When conducting their research, the Merrill Lynch analysts scanned their coverage universe and used specific criteria to pick short sale candidates.

1. Underperform rated stocks that were disproportionately owned by active portfolio managers. Stocks that could see heightened selling pressure on negative news.
2. Stocks with extremely concentrated ownership, where an extremely large portion of shares are held by a small subset of managers. These could see more selling pressure than those with more diversified ownership and thus diversified sell disciplines.

Here are the seven stocks that fit the bill for possible short sales.

J.C. Penney Co.Inc. (NYSE: JCP) is no surprise. CEO Ron Johnson has left the struggling retailer and turnaround efforts have been bleak at best. The Thomson/First Call estimate for the stock is $15.

Diamond Offshore Drilling Inc. (NYSE: DO) is a candidate to short. Despite deepwater drilling success, the stock is heavily owned by hedge funds that will sell at will on any negative news. The Wall St. consensus price target is $75.

DENTSPLY International Inc. (NASDAQ: XRAY) makes the Merrill Lynch list. This maker of dental products recently lost its CFO to a large medical devices firm. The consensus price target for the stock is $44.

Lockheed Martin Corp. (NYSE: LMT) fits the bill. While it is facing possible defense department budget cuts, the stock has had a huge run up of almost 50% in two years. The consensus target is $94.

Cintas Corp. (NASDAQ: CTAS) makes the list. Currently the stock is the ninth most shorted S&P 500 stock, and that does lower the odds for success somewhat. The consensus estimate for the stock is $46.50.

Sigma-Aldrich Corp. (NASDAQ: SIAL) is a short sale candidate. Having recently slipped below its critical 200 day moving average, the technicals seem to be weakening. The consensus price target is $77.

MetroPCS Communications Inc. (NYSE: PCS) finishes up the Merrill Lynch list. With a shareholder vote this Friday expected to reject the T-Mobile USA recapitalization, many believe a yes vote in priced in to the stock. The consensus price target for the stock is $11.50.

There is one note of interest. Most of the names on the Merrill Lynch list are trading at or close to their 52-week highs, which may imply that they are priced to perfection. Any miss on earnings, revenues or forward guidance may call for a trip to the short sale woodshed. Remember, when selling short any stock with a dividend, the short seller is responsible to pay that dividend coverage as well as the cost of borrowing the stock. As you can see, here is the latest short interest activity in our go-to list of high dividend stocks.

For the fourth quarter the holding company reported an earnings per share (EPS) loss of $0.08 on revenues of $3.71 billion. In the same period a year ago, the company reported EPS of $0.68 on revenues of $3.55 billion. Fourth-quarter results also compare to the Thomson Reuters consensus estimates for an EPS of $0.30.

Casualty losses due to Hurricane Sandy at Loews’ CNA insurance group were the primary cause of the unexpected loss. Excluding an after-tax loss of $171 million and a $97 million impairment charge at its wholly-owned HighMount oil and gas production company, net income on an adjusted basis totaled $236 million ($0.60 per share), compared with a GAAP loss of $32 million.

The company’s 50.4% investment in Diamond Offshore Drilling Inc. (NYSE: DO) also posted a loss in the fourth quarter. Diamond’s earnings were down due to an impairment charge on three of the company’s semisubmersible rigs and lower average daily revenue.

Boardwalk Pipeline Partners L.P. (NYSE: BWP), in which Loews owns a 55% stake, posted a revenue increase in the fourth quarter, from $301 million in the fourth quarter of 2011, to $325 million.

For the full year, the company reported adjusted EPS of $1.43 on revenues of $14.5 billion, compared with a consensus call for EPS of $1.73 on revenues of $13.97 billion.

Loews did not offer guidance in its news release, but the consensus analysts’ estimate for the current quarter calls for EPS of $1.73. For the year, the estimates call for EPS of $3.44 on revenues of $13.29 billion.

Shares are inactive in this morning’s premarket trading, and closed up 0.3% on Friday, at $43.85 in a 52-week range of $37.58 to $44.13. The consensus target price for the shares was around $46.00 before today’s report.

Amgen Inc. (NASDAQ: AMGN) cut to Neutral at Credit Suisse.

ARM Holdings PLC (NASDAQ: ARMH) cut to Hold at Benchmark.

