Aug 13, 2008

Wednesday, August 13, 2008

Pre Market Trading Gap News

Gapping Down

In reaction to disappointing earnings/guidance: TWB -33.6% (also downgraded to Sell at Citigroup and downgraded to Underperform at Friedman Billings), PODD -14.5%, HQS -14.3% (light volume), SATC -10.9%, WCG -9.0%, DE -8.5%, CSIQ -7.8%, LIZ -7.0%, ERII -6.2%, SRX -5.4%, M -2.9%, CRME -2.0%… M&A news: CVS -3.9% (to acquire Longs Drug Stores for $71.50 per share)… Select airline/cruise-related stocks trading modestly lower: CUK -3.7%, CCL -3.0%, UAUA -2.9%, CAL -2.1%, AMR -1.6%, DAL -1.5%, LCC -1.5%… Select European financials trading lower following weakness overseas: RBS -5.4% (CBA pulls out of talks with RBS - Financial Times), LYG -4.5%, BCS -2.9%, UBS -2.3% (UBS chiefs knew of rule breaches - FT), DB -2.3%, HBC -1.7%… Other news: CAP -4.1% (prices offering of 2.25 mln common shares at $15.50/share), CBMX -3.4% (files for $100 mln common stock offering), BTI -1.8% (still checking)… Analyst comments: MDRX -5.5% (downgraded to Market Weight at Weisel), LVLT -3.5% (downgraded to Underperform at Oppenheimer), ARAY -3.1% (downgraded to Hold at Jefferies), FOSL -2.6% (removed from Focus List at Morgan Keegan), CCOI -2.1% (downgraded to Underperform at Oppenheimer), TJX -1.4% (downgraded to Hold at Lazard Capital), HLEX -1.2% (downgraded to Market Perform at BMO Capital Markets), CNSL -1.0% (downgraded to Neutral at Credit Suisse).

Gapping Up

In reaction to strong earnings/guidance: DISK +19.7%, LFT +10.8% (light volume), CFSG +9.9%, SORL +7.8%, SBLK +6.3% (light volume), BRCD +5.1%, NVDA +4.6%, CREE +4.3%, APEI +2.5%, DPS +2.5%, AMAT +2.3%, TOL +1.3%, SQM +1.0% (light volume)… M&A news: LDG +29.9% (CVS Caremark to acquire Longs Drug Stores for $71.50 per share)… Select metals/mining stocks modestly rebounding: AAUK +2.1%, HMY +1.8%, AUY +1.7%, GG +1.2%… Other news: RAD +8.6% (trading up in sympathy with LDG), MHGC +6.4% (Zabeel and Mubadala square up for Morgans hotels - Times of London), TS +2.7% (still checking), ASML +2.0% (still checking), HRB +1.2% (Ameriprise Financial to acquire H&R Block Financial Advisors for $315 mln).

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Opening View: Nvidia, Canadian Solar Step into the Earnings Spotlight

On the earnings front, tractor titan Deere & Co. (DE: sentiment, chart, options) reported third-quarter net income of $575.2 million, or $1.32 per share, on revenue of $7.74 billion. Analysts, on average, were predicting earnings of $1.36 per share on revenue of $7.23 billion. The farm firm forecast a 5% drop in sales of construction and forestry equipment this year, and said that rising costs of raw materials will likely impact its margins. Ahead of the bell, the shares of DE are poised to open roughly 7% lower than yesterday's close of $69.35.

Elsewhere, Nvidia (NVDA: sentiment, chart, options) after the close yesterday reported a second-quarter net loss of $120.9 million, or 22 cents per share, compared to a profit of $172.7 million, or 29 cents per share, a year ago. Adjusted earnings docked at 13 cents per share, while revenue fell 5% to $892.7 million. The Street had forecast adjusted earnings of 12 cents per share on sales of $908.4 million. In pre-market activity, the stock is set to open moderately higher than yesterday's close of $11.07.

Meanwhile, Canadian Solar (CSIQ: sentiment, chart, options) reported a second-quarter profit of $10.5 million, or 36 cents per share, compared to a loss of $2.9 million, or 11 cents per share, a year prior. Excluding items, CSIQ posted earnings of $23 million, or 78 cents per share, on revenue of $212.6 million. Analysts, on average, were expecting earnings (excluding items) of 47 cents per share on sales of $206.8 million. The solar sultan also upped its full-year revenue guidance to a range of $850 million to $970 million, compared to its previous estimate of a range of $750 million to $870 million. The firm attributed the stellar numbers to a significant increase in revenue from the European region.

In merger-and-acquisition news, drugstore diva CVS Caremark (CVS: sentiment, chart, options) announced that it would purchase Longs Drug Stores Corp. (LDG: sentiment, chart, options) for about $2.7 billion. The $71.50 per-share cash offer represents a 32% premium to LDG's closing price of $54.04 yesterday. The acquisition, expected to aid CVS in its quest to build a West Coast presence, is projected to close in the fourth quarter.

Opening View: Nvidia, Canadian Solar Step into the Earnings Spotlight

Pre-Market: Stock Trading Before the Markets Open

Aug 13 8:29am†	Change	%Change	Level

FTSE 100	-70.60	-1.28%	5,463.90
XETRA-DAX	-108.08	-1.64%	6,477.79
CAC 40	-78.88	-1.75%	4,439.60
HANG SENG	-347.57	-1.61%	21,293.32
NIKKEI 225	-280.55	-2.11%	13,023.05

U.S. Dollar vs Euro	+0.0006	+0.04%	1.4918
U.S. Dollar vs Yen	-0.6900	-0.63%	0.0092
U.S. Dollar vs UK £	-0.02	-0.93%	1.88

Open

Closed

S&P 500	-7.20	1284.30	8/13 8:31am
Fair Value		1289.77	8/12 9:44pm
Difference*		-5.47

NASDAQ	-0.25	1944.50	8/13 8:30am
Fair Value		1944.96	8/12 9:44pm
Difference*		-0.46

Dow Jones	-50.00	11595.00	8/13 8:31am