Daily Archives: December 11, 2007

Cramer Going Defensive With Recession Proof Stocks

Jim Cramer came out on CNBC tonight and said the FOMC only giving a 1/4 point cut made him mad and sad, and he said the Fed doesn’t understand the magnitude of the financial woes out there.

24/7 Wall St. would caution perhaps that it’s time to review defensive stocks whose products you will buy whether you are happy or sad.  Here was our own list of Defensive stocks.  These were unfortunately down on the day too, although not as much as the market in general.

Cramer gave some of his own defensive picks for you ton hide out in the go-to plays there.

Jon C. Ogg
December 11, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: December 11, 2007 – 6:10 pm in Cramer, Defensive Stocks

Biotech Short Interest NOV 2007 II (AMGN, BIIB, CELG, GENZ, GILD, IMCL, MEDX)

We’ve had a lot of biotech stocks see their shares get the wrath of news over recent days.  Now that the November-end NASDAQ Short Interest has been released, we wanted to see how the gains and losses were in short selling activity.  Here is the key short selling data on NASDAQ as of November 27, 2007 and Settlement Date of November 30, 2007:

STOCK (Ticker)        Shares Short    Change
Amgen (AMGN)         29,112,550      +10.89%   
Biogen Idec (BIIB)     6,648,180         (9.58%)   
Celgene (CELG)       25,751,400      +12.19%   
Genzyme (GENZ)      6,536,150        +12.36%
Gilead (GILD)            25,557,168        (1.59%)
Imclone (IMCL)          4,252,342         (13.49%)
Medarex (MEDX)        30,181,760       (7.72%)   

As a reminder, Biogen Idec was the one that Wall Street feels is close to being acquired because of its review being announced.   

Jon C. Ogg
December 11, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: December 11, 2007 – 5:30 pm in Biotech, Short Interest, , , , , , ,

Short Sales Increase in Four Horsemen of Tech (AMZN, AAPL, GOOG, RIMM)

The NASDAQ has issued its short interest report for month-end reading for November, and out of the "New Four Horsemen of Tech" it appears that Google was the only one who saw a drop in the short interest.  Below is a summary of the shares in the short interest with a Trade Date of NOV 27 and  Settlement Date of NOV 30:

STOCK (Ticker)            Shares Short          Change
Amazon.com (AMZN)    33,302,976            +5.74%
Apple (AAPL)                  20,141,643            +14.66%   
Google (GOOG)               5,496,170              (2.29%)   
R-I-M (RIMM)                   18,963,762           +10.56%

Jon C. Ogg
December 11, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: December 11, 2007 – 5:09 pm in Short Interest, Technology Companies, , , ,

Apple (AAPL) Mac Sales On Sharp Up-Swing

According to new research, sales of Apple (AAPL) Macs will surge as the year turns to 2008.

Based on a two surveys done in November by research firm ChangeWave, 29% of potential PC buyers who plan to make a purchase in the next 90 days plan to buy an Apple Mac. In early 2006, that number was closer to 12%. The percentage of companies planning to buy Macs is also rising and hit 7%.

Dell (DELL) which has been doing poorly in the survey for the better part of two years may be reaching a point of stability. About 30% of people planning to buy a PC in the next 90 days plan to buy a Dell. That number was flat with the previous month, but down from about 43% in June 2006 when laptops and desktops are average together. Corporations planning to buy Dells actually moved up slightly in November.

Hewlett-Packard (HPQ) turned in remarkably weak results.  About 22% of PC buyer looking to buy in the next 90 days said they would get an HP. Among corporations, the number was about 14%.

If the figures are close to correct, Apple is going to have a huge Q1 and HP investors are going to be very disappointed.

Douglas A. McIntyre

Posted on: December 11, 2007 – 5:09 pm in PC Companies, , ,

The 52-Week Low Club

AMR (AMR) High fuel prices and predictions industry will lose money in Q4. Drops to $17.60 from 52-week high of $41.

NCI Building Systems (NCS) Company says it will miss 2008 numbers. Down to $28.09 from 52-week high of $60.61.

Family Dollar Stores (FDO) Dragged down by bad numbers out of discount stores. Trades off to $18.92 from 52-week high of $35.42.

Panacos Pharmaceuticals (PANC) Disappointing results from HIV drug trials. Falls to $.70 from 52-week high of $6.42.

Medarex (MEDX) Cancer drug does poorly in late-stage trials. Sells down to $10.44 from 52-week high of $18.23.

