The unofficial closing bells put the DJIA down about 33 points to12,675.75 (-0.26%), the NASDAQ rose just 2 points (0.09%) to 2,786.64, and the S&P 500 fell -0.10% or just more than 1 point to 1,314.63.

There were several analyst upgrades and downgrades today, including Netflix Inc. (NASDAQ: NFLX) maintained as ‘outperform’ with a $100 target price at Credit Suisse; Pan American Silver Corp. (NASDAQ: PAAS) maintained as ‘outperform’ but estimates lowered at Credit Suisse; Halliburton Co. (NYSE: HAL) maintained as ‘buy’ but target price lowered to $54 at Argus; Home Depot Inc. (NYSE: HD) reiterated as ‘buy’ and target price raised to $51 at Argus; ;and Michael Kors Holdings Ltd. (NYSE: KORS) started as ‘overweight’ at Morgan Stanley, as ‘outperform’ at Baird, and as ‘buy’ at Goldman Sachs.

Earnings reports since markets closed on last night have led to some price changes as of the last half hour of trading today: Air Products and Chemicals Inc. (NYSE: APD) is down nearly -3% at $87.29; Baker Hughes Inc. (NYSE: BHI) is down -0.57% at $47.46; Clearwire Corp. (NASDAQ: CLWR) is up 2% at $1.79; EMC Corp. (NYSE: EMC) is up 6.7% at $25.01; Western Digital Corp. (NYSE: WDC) is up 6.2% at $36.85; CSX Corp. (NYSE: CSX) is down -3.5% at $21.89; and Zions Bancorp. (NYSE: ZION) is down -7.6% at $17.15. Apple Inc. (NASDAQ: AAPL) reports earnings after markets close today. See our coverage here.

Other standouts from today include the following stocks:

BioLineRx Ltd. (NASDAQ: BLRX) is up nearly 79% at $5.88 after posting a new 52-week high today of $6.87. The biopharmaceutical company has signed an exclusive worldwide licensing agreement with a French company to develop and market its hepatitis C drug.

Lee Enterprises Inc. (NYSE: LEE) is up more than 26% at $1.39. The newspaper company has been granted permission to exit bankruptcy protection.

The Bon-Ton Stores Inc. (NASDAQ: BONT) is up nearly 18% at $3.81. The department store operator has hired a new CEO who was previously the CEO at Lord & Taylor, before that chain was acquired by a Canadian company.

InterDigital Inc. (NASDAQ: IDCC) is down nearly -20% at $35.68. The wireless technology developed has shut down its “strategic review” without finding a buyer and will continue to seek additional patent sales and licensing agreements.

Achillion Pharmaceuticals Inc. (NASDAQ: ACHN) is up more than 17% at $10.79. The drug company, which is developing its own hepatitis C drug, is enjoying a halo effect from BioLineRx’s announcement.

Stay tuned for Wednesday. President Barack Obama delivers his state of the union address at 9:00 P.M ET tonight. We have noted the following events on the schedule (all times Eastern):

• 7:00 a.m. – Mortgage Bankers Association purchase applications
• 10:00 a.m. – Federal Housing Finance Agency (FHFA) house price index
• 10:30 a.m. – EIA weekly petroleum status report
• 10:30 a.m. – 5-year Treasury note auction
• 2:15 p.m. – Fed chairman Ben Bernanke press conference

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InterDigital Inc. (NASDAQ: IDCC) was down 3.3% today as is, but now the company is getting slashed and burned on news of what many had considered an obvious coming outcome.  The company ended its strategic review process and it did not find a buyer for its deep patent collection.  Now it is going to proceed on its own licensing or selling patents.  Shares are down over 16% at $37.10 in the after-hours against a 52-week range of $34.61 to $82.50.
 
NVIDIA Corporation (NASDAQ: NVDA) was down 3% after the Texas Instruments earnings but now shares are down “only” about 0.6% after closing up 2.7% on the day.

Polycom Inc. (NASDAQ: PLCM) has a history of big hits and bad misses, but tonight’s reaction has shares on the up and up.  After beating earnings handily, Polycom shares are up 9.6% at $20.29 and that is after closing up almost 4% today. 

