited U.S. Web site, to increase the value of the shares, according to Sanford C. Bernstein & Co. analysts. The combined value of Yahoo!’s units amounts to $39 a share, New York-based analysts Jeffrey Lindsay and Aaron Byrd wrote in a report today. Selling Yahoo! to a buyer that will cut jobs and revamp the advertising and search businesses may lift Yahoo! shares to $45, they wrote. “Our sum of parts analysis indicates that Yahoo!’s breakup value exceeds the value of the combined entity with the current strategy,” Lindsay and Byrd wrote.

Sensex pare gains - The Business Standard
The Business Standard reports the Sensex has pared gains and is now up 40 points at 17,817. Out of 2,796 stocks traded so far, 1,672 have declined, 1,065 have advanced and 59 are unchanged.

PHM Pulte Homes downgraded to Sell from Neutral at Merrill (15.42 )
DHI DR Horton downgraded to Sell from Neutral at Merrill (14.39 )

FFIV F5 Networks: Checks show solid ent to quarter - Stifel (41.15 )
Stifel believes that FFIV entered the month of Sept tracking toward an in-line quarter; however, robust sales in Asia should allow F5 to exceed consensus expectations. Firm also believes that sales through Dell in the U.S. were particularly robust during the quarter. Firm believes that Dell sells F5’s products mainly to small and medium enterprises, which should be positive for the co’s lower-end BIG-IP 1500 and 3400 platforms. Finally, they believe that F5’s SSL-VPN product fared well during the quarter. Firm is updating their model for F5 due to the acquisition of Acopia. For September 2007, we have added $14 million for in-process R&D and approximately $2 million to operating expenses to account for one month of Acopia expenses.

S&P futures vs fair value: +9.5. Nasdaq futures vs fair value: +12.0.
Futures improve on news of 110,000 September nonfarm payroll gain. August was revised to a gain of 89,000, wiping out the 4,000 decline that had fueled recession fears.

BMO Bank of Montreal: Canadian banks likely to continue shopping binge - Globe and Mail (65.39 )
Globe and Mail reports Citigroup Global Markets analyst Shannon Cowherd thinks it could be BMO that’s next to make an acquisition. Possible targets for BMO include TCF Financial (TCB), she said. A number of the other potential targets are within the region adjacent to BMO’s Harris Bank in Illinois. The bank has expressed an interest in assets in those regions. It also has a few branches in coastal Florida.

Upgrades: Piper upgrades Edwards Lifesciences (EW 50.46) to Outperform from Market Perform… Rochdale upgrades Polaris Industries (PII 46.4 to Buy from Hold and raises their tgt to $55 from $47, based on increasing confidence in the co’s ability to achieve their ‘07 EPS target… Lehman upgrades Pall (PLL 40.80) to Overweight from Equal-weight. Downgrades: Sterne Agee downgrades Cameron Int’l (CAM 95.62) to Hold from Buy and raises their tgt to $100 from $96, based on valuation… BofA downgrades Walgreen (WAG 39.77) to Sell from Buy…BofA upgrades Werner Enterprises (WERN 17.31) to Neutral from Sell… BofA upgrades JB Hunt Transport Services (JBHT 25.74) to Neutral from Sell… BofA downgrades Arcelor Mittal (MT 76.13) to Neutral from Buy. Miscellaneous: BofA initiates K-Swiss (KSWS 25.95) with a Sell and sets a $20 tgt, as they believe the ongoing weakness in the Classics associated with a still deteriorating athletic market and further deceleration Internationally are more than likely to offset a potential domestic turnaround driven by a new management team and brand strategy… JMP Securities initiates DemandTec (DMAN 13.00) with a Market Outperform and sets a $16 tgt, following strong top-line growth and in-line EPS results for its Q2 and based on its leadership position in the high growth market for pricing optimization and supply chain management solutions.

Miscellaneous: Caris resumes TriZetto (TZIX 17.8 with a Buy and sets a $24 tgt, as they believe TZIX is poised to become the Healthcare IT provider of choice in the managed care industry with its cutting edge care management and consumerism software capabilities… Caris resumes Omnicell (OMCL 29.00) with an Average and sets a $28 tgt, based on valuation and believe OMCL’s strong #2 market position and deep product mix with its proven value proposition should generate strong sales activity from current and new customers, which will drive strong top line growth and margin expansion in line with expectations… Caris resumes inVentiv Health (VTIV 45.37) with an Above Average and sets a $50 tgt, as they view VTIV’s entry into the patient management market as a natural leverage of its core competencies, which strengthens its candidacy for pharmaceutical strategic partnerships… Utendahl Capital Partners initiates XM Satellite Radio (XMSR 14.14) with an Equal-weight and sets a $15 tgt, based on valuation and believe the merger with Sirius won’t obtain necessary regulatory approval, though their sentiment is constantly improving… Utendahl initiates Sirius Satellite Radio (SIRI 3.40) with an Overweight and sets a $4 tgt, as they favor SIRI over XM on a relative basis and the OEM segment could provide upside to Q3 results… Ferris, Baker initiates NetScout Systems (NTCT 11.00) with a Neutral, as they expect to be more constructive on their opinion of shares at lower prices that recognize acquisition integration challenges or when visibility/confidence improves regarding the pace and economics of same.

