The unofficial closing bells put the DJIA down more than 61 points to 11,983.32 (-0.51%), the NASDAQ fell more than 11 points (-0.44%) to 2,686.15, and the S&P 500 fell -0.63% or more than 7 points to 1,253.23.

There were several analyst upgrades and downgrades today, including Big Lots, Inc. (NYSE: BIG) raised to ‘outperform’ at Wedbush. Delta Air Lines (NYSE: DAL) was raised to ‘outperform’ at Zack’s and was named the firm’s Bull of the Day; Royal Gold Inc. (NASDAQ: RGLD) was cut to ‘sector perform’ at National Bank; SandRidge Energy Inc. (NYSE: SD) was cut to ‘hold’ at Stifel Nicolaus; Sunpower Corp. (NASDAQ: SPWRA) was cut to ‘underperform’ at Macquarie; and Trina Solar Ltd. (NYSE: TSL) was cut to ‘neutral’ at Macquarie. We noted a change in the solar sector earlier today.

Here are today’s big post-earnings news reactions with prices during the last half-hour of trading: Starbucks Corp. (NASDAQ: SBUX) is up about 6.4%, at $44.04, after posting a new 52-week high earlier in the day; LinkedIn Corp. (NASDAQ: LNKD) is down more than -6%, at $82.09; Analysts International Corp. (NASDAQ: ANLY) is up nearly 28%, at $4.67; Oxigene, Inc. (NASDAQ: OXGN) is down -33%, at $1.22; Rosetta Stone, Inc. (NYSE: RST) is down more than -23%, at $7.77, after posting a new low earlier today; and MasTec, Inc. (NYSE: MTZ) is down -20%, at $17.52.

Several other standouts from today are as follows…

Alon USA Energy, Inc. (NYSE: ALJ) is up nearly 46%, at $11.40. The Israeli-based oil refiner has struck a deal to receive 25,000 barrels/day of WTI crude at its Louisiana refinery, which will give its margins a sharp boost.

DragonWave, Inc. (NASDAQ: DRWI) is up 36%, at $4.91. The company has agreed to buy the microwave business from the joint venture Nokia Siemens Networks.

SemiLEDS Corp. (NASDAQ: LEDS) is up nearly 37%, to $4.04. The company got a huge boost from the Chinese government’s announcement that it will ban incandescent light bulbs beginning next year.

Chesapeake Energy Corp. (NYSE: CHK) is down more than -6%, at $27.24. The company reported better-than-expected earnings this morning, but asset sales to generate cash are causing concerns among investors.

Imperial Sugar Co. (NASDAQ: IPSU) is down more than -12%, at $6.01, after posting a new 52-week low of $5.75 earlier today. The company is suspending its quarterly dividend.

Seattle Genetics Inc. (NASDAQ: SGEN) is down about -18%, at $18.02. The shares posted an all-time high earlier this week, but the stock price run-up may have exaggerated the company’s growth prospects.

Stay tuned for Monday. Boston Federal Reserve president Eric Rosengren is giving a speech in the morning. We have noted the following events (all times Eastern):

• 11:00 a.m. – Four-week Treasury bill announcement
• 11:30 a.m. – Three- and six-month Treasury bill auction
• 3:00 p.m. – Federal Reserve consumer credit report

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Paul Ausick

These become the top analyst calls of the week.  This last week there were many such calls with keen insight and some which stand out from the pack… For better or worse.

This last week’s top research calls were in shares of the following: Apple Inc. (NASDAQ: AAPL); Bank of America Corporation (NYSE: BAC); Boston Scientific Corporation (NYSE: BSX); Google Inc. (NASDAQ: GOOG); Human Genome Sciences Inc. (NASDAQ: HGSI); Juniper Networks, Inc. (NYSE: JNPR); NASDAQ OMX Group (NASDAQ: NDAQ); Newmont Mining Corp. (NYSE: NEM); Pandora Media, Inc. (NYSE: P); Priceline.com Incorporated (NASDAQ: PCLN); Research in Motion Ltd. (NASDAQ: RIMM); Seattle Genetics Inc. (NASDAQ: SGEN); Sequenom Inc. (NASDAQ: SQNM); SLM Corporation (NYSE: SLM); VIVUS Inc. (NASDAQ: VVUS); VMware Inc. (NYSE: VMW); and World Fuel Services Corporation (NYSE: INT).

