Under The Radar News - Tuesday

Expect fast-tracked airline merger. Diana Moss, an economist at the nonprofit American Antitrust Institute, sees little reason the proposed Delta (DAL) Northwest (NWA) merger won't receive speedy regulatory approval. "This administration has taken a very pro-merger stance," she says. Here's what Sen. Herb Kohl, chairman of the antitrust judiciary subcommittee, has to say: "While we understand the financial pressures under which the major airlines have been operating, it is nonetheless also vital that this deal does not lead to fare increases and service reductions."

Down but not out. Jefferies analyst Katherine Egbert claims Akamai's (AKAM) web software application acceleration system was down for "a significant amount of time" during Q1, and would not be surprised if the company is forced to compensate clients. But industry guru Dan Rayburn says he spoke with the company, which said their network has not been down at any time in Q1. Other Ebgert beefs: AKAM missed its Q1 booking targets; customers were issued rebates due to an abnormally light (writers' strike) season; enterprise customers are becoming more frugal.

BP says China stake welcomed. A Chinese SWF has amassed a £1B stake (just under 1%) in BP, which is causing a stir within the British Government. The fund has also built up a stake in Total (TOT) worth about £1B.

Apple Store on Wall St.? Rumors that Apple (AAPL) may be moving into Manhattan's 15 Broad St. or 23 Wall St. "Apple moving into the financial district sounds completely crazy, yet it'd also be a genius move. And we have a feeling that there might be a granule of truth here."

Android phone imminent. Speculation that HTC will unveil the HTC Dream Android, the first mobile phone to run on Google's (GOOG) upcoming OS, on May 6.

Dendreon's prostate drug may treat other cancers. Dendreon's (DNDN) experimental treatment to stimulate the immune system against prostate tumors may also be effective against certain types of breast, ovarian and colorectal cancers, researchers say. Shares jumped in early trading.

Credit-default swaps: Driving defaults? Instead of dispersing risk as former Fed Chairman Alan Greenspan predicted, the $45T credit-default swap market has become the proverbial tail-wagging-the-dog -- they are now driving prices in the cash bond market, rather than the other way around. Speculators who bet on deteriorating credit quality end up propelling that reality, leading Wachovia analysts to call the derivatives "Frankenstein's monster."

More Merrill. Singapore SWF Temasek exercised its option to buy another $600M in Merrill Lynch (MER) stock in February, raising its stake to $5B. Temasek is probably sitting on about $540M of paper losses.

From State Street's conference call: Despite the high credit quality of its investment portfolio, the illiquidity in the marketplace and resulting prices affecting fixed income securities have caused the unrealized pretax loss on their portfolio to increase to $3.2B, up from $1.1B in December. State Street believes these prices are not reflective of the underlying value of the securities, and says its portfolio is not at risk of permanent impairment and is no more than temporarily impaired. (STT) (full transcript later today)

More bullish NAND news. Lazard says channel checks suggest a significant firming in NAND pricing for May, due in part to increased demand from Apple (AAPL) and supply reduction at Hynix. (SNDK, SIMO, MU)

Blackrock's 10 reasons to like U.S. equities: 1) Investor and consumer sentiment measures are very pessimistic. 2) Rapid monetary policy change adaptation. 3) Upcoming fiscal stimulus checks. 4) Q2 2008 will be the fourth and last quarter of negative Y/Y earnings. 5) Cheap $$ = export boom. 6) Non-financials remain strong with healthy cash flows. 7) Now that Bear (BSC) has failed, the "someone big must fall" mantra has been fulfilled. 8) Credit markets have improved noticeably. 9) Technical factors, including up vs. down volume, are on the rise. 10) Equity earnings yields vs. 10-year Treasurys are at 30-year lows. (SPY, DIA, QQQQ, etc.)

Comments

[seeksome]

Apple Store on wall street is Genius!
seeksomething.com

[tom1234]

the funny part of apple is that the WIZZORD has only just begun-- see jobs run---- look jane

[Brewer]

I wouldn't have though that would be a good enough neighborhood for an Apple store.

[nukldrager]

It's a windows world, or is it?

[sgleichman]

SIMO is the best deep value / high growth play on the street. Misunderstood as earnings and margins have been steady as they sell controllers and are not pressured by NAND pricing. PEG of less than .31 and a forward PE on guided earnings around 7 with a 30% growth rate.