PLCM Polycom profiled in Inside Wall Street - BusinessWeek Online (26.16 )
BusinessWeek Online reports some pros describing the selling in Polycom (PLCM) shares as an overreaction: “It’s a classic cleanout, and the stock is now oversold,” says Greg MacArthur, president of investment outfit Viewpoint2000. The fundamentals remain solid, he says, and the stock should be worth 40 in six months or a year. Scott Sutherland of Wedbush Morgan upgraded the stock from a hold to a buy. “Our checks with key resellers indicate third-quarter [results] will be in line with our and management’s guidance,” he says. Its current valuation is attractive, he adds, given Polycom’s growth opportunities. With the stock, which has since inched up to 27.18, trading at 16x estimated 2008 earnings of $1.61, it is selling at a big discount to Polycom’s estimated yearly growth of 20%, says Sutherland. For 2007, he sees earnings of $1.31 a share on sales of $929 mln, up from 2006’s $1.08 on $682 mln. He notes that Polycom, with cash on hand worth $4 a share, is No. 1 in an industry “experiencing accelerated growth.”

BID Sotheby’s profiled in Inside Wall Street - BusinessWeek Online (51.94 )
BusinessWeek Online reports the continued upward momentum in the art market and rapid wealth creation bode well for Sotheby’s (BID) says Rommel Dionisio of Wedbush Morgan. Sales have been robust, he notes. On Sept. 1 the auction house raised the commission it charges buyers from 20% to 25% on the first $20,000 of each lot. On Oct. 2, Dionisio raised his 2007 earnings forecast from $2.87 to $2.89 a share, and sales from $831 mln to $850 mln. He sticks with his 2008 profit estimate of $3.12 a share but raised his sales estimate from $853 mln to $874.3 mln. The new charges should boost earnings by as much as 30 cents a share annually, figures George Sutton of Craig-Hallum Capital Group, who rates Sotheby’s a buy.

BHI Baker Hughes announces Sept. 2007 rig counts (93.15 )
Co announces that the international rig count for September 2007 was 1,032, up 23 from the 1,009 counted in August 2007, and up 83 from the 949 counted in September 2006. The international offshore rig count for September 2007 was 285, up 5 from the 280 counted in August 2007 and up 21 from the 264 counted in September 2006. The US rig count for September 2007 was 1,783, down 21 from the 1,804 counted in August 2007 and up 44 from the 1,739 counted in September 2006. The Canadian rig count for September 2007 was 351, up 8 from the 343 counted in August 2007 and down 95 from the 446 counted in September 2006. The worldwide rig count for September 2007 was 3,166, up 10 from the 3,156 counted in August 2007 and up 32 from the 3,134 counted in September 2006.

NBR Nabors Ind guides Q307 EPS lower; blames lower than expected rig activity (30.38 )
Co issues downside guidance for Q3 (Sep), sees EPS of $0.73-0.76 vs. $0.81 Reuters Estimates consensus. Gene Isenberg, Nabors’ Chairman and CEO commented, “The operational component of our reduced third quarter outlook primarily is attributable to lower than expected rig activity across most of our North American rig operations and various factors in our international business unit. We also expect a net negative impact from several cash and non-cash items in our other income and investment income categories. Other income/expense and investment income, net of a significantly lower effective tax rate, constitutes the balance of the expected shortfall. Other income/expense is anticipated to be a net loss of approx $30 mln, substantially attributable to non-cash fixed asset write-offs, the bulk of which relates to rig

ALU Alcatel in danger of losing AT&T role - Financial Times (10.23 )
The Financial Times reports Alcatel-Lucent (ALU) looks to lose business with AT&T (T) to its arch-rival in a fresh blow to the telecom equipment maker. Ericsson (ERIC) is capitalizing on Alcatel-Lucent’s severe difficulties to strengthen its leading position in mobile phone infrastructure deals based on WCDMA technology. AT&T awarded a $2 bln contract in 2004 to Ericsson, Lucent and Siemens (SI) to supply 3G mobile infrastructure for its US wireless network. Under the original terms, Ericsson was to get about $900 mln, Lucent $700 mln and Siemens $400 mln. However, people familiar with the situation said Ericsson’s share of the contract was to exceed 50%. After delays by Alcatel-Lucent delivering WCDMA equipment, Ericsson had stepped in. AT&T has considered reducing its suppliers to two by dropping Alcatel-Lucent. It is understood to have decided for now to retain all three, subject to review. AT&T and Ericsson declined to comment.

