Subject: [NEXTEL-1] 9:35AM Nextel target raised to $22 at Friedman Billings (NXTL) 17.63 +0.29:

From: [email-masked]
Date: Fri, 20 Jun 2003 12:59:15 -0400

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11:58AM Roxio downgrade details (ROXI) 6.15 -0.68: Stock is down 10.0% this morning following the co's 4 mln share private placement and a B. Riley downgrade to Sell from Neutral; firm believes the co's private placement provides further indication that ROXI is facing a major dilemma with its declining software biz and aggressive spending plans to build the online music distribution biz, which is burning cash; firm is especially concerned about mgmt's lack of attention to shareholder value. Target is $3.50.
11:46AM Volume Alert -- ICOS Corp surges to best levels of the day (ICOS) 39.91 +1.41:
11:46AM Mirant -- trading resumed (MIR) 2.83 -0.27: -- Update --
11:44AM Treasury Market Update : Treasuries are moving sideways near their lows for the day, with the ten-year note down eleven ticks to yield 3.38%. The typical Friday afternoon bond market lull has been allowed to creep into the a.m. hours here, with no economic data or "Fed-speak" to banter about.
11:40AM j2 Global upped to Buy from Underperform at First Albany (JCOM) 41.45 +3.25: --Update-- The upgrade is based on co's $3 price increase for its service, diminished execution risk, and a continued lack of meaningful competition. Rate increase leads firm to raise FY04 est to $2.60 from $2.20. First Albany's price target goes to $46 from $31.
11:37AM S&P 500 levels : -- Technical -- Index recently edged to a new session high but has thus far failed to work through resistance highlighted in the Morning Set-Ups at 1002. Intraday supports are now at 1000 and 998.50. Initial short term resistances, if follow through develops, are at 1003 and 1004.50/1005.
11:36AM Leading Point Gainers By Sector : Retail (KMRT +2.80, NAUT +2.15, S +1.75), Defense (UTX +1.77, GD +1.76, NOC +1.48, ATK +0.77), Biotech (GILD +1.35, AMGN +1.35, BGEN +1.10), Asian Internet (NTES +1.85, SINA +0.78, SOHU +0.46)... Other gainers of interest include JCOM +3.50, ANSI +2.20, ABC +1.99, FILE +1.92, FRX +1.36, USNA +1.07, ESPD +1.00, SSYS +1.00, MATK +0.94).
11:14AM IBM flirting with 50 day average (IBM) 85.18 +0.63: -- Technical -- Big blue is attempting to stabilize above its 50 day sma (85.14) again with imporant range top resistance just slightly ahead at 85.24/85.29 (June highs).
11:03AM Verizon edges to a new five month high (VZ) 40.63 +0.52:
11:02AM Insmed gets European orphan drug designation for GHIS treatment (INSM) 3.45 +0.04: Announces that the Committee for Orphan Medicinal Products of the European Agency for the Evaluation of Medicinal Products has approved the co's application for orphan drug designation in Europe for rhIGF-I/rhIGFBP-3 for the treatment of Growth Hormone Insensitivity Syndrome.
10:56AM Relative Strength: SINA +3.5%, MXT +3.1% and PALM +1.6% break out to fresh session highs :
10:53AM Mirant halted - news pending (MIR) 2.83 -0.27:
10:48AM CDW Computer slips after testing 200 day resistance again (CDWC) 43.84 +0.80: -- Technical -- Solid performance today but the issue has held near resistance at its 200 day ema (44.12). This barrier has provided important resistance on several occasion over the last six months. A sustained penetration is needed to open the door back to the Feb-May highs between 45 and 45.84.
10:47AM Gen-Probe started with an Outperform at Leerink Swann; target $50 (GPRO) 40.65 +1.26:
10:44AM Kmart rallies to best levels since emerging from bankruptcy (KMRT) 24.97 +2.03:
10:35AM Dow Laggards: INTC -1%, HD -0.35%, DD -0.35% :
10:34AM Dow Leaders: GM +2.7%, UTX +2.3%, MCD +1.7%, AXP +1.7% : Dow (+75) is pushing out to its best levels of the day as the tech-dominated Nasdaq (-1) trades fractionally in the red.
