Trading for the Masses

09:09 WRAPX Pre-market Summary

Following yesterday’s lackluster session, futures indicate a slightly lower open for the mkt. The negative sentiment is attributed to geopolitical tensions, as futures began declining after Pakistani opposition leader Benazir Bhutto was reportedly killed in a gun and bomb attack following a rally in the city of Rawalpindi. Futures then hit their modest morning lows following early economic data. The Nov read on Durable Orders came in at a much worse than expected 0.1% (consensus 2.0%), with Orders ex-transportation -0.7% (consensus +0.5%). On the corporate front, SLM Corp (SLM) was hit by two separate news items and is indicated lower by ~12% pre-mkt. Following yesterday’s close, the co disclosed it had assigned all of its remaining equity forward contracts to Citibank, amending the terms to eliminate all trigger prices. Then this morning, the co announced it is commencing concurrent public offerings of common stock and mandatory convertible preferred stock to raise a total of $2.5 bln of capital. In other news, Goldman Sachs believes Citigroup (C) may cut its dividend by 40% to preserve capital and write down more fixed-income securities than it has told investors to expect, according to Bloomberg. On the positive side, Morgan Stanley said the additional details from Oracle’s (ORCL) 10-Q revealed an even stronger quarter than first thought, and the stock remains a top pick of the firm’s for 2008. Dow futures are currently -63; Nasdaq futures are currently -4.8; S&P futures are currently -6.6. For technical levels of interest, click here… Following yesterday’s sell-off, the Bond mkt was higher overnight, and furthered its gains following the economic data and reported death of Pakistani opposition leader Bhutto, which sent equity futures lower. The 10-yr is currently +22/32 to 4.189%. Note there are no Fed speakers scheduled today… In Commodities, the Dept. of Energy will release its weekly inventory statistics at 10:30ET, a day later than usual due to the Christmas holiday. Crude is expected to draw 1.5 mln, gasoline is expected to build 1.4 mln and distillates are expected to draw 900K. Ahead of the data, Feb crude oil is trading +0.45 to $96.42. Feb gold ($833.00 +3.50) spiked around 5 points to morning highs following the reported death of Pakistani opposition leader Bhutto… In Europe, mkts were higher around mid-day, rising for the fourth session in a row, with banking stocks rallying and mining shares advancing on buoyant base metal prices as mkts resumed trade following the Christmas break. FTSE is currently +0.2%; DAX is currently +0.5%; CAC is currently +0.2%. In Asia: Nikkei closed -0.6%; Hang Seng closed -1.0%; Shanghai Composite closed +1.4%… On the Earnings calendar, CBK and PAY are confirmed to report today after the close… On the Economic calendar, Dec Consumer Confidence (consensus 87.0) will be released at 10:00ET.
09:06 ADPI American Dental and PDG have entered into a Settlement Agreement with respect to the litigation (5.52 )

Co announces that it and PDG have entered into a Settlement Agreement with respect to the litigation among PDG, PDHC, one of the Company’s Minnesota subsidiaries, and the co filed in the District Court of Minnesota, Fourth Judicial District. The Settlement Agreement requires that the parties exercise all reasonable efforts to enter into definitive agreements on or prior to Jan 11, 2008. Under the terms of the Settlement Agreement and in settlement and release of the PDG Litigation, the co will transfer to PDG the leases and associated tangible assets with respect to 25 of 31 Park Dental facilities and various tradenames, including “Park Dental.” The co will retain six of the dental facilities and the resource group office, an administrative team of approximately 35 individuals that supports the Park Dental facilities. The parties have agreed that PDHC will provide interim management services to PDG for a period of up to nine months. PDG will pay PDHC a management fee of $19 mln regardless of whether PDG utilizes the mgmt services of PDHC during the nine month period. The co has also agreed to forgive outstanding accounts receivable due from PDG at December 31, 2007, which at September 30, 2007 were approximately $3 mln. Transfer of the facilities and associated assets is expected to occur by February 29, 2008. Park Dental is expected to generate approximately $88 mln in patient revenue and approximately $14.5 mln of earnings before interest, taxes, depreciation and amortization in 2007.
09:05 USPH U.S. Physical Therapy initiated with a Neutral at Longbow (14.10 )

09:02 AMZN Amazon.com adds music downloads from Warner Music Group (92.85 )

AMZN & WMG announce that DRM-free music audio downloads from Warner Music Group (WMG) are now available to customers on Amazon MP3. Beginning today, songs from WMG’s digital audio catalog will be available for purchase and download from Amazon MP3. In addition, Amazon and WMG will make available to consumers digital music products such as album bundles containing exclusive tracks. (Briefing.com note: WMG joins already available publishers EMI and Universal Music Group on AMZN’s service.)
09:01 EP El Paso: PG&E Corporation to acquire 25.5% interest in Ruby Pipeline (17.60 )

Co and PG&E (PCG) announces that the companies have entered into a letter of intent for PCG to acquire a 25.5% interest in El Paso’s Ruby Pipeline project — a proposed 680-mile, 42-inch natural gas transmission pipeline that would begin at the Opal Hub in Wyoming and terminate at the Malin, Oregon, interconnect, near California’s northern border. Capital expenditures for the project are expected to total approximately $2 billion.
09:01 XING Qiao Xing Universal Telephone’s major indicators of financial performance for 2007 expected to reach a record high (8.31 )

Co announced that management expects the net results for Q4 to be positive and major indicators of financial performance for the fiscal year of 2007 for the co to reach a record high. Co expects the financial performance of the operations of the CECT-branded mobile phone handset business in the fourth quarter of 2007 to be better than that in the third quarter. The co also expects the revenue from the sales of the COSUN-branded mobile phone handsets in the fourth quarter of 2007 to increase about 45% compared to the same period last year, and about 20% compared to the third quarter this year. “For the whole year of 2007, when all the four quarters are taken together… we expect that net sales, gross profit, gross margin, income from operations, net income and basic earnings per share of common stock of XING would reach a record-high for the fiscal year 2007… Looking ahead, we maintain our forecast that for the next five years, revenues from the telecommunication terminal business of XING would grow at a rate of 20-30% per year on average.”
09:00 S&P futures vs fair value: -5.3. Nasdaq futures vs fair value: -4.8.

