Style Outperformer:
Small-cap Value (-.15%)
Sector Outperformers:
Airlines (+6.19%), Drugs (+2.30%) and HMOs (+2.19%)
Stocks Rising on Unusual Volume:
PSMT, EBS, FLO, GSK, LLY, STC, XL, TEVA, TRLG, ESPW, WDFC, HELE, CYBX, MRTN, IPAR, LEAP, DMND, RICK, OZRK, ALEX, CELG, ALGT, CLNE, GENZ, IDRA, RBCAA, ANL, HTV, KNM and CSH
Stocks With Unusual Call Option Activity:
1) COG 2) ABT 3) SPG 4) ODP 5) HOLX
Late-Night Headlines
Bloomberg:
- China's 146 million stock investors, burned by slumping prices, are pulling money out of equities and putting it into deposits. That's not necessarily a good thing for banks
- Australian business confidence fell to the lowest level in seven years in June as cooling domestic demand and spiraling raw-material costs eroded corporate profits.
- New Zealand companies say sales and trading will decline in the third quarter, pushing profit expectations to a 25-year low, as economic growth slumps.
Wall Street Journal:
- China Scrambles to Meet Deadlines for Olympics. Transit, Construction Fall Behind Schedule As Pollution Persists.
- Virginia Democratic Sen. Jim Webb took himself out of consideration as a vice-presidential candidate amid growing speculation that he was on Sen. Barack Obama's shortlist of possible running mates.
MarketWatch.com:
- Unfortunately for the gold market, contrarians would not be surprised to see more of the same. That's because sentiment among gold timers remains too frothy to support a significant rally.
- Massive housing legislation moved one step closer to passage Monday night, as senators voted to limit debate on the package.
BusinessWeek.com:
- Germany Plans 30 More Wind Farms.
- The Coming of the Car-Bot. In the near future, autonomous driving will lead to safer roads and great fuel-efficiency.
- Regulation Looms for Prediction Markets. The CFTC is likely to become involved in regulating event futures – and it just may boost these markets.
IBD:
- Genzyme(GENZ) Taps Rare Disorders To Grow Profit.
CNNMoney.com:
- Oil speculation: Why we don’t have answers. There’s a lot we don’t know about how the oil futures markets now work. Congress should find out.
- Interactive TV ads are clicking with viewers.
- More cars sing with digital radio.
- GPS devices become a vital tool for business travelers.
Reuters:
- Washington Post picks ex-WSJ boss for editor.
- Ambac(ABK) says has enough funds to meet obligations.
- JPMorgan(JPM) 75% done with tough Bear integration.
- Bigger may be better as smaller hedge funds give up.
Financial Times:
- The biggest hedge funds are on a hiring binge, taking advantage of cutbacks at investment banks to recruit star traders, senior executives and whole teams to help them expand.
- Microsoft(MSFT) set the stage for a full-blown battle to overthrow Yahoo's(YHOO) board of directors on Monday when it declared it was interested in reopening talks to buy all or part of the internet company - but only if a new board was appointed first.
Expansion:
- The European Central Bank has no bias on the future path of interest rates, executive member Gertrude Tumpel-Gugerell said. She said the whole governing council backs President Jean-Claude Trichet in that position and takes the view that last week’s interest-rate increase will help to deliver price stability in the medium term. Tumpel-Gugerell also said that all countries must fight inflation and interest rates in
Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (HCC), lowered estimates, lowered target to $29.
- Reiterated Buy on (GME), target $66.
- Upgraded (MMC) to Buy, raised target to $33.
Night Trading
Asian Indices are -2.75% to +.50% on average.
S&P 500 futures -.62%.
NASDAQ 100 futures -.61%.
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Today in IBD
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Earnings of Note
Company/EPS Estimate
- (HELE)/.30
- (PBG)/.75
- (AA)/.66
- (ZZ)/.04
- (GBX)/.46
Upcoming Splits
- (PCU) 3-for-1
- (ATW) 2-for-1
Economic Releases
10:00 am EST
- Pending Home Sales for May are estimated to fall 3.0% versus a 6.0% increase in April.
- Wholesale Inventories for May are estimated to rise .7% versus a 1.3% gain in April.
3:00 pm EST:
- Consumer Credit for May is estimated to rise $7.5 billion versus an $8.9 billion gain in April.
