Among firms that had IPOs recently, the short interest in Zynga (NASDAQ: ZNGA) rose 35% to 56.6 million. Shares sold short in Groupon (NASDAQ: GRPN) rose 19% to 20.7 million. Both companies have been under attack because many investors believe that they cannot sustain sales in a market in which the number of competitors is multiplying quickly.

Among Web 1.0 firms, the short interest in Yahoo! (NASDAQ: YHOO) was up 23% to 25.6 million. Although the firm has been able to make progress with its Asian assets, its core portal business is in trouble, and it recently replaced another CEO. Shares short in eBay (NASDAQ: EBAY) rose 19% to 16.6 million.

Among other tech stocks, the short interest in Microsoft (NASDAQ: MSFT), which continues to struggle in the critical mobile industry, rose 25% to 87 million. Shares sold short in badly wounded Research In Motion (NASDAQ: RIMM) rose 18% to 53.4 million. The short interest in Oracle (NASDAQ: ORCL) rose 8% to 35.4 million shares.

Other companies with weak prospects hit by short sellers included Chesapeake Energy (NYSE: CHK); shares sold short rose 27% to 85.2 million. There are questions about the CEO’s practice of investing individually in some of the firm’s drilling projects. Shares short in Sprint-Nextel (NYSE: S) rose 20% to 116.7 million. The third-largest wireless company continues to lose ground to AT&T (NYSE: T) and Verizon Wireless.

Short interest in major banks also rose as worries about Europe’s finances and new regulations pushed share prices down. Shares sold short in Bank of America (NYSE: BAC) rose 6% to 150.7 million. The short interest in Citigroup (NYSE: C) rose 16% to 35.5 million. Shares sold short in Wells Fargo (NYSE: WFC) moved higher by 11% to 36 million.

Douglas A. McIntyre

Hewlett-Packard (NYSE: HPQ) posts better-than-expected earnings and says it will fire 27,000 people. (Reuters)

Oracle (NASDAQ: ORCL) loses an important ruling in an intellectual property suit against Google (NASDAQ: GOOG). (Reuters)

Shareholders sue Facebook (NASDAQ: FB) because of trouble with its IPO. (Reuters)

Facebook may move to the NYSE (NYSE: NYX). (Reuters)

Some large investors receive warnings from analysts that projections of Facebook’s earnings have come down. (WSJ)

Chesapeake Energy (NYSE: CHK) increases drilling on the Utica Shale in Ohio. (WSJ)

Sony (NYSE: SNE) will sell part of its LCD business to Sharp. (WSJ)

The head of sales at Research In Motion (NASDAQ: RIMM) departs. (WSJ)

Yields on German bonds fall to all-time lows as capital moves to safety. (WSJ)

General Electric (NYSE: GE) says its industrial profit margin will rise in 2013. (WSJ)

Oil falls below $90 for the first time since October. (WSJ)

Royal Dutch Shell (NYSE: RDS-A) will begin to drill in far north areas of Alaska. (NYT)

Martha Stewart will once again become chairperson of Martha Stewart Living Omnimedia (NYSE: MSO). (NYT)

A deal for financial coordination among EU nations will be put off until a June meeting. (FT)

Shale gas helps the U.S. lower emissions. (FT)

Large companies turn over CEOs less than in the downturn, according to Booz & Company. (FT)

BMW will triple its output in China. (Bloomberg)

Detroit turns off street lights to save money. (Bloomberg)

Douglas A.McIntyre

In the first phase of the trial, a federal judge narrowed the litigation over Oracle’s copyright claims and upheld a portion of Oracle’s claims. In the third phase the judge will assess damages against Google for its infringing use of some parts of Java code in Google’s Android operating system. Oracle has indicated that it intends to seek a seriously large payment for the infringement. Oracle has also said that it will appeal the jury’s verdict.

The verdict did not affect either company’s share price during today’s trading session. After hours both are down slightly.

Paul Ausick

The companies announced that SAP America has entered into an agreement to acquire Ariba for its cloud-based business commerce network at a price of $45.00 per share.  This generates and enterprise value (equity and debt) of about $4.3 billion.  The Ariba board of directors has already approved the transaction unanimously and the buyout represents a 20% premium over the May 21 closing price.

Today’s acquisition will combine Ariba’s buyer-seller collaboration network with SAP’s customer base and business process expertise “to create new models for business-to-business collaboration in the cloud.”

SAP is worth almost $70 billion in market value and its $58.77 share price for ADRs compares to a 52-week range of $47.39 to $72.52. Ariba shares were up 0.8% at $37.96 before being halted and the 52-week range is $21.90 to $40.45. With Thomson Reuters having a consensus estimate of $0.99 EPS for 2012, SAP is effectively paying 45-times earnings for Ariba.

