Trading for the Masses

08:36 China maintains cap on foreign ownership of brokerages at 33% - Bloomberg

Bloomberg reports China will keep its 33% cap on foreign ownership of joint-venture brokerages, resisting opening its mkt further to foreign competition. Revised rules, which take effect next year, relax some requirements for foreigners. The regulations will let investors from abroad buy into publicly traded brokerages and cap foreign ownership at 20% for single investors, and 25% for total foreign-owned stakes, the China Securities Regulatory Commission said in a statement on its Web site today. The limit for private ventures will remain at 33%.
08:33 WIRES On The Wires -Update-

Empire Financial Holding (EFH) announces that on Jan 2, 2008 it will change its name to Jesup & Lamont… Par Pharmaceutical Companies (PRX) provided an update on the development status of its three, in-licensed, proprietary pipeline products: pafuramidine, Loramyc, and Zensana.
08:31 BSX Boston Scientific announces CE Mark approval for next-generation cardiac resynchronization therapy defibrillator (11.71 )

CO announces CE Mark approval for its LIVIAN cardiac resynchronization therapy defibrillator.
08:31 LNCR Lincare reports intention to file shelf registration statement (35.48 )

Co announces that it intends to file with the SEC a resale shelf registration statement on or before January 29, 2008 on Form S-3 pursuant to the terms of a registration rights agreement Lincare entered into on October 31, 2007 in connection with the sale of its $275 mln principal amount of convertible senior debentures due 2037 - Series A and $275 mln principal amount of convertible senior debentures due 2037 - Series B and the shares of Lincare common stock issuable upon conversion of the Debentures.
08:30 GBT Advanced Battery forms development partnership with Shenzhen HuaJin Science & Technology (4.69 )

Co announces that it has entered into a cooperation agreement with Shenzhen HuaJin Science & Technology. Under the agreement, the companies will collaborate to develop and manufacture innovative energy-saving lamps for multiple uses.
08:30 ADLR Adolor announces investigational New Drug Application for novel delta agonist ADL5747 (4,64 )

Co announces that clinical testing will be permitted under an Investigational New Drug Application for ADL5747, a novel oral compound that targets the Delta opioid receptor. Co expects to initiate Phase 1 clinical testing in the first quarter of 2008. ADL5747 is the second delta compound that will enter clinical investigation under Adolor’s worldwide collaboration with PFE to develop novel pain compounds. A lead compound, ADL5859, is in Phase 2 clinical testing in several pain conditions.
08:30 S&P futures vs fair value: +14.5. Nasdaq futures vs fair value: +15.5.

It is still shaping up to be a higher start. On the economic front, December Chicago PMI will be released at 9:45 ET, and November new home sales will be released at 10:00 ET. Economists expect the PMI reading to dip to 52.0 and 715K new home sales.
08:29 GCO Genesco announces that Court orders specific performance of merger agreement by The Finish Line (33.06 ) -Update-

Co announces that the Chancery Court for the State of Tennessee has ordered The Finish Line (FINL) to specifically perform the terms of its Merger Agreement with GCO. In relevant part, the Court’s order states: “It is therefore ordered that the Court declares that all conditions to the Merger Agreement have been met. The Court declares that Finish Line has breached the Merger Agreement by not closing and declares that Finish Line is not entitled to invoke the December 31, 2007 termination procedures of Section 8 of the Merger Agreement. The Court ORDERS that Finish Line shall specifically perform the terms of the Merger Agreement…”
08:26 China telecoms revamp marked for next year - South China Morning Post

South China Morning Post reports the long-awaited restructuring of the mainland telecommunications industry would start next year, the Ministry of Information Industry said yesterday, in a move that may see the break-up of one telephone giant and more consumer choice. The govt also signalled it was ready to launch its high-speed 3G wireless network next year, based on home-grown technology. China Unicom (CHU) is expected to be broken up under the restructuring, with the three remaining operators - China Telecom (CHA), China Mobile (CHL) and China Netcom (CN) - to provide a broader range of services, including fixed-line, mobile and broadband. “We will actively push a restructuring plan as soon as possible next year so that telecoms operators can provide full-range services,” Minister of Information Industry Wang Xudong said. “Restructuring the industry is vital for further development.” China Telecom is expected to be the biggest winner out of the restructuring as the fixed-line market has poor growth prospects compared with mobile and broadband services. China Mobile will face increased competition under the plan.
08:25 SY Sybase: Sandell notifies Sybase of intention to nominate alternative slate of directors at 2008 annual meeting (25.88 )

Sandell Asset Management announces that it has notified SY of its intention to nominate three highly qualified independent candidates for election to the board of directors at the 2008 annual meeting of stockholders. This action follows the letter and presentation sent to SY on Oct 12th, 2007 that detailed specific actions Sandell believed the co should take to improve value for all shareholders. Specifically, Sandell requested that the co’s mgmt and board of directors immediately take one or more of the following actions: 1) IPO and spin-off 100% of Mobility segment; 2) aggressive use of the balance sheet to repurchase shares’ 3) sale of the co in whole or in part. “We have attempted to encourage the Company, both publicly and privately, to take action to improve its current discounted share price, but have been very frustrated by the apparent complacency of the board and management toward creating value. We feel that shareholder representation on the board is warranted to ensure that all alternatives are considered and a course of action is taken to close the gap between the current share price and its inherent value.”
08:22 FLIR FLIR Systems: $70 bln “bridge” bill includes $340 mln for G-BOSS, raising ests & tgt to $41 - TWP (30.56 ) -Update-

