• GM U-turn on Opel sparks German road rage. German officials were outraged by GM's surprise decision to keep Opel, its European arm, abandoning a long-expected sale to a Magna- (MGA) led group that the German government had agreed to back with €4.5B of state aid. GM said improving business conditions and the strategic importance of Opel had prompted the move, which came after the EU forced GM's board to revisit the deal over concerns Germany had influenced its decision. GM expects restructuring Opel to cost about €3B; it's unclear whether the German government will help it restructure.
• Buffett joins Goldman in bid for tax credits. Sources say Berkshire Hathaway (BRK.A) has joined Goldman Sachs (GS) in a bid to buy $3B in tax credits from Fannie Mae (FNM), adding a twist to a politically sensitive deal. The credits are virtually worthless to Fannie Mae, and require it to take losses each quarter as their value declines, while profitable companies could use them to offset taxes. The government, which controls Fannie, is thought to be reluctant to approve a deal that would allow Goldman to save on taxes, given the firm's already tenuous standing with lawmakers and on Main Street; taking widely-respected Buffett as a partner could reduce the tension.
• Berkshire bets big. Warren Buffett says his $100/share bid for Burlington Northern Santa Fe (BNI) was his first and only offer, stressing that the deal is "not a bet on next month or next year. We're going to own it forever." Berkshire (BRK.A) will pay about 60% cash and 40% stock for the railroad, taking on $8B in debt and depleting its cash store to about $20B, leaving it almost fully-invested according to its standards, which analysts say could result in strategic divestments in the future. Berkshire will split its so-called Baby Berkshire shares (BRK.B) by 50 to enable small Burlington stakeholders to participate in the share swap, which will help bring its famously pricey stock within the means of retail investors.
• Obese healthcare premiums. A Senate probe found U.S. health insurers (AET, CI, CVH, HUM, UNH, WLP) are spending considerably less of their premiums on medical care than official industry estimates - an average of $0.70/dollar instead of the $0.87 cited by industry group AHIP. The report also singled out Cigna for mis-categorizing $5B worth of clients. "The American people and I are asking a serious question and one that deserves a straight answer – why are health insurance costs going up each year?" Sen. Jay Rockefeller said. "While health-care costs are spiraling upwards, consumers are paying more and getting less, and the health insurance industry doesn't want anyone to know what they are up to."
• Regulators fret Asia bubble. The World Bank warned Tuesday that the sudden reappearance of billions of dollars in investment capital in East Asia is "raising concerns about asset price bubbles," while the IMF cited "a risk" that surging Hong Kong asset prices are being driven by a flood of capital "divorced from fundamental forces of supply and demand." About $53B has gone into emerging-market stock funds this year.
• China backs Shanghai Disney. Beijing gave Disney (DIS) the go-ahead to build a $4B theme park in Shanghai, allowing the media giant to establish a presence in a massive market that has presented substantial hurdles to foreign entertainment companies. The park has been discussed for close to a decade. Disney already operates a theme park in Hong Kong.
• Oracle awaits EU veto. Oracle (ORCL) is expecting a formal objection to its planned $7.4B acquisition of Sun Microsystems (JAVA) from the EU Commission within days, sources say. Despite concerns over the deal's impact on the database market, Oracle has refused to make any concessions to European regulators.
• Bain in exclusive talks to buy Citi's Bellsystem. Private-equity group Bain Capital is reportedly in exclusive negotiations with Citigroup (C) to buy its Japanese telemarketer Bellsystem24 in a deal that could be worth more than $1B. A team of CVC Capital and Blackstone (BX) also made an offer in the final round of bidding, which closed last Friday. Citigroup put Bellsystem24 up for sale as part of its efforts to raise cash; it has already sold its retail broker Nikko Cordial Securities and asset management firm Nikko Asset Management in Japan.
• Car sales show spark. U.S. vehicle sales declined less than 1% in October, the first signs of a recovery without the aid of government incentives. The drop made October the year's strongest month aside from August, which received a lift from the cash-for-clunkers program. The seasonally adjusted annual sales rate was 11.2M. "Thinking of where we've come from, it's certainly a positive signal," J.D. Power's Jeff Schuster said. GM's sales rose 5% - the first gain since Jan. 2008. Ford's (F) grew 3%.
• Second IPO nixed. Aviv REIT Inc. (AVI) became the second U.S. company in less than a week to pull its IPO after pricing and demand failed to meet investors' expectations, dealers said. September and October's 18 IPOs have collectively beaten the S&P 500 by just 0.3% during their first month of trading - the worst showing on record.
• Mortgage apps rise. Mortgage applications increased 8.2% from a week ago, MBA said, led by a 14.5% jump in refinancing. The average rate for 30-year fixed mortgages declined to 4.97% from 5.04%.
• Oct. Challenger Job-Cut Report: Announced layoffs fell to 55,679 vs. 66,404 in September, the lowest total since March 2008. As recently as October 2008, the number stood at 113K.