Banco Bilbao Vizcaya Argentaria S.A. (NYSE: BBVA) cut to Hold at Deutsche Bank.

Charter Communications Inc. (NASDAQ: CHTR) started as Outperform with $90 target at Credit Suisse.

Comcast Corp. (NASDAQ: CMCSA) started as Neutral at Credit Suisse.

Corning Inc. (NYSE: GLW) maintained Buy with $15 target but cautious earnings comments from BofA/Merrill Lynch.

DirecTV (NASDAQ: DTV) at Neutral at Credit Suisse.

Diamond Offshore Drilling Inc. (NYSE: DO) cut to Neutral at Credit Suisse.

DISH Network Corp. (NASDAQ: DISH) started as Outperform with $43 target at Credit Suisse.

Exact Target Inc. (NYSE: ET) started as Outperform with $30 target at Credit Suisse.

First Energy (NYSE: FE) cut to Underperform at Jefferies.

J.C. Penney Co. Inc. (NYSE: JCP) maintained Buy with $35 target at Argus.

Lam Research Corp. (NASDAQ: LRCX) reiterated Underperform with $32 target at BofA/Merrill Lynch.

Life Technologies Corp. (NASDAQ: LIFE) cut to Market Perform at William Blair.

LinkedIn Corp. (NYSE: LNKD) started as Neutral at Stern Agee.

PBF Energy Inc. (NYSE: PBF) started as Outperform with $35 target at Credit Suisse.

School Specialty Inc. (NASDAQ: SCHS) raised to Outperform as Bull of the Day at Zacks.

Schlumberger Ltd. (NYSE: SLB) reiterated Buy and raised target from $85 to $90 at Argus.

Symantec Corp. (NASDAQ: SYMC) maintained Neutral but raised target to $21.50 from $20 at BofA/Merrill Lynch.

Tiffany & Co. (NYSE: TIF) maintained Underperform and named Bear of the Day at Zacks.

Time Warner Cable Inc. (NYSE: TWC) started as Outperform with $114 target at Credit Suisse.

Wesco International Inc. (NYSE: WCC) raised to Outperform with target moving up to $84 at Credit Suisse.

Goldman Sachs has issued a very favorable 2013 outlook for major media stocks.

Major oil and gas companies spent quite a lot of effort shedding assets for one reason or another in 2012. BP PLC (NYSE: BP) parted with $32 billion in assets as it builds a cash reserve of $38 billion to pay claims resulting from the sinking of the Deepwater Horizon and the deaths of 11 workers in the Gulf of Mexico disaster that occurred in April 2010. Chesapeake Energy Corp. (NYSE: CHK) sold nearly $14 billion in assets as it tries to reduce its debt and find deep-pocketed partners to help fund future exploration. ConocoPhillips (NYSE: COP) spun off its refining and marketing business into Phillips 66 (NYSE: PSX), and refining company Valero Energy Corp. (NYSE: VLO) plans to spin off its downstream retail business this year.

Another big story was the $15.1 billion acquisition of Nexen Inc. (NYSE: NXY) by China’s Cnooc Ltd. (NYSE: CEO). The Canadian government approved the deal last month, but the United States still needs to weigh in because about 10% of Nexen’s assets are located in the U.S. This deal is being watched closely for precedent — Canada already has said that this sale will cause the country to reevaluate its policies on the sale of natural resource assets to companies controlled by foreign governments.

The other candidate for big story of 2012 is the surge in U.S. oil production, estimated to have reached 6.4 million barrels a day in 2012. Thanks to oil-rich shale formations and hydraulic fracturing (fracking), the International Energy Agency expects the United States to pull even with Saudi Arabia as the world leader in oil production by 2017 and to surpass the Saudis by 2022.

There is more at stake than simple bragging rights. While the United States still will rely on oil imports to maintain its ability to meet demand, the continuing boom in U.S. oil production could lower the price consumers pay at the pump, especially if the industry can develop transportation projects to get the oil to one of the coasts. The key here is a pending decision by the Obama administration on the Keystone XL pipeline, a 1,700-mile conduit proposed by TransCanada Corp. (NYSE: TRP) that would have capacity to carry 1.1 million barrels a day from Canada’s oil sands to the U.S. Gulf Coast.