JON C. OGG

Former CEO Market Hurd built his reputation because he was a talented cost cutter. He fired more people than Whitman will with the upcoming cuts. In one move, after HP bought tech consultant EDS, he sacked 24,000 people he deemed redundant. Despite the human damage, he increased HP’s margins and its share price. If it were not for indiscretions, he would still be wielding his axe.

IBM’s (NYSE: IBM) multidecade turnaround and success was built on a weeding out of weak businesses and bolstering of good ones, along with a smattering of smart M&A. Starting with uber-CEO Louis Gerstner, IBM cuts its workforce by tens of thousands. Some observers believe IBM continues to silently let people go as it outsources their jobs to India and other parts of Asia. Not many months ago, IBM’s shares were at an all-time high.

One of the most proficient cost cutters in the tech world is Larry Ellison of Oracle (NASDAQ: ORCL), one of his generation’s great success stories. His serial acquisitions of smaller companies almost always result in elimination of redundant jobs.

Layoffs at weak tech firms may seem cruel and examples of how some people who have jobs today help a company atone for past sins. But they also are often the start of new focus by a CEO with reasonable plans to make his or her company much better, at least financially.

Douglas A. McIntyre

The unofficial closing bells put the DJIA up nearly XX points to XXX (XX%), the NASDAQ rose more than XX points (XXX%) to XXX, and the S&P 500 rose XX% or nearly X points to XXX.

There were several analyst upgrades and downgrades today, including Oracle Corp. (NASDAQ: ORCL) cut to ‘hold’ at ThinkEquity; National Oilwell Varco Inc. (NYSE: NOV) maintained ‘buy’ with a lowered target price of $90 at Argus; 3M Co. (NYSE: MMM) cut to ‘market perform’ at Bernstein; Teva Pharmaceuticals Industries Ltd. (NASDAQ: TEVA) cut to ‘hold’ at Needham; and JDS Uniphase Corp. (NASDAQ: JDSU) raised to ‘buy’ at UBS.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: AMC Networks Inc. (NASDAQ: AMCX) is up 2.4% at $40.58; ArcelorMittal (NYSE: MT) is up 1.9% at $16.42; Harvest Natural Resources Inc. (NYSE: HNR) is down -1.6% at $5.71 after posting a new 52-week low of $5.44 earlier today; Kohl’s Corp. (NYSE: KSS) is down -4.6% at $48.52; and Windstream Corp. (NASDAQ: WIN) is down -10.3% at $10.10 after posting a new 52-week low of $9.42 earlier today.

On Friday we are scheduled to get earnings from Dillard’s Inc. (NYSE: DDS), Jinkosolar Holding Co. Ltd. (NYSE: JKS), Nvidia Corp. (NASDAQ: NVDA), Progressive Corp. (NYSE: PGR), ReneSola Ltd. (NYSE: SOL), and Uranium Resources Inc. (NASDAQ: URRE).

Other standouts from today include the following stocks:

Monster Beverage Corp. (NASDAQ: MNST) is up 9.2% at $71.34 in a 52-week range of $32.35-$83.96. The energy drinks company posted strong results, but buyout rumors continue to lead the charge. More coverage here.

MEMC Electronic Materials Inc. (NYSE: WFR) is down -24.3% at $2.46 after posting a new 52-week low of $2.41 earlier today. The solar component supplier posted bad results and a weak outlook. More coverage here.

We also took a detailed look today at short interest in a number of stocks — big names, volume leaders, and cult stocks.

Stay tuned for Friday. Dallas Fed President Richard Fisher is giving a speech. We have noted the following events on the schedule (all times Eastern):

• 8:30 a.m. – Producer price index
• 9:55 a.m. – Reuters/University of Michigan consumer sentiment

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Paul Ausick

ARM Holdings PLC (NASDAQ: ARMH) Raised to Market Perform at Bernstein.

Big Lots Inc. (NYSE: BIG) Raised to Overweight at Barclays.

Chesapeake Midstream Partners, L.P. (NYSE: CHKM) Started as Outperform at Credit Suisse.

Cisco Systems Inc. (NASDAQ: CSCO) Reiterated Buy with $24 target at Argus.

Cost Plus Inc. (NASDAQ: CPWM) Cut to Neutral at Wedbush.

Dolby Labs, Inc. (NYSE: DLB) Cut to Neutral at JPMorgan.

Human Genome Sciences Inc. (NASDAQ: HGSI) Cut to Market Perform at Leerink Swann.

JDS Uniphase Corporation (NASDAQ: JDSU) Raised to Buy at UBS.

Linn Energy, LLC (NASDAQ: LINE) Started as Outperform at Credit Suisse.

3M Co. (NYSE: MMM) Cut to Market Perform at Bernstein.

National Oilwell Varco Inc. (NYSE: NOV) Maintained Buy but cut target to $90 at Argus.