The futures market continues to point to a negative start following the killing of Pakistan’s form Prime Minister Benazir Bhutto and the weaker than expected economic data. The Dept. releases its weekly energy inventory report at 10:30 ET. The report was delayed a day due to the Christmas holiday. Crude oil is trading up 0.7% to $96.65 per barrel.
08:59 LGN Lodgian provides update on strategic alternatives; suspended discussions with interested parties (12.17 )

The co will continue its review of strategic alternatives to maximize shareholder value, including, among other things, a sale of the entire co. However, the current volatility in the debt and credit markets may inhibit or delay the signing or consummation of a transaction to sell the co. As a result, Lodgian has suspended discussions with interested parties.
08:59 SCANX Gapping up

In reaction to strong earnings/guidance: ONSM +6.3%, ASVI +2.1% (sees FY08 revs above consensus and EPS in-line)… M&A news: DOCX 73.8% (EMC to acquire DOCX for $14.75/share)… Select Chinese stocks showing strength: CBAK +23.7%, CSUN +6.8%, CPSL +4.9%, KUN +3.2%, CHINA +2.9%, SEED +2.4%… Select renewable energy stocks extending gains: OPTT +8.9%, AKNS +7.4%… Select gold stocks showing strength with spot gold prices moving higher this morning on news former Pakistani Prime Minister was killed: GFI +2.6%, HMY +1.3%, GOLD +1.0%, AUY +1.0%… Other news: END +22.0% (announces strategic investment by Smedvig), SQNM +9.1% (announces the New York State approval of a noninvasive prenatal test for Cell Free Fetal Nucleic Acid assessment), CAMP +8.4% (Echostar Communications discloses 5.4% stake in SC 13D), NOVN +8.1% (announces FDA tentative approval of Stavzor valproic acid delayed release capsules), CRUS +6.2% (Soros Fund Mgmt discloses 5.18% stake in SC 13G), FREE +3.8% (to acquire two modern drybulk carriers for a total of $76.75 mln), NOK +1.2% (delays gaming service launch to next year - Reuters), Q +1.1% (announce the settlement of patent litigation with Ronald Katz Technology), MBLX +1.0% (mentioned positively in Weekday Trader - Barron’s Online)… Analyst upgrades: ANR +5.8% (tgt raised to $35 from $27 at Friedman Billings), POT +3.2% (hearing upgraded to Buy at tier-1 firm), TEVA +1.0% (tgt raised to $55 from $48 at Deutsche Bank).
08:56 PPG PPG Industries: Platinum Equity to terminate agreement to purchase PPG’s auto glass businesses (71.86 )

Co announces it was notified that affiliates of Platinum Equity intends to terminate, after December 31, 2007, their contract under which they agreed to purchase PPG’s automotive original equipment manufacture glass and automotive replacement glass and services businesses. In addition, PPG confirmed that Platinum’s affiliates filed suit in the Supreme Court of the State of New York, County of New York, alleging that the Platinum group is not obligated to consummate the agreement. While PPG does not comment on the specifics of litigation, the company stated that it intends to vigorously enforce its rights under its agreements with the Platinum group.
08:54 RTP Rio Tinto keeps fending off BHP bid - Globe and Mail (438.50 )

Globe and Mail reports the co continued to defend itself against an unsolicited offer from larger rival BHP, saying it has greater potential as a stand-alone co. In a letter to shareholders that was posted on the Australian Securities Exchange, RTP chairman Paul Skinner said the co’s outlook was “exceptional,” spurred by rising demand for resources from developing countries. Mr. Skinner pointed to Rio Tinto’s prospects in iron ore, copper and aluminum, saying the co was well positioned to “capture strong growth in demand in the developing economies, including China and India.” Mr. Skinner also said he was pleased that Britain’s takeover regulator had agreed to give BHP Billiton until Feb. 6 to either formalize its proposal to buy Rio Tinto for around $130 bln or say it is not interested.
08:50 DELL Dell’s All-in-One PC reviewed in the Mossberg column in WSJ (24.99 )

WSJ reports something interesting is going on at Dell. The co, which in recent years seemed to care only about corporate customers, techies and hard-core gamers, appears once again interested in average, mainstream consumers who value simplicity. The most tangible example of this new approach is Dell’s XPS One desktop — an elegant, handsome, cleverly designed one-piece computer. Like Apple’s iconic iMac, the XPS One looks like it’s simply a sleek, flat-panel monitor. The guts of the computer have been stuffed into the back of the screen. In my tests, I found the XPS One to be much better designed and equipped than Gateway’s iMac competitor, also called the One. In fact, the Dell XPS One is the first Windows all-in-one desktop I’ve tested that I believe matches or exceeds the iMac in hardware design. That’s no small feat, especially coming from Dell. I still recommend the iMac over the XPS One for several reasons other than hardware design. First, there’s the software. I believe Apple’s operating system, Leopard, is superior to the new Windows Vista operating system, the only choice on the XPS One. And I regard Apple’s built-in software, especially the iLife multimedia suite, as superior to the Dell’s built-in software. Second, the iMac, unlike the Dell, is immune to the vast majority of malicious software floating around, so you don’t have to run annoying, memory-hogging security programs. Third, defying popular perception, the iMac costs less than the XPS One. Still, if you want a stylish Windows Vista machine that runs well and won’t cost a fortune, the XPS One fits the bill, despite its unlikely heritage.
08:47 ECONX Economic Perspective: Durable orders disappoint, new claims stable

As mentioned at 8:30, November durable goods new orders rose a disappointing 0.1%. This is below an expected 2.2% gain and follows a revised 0.4% decline in October. Excluding transportation, new orders were down 0.7%. The much watched category of nondefense capital goods orders excluding aircraft was down 0.4%. This is often seen as a barometer of business investment trends. Business investment trends are sluggish. The October-November decline is not large for this volatile series, but new orders in the first two months of the fourth quarter have been about flat. The breakdown of the data also reveals near-flat trends. The data don’t show significant weakness as would be expected in a recession, but overall investment (including residential construction and inventories) will be a drag on fourth quarter GDP growth. These numbers are not overly worrisome, but they aren’t good news either… New claims for unemployment for the week ended December 22 were essentially stable at 349,000 from 348,000 the prior week. Claims trends fall in a long list of economic data that clearly shows economic growth slowing to a sluggish rate, but which many are exaggerating to suggest recession. The trend in claims is clearly higher than a few months ago, but claims are also a long way from recessionary levels of near 400,000. In the last recession of 2001, claims quickly jumped over 450,000 per week… Equity futures, which were already experiencing weakness on the news that Pakistan’s Benazir Bhutto was killed, dipped further to pre-mkt lows following this morning’s economic data… Dow futures currently -68 pts, S&P futures -7 pts, Nas futures -7 pts.
08:36 WIRES On The Wires

