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Apple Shares Reach All-Time High [MarketWatch.com]

Summary: Apple shares soared yesterday after analyst rumors about the development of an Apple iPhone reached investors. The phone would have the same music-playing and instant message capabilities as existing iPod products. Release date and possible partners for such a product remain unclear. Investors also cheered the expected sales of 14 million iPods in its current fiscal quarter, which coincides with the holiday season. Yesterday, Apple stock climbed $2.13, up 2%, to close at $88.60.
Related links: Media coverage: Reuters , MSNBC. Commentary: Report: Apple Developing iChat SmartphoneApple's iPhone Would Undermine Carriers' Handset DominationBear Stearns: Apple iPhone Should Add $6 Billion Revenue. Conference call transcripts: Apple F4Q06 (Qtr End 9/30/06) Earnings.
Potentially impacted stocks and ETFs: Apple (AAPL) • Competitors: SanDisk (SNDK), Microsoft (MSFT), RealNetworks (RNWK), Creative Technology (OTCPK:CREAF), Sony (SNE) • ETFs: NASDAQ 100 Trust Shares (QQQQ), Internet Architecture HOLDRs (IAH), PowerShares Dyn Hardware&Con Electronics (PHW), iShares Goldman Sachs Technology Index (IGM), iShares S&P Global Technology (IXN), iShares Dow Jones US Technology (IYW).

IBM, Sun Set Server-Sales Growth Pace [Wall Street Journal]

Summary: IBM and Sun Microsystems had strong increases in server sales for Q3, according to industry statistics released yesterday. IBM (the #1 server supplier) expanded server sales by 7%, and Sun (#4) by 20%. Hewlett-Packard (#2) saw a 6% drop in server Server Room 22 11 06product revenues. Dell (#3) came in at 6% growth. For the first time in four years, Intel regained market share against rival ADM. Overall server market revenues were up 3.5%, and unit shipments were up 7.4%. . (Note: Conflicting figures were released by two separated research firms; the summary uses an average of both.)
Related links: Media coverage: ZDNet. Commentary: Sun Microsystems' Data Center in a Shipping Container Will Transform Corporate ComputingWhy Sun's Blackbox is the Future of Commoditized Computing • Jim Cramer on IBM, SUNW, DELL, HPQ, INTC, amd. Conference call transcripts: IBM Q3 2006, Sun Microsystems F1Q07, Dell Q2 2007, Hewlett-Packard F4Q06, Intel Q3 2006, AMD Q3 2006
Potentially impacted stocks and ETFs: International Business Machines Corp. (IBM), Sun Microsystems Inc. (SUNW), Dell Inc. (DELL), Hewlett-Packard Co. (HPQ), Intel Corp. (INTC), Advanced Micro Devices Inc. (AMD) • ETFs: PowerShares Dynamic Hardware & Consumer Electronics (PHW), iShares Dow Jones US Technology (IYW), iShares NASDAQ Biotechnology Index ETF (IBB), iShares Goldman Sachs Technology Index (IGM), Technology Select Sector SPDR (XLK), streetTRACKS Morgan Stanley Technology (MTK), First Trust NASDAQ-100-Tech Index (QTEC)

AOL's CEO change raises eyebrows [InfoWorld]

Summary: Jonathan Miller, the AOL CEO who supervised AOL's recent transition from a fee-based dial-up internet service to an ad-based business model, was fired last week. Though AOL's revenue dropped 3% in 3Q, its ad sales jumped 46%, significantly higher than the industry average, which is around 33-37%. Miller's replacement, Randy Falco, was previously president and COO of the NBC Universal Television Group. Analysts note Falco's lack of internet AOL logoexperience and wonder how this can be an asset in renewing AOL's prospects. Falco's supporters note that he was responsible for the release of a number of NBC websites. Falco's main advantage is his ad sales experience, crucial to the new AOL. Jason Calacanis, who started Weblogs Inc. and ran it as a subsidiary at AOL, resigned over his disappointment with Miller's departure. Miller's firing may be a sign that AOL's turnaround may be too late for Time Warner.
Related links: Media coverage: Reuters , MSN Money, Washington Post. Commentary:A New AOL Chief: Be AfraidThe AOL Soap Opera - Today's EpisodeBlog Pioneer Jason Calacanis Quits AOL. Conference call transcripts: Time Warner Q3 2006 Earnings.
Potentially impacted stocks and ETFs: Time Warner (TWX) • Competitors: News Corporation (NWS), Viacom (VIA), Disney Corp. (DIS) • ETFs: Internet HOLDRS (HHH), PowerShares Dynamic Large Cap Growth (PWB), Vanguard Consumer Discretionary VIPERs (VCR), Consumer Discretionary SPDR (XLY).