Douglas A. McIntyre

Posted on: December 11, 2007 – 4:38 pm in HI/LOW, , , , ,

The Business Day In Global Warming (CLNE, GE, YGE, ASYS, GFET, LDK, ACPW, MS)

Today, energy industry sage T. Boone Pickens was opening his new facilities for LNG conversion to fuel in California for his Clean Energy Fuels Inc. (NASDAQ: CLNE).  He came on CNBC and predicted "$100+ oil" and called for higher prices to be the norm from here on.

General Electric (NYSE:GE) announced orders for 20 Jenbacher Gen-Sets, 4 LMS 100 Gas Turbines for Latin American power companies, and 333 wind turbines in two U.S. states.

Yingli Green Energy Holding Company Limited (NYSE: YGE) priced its offering of US$150,000,000 zero coupon convertible senior notes due 2012 and the pricing of a concurrent offering of 5,600,000 American depositary shares by certain shareholders of the Company.

Amtech Systems, Inc. (NASDAQ: ASYS) received a $3.9 million follow-on solar order for diffusion processing systems from an existing solar cell customer based in Taiwan.

Yesterday, Gulf Ethanol (OTC: GFET) signed definitive agreements to acquire its new cellulose feed-stock processing technology for ethanol plants.

Just yesterday, Lazard Capital Markets reiterated its SELL rating on LDK Solar (NYSE: LDK) despite it being up large on a questionable supply order.

Active Power, Inc. (NASDAQ:ACPW) announced yesterday that the S.E.C. has completed its investigation into the company’s past stock option granting practices and is not recommending any enforcement action.

Yesterday, Morgan Stanley (NYSE: MS) invested in a $200 million staged solar project fund in Recurrent Energy to provide financing for $100mm of Recurrent Energy’s solar electric power projects in 2008 and an additional $100mm in 2009.

Jon C. Ogg
December 11, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: December 11, 2007 – 4:38 pm in Alternative Energy, , , , , , , , , , , , ,

GE’s Outlook Both Half Full & Half Empty (GE)

General Electric (NYSE: GE) is conducting its ANNUAL OUTLOOK MEETING today and there is really some fodder in here for bulls and bears alike.  The numbers and targets are impressive for a company of its size but the bears can argue that there are no "wow-factors" attached.

You can access the full presentation or you can see the most general financial data below:

  • GE’s total 2007 EPS outlook is $21.19 to $2.21 after noting that it will deliver $0.67 to $0.69 EPS in Q4, but more importantly GE is showing its initial 2008 targets;
  • Revenues approximately $195 Billion ($186+ Billion is estimate);
  • EPS up roughly 10% roughly $2.42 (estimate is $2.49, although we already noted that was coming down);
  • Cash of $23 to $26 Billion with dividend growth of 11% and buybacks north of $5 Billion;
  • Roughly 17% margins and roughly 20% return on capital.
  • Key goals for 2008 are to sustain growth in infrastructure, manage transition in financial services market, turnaround in healthcare, sustain an NBC/Universal turnaround, and to grow its industrial segment.

General Electric shares had been down over 1% after the FOMC market sell-off, but now shares are only down about 0.7% at $37.12. 

Based on all of the comments and forecasts, we’d expect analysts to be trimming the 2008 targets down in-line with Immelt’s guidance (as we telegraphed before) and we’d expect very few real ratings changes other than maybe a downward revision to price targets by $1.00 at most firm.

Jon C. Ogg
December 11, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: December 11, 2007 – 3:27 pm in Conglomerates,

FOMC Comes Up Short (DIA, TLT)

The FOMC did just come out and issue its discount on interest rates today.  We saw a 0.25% RATE CUT FED FUNDS and we saw a 0.25% RATE CUT ON THE DISCOUNT RATE.   That 0.25% dual cut might not be greeted with much love because many were hoping for a 0.50% cut perhaps at least on the Discount Rate.  The FOMC has noted several issues:
Slowing and intensification of housing,
the strain to financial markets has increased,
core inflation readings have improved modestly but higher energy prices could impact that,
balance of risks with a bias to inflation is gone.

Here is the page where you can access the full statement from the FOMC and compare to prior rate cuts. Here are critical developments around today:

At 2:11 PM EST the DIAMONDS Trust (AMEX:DIA) thattracks the DJIA was up $0.37 to $137.76 and the iShares Lehman 20+ Year Treasury ETF (NYSE:TLT) was up 0.7% at $91.89.  The DIAMONDS are now down 0.4% or so.