IA Global (IAO) announces that it had signed a binding term with the owners of ESPRIT. Upon completion of definitive agreements, IA Global will own 80% of ESPRIT… Point Therapeutics (POTP) announces that the SEC has declared effective its Form S-4 Registration Statement, which contains a joint proxy statement/prospectus relating to the proposed merger with DARA BioSciences… Bentley Pharmaceuticals (BNT) announces that its newly formed subsidiary, CPEX Pharmaceuticals, has filed an initial registration statement on Form 10 with the SEC in furtherance of Bentley’s plan to separate its drug delivery business from Bentley… Agrium (AGU) announces that it has withdrawn its notification and report form submitted to the Antitrust Division of the U.S. Department of Justice and the FTC under the Hart-Scott-Rodino Antitrust Improvements Act in connection with the previously announced acquisition of all of the outstanding common stock of UAP Holding.
08:35 Follow-up: Bhutto killed in bomb attack

Pakistani opposition leader Benazir Bhutto was killed in a gun and bomb attack after a rally in the city of Rawalpindi on Thursday, her party said. Earlier on Thursday, gunmen opened fire on supporters of another former prime minister, Nawaz Sharif, from an office of the party that supports President Pervez Musharraf, killing four Sharif supporters, police said. Mr Sharif was several kilometres away from the shooting and was on his way to Rawalpindi after attending a rally. Mr Sharif, who was overthrown by Musharraf in a 1999 coup and allowed back into the country just last month after seven years in exile, blamed supporters of the pro-Musharraf party for the violence. But a spokesman for the party denied that its workers were involved.
08:31 S&P futures vs fair value: -2.6. Nasdaq futures vs fair value: -6.0.

Futures slipped on reports that ex-Pakistan Prime Minister Benazir Bhutto was killed by a suicide bomber. Futures then dip a bit more on a pair of economic reports. The Dept. of Commerce reports that November durable orders rose 0.1%, which was less than the consensus estimate of 2.0%. Separately, there were 349K initial jobless claims for the week ended Dec. 22. Economists expected 340K claims.
08:31 RCNI RCN renews Peter Aquino as President and Chief Executive Officer under 3-yr agreement (15.97 )

08:30 MGM MGM deal prompts 2nd probe - The Star-Ledger (85.65 )

The Star-Ledger reports the efforts by MGM Mirage to open a casino halfway around the world have led to a review of whether there’s a conflict of interest within the New Jersey Division of Gaming Enforcement. For nearly three years, the division has been conducting an investigation into MGM’s partner in the Chinese enclave of Macau. The partner, Pansy Ho, is the daughter of gambling magnate Stanley Ho, who for decades has been suspected of having connections to the Chinese mob. The division’s long-awaited report has not yet been completed. The division has come under scrutiny because four of its investigators have been freelancing for a South Jersey casino consulting co, Spectrum Gaming, which conducted its own investigation of the Hos and wrote a report detailing allegations of links between Stanley Ho and Chinese “triads” and raising questions about Pansy Ho’s independence from her father. After MGM officials privately raised concerns about the freelance work of the division investigators New Jersey Attorney General Anne Milgram put a halt to the practice and started a review of their work.
08:30 AEIS Advanced Energy announces $75 mln share repurchase authorization (13.00 )

08:30 KSW KSW Inc awarded new projects by Chetrit Group/Stellar Management (6.60 )

Co announces that it in the month of Dec, it received $9 mln in additional contract work with the Chetrit Group/Stellar Management. This includes three new buildings, with luxury apartments and retail space, on Columbus Avenue on the Upper West Side. KSW is currently providing mechanical services on two other projects for this developer on the Upper West Side.
08:30 ECONX Initial Claims 349K vs 340K, prior revised to 348K from 346K

08:30 ECONX Durable Goods ex-trans -0.7% vs +0.5% consensus, prior revised to -0.4% from -0.7%

08:30 ECONX Durable Goods Orders +0.1% vs +2.0%, prior revised to -0.2% from -0.4%

08:26 BONDX Bond Watch: Take it Back

The market has recovered most of its losses from yesterday as overnight trade found a reason to boost prices. Disappointing holiday sales from Target & a report via Goldman Sachs indicating Citigroup would have to cut its dividend may have set the tone for today’s trade giving prices a headstart into data. The 2-10-yr yield spread is a little flatter at 95.2. Bond prices in the EuroZone suffered inflation fears while in Japan, bonds have recovered from an initial falloff following the drop in treasuries. The day ahead has some mid-tier data & expectations of weakness may be fueling some of the pre-market bid. Treasury will unload $13B of 5-yr notes later today which may weigh on prices. A mixture of flows in liquidity constrained trade should make for some nice price swings for the short-termers looking for a quick buck but the broader picture hints at a deeper price correction off Dec highs. The dollar is weak as euro broke above 1.4500 & the pound takes back lost ground. The yen is even weaker though giving the buck at least one positive pairing amongst the majors. Spot gold is up at 825.73 (+1.23) while crude oil is dipping to 95.75 (-0.22). The economic calendar has durable orders & initial jobless claims (8;30) followed by consumer confidence (10). Treasury auction $13B 5-yrs (13). The euro is at 1.4516 & the yen is at 114.5250 while the 10-yr is +09/32 yielding 4.238%. For more bond & economic commentary click here.
08:26 Benazir Bhutto is dead, according to TV - Reuters

08:18 China Telecom cos rise on hopes for 3G launch - DJ

DJ reports shares of China’s major telecommunications cos surged Thursday in Hong Kong trade after the State Council approved a plan on a new-generation broadband wireless network, raising hopes that the govt might restructure the telecom sector and give third-generation wireless licenses. China’s State Council, or cabinet, said late Wed the plan would “greatly promote the competitiveness and innovation of China’s wireless mobile communications.” In Hong Kong, shares in CHA ended 6.3% higher, while CHU gained 3.6%. Fixed-line operator CN rose 3.4%. The benchmark Hang Seng Index ended down 1% Thursday. But China’s Ministry of Information Industry and some analysts downplayed the statement’s significance on Thursday. Wang Lijian, a Ministry of Information Industry spokesman said the statement intended to express the Chinese govt’s general direction and is not a specific reference to the issuance of third generation licenses or the deployment of a TD-SCDMA network.
08:17 SCANX Early pre-market gappers