Earnings: Wed. Before Open

• Agrium (AGU): Q3 EPS of $0.16 in-line. Revenue of $1.84B (-40.8%) vs. $2.07B. (PR)
• Ambac (ABK): Q3 EPS of $7.58 vs. consensus of -$4.43. Revenue of $23.6M (-24.6%) vs. $23.4M. Says results "reflect significant unrealized mark-to-market gains in the credit derivatives portfolio and gains resulting from reinsurance cancellations during the quarter." Shares +30% premarket. (PR)
• Automatic Data Processing (ADP): FQ1 EPS of $0.56 beats by $0.06. Revenue of $2.1B (-3.6%) in-line. (PR)
• Aqua America (WTR): Q3 EPS of $0.25 in-line. Revenue of $181M (+2.1%) vs. $189M. Increases quarterly dividend by $0.01 (7.4%) to $0.145. Says results were negatively impacted by eighth wettest summer in 137 years. (PR)
• Baker Hughes (BHI): Q3 EPS of $0.26 misses by $0.10. Revenue of $2.23B (-26%) in-line. Says international results were negatively impacted by price discounting. Expects to complete acquisition of BJ Services (BJS) in Q1 2010. (PR)
• Becton Dickinson (BDX): FQ4 EPS of $1.25 beats by $0.01. Revenue of $1.9B (+5%) in-line. (PR)
• Comcast (CMCSA): Q3 EPS of $0.33 beats by $0.08. Revenue of $8.8B (+3%) in-line. Declares quarterly dividend of $0.0675. (PR I, II)
• Devon Energy (DVN): Q3 EPS of $1.10 beats by $0.20. Revenue of $2.1B (-64.9%) in-line. O&G production is up 8% YTD. Shares +4.3% premarket. (PR)
• Diedrich Coffee (DDRX): FQ1 EPS of $0.07 beats by $0.02. Revenue of $15.8M (+52%) vs. $13.2M. Diedrich is being acquired by Peet's Coffee & Tea (PEET). (PR)
• Foster Wheeler (FWLT): Q3 EPS of $0.71 beats by $0.08. Revenue of $1.22B (-29.2%) vs. $1.29B. (PR)
• Garmin (GRMN): Q3 EPS of $1.02 beats by $0.03. Revenue of $781M (-10.2%) vs. $704M. Gross margin 52%. Operating margin 30% from 25% last year. (PR)
• Huntsman (HUN): Q3 EPS of -$0.24 misses by $0.16. Revenue of $2.11B (+13%) vs. $1.95B. Says expansion of Asian ops "has allowed us to take advantage of markets less affected by the ongoing global recession." Anticipates economic recovery will continue. (PR)
• IAMGOLD (IAG): Q3 EPS of $0.18 beats by $0.08. Revenue of $235M (+3.7%) vs. $224M. Shares +3.5% premarket. (PR)
• Liz Claiborne (LIZ): Q3 EPS of $0.43 misses by $0.23. Revenue of $770B (-24.1%) vs. $790B. Says it's seeing "significantly improved comparable store sales results" Q4 to date. (PR)
• Marsh & McLennan (MMC): Q3 EPS of $0.48 beats by $0.22. Revenue of $2.52B (-10.5%) vs. $2.6B. (PR)
• Martha Stewart Living Omnimedia (MSO): Q3 EPS of -$0.22 misses by $0.13. Revenue of $49.8M (-25.1%) vs. $51.3M. Shares -8.1% premarket. (PR)
• MFA Finanacial (MFA): Q3 EPS of $0.25 misses by $0.01. Shares +0.3% premarket. (PR)
• Molson Coors (TAP): Q3 EPS of $1.14 beats by $0.16. Revenue of $854M (-7.3%) vs. $834M. (PR)
• Pulte Homes (PHM): Q3 EPS of -$1.15 misses by $0.46. Revenue of $1.09B (-30%) vs. $1.23B. Says results "reflect a homebuilding industry that continues its transition toward more stable market conditions as lower prices and historically low mortgage rates are helping to support homebuyer demand. Challenges remain, however, as economic weakness, foreclosures, rising unemployment and recent uncertainty over the expiration of the federal tax credit continue to influence buyer behavior." (PR)
• Quanta Services (PWR): Q3 EPS of $0.32 beats by $0.11. Revenue of $781M (-25.6%) vs. $858M. (PR)
• R.R. Donnelley & Sons (RRD): Q3 EPS of $0.54 beats by $0.09. Revenue of $2.5B vs. $2.4B. (PR)
• Time Warner (TWX): Q3 EPS of $0.61 beats by $0.08. Revenue of $7.13B (-5.9%) in-line.(PR I, II)
• Transocean (RIG): Q3 EPS of $2.65 misses by $0.02. Revenue of $2.82B (-11.6%) in-line. (PR)
• TRW Automotive (TRW): Q3 EPS of $0.68 beats by $0.52. Revenue of $3.11B (-13.5%) vs. $2.87B. Sees Q4 revenue of $3.2B vs. $3B. "The cautious optimism that has emerged for the industry is supported by the increasing vehicle production forecasts. Although it appears the bottom of the financial crisis has been reached, full recovery will be a long and gradual process." (PR)
• Tyco Electronics (TEL): Q3 EPS of $0.30 beats by $0.03. Revenue of $2.7B (-24.6%) vs. $2.6B. (PR)
• Watson Pharmaceuticals (WPI): Q3 EPS of $0.66 beats by $0.01. Revenue of $662M (+3.3%) vs. $688M. (PR)
• XTO Energy (XTO): Q3 EPS of $0.86 beats by $0.02. Revenue of $2.29B (+7.7%) in-line. (PR)

Earnings: Tue. After Close

• Anworth Mortgage Asset (ANH): Q3 EPS of $0.27 misses by $0.04. Interest income of $63M (-14%). Shares +2% AH. (PR)
• CBL & Associates Properties (CBL): Q3 FFO of $0.50 beats by $0.03. Revenue of $263M (-8%) vs. $255M. Shares -0.8% AH. (PR)
• Con-Way (CNW): Q3 EPS of $0.39 misses by $0.20. Revenue of $1.1B (-18%) in-line. Shares +0.1% AH. (PR)
• Crown Castle International (CCI): Q3 EPS of -$0.13 misses by $0.09. Revenue of $429M (+12%) vs. $419M. Sees full-year EPS of -$0.58 to -$0.49 vs. -$0.45, on revenue of $1.54B vs. $1.66B. Shares -6.3% AH. (PR)
• Digital River (DRIV): Q3 EPS of $0.42 beats by $0.01. Revenue of $99.4M (+3%) vs. $98.3M. Sees Q4 EPS of $0.30-0.34 vs. $0.42. Shares -1.3% AH. (PR)
• Discovery (DISCA): Q3 EPS of $0.22 misses by $0.05. Revenue of $854M (+1%) vs. $850M. Shares -0.1% AH. (PR)
• Excel Maritime (EXM): Q3 EPS of $0.81 beats by $0.68. Revenue of $174M (-25%) vs. $101M. Shares +6% AH. (PR)
• Exco Resources (XCO): Q3 EPS of $0.20 misses by $0.02. Revenue of $131M (-70%) vs. $229M. Shares -0.5% AH. (PR)
• Hartford Financial (HIG): Q3 core EPS of $1.56 beats by $0.45. Results exclude highly variable realized gains/losses. Raises full-year EPS guidance to $0.85-1.05 from $0.00-0.20, vs. $0.50. Shares +4.8% AH. (PR)
• Kraft (KFT): Q3 EPS of $0.55 beats by $0.07. Revenue of $9.8B (-6%) vs. $10.3B. "Our volume/mix, profit margin and cash flow trends are strengthening as we successfully execute our growth plan." Shares -2.9% AH. (PR)
• Onyx Pharmaceuticals (ONXX): Q3 EPS of $0.35 beats by $0.13. Revenue of $69M (+36%) vs. $65M. Shares -0.7% AH. (PR)
• Pioneer Natural Resources Company (PXD): Q3 EPS of -$0.06 misses by $0.13. Revenue of $410M (-32%) vs. $400M. Shares -0.2% AH. (PR)
• STEC (STEC): Q3 EPS of $0.50 beats by $0.03. Revenue of $98M (+54%) vs. $97M. Shares -31.9% AH. (PR)
• Unum Group (UNM): Q3 EPS of $0.64 in-line. Revenue of $2.52B (+3%) vs. $2.56B. (PR)
• Vivus (VVUS): Q3 EPS of -$0.30 beats by $0.01. Revenue of $4.3M (-2%) vs. $5.3M. Shares -3.7% AH. (PR
• Yamana Gold (AUY): Q3 EPS of $0.12 misses by $0.01. Revenue of $333M (+50%) vs. $358M. Shares -2% AH. (PR)

Today's Markets

Overseas markets posted solid gains Wednesday after U.S. markets rebounded from early weakness to finish off Tuesday flat. Futures are higher in moderate overnight trading.

Green energy experts accept that solar panels are one of the least cost effective ways to reduce your carbon footprint. Nevertheless, many buy solar stocks. They should rethink their investment strategies.

