Citigroup, Inc. (NYSE: C) Started as Equal-Weight by Evercore Partners.
Costco Wholesale Corporation (NASDAQ: COST) Cut to Negative from Neutral by Susquehanna; Reiterated Buy and raised price target objective to $93 by Argus.
Diamond Offshore Drilling Inc. (NYSE: DO) Cut to Neutral from Buy at Citigroup.
Dendreon Corporation (NASDAQ: DNDN) Started as Equal-Weight at Barclays.
Google Inc. (NASDAQ: GOOG) Reiterated Outperform with $700 price target objective.
Human Genome Sciences Inc. (NASDAQ: HGSI) Started as Equal-Weight at Barclays.
Molycorp, Inc. (NYSE: MCP) Started as Hold by ThinkEquity.
NetEase.com (NASDAQ: NTES) featured as aggressive growth stock of the day by Zacks Investment Research.
Newpark Resources, Inc. (NYSE: NR) featured as the Value stock of the day by Zacks Investment Research.
Pepco Holdings Inc (NYSE: POM) Raised to Outperform with $23 price target objective by Credit Suisse.
Pharmacyclics Inc. (NASDAQ: PCYC) has been downgraded by RBC Capital Markets and by Global Hunter this morning.
Sears Holdings Corporation (NASDAQ: SHLD) was initiated as “Underperform” by a firm called Imperial Capital.
SIRIUS XM Radio Inc. (NASDAQ: SIRI) was initiated with a Buy rating and was assigned a $2.20 price target objective by Citigroup; Sirius was also featured as the Bull of the Day by Zacks Investment Research.
Texas Instruments Inc. (NYSE: TXN) lowered estimates and targets by Credit Suisse.
Yahoo! Inc. (NASDAQ: YHOO) Started as Market Perform by BMO.

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JON C. OGG

Applied Materials Inc. (NASDAQ: AMAT) Started as Hold at Deutsche Bank.
Becton Dickinson & Co. (NYSE: BDX) Reiterated Buy with $87 target at Argus.
E. I. du Pont de Nemours and Company (NYSE: DD) Started as Neutral at UBS.
Genesco Inc. (NYSE: GCO) named as Value stock of the day at Zacks.
Hewlett-Packard Co. (NYSE: HPQ) Raised to Outperform at RBC.
Hibbett Sporting Goods (NASDAQ: HIBB) named as Bull of the Day at Zacks.
Ingram Micro, Inc. (NYSE: IM) named as Bear of the Day at Zacks.
Kodiak Oil & Gas Corp. (NYSE: KOG) Reiterated Outperform and raised target to $11 at Credit Suisse.
Nabors Industries Ltd. (NYSE: NBR) Cut to Hold at Jefferies.
Netflix, Inc. (NASDAQ: NFLX) maintained Sell but cut target to $57 at Canaccord Genuity.
Newpark Resources (NYSE: NR) Started as Hold at Canaccord Genuity.
QUALCOMM Incorporated (NASDAQ: QCOM) Started as Outperform at Scotia.
Research In Motion Limited (NASDAQ: RIMM) Raised to Market Perform at Bernstein.
Spectrum Brands Inc (NYSE: SPB) Started as Outperform at Credit Suisse.

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And there’s plenty of work for the likes of Nalco Holding Co. (NYSE: NLC),Clean Harbors, Inc. (NYSE: CLH), and Newpark Resources, Inc. (NYSE: NR). A ruptured crude oil pipeline belonging to Exxon Mobil Corp. (NYSE: XOM) dumped an estimated 1,000 barrels of oil into the Yellowstone River about 10 miles upstream of Billings, Montana. In China’s Bohai Bay, a well operated by ConocoPhillips Corp. (NYSE: COP) and China’s Cnooc Ltd. (NYSE: CEO) has leaked about 1,500 barrels of oil, and a well in the North Sea operated by Royal Dutch Shell plc (NYSE: RDS-A) has leaked about 1,300 barrels into the waters off the coast of Scotland.

The leaks — and there are plenty of others — have led to a slowdown in offshore drilling and, in the US, more opposition to a plan by Transcanada Corp. (NYSE: TRP) to build the 1,700-mile Keystone XL pipeline to carry crude from the oil sands region of western Alberta to the Gulf Coast. And the new regulatory regime is not just taking hold in the US either.

The five countries surrounding the Caspian Sea and its 30 billion barrels of oil have negotiated an agreement to establish an emergency response mechanism for potential oil spills. Greenland has just published its spill response plan even though test wells off the country’s west coast have so far shown no commercial quantities of oil or gas.