We won’t rush for the doors nor will we get the pom-poms out for this one today, particularly as many planned FOMC meeting reactions are ultimately reversed more than once in the minutes after an FOMC announcement.

Jon C. Ogg
December 11, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: December 11, 2007 – 2:23 pm in Economy, , , ,

T. Boone Pickens Still Sees $100+ Oil (CLNE, OIH, XLE)

The great oil sage T. Boone Pickens was just on CNBC for a quick interview while he was out in California today to kick off the Long Beach and Los Angeles harbors to switch trucks over to natural gas for his Clean Energy Fuels Corp. (NASDAQ: CLNE).  This is his liquid natural gas company out in California that is meant to replace diesel.

He said oil prices will continue to rise because we have no control over our destiny there.  He is talking up natural gas to replace diesel, which he said natural gas can be 50% to 70% cleaner than diesel.  As far as price parity, Pickens said LNG measured gallons comes in today at $3.55 per gallon of diesel versus $3.29 for liquid natural gas and they both take you the same distance.

As far as future oil prices, Pickens said "Get ready for $100.00, you’ll see $100.00 oil before $80.00."  His point is that oil exporters have seen how high we’ll continue to pay, and he even said that this is likely going to become the norm.   He thinks that the global production capacity is 85 million per barrels per day now, and he noted you have to 1,000 wells pumping 1,000 barrels per day to get just 1 million barrels per day.

  • Clean Energy Fuels Corp. shares are up about 5% at $15.00 today, and the post-IPO trading range this year has been $10.81 to $20.65.   Pickens can sometimes impact the sector with his calls:
  • the Oil Services HOLDRs (AMEX: OIH) are up 0.6% to $186.47 today;
  • the Energy Select Sector SPDR (AMEX:XLE) is up 0.4% at $77.25 today.

Jon C. Ogg
December 11, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: December 11, 2007 – 1:47 pm in Alternative Energy, Oil & Gas, , , , ,

Which Financials May Slash Dividends Next? (WM, FMD, RWT, BAC, C, KEY, WB, SFI, CSE)

Yesterday’s announcement that Washington Mutual (NYSE: WM) about a dividend slash, layoffs, exit of sub-prime, and a capital raise was greeted with far less than joy.  24/7 Wall St. has already warned not to trust the "dividend safety net" after Fannie Mae’s (NYSE: FNM) recent dividend cut even though many banks were out saying they want to protect their dividends and that the dividends were safe in October and November.  Companies say one thing but frequently end up doing something else entirely different. 

First Marblehead recently slashed its dividend in half, and it was yielding roughly 6.2% before its dividend cut.  The Washington Mutual (NYSE: WM) dividend of 10% or more was far to big to trust, so we put together a list of other financial stocks with high stated dividends now that the shares are off so much from their highs.  We are not saying all of these will cut their dividends and we’d even expect to formally declare "our dividend is safe" in response.  But these are the higher yielding dividends from financial companies that 247WallSt.com thinks could be at risk if the environment continues:

Redwood Trust Inc. (NYSE: RWT) is a company whose dividend we could argue is at risk.   Its president is retiring next year (but staying on the board), it just paid out a special $2.00 dividend, declared its regular dividend of $0.75 and announced 5 million shares for a stock buyback plan all in early November.  But then early in December it sold $122 million of common stock to "fund investment activities."  It invests in real estate loans and asset-backed securities.  At $36.42, its 52-week trading range is $24.07 to $66.60.

Of the major money center and larger regional banks, there are many yields that are incredibly far ahead of treasury yields because of large drops in underlying share prices.  Keep in mind that many of these dividends can be and likely will be maintained, but if banks need to save cash and get their dividends temporarily down to a more realistic percentage then this is one alternative.  Here is a partial list: Citigroup (NYSE: C) 6.3%, Wachovia (NYSE: WB) 5.9%, Bank of America (NYSE: BAC) 5.6%, KeyCorp (NYSE: KEY) 5.8%

iStar Financial Inc. (NYSE: SFI) just last week declared its normal $0.87 quarterly dividend and that is north of a 10.6% yield to today’s $32.50 handle (year range $25.25 to $52.87). Capital Source (NYSE: CSE) has an even higher yield and it just recently completed the voting approvals for its $400+ million buyout of TierOne (NASDAQ: TONE).  Because that deal is still pending regulatory closing and with a 13% yield, we just have a hard time believing this can be maintained indefinitely.  At $18.78, its 52-week trading range is $14.05 to $28.55.

