NEC to cut 10,000 workers. (Reuters)

Nintendo posts poor earnings and cuts forecasts. (Reuters)

Warren Buffett says higher taxes on the rich are a way to bring the burden on Americans back inline. (Reuters)

George Soros criticizes efforts to put austerity over growth in Europe. (Reuters)

Netflix (NASDAQ: NFLX) shares rise on news its subscriber base rose sharply. (Reuters)

Tokyo Electric Power will get a $13 billion bailout. (Reuters)

George Soros buys Italian bonds because of high yields coupled with deflation. (Reuters)

U.S. officials are looking at HSBC (NYSE: HBC) for money laundering. (Reuters)

German consumer morale reaches a 10-month high. (Reuters)

Creditors may accept a lower yield on Greek bonds to end negotiations to keep the nation out of default. (Reuters)

The International Monetary Fund says a halt to Iran’s oil flow would push crude prices up 30%. (Reuters)

Nintendo will have the new Wii in markets before the end of the year. (Reuters)

Strategy Analytics says Google (NASDAQ: GOOG) Android-based tablets have narrowed the sales gap with Apple’s (NASDAQ: AAPL) iPad. (Reuters)

SAP (NYSE: SAP) says it will do more to target Oracle (NASDAQ: ORCL) customers. (Reuters)

Public pensions have increased their investment in private equity, according to the Wilshire Trust Universe Comparison Service. (WSJ)

Roche’s offer for Illumina (NASDAQ: ILMN) is based on the belief that doctors will use genetic products on a more regular basis. (WSJ)

U.S. bond yields reached near record lows. (WSJ)

The U.S. Department of Agriculture releases data that show winters have been warmer recently. (WSJ)

A new Wall Street Journal poll shows better results for Obama. (WSJ)

Merkel says labor reforms and closer ties among EU nations were key to the success of austerity programs to close national deficits. (WSJ)

A drop in output shows the UK is closer to recession. (WSJ)

U.S. auto makers have returned to U.S. labor because of foreign exchange rates and low wages. (WSJ)

Samsung’s chip business is growing even faster than its cellphone division. (WSJ)

Farmers are planting more wheat despite droughts. (WSJ)

The Fed’s message is that a recovery may be years away. (NYT)

There is an oversupply of freighters, in part because it takes so long to make them. (NYT)

Citigroup (NYSE: C) says EU banks have raised $52.8 billion in new capital since the third quarter to meet regulatory demands. (NYT)

Hedge funds are dumping Greek debt. (NYT)

Apple thinks the Chinese market could sharply increase its sales. (FT)

Iran may block oil exports ahead of sanctions. (FT)

As EU-based banks keep cash on their balance sheets, more companies may default because of lack of capital. (Bloomberg)

Geithner says he will leave office after Obama’s first term. (Bloomberg)

Airbus begins to fix cracks in wings of its A380. (Bloombeg)

Ford (NYSE: F) may post its largest profit since 1998. (Bloomberg)

Douglas A. McIntyre

The unofficial closing bells put the DJIA down nearly 49 points to 12,422.06 (-0.39%), the NASDAQ fell more than 14 points (-0.51%) to 2,710.67, and the S&P 500 fell -0.49% or more than 6 points to 1,289.10.

There were several analyst upgrades and downgrades today, including VMWare Inc. (NYSE: VMW) cut to ‘sell’ with a target price of $80 at Citigroup; American International Group Inc. (NYSE: AIG) started as ‘hold’ at Stifel Nicolaus; The Charles Schwab Corp. (NYSE: SCHW) cut to ‘market perform’ at Wells Fargo; Chesapeake Energy Corp. (NYSE: CHK) reiterated as ‘sell’ with lower estimates at Argus; and Citrix Systems Inc. (NASDAQ: CTXS) raised to ‘buy’ from ‘neutral’ at Citigroup.

Earnings reports since markets closed yesterday have led to some price changes as of the last half hour of trading today: JPMorgan Chase & Co. is down -2.63% at $35.88; SAP AG (NYSE: SAP) is up 2.42% at $54.54; and JDA Software Group Inc. (NASDAQ: JDAS) is down nearly -14% at $28.21.

Other standouts from today include the following stocks:

Georgia Gulf Corp. (NYSE: GGC) is up more than 34% at $32.85. The chemical and home products maker has received a buyout offer of about $1.03 billion ($30/share) from Westlake Chemical Corp. (NYSE: WLK).

