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Wall St. Breakfast's Pre-Market Snapshot:

U.S. Futures

As of 9:02 AM ET

S&P 500: -10.75; 1,467.25
NASDAQ 100: -15.75; 2,041.75
Dow: -72; 13,203

International Indexes

Asia
NIKKEI 225: -0.67%; 15,396.30 (-103.26) 02:00 HANG SENG INDEX
HANG SENG: -1.42%; 28,751.21 (-414.80)
SHANGHAI SE COMPOSITE: -0.88%; 5,365.27 (-47.43)
BSE SENSEX 30: -0.72%; 19,784.89 (-144.17)

Europe
FTSE 100: -0.94%; 6,371.80 (-60.30)
CAC 40: -1.48%; 5,530.25 (-83.35)
XETRA-DAX: -1.19%; 7,690.12 (-92.99)

Commodity Futures

(Reuters/Jefferies CRB)

Oil: +0.03%; $94.12 (+$0.03)
Gold: -1.51%; $802.40 (-$12.30)
Natural Gas: +0.04%; $7.838 (+$0.003)
Silver: -1.59%; $14.825 (-$0.24)

U.S. Breaking News

see today's Wall Street Breakfast for earlier news

CPI Steady Despite Energy Jump; Jobless Claims More Than Expected

Retail inflationary levels for October were in line with economist forecasts, despite a sharp rise in energy costs. Consumer prices were up 0.3% over the month, due in part to a 1.4% jump in energy prices, the Labor Department reported Thursday. Food prices were up 0.3%. Net of food and energy, core CPI climbed 0.2% (CPI release). The data suggests higher oil prices haven't filtered into underlying inflationary pressures, and should serve as a comfort to Fed officials who have voiced concern about the potential inflationary impact of energy and commodity prices on the U.S. economy (WSJ, full story). On an annual basis, consumer prices are up 3.5%, while core CPI is up 2.2%, just above the unofficial 2% top end of the Fed's core inflation comfort zone, although the Fed generally gives more weight to the PCE inflation index, which currently stands at an annual 1.8% . Medical-care costs were up 0.6%; clothing prices were flat; housing was up 0.2%. Separately, first-time jobless claims jumped an unexpected 20,000 during the past week, brining total initial claims to 339,000, the Labor Department reported (Initial Claims release). Economists were expecting just a 3,000 increase. A Labor Department spokesman noted anecdotal evidence suggesting the Hollywood writers strike may have impacted claims (MarketWatch). The four-week average of initial claims remains 330,000. Americans receiving state jobless benefits fell 7,000 to 2.57 million during the week. After an initial jump following the release, pre-market futures continued their downward movement. S&P 500 futures are down 11.25 to 1466.75, while Dow futures are off 80 to 13195 as of 8:50 ET.

JCPenney Slashes Q4, FY Guidance, Shares Down 4%

JCPenney is trading down by 3.9% to $44.89 in pre-market activity, following its report of lower Q3 profits and a downward revised outlook. Q3 net income fell 9.1% to $261 million, or $1.17/share. Sales were off by 1.1% to $4.73B. Excluding items EPS were $1.03, or $0.02 better than expected, but sales missed estimates of $4.76B. In a statement, CEO Myron Ullman commented, "After the completion of a strong Back-to-School season and a favorable response to our early fall merchandise, we were disappointed to see sales weaken dramatically in September and October. The combination of weak housing conditions, mortgage and credit market concerns, and rising fuel prices has clearly led to a challenging macroeconomic environment for consumers. Along with unseasonable weather, this has created difficult conditions for most retailers, and our third quarter performance shows that JCPenney was not immune to those conditions." Consequently, JCPenney said it is taking a "more cautious view" of Q4 and 2008. The company slashed its Q4 and full-year EPS guidance to $1.65 to $1.80 (from $2.41 previously) and $4.63 to $4.78 (from $5.50 previously), respectively. Analysts were expecting EPS of $1.98 and $4.85. Shares of JCPenney lost 2.8% to $46.73 on Wednesday.

Tyco's Net Tanks on Restructuring Costs, But Adjusted EPS Beat

Tyco reported an 85% drop in fiscal Q4 earnings to $181M, or $0.36/share, due to restructuring costs and the absence of income from discontinued operations. However, adjusted EPS of $0.57 beat analyst expectations of $0.55. Revenue growth of 8.9% to $5.03B was also better than expected (est. $4.98B). In June, Tyco spun off Tyco Electronics and Covidien, its healthcare division. Tyco said revenues rose across the board, but profits were higher only at its flow control (pipes and valves) unit. Tyco also said from this quarter it is counting its infrastructure services unit, which is up for sale, as a discontinued operation. A Goldman analyst who rates Tyco's shares "sell" commented to clients in a note ahead of Tyco's earnings release that "After an unexpected change in ADT accounting policy in the first quarter post-separation, Tyco may now have a higher bar to regain favor with investors." In a statement, Tyco's CEO Ed Breen said the company "had a good finish to the year and made progress on a number of key initiatives that we expect to drive solid earnings growth in 2008." (Earnings call transcript later today). Shares of Tyco lost 1.9% to $39.31 on Wednesday and were untraded in the pre-market as of 8:15.