Texas Instruments Inc. (NYSE: TXN) was down initially due to headlines showing GAAP earnings above estimates but the chip giant is now up over 3% ay $34.25 in the after-hours session against a 52-week range of $24.34 to $36.71.

VMware Inc. (NYSE: VMW) closed down 2.4% at $86.00 today but shares are up 5% at $90.50 on almost 1 million shares after just over an hour after the 4PM closing bell.  The virtualization leader said sales rose 27% to $1.06 billion and it sees revenues of $1.015 billion to $1.04 billion for the first quarter of 2012.  These are being taken as above plan.  The news has the (former) parent company of EMC Corporation (NYSE: EMC) up about 1.8% at $23.87 on over 2 million after-hours shares.

Western Digital Corporation (NYSE: WDC) may have seen earnings drop almost 36%, but the update is proving to be above plan and it claims to be making much more progress in Thai floods.  Shares closed up marginally today and the after-hours reaction has shares up 4.4% at $36.25 versus a 52-week range of $22.64 to $41.87.

Zions Bancorporation (NASDAQ: ZION) posted earnings light at $0.30 versus estimates of $0.33.  Its book value per common shares grew to $25.02 from $24.78 one quarter earlier and shares are down 3% at $17.98 in the after-hours.

JON C. OGG

The company shipped approximately 47 million disk drives and sees revenues at $3.1 to $3.2 billion and expects gross margin as a percent of revenue to be at least 30.5% before the impact of the Samsung HDD acquisition charges.  Thomson Reuters has estimates of $2.81 billion for the quarter. 

For the next quarter, Seagate sees revenue of $4.2 to $4.5 billion and sees gross margin as a percent of revenue of at least 33%. Thomson Reuters has estimates of $3.62 billion for the quarter. 
 
Cash and cash equivalents at the end of the December quarter came to more than $2.1 billion that was “inclusive of substantial outflows of approximately $1.2 billion during the quarter for matured debt and cash consideration for the Samsung transaction.”

Seagate shares rose 2.4% today and shares are up another 7.5% at $18.09 against a 52-week range of $9.05 to $18.60.  Western Digital Corporation (NYSE: WDC) closed up 1% at $31.30 today and the shares are indicated up around $32.20 in the after-hours session.

JON C. OGG

Intel said that its key fourth-quarter results “are expected to be below the company’s previous outlook due to hard disk drive supply shortages.”  The new fourth-quarter revenue target is $13.7 billion, plus or minus $300 million.  The prior target had been $14.7 billion, plus or minus $500 million.

Where this gets interesting is that Intel says personal computer sales will be up sequentially but that the worldwide PC supply chain is reducing inventories and microprocessor purchases as a result of hard disk drive supply shortages.  Analysts had been warning about this last week and before for both Intel and the rest of the PC and semiconductor chain.

Unfortunately, Intel said that it expects hard disk drive supply shortages to continue into the first quarter.  The current expectation is that there will then be a rebuilding of microprocessor inventories as supplies of hard disk drives recover during the first half of 2012.

The Semiconductor HOLDRs (NYSE: SMH) is trading down nearly 2% on the news out of Intel this morning, while Advanced Micro Devices, Inc. (NYSE: AMD) is down 2% at $5.42 right before the open.  Micron Technology Inc. (NASDAQ: MU) is down 2.2% at $5.76 in the pre-market.

Gross margin is now put at 64.5%, plus or minus 2%, versus the prior forecast of 65% (plus or minus 2%); non-GAAP gross margin is expected to be 65.5% (+/- 2%) versus a prior target of 66% (+/- 2%).

Intel also noted that its earnings and news quiet period will begin on December 16 and that its earnings will be released on January 19, 2012.

Shares of Intel had been at $25.01 and its 52-week trading range is $19.16 to $25.78.  The pre-market trading is showing a drop of 3.2% at $24.20.  The market had been given warnings of this but no one ever seems to want to admit that just because a sector is slowing and has high supply problems that a warning will still come.  Had more warnings from analysts (and chip peers) in recent days and weeks not been given out, then the reaction may have been far worse.