Gapping up: DOCX +73.8%, END +22.0%, CBAK +15.2%, NOVN +10.3%, CAMP +8.4%, AKNS +7.4%, CSUN +6.8%, CRUS +6.2%, ANR +5.8%, CHINA +4.8%, FREE +3.8%, SEED +3.3%, POT +3.2%, STP +2.9%, GFI +2.6%, ASVI +2.1%, NOK +2.0%, ESLR +1.1%, Q +1.1%, TEVA +1.0%, MBLX +1.0%, MER +1.0%… Gapping down: CAF -14.3%, SLM -9.6%, IFN -8.3%, CTDC -3.9%, AVNX -3.6%, CHL -2.0%, RTP -1.5%, CCL -1.3%, XOMA -1.1%, CVO -1.1%.
08:16 Pakistan’s Bhutto injured in bomb and gun attack - FT

The FT.com reports that Pakistani opposition leader Benazir Bhutto was wounded in a gun and bomb attack after a rally in the city of Rawalpindi on Thursday, a party security official and police said. “She is injured,” said party security official Rehman Malik.
08:13 Las Vegas is managing to sever itself from a jittery economy - NY Times

NY Times reports Las Vegas is managing to sever itself from a jittery economy causing conniptions among retailers, restaurateurs and other consumer-oriented businesses — including the rest of the casino industry. Gambling revenues on the Strip are up this year — way up in recent weeks. Despite higher energy prices, a volatile stock mkt, a slumping housing mkt and fears the economy may be heading into a recession, some of the city’s largest casinos are on pace for a record-setting year. By contrast, casinos elsewhere are not proving so resilient. Operators are reporting slowing growth rates in recent months. In a number of places, revenues are actually down, sometimes by 5% or more. The differences reflect a wider disparity within the economy. Businesses in a variety of sectors that attract the most affluent customers and take advantage of foreigners from countries with strong currencies who are drawn to the glitter of Las Vegas and Manhattan are doing very well, while those dependent largely on middle-class buyers are having a harder time. In Las Vegas, one extra factor has been a booming Chinese economy, as wealthy Asian players are risking — and losing — money in record numbers inside the city’s most exclusive V.I.P. lounges. And the whole industry enjoys one advantage over its counterparts among discretionary spending activities: the propensity of people to gamble despite harder times, or perhaps because of them. (Stocks mentioned include: MGM, PNK)
08:10 Stifel discusses retailers, says as anticipated the pre-Christmas sales were lackluster

Stifel notes that as anticipated the pre-Christmas sales were lackluster, as a late surge by customers and deep discounting by retailers were unable to sufficiently drive Christmas sales, likely resulting in a sales and earnings shortfall (as reflected in their EPS revisions in their note dated Dec 20, 2007). While overall results are incrementally weaker than originally anticipated they say there are both market share winners and losers in this difficult environment. They believe the cautious consumer looking for greater value has driven sales at both TJ Maxx (TJX) and Kohl’s (KSS). Additionally they believe momentum at Tween Brands (TWB) and Urban Outfitters (URBN) has continued given the fashion right assortments offered at both companies. With a significant increase in gift card sales this year, the post-Christmas week will prove important, particularly for the well managed retailer who has been able to convert their inventory to full priced, wear now, go-forward fashions that inspire the consumer. They believe these retailers include AEO, JCG and TJX.
08:07 OLED: The next big thing for screens? - WSJ

WSJ reports even as plasma and LCD television screens flew off the shelves before Christmas, manufacturers were starting to roll out a new technology that they predict will produce the next generation of mass-market video displays. After decades of development, organic light-emitting diode displays, or OLEDs, are finally emerging in consumer products. Some big cos predict that within five years they will remake the television, cellphone, computer screen and lighting markets. OLEDs are difficult to make and involve temperamental chemistry. But they produce brighter colors, consume less electricity, and make screens that are thinner and lighter than any competing technology. Currently, they are much more expensive than LCDs, or liquid crystal displays, but many people in the industry predict that as manufacturing efficiency improves, their cost could fall below LCDs. This year have manufacturers fine-tuned the process well enough to start putting them into significant numbers of consumer products. Much of the underlying intellectual property for OLEDs is owned and licensed by EK and two small engineering cos, PANL and Cambridge Display Technology. iSuppli predicts the color OLED mkt will triple next year to $280 mln and will grow to $2.8 bln by 2013.
08:04 CSU Capital Senior: Believe Hearthstone Senior Services transaction would be approx $0.04-$0.05 accretive to their 2008 C.F.F.O/share estimate- Stifel (10.07 )

Stifel notes CSU has agreed to purchase leasehold interests in 32 assisted living properties with a resident capacity of 3,800 from Hearthstone Senior Services L.P. for $35 mln. Given the lengthy time to close and pending 1/3/08 company conference call, the firm says they are not revising estimates at this time. However, based on available information, they believe the transaction would be approx $0.04-$0.05 accretive to their 2008 C.F.F.O per share estimate, if all other assumptions remain the same. Firm reits Buy and $10.50 tgt.
08:03 WIRES On The Wires

Environmental Tectonics’ (ETC) BioMedical Division announces the purchase of two BARA-MED XD Monoplace Hyperbaric Chambers by Comprehensive Healthcare Solutions… Innovative Card Technologies (INVC) announces that it received a letter from Nasdaq Listing Qualifications stating that it had regained compliance with the independent director and audit committee requirements for continued listing on The Nasdaq Capital Market… Computer Sciences (CSC) announces that it has signed an extension to a global information technology applications management services agreement with Sun Microsystems (JAVA).
08:01 BONDX Economic Calendar

Durable orders and initial jobless claims at 8:30 followed by consumer confidence at 10.
08:01 ALTH Allos Therapeutics: Interim safety analysis supports continuation of pivotal phase 2 PROPEL trial of PDX in patients with peripheral T-cell lymphoma (7.04 )

Co announced that an independent Data Monitoring Committee has completed the pre-specified 65-patient safety review of data from the co’s pivotal Phase 2 PROPEL trial of PDX in patients with relapsed or refractory peripheral T-cell lymphoma, and has recommended that the trial continue per the protocol. This interim assessment was based upon an evaluation of patients enrolled in the study who completed at least one cycle of treatment with PDX. The co currently expects to complete patient enrollment in the PROPEL study in the second quarter of 2008.
08:00 S&P futures vs fair value: +1.7. Nasdaq futures vs fair value: +3.3.