Metabolix Inc. (NASDAQ: MBLX) is down about -58% at $2.52, after posting a new 52-week low of $2.51 earlier. The bioscience and chemicals company is suffering from the cancellation of a joint venture with Archer Daniels Midland Co. (NYSE: ADM), which the larger company unexpectedly announced this morning.

Patriot Coal Corp. (NYSE: PCX) is down nearly -13% at $7.87. The coal miner lowered its production forecast and closed several operations. We have more coverage here.

Diamond Foods Inc. (NASDAQ: DMND) is down more than -10% at $29.71. The snack food maker is now the subject of a criminal inquiry related to payments it made to farmers.

Canadian Solar Inc. (NASDAQ: CSIQ) is down more than -9% at $3.19. The China-based solar panel maker is among the group of Chinese makers who are cooling off, probably due to profit taking, after several days of sharp share price increases.

US markets are closed on Monday in observance of the birthday of Martin Luther King, Jr. We have the following events for Tuesday:

• 8:30 a.m. – Empire State manufacturing survey
• 11:30 a.m. – 3- and 6-month Treasury bill auctions

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Have a great long weekend.

Paul Ausick

SAP reported record software revenue up 16% in the quarter to 1.74 billion euros, and up 22% for the year 2011.  More important is that the company is claiming to have beaten its annual guidance in non-IFRS software and
 software-related service sales.  It is also claiming to have exceeded its earnings guidance on higher margins.

SAP is planning to release more detailed quarterly and annual financial data on January 25 but this was called by the company as having been its “best ever full-year and fourth quarter” in the release.

After closing at $53.25 in New York against a 52-week range of $47.39 to $68.39, the pre-market trading has shares up just over 2.5% at $54.57 in active trading.

Shares of Oracle are indicated down 0.4% at $27.05 against a 52-week range of $24.72 to $36.50.

JON C. OGG

AstraZeneca PLC (NYSE: AZN) Cut to Underweight at JPMorgan.
BlackRock, Inc. (NYSE: BLK) Cut to Neutral at Stern Agee.
Broadcom Corp. (NASDAQ: BRCM) Reiterated Buy with $46 price target at Argus.
Constellation Energy Group, Inc. (NYSE: CEG) Cut to Neutral at Citigroup.
Consolidated Edison Inc. (NYSE: ED) Cut to Neutral at Citigroup.
eBay Inc. (NASDAQ: EBAY) Reiterated Buy with $40 price target at Argus.
LM Ericsson Telephone Co. (NASDAQ: ERIC) Cut to Neutral at Credit Suisse.
Exelon Corporation (NYSE: EXC) Cut to Neutral at Citigroup.
Google Inc. (NASDAQ: GOOG) downgraded to Hold at Benchmark; Raised targets at boutique firm Global Equities Research.
Netflix, Inc. (NASDAQ: NFLX) Maintained Underperform and cut estimates at Needham.
Nokia Corporation (NYSE: NOK) Raised to Outperform at Credit Suisse (full summary).
Pacific Sunwear of California Inc. (NASDAQ: PSUN) Raised to Buy at Janney Capital Markets.
ReneSola Ltd. (NYSE: SOL) named as the Bear of the Day at Zacks Investment Research.
SAP AG (NYSE: SAP) Raised to Neutral at BNP Paribas.
Sanofi (NYSE: SNY) Cut to Neutral at JPMorgan.
Trinity Industries, Inc. (NYSE: TRN) named as value stock of the day at Zacks.
United Parcel Service, Inc. (NYSE: UPS) Cut to Neutral at HSBC.
VIVUS Inc. (NASDAQ: VVUS) Started as Perform at Rodman & Renshaw.
VMware Inc. (NYSE: VWM) Started as Buy at Stern Agee.

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JON C. OGG

Oracle’s sales rose only 2% in the quarter that ended November 30 to $8.29 billion. EPS was $0.43, compared to $0.37 last year. Hardware system revenue fell 10% to $1.58 billion.

Oracle is the world’s largest enterprise software company. In the past two years, it has faced more aggressive competition from Microsoft (NASDAQ: MSFT), IBM (NYSE: IBM), SAP (NASDAQ: SAP) and Salesforce.com (NYSE: CRM) in particular. Each has had a chance to examine Oracle’s strength as it grows, primarily through acquisition. Oracle is a particularly attractive target, as most market leaders are.