Refiners with access to domestic crude oil should continue to see good margins in 2013. Marathon Petroleum Corp. (NYSE: MPC), HollyFrontier Corp. (NYSE: HFC) and Tesoro Corp. (NYSE: TSO) are well positioned to take advantage of the price differential between West Texas Intermediate (WTI) and Brent crude, which was about $19 a barrel last night. As U.S. production grows again this year, that differential probably will not close much.

In the same vein, the switch to Brent crude prices as the international benchmark for crude prices is nearly complete. WTI, virtually none of which is available outside the U.S., will lose its benchmark status to Brent, which is traded far more widely. This is not likely to affect actual pump prices for gasoline, but it’s the sort of change that can cause a lot of ink to be spilled about not much. Just be warned.

Gasoline pump prices average around $3.27 a gallon in the U.S. today, below the year ago price of $3.22 and the month ago price of $3.30. Prices rose to more than $5 a gallon in some places in California last summer, and were near $4 at times in most other states. Prices remain below $3 a gallon in a handful of states through the first few days of the new year, although reaction to the fiscal cliff deal sent crude prices higher this week. Crude prices are expected to be somewhat lower this year, and that should keep a rein on pump prices for gasoline.

Crude prices might have fallen well below $80 a barrel if the United States had not dodged the fiscal cliff, and U.S. and Canadian producers may be forced to reduce new drilling for oil because they will not be able to cover their costs at prices much below $80 a barrel, assuming a similar discount to Brent. The average breakeven cost for a new well in the Bakken play is about $80 to $90 a barrel. Bakken crude and Western Canadian Select already sell for a discount of about $20 to the WTI price, or a whopping $40 a barrel discount to Brent. This turn of events cannot continue for long.

Finally a word about natural gas prices. The average price for natural gas fell from $4 per thousand cubic feet in 2011 to $2.78 in 2012, and the EIA expects the price to average $3.68 in 2013. At that price, coal again becomes competitive as a fuel source for power generation, and gas producers still realize very little margin. This year will be another tough year for natural gas producers, but perhaps not as tough as 2012.

Also hard hit by low natural gas prices were the field services companies like Schlumberger Ltd. (NYSE: SLB), Halliburton Co. (NYSE: HAL) and Baker Hughes Inc. (NYSE: BHI), all of which got hurt by the decline in onshore drilling in the U.S. and Canada. Offshore drilling companies like Transocean Ltd. (NYSE: RIG) and Diamond Offshore Drilling Inc. (NYSE: DO) should perform better this year as demand for rigs, particularly mid-depth rigs, and day rates are rising.

Remaining fiscal issues in the U.S., rising production and slow global economic growth all conspire to make energy production a pretty risky business in 2013. These will keep prices down for consumers, but perhaps we would all be willing to pay more for a better and faster growing economy. That is the trade-off we will confront in the coming year.

Major oil and gas companies spent quite a lot of effort shedding assets for one reason or another. BP PLC (NYSE: BP) has parted with $32 billion in assets as it builds a cash reserve of $38 billion to pay claims resulting from the sinking of the Deepwater Horizon and the deaths of 11 workers in the disaster. Chesapeake Energy Corp. (NYSE: CHK) has sold nearly $14 billion in assets as it tries to reduce its debt and find deep-pocketed partners to help fund future exploration. ConocoPhillips (NYSE: COP) spun off its refining and marketing business into Phillips 66 (NYSE: PSX), and refining company Valero Energy Corp. (NYSE: VLO) plans to spin off its downstream retail business next year.

Another big story was the $15.1 billion acquisition of Nexen Inc. (NYSE: NXY) by China’s Cnooc Ltd. (NYSE: CEO). The Canadian government recently approved the deal, but the United States still needs to weigh in because about 10% of Nexen’s assets are in the U.S. This deal is being watched closely for precedent — Canada already has said that this sale will cause the country to reevaluate its policies on the sale of natural resource assets to companies controlled by foreign governments.

The other candidate for big story of the year is the jump in U.S. oil production, now estimated to reach 6.4 million barrels a day in 2012. Thanks to oil-rich shale formations and hydraulic fracturing (fracking), the International Energy Agency expects the U.S. to pull even with Saudi Arabia as the world leader in oil production by 2017 and to surpass the Saudis by 2022.