Early indications suggest a slightly higher open for the stock market. Goldman Sachs said Citigroup (C) may cut its dividend by 40% and may write-down $18.7 bln in CDOs, which is more than the previous estimate of $11 bln. There are a handful of economic reports. Durable orders (consensus 2.2%) and initial claims (consensus 345K) are both set to be released at 8:30 ET. Consumer confidence (consensus 87.0) is slated for release at 10:00 ET.
08:00 WATG Wonder Auto Tech target raised to $15 at Piper (10.62 )

Piper raises their ests and target to $15 from $12 after the co announced a 3-year $32 million export contract win. Firm says the contract win continues to solidify the co’s position as a global supplier of auto parts, and they believe that future contract wins with global OEMs will provide positive catalysts for the stock.
07:58 PNM PNM Resources: Reducing estimates due to lower expected plant utilization - Jefferies (22.40 )

Jefferies reduces their 4Q and full year ‘07 PNM ests by $0.10 to $0.30 and $1.20 respectively (consensus of $0.35 and $1.28 respectively) due to lower than anticipated output at the co’s San Juan and Palo Verde power plants. The firm is also reducing their ‘08 est by $0.05 to $1.70 (consensus of $1.69) due to lower expected utilization at Palo Verde. Using a DCF valuation approach, which adjusts for hedging and commodity price exposure, they arrive at a tgt of $24.50.
07:57 HSY Hershey Foods tgt cut to $42 from $46 at UBS (39.65 )

UBS cuts their tgt on HSY to $42 from $46 saying in 2007, Hershey has continued to struggle with its relatively low marketing support, ineffective innovation, and lack of a significant premium brand (as consumers trade up in bar chocolate). Furthermore, input costs remain an issue through the 1H08. With this backdrop, the firm says they wonder what a new board and CEO will do to reposition HSY for growth-and what implications this may have for ‘08 EPS.
07:53 AMLN Amylin Pharms estimates cut at Soleil (38.69 ) -Update-

Soleil says that with Q4 Byetta Rx trends falling below their ests, they trim their YE Byetta forecasts again. Firm now looks for FY07 revs to come in below the low end of mgmt’s most recent guidance. While the commercial traction of the current Byetta formulation has been shrugged off by investors over the last couple of quarters, firm believes that the Street will become increasingly concerned over the competitive landscape in 2008.
07:53 ORCL Oracle: Morgan Stanley says additional details from ORCL’s 10-Q reveal an even stronger qtr than first thought; remains their top pick for 2008 - CNBC (23.00 )

07:53 NOVN Noven Pharma: Maintain Neutral following tentative approval of Stavzor for 3 indications - Baird (14.50 )

Baird maintains their Neutral on NOVN following the FDA’s tentative approval of Stavzor for the treatment of manic episodes. The product is essentially approved, but NOVN must wait until the end of July 2008 to launch the product because its NDA application is a 505(b)(2) filing that references ABT’s Depakote, which will likely retain exclusivity until July-08. Firm has not changed their ests following this event, and still model a 3Q08 launch.
07:51 ROS Rostelecom names Konstantin Solodukhin new CEO, according to report - DJ (70.89 )

07:38 Mortgage application volume drops 7.6%, despite declines in interest rates - AP

AP reports mortgage application volume dropped 7.6% during the week ending Dec. 21, despite a drop in interest rates, according to the Mortgage Bankers Association’s weekly application survey. Refinance volume fell 8.5% during the week, while purchase volume dropped 6.6%. Refinance applications accounted for 53% of total mortgage applications during the week ending Dec. 21.
07:38 MER Merrill Lynch: Writedowns in the qtr to be larger than expected - Keefe, Bruyette (54.54 )

Keefe, Bruyette says MER’s capital infusion is positive for the future but notes there’s no escaping the November carnage. The firm believes writedowns of ABS/CDO exposures at MER in the qtr will be larger than initial forecast given magnitude of peer writedowns and market climate. The firm is lowering 4Q07 EPS to ($5.03) from ($1.55) and ‘07 goes from $0.10 to ($3.38). The firm is also trimming their tgt to $64 from $66.
07:34 CVO Cenveo to acquire Rex Corp; transaction expected to be accretive to 2008 earnings (18.71 )

Co announces it will acquire Rex Corporation, in an all-cash transaction. Rex generates annual revs of over $40 mln. The transaction is expected to be completed in the first qtr of 2008 and to be accretive to earnings in 2008. The transaction is currently expected to be funded using the co’s revolver.
07:34 PRICE Filings, Offerings, Pricings and IPOs

Filings: XOMA Limited (XOMA) files for a $150 mln mixed shelf offering… Offerings: SLM Corporation (SLM) announces it is commencing concurrent public offerings of common stock and mandatory convertible preferred stock to raise a total of $2.5 bln of capital.
07:30 YHOO Yahoo!: Jefferies adjusts estimates for AT&T, Alibaba; Maintain Buy on valuation (23.95 )

Jefferies believes the YHOO’s turnaround downside risk is limited by the likelihood of a sale. The firm adjusts their model to reflect lower fees from a-soon-to-be renegotiated agreement with AT&T (they say this was somewhat expected, but the timing may come sooner than previously thought). They do not expect ad revenues to offset access fees for at least a couple of years. Firm believes the co’s solid balance sheet fails to account for stakes in Yahoo! Japan, Alibaba, and Gmarket, valued at a total of over $12 bln (or ~$9/share). Firm reiterates their Buy rating and highlight YHOO as a value pick, given the current valuation at 9.7x FY08 EV/EBITDA. The changes made to the model caused their price target to move to $32 from $35.
07:26 SNE Sony plans to exit rear-projection TV business - WSJ (55.95 )

WSJ reports the co is dropping its unprofitable rear-projection television business world-wide to focus on liquid-crystal display and organic light-emitting diode flat-panel technologies, the co said. Sales of rear-projection TVs had been declining recently as LCD TVs gain in popularity and get bigger in size, Sony spokesman Shinji Obana said. The decision to abandon rear-projection TVs underlines Sony’s strategy of focusing on LCDs and OLEDs at a time when competition is heating up in flat-panel TVs. In the fiscal half-year through Sept, Sony lost $526.3 mln in its TV operations, partly because of losses tied to rear-projection TVs.
07:25 APPY AspenBio Pharma: Physician update and 2008 preview - Oppenheimer (8.28 )

Oppenheimer notes while another trial would likely slow commercialization and a potential sale of the co, the firm does not believe it alters APPY’s long term potential success. After speaking to doctors involved in the previous trials, they believe if there is another trial, that it will provide stronger results than the previous ones.
07:21 CSC Computer Sciences wins $113 million NASA contract (50.61 )

The co announces today it has won a task order to provide supercomputing support services to the NASA. Awarded under the General Services Administration Millennia contract, the estimated value of the five-year task order is $113 mln. Under the terms of the task order, CSC will provide supercomputing systems integration services to the NASA Center for Computational Sciences, the high performance scientific computing facility that is operated, maintained and managed by the Goddard Space Flight Center’s Computational and Information Sciences & Technology Office.
07:20 Credit crunch delays media deal - WSJ