10:24AM j2 Global continues to run as market applauds price increase, shorts scramble (JCOM) 41.90 +3.70: Stock was highlighted here yesterday as a Relative Strength name early in the day and a Daily Breakout later in the session. As noted in these comments, JCOM sports a huge short-interest. Based on comments by Pacific Growth that 2004 estimates could move significantly higher following co's price increase to customers (see yesterday's 15:58 comment), many of those shorts are being forced to cover. Latest move carries JCOM shares to a new all-time high.
10:19AM Panera Bread demonstrates relative strength in early trade (PNRA) 40.91 +0.74: Stock is also in the process of breaking out to new 52-wk high. Contributing to advance is stock's very high short-interest of approx. 28% of the float.
10:18AM JDA Software edging back toward support at 11.52 (JDAS) 11.53 -0.11: -- Technical --
10:14AM LSI Logic seen as likely SAS silicon partner for H-P (LSI) 7.82 +0.13: RBC Capital Mkts believes that the Industry Standard Server (ISS) group within Hewlett-Packard is close to selecting a silicon partner for its initial SAS strategy. Firm believes that HP is likely to select LSI over Adaptec for this program.
10:11AM Drexler Tech defended by Raymond James (DRXR) 16.94 +0.32: Raymond James disagrees with certain factual claims and conclusions within a recent research report that has caused the stock to fall heavily over the past several days. Raymond James remains convinced that Drexler's LaserCard technology holds an edge over competing smart card alternatives. Firm is maintaining its Strong Buy rating and $25 target, while noting that a VISIT win will likely catapult the stock significantly higher. (See Briefing archive for June 16 research comments that have pressured DRXR in recent trading).
10:00AM Jetblue Airways downgraded at Raymond James (JBLU) 38.84 -0.87: Raymond James downgrades to Outperform from Strong Buy based on valuation, as the stock is nearing their former target of $41.
9:58AM Youbet.com initiated with Strong Buy at Roth; target $4.80 (UBET) 2.96 +0.25: Stock is up 9.6% this morning after Roth Capital initiated coverage with a Strong Buy rating and $4.80 price target; firm believes UBET will be a primary beneficiary of account wagering due to its key industry relationships, proven technology, a lean operating structure, and proven ability to outgrow its peers.
9:58AM Marsh McLennan cut to Underperform at Friedman Billings (MMC) 52.42 +0.12: The downgrade from Mkt Perform comes as firm predicts deteriorating market fundamentals for insurance brokers in 2004. Target goes to $41 from $48.
9:51AM Pharm Resources begins shipment of Mirtazapine Tablets (PRX) 49.31 +0.87: Co. announces that its principal subsidiary, Par Pharmaceutical, has received FDA approval to begin shipment of mirtazapine tablets in 15 mg, 30 mg and 45 mg strengths and has exclusive marketing rights. The product was developed by Genpharm.
9:51AM Apollo Group earnings preview (APOL) 61.26 +0.30: APOL reports Q3 earnings before the market open June 23. While UBS expects outperformance relative to estimates, thinks the risk/reward in general, and ahead of the quarter, remains unfavorable. Firm concerned about countercyclicality risk and valuation levels. Notes that APOL's current forward PE multiple is within 2% of its four-year high. UBS rates the stock a Neutral.
9:48AM Cognos Inc defended by Lehman (COGN) 28.27 -1.63: -- Update -- Lehman reiterates their Overweight rating and $33 target on COGN after the co guided below Q2 consensus; firm believes the pipeline of business, both straight biz intelligence and analytical apps, remains very healthy; co closed 9 deals over $1 mln (the most ever in a qtr), ASPs were up, sales of the Adaytum products were strong, and the new ReportNet product is now in the hands of the sales force and already impacting sales engagements; firm would be buyers on today's weakness.