If you wonder why there are no brokerage firms listed here, it is because they are serial ‘under-dividend’ payers.  They may pay out $1 Billion or $2 Billion in year-end bonuses, but a 2% yield is actually high for the brokerage firm stocks.

The truth is that there are dozens more that could be under review as well, and we wanted to keep this list limited to a few of the larger companies out there in banking and lending that have ties to lending, mortgages, ABS, and CDO’s.  We do not expect that these will all cut their dividends.  But we also know that sectors tend to cut and act in unison and are often all lumped together for better and for worse.  The problems in these sectors are not merely isolated events.

With an FOMC decision to cut rates less than two hours away, we do not expect the financial stocks to trade normally as if there was nothing going on.

Jon C. Ogg
December 11, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: December 11, 2007 – 12:33 pm in Dividend, Financial Stocks, , , , , , , , ,

AT&T (T) And The Dividend Economy: Where Is Apple’s (AAPL) Yield?

AT&T (T) raised its dividend today and upped its share buy-back. The company’s stock is up almost 9% on the news, the most in five years, according to Bloomberg.

It looks like the old dividend is become a big item in a tough economy.

Who should follow suit? The cash rich and dividend poor. Even some of the companies with share buy-backs. It is easier for investors to see a benefit in a dividend hike than it is when shares are being bought over a long period.

Intel (INTC) has too much cash. It has a 1.6% yield. Moving that to 2% or better would help the stock.

Apple (AAPL) has $15 billion of cash in the bank. It never buys other companies. Apple could probably afford a $6 or $7 special dividend.

Verizon (VZ) should not want AT&T to get ahead of it. But, it already yields 3.8%, so it would not have to do much.

Cisco (CSCO) could certainly offer a 3% yield. With its shares down, it would be attractive.

Exxon (XOM) has an extremely modest yield of 1.5% and the company is minting money. The number should be 4%.

Douglas A. McIntyre

Posted on: December 11, 2007 – 11:25 am in Dividend, , , , , ,

As Google’s (GOOG) Share Of Search Market Rises, Microsoft’s (MSFT) Falls

Google (GOOG) to no one’s surprise, keeps expanding its share of the US search market. November numbers from Hitwise put the company’s piece of the pie at 65.1%, up from 61.8% a year ago.

Yahoo! (YHOO) lost a bit, moving from 22.4% in November a year ago to 21.2% this year.

Microsoft (MSFT) took a real slide, moving from 9.8% last year to 7.1% this.

Douglas A. McIntyre

Posted on: December 11, 2007 – 9:22 am in Media, , ,

Pre-Market Stock News (December 11, 2007)

Below is a snapshot of the individual company news affecting share prices being watched by 247WallSt.com:

  • Amtech Systems (NASDAQ: ASYS) shares up 3% after it announced receipt of a $3.9 million solar order for diffusion processing systems from an existing solar cell customer based in Taiwan.
  • Boeing (NYSE: BA) has an update for the progress on its 787 Dreamliner today.
  • Celanese (NYSE: CE) guided up slightly for 2007 and in-line for 2008, guidance upped to 2010 as well.
  • ChinaEdu Corporation (NASDAQ: CEDU) priced its 6.82 million ADR IPO at $10.00 per share.
  • Citigroup (NYSE: C) cuts size of SIV by $15 Billion.
  • Dell (NASDAQ: DELL) introduced new tablet PC with touchscreen.
  • General Electric (NYSE: GE) set to give outlook meeting this afternoon with guidance.
  • Genesis Micro (NASDAQ: GNSS) shares up over 50% after being acquired by STMicroelectronics for $8.65 per share.
  • H&R Block (NYSE: HRB) shares trading down about 8% after posting loss for quarter.
  • IAC/Interactive (NASDAQ: IACI) is allowing users to dump their searches stored by the search engine in a bout to win over customers via privacy.
  • Macrovision (NASDAQ: MVSN) won a tier 1 pact from a European automotive integrator.
  • Medarex (NASDAQ: MEDX) shares trading down almost 20% after saying its BMY partnered Ipilimumab failed to meet endpoints for its metastatic melanoma treatment.
  • MultiMedia Games (NASDAQ: MGAM) $0.02 EPS vs $0.01 est.
  • PCTEL (NASDAQ: PCTI) selling its mobility solutions unit to Smith Micro for $59.7 million.
  • Smith Micro (NASDAQ: SMSI) traded up 12% after announcing it was acquiring PCTEL’s mobility solutions group for $59.7 million.
  • Texas Instruments (NYSE: TXN) traded up almost 5% after raising its mid-point of guidance to above consensus.
  • UBS (NYSE: UBS) shares trading down 3% after it wrote-down another $10 Billion in value of mortgage backed assets and sold a 10% stake to investors from Singapore and the Middle East.
  • Valero (NYSE: VLO) may sell some more refinery assets.
  • Washington Mutual (NYSE: WM) shares trading down 9% after it cut its dividend, announced lay-offs, and will exit sub-prime operations.