Oracle Corporation (NASDAQ: ORCL) Cut to Hold at ThinkEquity.

Regency Energy Partners LP (NYSE: RGP) Started as Outperform at Credit Suisse.

Tempur-Pedic International Inc. (NYSE: TPX) Raised to Strong Buy at Raymond James.

Tesoro Logistics LP (NYSE: TLLP) Started as Outperform at Credit Suisse.

Teva Pharmaceutical Industries Limited (NASDAQ: TEVA) Cut to Hold at Needham.

Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) Cut to Outperform at RBC.

If you enjoyed the top analyst upgrades and downgrades, you can join our free email newsletter that includes analyst summaries each morning sent right to your inbox.  We also cover top issues such as IPOs, special financial exclusives, mergers and more. Sign up in the box below.

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JON C. OGG

Thomson Reuters has estimates of $0.47 EPS and $11.57 billion in revenues.  Guidance is not offered usually until the conference call but the estimates for the current (July) quarter are $0.49 EPS and $11.99 billion in revenue.

The first real inference today is that Juniper Networks, Inc. (NYSE: JNPR) and Alcatel-Lucent, S.A. (NYSE: ALU) both have slid lower since their earnings.  Juniper looked like it was a stabilization after a really bad drop, but the initial stock pop higher was sold off immediately and its stock price is now under where it was before earnings.  Alcatel-Lucent is now under $1.50 after recently giving a poor earnings report that brings up relevance into question.

Our main reason for putting Cisco as the lynchpin for technology is that it often acts as a preview to Oracle Corporation (NASDAQ: ORCL) as the other off-quarter earnings from the technology leadership.  Oracle has historically been more of a software play but the comparison is still crucial.  Cisco grabs a different part of the enterprise technology spending dollars, but weakness in one may mean weakness in another as technology officers can push orders out further on the horizon.

Cisco has also been in the midst of a restructuring that seems to be mostly complete.  The problem is that shares have slid from recently being above $20.00 down to $18.70.  Thomson Reuters has a consensus price target of $22.58 and the 52-week range is $13.30 to $21.30. The company’s market cap today is right at $100 billion.

The stock chart may hold the keys to the post-earnings reaction after today.  With a price of $18.70, the 200-day moving average is down at $18.14 and the 50-day moving average is up at $19.96.  In short, Cisco had recovered handily off of its lows in the last year but its stock has been very weak for the last month and $20.15 to $20.20 acted as very strong resistance on the chart throughout April after shares slid from the peak of just over $21.00.

Options traders appear to be braced for a move of up to about $0.75 or so in either direction based upon the speculative call and put options pricing.

Just one suggestion for Cisco not pertaining its earnings call: the investor relations site takes far too long to navigate.  Still, the stock trades at only about 10-times current earnings expectations.  Does that make Cisco a value stock in its turnaround, or is Cisco’s turnaround just a value trap.

We would note one strength from the last quarter… gross margin rose to 61.3% from 60.2% and the cost of sales rose by more than 7%.

Keep in mind that Cisco’s earnings will prelude an investor day presentation by Intel Corporation (NASDAQ: INTC) on May 17, 2012 and it will also prelude the Hewlett-Packard Co. (NYSE: HPQ) earnings report currently penciled in around May 23, 2012.

JON C. OGG

The technology sector needs for Cisco to show that the warnings of spotty spending a month ago were just contextual.  Does Apple Inc. (NASDAQ: AAPL) have much to do with Cisco?  Technically not a thing if you just use common sense.  The reality is different though.  Apple remains the tech darling of Wall Street but its shares have pulled back and have gotten down almost as low as they were before the huge earnings gap-up in the last couple of weeks.

The first two issues to address are Juniper Networks, Inc. (NYSE: JNPR) and Alcatel-Lucent, S.A. (NYSE: ALU).  Juniper turned in an earnings report that looked like it was offering a stabilization to a really bad drop, but its stock popped up and then immediately pulled back and the stock is now under where it was before earnings.  Alcatel-Lucent just gave poor results this earnings season and its stock is back under $1.50 per ADR and is floundering as it tries to find some sense of remaining relevant outside of Europe.

The real issue here is Oracle Corporation (NASDAQ: ORCL) with Cisco.  Many analysts do not compare Oracle and Cisco enough because up until lately Oracle was more of a software play.  With Sun under its belt it has datacenter exposure but even if Oracle was to jettison its physical equipment the comparison is still crucial to understand.  While Cisco is a very different part of the enterprise technology dollars to be spent, weakness in one may mean weakness in another as technology officers can push orders out further on the horizon.

Hewlett-Packard Co. (NYSE: HPQ) is now more and more of a competitor with Cisco as well, even though the company was trying to get rid of the PC unit.  By competing in the datacenter, the former partners now compete.  H-P is also an off-calendar quarterly reporting company and its shares are back down to almost $23.00 and close to a 52-week low.