We have included the impact and pricing data on each, as well as added in some outside trading color if applicable.

Apple Inc. (NASDAQ: AAPL) was in the news after the departure of Steve Jobs as CEO.  What is interesting is that almost every research analyst out there came out and defended Apple saying that this was mostly factored in and that the prospects for Apple remain solid.  Here were some of the calls that we saw:

• Maintained Overweight at JPMorgan;
• Maintained Outperform at Credit Suisse;
• Maintained Buy at BofA/ML;
• Reiterated Buy at Canaccord Adams;
• Maintained Buy at Gabelli;
• Maintained Buy at Deutsche Bank.

The drug treats a less common form of the cancer known called systemic ALCL (anaplastic large cell lymphoma).  The ‘more rare’ and ‘rarer’ wording is the key here.  Also, the figure for the treatment used is now being set at $13,500.00.  It is going to take many treatments before the company recaptures what was called more than $500 million in R&D expenses per CNBC data during a company interview this morning.

Seattle Genetics is apparently going to make the drug, again its first commercially available drug, available next week.  The long and short of this is that brentuximab combines an antibody to target the cancer along with the effects of chemotherapy.

We looked for analyst opinion and Bloomberg showed an RBC comment noting that a conservative estimates is that the drug may reach $200 million in two years.  RBC did note that it could be larger.  Canaccord Genuity sent us some data that was much more cautious and it maintained a “Sell” rating and $10 target.

What is going to drive the sentiment here is rather simple… Dollars in versus dollars out against valuations.  The $500 million price tag and the $1.7 billion market capitalization play a part for a drug that could be a $200 million a year drug.  If the drug generates more in sales, then the caution on valuation is going to be less warranted.  Still, this values the one-product company at close to 8.5-times sales and the straight-line math puts a 2-year or 3-year cost recapture period in place.  Then will come the real profits.

The good news is that Seattle Genetics has more than $400 million in cash and liquidity on the books.  That will bolster the company for a while.  Before the effects of this approval, which was mostly expected, Thomson Reuters had estimates of $55.31 million for 2011 sales and $151.76 million for 2012 sales.

In the case of a biotech, we cannot back out a penny of the cash to derive a raw value for the company.  The cash burn and cash cushion is just too deeply required by the investment community to discount the cash from the market capitalization analysis.

If the drug generates even a 50% upside to the RBC target and manages $300 million after a couple or few years on the market without any news of prohibitive side-effects (an unsafe automatic assumption) then the company as it stands today for commercialized product will trade at more than 5-times annual peak sales and that is before the cost recapture time.

While no new treatment has been approved in more than 30 years for this indication, imagine what happens if another drug approval is granted or even if another drug approval looks possible.  The forward value comes under fire.

Here is what else the company has in its pipeline.  Brentuximab has more Phase I to Phase III trials underway for broader aspects in Hodgkin Lymphoma.  More is a s follows:

• SGN-75 for Renal cell carcinoma and non-Hodgkin lymphoma is in Phase I;
• ASG-5ME    for Pancreatic and for Prostate cancers is in Phase I;
• ASG-22ME for Solid tumors is in Phase I;
• SGN-19A    for CD19+ hematologic malignancies is in pre-clinical studies,

The company shows that 11 clinical-stage ADC programs in hematologic malignancies and solid tumors are in pre-clinical to Phase II studies under ADC Collaboration.

Now you know why we refuse to value the cash and liquidity as a discounting mechanism against the market capitalization.  That cash may all be spoken for in current R&D and clinical studies as far as monetary commitments.  The good news is that this will begin to assure much-needed revenues for the company.

Before you consider that this is a bash against Seattle Genetics, it is not.  The problem that exists is that there is only so much a single drug approval can do for the total value of a company.  Shares were up after the news initially, but at 1:00 PM EST the stock is down about 2% and around the $14.70 level.  The 52-week trading range is $11.36 to $21.41.

The old trading adage is “buy the rumor and sell the news.”  This was mostly an expected outcome for approval, so investors and traders are currently following the textbook trade.  No more, no less.