Jon C. Ogg
December 11, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: December 11, 2007 – 8:17 am in Pre-Market Activity, , , , , , , , , , , , , , , , , ,

Top 10 Pre-Market Analyst Calls (APD, PX, AMX, GOL, MA, MMM, UTX, MEDX, NEM, UBS, VIP, WWY)

These are not at all the only analyst calls being covered or making an impact in stocks this morning, but these are the ones 247WallSt.com is focusing on initially this morning:

  • Air Products (APD) & Praxair (PX) were both downgraded to Neutral at JPMorgan.
  • Amecia Movil SA (AMX) started as Overweight at HSBC.
  • Gol Intelligent Airlines (GOL) downgraded from Neutral at Sell at UBS.
  • MasterCard (MA) raised to Outperform at Keefe Bruyette Woods.
  • 3M (MMM) & United Technology (UTX) both started as Neutral at Banc of America.
  • Medarex (MEDX) downgraded from Outperform to Peer Perform at Bear Stearns.
  • Newmont Mining (NEM) downgraded from neutral to Underweight at HSBC.
  • UBS (UBS) raised to Outperform at Bear Stearns.
  • Vimpel Communications (VIP) downgraded from Peer Perform to Underperform at Bear Stearns.
  • Wrigley (WWY) downgraded to Equal Weight from Overweight at Lehman Brothers.

See full notes on Starbucks downgrade at Goldman Sachs.

Jon C. Ogg
December 11, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: December 11, 2007 – 7:43 am in Analyst Calls, , , , , , , , , , , ,

Stock Split Tuesday (GRC, MPR, ROL, CART)

For some reason, there are four stocks trading ex-split today.  The following stocks will trade ex-split today at their new adjusted prices:

  • Gorman-Rupp Co. (NYSE:GRC) trades after a 5-for-4 stock split.
  • Met-Pro Corp. (NYSE:MPR) trades after a 4-for-3 stock split.
  • Rollins Inc. (NYSE:ROL) trades after a 3-for-2 stock split.
  • Carolina Trust Bank (NASDAQ:CART) trades after a 11-for-10 split, or another words a common old 10% small bank stock dividend.

None of these are highly active, but it is rare in this day and age to see four stocks trading ex-split on a random trading day.

Jon C. Ogg
December 11, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: December 11, 2007 – 7:22 am in Stock Splits, , , ,

Goldman Sachs Pours Starbucks Down The Drain (SBUX)

Starbucks (NASDAQ:SBUX) is being downgraded from a BUY rating down to a NEUTRAL rating at Goldman Sachs this morning.  Starbucks has now underperformed its peers since being a buy at Goldman in 2005 and the S&P after a 37.6% drop over the last year on same store sales growth leading to underperformance.  Goldman Sachs also notes declining new store productivity, margin erosion, and concerns over U.S. competition and market saturation.

Goldman Sachs says it continues to view Starbucks favorably but sees few near-term catalysts to reinvigorate sentiment in the coffee king.  Goldman Sachs is lowering its $27.00 target down to $26.00.

After you read this note and see the Goldman Sachs stamp on it, you might wonder where the analyst was hanging out over the last 5 or 6 months.

Jon C. Ogg
December 11, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: December 11, 2007 – 7:13 am in Analyst Calls, Food,

GE (GE): The Agony Of Being Average

GE (GE) shares had a real rally this year. They hit a multi-year high in late October. The big company was firing on most cylinders, and earnings for the rest of the year and into 2008 looked good.

But, over the last six months, GE’s stock has been flat. It is hard to explain. Management has sold its new program for growth, and sold it hard. And, the program makes sense.

GE has argued that it will build the infrastructure for the developing world, almost by itself. Turbines, railroad engines, healthcare equipment, even financing. And, why not? Huge countries like China, India, and Russia cannot build all of this own their own. They need a huge supplier of capital, expertise, and advanced systems and technologies. GE is the perfect company.