Thomas Weisel raises their 2008 EPS est and raises their tgt to $41 from $38.50, saying they have confirmed that the $70 bln “bridge” supplemental includes funding of $340 mln for G-BOSS, a key program for FLIR. Firm estimates that FLIR’s share of the $340 mln is $145 mln, and that the spring supplemental could include up to $300 mln more, of which FLIR’s share would be around $130 mln.
08:22 BONDX Bond Watch: Following Through

The market remains bid as the global push to safety continued overnight. Turmoil in the nuke-possessing Pakistan leads the headlines fueling such sentiment while the declining global economic outlook is a close runner-up. The 2-10-yr yield spread hustled its way steeper to 101.9 overnight but has since pulled back in to 97.2 as curve trade faded the move. Bond prices in the EuroZone also benefited from a softer inflation report out of Germany while in Japan, bond prices blew higher in a shortened pre-holiday session. Treasuries will poke through some manufacturing & housing numbers this morning with expectations pretty low. The market made a strong recovery from Wed’s weakness yesterday & mostly bulls will be looking to see today’s pre-market follow-through maintained. Should the momentum stall trade could turn quickly, particularly if the data isn’t bad enough. While the perk in prices is welcomed the Dec correction is still playing out & may yet have room to run on the downside. The dollar is still tracking lower against the majors including the yen which is benefiting from risk aversion carry unwind. The euro has reclaimed the 1.4700 tentatively with headwinds above at 1.4725. Spot gold is charging higher at 832.60 (+7.20) while crude oil is up just a bit at 96.76 (+0.14). The calendar has Chicago PMI (9:45) & new home sales (10). The euro is at 1.4987 & the yen is at 113.0550 while the 10-yr is +11/32 yielding 4.152%. For more bond & economic commentary click here.
08:21 NVDA NVIDIA to postpone shipments of MCP72 chipset family to January - DigiTimes (35.14 )

DigiTimes reports the co originally planned to roll out the new MCP72 chipset in late November or early December but will now postpone shipping to January, along with the planned launch of its MCP78, according to sources at Taiwan motherboard makers. The sources detailed that Nvidia will introduce the new nForce 700a chipset family for AMD platforms, which includes MCP72XE, MCP72P and MCP78H in January, in attempts to compete with AMD’s rival RD790 chipset.
08:20 SCANX Early pre-market gappers

Gapping up: GCO +19.8%, CALM +12.2%, SIX +11.1%, CLWT +11.0%, CHRD +10.8%, CHINA +9.5%, DNDN +8.1%, MLNM +5.8%, SOLF +5.2%, ALXA +4.7%, LUB +4.6%, CYD +4.4%, CBAK +4.3%, SYNX +4.2%, NEM +3.6%, SLM +3.3%, CSIQ +3.1%, HOKU +2.8%, WM +2.7%, GFI +2.0%, TOT +2.0%, TIN +1.9%, CSUN +1.8%, FCN +1.7%, HAFC +1.7%, RTP +1.5%, BIDU +1.2%, ABX +1.1%, C +1.0%, PAAS +1.0%, SI +1.0%… Gapping down: ADPI -4.3%, MBI -3.9%, THRX -3.8%, ABK -3.6%, MESA -2.9%, CBK -2.9%, GOLD -1.6%.
08:19 SGR Shaw Group announces completion of SEC inquiry (59.77 )

Co announces that it has received notification from the SEC that the SEC’s Division of Enforcement has completed its informal inquiry, which the company announced in June 2004, and that the Division of Enforcement does not intend to recommend any enforcement action.
08:13 DNDN Dendreon: Color on pre-mkt strength (6.18 )

DNDN is trading up 5% this morning following a Fast Money segment last night that highlighted DNDN as a healthcare play in 2008 (the stock spiked as high as $7 in after-hours). During the segment a CNBC commentator noted that DNDN is expected to release preliminary data in the middle of 2008 to see whether the co’s Provenge drug extends the lives of prostate cancer patients. He noted that if it does, DNDN says the FDA has told the co that it might approve the drug. (Briefing.com note: DNDN saw heavy call buying yesterday prior to the Fast Money segment, with a total of 28.6K Jan08 7.50 calls trading vs open interest of 219K — see yesterday’s 13:17 OPTNX comment for further details on the options trading)
08:11 AUO AU Optronics says could see shortage in global LCDs in 2008 - Reuters (18.31 )

Reuters reports the co said there could be a supply shortage of LCDs in the global market next year. “Supply is seen to grow by 22 to 25 percent, but demand is seen growing by 28 to 30 percent,” an official from AU, who declined to be identified, told a news conference, referring to LCD panels. The official also said the company’s first-quarter sales for next year would not be as weak as the first quarters of previous years.
08:10 WMT Wal-Mart cancels movie download service - Reuters (47.77 )