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

The top calls of the week were seen in the following companies: Avalon Rare Metals Inc. (AMEX: AVL); Berkshire Hathaway Inc. (NYSE: BRK-B); Carrizo Oil & Gas (NASDAQ: CRZO); Domino’s Pizza, Inc. (NYSE: DPZ); Gilead Sciences Inc. (NASDAQ: GILD); Goodyear Tire & Rubber Company (NYSE: GT); Google Inc. (NASDAQ: GOOG); Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR); Hewlett-Packard Co. (NYSE: HPQ); Lululemon Athletica Inc. (NASDAQ: LULU); Research In Motion Ltd. (NASDAQ: RIMM); Sina Corporation (NASDAQ: SINA); and Western Digital Corporation (NYSE: WDC).

We have outlined the research summaries here on each, and we have added color or linked to more details on the calls if applicable. 

Avalon Rare Metals Inc. (AMEX: AVL) is considered the speculative step child in the field of rare-earth metals.  Still, this week came coverage from Citigroup with a “Buy” rating this last Monday. The prior closing price had been $2.63 and the stock ramped mid-week.  The high close was $3.34 on Wednesday even though it closed down over 5% on Friday at $3.05.  The high close in the week would have given a gain of 27% and the gain for the week was still up 16%.  The 52-week range is $2.29 to $10.11, making this a leveraged call with huge upside if things work out at the company.

Berkshire Hathaway Inc. (NYSE: BRK-B) very rarely shows up in research calls, so it was a surprise when Zacks came out and named Warren Buffett conglomerate as the Bull of the Day with a $91.00 target for the next six-months.

Carrizo Oil & Gas (NASDAQ: CRZO) was only a reiterated Buy rating on Thursday by Canaccord Genuity but the implications offer huge upside if the firm is right.  The firm called it a top small cap idea with multiple ways to win and with a “valuation too tepid.” The new $49.00 price target implies upside of 71%. 

Domino’s Pizza, Inc. (NYSE: DPZ) was a cautious call because of valuation, but it may offer insight into how much investors should be willing to pay for the pizza delivery leader.  The stock was started as Hold at KeyBanc on Friday, which was also the day that this hit a 5-year high.  24/7 Wall St. originally went out with the “buy the value here” call early in 2011 when shares were under $20.00 and we had already taken this one off the list because of value concerns.  Friday’s call may point to more and more peak-values here.

The unofficial closing bells put the DJIA down less than 1 point to 12,019.42 (-0.01%), the NASDAQ rose less than 1 point (0.03%) to 2,626.93, and the S&P 500 fell 0.02% or less than 1 point to 1,244.28. Folks, that’s flat!

There were several analyst upgrades and downgrades today, including Lululemon Athletica Inc. (NASDAQ: LULU) raised to ‘buy’ at KeyBanc. Other ratings action Cliffs Natural Resources Inc. (NYSE: CLF) raised to ‘outperform’ at Credit Suisse; Domino’s Pizza Inc. (NYSE: DPZ) started as ‘hold’ at KeyBanc; Western Refining Inc. (NYSE: WNR) raised to ‘outperform’ at Credit Suisse; Sina Corp. (NASDAQ: SINA) raised to ‘buy’ at Deutsche Bank; and Guess? Inc. (NYSE: GES) cut to ‘neutral’ at Citigroup.

Here are today’s big post-earnings news reactions with prices during the last half-hour of trading:
Big Lots, Inc. (NYSE: BIG) is down -8.6%% at $36.34; Zumiez Inc. (NASDAQ: ZUMZ) is up 23.9% at $28.95; Royal Bank of Canada (NYSE: RY) is up 3.4% at $47.82; and Bank of Nova Scotia (NYSE: BNS) is down -3.1% at $48.08.

Several other standouts from today are as follows…

YRC Worldwide Inc. (NASDAQ: YRCWD) is up 29.7% at $12.61. The freight hauler concluded a 1-for-300 reverse split that drove the share price to $9 from $0.03.

Western Digital Corp. (NYSE: WDC) is up about 7% at $31.30. The computer disk drive maker announced that it was resuming operations at one of its flooded Thai plants and raised its revenue estimate for the current quarter. More details here.

Research in Motion Ltd. (NASDAQ: RIMM) is down about -9.6% at $16.79. The smartphone and tablet maker announced an inventory writedown of $485 million for unsold PlayBook tablets and said that full-year earnings would be lower. Detailed coverage here.