There is more at stake than simple bragging rights. While the U.S. will still rely on oil imports to maintain its ability to meet demand, the continuing boom in U.S. oil production could lower the price consumers pay at the pump, especially if the industry can develop transportation projects to get the oil to one of the coasts. The key here is a pending decision by the Obama administration on the Keystone XL pipeline, a 1,700-mile conduit proposed by TransCanada Corp. (NYSE: TRP) that would have capacity to carry 1.1 million barrels a day from Canada’s oil sands to the U.S. Gulf Coast.

Refiners with access to domestic crude oil should continue to see good margins in the coming year. Marathon Petroleum Corp. (NYSE: MPC), HollyFrontier Corp. (NYSE: HFC) and Tesoro Corp. (NYSE: TSO) are well positioned to take advantage of the price differential between West Texas Intermediate (WTI) and Brent, which was about $22 a barrel last night. As U.S. production grows again next year, that differential probably will not close much.

In the same vein, the switch to Brent crude prices as the international benchmark for crude prices is nearly complete. WTI, virtually none of which is available outside the U.S., will lose its benchmark status to Brent, which is traded far more widely. This is not likely to affect actual pump prices for gasoline, but it is the sort of change that can cause a lot of ink to be spilled about not much. Just be warned.

Gasoline pump prices average around $3.21 in the U.S. today, below the year-ago price of $3.22 and the month-ago price of $3.49. Prices rose to more than $5 a gallon in some places in California this summer, and were near $4 at times last year. Prices have fallen below $3 a gallon in a handful of states already, and we could be headed toward the two-year low of $2.97 — or even lower.

If U.S. political leaders fail to negotiate an end to the threat of the fiscal cliff, crude prices will dive further on the belief that economic growth will stagnate even more. The declines will not be as far or as fast as the decline in 2008 following the collapse of Lehman Brothers. Brent crude sold for about $97 a barrel in September of that year, and by December had collapsed to around $36 a barrel. The recovery was just as quick.

Crude prices could decline well below $80 a barrel if the U.S. does not avoid the cliff, but at some point U.S. and Canadian producers would have to shut-in production because they would not be able to cover their costs at prices below $60 a barrel, assuming a similar discount to Brent. In fact, Bakken crude and Western Canadian Select already sell for a discount of about $20 to the WTI price, or a whopping $40 a barrel discount to Brent.

Finally a word about natural gas prices. The average price for natural gas fell from $4 per thousand cubic feet in 2011 to $2.78 in 2012, and the EIA expects the price to average $3.68 in 2013. At that price, coal again becomes competitive as a fuel source for power generation and gas producers still realize very little margin. Next year will be another tough year for natural gas producers, but perhaps not as tough as this year has been.

Also hard hit by low natural gas prices and potentially even harder hit by a U.S. tumble off the fiscal cliff are the field services companies like Schlumberger Ltd. (NYSE: SLB), Halliburton Co. (NYSE: HAL) and Baker Hughes Inc. (NYSE: BHI), all of which have been hurt by the decline in onshore drilling in the U.S. and Canada. Offshore drilling companies like Transocean Ltd. (NYSE: RIG) and Diamond Offshore Drilling Inc. (NYSE: DO) should perform better in 2013 as demand for rigs, particularly mid-depth rigs, and day rates are rising.

Fiscal cliffs, rising production and slow global economic growth all conspire to make energy production a pretty risky business in 2013. That will keep prices down for consumers, but perhaps we’d all be willing to pay more for a better and faster growing economy. That is the trade-off we will be confronting next year.

Check out other sector outlook pieces from 24/7 Wall St. for 2013:

• A Turnaround for Coal?
• Some Potential Turnarounds and Losers in Cleantech and Alternative Energy
• Semiconductors Look to Be All About Mobile
• Will Base Metals Make a Comeback?
• Next Year’s Biotech Winners

Paul Ausick

Although much smaller than competitors like Seadrill Ltd. (NYSE: SDRL), Transocean Ltd. (NYSE: RIG), Ensco PLC (NYSE: ESV), Diamond Offshore Drilling Inc. (NYSE: DO) and Noble Corp. (NYSE: NE), Hercules is in a solid position to take advantage of new opportunities in the U.S. Gulf of Mexico. The company has the added advantage of not having any Gulf contracts with BP PLC (NYSE: BP), which may be unable to bid for new leases as a result of yesterday’s suspension of the company from entering into new federal contracts.

