Posted by Optiondragon for myhappytrading.com, join us for free, check out our trading room with hundreds of traders and trading ideas.
From Briefing.com
Periodicals Wrap-Up for Monday, October 13
WALL STREET JOURNAL: General Motors’ (GM) board does not appear to be enthusiastic about acquiring Chrysler according to sources, and GM’s board may “assert itself more than in the past” if asked to approve a deal involving Chrysler. GLOBE AND MAIL: Mitsubishi UFJ Financial Group (MTU) is amending its deal to invest $9B in Morgan Stanley (MS), an inside source said. Under the amended agreement, Mitsubishi’s 21% stake would include only convertible preferred shares and no common stock. CNBC.com: The turmoil in the financial markets may spark many mergers among banks and brokerage firms in the next several weeks, Wall Street executives say. WALL STREET JOURNAL: Boeing (BA) and its machinists union negotiated over the weekend with the assistance of a federal mediator. The negotiations were the first between the two sides since Boeing’s workers started striking early last month.
Asian Markets Wrap-up for Monday, October 13
Asian stocks rallied as investors speculated that governments’ actions would prevent the financial system from deteriorating further. Japan’s stock market is closed today. CHINA: Financial stocks spearheaded an advance. The CSI 300 Index surged 4.1% to 1,985.49. Industrial and Commercial Bank of China jumped 7.5%, while China Construction Bank Corp. rose 6.8%. Shenzhen Development Bank Corp. gained 10%, after it reported that its profits could have climbed 80% in the first nine months of the year. Real estate developers also rallied, with China Vanke (CVKEF) gaining 7.8% and Poly Real Estate adding 6.3%. HONG KONG: Banks and developers led a major surge, as the Hang Seng Index jumped 10%, to 16,312.16. Hung Lung Properties rose 20%, and another developer, China Overseas Land & Investments (CAOVF), climbed 9.7%. China Life Insurance (LFC) rallied 16%, while HSBC (HBC) added 4.3%. AROUND ASIA: South Korea’s KRX 100 gained 3.44%, while Australia’s S&P/ASX 200 Index soared 5.55%, but Taiwan’s Taiex Index slipped 2.15%….Japan’s government will put a freeze on the sale of state-owned shares of major banks, the Nikkei newspaper reported.
iPhone could be coming to Walmart-The Boy Genius Report
The Boy Genius Report sources say the iPhone (AAPL) may be coming to Walmart (WMT) in time for the holiday shopping start.
Financial turmoil could spark many mergers in the banking sector-CNBC.com
According to Wall Street Executives interviewed by CNBC, the continued turmoil in the financial markets could result in many mergers among banks and brokerage firms in the coming weeks.
AIG insiders knew of derivatives problem-WSJ
The Wall Street Journal reports that, according to documents released by congressional Investigators America International Group (AIG) insiders knew of the problems valuing derivatives long before the shares were sold off.
SAC capital going to cash-Dealbreaker
Dealbreaker has it on rumor that Steven Cohen of SAC Capital told his traders to flatten out last week.
Weekly additions to the Investors Business Daily-100
The following are additions to the Investors Business Daily-100 list for the week of October 10: Netlogic Microsystems (NETL), Dollar Tree (DLTR), Childrens Place (PLCE), Wolverine World Wide (WWW), DeVry (DV), Franklin Electric (FELE), Marvel Entertainment (MVL), Diamond Foods (DMND), Cellcom Israel (CEL), Exponent (EXPO), Hawaiin Electric Industries (HE), Centene Corp (CNC), Boston Beer Company (SAM), Haemonetics Corp (HAE), Family Dollar Stores (FDO), Arrow Financial Corp (AROW), LHC Group (LHCG), Hanger Orthopedic Group (HGR), C.R. Bard (BCR), Heartland Payment (HPY), BJS Wholesale Club (BJ), Potlatch Corp (PCH), Oriental Financial GP (OFG), Stifel Financial Corp (SF), Towne Bank (TOWN), Tractor Supply (TSCO), IPC The Hospital (IPCM), Partner Communications (PTNR), Applied Industrial Tech (AIT), Nike (NKE), Walmart (WMT), Campbell Soup (CPB), Navigant Consulting (NCI), Bio Rad Labs (BIO), Greenhill & Co. (GHL), NBT Bancorp (NBTB), Applied Signal Tech (APSG), Ecolab (ECL), Amsurg Corp (AMSG), Mathews Intl (MATW) Comtech Telecom (CMTL), Duff & Phelps (DUF), Suffolk Bancorp (SUBK), Hancock Hldg. (HBCP), Ralcorp Hldg. (RAH), Aptargroup (ATR), Abbott Labs (ABT), UIL Holding (UIL), Peets Coffee & Tea (PEET), Waste Connections (WCN), Northwest Bancorp (NWSB), City Holding (CHCO), Commerce Bancshares (CBSH), First Finl Bankshares (FFIN), CVS Caremark (CVS), Nicor (GAS), Nash Finch Co. (NAFC), Tompkins Financial Corp (TMP), Dime Community Bancshares (DCOM), SVB Financial Group (SIVB), Landauer Inc (LDR), Heartland Financial (HTLF), Prosperity Bancshares (PRSP), First Financial Corp (THFF), Phase Forward (PFWD).