Tenet Healthcare Corp. (NYSE: THC) is down more than -10% at $4.20. The health care facilities operator likely is suffering from a lowered target price from BMO Capital Markets with rating of ‘market perform’.

JA Solar Holdings Co. Ltd. (NASDAQ: JASO) is down nearly -7% at $1.74. The solar PV maker is likely giving back gains made over the past two days. The was little reason for the gain in the first place, so that investors are taking it back should be no surprise.

Stay tuned for Monday. We have noted a speech due from Chicago Federal Reserve President Charles Evans and short-term Treasury bill auctions in the morning. Here are other noteworthy events scheduled for Monday (all times Eastern):

• 10:00 a.m. – Census Bureau factory orders report
• 10:00 a.m. – Industrial Supply Management non-manufacturing index

Have a great weekend.

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Paul Ausick

The quicker-than-expected re-start doesn’t really do much to change the landscape though. In its release, Western Digital had this to say about industry conditions going forward:

The company believes that hard drive industry shipments in the December quarter will be limited to approximately 120 million units due to production and supply constraints related to the historic flooding in Thailand. This includes units that were in inventory at the beginning of the quarter. The company believes that demand for the December quarter is in the range of 170 million to 180 million units. The company believes that significant industry supply constraints will continue in the March quarter and beyond.

In an interview with All Things Digital last week, Seagate CEO Steve Luczo provided an essentially identical forecast for a return to normalcy in the production of disk drives. The problem, as he sees it, lies in the mix of drives that will be available. According to Luczo,

companies like Western Digital, who don’t have access to the sliders [a critical component in a drive], are shipping one- and two-headed devices so they can ship more units. So instead of shipping a drive that contains two disks and four heads, which is what the market needs right now, they’ll be shipping a one-disk, one-head or one-d[i]sk, two-head product. They’ll be maximizing the units they can sell, rather than shipping the product the customer actually needs.

The customers he is referring to, of course, are the PC makers. Luczo said that drive prices to computer manufacturers would likely rise 20% and that prices to resellers would rise even higher. For HP and Dell, that means either that they raise prices on their products or that they eat the loss.

The 50-60 million unit shortfall in the December quarter will be filled in over the course of 2012, but even when full production returns, Luczo estimates that about 100 million drives will have been lost. Not every one of those drives would have been shipped in a new PC or server, but around 60-70 million would have. That’s a huge hit to the computer makers.

Western Digital’s shares are up about 11% this morning, at $32.49, in a 52-week range of $22.64-$41.87. Seagate’s shares are off about -1%, at $17.22, in a 52-week range of $9.05-$18.60. HP’s shares are down less -0.5%, at $28.10, in a 52-week range of $21.50-$49.39, and Dell’s shares are down about -0.4%, at $15.73, in a 52-week range of $12.99-$17.60.

Paul Ausick

Canaccord’s Booby Burleson noted in a report, “We see risk of inventory correction for Intel in the first quarter. Recent checks indicate Intel’s customers are experiencing CPU inventory growth in Q4 as a result of hard disk drive shortages.”  The report noted that Tier-2 customer inventories appear to be growing the most and have grown to “around six to seven weeks” versus a normal count four weeks. At the top, the Tier-1 customers are also noted as seeing inventories grow to about 1.5 weeks above normal.

The blame is being put on hard disk drive shortages at a time of increasing uncertainty about overall PC demand.  The Thailand floods are the biggest single contributor here as has been noticed out of Western Digital Corporation (NYSE: WDC).  Western Digital’s woes have actually gone on to help rival Seagate Technology PLC (NYSE: STX) in its most recent guidance.

A week ago came an upgrade of Western Digital to ‘Overweight’ by Barclays, but the problems from October brought on prior analyst downgrades from Needham, J.P. Morgan, S&P, and others.

The Canaccord Genuity research this morning is also about a week after Raymond James downgraded Intel to “Market Perform” based upon upside limits on unit sales.

Pointing out one research report of caution does at least need to be considered as overlooked and potentially discounted entirely when shares are up 4.9% at $24.74 due to global stock strength.  Thomson Reuters has a consensus price target of $26.65 for the stock and the 52-week trading range is $19.16 to $25.50.