The plan with the largest effect appears to come from the United Nations Environment Programme, related to pollution of drinking water in Nigeria’s Ogoniland. The UN conducted a 14-month study of the effects of 50 years of oil drilling and transportation in the region and concluded that the situation is much worse than originally believed. The clean-up effort is expected to surpass that which followed the Gulf of Mexico spill last year with officials estimating recovery could take 25-30 years.

Tighter regulations and the development by governments of detailed emergency response plans means that companies like Nalco and Clean Harbors have an opportunity to shop their expertise more widely around the world. The work would not be just clean-up, but could also involve specialized consulting.

When Clean Harbors announced its second quarter results earlier this month, the company also indicated it is shopping around for acquisitions. Nalco has also reported second quarter earnings and raised its guidance for both EPS and revenues for the full fiscal year. Nalco has also agreed to a merger with Ecolab Inc. (NYSE: ECL) that is expected to close in the fourth quarter.

Clean Harbors posted an all-time high earlier this month and the stock closed yesterday at $51.57, in a 52-week range of $29.35-$59.35. Clean Harbor shares are up nearly 70% in the past 12 months. Nalco’s shares jumped in mid-July on the merger agreement with Ecolab. Shares closed yesterday at $33.48, in a 52-week range of $21.98-$37.34.

Paul Ausick

Brocade Communications Systems, Inc. (NASDAQ: BRCD) is trading higher by over 4.6% at $6.29 after reporting that earnings were down by almost half but still above estimates.  We have seen more than 3.5 million shares trade in the after-hours alone.

Duckwall-Alco Stores, Inc. (NASDAQ: DUCK) is down 5.6% at $12.50 on more than 500,000 shares since the 4PM Close.  Here is the thing to consider: volume is only about 7,000 shares a day.  This is very likely a clean-up block trade

Intuit Inc. (NASDAQ: INTU) is up 2.1% at $51.50 on more than 165,000 after-hours shares after profit fell about 36% after selling its real estate solutions business in 2010.

Newpark Resources Inc. (NYSE: NR) is up more than 10% at $7.16 on more than 35,000 shares after the closing bell after beating earnings expectations.

Nordstrom, Inc. (NYSE: JWN) is down about 2.1% at $45.50 in after-hours trading on more than 170,000 shares despite a 35% rise in earnings.  Retail stocks have risen sharply, so it is a sell-the-news event.

SunPower Corporation (NASDAQ: SPWRA) is surging more than 7.8% in the after-hours on more than 570,000 after-hours shares after profit rose on higher gross margins and strong demand… Wait a minute, Higher Margins in SOLAR?  It also lifted its full-year forecast.

Red Robin Gourmet Burgers Inc. (NASDAQ: RRGB) is up 7% at $22.60 after its Q4 earnings rose over 30%. Volume is light at 19,000 after the close.

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JON C. OGG

Clean Harbors, Inc. (NYSE: CLH) gave projections about how much the spill clean-up was helping to boost business.  Its shares are down over 3% at $62.50 this morning after having seen prices almost $67.00 on just Wednesday and Thursday.  Its 52-week range is $49.07 to $72.14.  Shares are down about 14% from their highs during the BP event.

Nalco Holding Co. (NYSE: NLC), which makes the chemical dispersant Corexit, has many areas of operation so is less of pure-play.  With a 2% drop to $22.95 today, this peaked above $23.60 this week and the 52-week range is $16.50 to $29.25.  Shares are down over 21% from their highs now.  Unfortunately for the company, dispersants and Corexit have many issues of their own.

Newpark Resources Inc. (NYSE: NR) peaked at just above $7.00 all throughout this week so far and shares are down 2% at $6.87 this morning.  Its 52-week range is $2.26 to $8.05.  Shares are down almost 15% from their highs.

MOP Environmental Solutions, Inc. (Pink Sheets: MOPN) is an example of true penny stock purgatory and just one more sampling of dozens and dozens of routine instances where Pink Sheet stocks just do not make the grade for most investors.  The stock is down over 4% at $0.12+ this morning and was at $0.18 earlier this week and above $0.20 last week and hit $0.35 last month.  So much for the great ‘boom growth’…

Many companies do win in these disaster situations.  The problem is that the work tied to such wins is short-lived and analysts and investors always figure out that this is a revenue stream that will one day go away or be for less.