Shares are up about 43% in the past 12 months and are trading up more than 6% today, at $4.98 in a 52-week range of $2.91 to $5.57.

Paul Ausick

Today’s announcement that Seadrill has acquired a 64% stake in Asia Offshore Drilling (AOD) and must initiate an offer for the rest of the small company is not a game-changer. AOD is a small outfit, with a market value of about $200 million, but it just received a contract worth $236.5 million for a new jack-up rig. That contract underscores the demand we’ve noted before for shallow water and midwater rigs.

And although offshore rig counts are somewhat lower in many parts of the world, the U.S. offshore count has been rising, from just 20 in September 2010 to 52 at the end of last month. In the same time span, worldwide offshore rig counts have gone from 317 to 293.

Seadrill Ltd. (NYSE: SDRL) traded at $40.13 and has a market value of about $18.81 billion. The consensus target price from Thomson Reuters is $44.31 and the 52-week range is $31.02 to $42.34. Seadrill has a dividend yield of 8.3%. The implied upside to the consensus target is 10%, and the target price is above the 52-week high.

Transocean Ltd. (NYSE: RIG) traded at $46.54 and has a market value of about $16.74 billion. The consensus target price from Thomson Reuters is $60.27 and the 52-week range is $38.21 to $60.06. Transocean does not pay a dividend. The implied upside to the consensus target is 29.5%, and the target price is slightly above the 52-week high.

Ensco plc (NYSE: ESV) traded at $58.35 and has a market value of about $13.52 billion. The consensus target price from Thomson Reuters is $64.80 and the 52-week range is $41.63 to $61.48. Ensco has a dividend yield of 2.6%. The implied upside to the consensus target is 11%, and the target price is above the 52-week high.

Diamond Offshore Drilling Inc. (NYSE: DO) traded at $69.95 and has a market value of about $9.71 billion. The consensus target price from Thomson Reuters is $74.19 and the 52-week range is $52.98 to $73.50. Diamond has a dividend yield of 0.7%. The implied upside to the consensus target is 6%, and the target price is above the 52-week high.

Noble Corp. (NYSE: NE) traded at $38.26 and has a market value of about $9.65 billion. The consensus target price from Thomson Reuters is $47.53 and the 52-week range is $28.73 to $41.71. Noble has a dividend yield of 1.5%. The implied upside to the consensus target is 24%, and the target price is well above the 52-week high.

Given it’s size and its very high dividend yield, it’s hard to ignore Seadrill, but Noble appears to have the upper hand based on implied gain. Seadrill has also posted the largest share price gain over the past 12 months — nearly 20% — compared with just a 7% gain for Noble. But Noble has posted the largest gain over the past 30 days — more than 13% — although it has come down as crude prices have dipped. It could be that Noble is just getting started.

Paul Ausick

The U.S. dollar index rose today, now up 0.28% at 79.235. The GSCI commodity index is up fractionally at 664.94, with commodities prices mixed today. WTI crude oil closed flat today, at $92.10 a barrel. Brent crude trades down 0.35% at $112.82 a barrel. Natural gas is up 3.1% today at about $3.58 per thousand cubic feet, after the weekly storage report showed another inventory gain (more coverage here). Gold closed at $1,744.70 an ounce, down 0.5% for the day.

The unofficial closing bells put the DJIA down more than 7 points to 13,549.48 (-0.06%), the NASDAQ fell more than 31 points (-1.01%) to 3,072.87, and the S&P 500 fell -0.24% or more than 3 points to 1,457.36.

There were several analyst upgrades and downgrades today, including Apple Inc. (NASDAQ: AAPL) maintained as ‘outperform’ but target price lowered to $730 at BMO Capital Markets; Duke Energy Corp. (NYSE: DUK) raised to ‘buy’ at Citigroup; ConocoPhillips (NYSE: COP) raised to ‘neutral’ at Goldman Sachs; Potash Corp. of Saskatchewan (NYSE: POT) cut to ‘sector perform’ at RBC; and Harley-Davidson Inc. (NYSE: HOG) raised to ‘buy’ with a target price of $54 at Goldman Sachs.