9:45AM Family Dollar earnings preview (FDO) 37.84 -0.06: CIBC sees no upside to Q3 earnings estimate; thinks results could come in a penny shy of firm's $0.41 est due to weak spring apparel sales and slower store growth. (Note that the consensus est is $0.40).
9:44AM Sector Watch : Solid start with the Dow pacing the way but the opening jump is currently being trimmed Sector leadership has come from the biotech, airline, paper, broker/dealer, tobacco and banking. The semi sector has slipped into the red after a short lived bounce off the open (AMAT -1.7%, MOT -1.4%, TER -1.2%, AMD -1.3%, ALTR -1.1%). Other weaker groups include: HMO, housing, software, gold and networking.
9:43AM Fox Entertainment appears on track to beat consensus again -- CIBC (FOX) 28.95 +0.15: CIBC believes that Fox is again on track to beat street estimates for 6th straight Q, despite the Auto-led meltdown in Spot. Firm is raising its Q4 est to $0.27 from $0.26, or 4 cents above consensus.
9:38AM XM Satellite: Near-term positives priced in, but could see rally later (XMSR) 10.83 +0.08: --Update-- SG Cowen believes that near-term pluses are priced in, but that 2nd-half should offer more upside. Specifically, believes stock has priced in expected Q2 outperformance, but subscriber accelerations in H2 could trigger a further rally later this year. Firm's DCF valuation suggests a $15 share price.
9:37AM Entegris may underperform near-term - Goldman Sachs (ENTG) 13.15 +0.17: Goldman Sachs maintains their In-Line rating following yesterday's strong results, but firm says the co's flat rev guidance for Q3 is disappointing; while ENTG has been their favorite small−cap stock, ENTG may underperform capex-driven peers in the near-term as relative valuation is stretched and capex growth is likely to outpace wafer start growth in 2H03.
9:35AM Nextel target raised to $22 at Friedman Billings (NXTL) 17.63 +0.29:
9:34AM Applied Films downgraded at Needham (AFCO) 24.39 -0.51: Needham downgrades AFCO to Buy from Strong Buy based on valuation, as the stock is nearing their target of $29 (up from $28).
9:32AM MGI Pharma upgraded at CE Unterberg (MOGN) 24.66 +0.81: CE Unterberg upgrades to Short-Term Buy from Mkt Perform, saying the stock is significantly undervalued given their conviction that MOGN's drug Palonosetron could receive FDA approval by July 27 and could be viewed as the best-in-class 5 HT-3 inhibitor, potentially achieving at least a 30% share of a $1 bln+ mkt.
9:31AM KV Pharm announces $200 mln convertible (KVA) 29.68 unch:
9:30AM Microsoft vacillating near resistance (MSFT) 26.34 +0.27: -- Technical -- Modest push in opening action with the issue probing resistance at 26.40 which has capped the upside over the last two days. The May high comes in thereafter at 26.50.
9:30AM Angiotech Pharm cut to Sector Perform at RBC Capital (ANPI) 39.80 -0.10: The downgrade from Outperform is based on valuation. Firm increases target to $56 from $44.
9:24AM Nasdaq technical levels : -- Technical -- From current levels, the index faces a notable pivot point initially at 1653, followed by additional resistance at 1660. On a failure to hold support at 1653, look for additional support at 1646.