There is no evidence that IT departments at large companies and government enterprises have sharply curtailed their activity to upgrade essential systems. That likely will mean that Oracle has lost market share, and it probably will continue to do so. Competition has found weak spots in Oracle’s product and service lines.

Oracle has been successful in large part because CEO Larry Ellison has been particularly talented in his choice of buyout targets and his ability to almost seamlessly integrate these firms into his company. The integration process usually has kept sales from the new operations while effectively dropping costs.

One quarter does not mean Ellison’s miracle is over. A second weak quarter would.

Douglas A. McIntyre

As always, we would look for the company to make a statement that it continues to win away business from SAP AG (NYSE: SAP).  Is that a permanent or secular trend that will remain?

Thomson Reuters has estimates of $0.57 EPS and $9.23 billion in sales.  For the next quarter, the estimates are $0.59 EPS and $9.46 billion,  It is unlikely that we will get any fiscal estimates but the May-2012 fiscal consensus estimates are $2.41 EPS and $38.64 billion in sales. It is worth noting that the earnings estimates, despite a very strong U.S. Dollar and a very weak situation in Europe, have not really come down in the last 90 days or so.

Using the weekly options, options traders appear to be braced for a share price move of about $0.90 to $1.05 in either direction.  The chart from stockcharts.com below should show much of the picture.  Shares have been weak.  There is big resistance ain the $231 to $32 range that had been seen last week and the week before and the stock failed that level.  Another technical analysis aspect is that Oracle’s stock has the 200-day moving average up at $31.37 and its 50-day moving average at $31.27.  That puts most of the prior $31 to $32 resistance more likely in the $31.00 to $31.30 range now. 

If something bad is reported, there could be nothing but dead air underneath the stock down to $27.50 or even down to $27.00 before even lower support would come into play around $26.40 and then closer to $25.00.

As far as analyst calls, the consensus price target objective from Thomson Reuters is still up at $36.49.  That is just a penny shy of its 52-week high.

For some outside notes we would note what WhisperNumber.com sent to us: “The whisper number is $0.56, one cent behind the analysts estimate.  Oracle has a 62% positive surprise history (having topped the whisper in 31 of the 50 earnings reports for which we have data).  The average price movement (starting at next market open) within ten trading days of these fifty earnings reports is +0.6%.  The strongest price movement of +1.7% comes within ten trading days when the company tops the whisper number.  Last quarter the company reported earnings one cent ahead of the whisper number.  Following that report the stock realized an 8.2% gain in thirty trading days.

At $29.15 after a 1.9% rise today, the 52-week trading range is $24.72 to $36.50.  Kep in mind that even with shares down more than 15% from the 52-week high that Oracle has a market capitalization rate of some $147 billion.

JON C. OGG

• Hewlett-Packard (NYSE: HPQ) continued its revolving door policy, showing CEO Leo Apotheker the exit in September after the SAP (NYSE: SAP) software veteran fumbled the TouchPad tablet launch. During his 11-month tenure, the common stock fell some 45% in value. Apotheker had hoped to leverage HP’s strengths in global reach and hardware to make the webOS-based device a formidable competitor to Apple’s (NASDAQ: AAPL) ubiquitous iPad. He bungled magnificently — the product was killed a mere six weeks after its launch due to anemic sales. Nonetheless, despite his failure to lead, Apotheker received almost $16 million in compensation: a severance payment of $7.2 million (including the accelerated vesting of shares worth $3.6 million and a performance bonus of $2.4 million) and a cash sign-on bonus totaling $8.6 million. HP believed the severance package, also called the “Apotheker Agreement,” was appropriate — in “recognition of, among other things, the compensation from his former employee being foregone … and the considerable expense he incurred in relocating his family to the United States (from Europe).” The board of directors might want to reconsider its “pay-for-results” ethos.

• Can Groupon (NASDAQ: GRPN), industry leader in the online coupon discounting space, defy the odds? Of the 30 social media or Internet-related IPOs launched since the start of 2010, 60% are trading below their offering price, according to Birinyni Associates analyst Kevin Pleines. In two amended prospectus filings leading up to its November 4 IPO, the company backed away from a controversial accounting metric. In particular, Groupon’s original offering prospectus in July focused on “adjusted income” of $81.6 million. In actuality, the company’s operations had generated losses of $117.8 million in the quarter ending March 31 — if some $200 million in online marketing expenses were recognized. Conveniently, adjusted income does not reflect the significant working capital consumed in acquiring subscribers. Come 2012, whether Groupon can continue to trade above its original IPO of $20 a share ultimately will depend on the company posting real earnings and cash flow growth.

