Websense’s senior management is expected to remain in place after the acquisition is completed. Under terms of the agreement, a subsidiary of Vista will commence a tender offer for all outstanding shares of Websense. If the tender does not meet a minimum (unspecified) number of shares tendered, Vista and Websense will complete the transaction in a one-step merger, following shareholder approval.

Four of six Internet security companies are showing share price gains for the past 12 months. The biggest gainer is Vasco Data Security International Inc. (NASDAQ: VDSI), up nearly 22%, followed by Sourcefire Inc. (NASDAQ: FIRE), up about 8.5%; Palo Alto Networks Inc. (NYSE: PANW), up about 6%; and Websense, up nearly 4%. Fortinet Inc. (NASDAQ: FTNT) and CheckPoint Systems Inc. (NASDAQ: CHKP) have both posted declines in the past year.

The trick for these firms is either to get their noses into the federal government trough or to persuade private firms that they need better security given the increasing number of attacks.

Websense shares are up about 28.3% in the premarket this morning, at $24.67, well above the 52-week range of $12.70 to $19.36.

ACADIA Pharmaceuticals inc. (NASDAQ: ACAD) is up 64.4% at $13.10.

Rite Aid Corp. (NYSE: RAD) is up 18.4% at $2.12.

Metalico Inc. (NYSEMKT: MEA) is up 17.5% at $1.68.

Redhill Biopharma Ltd. (NASDAQ: RDHL) is up 17% at $11.70.

Innotrac Corp. (NASDAQ: INOC) is up 16% at $3.98.

And here are today’s five biggest losing stocks at closing:

Northern Technologies International Inc. (NASDAQ: NTIC) is down 17.6% at $10.75.

SemiLEDS Corp. (NASDAQ: LEDS) is down 17.5% at $1.18.

Durata Therapeutics Inc. (NASDAQ: DRTX) is down 15.6% at $7.28.

Fortinet Inc. (NASDAQ: FTNT) is down 13.1% at $18.99.

GenVec Inc. (NASDAQ: GNVC) is down 13% at $1.21.

Shares of Palo Alto Networks Inc. (NYSE: PANW), Sourcefire Inc. (NASDAQ: FIRE), CheckPoint Systems Inc. (NASDAQ: CHKP), Websense Inc. (NASDAQ: WBSN), Vasco Data Security International Inc. (NASDAQ: VDSI), and Proofpoint Inc. (NASDAQ: PFPT) all opened lower or nearly flat this morning.

At the same time that Fortinet said its lowered expectations are partly due to “a few deal” that failed to close as expected, the Obama administration budget proposal to Congress seeks to boost spending on cybersecurity in the public sector by about $1 billion in fiscal year 2014, to more than $13 billion. In the Defense Department alone, an additional $800 million is proposed for cybersecurity operations.

Ironically, the largest providers of security systems to the Defense Department are traditional defense firms like Lockheed Martin Corp. (NYSE: LMT), Raytheon Co. (NYSE: RTN), and British-based BAE Systems Inc. These firms got a share price boost today, as did SAIC Inc. (NYSE: SAI).

Firms like Fortinet do sell to government agencies, although the sales are often made indirectly through another reseller or government contractor. In its Form 10-K for last year Fortinet said that it has had “limited traction” in sales to the U.S. federal government.

It seems obvious that Fortinet and the other primarily non-defense firms should begin to focus more on government sale since that appears to be where the money will be. Just sayin’.

Fortinet shares have been hit hard today, down more than 14% at $18.75 in a 52-week range of $17.53 to $28.23.

Adobe Systems Inc. (NASDAQ: ADBE) raised to Neutral from Sell at Goldman Sachs.

Apple Inc. (NASDAQ: AAPL) maintained Buy with $630 price target on Yahoo! ties at Stern Agee.

Digital Realty Trust inc. (NYSE: DLR) cut to Neutral at Macquarie.

Fortinet Inc. (NASDAQ: FTNT) lowered guidance and shares are down 17%. It was downgraded to the equivalent of Neutral or Hold by BofA/Merrill Lynch, Needham, Wells Fargo and perhaps other firms.

Kraft Foods Inc. (NASDAQ: KRFT) started as Market Perform at Wells Fargo.