Suntech Power Surges on Beat, Strong Production Forecast

Chinese photovoltaic [PV] panel maker Suntech Power Holdings surged 11.36% in pre-market action (as of 8:06 AM ET) on a strong earnings beat and projections it would reach 1 gigawatt of PV cell production capacity by the end of 2008 - two years ahead of schedule (full earnings call transcript later today). Q3 net earnings rose 85.7% to $53.3 million, good for EPS of $0.32, including $0.04 a share in stock-based compensation. Sales more than doubled to $386.7 million from $163 million a year ago. Analysts were expecting EPS of $0.28 on average, on sales of $355 million. The company opened a new 1 gigawatt production facility in Wuxi, China raising its PV production capacity to 420 megawatts in Q3. As a result of strong orders, Suntech raised its year-end production capacity target to 540 megawatts, from a previous target of 480; it also upped next year's year-end PV production capacity target to 1 gigawatt, from a previous forecast of just 600 megawatts. It expects FY2008 revenue of $1.9 billion to $2.1 billion (midpoint of $2 billion); analysts were forecasting FY2008 revenue of $1.95 billion.

3M Enhances Personal Protection Gear With $1.2B Aearo Acquisition

3M (MMM) said Thursday it has agreed to acquire privately-held Aearo Technologies for $1.2B in cash, in an effort to expand its occupational health and environmental safety program. Aearo's hearing protection, eyewear, and fall protection products will supplement 3M's respiratory line to provide industrial and military customers and consumers with a more complete personal protection solution. "Aearo complements and significantly broadens our core safety and personal protection business, a space which is growing fast and of strategic importance to the company," 3M CEO George W. Buckley said (press release). Aearo's hearing and eye protection products include E-A-R, Peltor, AOSafety and SafeWaze. Aearo's current yearly sales are $508 million. 3M said the deal does not change its 2007 guidance and will not likely close until Q1 2008. Lehman (LEH) advised 3M on the transaction. The purchase brings 3M's year-to-date shopping spree up to at least 16 acquisitions. During 3M's Q3 earnings call, Buckley told investors the company, "announced two further acquisitions in the month of September, this makes 15 acquisitions year-to-date, and I wouldn't be surprised if we announced a few more before the year is out." He added, "Our investments in R&D and in acquisitions are clearly paying dividends," (full transcript).

Sun, Dell to Cooperate on Solaris Sales

Dell and Sun Microsystems, longtime rivals in computer servers market, unveiled on Wednesday a cooperation agreement which will see Dell selling servers preinstalled with Sun's latest Solaris operating system, and funnelling customers to Sun for support and services. The multi-year distribution agreement launched at the Oracle OpenWorld conference shows how the computer industry is increasingly driven by corporate demand for openness. Sun found a third of its Solaris users were running on Dell systems. Server vendor Hewlett-Packard supports Solaris on its x86-based ProLiant server line, while IBM distributes Solaris on its System x machines. "Our customers said they wanted us to provide better support for Solaris," said Dell CEO Michael S. Dell, who announced the partnership with Sun CEO Jonathan I. Schwartz. Richard Green, a VP and general manager in Sun's software business, told InformationWeek his company sees this as a chance to start a dialogue with the millions of Dell customers downloading Solaris even though Dell gets the hardware sale, while Sun only gets revenue from the support contract. John Spooner, analyst for Technology Business Research, said, "If the customer wants Solaris, then Dell is saying we'll give you what you want," adding that for Sun, the deal represents a potential increase in high-margin software sales.


Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.

Today's Market

(via Sam Collins, ChangeWave.com)

Recap of Yesterday's Action

The day after the market's second-biggest advance of the year, stocks took back a part of the gains, and most of the selling just looked like traders nailing down profits. Even the retailers that rallied strongly Tuesday strongly on Wal-Mart's (NYSE:WMT) better sales sold off in response to Macy's (NYSE:M) disappointing Q4 estimates. Some analysts said the holiday season would not live up to expectations, drawing in more sellers.

Stocks opened higher Wednesday after some reassuring data from the 8:30 a.m. October Producer Price Index, which came in exactly where anticipated, and a retail sales number that also matched expectations.

But late in the day, there was talk that, in light of such good reports, the Fed may not lower rates at its next meeting in December. So profit taking, poor retail sales from one big department store, and a re-evaluation of the economic reports, and -- oh yes -- higher oil prices (again) turned stocks lower.