JON C. OGG

The unofficial closing bells put the DJIA down about 248 points to 11,547.23 (-2.11%), the NASDAQ fell more than 49 points (-1.92%) to 2,523.14, and the S&P 500 fell -1.86% or more than 22 points to 1,192.99.

There were several analyst upgrades and downgrades today, including Apple Inc. (NASDAQ: AAPL) reiterated as ‘buy’ with a $500 price target at Credit Suisse. Other ratings actions included DeVry, Inc. (NYSE: DV) cut to ‘underperform’ and ‘Bear of the Day’ at Zack’s; Morgan Stanley (NYSE: MS) raised to ‘buy’ at Argus; Qualcomm Inc. (NASDAQ: QCOM) reiterated as ‘buy’ with a $72 price target at Argus; Target Corp. (NYSE: TGT) cut to ‘neutral’ at JPMorgan; and Western Digital Corp. (NYSE: WDC) raised to ‘overweight’ at Barclays.

Here are today’s big post-earnings news reactions with prices during the last half-hour of trading: Hastings Entertainment Inc. (NASDAQ: HAST) was down more than -13%, at $1.65, after posting a new 52-week low of $1.55; Tech Data Corp. (NASDAQ: TECD) was down -0.9%, at $47.47, and Tyson Foods Inc. (NYSE: TSN) was up about 0.3% at $19.51. We took a closer look at Tech Data’s earnings earlier today.

After markets close today and before they re-open for tomorrow, there will be an avalanche of earnings reports. Perhaps the most closely watched will be Hewlett-Packard Co. (NYSE: HPQ) and a half dozen Chinese solar PV makers: JinkoSolar Holding Solar Co. Ltd. (NYSE: JKS), Trina Solar Ltd. (NYSE: TSL), Canadian Solar Inc. (NASDAQ: CSIQ), JA Solar Holdings Co. Ltd. (NASDAQ: JASO), LDK Solar Co. Ltd. (NYSE: LDK), and Suntech Power Holdings Co. Ltd. (NYSE: STP). Shares in all these solar makers are down today, as investors anticipate the bad news that’s coming.

Several other standouts from today are as follows…

LinkedIn Corp. (NASDAQ: LNKD) is down more than -4%, at $68.95. The company’s 180-day lock-up period ended today, adding another 24 million shares of the company available for sale. LinkedIn tied up another 56 million shares for an additional 90 days or the damage could have been worse.

Pharmasset, Inc. (NASDAQ: VRUS) is up nearly 85%, at $134.03, after hitting a new 52-week high of $135. The company has agreed to be acquired by Gilead Sciences Inc. (NASDAQ: GILD) for $11 billion.

Gilead Sciences, Inc. (NASDAQ: GILD) is down nearly -9.7%, at $36.02, after posting a new 52-week low of $34.45. Investors tend to believe that Gilead is paying too much for Pharmasset.

Focus Media Holding Ltd. (NASDAQ: FMCN) is down nearly -39%, at $15.56. The Chinese advertising company is the target of a report by short-selling firm Muddy Waters alleging that Focus Media has signififcantly overstated the number of screens in its LCD network.

Global Education and Technology Group Ltd. (NASDAQ: GEDU) is up more than 97%, at $10.60, after posting a new 52-week high of $10.70. The company is being acquired by Pearson plc, owner of the Financial Times newspaper and other media properties.

Regeneron Pharmaceuticals Inc. (NASDAQ: REGN) is up more than 10%, at $55.02. The company received USDA approval for its eye drug Eylea.

Zillow, Inc. (NYSE: Z) is down more than -13%, at $23.52, after posting a new 52-week low of $22.55. There is no specific news about the company, but, like LinkedIn, a pile of shares will be available on the market when the company’s lock-up period ends in about another two months.

Stay tuned for Tuesday. In addition to the earnings reports we’ve mentioned, here’s a list of other noteworthy events (all times Eastern):

• 7:45 a.m. – International Council of Shopping Centers-Goldman Sachs retail sales report
• 8:30 a.m. – US third-quarter GDP report revisions
• 8:30 a.m. – BEA corporate profits report
• 2:00 p.m. – Federal Open Market Committee minutes released

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