JON C. OGG

Agrium Inc. (NYSE: AGU) Cut to Underperform at BofA/ML.
Intrepid Potash, Inc. (NYSE: IPI) Cut to Neutral at BofA/ML.
Newmont Mining Corp. (NYSE: NEM) Raised to Buy at Citigroup.
OmniVision Technologies (NASDAQ: OVTI) Reiterated Buy with $38 target at Canaccord Genuity.
PMI Group, Inc. (NYSE: PMI) named as Bear of the Day at Zacks.
Seattle Genetics Inc. (NASDAQ: SGEN) Reiterated Sell with $10 target at Canaccord Genuity.
SLM Corporation (NYSE: SLM) Raised to Outperform at Credit Suisse.
SunPower Corporation (NASDAQ: SPWRA) Raised to Hold at Auriga.
Toyota Motor Corporation (NYSE: TM) Raised to Outperform as Bull of the Day at Zacks.
Under Armour, Inc. (NYSE: UA) Started as Buy at Canaccord Genuity.
Yingli Green Energy Holding Co. Ltd. (NYSE: YGE) Raised to Overweight at Piper Jaffray.

You are invited to join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Google, Inc. (NASDAQ: GOOG) is up nearly 13% premarket to $597.10, relative to a 52-week range of $447.65-$642.96. The Internet search giant released very impressive earnings and revenue after market close yesterday. Read about it here.

Logitech International, Inc. (NASDAQ: LOGI) is down 2.4% premarket to $9.86, relative to a 52-week range of $10.05-$23.29.

Seattle Genetics, Inc. (NASDAQ: SGEN) is down 6.2% to $19, relative to a 52-week range of $11.34-$21.41.

AAR Corporation (NYSE: AIR) Maintained Outperform as Bull of the Day at Zacks.
Alcoa Inc. (NYSE: AA) Raised to Buy at Goldman Sachs.
Applied Materials Inc. (NASDAQ: AMAT) Cut to Neutral at JPMorgan.
Buffalo Wild Wings, Inc. (NASDAQ: BWLD) Maintained Strong Buy at Zacks.
Caterpillar Inc. (NYSE: CAT) Reiterated Outperform and target raised to $148 at Credit Suisse.
Corporate Office Properties (NYSE: OFC) Cut to Underweight at JPMorgan.
Dendreon Corporation (NASDAQ: DNDN) Started as Underperform at Credit Suisse.
EMC Corp. (NYSE: EMC) Raised to Buy with $35 target at BofA/ML.
Montpelier Re Holdings (NYSE: MRH) named as Bear of the Day at Zacks.
Netflix, Inc. (NASDAQ: NFLX) Raised to Buy at Citigroup.
Sanmina-SCI Corporation (NASDAQ: SANM) Raised to Buy at Argus.
Seattle Genetics Inc. (NASDAQ: SGEN) Started as Buy
Sprint-NexTel Corporation (NYSE: S) Reiterated Buy with $7 target at Argus.
UnitedHealth Group (NYSE: UNH) Kept at Strong Buy and noted as Value at Zacks.
V.F. Corporation (NYSE: VFC) Cut to Hold at Citigroup.
Whole Foods Market, Inc. (NASDAQ: WFMI) Cut to Hold at Jefferies.
Y M Biosciences Inc. (AMEX: YMI) Started as Neutral with $4 target at BofA/ML.
Zebra Technologies Corp. (NASDAQ: ZBRA) Raised to Overweight at JPMorgan.

You are invited to join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

JetBlue (NASDAQ: JBLU) is up 10% in sympathy with AirTran

Southwest Air down 3% on plans to buy AirTran.

LDK Solar (NYSE: LDK) up 7% on news that China Development Bank will put $8.9 billion in the company over a five year period.

Seattle Genetics (NASDAQ: SGEN) up 11% on news that one of its cancer treatments passed a critical trial.

DryShips (NASDAQ: DRYS) up 3% on an analyst upgrade.

Douglas A. McIntyre

A123 Systems, Inc. (NASDAQ: AONE) is surging after it opened the largest lithium ion automotive battery manufacturing plant in North America.  The CEO has also been giving a CNBC interview to show how these batteries will be for domestic sale and will also be exported.  Shares are up 10.7% at $8.15 on over 150,000 shares.