Reuters reports the co quietly canceled its online video download service less than a year after the site went live, a spokeswoman said on Thursday. Wal-Mart shut down the download site after Hewlett Packard discontinued the technology that powered it, Walmart.com spokeswoman Amy Colella said in an e-mail. She added that it will not look for another technology partner. HPQ spokesman Hector Marinez said the co decided to discontinue its video download-only merchant store services because the mkt for paid video downloads did not perform “as expected.” He noted that the Internet video business remains uncertain and is changing rapidly. (BBI, NFLX)
08:08 COP ConocoPhillips OKs sale of China gas field to EOG, sources say - DJ (88.65 )

DJ reports the co has agreed to sell its Chuan Zhong natural gas block in China’s Sichuan province to Houston-based EOG Resources (EOG), two people familiar with the deal said Friday. The Chuan Zhong block, which covers an area of 295,000 acres in southwestern China and includes the Ba Jiao Chang gas field, produced an average of 10.3 mln cubic feet of natural gas a day in 2006. The deal marks EOG Resources’ return to China’s energy sector and will see it resume ownership of the Chuan Zhong gas block, which it sold some years earlier to Burlington Resources.
08:07 WSM Williams-Sonoma: Tough holiday environment, but material surprise to guidance unlikely- Thomas Weisel (26.34 )

Thomas Weisel notes WSM shares have declined 13.7% over the last three weeks, and the market appears to have priced in some downside to 4Q results. Firm says the retail environment is admittedly more sluggish than expected, although their analysis suggests that trends are not likely to be worse than the year ago quarter, when the slowing environment caught Pottery Barn by surprise.
08:04 BONDX Economic Calendar

Chicago PMI at 9:45 & new home sales at 10.
08:04 MRGE Merge Healthcare reports Q2 and restates previous results (1.40 )

Co reports Q2 GAAP EPS of ($0.32), includes charges, may not compare to ($0.26) consensus; reports revs of $14.0 mln vs $14.5 mln consensus. Co also announces it has filed restated financial statements for the years ended December 31, 2006, 2005 and 2004 and for the three months ended March 31, 2007 and 2006
08:03 TRMP Trump Entertainment: New credit facility should eliminate financing concerns (4.29 )

Brean Murray notes late yesterday, TRMP announced that it entered into a new $493 mln first lien mortgage credit facility that will be used to refinance all of the co’s current first lien debt. The new agreement eliminates requirements to maintain certain leverage, first lien leverage and interest coverage ratios, which the firm says, should be a positive for the stock. The new agreement should alleviate concerns over funding the completion of the Taj Hotel Tower and concerns regarding debt covenants.
08:02 MLNM Millennium Pharm to receive $40 mln milestone payment for achievement of sales threshold for Velcade (Bortezomib) for injection (15.13 )

Co announces that it will receive a $40 mln payment from Ortho Biotech Products for achieving a material sales milestone in 2007 for Velcade outside the U.S. Milestone payments are recorded in the strategic alliance revenue line on the co’s income statement.
08:01 S&P futures vs fair value: +15.0. Nasdaq futures vs fair value: +17.0.

Stocks are poised to start the day on a positive note. There is not a specific news item that accounts for the positive sentiment, although there is a sense that the market over-reacted to the news of Benazir Bhutto’s death. Reports that Berkshire Hathaway (BRK.A) is buying a reinsurance unit from ING is making headlines this morning.
08:00 CSC Computer Sciences wins $613 mln Defense Information Systems Agency contract for Information Systems Network Support (49.61 )

Co announces that it has been awarded the Defense Information System Network Network Management Support Services-Global Recompete Network Engineering contract from the Defense Information Systems Agency. The indefinite-delivery/ indefinite-quantity contract, which has a two-year base period and three one-year options, has a contract ceiling amount of $613 mln if all options are exercised. This contract is the result of a competed acquisition, and is a continuation of the previous DISN Network Management Support Services-Global Network Engineering Contract. The DNMSS-G contract was awarded to CSC in June 1999.
08:00 CRIS Curis announces sale of its BMP-7 assets to Stryker (1.02 )

Co announces that it has entered into an agreement to sell and assign its remaining BMP-7 technologies to Stryker. CRIS will receive an initial payment of $1 mln, which is net of a payment to be made by Curis to a former third party collaborator of Creative BioMolecules, a predecessor company involved in the 2000 merger that formed Curis. In addition to the initial payment, Stryker has agreed to make cash payments to Curis upon the successful achievement of specified clinical development and drug approval objectives. In lieu of royalty payments, Stryker has also agreed to pay additional cash payments upon the achievement of specified net product sales targets, should such targets be achieved within contractually-specified time periods that are based on the expiration of valid claims of Curis’ BMP-7 intellectual property. Assuming that at least one product is successfully developed and commercialized by Stryker on a global basis, Curis could receive up to approximately $41 mln in such payments. However, in connection with its receipt of such payments, Curis would be required to make payments of up to approximately $14 mln to the former third-party collaborator if such product candidates or products are designed to treat certain indications affecting chronic kidney disease patients.
08:00 AVNX Avanex: The stock is oversold; and a buying opportunity - Roth Capital (0.97 )