But, GE’s size and scope got the better of it. While it successfully sold 20% per annum growth in emerging markets, the fact that it has tremendous consumer financial exposure in the US began to make Wall St. nervous. What about the mortgage securities a GE financial unit might have? What about all of its consumer lending businesses?

So, Wall St. has backed off on GE, and will stay backed off. The growth overseas is not a bird in the hand. It is a promise, and a very promising promise. But, GE has problems at home, exposure the the US financial markets

That kind of averages things out.

Douglas A. McIntyre

Posted on: December 11, 2007 – 6:57 am in Conglomerates,

The Fed Gets Ready To Push The Dow To 15,000

Over that last six months, the Dow is up 3%. But, it has been a "no stock market growth" kind of period. GDP was fairly strong, but any strength in tech shares and consumer goods stocks was taken down by financial companies like Citigroup (C) and Washington Mutual (WM).

The Dow peaked on October 9 at above 14,198, and is now at 13,727. In October, the Dow was actually up 14% for the year. Then, that fell apart.

The Fed will cut a quarter of a point later today, and may cut again in January. No matter what economists say, business and consumers like lower interest rates. It will help with credit card debt, mortgage resets, and the rates that businesses can get to fund a little expansion, or pay off current obligations. Some analysts say that a rate cut is too late. A rate cut may be tardy, but, by definition, saving money can’t come too late.

The rate cut comes at a time when some of the write-off working their way through big financial institutions may be peaking, Given them a better rate to loan troubled SIVs and money market funds capital to improve liquidity will help make the crisis pass. It won’t fix it overnight, but it could allow shares in financial institutions to recover. When a stock is down 50%, it does not take much good news to help it bounce up a bit.

If the consumer sees he can pay a bit less on his "about to reset" mortgage and buy a car for a little less per month, he is going to feel better. He may not be out of the woods, but at least the undergrowth is not as thick.

For the Dow to hit 15,000 from here, it needs a 9% move. That is less than the move that it made from January to October. It is certainly possible that the big financial company shares will recover 15% over the next two months, especially if they get some relief on the cost of borrowing. Auto companies, trading at 52-week lows, should also recover.

A small bounce in capital spending, helped by a little easing in credit, will help companies like Cisco (CSCO) and GE (GE). Troubled companies with big debt loads like AMD (AMD) and Level 3 (LVLT) should also get some earnings help if rates drops.Good for their stocks.

The Dow at 15,000. It was getting close a few weeks ago. The rally will be on today. By the end of January the market will have recovered what it has lost plus 5%. Not such a big ambition.

Douglas A. McIntyre

Posted on: December 11, 2007 – 6:47 am in Economy, , , , , ,

ChinaEdu Prices IPO (CEDU)

ChinaEdu Corporation (NASDAQ: CEDU) priced its 6.82 million ADR IPO at $10.00 per share, which is actually at the lower-end of its $10.00 to $12.00 range.  Bear Stearns acted as Lead mamanger and co-managers were listed as Piper Jaffray and CIBC World Markets.

This Beijing-based company is an educational services provider for online degree programs, and is now profitable..

More information can be found at its web site www.chinaedu.net.

Jon C. Ogg
December 10, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: December 11, 2007 – 6:42 am in China, IPOs, , ,

Sony (SNE): US Consumer Electronics Are Doing Fine

Consumers in the US cannot afford cars and houses, at least not based on current economic information.

A look at the McDonald’s (MCD) numbers show that people can still buy hamburgers and premium coffee, but what about things that cost a little more.

According to Sony (SNE), the US slowdown is not hurting sales of consumer electronics. That may make sense. Recent comScore data shows that online sales of electronics and game consoles are up about 100% from the holiday season last year.

But, the CEO of Sony put a point on that. The shaky economy "has not affected electronics in the U.S. We are holding up," Howard Stringer, the CEO of Sony said, quoted in The New York Times. "Black Friday turned out to be very good for consumer electronics sales, and very good for PS3 (PlayStation 3) sales, PSP (PlayStation Portable) sales and beyond.", he added.

What the US economy may be seeing is half a recession, one in which the consumer will not buy high ticket items. He no longer has the home equity loan and his mortage is about to reset to a higher payment.

But, the American consumer does not appear to be willing to give up his beer, fast food, and electronics gadgets. Not yet, anyway.

Douglas A. McIntrye

Posted on: December 11, 2007 – 6:23 am in Consumer Electronics,