I recently spoke on "Stock Selection in the Era of Peak Oil and Climate Change" at the ASPO 2009 International Peak Oil Conference. Whenever green energy enthusiasts find out that I analyze green energy stocks professionally, they react in one of two ways. Many want to know my top stock pick in general (New Flyer Industries NFI-UN.TO/NFYIF.PK) or in their favorite sector (see below). Others tell me about their own green energy investments.

Quanta Services, Inc. (PWR) – A long-term bullish play on the provider of specialty contracting services today caught our attention amid a more than 1% rally in shares to $22.00. The bullish reversal we observed in the January 2011 contract suggests at least one investor expects Quanta Services to move higher by expiration. The reversal involved the sale of 4,671 puts at the January 20 strike for a premium of 3.30 apiece, spread against the purchase of 4,671 calls at the higher January 25 strike for 3.10 each. The transaction results in a net credit of 20 pennies per contract. The full credit is retained by the investor as long as shares of PWR remain higher than $20.00 through expiration. Additional profits are available if the stock rises above the effective breakeven point at $25.00. We note that Quanta’s shares last traded up to $25.09 on September 11, 2009.

On Monday morning, I received an e-copy of a new research note by BofA Merrill Lynch arguing that disclosure by publicly-listed companies on the issue of climate change was becoming increasingly "important". The note claimed: "[w]e believe smart investors and companies [...] will recognize the edge they can gain by understanding low carbon trends." I couldn't agree more with that statement.

It was no coincidence that on that same day the Carbon Disclosure Project (CDP), a non-profit UK-based organization that surveys public companies each year on the state of their climate change awareness, was releasing its latest report at event organized by BofA/ML in NYC.

In Great Britain, more than 60 gigawatts (GW) of power, a quarter of that from renewable sources, reportedly is waiting to be connected to the nation’s power grid. In California, electric utilities say they have little hope of meeting the state’s mandate of achieving 20% of their generation from green sources by 2010 largely because of delays in getting transmission lines licensed and built. Meanwhile in Brazil, work is underway on what will be the world’s longest power line, which is being built with high-voltage, direct-current (HVDC) technology because it is ideally suited for hooking up renewable energy sources located in remote regions of the country.

Notice a trend here?

I started my "Clean Energy Shopping List" series on the premise that the market was near a peak, and it would be better to wait than to buy now. My market call turned out to be premature (or just plain wrong... time will tell) and the market has since advanced more than I thought it would. But I feel the challenges facing our economy and financial system are too grave not to bring down the market from its current heights eventually, so each rise simply makes me more bearish.

However, I feel the shopping list series is getting tired (or at least I'm getting tired of it), so I'm going to end it now, with just a list of stocks in the series and the articles that cover them. In addition, I'll throw in the few companies I've been thinking about using but have not made it in so far.

• Bottlers get a pop from Pepsi deal. PepsiCo (PEP) reached a deal to buy its two largest bottlers, Pepsi Bottling Group (PBG) and PepsiAmericas (PAS), for $7.8B, a 20% premium over its previous offers in April. PepsiCo will pay $36.50/share for Pepsi Bottling Group and $28.50/share for PepsiAmericas; the news sent Pepsi Bottling Group up 8.5% and PepsiAmericas up 9% in trading yesterday. PepsiCo says the purchases will speed the decision-making process and increase efficiencies.
• Sony's very cheap e-reader. Sony (SNE) is raising the stakes in its battle with Amazon (AMZN), introducing a new e-reader for $199, with a larger touchscreen version available for $299. The lower-priced e-reader will be the cheapest one sold in the U.S. as Sony looks to take a bigger share of the small but fast-growing market. The devices will go on sale in retail outlets like Best Buy and Wal-Mart, and Sony will also lower the prices it charges for downloads of best-sellers and new releases to bring its pricing largely in line with Amazon's.
• SEC ban could come in a flash. The SEC is considering a ban on flash trading to "eliminate the inequity that results from flash orders." Sen. Charles Schumer, who is strongly pushing for an end to flash trading, said SEC's Mary Schapiro assured him a ban is imminent. NYSE Euronext (NYX), which is the only one of the four major U.S. exchanges that doesn't use flash trading, hopes a ban will help it regain marketshare from fast-growing rival Direct Edge Holdings.
• More Microhoo details. As part of their search partnership, Microsoft (MSFT) will hire at least 400 Yahoo (YHOO) employees, affecting around 3% of Yahoo's workforce. According to a regulatory filing, Microsoft will also pay Yahoo $150M over three years to help cover Yahoo's costs in getting the partnership started. Yahoo's 88% revenue share could rise to 93% or drop to 83% in five years, depending on whether Microsoft terminates Yahoo's exclusivity for premium search advertising.
• GE settles civil suit. General Electric (GE) agreed to pay $50M to the SEC to settle civil fraud and other charges that its 2002 and 2003 financial statements misled investors. The SEC alleged that GE used improper accounting methods to raise earnings and avoid disappointing investors. GE neither admitted to nor denied the allegations.
• GMAC turns to Fed for money. Battered lender GMAC reported that its Q2 loss widened to $3.9B, with revenues falling 22% to $1.03B and loan loss provisions rising 50% from the year before to $1.16B. GMAC also confirmed it's in discussions with the Federal Reserve over $5.6B in new capital it needs to raise by November to satisfy the government's stress test requirements. Since the government has already invested $12.5B in GMAC, the lender is unlikely to find external investors willing to help with capital raising.
• Lloyds' loss. Lloyds Banking Group (LYG) reported a loss of £3.1B ($5.2B) in H1, in large part from its HBOS acquisition in January, but said loan loss provisions will come down 'significantly' in H2 and will continue to fall in 2010. The bank set aside £13.4B in H1 to cover bad loans vs. consensus of £11.3B. Shares +12% premarket (7:00 ET).
• GM position weakens on Opel bid. General Motors' opposition to Magna's (MGA) Opel bid is weakening, said German officials, and it will be up to Chancellor Angela Merkel to step in and remove any final obstacles holding up a deal. An agreement between the U.S., GM and Germany could be reached by the end of the week.
• Personal income falls. Personal income fell 1.3% in June as the effects of one-time stimulus checks wore off, marking the largest drop since January 2005 and a sharper decline than the expected -1%. Spending rose slightly more than expected, coming in at +0.4% vs. consensus of +0.3%. High unemployment, tight credit and falling home values contributed to the fall in personal incomes, and will continue to hurt consumer spending.
• MBA apps rise. Mortgage applications rose 4.4% from last week, MBA said. The average interest rate on 30-year fixed-rate mortgages fell to 5.17% from 5.36%.
• Retail sales. Chain store sales fell 1.6% in the first four weeks of July, Redbook said, worse than the -0.9% expected. According to ICSC, weekly sales were down 0.2%, and 0.7% Y/Y. A later sales-tax holiday trimmed comparisons but should lift sales this coming week.
• Home sales rise. June Pending Home Sales increased +3.6% from May to 94.6, the fifth straight monthly gain. May's index was revised from 90.7 to 91.3. The last five-month streak was in July 2003. NAR chief economist Lawrence Yun noted activity is much stronger for lower-priced homes.