Roth Capital notes yesterday AVNX reported that it filed an arbitration complaint against 3S Photonics of France. As a result of 3S’ premature termination of the distribution agreement, the co expects that revenue for F2Q will be in the range of $51-53 mln, compared to the previous guidance of $56-58 mln. The firm believes the gross margin expansion strategy remains intact. As a result of yesterday’s pullback, the stock is trading at 0.84x FY08 revenue estimate, which they believe is an attractive entry point, especially considering the company has $46.5 mln or $0.20 per share in cash and no debt. They believe the stock was oversold, and as a result, would view the pullback as a buying opportunity.
07:55 AET Aetna to end payment for a drug in colonoscopies - NY Times (57.78 )

NY Times reports the co is the latest insurer to clamp down on the use of a powerful anesthetic during an increasingly common form of colon cancer screening. The co will send a letter to doctors on Friday, saying that it plans to classify the drug as “medically unnecessary” for most such procedures. As of April 1, Aetna plans to stop paying for its use in those cases. Critics say Aetna’s decision would be a step backward in the battle against cancer of the colon and rectum, which trails only lung and prostate cancer as a cause of cancer death among Americans, according to the federal Centers for Disease Control… All three major medical associations for specialists who perform colonoscopies have published guidance statements saying the anesthetic was not needed for routine procedures.
07:55 LXP Lexington tgt cut to $19 from $24 at Cantor Fitzgerald (14.64 )

Cantor Fitzgerald cuts their tgt on LXP to $19 from $24 noting on Monday, after market close, Lexington announced a $2.10 per share special dividend due to planned asset sales. The firm expects another special dividend in 2008 as a result of additional planned asset sales. The firm continues to rate the shares of Lexington a Buy based on a high quality portfolio, attractive and secure dividend yield, strong portfolio operating performance and a well positioned balance sheet
07:52 MGM MGM Mirage: Dubai World increases MGM Mirage stake - WSJ (84.25 )

WSJ reports Dubai World increased its stake in casino operator MGM Mirage to 6.5% after agreeing to buy five million shares from a foundation founded by MGM controlling shareholder Kirk Kerkorian. Dubai World, a holding company for the Persian Gulf state that previously held a 5% stake in MGM, bought its additional shares from the Lincy Foundation for $424 million, or $84.80 a share. The deal was announced Friday in a filing with the SEC. In the filing, Dubai World said the purchase was for investment purposes.
07:52 ATK Alliant Tech initiated with a Neutral at Cowen (116.50 )
07:51 ENDP Endo Pharm: Think Phase I inhaled fentanyl compound could be a substantially differentiated product- Baird (26.86 )

Baird maintains their Outperform and recommend purchase of the stock following the in-licensing of a Phase I inhaled fentanyl compound from Alexza (ALXA). They think this device system could be a substantially differentiated product, but need to see more data to determine its viability in the marketplace. In light of FDA’s very conservative stance, the firm says they also need to be assured that there will be no safety concerns with the product.
07:49 ARTC ArthroCare: Discounting the Discocare rumors- Oppenheimer (48.12 )

Oppenheimer says when the N.Y Post published a negative article with a questionable source of information and that was followed by negative research reports from little known companies about a stock that is heavily shorted, they became skeptical. The firm says while it is unclear if Discocare has done anything wrong, they believe at most Discocare is responsible for less than 3% of Arthrocare’s rev. Even if Discocare has broken the law, they doubt that this applies to all related revenue. They believe this issue has been blown out of proportion. Firm reits Buy and $70 tgt.
07:49 Stock Index futures rally sharply in recent trade, make new morning highs

Currently, Mar. S&P 500 @ 1502.00 +12.25. Mar. Nasdaq 100 @ 2144.00 +12.50. Mar. Dow @ 13546 +87.
07:47 Gold to pass record in 2008 on inflation, survey says - Bloomberg.com

Bloomberg.com story discusses the outlook for Gold, saying Gold will rise to a record in 2008, increasing for an unprecedented eighth consecutive year, as investors seek protection from accelerating inflation, metals analysts say. Gold will probably average $800 an ounce, compared with $696 this year, according to the median estimate of 37 traders, analysts and investors surveyed by Bloomberg News. Gold has gained 30% to $827.20 an ounce in London this year, its best year since 1979, when the Iranian revolution crippled crude- oil exports and U.S. inflation surpassed 13%. Prices may gain as much as $100 in 2008, because of production shortages, said Graham Birch, the London-based head of BlackRock’s natural resources team that manages $40 bln. “The price needs to be north of $1,000,” he said. “$800 is not enough to reverse the gradual decline in production.”
07:45 Hedge funds feeling pinch on credit, too - WSJ