Weekly subtractions from the Investor’s Business Daily-100
The following are subtractions from the Investors Business Daily-100 list for the week of October 10: Ezcorp (EZPW), Integral Systems (ISYS), Sykes Enterprises (SYKE), Man Tech International (MANT), Axsys technologies (AXYS), Ensign Group (ENSG), Cybersource Corp.(CYBS), AZZ Inc (AZZ), Psychiatric Solutions (PSYS), Natus Medical (BABY), United Therapeutics (UTHR), National Presto (NPK), Gentiva Health Services (GTIV), NCI (NCIT), Vistaprint Limited (VPRT), Permian Basin (PBT), Flir Systems (FLIR), Clean Harbors (CLHB), Netflix (NFLX), Icon Plc (ICLR), Hudson City Bancorp (HCBK), True Religion Apparel (TRLG), Varian Medical Systems (VAR), Stepan Co. (SCL), Empresa Nac El Chile (EOC), Express Scripts (ESRX), IPG Photonics (IPGP), Teledyne Tech (TDY), Big Lots (BIG), Cornell Companies (CRN), FPIC Insurance (FPIC), Westwood Holdings Group (WHG), Celgene (CELG), Alcon Inc (ACL), Somanetics Corp (SMTS), Sybase (SY), MWI Veterinary Supply (MWIV), Strayer Education (STRA), Collective Brands (PSS), Kendle International (KNDL), Balchem (BCPC), Stericycle (SRCL), Genzyme (GENZ), Ross Stores (ROST), UMB Financial (UMBF), SWS Group (SWS), Merit Medical Systems (MMSI), Enersis (ENI), Iris International (IRIS), Covance (CVD), St Jude Medical (STJ), Open Text Corp (OTEX), Integra Lifesciences (IART), Proassurance (PRA), American Med Systems (AMMD), Steris Corp (STE), Standex International (SXI), Herbalife (HLF), Tower Group (TWGP), Microsemi (MSCC), ITC Holdings (ITC), Blackrock (BLK), Idexx Labs (IDXX), Techne Corp (TECH), Owens & Minor (OMI).
What to buy for the post-capitulation rally - Barron’s
Fred Hickey, proprietor of the High-Tech Strategist and valued member of Barron’s Roundtable, has been resolutely bearish for quite a spell on the economy, on the techs, and on the market as a whole. Hickey turned his unyielding negative stance to good use by buying puts and selling them, for the most part auspiciously, all the while adding to his gold stake. Barron’s chatted with Hickey late last week, and he was resolute that we were on a collision course with a classic capitulation that might see a four-digit drop in the Dow — which came perilously close on Thursday — that would likely create a short-term market bottom that could hold at least for a few months. Hickey he admitted drawing a measure of comfort from his puts on, among other stocks, Amazon.com (AMZN), Qualcomm (QCOM), and IBM (IBM). Hickey staunchly believes in being prepared. So he has drawn up a list of what to buy comes the post-capitulation rally. Since he’s convinced we’re heading into a deep and extended recession, his picks are restricted pretty much to companies boasting high cash flows, clean balance sheets and hefty gross margins. Microsoft (MSFT) is at the top of his list if it can be snared in the low $20s. He considers EMC (EMC) attractive in the single digits, reckoning that demand for storage equipment will hold up even in a recession; its software business has been growing rapidly, and it owns most of VMware (VMW), No. 1 in virtualization. For that matter, he likes VMware itself, plus a bunch of other software companies from Adobe Systems (ADBE), Sybase (SY) and Oracle (ORCL) to Lawson Software (LWSN) and JDA Software (JDAS). Hickey thinks Nokia (NOK) might be worth a look, thanks to its status as the leading mobile phone maker and the stock’s 5% dividend. And if you can buy Cisco Systems (CSCO) in the teens, you probably won’t be sorry. Hickey even suggested Apple (AAPL) in the $70s or low $80s might be worth a fling. Bottom-line: Hickey is proposing these as stocks strictly for a rebound in the stock market, if and when, but not to fall in love with them.