Global Chip Plant Usage Rate Falls Below 90% [Reuters]

Summary: World's microchip plant usage fell to 88.6% in July-September (from 91.2%) -- its lowest in 6 quarters. Rates below 90% discourage chip makers from building new factories, a negative development for chipmakers as well as equipment suppliers SOX Chart 22 11 06such as Applied Materials Inc. However, usage rates remain higher than in previous downturns (Q1 2005 saw 84.8%) on aggressive production by computer memory makers ahead of Microsoft January Vista launch. But some experts see further drops -- down to 81% by January-March 2007 -- before climbing back above 90% utilization by the end of 2007. Chipmakers had previously cut 2006 sales growth from 10.1% to 8.5%.
Semi Factory 22 11 06Related links: Commentary: Amkor Technology - Riding the Chip CycleSemi Bookings Don't Lie: A Chip Sales Glut's Is InevitableWith a Production Glut Already Underway, Semi Equipment Orders Continue Unfazed.
Potentially impacted stocks and ETFs: Chip equipment suppliers: Applied Materials Inc. (AMAT) (-0.16%), KLA-Tencor Corp. (KLAC) (-0.54%), LAM Research Corp. (LRCX) (-2.5%). Chipmakers affected by the news: Advanced Micro Devices Inc. (AMD) (-1%), Broadcom Corp. (BRCM) (-2.6%), Intel Corp. (INTC) (-3%), Linear Technology Corp. (LLTC) (-2%), Marvell Technology Group (MRVL) (-2.5%), National Semiconductor Corp. (NSM) (-2%), Novellus Systems Inc. (NVLS) (-2.5%), Texas Instruments Inc. (TXN) (-1.7%) • ETFs: iShares Goldman Sachs Semiconductor (IGW), PowerShares Dynamic Semiconductors (PSI), SPDR Semiconductor (XSD), Semiconductor HOLDRs (SMH)

Dell Posts Gain in Delayed 3Q Results [Business Week]

Summary: Dell reported preliminary Q3 net income of $677m, or $0.30/share, beating analyst estimates of $0.24/share, on revenue of $14.44b. Sales and margins were driven by its "mobility products" (inc. notebook PCs) in which sales grew 17%, whereas desktop PCs sales fell 5%. Dell is under SEC investigation and warned its earnings could be revised and impacted negatively, thus it didn't provide y-o-y figures. Last Q3 it earned $606m, or $0.25/share, on revenue of $13.9b. Dell was surpassed by HP in the quarter, losing its #1 ranking in PC shipments, according to IDC and Gartner. It suspended its share buyback program in Sept after spending $335m to repurchase 15m shares in the quarter. Its shares closed 0.7% higher at $24.82 yesterday, but soared in the after-hours to $27.04 on heavy volume. So far early in the pre-market they are near $27 on thin volume. At $27/share Dell is about 20% off its 52-wk high.Dell-DELL-1yr-chart-11-21-06
Related links: Dell Press Release. Media coverage: BusinessWeek, Reuters and NY Times. Commentary: Dell's Delayed Numbers Were Worth The WaitDell's Operating Margins, Sales Show ImprovementDell Stonewalls Investors - Mum on SEC Investigation, EarningsHP's Q4 Earnings Jump; Surpasses IBM and Dell . Conference call transcripts: Dell Q2 2007, Note: Dell will not host a Q3 CC.
Potentially impacted stocks and ETFs: Dell (DELL) • Competitors: Hewlett-Packard (HPQ), Gateway (GTW), Lenovo (OTCPK:LNVGY), Sony (SNE), Apple (AAPL) • ETFs: Internet Architecture HOLDRS (IAH), Vanguard Information Technology ETF (VGT)