WSJ reports it isn’t just consumers who are having a harder time getting credit from lenders. It’s hedge funds, too. Investment banks are cutting back on loans to hedge funds, eliminating some clients and raising borrowing fees for others. The lenders are slimming their balance sheets after heavy losses in the debt mkts in recent months. And, after taking multibillion-dollar write-downs, they also are becoming more cautious as the economy slows, according to people familiar with the situation. If the change continues, it could put some pressure on the profits of the prime-brokerage units of the major banks. The move also could put pressure on the returns of some hedge funds, which often rely on healthy doses of borrowed money, or leverage, to boost their returns.
07:43 EFOI Energy Focus: New distribution agreement with TCP gives EFOI the broad marketing and sales reach needed to penetrate high efficiency lighting market - Merriman (6.85 )

Merriman says Energy Focus has established a broad marketing and sales reach into the commercial and industrial markets as a result of its private label alliance with T.C.P. The private label alliance with T.C.P includes three LED based lighting products — the LED based EFO Dock Light, the Armada Globe and the Light Rail. The firm says shipments of the Dock Light to T.C.P are expected begin immediately. The firm says Energy Focus articulated its success in developing new efficient lighting solutions for the military, which they believe could translate into significant EFO lighting sales to this important vertical next year.
07:42 MS Morgan Stanley’s CICC stake in doubt - FT (53.32 )

FT reports the $5 bln investment in China Investment, the sovereign wealth fund, by the co is raising questions about the future of the cash-strapped US bank’s stake in one of China’s premier investment banks. Its 34% passive holding in China International Capital is a source of cash for Morgan Stanley, which this month announced its first quarterly loss and $9.4 bln of writedowns on subprime losses. There would be plenty of potential buyers should Morgan Stanley decide to sell its stake, including private equity cos and foreign securities cos seeking a substantial foothold in China’s growing mkt.
07:35 Pound falls to a record against Euro as U.K. house prices drop - Bloomberg.com

Bloomberg.com reports the pound fell to a record low against the euro for a seventh day, reversing an earlier gain, after an industry report showed house prices declined for a second month in December. Home values dropped 0.5% from November, when they fell 0.8%. Traders raised bets on the Bank of England cutting interest rates next year as the drop in house prices adds to signs of slower economic growth. Briefing.com note: U.S. New Home Sales data is due out at 10:00 (ET) today.
07:31 RSYS RadiSys: Expect solid 4Q07; reducing FY08 and FY09 projections- Cantor Fitzgerald (13.64 )

Cantor Fitzgerald says they are making a number of revisions to their financial model. First, they believe that 4Q:07 has tracked ahead of their initial expectations and, are increasing their 4Q:07 rev and EPS ests from $94.3 mln and $0.11 to $96. 4 mln and $0.13, respectively (consensus is $0.12 on $95.36 mln). Second, firm believes they may have been too aggressive regarding FY:08 and FY:09 outlook as it relates to Nokia (NOK) and are therefore tweaking down their FY:08 and FY:09 revenue and EPS projections. FY:08 revs have been reduced to $382.8 mln from $388.0 mln and EPS declines to $0.47 from $0.52 (consensus is $0.54 on $383 mln)
07:30 Most Asian markets fall on Bhutto death - Newsweek

Newsweek reports most Asian mkts fell amid anxiety over the assassination of Pakistani opposition leader Benazir Bhutto and lingering worries about the outlook for the U.S. economy. Bhutto’s death on Thursday, just ahead of Jan. 8 elections, sent shock waves through international markets on worries that global instability may follow, although some analysts said the impact is likely to be limited. While Pakistan’s stock mkt was closed, the mkt reaction in neighboring India was muted. Mumbai’s Sensex index dipped 0.1%. In Tokyo, Japan’s stock market wrapped up the year with a sharp drop. The Nikkei 225 index fell 1.7%. Mainland Chinese mkts ended a stellar if turbulent year on a down note. The Shanghai Composite index fell 0.9% on worries that authorities will raise interest rates or take other steps to cool the country’s blazing growth. In Hong Kong, jitters over Bhutto’s assassination and continued concerns about the U.S. economy dragged down the benchmark Hang Seng Index by 1.7%.
07:30 CHINA CDC Corp says co insiders purchased 467,825 shares during last nine trading days (4.11 )

Co announces that directors and executives have purchased a net amount of approximately 467,825 shares since the insider trading window was opened on December 17, 2007. Additionally, during the fourth quarter of 2007, the company and its subsidiaries repurchased 366,000 common shares at an average price of US$6.31 per share for a total of US$2,309,246.
07:30 MYL Mylan Labs announces final FDA approval for Cetirizine Hydrochloride tablets (13.80 )

Co announces it has received final approval from the FDA for its Abbreviated New Drug Application for Cetirizine Hydrochloride Tablets, 5 mg and 10 mg.
07:26 ING ING to sell N.R.G. unit to Berkshire Hathaway - Fox Business (38.90 )

Fox Business reports the co announced today that it has reached an agreement with Berkshire Hathaway Group (BRK.A) to sell its reinsurance unit N.R.G. for approximately EUR 300 mln. The sale is part of ING’s strategy to focus on its core insurance, banking and asset mgmt businesses.
07:21 FREE Freeseas significantly expands fleet with accretive acquisitions- Cantor Firtzgerald (5.31 )