This could be one of history’s quintessential buying opportunities - Barron’s
The brutal market sell-off has stung even famed investors like Buffett, but patient investors stand to benefit, particularly if they choose well-capitalized companies with strong market positions whose stocks now trade at very depressed values. Investors willing to show a little patience can find discounts on everything from real estate to stocks, bonds and commodities. With such broad and deep losses throughout the stock market, a case can be made for virtually every major sector, including drugs, financials, consumer staples, technology and energy. Barron’s selected 25 cash-rich companies for potential stock purchase. These stocks include: [Big companies] ExxonMobil (XOM); Microsoft (MSFT); Apple (AAPL); Intel (INTC); Dell (DELL); Ebay (EBAY); Motorola (MOT); Yahoo (YHOO); Electronic arts (ERTS); Loews (L). [Small companies] Nvidia (NVDA); Broadcom (BRCM); Novell (NOVL); IAC InterActive Corp (IACI); KBR (KBR); RealNetworks (RNWK); Nam Tai Elec. (NTE). [Industrial Stocks] Caterpillar (CAT); Cummins (CMI); Deere (DE); Honeywell (HON); Illinois Tool Works (ITW); Paccar (PCAR); Terex (TEX); United Tech. (UTX). Also, there was renewed concern last week on Wall Street about whether Ford Motor (F) and General Motors (GM) may be forced to file for bankruptcy. GM said Friday it has no such intentions, although its debt now trades as if it were in bankruptcy. These bonds, which have a current yield of 31%, look like a much better bet than GM’s common shares, which ended the week at $5.
Past stock-market performance suggest the Dow could see a low shortly- Barron’s
History tells us with stocks, down 40% in the past 12 months, the stock-market could bottom soon if a recession started in July and proves to be of average length. Since the late1940s, recessions have lasted an average of 10 months, and stocks have hit bottom an average of three months before the economic downturn ends. The worry now is that, if the world’s financial system doesn’t right itself, a recession could last longer, perhaps even as long as the 16-month slump that ended in 1975. It seems unlikely the nation is headed for something much worse, like the Great Depression, which saw the economy shrink for nearly four straight years. Indeed, stocks showed some signs of finding a bottom late Friday, with the Dow Jones industrial average closing down just 128 points on the day, after having plummeted about 700 points earlier in the session. The Nasdaq Composite even managed a small gain on the day. Investors will be watching for a possible market bounce that could occur early this week, especially if any new measures to ease the global economic crisis emerge from the weekend’s meeting in Washington of the finance ministers of the so-called G-7 industrial nations.
Morgan Stanley’s Mack says company looking at acquisitons-WSJ
In a memo to employees, Morgan Stanley’s CEO John Mack said: “We also will be looking at acquisitions that might make sense for the Firm and help us ramp up our deposit base.”
Futures are indicating a positive start to the week
U.S. equity futures continue to point to a higher open. After eight straight sessions of volatile trading which ended each day with the major indices lower, the averages are trying to start this week on a more upbeat note. The coordinated actions by major central banks over the weekend have given investors optimism that, with the help of governments around the world, the credit logjam can be broken. The averages appear set to start the day higher, following the lead of their counterparts overseas. Since today is Columbus Day, the volume may be a little lighter than in the past several days.
US Exchanges looking at new ways to limit short sales-WP
U.S. stock exchanges are considering other ways to limit short selling after the expiration of the temporary ban on short selling. The recommendation that has the most traction is for a five-day ban on short selling in any stock that finishes down 20% in a session from its prior day’s closing price, according to two sources.
Fast money recap- Macke Owns (DIS), (WMT), Finerman and Firm Own (GLNG); Finerman’s Firm Owns (MSFT), (RIG), (IYR), (SPY), (MDY), (USO) (PM); Finerman Firm Is Short (COF); Adami Owns (C ), (INTC), (MSFT), (AGU), (NUE), (GS), (BTU); Terranova Owns (AAPL), (GS), (VLO), (FTO), (X), (POT), (NOV), (FCX), (EXM), (EOG).
Market is rip roaring this morning and looks like a bounce today. Everything is bouncing. I love long UYG, JPM, DBA, WFC, AAPL, GOOG, RIMM, IBM, EBAY. Keeping nimble and trying to avoid the gap up. Let’s see how things shake out for the rest of the day. This Soros article is a good read and points in the direction of a possible solution and some relief. See you in the trading room, there are some excellent ideas coming up.
Did you like this article?
Submitted By 
's