Earnings: Wednesday Before Open

• Agrium (AGU): Q2 EPS of $2.35 beats by $0.54. Revenue of $4.1B (+6%) vs. $3.4B. (PR)
• Avnet (AVT): FQ4 EPS of $0.32 misses by $0.03. Revenue of $3.8B (-19.5%) vs. $3.7B. (PR)
• Baker Hughes (BHI): Q2 EPS of $0.41 misses by $0.05. Revenue of $2.3B (-22%) vs. $2.25B. Shares -0.9% premarket (6:40 ET). (PR)
• Boyd Gaming (BYD): Q2 EPS of $0.15 beats by $0.03. Revenue of $423M (-8%) vs. $432M. (PR)
• CenterPoint Energy (CNP): Q2 EPS of $0.24 beats by $0.01. Revenue of $2.7B (+63%) vs. $2.2B. (PR)
• Dean Foods (DF): Q2 EPS of $0.43 in-line. Revenue of $2.7B (-14%) vs. $2.8B. (PR)
• Devon Energy (DVN): Q2 EPS of $0.71 beats by $0.12. Revenue of $2.1B (-41%) vs. $1.9B. (PR)
• Fortress Investment (FIG): Q2 EPS of -$0.41 vs. consensus $0.07 (may not be comparable). Revenue of $117M (-29%) vs. $108M. Daniel Mudd becomes CEO effective August 11, 2009. (PR)
• Foster Wheeler (FWLT): Q2 EPS of $0.98 beats by $0.36. Revenue of $1.3B (-23%) vs. $1.4B. (PR)
• Garmin (GRMN): Q2 EPS of $0.83 beats by $0.32. Revenue of $669M (-27%) vs. $657M. (PR)
• Marsh & Mclennan Companies (MMC): Q2 EPS of $0.33 beats by $0.01. Revenue of $2.6B (-13%) vs. $2.8B. (PR)
• Overseas Shipholding Group (OSG): Q2 EPS of -$0.29 beats by $0.37. Revenue of $283M (-34%) vs. $260M. (PR)
• Owens Corning (OC): Q2 EPS of $0.49 beats by $0.40. Revenue of $1.2B (-23%) vs. $1.3B. (PR)
• PetroQuest Energy (PQ): Q2 EPS of $0.15 beats by $0.02. Revenue of $55M (-40.5%) vs. $54M. (PR)
• Polo Ralph Lauren (RL): FQ1 EPS of $0.76 beats by $0.26. Revenue of $1B (-8%) in-line. Shares +1.7% premarket (8:20 ET). (PR)
• Procter & Gamble (PG): FQ4 EPS of $0.80 beats by $0.01. Revenue of $19B (-11%) in-line. (PR)
• Quanta Services (PWR): Q2 EPS of $0.20 beats by $0.04. Revenue of $813M (-15%) vs. $861M. Issues downside Q3 EPS guidance $0.23-0.24 vs. $0.28 consensus; sees Q3 revenue of $840-870M vs. $1.04B consensus. (PR)
• Radian Group (RDN): Q2 EPS of $2.82 vs. consensus of -$1.58 (may not be comparable). Revenue of $577M (58%) vs. $284M. Shares +22% premarket (8:20 ET). (PR)
• R.R. Donnelley & Sons (RRD): Q2 EPS of $0.37 beats by $0.06. Revenue of $2.4B (-19%) in-line. (PR)
• Transocean (RIG): Q2 EPS of $2.79 misses by $0.24. Revenue of $2.9B (-8%) in-line. Shares -5.4% premarket (7:50 ET). (PR)

Earnings: Tuesday After Close

• Avis Budget Group (CAR): Q2 EPS of -$0.06 beats by $0.09. Revenue of $1.3B (-17%) vs. $1.4B. (PR)
• BMC Software (BMC): FQ1 EPS of $0.59 beats by $0.10. Revenue of $450M (+3%) vs. $441M. Sees full-year EPS of $2.47-2.57 vs. $2.42. Shares +0.3% AH. (PR)
• Boston Beer Company (SAM): Q2 EPS of $0.83 beats by $0.21. Revenue of $118M (+1%) vs. $121M. (PR)
• BRE Properties (BRE): Q2 FFO of $0.70 beats by $0.09. Revenue of $86M (flat) vs. $81M. Shares +8.6% AH. (PR)
• CBL & Associates Properties (CBL): Q2 FFO of $0.71 beats by $0.08. Revenue of $267M (-2%) vs. $256M. (PR)
• Central European Distribution (CEDC): Q2 EPS of $0.38 beats by $0.03. Revenue of $362M (-14%) vs. $338M. Shares +2.7% AH. (PR)
• Cephalon (CEPH): Q2 EPS of $1.44 beats by $0.14. Revenue of $539M (+11%) vs. $541M. Sees full-year EPS of $6.30-$6.40 vs. $5.64. Shares -3.8% AH. (PR)
• Coinstar (CSTR): Q2 EPS of $0.23 beats by $0.06. Revenue of $314M (+43%) vs. $305M. Sees full-year EPS of $0.80-0.86 vs. $0.77. Shares +3% AH. (PR)
• Ctrip.com (CTRP): Q2 EPS of $0.39 beats by $0.10. Revenue of $70M (+27%) vs. $65M. (PR)
• Denny's (DENN): Q2 EPS of $0.09 beats by $0.03. Revenue of $156M (-18%) in-line. Shares -1.6% AH. (PR)
• Electronic Arts (ERTS): FQ1 EPS of -$0.02 beats by $0.11. Revenue of $816M (+34%) vs. $730M. Sees full-year EPS of $1.00 vs. $0.97. Shares +3.7% AH. (PR)
• Exco Resources (XCO): Q2 EPS of $0.29 beats by $0.05. Revenue of $288M (-15%) vs. $270M. (PR)
• Federal Realty Investment Trust (FRT): Q2 FFO of $0.97 beats by $0.03. Revenue of $130M (+1%) vs. $131M. Sees full-year FFO of $3.82-3.87 vs. $3.50. (PR)
• GT Solar (SOLR): FQ1 EPS of $0.05 misses by $0.01. Revenue of $72M (+26%) vs. $86M. Shares -0.2% AH. (PR)
• HealthSouth (HLS): Q2 EPS of $0.39 beats by $0.15. Revenue of $484M (+6%) vs. $472M. Raises full-year EPS guidance to $1.15-1.25 from $0.85-0.90 vs. $1.05. Shares +3.5% AH. (PR)
• Jack in the Box (JACK): FQ3 EPS of $0.57 misses by $0.01. Revenue of $576M (-3%) vs. $585M. Q3 same-store sales down 1%. Shares -0.8% AH. (PR)
• Jones Lang LaSalle (JLL): Q2 EPS of $0.30 beats by $0.14. Revenue of $576M (-13%) vs. $582M. (PR)
• Kraft (KFT): Q2 EPS of $0.56 beats by $0.02. Revenue of $10.2B (-6%) vs. $10.4B. Shares -0.9% AH. (PR)
• Papa John's International (PZZA): Q2 EPS of $0.51 beats by $0.17. Revenue of $277M (-2%) vs. $273M. Sees full-year EPS of $1.38-1.44 vs. $1.47. Shares -2% AH. (PR)
• Petrohawk Energy (HK): Q2 EPS of $0.10 beats by $0.05. Revenue of $227M (-25%) vs. $258M. Shares -5.7% AH. (PR)
• Pioneer Natural Resources (PXD): Q2 EPS of $0.16 beats by $0.37. Revenue of $371M (-42%) vs. $376M. (PR)
• Protective Life (PL): Q2 EPS of $1.16 beats by $0.39. Revenue of $726M vs. $732M. Shares -1.8% AH. (PR)
• Sotheby's (BID): Q2 EPS of $0.18 misses by $0.10. Revenue of $167M (-48%) vs. $153M. (PR)
• Tessera Technologies (TSRA): Q2 EPS of $0.37 beats by $0.23. Revenue of $62M (+11%) vs. $60M. Shares +3.3% AH. (PR)
• UDR Inc. (UDR): Q2 FFO of $0.35 beats by $0.04. Revenue of $152M (+9%) vs. $148M. Sees full-year FFO of $1.23-1.35 vs. $1.22. Shares +0.1% AH. (PR)
• Unum Group (UNM): Q2 EPS of $0.65 beats by $0.04. Revenue of $2.6B (-2%) vs. $2.5B. Raises full-year EPS guidance to $2.50-2.60 vs. $2.48. (PR)
• ValueClick (VCLK): Q2 EPS of $0.23 beats by $0.09. Revenue of $130M (-18%) vs. $128M. Sees Q3 EPS of $0.19-0.20 vs. $0.15. Shares +1% AH. (PR)
• Whole Foods Market (WFMI): FQ3 EPS of $0.25 beats by $0.05. Revenue of $1.9B (+2%) in-line. Same-store sales down 1.1% in first four weeks of new quarter. Sees Q4 EPS of $0.16-0.18 vs. $0.14. Sees full-year EPS $0.80-0.82 vs. $0.75. Shares +7.7% AH. (PR)
• Yamana Gold (AUY): Q2 EPS of $0.13 beats by $0.04. Revenue of $270M vs. $299M. Shares +1.4% AH. (PR)