At the close, the Dow Industrials were off 76 points at 13,231. The S&P 500 was off 29 points at 1,471, and the Nasdaq was down 29 points at 2,644. The NYSE traded 1.5 billion shares, with decliners over advancers by a margin of 5-to-3, and the Nasdaq traded almost 2.5 billion shares at a negative margin of 3-to-2.

Crude oil (December contract) gained an impressive $2.92, closing at $94.09, and the Amex Energy SPDR (NYSEARCA:XLE) gained 38 cents at $73.24. The December gold contract was up $15.70 closing at $814.70, and the Philadelphia Gold/Silver Index was up $2.20 at $178.48.

What the Markets Are Saying

"Rome wasn't built in a day," and a new significant support zone for the stock market won't be either.

After Tuesday's big day (the second-best of the year), many thought the buying would continue yesterday, but that's not been the pattern since April as the markets have swung wildly from support to resistance almost weekly. The best that we can hope for in the next couple of days is a successful test of the support at S&P 1,430, since stocks turned away from the extremely near-term resistance at 1,490 yesterday.

I foresee that the support will hold and the next thrust up will take us above the 200-day moving average and near-term resistance, then begin an attack in the upper range with the top at 1,555. If this happens then a new, broader and more comfortable range of 1,430 to 1,555 would be established.

Don't count on a breakout to new highs this year, but keep the New Year's champagne on ice until late in January.

Today's Trading Landscape

Look for these earnings today: Agilent, BEA Systems, Digital Lightwave, Experian, Helmerich & Payne, JM Smucker's, Kohl's, Kulicke & Soffa, Maximus, Nuance, Salesforce.com, Suntech Power, Tecumseh Products, The Pantry, Tyco (Electronics and International), Verasun, Williams-Sonoma and Zoll Medical.

We'll also get the following reports today: weekly jobless claims, October's Consumer Price Index (the consensus expects +0.3%), the NY diffusion index, and the Philadelphia Fed index (at noon).

General Electric (NYSE:GE) announced that it would redeem one of its money-market funds and Barclay's Capital said that it will write-off $2.7 billion, which is much less than expected. Neither of these stories should negatively impact stocks today.

Asian Headlines

(via Bloomberg.com)

Asian Stocks Fall on Concern U.S. Growth Will Slow; Honda Motor Declines Asian stocks declined after U.S. consumer spending slowed, suggesting that expansion in the world's largest economy is cooling. Honda Motor Co., which gets more of its earnings from the U.S. than other major Japanese carmakers, led the drop among exporters.

China's Industrial Output Growth Sparks Concern Economy May Be Overheating China's industrial production grew 17.9 percent in October as automobile and electronics output accelerated, underscoring government concern that the world's fastest-growing major economy risks overheating.

Indonesia's Economy Expands 6.5 Percent, Fastest Pace Since 1997 Crisis Indonesia's economy expanded 6.5 percent in the third quarter, the fastest pace since the 1997 Asian financial crisis, spurred by bumper harvests and rising sales of cars, motorcycles and homes.

Hutchison Telecom Profit Rises 42 Percent on Gain in Subscribers at Units Hutchison Telecommunications International Ltd., a mobile-phone company controlled by billionaire Li Ka-shing, posted a 42 increase in third-quarter profit after gaining users in Indonesia and Israel.

Advanced Micro May Prolong Delay of Newest Chip, Helping Intel, Buyers Say Advanced Micro Devices Inc., the world's second-largest maker of computer processors, is late delivering its newest chip geared for servers, helping Intel Corp. extend its lead in the market, customers in Taiwan said.

Toyota Says U.S. Auto Sales to Extend Decline into 2008 on Housing Slump Toyota Motor Corp., second in U.S. auto sales this year, expects an industrywide slowdown in demand to continue into 2008 because of a housing slump and rising gasoline prices.

European Headlines

(via Bloomberg.com)

Carlsberg, Heineken Raise Offer for Scottish & Newcastle to $14.9 Billion Carlsberg A/S and Heineken NV raised their bid for Scottish & Newcastle Plc to 7.3 billion pounds ($14.9 billion), aiming to force talks as Britain's largest brewer rejected their approach for a second time.

Iberia Lineas Received $5.4 Billion Takeover Approach From Gala Capital Iberia Lineas Aereas de Espana SA, Spain's largest airline, received a takeover approach valued at as much as 3.7 billion euros ($5.4 billion) from a group of investors including Spanish billionaire Alicia Koplowitz.

Food Prices Soar Most in Five Years, Pushing Inflation Past ECB Target European prices for bread, cheese and other food increased in October at the fastest annual pace in more than five years, pushing the overall inflation rate further above the European Central Bank's 2 percent ceiling.

Deutsche Bank 2008 Profit May Not Meet Management Forecasts, JPMorgan Says Deutsche Bank AG, Germany's biggest bank, may miss its 2008 profit targets on declining investment banking revenue following the U.S. subprime mortgage market collapse, JPMorgan Chase & Co. analysts said.

Source: Pre-Market Snapshot