Microsoft Corp. (NASDAQ: MSFT) cut to Sell from Neutral at Goldman Sachs (FULL SUMMARY) and cut to Neutral from Buy at Nomura.

Mondelez International Inc. (NASDAQ: MDLZ) started as Outperform at Wells Fargo.

Schlumberger Ltd. (NYSE: SLB) maintained Buy with $90 target price but lowered earnings estimates ahead of earnings at Argus.

Toll Brothers Inc. (NYSE: TOL) raised to Neutral from Negative at Susquehanna.

Under Armour Inc. (NYSE: UA) reiterated Outperform and raised target to $64 from $60 at Credit Suisse.

Jefferies raised its targets and estimates on many Big Pharma stocks.

Merrill Lynch sees upside earnings surprises from these eight large companies during earnings season.

Argus made many big changes in its model portfolios today.

Juniper Networks Inc. (NYSE: JNPR) is down more than 6%, Cisco Systems Inc. (NASDAQ: CSCO) is down nearly 4%, Riverbed Technology Inc. (NASDAQ: RVBD) is down nearly 3.5%, Fortinet Inc. (NASDAQ: FTNT) is down nearly 3.5% and Ciena Corp. (NASDAQ: CIEN) is down about 3.1%. Even Alcatel-Lucent (NYSE: ALU), which jumped about 10% yesterday, is down nearly 2% this morning.

F5 blamed the cuts on slowing sales in North America and its Europe, Middle East and Africa region. The company also noted that sales to the U.S. government were down “significantly” compared with the year-ago quarter.

The bloodbath at F5 has the shares down more than 19% at $72.69, after posting a new 52-week low of $71.95. The 52-week high is $139.20.

Today, Sourcefire more than repaid the favor, reporting better-than-expected results for the third quarter and putting a charge back into the security stocks. Palo Alto Networks Inc. (NYSE: PANW) just closed its third quarter yesterday, and is expected to post EPS of $0.03 on revenues of $83.7 million when it reports results in December.

Sourcefire even boosted its full-year guidance to adjusted EPS of $0.80 to $0.82, nicely above the consensus estimate of $0.76. Revenues were also forecast above the current consensus.

Over the past 12 months, Sourcefire’s shares are up about 77%, far more than any of the other players, including Symantec Corp. (NASDAQ: SYMC), which grew about 13%. Palo Alto Networks, which came public in July, is up about 6%, Fortinet is down almost 11%, and Check Point is down about 20%.

Fortinet and Check Point both called out softness in the European market as a source of their lowered estimates. But Sourcefire’s international revenues grew 69%. Sourcefire’s U.S. government sales grew by just 4% in the quarter, and the looming cuts in federal spending could be a bigger problem for all these vendors than weak sales in Europe.

Sourcefire shares are up 12.8% at $48.25 in a 52-week range of $28.35 to $59.64.

Fortinet is up 4.5% at $20.25 in a 52-week range of $18.15 to $28.82.

Check Point is up 2% at $45.43 in a 52-week range of $40.60 to $65.00.

Palo Alto Networks is up 2.4% at $56.28 in a post-IPO range of $51.10 to $72.61.

Symantec is up 2.1% at $18.57 in a 52-week range of $13.06 to $19.54.

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

Doesn’t it seem odd that just a few days ago, U.S. Secretary of Defense Leon Panetta warned of a possible “cyber-Pearl Harbor” that could disable the U.S. power grid, its transportation system, financial networks, and government operations, and the companies that make products to defend against these kinds of attacks are not posting better revenues and profits? Just yesterday a U.S. intelligence official said that Iran was behind an attack on U.S. oil companies and banks that disabled 30,000 computers in Saudi Arabia last summer.

Check Point and Fortinet pointed to softness in European markets and both companies are getting more competition from recently public Palo Alto Networks Inc. (NYSE: PANW). Big-time competition is also threatening from International Business Machines Corp. (NYSE: IBM) and Intel Corp. (NASDAQ: INTC), which now owns McAfee.

Another possible explanation is that the looming fiscal cliff in the U.S. is making companies, and the federal government, more cautious about making investments in security, choosing to take a wait-and-see approach both on funding levels and on a cyber-attack as well. Maybe Panetta’s warning is too much, too soon.