Today's Markets

Asian markets closed mostly down, European markets are showing small gains and U.S. futures are sending no clear signals.

Bullish Calls:

Omnivision Technologies (OVTI): "...in the sweet spot...is up alot...the fundamentals are strong, because of Mobile Internet...the theme for the next 3 years."

We may be headed into a renewed market slump. If so, it will pay to wait before buying, but when the time does come to buy, here are 5 electric transmission stocks I have my eye on.

On June 2, I wrote that I thought the market was near its peak. That day, the S&P 500 closed at 944.74. On June 12, it closed up 0.15% at 946.21, and has since trended down, currently trading down 5% as I write. I expect further declines this year, either with the market heading straight down from here, or bouncing around for a while, possibly for a few months, before declining in earnest.

A little while ago, we received the following request from a reader:

While we don't plan on launching a licensable index or a mutual fund because of all the regulatory thicket we'd have to cut through, this request nonetheless led to a few internal exchanges about the merits of this idea and what could go into such an index/fund.

Profits of Doom

In order to electrify transportation, well need batteries, with ultracapacitors and compressed air playing supporting roles. Based on cost, John Petersen has been making the case that the batteries for economical cars are more likely to be advanced lead-acid (PbA) than the media darling, Lithium-ion (Li-ion.) I generally agree, especially since recycling Li-ion batteries is an expensive and difficult process, although I see a future where both cars and oil are simply more expensive, and we have far fewer of them.

But transportation is only one application for energy storage technologies. Another is matching the electricity output of variable power sources such as wind and solar with demand, as well as providing standby power to accommodate sudden ramp-ups and ramp downs.

• BoA's growing capital shortfall. Bank of America (BAC) reportedly needs around $34B in new capital, significantly more than the $5-10B shortfall expected for Citigroup (C), while JPMorgan Chase (JPM) apparently won't need more capital at all. Last month, CEO Ken Lewis told analysts "we absolutely don't think we need additional capital," but the bank is now considering selling part of its stake in China Construction Bank immediately to raise around $8B. Since the size of the shortfall could exceed what the bank can raise through asset sales or a public share offering, Bank of America could potentially be left with no choice but to convert the government's preferred shares into common stock. For its part, Citigroup is trying to accelerate a brokerage venture with Morgan Stanley (MS) to lock in a $5.8B gain. BAC -11.2%, C -1.8% premarket (7:00 ET).
• Basel may call for larger bank reserves. Independent of the U.S. stress tests, banks worldwide may be asked to raise minimum capital reserves by several percentage points to better position themselves for the next financial crisis. Nout Wellink, chairman of the Basel Committee on Banking Supervision, believes current requirements are 'still not enough' and said the Basel proposal may be completed in the first half of next year.
• TARP exit guide. U.S. officials will soon lay out guidelines for how banks can repay TARP funds. One key condition will likely be that banks must be able to participate in credit markets without the help of government facilities, such as the FDIC's debt guarantee program. Other repayment conditions are still unclear, as Geithner previously said repayment policies must take into account "the soundness of the entire financial sector." An announcement could come as soon as today.
• Bernanke is cautiously hopeful. Speaking before Congress, Bernanke said he expects "economic activity to bottom out, then to turn up later this year... Even after a recovery gets under way, the rate of growth of real economic activity is likely to remain below its longer-run potential for a while..." He made a cautious prediction of 2% GDP growth in 2010 and 4% in 2011, under the assumption that financial markets stabilize and strengthen. On the issue of Bank of America's (BAC) silence over its Merrill Lynch acquisition, Bernanke said he "absolutely did not in any way ask Mr. [Ken] Lewis to obscure any disclosures or fail to report information he should be reporting." (Read Bernanke's prepared testimony)
• Chrysler bankruptcy plan approved. A bankruptcy court approved Chrysler's plan to auction most of its assets by May 27 with an offer from Fiat as the lead bid. The judge also approved a $35M breakup fee for Fiat if it's outbid. However, the judge rejected a claim by Chrysler's lenders that their safety was at risk because of anger over the bankruptcy. The lenders, who had requested secrecy, must reveal their identities today.
• GM's shareholders wipe-out. General Motors (GM) detailed plans to issue up to 60B new shares in a bid to pay off debt to the government, bondholders and UAW union. The move would essentially wipe out the holdings of remaining shareholders, leaving them with just 1% of the equity in a restructured automaker. The unusual plan would need only the approval of the Treasury to proceed, since the government would be the majority shareholder of the new GM. Shares -17.3% premarket (7:00 ET).
• Fed eyes derivatives regulation. For the first time, the Federal Reserve signaled it plans to break Wall Street's hold over the $684T over-the-counter derivatives market and to increase the market's regulation and transparency. Theo Lubke, the Federal Reserve Bank of New York official responsible for oversight of the market, called it 'simply unacceptable' that the OTC derivatives market 'can be controlled by a handful of large dealers,' and said the lack of transparency 'is not something that can continue.'
• SEC gets more aggressive. The SEC accused the father-and-son team that managed the Reserve Primary Fund of securities fraud, alleging the two had lied to investors, the fund's board and rating agencies after the flagship fund 'broke the buck' last fall. The civil lawsuit also seeks an order to distribute the fund's remaining $62B of assets to investors. Separately, the SEC brought its first-ever case alleging insider trading in credit default swaps.
• Aid recipients gained from subprime lenders. A newly released study revealed that 21 of the 25 largest subprime lenders were owned or financially supported by Citigroup (C), Wells Fargo (WFC) and other lenders that received U.S. aid. The watchdog group that released the report said it showed "mega-banks that funded the subprime industry were not victims of an unforeseen financial collapse, as they have sometimes portrayed themselves. These banks were deliberate enablers that bankrolled the type of lending that’s now threatening the financial system."
• Boston Globe reaches union deal. The Boston Globe (NYT) reportedly reached a tentative deal with its largest union early this morning, with the union agreeing to a substantial pay cut, unpaid furloughs, and modifications to the lifetime job guarantee provisions that cover nearly 200 employees. The Globe now has the $20M in concessions its parent company demanded a month ago. Details of the negotiations will be released tomorrow.
• Wal-Mart expands in China. Wal-Mart (WMT) said it launched a pilot program to open convenience stores in China, hoping to boost its presence in the fast-growing retail market. The company opened three convenience stores in a south China city in December and will analyze market acceptance and customer preferences before deciding on future plans.
• Europe retail sales plunge. Euro-area retail sales suffered their largest drop on record in March, falling 4.2% from a year ago, worse than the -2.6% expected. Economists say growing unemployment is crimping spending, and consumer confidence remains near record lows. "This adds to other signs that the recession is still in full swing in the euro zone," economist Jennifer McKeown said. "It is difficult to be very optimistic about the future."
• More underwater mortgages. U.S. home values continued to fall in Q1, and nearly 22% of homeowners are now underwater on their mortgages. Real estate website Zillow.com reported home values fell 14.2% Y/Y, leading to a $704B drop in value in Q1.
• Retail sales. Retail chain store sales rose 0.7% from a week ago, ICSC said, and fell 0.8% Y/Y. Sales got a lift from drug stores, department stores, discounters, wholesale clubs, electronic stores and office supply. According to Redbook, chain store sales rose 0.3% in the first four weeks of April, and rose 0.5% Y/Y.
• Non-mfg contraction moderates. Economic activity in the non-manufacturing sector contracted in April, registering 43.7% on the ISM Index vs. March's 40.8%. This is the seventh month in a row of contraction, though the contraction was at a more moderate pace.
• Mortgage apps rise. Mortgage applications rose 2% from a week ago, MBA said. The average interest rate on 30-year fixed-rate mortgages inched up to 4.79% from 4.62%.