9:19AM Gapping Up/Down : Gapping Up: ACTU +47% (upgraded after court victory), COB +22% (FDA drug approval), RFMI +20.5% (B-Week story), OSUR +11.5% (UBS upgrade), ET +3.5% (Merrill starts at Buy), GM +3% (upgraded, also announces debt offering), ITMN +2% (edges up on CBST news), GE +1.1% (reaffirms guidance)... Gapping Down: UHAL -19.6% (FT article suggests bankruptcy filing may occur), TIBX -11% (misses qtr), AMHC -10% and COGN -7.4% (disappointing guidance), BPUR -7% ($50 mln shelf), HLTH -6.7% (plans $300 mln convert offering), CBST -6.3% (FDA delays drug review), ESRX -6% (subpoena from NY Attorney General), BOBJ -6% (Merrill downgrade), RIMM -4.4% (downgrade), HAL -3.5% (comments on asbestos claims).
9:16AM MCG Capital upgraded at Wachovia (MCGC) 15.12: Wachovia upgrades to Outperform from Mkt Perform; after a recent discussion with mgmt, firm believes that the co has dealt with their credit quality problems and is now poised to increase shareholder value.
9:15AM S&P futures vs fair value: +6.2. Nasdaq futures vs fair value: +6.5. The futures market is at its best levels of the morning suggesting a moderately higher open for the cash market.
9:10AM CuraGen Corp downgraded at Bear Stearns (CRGN) 5.03: Bear Stearns downgrades to Peer Perform from Outperform based on their expectation of limited near-term clinical newsflow; while CRGN is making considerable progress in transitioning from a drug discovery co into drug-development, firm views the co as a clinical news-driven investment story and do not expect any major clinical data before 1H04.
9:07AM Marathon Oil & Kinder Morgan dissolve MKM Partners L.P. (MRO) 26.47: Co. announced that it has signed a Dissolution and Distribution Agreement with Kinder Morgan (NYSE: KMP) to dissolve MKM Partners L.P. and MKM Holdings LLC, which has oil and gas production operations in the Permian Basin of Texas. Marathon holds an 85 percent equity interest in the MKM partnership.
9:02AM Genentech PDUFA date for Xolair is today (DNA) 74.07: Today is Xolair (omalizumab) PDUFA date for moderate to severe allergic asthma. Genentech and partners TNOX/NVS are expected to receive a full approval. Also PDLI is set to receive a 3% royalty on the projected $500 mln worldwide sales. Of note, the FDA panel unanimously backed Xolair on May 15.
9:02AM Lehman Brothers downgraded at Bernstein (LEH) 71.02: Bernstein downgrades to Mkt Perform from Outperform following yesterday's results, saying they believe the high water mark for fixed income revs this year will have occurred in Q1-Q2; firm expects Q3-Q4 rev to have a lower contribution from fixed income as an ever-smaller number of fixed income sectors continue to rally. Target is $80.
9:00AM Cypress Semi restates quarterly results (CY) 12.44: In a 10-Q/A filing, co revises quarterly results to reflect an error in the extraction of data related to the number of stock options utilized to arrive at the deduction for stock-based employee compensation expense. The correct pro forma loss per share is $0.33 and $0.56 for the three month periods ended March 30, 2003 and March 29, 2002 (vs previously reported losses of $0.28 and $0.35).
8:56AM S&P futures vs fair value: +4.4. Nasdaq futures vs fair value: +5.0. The futures market continues trading with a positive bias indicating a moderately higher open for the cash market on the back of yesterday's pullback... Contributing to the favorable trade of the futures are modest gains in the European bourses, the stronger dollar, and the reaffirmation of guidance by GE.
8:53AM Alliant Tech awarded $222.6 mln contract from Navy (ATK) 52.34: Company announces it has received $222.6 mln system development and demonstration (SD&D) contract from U.S. Navy to develop precision-strike, air-to-surface AGM-88E Advanced Anti-Radiation Guided Missile (AARGM). The contract runs from June '03 thru Sept. '08.
8:50AM Valero Energy warns for Q2 (VLO) 37.61: Company warns for Q2 (Jun), sees earnings in the range of $1.00-1.10 vs. Reuters Research consensus of $1.63. Co cites combined impact of continued high natural gas prices, unplanned outages at a few of their refineries, lower sour crude discounts and recent rapid decline in distillate margins to have lowered earnings for Q2.