Whatever the reason, Check Point’s shares are down 12.8% today at $41.37 after posting a new 52-week low of $40.92. The prior range was $43.18 to $ 65.00.

Fortinet’s shares are down 20.7% at $19.67 in a 52-week range of $17.54 to $28.82.

Sourcefire is down 13.9% at $41.01 in a 52-week range of $26.12 to $59.64.

Palo Alto Networks is up 1% at $66.26 in a post-IPO range of $51.10 to 72.61.

Paul Ausick

These are Wednesday’s market winners and losers.

Biggest Winners

Shares of Cymer Inc. (NASDAQ: CYMI) are up 56.39% to $74.80 on trading volume of 5.2 million shares. The company, which provides light sources for lithography, will be bought by ASML Holdings for approximately $2.5 billion in a cash-and-stock transaction. Before Wednesday, the 52-week high was $62.40.

Shares of Dean Foods Co. (NYSE: DF) are up 11.97% to $16.84 on trading volume of 3.7 million shares. The company has filed documents with the Securities and Exchange Commission to hold an IPO for its WhiteWave Foods unit. The 52-week high is $17.50.

Biggest Losers

Shares of Apollo Group Inc. (NASDAQ: APOL) are down 17.61% to $22.65 on trading volume of 5.4 million shares. The company reported earnings of 52 cents a share in the fourth quarter, down 49% from a year ago. The company is also shutting 115 University of Phoenix campuses. Before Wednesday, the 52-week low was $25.77.

Shares Fortinet Inc. (NASDAQ: FTNT) are down 17.18% to $20.54 on trading volume 7.6 million shares. The network security products maker cut its full-year revenue outlook from between $525 million and $530 million to between $524 million and $528 million. The 52-week low is 17.54.

Samuel Weigley

Follow him on Twitter: SWeigley

Akamai Technologies, Inc. (NASDAQ: AKAM) loved its earnings report as shares are up over 16% at $32.80 on more than 725,000 shares since the closing bell.

Fortinet, Inc. (NASDAQ: FTNT) is up over 10% at $24.73 on well over 200,000 shares. The company beat expectations on its earnings report.

Las Vegas Sands Corp. (NYSE: LVS) is down 6% at $35.25 on more than 2.4 million shares after a big earnings disappointment.

Great news in disk drive earnings…. Seagate Technology Ltd. (NASDAQ: STX) is up 8.3% at $28.51 on more than 600,000 shares since the close of trading. Western Digital Corporation (NASDAQ: WDC) is up almost 18% at $38.28 on more than 1 million shares since the closing bell.

OmniVision Technologies, Inc. (NASDAQ: OVTI) is up big with a 9% gain to $13.67 but only on 23,000 shares since the closing bell.

Synacor, Inc. (NASDAQ: SYNC) is down almost 19% at $10.50 on about 70,000 shares since the closing bell. The company known for TV everywhere missed its earnings expectations.

Terex Corporation (NYSE: TEX) is up 16% at $16.36 after earnings and more than 73,000 shares have traded hands.

Tractor Supply Company (NASDAQ: TSCO) is up 6% at $83.70 on nearly 500,000 shares after posting a 17% gain in earnings and managing to lift its guidance.

Whole Foods Market, Inc. (NASDAQ: WFM) is soaring after beating earnings and raising guidance. The margins are now 3-times that of some rivals in the grocery business. Shares are up close to 11% at $93.67 on over 1.2 million shares since the closing bell. Its smaller and fairly new rival called The Fresh Market, Inc. (NASDAQ: TFM) is up 7% at $55.06 as a secondary trade with only about 20,000 shares having traded hands.

Zynga Inc. (NASDAQ: ZNGA) is getting crushed after cutting its earnings outlook for the year in half after a truly poor earnings report with only $0.01 EPS. As of 5:55 PM EST we had shares down 36.4% at $3.23 on more than 18 million shares. The news is also bashing Facebook, Inc. (NASDAQ: FB) as the two are tied for better or worse ahead of the social networking giant’s own earnings report Thursday. Facebook shares are down 7.6% at $27.10 on more than 2.5 million shares after the close of trading.

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JON C. OGG