Cantor Fitzgerald notes Wednesday, FreeSeas announced it agreed to purchase two Handysize vessels for an aggregate price of $76.8 mln. The firm says no charter has yet been arranged for the two new vessels, so for modeling purposes they assume the ships are fixed for short-term charters at a rate of $30,000 per vessel/day. Firm says they are encouraged to see FreeSeas utilize some of the cash from their public equity offering in October 2007 to make accretive acquisitions. They note that the co still retains cash on the balance sheet to make additional vessel purchases.
07:20 Citigroup, Goldman cut LBO overhang with discounts up to 10% - Bloomberg

Bloomberg reports Citigroup (C), Goldman Sachs (GS), Morgan Stanley (MS) and JPMorgan (JPM) are offering discounts of as much as 10 cents on the dollar to clear a $231 bln backlog of high-yield bonds and loans. While lenders reduced the overhang by 32% since July, they are struggling to unload debt from this year’s record $438 bln of leveraged buyouts after losses from securities linked to subprime mortgages reduced demand for higher-yielding assets, according to data compiled by Bloomberg. They sold some bonds at a discount of 10% to face value and loans at 5% below par, according to Barclays.
07:16 FTK Flotek Industries profiled in New America section of IBD (38.32 )

IBD reports oil is big business, especially when commodity prices are high and demand strong. As oil cos crank up drilling in such an environment, the work trickles down to oil field services providers and their suppliers. One of the suppliers to the suppliers is Flotek Industries. It focuses on specialty chemicals used in drilling, as well as drilling tools and gas extraction gear. Flotek’s customers include three of the biggest names in the oil field services industry, Halliburton, Schlumberger and BJ Services. Flotek’s overall sales have taken off since 2003 when the co took in just $15 mln. By last year, the sum was $101 mln. Earlier this year, Schlumberger and BJ Services decided to add the “green” chemicals to their tool chest as well. While Halliburton is one of if not the biggest buyer of Flotek’s “green” additives, BJ and Schlumberger are still in the early stages of getting their customers onboard. Flotek’s half-dozen or so environmentally friendly microemulsion additives — protected by patents and trade secrets — give the co a competitive edge in a packed mkt. Analysts expect expanded use of microemulsions in already productive oil fields to provide another leg of growth. Most of Flotek’s jobs are in the U.S., but Flotek has been making a push to expand internationally. Flotek will earn an estimated $1.01 a share in 2007, up from 61 cents in 2006, according to analysts polled by Thomson Financial. The analysts expect earnings to jump 80% in 2008, to $1.82 a share, and move up 51% in 2009.
07:11 CHRD Chordiant Sftwr signs largest deal ever with Vodafone; further proof CHRD is more than banks- CIBC (8.12 )

CIBC notes yesterday after the close, CHRD filed an 8-K detailing a ~$26 mln transaction with Vodafone (VOD). This deal, the largest in CHRD’s history, is yet another demonstration of increasing geographic and vertical diversity in its business and is the first time it has entered A.P.A.C. Firm says this transaction will contribute, at worst, $18.9 mln of license revenue overall, including $9.1 mln in FY08, giving CHRD additional visibility. The firm notes the co guided and the Q1 shortfall is attributable to higher commission expense and lower than expected revenue from VOD in F1Q. They say the pre-announcement is mostly a non-event.
07:02 CALM Cal-Maine Foods reports Q2 EPS of $1.69 vs $0.27 in yr ago period; revs $223.69 mln vs $137.73 mln in yr ago period (25.85 )

“Looking ahead, our feed costs remain high, and we expect this trend to continue with the high demand for corn for ethanol use creating additional price pressures. However, both the egg industry and the USDA predict that egg production will be similar to 2007 levels, and this should support profitable egg prices for the year ahead”.
07:01 CYD China Yuchai subsidiary wins major awards in Chinese auto parts convention (9.87 )

Co announces that its subsidiary, Guangxi Yuchai Machinery, has won three major awards at the China International Summit Forum on the Auto Parts Industry in Beijing.
07:01 NCOC National Coal Corp. announces it has sold two mln shares of its common stock in a private placement netting total proceeds of approx $8 mln (5.74 )
06:52 CTV Commscope: Est CTV EPS accretion of $0.19, or 6% from the deal in 2008- Baird (31.39 )

Baird notes the co closed the acquisition of Andrew Corporation for $2.65 billion ($13.50 in cash, $1.50 in CTV stock per share). They estimate EPS accretion of $0.19, or 6% from the deal in 2008. There may be some near-term uncertainty until new guidance is issued, but the firm believes the combined co has significant opportunities to drive EPS growth through synergies/cost saving programs. Firm reits their Outperform and $55 tgt.
06:49 GCO Judge rules for Genesco in $1.5 bln buyout - AP (33.06 )