Google's $500 Question: Can Growth Keep Pace? [Business Week]

googleGSummary: Google's share price crossed $500 on Tuesday, leaving many wondering if its remarkable earnings growth is sustainable. Third quarter revenue grew more than 70% y/y, but with online ad competition heating up from new media ventures, Morningstar analyst Rick Summers expects annual revenue growth to settle at around 27-28% over the next five years.
Related links: Media coverage: WSJ. Commentary: Lessons From Google's Big Run , Google Surpasses Chevron, IBM In Market Cap , How Google Hits $1000 a Share , Google Nearing $500; Credit Suisse: It'll Go To $600 . Conference call transcripts: Google Q3 2006 .
Potentially impacted stocks and ETFs: Google (GOOG)

ENERGY AND MATERIALS

Freeport-McMoRan Stock Up Amid BHP Bid Speculation [Reuters]

Summary: Freeport-McMoRan Copper & Gold stock jumped 5% in late trading on rumors of a takeover bid by BHP Billiton. But with Freeport's $11 billion market cap and a problematic mine in Indonesia, most analysts give the rumor little chance of fruition; BHP has its own mining challenges it's currently addressing. The speculation comes just two days after Freeport bid to takeover its far larger copper mining counterpart Phelps Dodge for $25.9 billion. BHP, with a market cap of $114 billion, is big enough to absorb both Freeport and Phelps Dodge.
Related links: Media coverage: Dow Jones Newswire . Commentary: Does Freeport's Phelps Dodge Acquisition Signal a Top in Metal Prices? , Credit Suisse: Copper Prices Should Rise On New Chinese Demand , The Gold Miner ETF: A Close Look , Playing the Copper Rush , all coverage of metal miners
Potentially impacted stocks and ETFs: Freeport (FCX), BHP Billiton (BHP), Phelps Dodge (PD), Inco Ltd. (N), Cabot Corp. (CBT), Southern Copper Corp. (PCU), Newmont Mining Corp. (NEM), Rio Tinto plc (RTP) • ETFs: SPDR Metals and Mining ETF (XME), Market Vectors Gold Miners ETF (GDX)

RETAIL

Mattel Claims Bratz Maker Stole Secrets [AP]

Summary: Mattel is suing competitor MGA Entertainment for allegedly stealing the concept for the popular Bratz doll by recruiting former Mattel employees and convincing them to surrender valuable trade secrets. The creators of the classic doll, Barbie, filed papers in the U.S. District Court in Central California claiming that it has sketches of the Bratz dolls produced by Carter Bryant before he left Mattel for MGA in 1999 or 2000. In 2004, Bratz Logo 21 11 06Mattel alleged that Bryant had been giving ideas for Bratz to MGM while he was still working for Mattel, and violated intellectual property rights to the product. In response, MGM accused Mattel of getting "revenge on a few people who have Mattel 11-22-06chosen to work for a better, more innovative toy company after realizing that Mattel has lost touch with its consumers." Mattel executives did not comment.
Related links: Media coverage: Bizjournals.com. Commentary: Top 10 Holiday Season Toys and Video Games -- Lycos A Pre-Holiday Comeback for Elmo and MattelNew Extreme Elmo Doll Tickles Parents' Wallets Mattel: Watch Elmo Laugh All The Way To The Bank
Potentially impacted stocks and ETFs: Mattel (MAT), Hasbro (HAS), JAKKS Pacific Inc. (JAKK)

GameStop On the Go [TheStreet.com]

Summary: GameStop reported Q3 y-o-y net income of $13.6m, or $0.17/share, after a loss of $2.5m, or $0.04/share last year, in-line with analyst estimates. Revenue growth was impressive at 89% y-o-y to $1.01b, compared to $534m last Q3, but missed analyst estimates of $1.03b. Same-store-sales increased 8.8% and are expected to be 14%-18% in Q4. GameStop expects Q4 EPS (diluted) of $1.53-$1.59 and full-year EPS of $1.98-$2.04, while analysts expect $1.59 and $2.01/share, respectively. GameStop's acquisition of rival Electronics Boutique in Apr. '05 is an important factor in expanding its scale and competitiveness. Wedbush Morgan analyst Michael Pachter commented, "GameStop is a very safe way to play the games cycle. You don't care which console succeeds or which game does well. You just care that people are buying games." GameStop's shares gained 3.6% to close at $53.00, reaching a new 52-week intra-day high of $54.93. Analysts are bullish on GameStop over the long-term and are looking for buying opportunities with any volatility in the near-term. GameStop-GME-1yr-chart-11-21-06
Related links: GameStop press release. Media coverage: BusinessWeek and Reuters. Commentary: GameStop Jumps On Strong Earnings ReportTop 10 Holiday Season Toys and Video Games -- LycosSony's PS3 Launch Shortfall: Who It Affects Most. Conference call transcript: GameStop Q3'06.
Potentially impacted stocks and ETFs: GameStop (GME) • Game Console stocks: Microsoft (MSFT), Nintendo (OTCPK:NTDOY), Sony (SNE) • Gaming Software stocks: Electronic Arts (ERTS), Activision (ATVI), Konami (KNM), Take Two (TTWO), THQ (THQI) • Retail Competitors: Amazon (AMZN), Best Buy (BBY), Circuit City (CC), Wal-Mart (WMT) • ETF: Rydex S&P Midcap 400 Pure Growth (RFG)