• MF Global Holdings became the first U.S. casualty of the European sovereign debt crisis in 2011, filing for bankruptcy on October 31. Though he has yet to acknowledge culpability, the blame rests squarely with chairman and chief executive Jon Corzine, who pushed the financial derivatives broker-dealer to make an ill-timed $11.5 billion bet on European bonds (with borrowed money). Corzine’s judgment that European leaders would resolve the euro crisis, leading to a rebound in the value of MF Global’s holdings, proved dead wrong. As the euro crisis intensified, the value of MF Global’s bonds dropped, leading to margin calls and the subsequent collapse of the company. Bondholders of a $325 million offering last August probably are rethinking their insistence of a “key man event” clause, which stated that “the interest rate applicable to the notes would be subject to an increase of 1.00% upon the departure of Mr. Corzine as full time chief executive officer due to his appointment to a federal position by the President of the United States.” In hindsight, bond buyers probably would have accepted 100 basis points less to have been rid of the erstwhile New Jersey senator and governor.

• Buffalo Wild Wings (NASDAQ: BWLD) insists that professional basketball is not a significant driver of restaurant sales (like the NFL). Nonetheless, the share price rose 10% in the days following word that NBA owners and players reached a new labor accord over the Thanksgiving weekend, ending a five-month lockout that led to the loss of 16 games in the regular 82 game season schedule. Notwithstanding a potential labor dispute in the NHL next year (collective bargaining agreement expiry), profitability at the chicken-wing restaurant chain could come undone in 2012 due to rising poultry prices. A report by the USDA suggests that a combination of high feed costs and (anticipated) processing cutbacks could send boneless/skinless breast prices into the $1.50 to $1.60 per pound range by spring, from $1.15 per pound in November 2011. Wings accounted for 39% of third-quarter 2011 sales, according to the Buffalo Wild Wing’s quarterly filing with the SEC.

• In straightforward fashion, News Corp. (NYSE: NWS) reported that the company faced criminal investigations regarding the well-publicized phone hacking scandal and “inappropriate payments” (bribes) to British police made by higher-ups at the media company’s erstwhile publication, News of the World. “It is also possible that these proceedings could damage our reputation and impair our ability to conduct our business,” declared the 10-K filing. You think? In July, the media conglomerate withdrew its $12.4 billion takeover bid for British pay-TV satellite broadcaster British Sky Broadcasting (BSkyB), following pressure from the government. Despite mounting legal problems, it was another profitable year for anyone named Murdoch at the family-controlled holding. Chairman and CEO Rupert Murdoch took home total compensation of $33.3 million, up from $22.7 million in 2010; his son James, deputy chief operating officer, pocketed $17.9 million, a 70% increase over the prior year. It looks like the financial messes resulting from the newspaper scandal did not damage the Murdochs’ ability to conduct business.

Read the rest of the “Worst of the Bad” regulatory filings of 2011 in tomorrow’s 24/7 Wall St.

David Phillips

Altera Corporation (NASDAQ: ALTR) Raised to Outperform at BMO Capital Markets.
AutoZone Inc. (NYSE: AZO) Maintained as Buy with a price target of $381 by Argus.
Boardwalk Pipeline Partners, LP (NYSE: BWP) Started as Neutral at JPMorgan.
Boeing Co. (NYSE: BA) Raised to Overweight with $82 price target at Morgan Stanley.
Bally Technologies, Inc. (NYSE: BYI) Raised to Overweight at JPMorgan.
El Paso Pipeline Partners, L.P. (NYSE: EPB) Started as Overweight at JPMorgan.
E I DuPont de Nemours & Co. (NYSE: DD), or DuPont, Cut to Neutral at Citigroup; Lowered estimates for DuPont at Credit Suisse.
Edwards Lifesciences Corp. (NYSE: EW) Raised to Buy with $75 target at Canaccord Genuity.
Kindred Healthcare, Inc. (NYSE: KND) is already a strong buy but was named as the value stock of the day by Zacks Investment Research.
Lennar Corporation (NYSE: LEN) Cut to Hold at KeyBanc.
Linear Technology (NASDAQ: LLTC) Reiterated Underperform and named Bear of the Day by Zacks Investment Research.
MetroPCS Communications, Inc. (NYSE: PCS) Started as Outperform at Credit Suisse.
Pall Corporation (NYSE: PLL) on Focus List and raised price target to $68 at Credit Suisse.
PNM Resources, Inc. (NYSE: PNM) Cut to Market Perform at Wells Fargo.
PS Business Parks (NYSE: PSB) reiterated Outperform and named as Bull of the Day at Zacks.
SAP AG (NYSE: SAP) Reiterated Buy with $84 price target objective by Argus.
Toll Brothers (NYSE: TOL) Cut to Hold at KeyBanc.