AP reports a judge rules Thursday that Genesco (GCO) executives did not commit fraud during negotiations over a $1.5 bln acquisition and that Finish Line (FINL 3.05) must complete the purchase. Nashville Chancellor Ellen Hobbs Lyle dismissed Finish Line’s claims that Genesco withheld key financial information that could have signaled worse-than-expected earnings after the deal closed in June. Lyle said Finish Line and UBS (UBS) were sophisticated enough to know what they were getting into with the $54.50-per-share purchase. That case is still pending, but Lyle disagreed that the combined co would be doomed. “The merger has a reasonable chance of succeeding,” she said.
06:38 CALLS Early Research Calls I

Downgrades: Bear Stearns downgrades MSC Industrial (MSM 41.70) to Peer Perform from Outperform. Miscellaneous: Lehman initiates El Paso Pipline Partners (EPB 24.92) with an Overweight… Standpoint Research initiates Ambac Financial (ABK 29.14) with a Buy and sets a 3-yr tgt of $58, based on shares that trade at 0.55x book value, 4x cash flow, 4x earnings (’09) and believe that despite exposure to sub-prime, ABK is a solid underwriter with safe risk and capital management practices in place.
06:30 Weak banks, carmakers end European stocks rally

European stocks dipped in early trade on Friday, falling for the first time in five sessions as banking shares slipped on renewed worries over the global credit crunch. Geopolitical concerns following the assassination of Pakistani opposition leader Benazir Bhutto also dampened the mood in equity markets around the world… Around Europe, Germany’s DAX index shed 0.4%, UK’s FTSE 100 index was down 0.6% and France’s CAC 40 fell 0.6%. (Reuters)
06:29 Asian stocks fall as Bhutto assassination highlights geopolitical risk; Sensex ends down 10pts

Asian stock markets fell Friday after the assassination of Pakistani opposition leader Benazir Bhutto heightened geopolitical risk, sending Wall Street sharply lower and leading Japan to an almost 2% decline on its final day of trade for the year. The Karachi Stock Exchange is closed for three days as the nation observes a period of mourning for the slain politician… The Nikkei closed a truncated session down 1.7% at 15,307.78. Japanese financial markets will be closed from Dec 31 through Jan 3. The Hang Seng fell 1.1% to 27,546.82, while the South Korean KOSPI closed down 0.6% at 1,897.13. The Shanghai Composite was down 0.89% at 5,261.56… Mirroring the weak trend in the global markets following the assassination of former Pakistan Prime Minister Benazir Bhutto, the Sensex opened with a negative gap of 59 points at 20,158. Fresh buying at lower levels saw the index move into positive zone and touch a high of 20,259. The index, thereafter, exhibited lacklustre movement for the major part of the day before slipping to a low of 20,023 - down 236 points from the day’s high. Late buying saw the index move up, once again, into positive zone and finally end with a marginal loss of 10 points at 20,207. (Thomson, The Business Standard)
06:20 S&P futures vs fair value: +8.2. Nasdaq futures vs fair value: +6.8.
06:19 European Markets

FTSE…6470.20…-27.60…-0.4%. DAX…8027.40…-11.20…-0.1%.
06:19 Asian Markets

Nikkei…15307.78…-256.91…-1.7%. Hang Seng…27370.60…-472.33…-1.7%.
05:37 CSHB Community Shore Bank reports Q4 increases in loan loss provision (6.36 )

Co announces that it will take an additional provision in Q4 for the impairment of one commercial loan that is part of a $5 mln relationship. In addition to the C&I loan, this relationship includes loans collateralized by commercial real estate and one residential construction project. Community Shores is also increasing its reserve allocation for loans to residential real estate and land developers due to deteriorating conditions in the Bank’s local market. The co estimates its Q4 provision for loan losses to be approx $1.0 mln. This estimate provides for a specific allocation of $689,000 related to the impairment of the previously-mentioned C&I loan. Additionally, an increased allocation of $100,000 has been made on its $15 mln portfolio of residential and land development loans. The increased provision should lower pre-tax earnings by approx $0.68 per diluted share when CSHB reports its financial results for Q407 and FY07.
05:28 GSK Glaxo says Advair shows edge over Spiriva in COPD - Reuters (51.32 )

Reuters reports GlaxoSmithKline (GSK) said on Friday that clinical trial results showed its top-seller Advair had an edge over Pfizer’s (PFE) rival product Spiriva in treating patients with the lung disease COPD. A two-year study of 1,300 patients found both drugs had a similar impact on rate of exacerbations, but people treated with Advair gained a significant improvement in health status and greater survival benefit than those on Spiriva, the firm said. Advair reduced the risk of patients with chronic obstructive pulmonary disease dying from any cause by 52% compared with patients on Spiriva. Results of the first head-to-head study of the two medicines in COPD were published in the American Journal of Respiratory and Critical Care Medicine. While the number of exacerbations — or sudden worsening of symptoms — was not significantly different between the two groups, cases requiring antibiotics were more frequent in patients on Advair while exacerbations needing systemic steroids were more common with Spiriva.
05:25 Citigroup, HSBC among banks considering selling units - WSJ