Earnings: Wednesday Before Open

• Agrium (AGU): Q1 EPS of $0.04 misses by $0.20. Revenue of $1.75B (+58.4%) vs. $1.2B. Issues downside guidance for Q2, sees EPS of $2.00-2.40 vs. $2.77 consensus. (PR)
• American Capital (ACAS): Q1 EPS of $0.31 misses by $0.06. Revenue of $195M (-33.2%) vs. $186M. (PR)
• Aqua America (WTR): Q1 EPS of $0.14 in-line. Revenue of $154.5M (+10.9%) vs. $151M. (PR)
• The Blackstone Group (BX): Q1 EPS of -$0.07 beats by $0.03. Revenue of $47M (-31.2%) vs. $64M. Shares +2.2% premarket (8:00 ET). (PR)
• Boyd Gaming (BYD): Q1 EPS of $0.15 beats by $0.07. Revenue of $435M (-7.7%) in-line. Shares +3.9% premarket (7:10 ET). (PR)
• Devon Energy (DVN): Q1 EPS of $0.48 beats by $0.20. Revenue of $2.0B (-31.8%) vs. $1.8B. (PR)
• Diana Shipping (DSX): Q1 EPS of $0.47 beats by $0.01. Revenue of $63M (-20.5%) vs. $61M. (PR)
• Fortress Investment Group LLC (FIG): Q1 EPS of -$0.71 misses by $0.66. Revenue of $122M (-39.1%) vs. $87M. Shares +10.5% premarket (7:20 ET). (PR)
• Foster Wheeler (FWLT): Q1 EPS of $0.59 misses by $0.09. Revenue of $1.3B (-29.6%) vs. $1.5B. (PR)
• Garmin (GRMN): Q1 EPS of $0.25 misses by $0.17. Revenue of $437M (-34.2%) vs. $532M. Shares -1.8% premarket (7:20 ET). (PR)
• Marsh & McLennan Companies (MMC): Q1 EPS of $0.42 misses by $0.01. Revenue of $2.6B (-13.5%) vs. $2.9B. (PR)
• Petrohawk Energy (HK): Q1 EPS of $0.02 in-line. Revenue of $263.5M (+22.6%) vs. $247M. (PR)
• Quanta Services (PWR): Q1 EPS of $0.11 beats by $0.01. Revenue of $738.5M (-12.5%) vs. $796M. Issues downside EPS guidance for Q2 of $0.14-0.15 vs. $0.22 consensus, sees Q2 revenue of $850-890M. (PR)
• Quicksilver Resources (KWK): Q1 EPS of $0.16 beats by $0.07. Revenue of $186M (+18%) vs. $184M. (PR)
• R.R. Donnelley & Sons Company (RRD): Q1 EPS of $0.24 misses by $0.14. Revenue of $2.46B (-18.1%) vs. $2.47B. (PR)
• Senior Housing Properties Trust (SNH): Q1 EPS of $0.44 misses by $0.01. Revenue of $69M (+38.4%) vs. $67M. (PR)
• TETRA Technologies (TTI): Q1 EPS of $0.15 beats by $0.06. Revenue of $195M (-13.3%) vs. $198M. Shares +1.7% premarket (7:45 ET). (PR)
• Transocean (RIG): Q1 EPS of $3.75 beats by $0.24. Revenue of $3.1B (+0.3%) in-line. (PR)
• Western Refining (WNR): Q1 EPS of $0.86 beats by $0.02. Revenue of $1.4B (-46.4%) vs. $3.0B. (PR)