8:49AM PeopleSoft board recommends that holders reject Oracle bid (PSFT) 17.61: Announces that PeopleSoft's Board of Directors voted unanimously to recommend that stockholders reject Oracle's (ORCL) revised unsolicited offer to purchase all of the shares of PeopleSoft for $19.50 per share in cash. The Board concluded that the proposed combination of PeopleSoft and Oracle faces substantial regulatory delays and a significant likelihood that the transaction would be prohibited.
8:44AM Watch for possible fallout in PBMs ADVP, CMX, MIMS on ESRX subpoena :
8:42AM FileNET initiated with a Buy at First Albany (FILE) 17.08: First Albany initiates coverage with a Buy rating and $23 target, citing the following factors: 1) enterprise content mgmt is becoming a top-spending priority, 2) co recently launched its first major product cycle in 5 years, 3) valuation is compelling, 4) co is one of only two pure-play ECM vendors (with DCTM) with enough critical mass to capitalize on ECM mkt consolidation, 5) co is just starting to get its marketing message out, and 6) co has a highly leverageable financial model.
8:41AM Aspen Tech names Charles Kane as CFO (AZPN) 5.10: Co. announced that Charles F. Kane will succeed Lisa Zappala, effective July 1, 2003. Ms. Zappala will assist with transition over the next several months and will consult on projects for remainder of fiscal 2004. Kane served as Executive Vice President and Chief Financial Officer of Informix Software and, most recently, as Chief Executive Officer of Corechange.
8:41AM ESRX quickly falls 2.60 pts :
8:38AM Express Scripts receives subpoena from NY Attorney General (ESRX) 69.42: In an 8-K filing, co announces that on June 16 it received a subpoena from the Office of the Attorney General of the State of New York. The subpoena seeks information regarding co's compliance with certain state and federal antitrust and consumer protection statutes. Also requests information relating primarily to co's contracts and business practices with respect to health plans organized under New York law. ESRX believes its practices are in compliance in all material respects with applicable laws and regulations.
8:35AM Deutsche still bullish on regional airlines : Deutsche Securities says they remain bullish on the growth prospects of the regional airlines, since the majors continue to highlight the use of regional jets as an important part of their financial recovery. Based on 15x their CY04 ests, firm believes SKYW should trade to $23 and ACAI should trade to $18; firm favors SKYW since the co has already reached a new agreement with United, so their growth for 2004 is more certain, and the co doesn't have any outstanding labor contracts as they are non-union.
8:33AM Orbital Sciences guides for Q2 & Y03 (ORB) 7.65: Company sees Q2 (Jun) revenues of $152-157 mln, no estimate available and reaffirmsY03 revenues guidance to be in the range of $560-580 mln vs. Reuters Research consensus of $586 mln.
8:31AM S&P futures vs fair value: +3.5. Nasdaq futures vs fair value: +3.0. The futures indications are a bit weaker, but continue to suggest a higher open for the cash market in the face of the upward bias in the European bourses, reaffirmation of guidance by GE, and what's shaping up to be the best week for the dollar against the euro in three months.
8:28AM AMERCO could declare bankruptcy today - FT (UHAL) 4.89: The Financial Times reports that UHAL is having serious difficulty securing the emergency finance it needs, and the van rental group could file for bankruptcy as early as today. People close to the discussions said yesterday that a last-minute deal was still possible but that some creditors and bondholders were running out of patience.
8:22AM Morgan Stanley maintains Underweight on PMC-Sierra (PMCS) 12.74: Morgan Stanley maintains their Underweight rating on PMCS; although they believe the co is well-positioned and the telecom industry fundamentals appear to have at least stabilized, they are uncomfortable with the aggressive expectations that are driving the stock's premium valuation.