WSJ reports weak credit mkts have scuttled another deal, at least temporarily. Family-controlled Freedom Communications, which owns the Orange County Register newspaper, has postponed a plan to buy out two minority partners, Blackstone Group (BX) and Providence Equity Partners. Freedom was planning to spend more than $500 mln to buy back the roughly 45% stake held by Blackstone and Providence, according to people familiar with the situation. Freedom had intended to borrow from GE’s GE Capital and others to fund the purchase, and the deal was nearly complete a few weeks ago, those people say. But negotiations were suspended amid the credit-market turmoil. Some banks were leery of lending money to Freedom, in part because of uncertainties facing the newspaper industry, and Freedom also faced higher borrowing costs, a person familiar with the situation said. The Hoiles family, which controls the majority stake in Freedom, decided to wait until the mkt calms down, this person said.
07:14 ABB ABB profiled in New America section of IBD (28.76 )

IBD reports the electrical engineering giant has turned itself around after coming close to bankruptcy in 2002. ABB has changed course in large part by focusing on its core power and automation units, while shedding other holdings. But amid financial woes, ABB managed to maintain its relationships with emerging mkts, analyst Nicholas Heymann of Sterne, Agee & Leach says. Today those mkts, especially China, India and the Middle East, are helping power the co’s resurgence. Emerging mkts are investing heavily in expanding their power infrastructure. But ABB’s customers in mature mkts also are boosting its profits as they replace aging equipment and strengthen their power grids, the co says. The co said it expects positive mkt conditions to continue through the first half of 2008. It doesn’t expect to take a significant hit from the current slowdown in the U.S. construction industry. Analysts are predicting fourth-quarter EPS will climb 90% to 40 cents as revenue rises 18% to $8.49 bln. Besides competitors, another cause for concern is the potential for problematic acquisitions, especially given ABB’s past buying sprees. Some analysts see an expensive acquisition as a top risk while watching ABB’s cash pile up. But Heymann dismisses rumors of ABB buying Rockwell and other acquisition concerns. He says the co probably will announce a dividend soon, perhaps combined with a modest stock buyback program.
07:12 C Citigroup may cut dividend by 40%, Goldman Sachs says - Bloomberg.com (30.45 )

Bloomberg.com reports that Goldman Sachs Group believes Citigroup, the biggest U.S. bank, may cut its dividend by 40% to preserve capital and write down more fixed-income securities than it has told investors to expect. The New York-based bank may write off $18.7 bln in collateralized debt obligations such as subprime mortgages, up from its Nov. 4 estimate of as much as $11 bln, Goldman’s William F. Tanona wrote in a note dated Dec. 26. C, which paid out 54 cents each quarter this year, will have to raise $6.2 bln in extra capital to reach its target, they wrote… “Given the magnitude of the writedowns we assume and Citi’s remaining exposure, we believe the firm has a serious need to preserve or raise additional capital.” Writedowns at the biggest banks are still likely to be “significantly larger than investors are anticipating,” Tanona wrote, doubling his estimates for charges at New York-based JPMorgan (JPM) and Merrill Lynch (MER). Goldman analyst Tanona estimated that JPM, the third- biggest U.S. bank, may have a CDO-related writedown of $3.4 bln in the final quarter, up from a previous estimate of $1.7 bln. MER, which replaced CEO Stan O’Neal with John Thain, may write off $11.5 bln, compared with an earlier estimate of $6 bln, Tanona said in his note.
07:06 WIRES On The Wires

Qwest Communications International (Q) and Ronald A. Katz Technology Licensing announce the settlement of patent litigation between the parties. As part of the settlement, Q has agreed to pay an undisclosed sum for a nonexclusive license under a comprehensive portfolio of patents that Katz owns relating to interactive voice applications… Cogdell Spencer (CSA) announces the signing of a new development agreement with St. Luke’s Hospital and Health Network of Bethlehem, Pennsylvania to develop the first phase of their Riverside Outpatient Campus.
07:04 RBCN Rubicon Tech: Initiation details (21.96 )

As mentioned at 6:36 CIBC initiated RBCN with an Outperform and a $23 tgt saying as the leading sapphire supplier with the most advanced and highest quality substrate, they think RBCN is uniquely poised to leverage fast ramping L.E.D volumes as new applications drive demand ahead of supply.
07:01 ANR Alpha Natural Resources tgt raised to $35 from $27 at Friedman Billings (33.84 )

Friedman Billings raises their tgt on ANR to $35 from $27 saying last Friday, they hosted an investors’ conference call with Alpha’s CEO Mike Quillen. On the positive side the firm says, the met coal market, where ANR has its most open positions, is still showing strength, bolstered by strong demand and continued supply constraints in Australia and the U.S. On the negative side, Mr. Quillen expressed concerns over, S404 permits, the impact of MINER Act on productivity and sharply rising prices could reduce purchase coal opportunities. The firm says the coal sector has had a tremendous rally since Nov, and they recommend investors continue to be selective when investing in this space.
07:01 AVNX Avanex files arbitration complaint against 3S Photonics; sees Q2 revs of $51-$53 mln (1.37 )

Co announces that it filed an arbitration complaint in New York against 3S Photonics. The arbitration complaint alleges various breaches by 3S Photonics of its obligations to Avanex, including that 3S Photonics prematurely terminated its exclusive distribution agreement with Avanex. As a result of 3S Photonics’ termination of the distribution agreement, Avanex expects that rev for the second fiscal quarter of 2008 will be in the range of $51-$53 mln (consensus of $57.4 mln) and will fall below the low end of its earlier announced guidance for the quarter of $56-$58 mln. The co does not expect to receive future distribution revenue associated with 3S Photonics, which will reduce Avanex’s rev for the third fiscal quarter, resulting in flat to slightly lower revenues for the third fiscal quarter compared to the second fiscal quarter. AVNX believes gross margins for the second fiscal quarter will generally be consistent with the prior quarter.
06:55 WG Willbros Group initiated with an Outperform at Credit Suisse- tgt $46 (39.79 )

Credit Suisse initiates WG with an Outperform and a $46 tgt saying fueled by record oil and gas prices, Willbros is well positioned to capitalize on increased pipeline construction in the United States and Canada as well as various overseas markets that offer an acceptable risk/return profile.
06:47 CLNE Clean Energy Fuels: Seaports C.A.A.P opportunity progressing; CLNE well positioned to benefit- Broadpoint (15.16 )