Earnings reports since markets closed last night resulted in some price moves today, including these as of the last half hour of trading: American Express Co. (NYSE: AXP) is down 3% at $57.60; eBay Inc. (NASDAQ: EBAY) is up 5.3% at $50.76 after posting a new 52-week high of $50.90 earlier today; Noble Corp. (NYSE: NE) is up 4.8% at $39.49; Select Comfort Corp. (NASDAQ: SCSS) is down 6.8% at $30.41; Steel Dynamics Inc. (NASDAQ: STLD) is up 2.9% at $12.98; Boston Scientific Corp. (NYSE: BSX) is down 3.8% at $5.41; Diamond Offshore Drilling Inc. (NYSE: DO) is up 2.3% at $71.34; KeyCorp (NYSE: KEY) is up 4.7% at $8.81; Morgan Stanley (NYSE: MS) is down 3.8% at $17.79; NVR Inc. (NYSE: NVR) is up 3% at $902.46 after posting a new 52-week high of $915.00; Philip Morris International Inc. (NYSE: PM) is down 4.1% at $88.09; Southwest Airlines Co. (NYSE: LUV) is up 0.8% at $9.03 (more coverage here); SUPERVALU Inc. (NYSE: SVU) is up 4.4% at $2.13; Union Pacific Corp. (NYSE: UNP) is up 1.6% at $125.65; and Verizon Communications Inc. (NYSE: VZ) is up 2.6% at $45.87 (more coverage here).

Before markets open tomorrow we are scheduled to hear from Advanced Micro Devices Inc. (NYSE: AMD), Capital One Financial Corp. (NYSE: COF), Chipotle Mexican Grill Inc. (NYSE: CMG), Microsoft Corp. (NASDAQ: MSFT), Riverbed Technology Inc. (NASDAQ: RVBD), Baker Hughes Inc. (NYSE: BHI), Honeywell International Inc. (NYSE: HON), Kansas City Southern (NYSE: KSU), and Schlumberger Ltd. (NYSE: SLB).

Some standouts from today include the following stocks:

Google Inc. (NASDAQ: GOOG) is down 8.2% at $693.65. The Internet search giant reported early today and the news was not pretty. More coverage here.

Clearwire Corp. (NASDAQ: CLWR) is down 9.1% at $2.06. The wireless carrier is now majority owned by Sprint Nextel Corp. (NYSE: S) and a full buyout looks increasingly unlikely for now. More coverage here.

Nokia Corp. (NYSE: NOK) is down 2.7% at $2.86. The mobile handset maker reported better-than-expected EPS, but the company’s forecast points at more losses. More coverage here.

Stay tuned for Friday. We have noted the following event on the schedule (all times Eastern):

• 10:00 a.m. – Existing home sales

Paul Ausick

The U.S. dollar index fell today, now down 0.47% at 79.033. The GSCI commodity index is up fractionally at 664.24, with commodities prices mostly higher again today on the weaker dollar. WTI crude oil closed flat today, at $92.12 a barrel, following a larger-than-expected addition to the country’s commercial crude oil stocks (more coverage here). Brent crude trades down 0.77% at $113.12 a barrel. Natural gas is up 1% today at about $3.47 per thousand cubic feet. Gold closed at $1,753.00 an ounce, up 0.4% for the day.

The unofficial closing bells put the DJIA up about 5 points to 13,556.77 (0.04%), the NASDAQ rose about 3 points (0.10%) to 3,104.12, and the S&P 500 rose 0.41% or about 6 points to 1,460.90.

There were several analyst upgrades and downgrades today, including Citigroup Inc. (NYSE: C) raised to ‘outperform’ at CLSA and reiterated as ‘sell’ at Argus; Cisco Systems Inc. (NASDAQ: CSCO) cut to ‘hold’ at Cantor Fitzgerald; Time Warner Inc. (NYSE: TWX) started as ‘outperform’ with a target price of $50 at Credit Suisse; Ryland Group Inc. (NYSE: RYL) cut to ‘market perform’ at Raymond James; and ADTRAN Inc. (NASDAQ: ADTN) raised to ‘neutral’ at Goldman Sachs.