8:22AM Pre-Market Movers : Trading Up: ACTU +40% (upgraded after court victory), RFMI +21.8% (B-Week story), OSUR +12% (UBS upgrade), COB +12% (FDA drug approval), ITMN +4% (edges up on CBST news), ET +3.5% (Merrill starts at Buy), GM +1% (upgraded, also announces debt offering), GE +0.8% (reaffirms guidance)... Trading Off: TIBX -11% (misses qtr), AMHC -10% and COGN -8% (disappointing guidance), BPUR -7% ($50 mln shelf), HLTH -5.5% (plans $300 mln convert offering), BOBJ -4.6% (Merrill downgrade), CBST -3.9% (FDA delays drug review), RIMM -3% (downgrade).
8:22AM McClatchy Co provides Q2 & Y03 guidance (MNI) 59.95: Company sees Q2 (Jun) EPS of $0.79-0.81 vs. Reuters Research consensus of $0.84. Also sees Y03 (Dec) EPS of $2.85-2.95 vs. Reuters Research consensus of $3.05.
8:14AM Smith Barney initiates coverage on software stocks : Smith Barney initiates the software industry with a Mkt-Weight rating, saying current valuations leave little room for upside as earnings growth resumes; initiates coverage of BEAS and QSFT with an Outperform; MERQ and VRTS with an In-Line; and BMC, SEBL, and SYMC with an Underperform.
8:13AM General Electric reaffirms Q2 & Y03 EPS guidance (GE) 29.86: Company reaffirms Q2 (Jun) EPS guidance of $0.37-0.39 in line with Reuters Research consensus of $0.38. Also see Y03 (Dec) EPS of $1.55-1.70 also in line with the R.R. consensus of $1.60.
8:13AM Crude oil slightly higher : Modest gains noted in London (+1.2%) and in early U.S. action (+0.6%). Traders are citing concerns about a delay in the resumption of Iraqi exports but after sliding 9.6% from high to low over the last week or so, the front month futures have been due for at least a short term pause in the decline.
8:10AM Corporate Bond Update : GM has announced that it will offer $10B in new straight and convertible debt in USD's and EUR's. GM's CFO said in a statement: "One important purpose of these offerings is that they will allow [GM] to use cost-efficient, long-term debt to provide near-term funding of some of its pension and retirement benefit obligations." For an examination of the general historical relationship between corporate spreads and debt issuance, please visit our Bond Brief page.
8:08AM First Charter Corp. warns for Q2 (FCTR) 18.56: Co.. announced several initiatives designed to improve asset quality and to reposition and strengthen its balance sheet. Says the effect of initiatives and adverse business conditions are expected to result in an increased provision for loan losses. Consequently, second quarter and full year 2003 earnings are expected to be below previous earnings guidance.
8:08AM Darden Restaurants cut to Underperform at Smith Barney (DRI) 19.50: Smith Barney downgrades to Underperform from In-Line following last night's earnings report, saying the magnitude of their concerns regarding poor sales at Bahama Breeze and various cost pressures such as insurance has deepened; says co's goal of 8-12% EPS growth in FY04 looks even worse once one realizes the target incorporates the earnings boost from FY04's extra 53rd week; cuts target to $18 from $22.
8:06AM GE reaffirms Q2 of $0.37-$0.39, full yr of $1.55-$1.70 :
8:03AM Amgen: Enbrel combination therapy inhibits joint damage (AMGN) 63.82: Co and Wyeth Pharma (WYE) announce that 80% of patients treated with combination therapy (Enbrel and methotrexate) experienced no radiographic progression through one year, compared to 68% of patients treated with ENBREL alone and 57%of patients treated with methotrexate. Both combination therapy and Enbrel monotherapy provided significant inhibition of joint damage compared with methotrexate alone. (Briefing's Biotech News Rating Scale puts this news at 2, or moderate importance).
8:02AM Pacer Intl downgraded at UBS (PACR) 19.00: UBS Warburg downgrades to Neutral from Buy, citing valuation (stock is near $20 target) as well as slowing intermodal growth due to: a weaker U.S. dollar, 31% increases in Eastbound trans-Pacific ocean freight rates, a likely slowdown in the rate of outsourcing to China (irrespective of SARS), and tougher comparisons.