Other Potential Market Movers
- The weekly retail sales report, (DLM) analyst day, (HANS) business update, (AZZ) shareholders meeting, (ATVI) special meeting, (SEL) shareholders meeting, (CCUR) special meeting, Oppenheimer Consumer Growth Conference and CE Unterberg Towbin Growth Conference could also impact trading today.
Bloomberg:
- Record bets against U.S. stocks may mean the market is on the verge of a rebound fueled by purchases of shares that were sold short, according to JPMorgan Chase & Co.(JPM). So-called short interest on the New York Stock Exchange has risen 55 percent this year to a record 3.6 percent of listed shares, JPMorgan Chief Equity Strategist Thomas J. Lee wrote in a report today. A record 36 percent of the companies in the S&P 500 have at least 5 percent of their shares sold short, the report said. Eighteen percent have more than 10 percent of their shares shorted. The 55 percent jump in short interest since October exceeds all other gains since 2000, the report said. The six previous increases averaged 28 percent and lasted 11 months, Lee wrote. During those periods, the S&P 500 declined an average of 6 percent. The benchmark U.S. stock index gained an average of 8 percent in the six periods since 2000 when short interest declined, according to the report. The typical rally to cover bets reduced short interest by 12 percent. A drop in current short interest by that amount would lower the figure by 2.4 billion shares, worth about $70 billion, Lee said.
- Broadcom Corp.(BRCM) the maker of chips for cell phones, climbed the most in two weeks in New York trading after Piper Jaffray Cos. upgraded the stock to ``buy'' and said second-quarter revenue may exceed estimates.
- Juniper Networks Inc.(JNPR) rose the most in almost five months in Nasdaq trading after a Piper Jaffray Cos. analyst said new products will help the maker of networking equipment meet revenue goals.
- The German economy,
- NYSE Euronext’s Liffe derivatives market will offer to guarantee credit-default swaps traded outside of exchanges, as the industry responds to demands from regulators to reduce the risk of market failure.
- Freddie Mac(FRE) and Fannie Mae(FNM) plunged in New York Stock Exchange composite trading on concern the two largest mortgage-finance companies may need to raise more capital.
- Commodities plunged the most since March, led by tumbling grain futures, as favorable Midwest weather improved prospects for U.S. crops. Energy prices also dropped.
- Goldman Sachs Group Inc.(GS), the securities firm that generates more trading revenue than any of its U.S. rivals, lost money on 20 days last quarter, more than the prior period, as the value of credit products fell.
- Federal Reserve Bank of San Francisco President Janet Yellen said the central bank shouldn't allow any increase in wages and prices to fuel inflationary pressures as sluggish U.S. economic growth quickens next year.
- Microsoft Corp.(MSFT) said it may revive takeover talks with Yahoo! Inc.(YHOO), the second most popular U.S. search engine, if investors back Carl Icahn's attempt to oust the board and Chief Executive Officer Jerry Yang.
- Investors betting on a rebound in China's tumbling stocks are setting themselves up for more losses, according to Marc Faber, who told investors to bail out of U.S. stocks before 1987's so-called Black Monday crash and correctly predicted last August the U.S. would enter a bear market. Faber's forecast contrasts with local stock analysts, who are as bullish as ever even after a 51 percent plunge in the CSI 300 Index since its October record.
- Manufacturing in Germany and the U.K. declined in May, choked by record commodity prices and slowing economic growth across Europe.
Wall Street Journal:
- GM May Cut Management, Sell Brands, Boost Liquidity.
- Sen. Barack Obama, the presumed Democratic presidential nominee, faces dissent from dozens of top fund-raisers and other supporters of former rival Sen. Hillary Clinton, who are angry over how she was treated during their bruising primary battle and are hesitating to back Sen. Obama.
- US Congress Urges Commodities Watchdog to Speed Up. With oil at more than $140 a barrel, the real fireworks in Washington resume this week on one of the hottest issues in the global economy: whether speculation is contributing to the past year’s doubling of crude-oil prices and should be curbed.
Dagens Nyheter:
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Expansion:
- Sales of fuel at the pumps of Spanish service stations have fallen 2% in the first five months of the year compared with the same period of 2007, citing data from oil companies. In May, the decline was 4% from the year-ago month.