Earnings: Tuesday After Close

• American Capital Strategies (ACAS): Q1 EPS of $0.31 misses by $0.06. Revenue of $195M (-33.2%) vs. $186M. (PR)
• ArvinMeritor (ARM): FQ2 EPS of -$0.12 vs. consensus of -$0.68. Revenue of $1.1B (-38.2%) vs. $1.24B. Total exposure to Chrysler: $7M. +10.4% AH. (PR)
• Atmel (ATML): Q1 EPS of $0.04 beats by $0.08. Revenue of $271.5M (-34%) vs. $289M. Sees Q2 revenue growth of 1-4% sequentially. Shares -3.4% AH. (PR)
• Centex (CTX): FQ4 EPS of -$3.26 vs. consensus of -$1.27. Revenue of $823M (-64.4%) vs. $895M. Shares -3.5% AH. (PR)
• Charles River Laboratories International (CRL): Q1 EPS of $0.58 beats by $0.05. Revenue of $301M (-10.7%) in-line. Shares +8.4% AH. (PR)
• Cephalon (CEPH): Q1 EPS of $1.47 beats by $0.20. Revenue of $520M (+17.3%) vs. $533M. Shares -2.9% AH. (PR)
• Disney (DIS): FQ2 EPS of $0.43 beats by $0.03. Revenue of $8.09B (-7.2%) in-line. "We had a difficult second quarter due to the weak economy and other factors... At the same time, we remain focused on our core business strategy and believe our creativity, brands and businesses will serve us well as the economy recovers." Shares +4.1% AH. (PR)
• Electronic Arts (ERTS): FQ4 EPS of -$0.37 beats by $0.06. Revenue of $609M (-33.7%) vs. $632M. Reaffirms full-year guidance. Shares -3.3% AH. (PR)
• Exco Resources (XCO): Q1 EPS of $0.19 beats by $0.02. Revenue of $189M (-43.1%) vs. $279M. Shares flat AH. (PR)
• Harris (HRS): FQ3 EPS of $1.02 beats by $0.02. Revenue of $1.36B (+2.4%) vs. $1.21B. Sees 2010 full-year EPS of $3.10-3.40 vs. $3.92. Shares -8.3% AH. (PR)
• HCC Insurance (HCC): Q1 EPS of $0.73 beats by $0.03. Revenue of $601M vs. $587M. (PR)
• Helix Energy Solutions (HLX): Q1 EPS of $0.50 beats by $0.35. Revenue of $571M (+29.2%) vs. $463M. Shares +9.9% AH. (PR)
• Kinross Gold (KGC): Q1 EPS of $0.11 misses by $0.02. Revenue of $533M (+61.3%) vs. $492M. Margin per ounce of gold a best ever $478. Shares -0.7% AH. (PR)
• Las Vegas Sands (LVS): Q1 EPS of $0.01 beats by $0.03. Revenue of $1.08B (+0%) in-line. Shares -3.9% AH. (PR)
• Lincoln National (LNC): Q1 EPS of $0.66 misses by $0.05. Revenue of $2.25B (-13.4%) vs. $2.54B. Shares +5.5% AH. (PR)
• Pioneer Natural Resources (PXD): Q1 EPS of -$0.13 beats by $0.13. Revenue of $484M (-17.3%) vs. $349M. (PR)
• Pitney Bowes (PBI): Q1 EPS of $0.55 misses by $0.08. Revenue of $1.38B (-12.3%) vs. $1.47B. Sees full-year EPS of $2.40-2.60 vs. $2.63. Shares -5% AH. (PR)
• Stone Energy (SGY): Q1 EPS of -$0.20 misses by $1.00. Revenue of $134M (-11.3%) vs. $132M. Shares -11% AH. (PR)
• TheStreet.com (TSCM): Q1 EPS of -$0.10 misses by $0.07. Revenue of $90.3M (-25.9%) vs. $90.9M. Shares -0.4% AH. (PR)
• Titanium Metals (TIE): Q1 EPS of $0.11 beats by $0.02. Revenue of $203M (-30.7%) vs. $239M. Shares flat AH. (PR)
• True Religion Apparel (TRLG): Q1 EPS of $0.32 beats by $0.04. Revenue of $63.6M (+19.1%) vs. $58.7M. Reaffirms full-year guidance. Shares +6.7% AH. (PR)
• UDR Inc. (UDR): Q1 FFO of $0.37 beats by $0.04. Sees full-year FFO in-line with consensus. Shares +7.8% AH. (PR)
• ValueClick (VCLK): Q1 EPS of $0.22 beats by $0.10. Revenue of $135M (-20.2%) vs. $130M. Shares +4.4% AH. (PR)
• Yamana Gold (AUY): Q1 EPS of $0.12 beats by $0.06. Revenue of $224 vs consensus of $231. Shares +2.4% AH. (PR)

Today's Markets

Asia markets were higher Tuesday. In Europe, stocks are up modestly. Futures are in the red, and sit in the middle of their overnight range.

This is the 4th Quarter 2008 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings preface.

Next up is Jeffrey Gendell's Tontine Associates. If you're unfamiliar with Tontine, they specialize in macro investing and take very large, concentrated positions in companies Gendell feels will benefit from those macro themes. Additionally, he will take on an activist role when necessary, to ensure shareholder returns. The fund has posted returns in excess of 100% in both 2003 and 2005. Conversely, 2008 was the year from hell for Tontine.

Nordic American Tanker (NAT): "Listen to me. Nordic American Tanker is is my play and I'm not going to deviate. I don't know enough to recommend anyone else."