Ascent Solar Technologies Inc. (NASDAQ: ASTI) is surging on news that it has a deal with Radiant Holding Ltd. in China to distribute its PV modules in China’s solar market.  Ascent shares are up 8.6% at $3.16.

Arc Sight, Inc. (NASDAQ: ARST) is trading higher by 25% at $44.07 on more than 2.5 million shares after Hewlett-Packard announced a $43.50 per share offer to acquire ArcSight for its security and compliance.

Direxion Daily Financial Bull 3X Shares (NYSE: FAS) is seeing a surge this morning on relief rallies in many financial shares this morning.  With the triple-leverage, shares are up 4% at $22.29 on more than 325,000 shares.

Dollar Thrifty Automotive Group Inc. (NYSE: DTG) is up 5.7% at $50.75 on over 140,000 on a sweetened $50 merger bid from Hertz.

OpenTable, Inc. (NASDAQ: OPEN) is trading up after Citigroup raised its rating to BUY from HOLD… Shares are up 4.1% at $59.21.

OXiGENE, Inc. (NASDAQ: OXGN) is surging on positive results against Anaplastic Thyroid Cancer treatment.  Shares are up 47%, but this is just a $0.40 stock even after the move.

Seattle Genetics, Inc. (NASDAQ: SGEN) is trading lower after a tria lof its leukemia drug failed to met their endpoints.  Shares are down nearly 5% at $12.10 on more than 200,000 shares.

VMware, Inc. (NYSE: VMW) is down after Barron’s noted cautiously about its growth prospects and that it is vulnerable to competition and trades at 61-times expected earnings.  Shares are down 1.3% at $83.80 on light trading.  It is surprising this did not take more of a bite out of the company.

Xerox Corporation (NYSE: XRX) was given the front-page cover story called “Just Try to Copy That” noting it could go to $14 or $15 in the next year.  Shares are trading up 5.5% at $9.61 on over 150,000 shares.

You can join our free daily email distribution list to hear more about dividend trends, analyst upgrades and downgrades, top day trader and active trader alerts, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C.OGG

• Everest Re (RE) to Outperform at Wachovia.
• Fortress Investment (FIG) Raised to Hold from Sell at Citigroup.
• PartnerRe (PRE) Raised to Outperform at Wachovia.
• Seattle Genetics (SGEN) Raised to Outperform at Oppenheimer.
• T. Rowe Price (TROW) Raised to Outperform at KBW; raised to Outperform at Wachovia.
• Yamana Gold (AUY) Raised to Outperform at CIBC.
• Nortel (NT) Cut to Neutral at UBS.
• Rick’s Cabaret (RICK) Cut to Neutral at Merriman Curhan Ford.
• Royal Dutch Shell (RDS.A) Cut to Underperform at Credit Suisse.
• US Steel (X) Cut to Sell at UBS.

Jon C. Ogg
October 27, 2008

Genentech is tied to many other drug and biotech companies because of partnerships, so as the number one biotech stock it has implications in many companies based upon the breakdown of its trends and its individual drug comments.  Below are some of its partners:

• OSI Pharmaceuticals (NASDAQ: OSIP) for Tarceva,
• Seattle Genetics (NASDAQ: SGEN),
• Abbott Laboratories (NYSE: ABT),
• Roche for Avastin 9and ownership),
• and Biogen-Idec (NASDAQ: BIIB) for Rituxan.

Analysts have an average price target north of $85.00.  Shares were down almost 1% at $79.00 late today before the market closed.  That price target used to be significantly higher before this on peaked out around $90.00 and fell to under $70.00 in Dec-2007 and Jan-2008.  Genentech’s 52-week trading range is $65.35 to $83.41.

Genentech’s annual meeting of stockholders will also be held on April 15, 2008, so there is another round of much of the same presentation data to see next week.  While the woes of one biotech may be mothers milk for another biotech company, Genentech can create at least somewhat of bias for traders going into an earnings season.  As traders are constantly looking for stocks and sectors with less and less economic sensitivity, that may be more true than in many years and quarters of the past.

Jon C. Ogg
April 7, 2008