TRANSPORTATION

Deere 4Q Profit Rises 19 Percent [AP]

deere logoSummary: Deere & Co. rode higher prices for farm and lawn-care equipment to 5% higher (y/y) earnings in its fiscal fourth quarter. Sales were flat, but cost-cutting and inventory control allowed the company to raise its bottom line. Deere execs warned of slower sales over the coming year due to a construction and forestry slowdown, but the stock jumped over 6% on the day nonetheless. Earnings were $277.3 million or $1.20/share (analysts expected 94 cents); revenue was $5.12 billion (analysts expected $4.79 billion).
Related links: Media coverage: WSJ . Commentary: Deere & Company: It Takes Oil to Make Ethanol , Jim Cramer's take on Deere
Potentially impacted stocks and ETFs: Deere & Co (DE), Caterpillar (CAT), Joy Global (JOYG), Manitowoc (MTW), AGCO (AG), Toro Company (TTC)

FINANCIAL

NYSE, Euronext Agree to Split Board; Shares Rally [Bloomberg]

Summary: News that NYSE Group and Euronext agreed to split the combined board evenly upon their merger sent NYSE's shares soaring 9.74% to reach all-time intra-day and closing highs of $105.12 and $104.60, respectively. Each party will have 11 members on the board. This move is seen assuaging regulators' concerns including France's Finance Minister, who previously questioned the corporate governance of the merged entity. Regarding the rise in NYSE's share price, the chairman of a Toronto-based asset management firm commented, "The more the stock goes up, the more likely it is the deal will happen without NYSE having to sweeten its offer, and it just feeds on itself." NYSEGrp-NYX-1yr-chart-11-21-06
Related links: Media coverage: Forbes-AFX Paris newswire and Reuters. Commentary: Exchange Stocks: Beware The BearNYSE: Gains Are Far From Automatic -- Barron'sDeutsche Börse Drops Euronext Takeover Bid, Clearing Way for NYSE GroupNymex's IPO: $34 Million Left on the Table? -- Exchanges' P/E RatiosA Unified, Global Stock Exchange May Be Approaching.
Potentially impacted stocks and ETFs: NYSE Group (NYX) • Competitors: Nasdaq (NDAQ), Chicago Mercantile Exchange (CME), InterContinental Exchange (ICE), Int'l Securities Exchange Hldgs (ISE), NYMEX Holdings (NMX) • ETFs: iShares Dow Jones US Broker-Dealers (IAI), streetTRACKS KBW Capital Markets (KCE)

Lazard to Sell Stock [TheStreet.com]

Summary: Merger-and-acquisition specialist firm Lazard filed a S-3 registration statement yesterday outlining a plan to sell 12 million shares, half of which are presently owned by executives and key company employees. Lazard has 37 million shares outstanding, 12 million of which are available for trading; yesterday's announcement means a Lazard Chart 22 11 06doubling of the float. The proceeds from the 6 million shares the firm plans to sell (approx. $632m) will be used to expand its asset management business, advisory businesses and merchant banking activities, the investment bank said. Following the offering, public investors will have 46.9 percent stake in Lazard Ltd. Shares were down 4% to $43.96 on the news.
Related links: Press release. Media coverage: Reuters. Commentary: Barron's take on "boutique banks"Insider Trading -- How it Works.
Potentially impacted stocks and ETFs: Lazard Ltd. (LAZ)

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