Broadpoint notes as part of the San Pedro Clean Air Action Plan, the Ports of Los Angeles and Long Beach recently approved the Clean Trucks Fee tariff. The firm says this removes a major hurdle toward the rollout of the L.N.G trucks. They say C.A.A.P represents a potential cornerstone of growth for Clean Energy over the next several years, and the co appears particularly well positioned, given the scarce L.N.G supply available on the West Coast. In addition, it recently opened the first public access L.N.G fueling station in California and has won an R.F.P for two more stations to service the ports, the only one to be awarded thus far.
06:42 POT Potash: Hearing upgraded to buy from neutral at tier 1 firm (143.41 )

06:42 OMTR Omniture tgt raised to $42 from $35 at Broadpoint Capital (34.95 )

Broadpoint Capital raises their tgt on OMTR to $42 from $35 saying ticipate Omniture will report another robust quarter, as the co’s fundamentals appear stronger than ever. The firm says they have uncovered a deal with a very large interactive agency and another transaction with a very large financial services company. With the pending acquisition of Visual Sciences (VSCN) and other recent industry developments, they believe Omniture’s already dominant competitive position improved further in 4Q:07.
06:36 CALLS Early Research Calls I

Downgrades: Morgan Stanley downgrades Resources Connection (RECN 18.83) to Equal Weight from Overweight… Miscellaneous: Keefe, Bruyette initiates Mercer Insurance (MIGP 17.44) with a Market Perform and sets a $19 tgt… Citigroup initiates El Paso Pipline Partners (EPB 24.43) with a Buy… CIBC initiates Rubicon Technology (RBCN 21.96) with an Outperform… Thomas Weisel initiates Internet Brands (INET 7.04) with an Overweight.
06:25 DOCX EMC announces plan to acquire Document Sciences for $14.75 per share (8.23 )

EMC (EMC 18.96) and co announce that they have signed a definitive agreement whereby EMC will acquire Document Sciences in a cash transaction valued at approx $85 mln. Under the terms of the agreement, Document Sciences stockholders will receive $14.75 in cash for each share of Document Sciences common stock. The transaction isn’t expected to have a material impact on EMC financial results in ‘08.
06:22 Miners, banks help keep Europe stocks rally alive

European stocks gained ground in early trade on Thursday, rising for the fourth consecutive session as mining shares advanced on buoyant base metal prices while recently beaten-down banks rallied. Trading volumes were expected to be thin with a number of investors away on holiday… Around Europe, Germany’s DAX index was up 0.6%, UK’s FTSE 100 index up 0.3% and France’s CAC 40 up 0.6%. (Reuters)
06:22 Asian stocks drift up in light holiday trade as US economic worry weighs; Sensex ends up 24 points

Asian stocks drifted higher in light volumes Thursday with Shanghai, the Philippines and Taiwan leading the gainers as fund managers adjusted portfolios for year-end. Japan and Hong Kong faltered as the latest batch of data from the US revived economic concerns. The Shanghai Composite Index closed up 1.4% at 5,308.89 with telecom stocks such as Unicom pacing the gains on news that the Chinese government is planning to speed up the launch of third-generation mobile networks. Taiwan’s Taiex added 1.9% to 8,313.72 and the Philippines Composite rose 1.5% to 3,667.64. The Nikkei underperformed the broader region, closing down 0.6% at 15,564.69, as investors cashed in gains on the market’s advance of more than 620 points over the last four days. The Hang Seng lost 1% to 27,842.93 as early gains petered out… The Sensex opened with a positive gap of 108 points at 20,301. The index touched a high of 20,324, pared gains and displayed range-bound movement throughout the day. The index dropped to a low of 20,160 - down 164 points from the day’s high - in mid noon deals. The Sensex finally ended with a marginal gain of 24 points at 20,217. (Thomson, The Business Standard)
06:21 S&P futures vs fair value: +1.4. Nasdaq futures vs fair value: +3.0.
06:20 European Markets

FTSE…6498.10…+18.80…+0.3%. DAX…8066.38…+63.71…+0.8%.
06:20 Asian Markets

Nikkei…15564.69…-88.85…-0.6%. Hang Seng…27842.93…-285.87…-1.0%.
06:18 UCBI United Community Banks announces update on credit environment and FY07 EPS guidance (17.73 )

Co announces that continued deterioration in the housing construction markets has placed negative pressure on certain key credit indicators, requiring an increase to the provision for loan losses — including a $3 mln, or $0.04 per-share, special fraud-related provision for the Spruce Pine development — and a charge for other real expense. Consequently, co issues downside guidance for Q4 (Dec), sees EPS of $0.12-0.14 vs. $0.43 First Call consensus. “Based on our extensive and regular review of loans, the fourth quarter will reflect a higher level of negative credit migration within our risk grades,” stated Jimmy Tallent, president and chief executive officer. “As we aggressively move problem loans and assets off our balance sheet, we expect a higher level of loan charge-offs than discussed in our third quarter conference call and a further write-down of other real estate assets.
06:09 ASVI ASV announces guidance for 2008; sees FY08 revs above consensus and EPS in-line (14.69 )

Co issues mixed guidance for FY08 (Dec), sees EPS of $0.58-0.72 vs. $0.60 First Call consensus; sees FY08 (Dec) revs of $220-250 mln vs. $213.53 mln consensus. Under their new guidance reporting format, co plans to issue summary guidance prior to the close of the fiscal year, with more detailed guidance included in its Q4 earnings release.
06:05 POWL Powell Industries announces stock sales plan for Chief Executive (46.10 )

Co that Thomas W. Powell, Chairman and Chief Executive Officer, has entered into a planned sale of certain shares of common stock. Under the terms of the plan, Mr. Powell proposes to sell 200,000 shares of common over a period of six months.
06:03 WIRES On The Wires -Update-

XTENT (XTNT) announces that it has submitted its application to the designated European Notified Body for CE Mark approval of its Custom NX DES System… GOL Linhas Aereas Inteligentes S.A. (GOL) announces that it has exercised firm orders for 34 Boeing (BA) 737-800 NGs, completing the purchase option for 121 aircraft negotiated in October 2006, and has signed a new contract for the acquisition of 40 additional aircraft for delivery in 2012-2014.
05:51 WIRES On The Wires -Update-

Boeing (BA) and British Airways have finalized an order for eight Boeing 787-8s and 16 787-9s; the order is valued at $4.4 bln at list prices. British Airways also placed options for 18 787s and purchase rights for an additional 10… VimpelCom (VIP) announces that its Board of Directors unanimously agreed to extend Alexander Izosimov’s contract term as Chief Executive Officer until January 1, 2010.
05:49 STM Intel’s venture with STMicro delayed - Financial Times (14.51 )