There is also the old ties to Research In Motion Limited (NASDAQ: RIMM) and Nokia Corporation (NYSE: NOK), although this is more historic than present day.  Both companies remain highly challenged and we suspect that their futures will both remain challenged regardless of what Cisco says in its conference call.

Cognizant Technology Solutions Corporation (NASDAQ: CTSH) recently kept the pace of other IT-outsourcing outfits by warning about a weak IT-spending climate but it was hard to not notice that some of the more fresh weakness was noted as being in North America.  Cisco could easily be in a different bucket here, but we did see this trend as almost unified in the outsourcing segment.

Perhaps the biggest relevance is International Business Machines Corporation (NYSE: IBM).  IBM’s services backlog was slightly lower but IBM is still maintaining its long-term goals of $20.00 in earnings per share.  The stock is still within 5% of all-time highs and it has recently juiced up its dividend more than expected.

Cisco is also the last major tech report before Intel Corporation (NASDAQ: INTC) updates investors this Thursday.  It has only been about three weeks since Intel’s earnings report and we are only 24 hours or so since the chip and processor giant announced a dividend hike of its own.  Shares of Intel are now off almost $2.00 from the high of $29.27 and the consensus price target is $29.72.

Cisco shares are back under the $19.00 mark after having been at $20.00 as recently as May 1, 2012 and having been at $21.00 as recently as April 3, 2012.  The 52-week trading range is $13.30 to $21.30 and the consensus price target from Thomson Reuters is $22.58.

The Thomson Reuters estimates for Cisco are $0.47 EPS and $11.57 billion in revenue.  Cisco usually offers guidance in the conference call rather than in the press release and those estimates are $0.49 EPS and $11.99 billion in sales for the quarter ahead.  Keep in mind that Cisco trades at a mere 10.2-times its expected earnings for the fiscal year-end of July 2012.

As far as Cisco on the stock charts, this has been very weak and the 50-day moving average was up above at $19.00 and the 200-day moving average was lower around $18.13.  Both of those figures are likely to be a couple of cents different on Wednesday ahead of earnings.

A more detailed preview will appear Wednesday morning ahead of the formal Cisco earnings report showing expectations for cash, margins, options trading, stock charts, and a final revised set of earnings estimates.

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JON C. OGG

Facebook CEO Mark Zuckerberg begins the company’s IPO road show. (Reuters)

Comscore says people spent more time on Facebook via mobile devices than on PCs during March. (Reuters)

Yahoo! (NASDAQ: YHOO) CEO Scott Thompson issues an apology to employees over a resume misstatement scandal as its board meets to determine his fate. (Reuters)

Gasoline prices fall for the fifth-consecutive week. (WSJ)

The political turmoil in Greece threatens to break its bailout agreement with Europe. (WSJ)

Walt Disney’s (NYSE: DIS) ABC News and Univision to start a 24-hour news channel broadcast in English. (WSJ)

Electronic Arts (NASDAQ: EA) stock is hurt as its delays launching important games. (WSJ)

The Ontario Teachers Pension Plan says it is opposed to Sprint-Nextel (NYSE: S) CEO Dan Hesse’s reelection to the board of the telecom firm. (WSJ)

Lenovo plans to develop products other than PCs. (WSJ)

A court says that Google’s (NASDAQ: GOOG) Android software violates Oracle’s (NASDAQ: ORCL) IP, but the financial damages likely will be light. (WSJ)

Regulators probably will approve a plan by Anadarko Petroleum (NYSE: APC) to drill 3,700 natural-gas wells in eastern Utah. (WSJ)

The Fed says consumer borrowing rose 10.2% in March. (WSJ)

Hollande of France and Merkel of Germany will meet to talk about the future of the eurozone. (WSJ)

The FAA will delay plans to upgrade fuel tanks on many airline planes. (WSJ)

A new wave of start-ups works on programs to upload personal videos to smartphones. (WSJ)

Spain will begin a new program to help the balance sheets of its troubled banks. (WSJ)

High-yield bond yields hit record lows. (WSJ)

Amazon.com (NASDAQ: AMZN) to sell high-end fashion products. (NYT)

The sales of used SUVs remain good as people move to more fuel-efficient new cars. (NYT)

Scientists begin to look at whether airline seats are strong enough for some heavy passengers. (NYT)

A failure of Greek parties to form a coalition may lead to a new round of elections. (FT)

Spain will have to spend billions of dollars to rescue weak banks. (FT)

Iran will take yuan as payment for oil. (FT)

A credit rating agency downgrade of Morgan Stanley (NYSE: MS) would prompt it to increase its collateral sharply. (FT)

Antitrust investigations against Google (NASDAQ: GOOG) in Europe expand. (Bloomberg)

Douglas A. McIntyre