Dallas Fed chief warns on inflation - Financial Times
The Financial Times reports the president of the Federal Reserve Bank of Dallas has cautioned against ignoring the inflation represented by rising food and energy prices, revealing a continuing debate inside the US central bank over how best to evaluate price pressures. Richard Fisher on Thursday said the increases in food and energy prices over recent years could represent “longer-lived trends rather than transitory blips”. If this was the case “the arguments made for excluding food and energy prices” from core inflation, the Fed’s traditionally preferred measure, “would?be on shaky ground”. The Dallas Fed chief cited Bank of England chief economist Charles Bean, who argues that core inflation captures the benefit of globalization and the rise of China in the form of cheaper manufactured goods, but ignores the cost in terms of upward pressure on food and energy prices. Mr. Fisher said he preferred the Dallas Fed’s trimmed mean measure, which excludes only those goods and services that rise most or least in a given month. On this measure, the underlying rate of US inflation is 2.1% year on year, although Mr. Fisher said it could fall in the months ahead.

STT State Street blues: Fund woes linger - WSJ (68.22 )
The Wall Street Journal reports State Street (STT) customers are fuming about losses they have suffered in State Street bond funds that are designed not only to track but also just beat the indexes. The funds made aggressive bets on mortgage-backed securities, derivatives and other investment exotica and in the latest development, attorneys general in Alaska and Idaho are looking into possible legal action against State Street over losses their state retirement funds suffered investing in two “enhanced index” bond funds. Both states have dropped the State Street funds in question and say the funds veered wildly from their index benchmarks, which caused them to post losses over the summer. The potential costs of lawsuits could be just part of State Street’s troubles. Its enhanced-index funds are “actively managed” vehicles that typically carry higher management fees than plain-vanilla index funds, and investors appear to be dumping the enhanced-index funds. Assets in the co’s five bond mutual funds are down 43% so far this year. Because State Street is paid based on the assets it manages, it could potentially cut its profits. State Street said the Alaska and Idaho employee retirement plans still have money invested in other State Street funds and “remain valued clients.”

GOL GOL announces traffic statistics for Sept. 2007 (23.33 )
Co reports consolidated domestic passenger traffic for September 2007 increased 21% and capacity increased 49% y/y. Domestic consolidated load factor for the month was 62%, and in the international market consolidated load factor was 59%. GOL’s total consolidated load factor for the month of September was 61%. Average fares increased 1% versus September 2006

LCC US Airways reports Sept. traffic (29.51 )
Co reports Sept., Q3, and YTD traffic results for 2007. RPMs for the month were 4.7 bln, up 2.3% from September 2006. Capacity was 6.0 bln ASMs, down 4.8% from September 2006. Passenger load factor for the month of September was 78.1% vs. 72.7% in September 2006.

PNCL Pinnacle Airlines releases Sept. traffic (16.21 )
Co reports its passenger Load Factor was 75.9%, an increase of 3.2 points over September 2006 levels. For the month, Pinnacle flew 502.1 mln Available Seat Miles, a 4.3% increase when compared to the same period in 2006. Pinnacle flew 381.0 mln Revenue Passenger Miles, an increase of 8.7% over September 2006.

Tech sector mentioned favorably in Weekday Trader - Barron’s Online
Barron’s Online reports this could be the year that the tech sector returns to dominance both in the fourth quarter and for the full year, a feat it hasn’t pulled off since 2003. Tech’s disproportionate exposure to international markets will yield large profits in dollars and some protection from U.S. economic woes, say fund managers.”Tech can outperform,” in the fourth quarter, says Dan Niles, chief executive of Neuberger Berman Technology Management. “As recently as the spring, nobody wanted to be in tech, and tech was underperforming. Now all that’s changing” because of the fallout in financials, he believes. Even with the recent run-up, tech is still a laggard during the last three years, says Tony Ursillo, with Loomis Sayles. He thinks that means tech has further upside. Bill Nygren of Oakmart Fund and Oakmark Select Fund is sticking to stocks closer to the market multiple, such as Intel (INTC), Dell (DELL) and Texas Instruments (TXN).

Mad Money’ Recap: Lightning Round cont. - TheStreet.com
Cramer was bearish on Ruth’s Chris Steak House (RUTH), Cree (CREE), Brunswick (BC), Northgate Minerals (NXG) and First Bancorp (FBP).

Mad Money’ Recap: Lightning Round - TheStreet.com
Cramer was bullish on Merrill Lynch (MER), Barrick Gold (ABX), ValueClick (VCLK), National City (NCC), Huntington (HBAN), Corning (GLW) and Enbridge (ENB).

Cramer’s ‘Mad Money’ Recap - TheStreet.com
On Thursday’s edition, Jim is positive on Kroger (KR) and bases this on their EPS that was $0.04 above consensus and raised guidance. He says inflation is under control and the co expects margins to expand. Moving onto his overlooked IPO of the day, he highlighted Starent Networks (STAR). He believes it should be the next Qualcomm (QCOM). He notes its long-term growth rate of 57% and superior technology yet claims he would wait for a pullback in price before buying. Finally, he presents a bear case for Macquarie Bank (MBL). He claims the co overpays for infrastructure assets and uses debt to buy them. It creates funds that own the assets so it’s difficult to determine how much debt is employed because they don’t have to record it on its book