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JON C. OGG

Altria Group Inc. (NYSE: MO) Started as Buy at Deutsche Bank.
Advance America, Cash Advance Centers Inc. (NYSE: AEA) named as value stock of the day at under 10-times earnings by Zacks.
Crown Holdings Inc. (NYSE: CCK) Started as Outperform with $43 target and was added to the Focus List at Credit Suisse.
General Electric Co. (NYSE: GE) Raised to Outperform by Bernstein (call was made late Monday afternoon).
Hibbett Sporting Goods (NASDAQ: HIBB) maintained Outperform with $47 target and named as Bull of the Day at Zacks.
HSBC Holdings PLC (NYSE: HBC) started as Underperform and named as Bear of the Day at Zacks.
ITC Holdings Corp. (NYSE: ITC) Cut to Neutral from Outperform at Credit Suisse.
LinkedIn Corporation (NYSE: LNKD) Raised to Overweight at JPMorgan.
MetroPCS Communications, Inc. (NYSE: PCS) Raised to Outperform from Market Perform on valuation by William Blair.
SAP AG (NYSE: SAP) Cut to Hold at S&P Equity Research.
Sonoco Products Co. (NYSE: SON) Started as Neutral with $34.00 price target at Credit Suisse.
Tesoro Corporation (NYSE: TSO) Cut to Neutral with $34 target from Outperform at Credit Suisse.
Verizon Communications Inc. (NYSE: VZ) Reiterated Buy with a $44 price target at Argus.

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JON C. OGG

Samsung shares rise after its victory in the U.S. against Apple’s (NASDAQ: AAPL) attempt to block its Galaxy tablet from the U.S. market. (Reuters)

HSBC data show that China’s PMI slowed considerably. (Reuters)

U.S. Treasury Secretary Tim Geithner lobbies European Union finance ministers to slow the sovereign debt crisis. (Reuters)

Olympus hid as much as $1.7 billion. (Reuters)

Online gaming firm Nexon fixes the price for its $1.2 billion initial public offering, the largest in Japan this year. (Reuters)

JPMorgan (NYSE: JPM) sets up a loan to help SAP (NYSE: SAP) buy SuccessFactors (NASDAQ: SFSF). (Reuters)

Estimates of the U.S. corn crop have been flawed. (WSJ)

Yahoo! (NASDAQ: YHOO) may lose some of its key employees after year-end bonuses are paid. (WSJ)

General Motors’ (NYSE: GM) Chevy Volt sales were slow ahead of problems with the car. (WSJ)

Italy’s government produces new austerity plans. (WSJ)

Japan’s Fukushima Daiichi nuclear complex has a new leak. (WSJ)

Western Digital (NYSE: WDC) restarts its Thailand plants, key suppliers for the company’s products. (WSJ)

Boeing (NYSE: BA) will circle the globe in its new 787 Dreamliner to get more business; however, a key Japanese customer has just cut orders. (WSJ)

A Tulane University Freeman School of Business study shows that large severance packages may encourage CEOs to take more risks. (WSJ)

Futures firms may face new rules about how they treat customer accounts. (WSJ)

Microsoft (NASDAQ: MSFT) creates new features for its Xbox Live product that allow it to compete with set-top boxes. (NYT)

China shows its reluctance to help the EU. (NYT)

The EU is closer to charges against Google’s (NASDAQ: GOOG) monopolistic practices. (FT)

Time Warner (NYSE: TWX) to allow consumers to watch movies on any device that uses video. (FT)

China prepares for the social unrest that may come with a slow economy. (FT)

The new Italian austerity plan may prompt worker strikes. (Bloomberg)

Ireland renews its austerity push. (Bloomberg)

Italy’s shopping season is the worst since World War II. (Bloomberg)

Douglas A. McIntyre