Earnings reports since markets closed last night resulted in some price moves today, including these as of the last half hour of trading: Bank of America Corp. (NYSE: BAC) is down 0.05% at $9.46 (more coverage here); CSX Corp. (NYSE: CSX) is down 1.5% at $21.30 (more coverage here); International Business Machines Corp. (NYSE: IBM) is down 5.1% at $200.33 (more coverage here); Intel Corp. (NASDAQ: INTC) is down 2.6% at $21.78 after posting a new 52-week low of $21.26 earlier today (more coverage here); United Rentals Inc. (NYSE: URI) is up 15.3% at $39.14; Abbott Laboratories (NYSE: ABT) is down 4.2% at $69.08 (more coverage here); Bank of New York Mellon Corp. (NYSE: BK) is up 5.7% at $24.90 after posting a new 52-week high of $24.97 earlier today; BlackRock Inc. (NYSE: BLK) is down 0.4% at $189.17; Check Point Software Technologies Inc. (NASDAQ: CHKP) is down 12.7% at $41.39 after posting a 52-week low of $40.92 earlier today; Comerica Inc. (NYSE: CMA) is down 2.6% at $30.25; Halliburton Co. (NYSE: HAL) is up 1.9% at $35.20 (more coverage here); Knight Capital Group Inc. (NYSE: KCG) is up 1.2% at $2.61; PepsiCo Inc. (NYSE: PEP) is down 0.4% at $70.00 (more coverage here); and U.S. Bancorp (NYSE: USB) is up 1.7% at $34.19 (more coverage here).

Before markets open tomorrow we are scheduled to hear from American Express Co. (NYSE: AXP), eBay Inc. (NASDAQ: EBAY), Noble Corp. (NYSE: NE), Select Comfort Corp. (NASDAQ: SCSS), Steel Dynamics Inc. (NASDAQ: STLD), Boston Scientific Corp. (NYSE: BSX), Diamond Offshore Drilling Inc. (NYSE: DO), KeyCorp (NYSE: KEY), Morgan Stanley (NYSE: MS), NVR Inc. (NYSE: NVR), Philip Morris International Inc. (NYSE: PM), Southwest Airlines Co. (NYSE: LUV), SUPERVALU Inc. (NYSE: SVU), Union Pacific Corp. (NYSE: UNP), and Verizon Communications Inc. (NYSE: VZ).

Some standouts from today include the following stocks:

Cymer Inc. (NASDAQ: CYMI) is up 49.9% at $71.70 after posting a new 52-week high of $77.07 earlier today. The semiconductor equipment maker is being acquired by Holland’s ASML for $2.5 billion, or $20 a share in cash and 1.15 shares of ASML stock for each Cymer share held.

Apollo Group Inc. (NASDAQ: APOL) is down 20.7% at $21.80 after posting a new 52-week low of $21.72 earlier today. The for-profit education provider reported weak results and more of the same to come. More coverage here.

Fortinet Inc. (NASDAQ: FTNT) is down 19.6% at $19.95. The Internet security company reported weak results and lowered its outlook. Other stocks in the sector are feeling the pain as well today. More coverage here.

Stay tuned for Thursday. We have noted the following events on the schedule (all times Eastern):

• 8:30 a.m. – New claims for unemployment benefits
• 10:00 a.m. – Philadelphia Fed survey
• 10:00 a.m. – Leading economic indicators
• 10:30 a.m. – EIA weekly natural gas storage report
• 1:00 p.m. – 30-year Treasury Inflation-Protected Securities (TIPS) auction
• 4:30 p.m. – Fed balance sheet and money supply

Paul Ausick

Transocean Ltd. (NYSE: RIG), Diamond Offshore Drilling Inc. (NYSE: DO), and Ensco plc (NYSE: ESV) are best positioned to take advantage of the rising day rates and tight supply. Transocean recently contracted for a new rig in the North Sea at a day rate of $405,000 for 11 months, a 60% increase from previous contracts.

The analysts also say that the North Sea is the sweet spot for new drilling and that only 50% of the rigs currently working the Norths Sea are capable of midwater work. In addition to Transocean, which owns a total of 35 midwater rigs, Diamond (19 rigs), and Ensco (six rigs), Noble Corp. (NYSE: NE) owns 8 midwater rigs.

Stocks in the offshore drillers are trading down less than 1% today as crude prices remain nearly flat.

Paul Ausick