Financial Times reports the credit crunch has forced Intel (INTC) and STMicroelectronics (STM) to delay the merger of their unprofitable memory chip businesses as new financing arrangements are worked out. Under the deal, announced last May, lenders were to provide $1.55 bln in debt financing for the new co, Numonyx. But in separate statements yesterday, Intel and STMicro said they had been renegotiating terms with lenders. Revised financing will provide less than half the original total, with a senior loan of $650 mln and $100 mln in a revolving credit facility. “The financing terms will result in certain changes in the terms of the master agreement, which are being negotiated by the parties,” Intel said. In the meantime, there had been an agreement to extend the termination date for the merger from December 31 to March 28, 2008. “We are in the process of renegotiating credit agreements, and clearly [the amount] will be less,” Intel said. “The markets have changed significantly since we first announced the deal.”
05:46 NOK Nokia delays gaming service launch to next year - Reuters (38.82 )

Reuters reports Nokia (NOK) has delayed the launch of its gaming service N-gage to “early 2008″ from this month due to delays in software testing, a spokesman for the co said on Thursday. “We found one more issue which had to be solved before we could open the service,” spokesman Kari Tuutti said. The gaming service, together with a music shop and mapping services, is one of the cornerstones of Nokia’s large push into mobile Internet services under its new “Ovi” brand.
05:44 AAPL Apple and Fox planning movie rental deal: Reports - Reuters (198.95 )

Reuters reports Apple (AAPL) and News Corp.’s (NWS) Twentieth Century Fox are set to announce a deal that will allow consumers to rent movies through Apple’s digital iTunes Store, media reports said on Thursday. The agreement will allow rentals of Fox’s latest DVD releases by downloading a copy from the online iTunes store for a limited time, the Financial Times said, quoting a source. The Wall Street Journal also reported the deal in its online edition.
05:41 WFC Reining in risky bets - WSJ (31.26 )

The Wall Street Journal reports it may be time to get out of Wells Fargo (WFC), before more bad news comes along. The housing downturn is starting to tarnish even Wells Fargo’s reputation for conservative loan underwriting. And, the bank does have subprime exposure, although it likes to downplay the risks. The bank’s recent home-equity missteps, combined with the worsening housing market, make it appear unlikely that Wells can avoid a tough year ahead as it builds reserves for bad loans. The bank’s loans are concentrated in areas likely to see more problems, says Fred Cannon, an analyst with Keefe, Bruyette & Woods. “They have more exposure to home-equity loans” than their peers, “and the exposure is in areas where housing is fairly weak,” says Matthew Wright, a fund manager overseeing First Investors Blue Chip Fund. He adds: “I tend to think there will be more loan-loss provisions” in the future. Mr. Cannon calculates that Wells had nearly 17% of its loan portfolio in home-equity loans at the end of Q3, compared with about 9% overall for the 10 biggest banks. He also sees risk in the bank’s big servicing business, as more borrowers default on their payments. Mr. Cannon is one of several analysts who downgraded Wells’s shares in recent weeks, in part because they look pricey. He is one of two who rate the shares a “sell,” according to Zacks Investment Research. Wells currently trades at about 11.2x estimated earnings for the next 12 months, compared with 9.9 times for its peers in the KBW Bank Index.
05:37 Morning News Summary: WFC - AAPL - NOK - INTC/STM

WSJ: Reining in risky bets (WFC). Reuters: Apple (AAPL) and Fox planning movie rental deal: Reports… Nokia (NOK) delays gaming service launch to next year. Financial Times: Intel’s (INTC) venture with STMicroelectronics (STM) delayed.
00:42 STSA Sterling Financial revises estimated range for Q407 EPS, reports increased charge for credit costs (19.66 )

Co issues downside guidance for Q4 (Dec), sees EPS of $0.31-0.34 vs. $0.53 First Call consensus. Co issues downside guidance for FY07 (Dec), sees EPS of $1.84-1.87 vs. $2.09 consensus. Co cites an increased charge for credit costs, a charge to prepay some high fixed rate trust preferred securities and other charges during Q4.
00:37 WIRES On The Wires

SST (Silicon Storage Technology) (SSTI) announces that it plans to file its delinquent periodic reports with the SEC by January 15, 2008… Sequenom (SQNM) announces the New York State approval of a noninvasive prenatal test based on Sequenom’s SEQureDx Technology for Cell Free Fetal Nucleic Acid assessment.
00:35 SLM SLM announces proposed public offerings of $2.5 bln in common stock and mandatory convertible preferred stock (22.13 )

Co announces that it is commencing concurrent public offerings of common stock and mandatory convertible preferred stock to raise a total of $2.5 bln of capital. SLM intends to apply approx $2.0 bln of the net proceeds from the proposed offerings to physically settle its outstanding equity forward purchase contract, pursuant to which it will effect the repurchase of 44,039,890 shares of common stock deliverable to Sallie Mae under the contract. The dilutive impact of the two offerings will be partially offset by the physical settlement of the outstanding equity forward purchase contract. Any proceeds remaining after such settlement will be used for general corporate purposes.
00:30 MBLX Metabolix mentioned positively in Weekday Trader - Barron’s Online (22.45 )

Barron’s Online reports Metabolix (MBLX) is at the forefront of developing a new type of environmentally-friend plastic. Derived from corn, natural plastic completely breaks down to its basic elements of carbon dioxide and water on its own whether it is in a landfill or sitting in water. These plastics can be engineered to biodegrade over weeks or months. “The key to Metabolix is that they seem to be the most advanced public company with a green plastic alternative to fossil-fuel based plastic,” says Jackson Robinson, president of Winslow Management, a firm that invests solely in environmentally-friendly companies. Recently, Metabolix struck a licensing agreement with Abbott (ABT), giving it exclusive access to its genetic technology. In the longer run, the plastic maker would also receive royalty payments for drugs eventually developed from this. The sell-off in shares recently is tied to the FDA’s request for more information, thereby delaying the approval of Metabolix’s plastic for food-related uses. Michael Corby, managing director of equity research at Signal Hill, says these problems are short-term in nature and should create buying opportunities for a stock that requires investor patience. Jefferies analyst Laurence Alexander believes that FDA approval of using Mirel plastic in food containers is imminent because natural plastic is already used for medical stitches by a co called Tepha, a former subsidiary of Metabolix. Positive news on these fronts could boost the stock 30% in upcoming months with additional upside as the co starts to announce new customers by creating earnings visibility, adds Carboy. Metabolix in fact is not expected to become profitable until 2010, although losses will consistently narrow. The benefit of owning the stock now is that “the instant this company announces a major customer, the stock will double,” says Carboy.