The Wall Street Journal reports in a sign that tougher times lie ahead, U.S. and European banks are considering sales of everything from branches to entire units. Possible sellers include Citigroup (C), which may unload or shut several midsize units, and HSBC Holdings plc (HBC), which could exit all or parts of its $13 bln auto-finance business, say people familiar with the situation. “I think we are going to see a real wave of these coming through in the first half of next year,” says Huw van Steenis, a banking analyst at Morgan Stanley in London. Spokeswomen for HSBC and Citigroup declined to comment on any potential asset sales. Some executives estimate that Citigroup could dispose of as much as $12 bln worth of what are considered noncritical assets, according to the Journal. Units it could possibly shed include Student Loan Corp., which is 80% owned by the bank; its N. American auto lending business; Brazilian credit card co Redecard SA, in which Citigroup held a 24% stake as of September 30; and its Japanese consumer finance business, according to the Journal.
05:19 BRK.A Buffett to start a bond insurer for cities, states - WSJ (137800 )

The Wall Street Journal reports Warren Buffett is starting up a bond insurer that aims to make it cheaper for local governments to borrow and promises to be a tough competitor for the industry’s incumbents. The investor’s Berkshire Hathaway Assurance Corp., set to open for business today in New York state, will guarantee the bonds that cities, counties and states use to finance sewer systems, schools, hospitals and other public projects. The new venture, backed by an almost-certain triple-A credit rating, is likely to be cheered by municipalities and municipal-bond investors because it will offer them an alternative at a time when other bond insurers’ ratings look suspect. Mr. Buffett said in an interview that interest appears high enough for the new co to seek permission to operate in other states that account for a large chunk of municipal-debt issuance. After New York, he and Ajit Jain, who heads Mr. Buffett’s insurance businesses, will seek approval to open in California, Puerto Rico, Texas, Illinois and Florida. “Ideally we’d be licensed in every state, but there’s a limit to what we can do,” Mr. Buffett told The Wall Street Journal. “We can’t guarantee everything, and we will not take risk beyond what’s prudent for us.” He added, however, that he would commit “quite a bit of capital if we like the business.”
05:11 Morning News Summary: BRK.A - C/HBC - GSK

WSJ: Buffett to start a bond insurer for cities, states (BRK.A)… Citigroup (C), HSBC (HBC) among banks considering selling units. Reuters: Glaxo (GSK) says Advair shows edge over Spiriva in COPD.
00:46 BBI Blockbuster mentioned positively in Weekday Trader - Barron’s Online (3.90 )

Barron’s Online reports those bullish on Blockbuster (BBI) say the co could rediscover its 2004 earnings peak by raising prices for its DVD-by-mail programs, reinstituting some form of late fee and paring back on inefficient advertising expenses. Arvind Bhatia, an analyst with Sterne, Agee & Leach, says the online unit could break even for the first time in 2008. He estimates online sales will grow from 10% of total revenue this year to 11.5% in 2008. Additional announcements could have a positive impact on Blockbuster shares. Ward Davis, managing partner at Trivium Capital Management, believes Blockbuster could be worth more than $12 in two years. Analysts surveyed by Thomson Financial expect BBI to post a loss of 83 cents per share this year, but forecast a per-share profit of five cents in 2008. Over the next 24 months, Davis sees an incremental EBITDA improvement of $245 mln at Blockbuster, thanks to stemming losses in the online program, cost savings via restructuring and a smaller advertising budget. “And that’s really before you get to see Jim Keyes work his retail and merchandise magic on the company,” Davis adds. Additionally, Sterne Agee’s Bhatia sees the potential for a $20 mln to $40 mln EBITDA windfall for Blockbuster in 2008, as former Hollywood Video customers migrate to the nearest Blockbuster.
00:43 WIRES On The Wires

On December 26, 2007, the Directorate-General for Competition of the European Commission has notified LAN Cargo S.A. and LAN Airlines S.A. (LFL) of the initiation of proceedings against 25 cargo airlines, among them LAN Cargo S.A., for allegations of anti-competitive behavior in the air freight business.
00:42 MESA Mesa Air delays release of Q407 results (3.40 )

Co announces that it is delaying the release of its financial and operating results for Q407 until on or about January 15, 2008 and canceling the earnings conference call originally scheduled for Friday, December 28. In its Form 12b-25 filing with the SEC on December 14, 2007, MESA reported that it was delaying the filing of its Form 10-K pending completion of its review of certain estimates and reserves that may affect the financial statements. The co’s review of such estimates and reserves remains ongoing and is not expected to be completed until early next week.
00:39 SLM SLM announces the pricing of its public offering of common stock and mandatory convertible preferred (19.65 )

Co announces the pricing of the public offerings of 101,781,170 shares of its common stock at $19.65 per share and of $1.0 bln aggregate liquidation preference of 7.25% mandatory convertible preferred stock, series C. Each share of mandatory convertible preferred stock, series C, represents a $1,000 liquidation preference and is subject to mandatory conversion on December 15, 2010, into between 41.7188 and 50.8906 shares of SLM common, unless previously converted at the option of the holder. Both offerings are expected to close on December 31, 2007.