JON C. OGG

The remediation players include large companies like Procter & Gamble (NYSE:PG); medium-cap companies like Ashland Inc. (NYSE:ASH), Eastman Chemical Co. (NYSE:EMN), Nalco Holding Co. (NYSE:NLC), and Clean Harbors, Inc. (NYSE:CLH); and small-caps Newpark Resources, Inc. (NYSE:NR) and Arch Chemicals, Inc. (NYSE:ARJ). There’s even a OTC stock, MOP Environmental (OTC:MOPN) that is likely to benefit from the clean-up.

Procter & Gamble makes Dawn dishwashing detergent, which is the cleaner of choice for wildlife covered with oil. The company has already delivered 2,000 bottles of the detergent to the Gulf coast, and more will likely be needed. The impact on P&G’s bottom line should only be minimal, but this will give the Dawn brand a nice boost and it would be unlike P&G to miss a chance like this to build its image.

Ashland, Eastman, Nalco, and Arch make specialty chemicals that are being used to disperse the oil slick formed by the leaking well. Nalco has already supplied more than 300,000 gallons of its dispersant to BP and the others might be shipping the stuff as well.  Ashland provides hazardous waste removal services as well as chemicals. Eastman and Arch make specialty chemicals and solvents that can be used to clean up oil slicks.

Clean Harbors offers ships and crews to the Gulf coast and has been contracted by government agencies to provide logistics and support services. The company today released an update to its expected revenues as a result of its work on the spill. Clean Harbors now forecasts an increase of second quarter revenues of 15%-20% above the First Call estimates of $352 million.

There are more than 650 vessels now in the Gulf to work on containing and cleaning up the oil. Over 1.25 million feet of containment boom is already in place (that’s more than 235 miles worth) and some 440,000 feet of absorbent boom has also been deployed. About 285,000 feet of containment boom and 900,000 feet of absorbent boom is still available for deployment. Almost double the amount of deployed containment boom is already on order from various suppliers, mostly small privately held companies along the Gulf coast.

One company that makes absorbent booms is MOP Environmental Solutions, Inc. MOP booms can absorb the floating oil and the oil can then be extracted from the boom material. The boom itself is recyclable. The company announced in a press release that it has lowered the price on its boom in response to the Gulf spill.

While all these companies are likely to see a revenue boost as a result of their abilities to aid in the clean up of the Gulf, the longer term prospects might be even brighter. It’s almost certain that new federal regulations will be adopted not only to make deepwater drilling safer, but that companies involved in drilling will be required to be better prepared for an a spill. That requirement will provide an opportunity for these companies to do even more business both with the federal government and with the oil companies that will surely be picking up the tab.

With the exception of Clean Harbors, all these companies are trading nearly flat or down today, probably due to the news that BP is having some success with its efforts to contain the spill.

Paul Ausick

Refiners fared worse, with Western Refining (NYSE:WNR) off 11.22% for the day and Alon (NYSE:ALJ) off 6.53%.  In light of last Friday’s huge jump in crude oil, this all makes some sense. The oil majors and the E&P companies are getting their reserves factored in at the new prices. New exploration and drilling is bumping up the services companies. Refiners, who can’t raise prices fast enough to offset the costs of crude, are falling.

Many analysts think last week’s spike in crude prices was the result ofshort covering, abetted by the strengthening dollar. That may accountfor the uptick in companies with E&P plays, but what about servicescompanies? Yesterday’s surge indicates that traders are pricing newoperations into the companies’ stocks. But, if demand for crude isdropping, and according to the IEA, the latest projections for the restof 2008 indicate a global drop of 70,000 b/d, then it iscounter-intuitive that drilling will increase.

The oil majors and the E&P companies do not have to pump the oil.In fact, the longer it stays in the ground, the more valuable itbecomes. That is not good for the services companies. As for therefiners, as demand for gasoline drops, they manage their crudeinventory more carefully. That’s why the EIA reported lower demand forgasoline last week, even as crude inventories declined. Refiners aren’tbuying as much as prices stay above about $120 because they can’tcharge enough for the finished product to make a profit. They will onlyreplenish inventory when absolutely necessary.

The current calls for opening up the US outer continental shelf andother protected areas for exploration are just noise. There is nothingin any of those proposals that will have any short-term impact on crudeprices. The long-term impact won’t accomplish anything more than toreplace old supply with new–a costly zero-sum game.

Lower consumption, brought on by higher prices, will reduce (or evendestroy) demand. One way to hurry this along is through seriousconservation. For some reason, no politician appears interested inreducing highway speed limits, which could save as much as 10%-20% ofUS gasoline consumption. Sooner or later conservation will enter thediscussion because nothing else has any significant short-term impact.Sooner would be better.

Paul Ausick
June 10, 2008