8:01AM S&P futures vs fair value: +3.7. Nasdaq futures vs fair value: +4.5. Futures trade higher on the back of yesterday's losses, a stronger dollar against the euro, and the modestly favorable bias of trade in the European bourses, with the widely-watched DAX, CAC, and FTSE up 0.2, 0.6, and 0.8%, respectively.
8:00AM Xerox Corp prices new financing (XRX) 10.40: Co sets pricing on the issuance of new common stock, mandatory convertible preferred stock and senior unsecured notes. The company also said that it finalized the terms of a new revolving credit facility. The offering includes approx 40 mln shares of common stock at $10.25.
7:59AM OraSure Tech upgraded at UBS (OSUR) 6.70: UBS Warburg upgrades to Buy from Neutral, saying their discussions with the CDC indicates that it is likely that OSUR will receive an order for their OraQuick rapid HIV test for about $2 mln, and firm believes there is potential for further govt-related orders in 2004, which could have a more significant impact on numbers; raises target to $9 from $6.
7:56AM S&P futures vs fair value: +3.7. Nasdaq futures vs fair value: +4.5.
7:55AM CarMax Group reports in-line (KMX) 29.70: Reports Q1 (May) earnings of $0.34 per share, in line with the Reuters Research consensus of $0.34; revenues rose 16.6% year/year to $1.17 bln vs the $1.17 bln consensus. Co. sees Q2 (Aug) EPS of $0.33-0.35 vs. Reuters Research consensus of $0.33.
7:55AM European Markets FTSE...4164.20...+32.70...+0.8%. DAX...3257.39...+10.28...+0.3%.
7:55AM Asian Markets Nikkei...9120.39...+9.88...+0.1%. Hang Seng...9930...-49.80...-0.5%.
7:54AM Wachovia initiates coverage of managed care industry : Wachovia initiates coverage of the managed care industry with a positive bias; initiates AET and CVH with Outperform ratings based on their belief that they have the highest probability of meaningful EPS upside as well as valuations that are especially attractive; initiates ATH, HUM, MME, UNH, and WLP with Mkt Perform ratings based on valuation; and initiates CI and OHP with Underperform ratings, as they see EPS growth problems for both co's.
7:49AM Halliburton addresses asbestos claims & Barracuda-Caratinga project (HAL) 24.43: Co. announced additional operating losses on Barracuda-Caratinga project of approx $104 mln or $0.24 per share after tax. The additional charges follow a thorough review of the project indicating higher cost estimates, schedule extensions and other factors. Co. sees diluted EPS from continuing operations of at least $0.02 in Q2. In addition, Co. has continued to conduct due diligence on current asbestos claims. Documentation continues to improve and supports previously proposed settlement. However, as a result of an increase in the estimated number of claims, the cash required to fund the settlement may exceed previously announced $2.775 bln. If it does, the Co. would either adjust settlement matrices to reduce overall amounts per claim, or increase the amount it would be willing to pay to resolve its asbestos and silica claims.
7:47AM Treasury Market Update : Treasuries are a tad higher this morning, ahead of a quiet news day. There is nothing significant on the economic calendar for the two remaining days before the FOMC meeting commences on Tuesday. As well, we are in the midst of the usual pre-FOMC blackout period on Fed-speak. Having said that, the next few days will continue to feature a tug-o-war between the "25 bp cut" camp and the "50 bp cut" camp until the FOMC's official policy announcement is made at around 14:15 ET Wednesday. As of yesterday's futures close, the July fed funds contact is implying a 66% chance that the Fed will ease by 50 bps next week, assuming 25 bps as given; this is up from 42% at Wednesday's close.
7:46AM Metro One announces patent award (MTON) 5.76: Co announced that it has been awarded U.S. Patent No. 6,580,904 for a method of providing driving directions and related assistance through its Enhanced Directory Assistance system and recently launched Infone service.
