Thursday, March 08, 2007

Friday Watch

Late-Night Headlines
Bloomberg:
- American Airlines parent AMR Corp.(AMR) will consider Boeing Co.(BA) 737-800s to replace its fleet of 300 MD-80 jets and expects an announcement “in the near future,” citing CFO Tom Horton.
- Microsoft Corp.(MSFT) Chairman Bill Gates’ net worth swelled to $56 billion, making him the world’s richest person, followed by Warren Buffett, at No. 2, according to Forbes magazine’s annual survey of billionaires.
- New Century Financial(NEW) halted new loans and lined up almost $1 billion in new funding to help it stay in business.
- Afghanistan’s economic growth will accelerate over the next two years, according to the International Monetary Fund, with increased production of wheat and fruit.
- PT Bumi Resources, Indonesia’s biggest coal exporter, plans to boost production of the fuel by 50% in the next three years.
- European Union governments plan to set binding targets for the use of renewable energies such as solar and wind power, overcoming an East-West rift, Swedish Prime Minister Fredrik Reinfeldt said.
- Corn prices fell in Chicago and soybeans rose on speculation that US farmers will shift a record number of acres to produce more grain for ethanol.
- China, the world’s biggest energy consumer after the US, may offer tax breaks to companies that support energy conservation, Finance Minister Jin Renqing said.
- National Semiconductor(NSM) said that profit fell less than analysts expected in the fiscal third quarter after the company recovered from an inventory glut. The stock surged 5% in after-hours trading.
- Cooper Companies, the maker of contact lenses, said it earned 60 cents a share in its first quarter versus estimates of .54. The stock jumped 8.44% in after-hours trading.
- Gmarket(GMKT), the South Korean online auctioneer, reported profit of .13/share in the fourth quarter, below analysts’ estimates of .15. The shares plunged 18% in after-hours trading.

bankstocks.com:
- The bulls on subprime mortgage lending learn what fun it can be to be a contrarian investor.

China Business News:
- China Development Bank, which funds the country’s biggest public works projects, may write off $2 billion in bad loans, citing the bank’s board of supervisors.

Nikkei:
- Sony’s(SNE) Sony Computer Entertainment, which loses money on each PlayStation 3 it sells, plans to use cheaper chips to make the games profitable.

JoongAng Ilbo:
- The US and North Korea agreed to remove the communist country from the list of countries that support terrorism, citing North Korean Vice Foreign Minister Kim Kye Gwan.

Late Buy/Sell Recommendations
RBC:
- Rated (CIEN) Outperform, target $33.
- Rated (FFIV) Outperform, target $90.

Citigroup:
- Upgraded (HST) to Buy, target $29.
- Reiterated Buy on (MCD), target $49.

Business Week:
- Hythiam Inc.(HYTM), maker of the Prometa outpatient system to treat drug and alcohol addiction, may have its stock rise as more centers use the treatment. The treatment, which Hythiam licenses to treatment centers, managed-care providers and government agencies, remains controversial and the early results have been “overwhelmingly successful,” citing Ryan Daniels, an analyst at William Blair.
- Mosaic Co.9MOS) shares may rise 55% in a year because rising demand for corn will lead to higher sales of products from the fertilizer producer. “Huge” demand for corn will continue for years, forcing farmers to buy fertilizer to try to increase their yield, citing William Harnisch, president of Peconic Partners.
- Home Depot(HD) is undervalued and may have its shares rise 19% in the next year, citing Douglas Davenport, President of Atlanta Investment Counsel.

Night Trading
Asian Indices are unch. to +25% on average.
S&P 500 indicated -.05%.
NASDAQ 100 indicated +.01%.

Morning Preview
US AM Market Call
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Before the Bell CNBC Video(bottom right)
Global Commentary
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In Play
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Rasmussen Consumer/Investor Daily Indices
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Earnings of Note
Company/EPS Estimate
- (BIG)/.68

Upcoming Splits
- (GES) 2-for-1

Economic Releases
8:30 am EST
- The Trade Deficit for January is estimated to shrink to -$59.8 billion versus -$61.2 billion in December.
- The Change in Non-farm Payrolls for February is estimated at 95K versus 111K in January.
- The Unemployment Rate for February is estimated at 4.6% versus a reading of 4.6% in January.
- Average Hourly Earnings for February are estimated to rise .3% versus a .2% gain in January.

10:00 am EST
- Wholesale Inventories for January are estimated to rise .1% versus a -.5% decline in December.

BOTTOM LINE: Asian indices are slightly higher, boosted by automaker and technology shares in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

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