7:44AM General Motors upgraded at Prudential before debt announcement (GM) 38.07: -- Update -- Before the co's $10 bln debt announcement hit the wires, Prudential upgraded GM to Buy from Sell and raised their target to $45 from $29; firm says the perception of an economic recovery should trump short-term negative news flow (sales, share, quarterly earnings, UAW), new models in 2004-05 should stem share slide, and the co's pension and healthcare problem should stabilize after peaking in 2004; also, firm thinks the $2 dividend is likely safe in the medium-term, providing a downside cushion for the shares.
7:43AM Actuate upped to Strong Buy at JMP -- MicroStrategy victory (ACTU) 2.28: Last night, ACTU announced that the Fairfax County Circuit Court ruled in favor of Actuate on all counts in a case brought by MicroStrategy involving claims that Actuate and two former employees had misappropriated its trade secrets and confidential information, tortiously interfered with MicroStrategy's contract, and committed civil conspiracy and fraud. Following the ruling, JMP Sec upgrades to Strong Buy from Mkt Perform with a $4 target. The upgrade is based on ACTU successfully defending itself against a suit that threatened its ability to sell its core product, Actuate 6.0.
7:36AM GM crossing wires right now -- to offer $10 bln in debt to fund pension plan :
7:33AM GM -- Rumor that General Motors planning debt offering : Our bond team is hearing rumors that GM is planning to issue some new debt in coming days, perhaps as much as $15 bln. Company currently has slightly more than $100 bln outstanding (downgraded by Fitch yesterday and Moody's last week). Spreads reportedly widening in Europe. Credit derivative product prices allegedly rising, too. From the equity side, stock upgraded to Buy this morning at Prudential.
7:32AM Research In Motion downgraded at Morgan Stanley (RIMM) 23.01: Morgan Stanley downgrades to Underweight from Equal-Weight based on valuation, as the stock has rallied 35% since the co's May 5 analyst day and firm believes it is priced for perfection.
7:29AM Columbia Labs: FDA approves testosterone replacement therapy (COB) 7.86: Announces that the FDA has approved Striant (testosterone buccal system) mucoadhesive, the first-ever transbuccal (gum surface) treatment for testosterone replacement therapy in men for conditions associated with a deficiency or absence of endogenous testosterone, including hypogonadism
7:27AM SciClone Pharma animal model shows mechanism of action of SCV-07 (SCLN) 7.97: Announces the results of a tuberculosis (TB) animal model study demonstrating the mechanism of action of SCV-07, the co's proprietary compound that enhances the immune system. The study showed that SCV-07 stimulated a Th1 immune response, which led to a significant decrease in the lung damage index in the treatment group.
7:21AM Automatic Data acquisition of ProBusiness cleared by Dept. of Justice (ADP) 35.04: Co. announced that Dept of Justice has decided to terminate its investigation of ADP's proposed acquisition of ProBusiness Services, Inc. and has granted early termination of the Hart-Scott-Rodino waiting period, allowing ADP to complete its acquisition of ProBusiness for $17.00 per share, approximately $500 million, in cash. Co. anticipate that the transaction will close later today, and that the "transaction will be about $.01 to $.02 per common share dilutive in fiscal 2004 and accretive thereafter."
7:20AM American Intl: Bull makes their case for AIG in Business Week (AIG) 57.90: For months, global ills have weighed down insurer AIG. But is it set for a robust recovery? Some bulls swear by it. Richard Steinberg of Steinberg Global Asset Management says SARS jitters provided a chance to buy at low prices and that AIG is still cheap given its superior, diverse businesses, its management, and the rebound in airline-leasing, variable-annuity, and mutual-fund operations. Trading at $80 in early 2002, AIG sank to $42 in mid-March of 2003 but has since bounced up to $59. Steinberg sees it at $75 in a year.

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