Q4 2008 Earnings Call

February 24, 2009 9:30 am ET

• AIG wants new loan terms, again. Sources say AIG (AIG) is looking to overhaul its $150B government bailout to reduce its financial burden, and in the process would further expose taxpayers to the troubled insurer's balance sheet. The new plan would have $60B of the government's loan repaid with a combination of debt, equity, cash and operating businesses. It would also mark a complete turnaround for the government, changing its approach to the insurer from that of a creditor to one of a potential owner. Sources say AIG would like to announce the changes next week when it releases Q4 earnings but talks, though in advanced stages, have not yet produced a final deal. The company is expected to post a heavy quarterly loss of over $60B, marking the biggest loss in corporate history.
• Thain testifies on bonuses. John Thain, former CEO of Merrill Lynch, will answer questions posed by New York AG Andrew Cuomo's staff today, and will disclose the names of Merrill employees who received $3.6B in bonuses just before the bank merged with Bank of America (BAC). Thain had already answered some general questions from Cuomo's office but had refused to identify individual recipients, citing orders from Bank of America to keep that information private. A judge on the New York Supreme Court ruled that Thain is required to provide those details, and the judge will later decide if that information should become public.
• Hedge funds face off on more regulation. One of the world's largest hedge fund groups is ready to propose new measures that would push money managers to open up their businesses. The Alternative Investment Management Association, a U.K. group with members in the U.S. and many other countries, could release a proposal as early as today suggesting hedge fund managers take such steps as registering with regulators and having regular contact with authorities about their businesses. These changes have faced resistance from many U.S. funds, but global pressure is growing to institute financial reform and extend hedge fund regulations.
• JPMorgan slashes dividends. JPMorgan (JPM) cut its common stock dividend by 87%, to $0.05 from $0.38. The surprise move will save JPMorgan around $5B a year, money it hopes to use to speed its repayment of $25B in TARP funds. CEO Jamie Dimon said the firm cut its dividend out of a "normal abundance of caution," and that "extraordinary times must call for extraordinary measures." The bank also said it has been 'solidly profitable' this quarter and quarterly outlook is 'roughly in line' with consensus forecasts.
• Roche bid still too low. Roche Holding (RHHBY.PK) will likely have to raise its bid for the 44% of Genentech (DNA) it doesn't already own after Genentech urged shareholders to reject Roche's $42B bid, saying it substantially undervalues the company. Before Roche went forward with its $86.50/share hostile offer, Genentech's banker had proposed $112/share as an acceptable price, showing just how far apart the two sides are on a fair valuation of the deal. Analysts believe the companies will ultimately meet somewhere in the middle, around the $95-$100 range.
• Employee churn at News Corp. Peter Chernin, the highly regarded President and COO of News Corp. (NWS), plans to leave the company when his contract expires this summer. Chernin has run News Corp.'s Fox television and film production, one of the company's largest divisions, for over 12 years. No replacement was named, and businesses Chernin oversaw will instead report directly to CEO Rupert Murdoch. Chernin's departure comes at a difficult time for the media giant, whose stock price has dropped by more than two-thirds in the past year.
• Yahoo upgrades ad services. Trying to win back business as the economy falters, Yahoo (YHOO) will unveil several new tools today to help create better matches between online ads and their target audiences. Among the services offered, ads can be customized based on which websites consumers have visited and their behavior on those sites, and marketers will be able to buy text ads targeted to users at a certain time of day or based on other factors like age or gender. Though other companies already offer some similar features, Yahoo is betting on its ability to harness a user base of hundreds of millions of monthly visitors.
• Here's $300. Now shoo! American Express (AXP) is offering select customers a $300 prepaid AmEx gift card to pay off their balances and close their accounts. The unusual move underscores how badly the credit card market has deteriorated and the steps companies are willing to take to avoid what could become a massive surge in credit card defaults. American Express declined to disclose the specifics of which customers are eligible for the offer, but said the offer applied to a "relatively small number of cardmembers who have sizeable balances and little spending and payment activity."
• Dark news from regional Feds. The Chicago Fed's National Activity Index inched up to -3.45 from -3.65 in December, but the three-month average of -3.41 was the lowest since at least 1975. According to the Dallas Fed's Texas Manufacturing Outlook Survey, factory activity deteriorated further in December. New orders and capacity utilization fell precipitously, with declines outnumbering increases 5 to 1.
• German confidence keeps falling. German business confidence fell to a 26 year low in February as the worst recession since WWII led companies to slash production and fire workers. The IMF expects Germany's economy to contract 2.5% this year, despite stimulus efforts.

Earnings: Tuesday Before Open

• FirstEnergy (FE): Q4 EPS of $1.09 beats by $0.06. Revenue of $3.2B vs. $3.32B. (PR)
• Foster Wheeler (FWLT): Q4 EPS of $1.03 beats by $0.08. Revenue of $1.6B (+11.9%) vs. $1.8B. (PR)
• GrafTech International Ltd (GTI): Q4 EPS of $0.49 beats by $0.11. Revenue of $265M (-1.7%) vs. $280M. (PR)
• Heinz (HNZ): FQ3 EPS of $0.76 beats by $0.12. Revenue of $2.4B (-7.5%) vs. $2.5B. (PR)
• Home Depot (HD): Q4 EPS of $0.19 beats by $0.04. Revenue of $14.6B (-17.3%) vs. $14.7B. (PR)
• Macy's (M): Q4 EPS of $1.06 beats by $0.05. Revenue of $7.9B (-7.7%) in-line. (PR)
• Magna International (MGA): Q4 EPS of -$0.68 in-line. Revenue of $4.8B (-29.3%) vs. $4.7B. (PR)
• Medco Health Solutions (MHS): Q4 EPS of $0.59 beats by $0.01. Revenue of $13.0B (+13.9%) vs. $12.7B. (PR)
• Office Depot (ODP): Q4 EPS of -$0.73 vs. consensus of -$0.06. Revenue of $3.27B (-15.4%) vs. $3.47B. Takes $1.27B charge for goodwill and trade-name impairments. (PR)
• Pacific Gas & Electric (PCG): Q4 EPS of $0.70 beats by $0.04. "Looking ahead, we are confident that we are well positioned to continue making the needed investments to strengthen energy reliability and services for our customers." (PR)
• Parker Drilling Company (PKD): Q4 EPS of $0.27 beats by $0.12. Revenue of $212.4M (+17.5%) vs. $225.7M. (PR)
• Quanta Services (PWR): Q4 EPS of $0.24 beats by $0.05. Revenue of $921.5M (+4.8%) vs. $913.5M. (PR)
• RadioShack (RSH): Q4 EPS of $0.50 misses by $0.20. Revenue of $1.3B (-7.7%) vs. $1.4B. (PR)
• Sempra Energy (SRE): Q4 EPS of $1.30 beats by $0.39. Revenue of $2.3B (-26.3%) vs. $2.55B. (PR)
• Target (TGT): Q4 EPS of $0.81 misses by $0.02. Revenue of $19.02B vs. $19.53B. Credit card receivables increased 9.6% to $9.1B from a year ago. (PR)
• Tenet Healthcare (THC): Q4 EPS of -$0.02 in-line. Revenue of $2.2B (+5.7%) in-line. (PR)
• Valeant Pharmaceuticals International (VRX): Q4 EPS of $0.52 beats by $0.24. Revenue of $183M (-3.1%) vs. $185M. (PR)
• ViroPharma (VPHM): Q4 EPS of -$0.01 misses by $0.16. Revenue of $50M (+4.8%) vs. $61M. (PR)

Earnings: Monday After Close

• DTE Energy Company (DTE): Q4 EPS of $0.80 misses by $0.18. Revenue of $2.17B (-1.8%) vs. $2.1B. Shares -2.4% AH. (PR)
• Forest Oil (FST): Q4 EPS of $0.32 beats by $0.01. Revenue of $281M (-15.7%) vs. $331M. Shares +2.4% AH. (PR)
• General Growth Properties (GGP): Q4 FFO of $0.70 misses by $0.15. Revenue of $1B (-2.8%) vs. $830M. Shares +16.7% AH. (PR)
• Health Management Associates (HMA): Q4 EPS of $0.07 in-line. Revenue of $1.11B (+3.3%) in-line. (PR)
• Healthcare Realty Trust (HR): Q4 EPS of $0.38 in-line. Revenue of $57.1M (+13.5%) vs. $58.3M. Shares +7.6% AH. (PR)
• Hecla Mining Company (HL): Q4 EPS of -$0.24 misses by $0.13. Revenue of $27.5M (-24.1%) vs. $73M. Shares -1.2% AH. (PR)
• Hertz Global (HTZ): Q4 EPS of -$0.22 misses by $0.17. Revenue of $1.79B (-16.4%) vs. $1.95B. (PR)
• Mohawk Industries (MHK): Q4 EPS of -$1.87 vs. consensus of $0.24. Revenue of $1.49B (-17.8%) vs. $1.54B. Sees Q1 EPS of -$0.89 to -$0.80 vs. $0.28 consensus. Shares -15.1% AH. (PR)
• Nordstrom (JWN): Q4 EPS of $0.31 beats by $0.01. Revenue of $2.3B (-8.5%) in-line. Sees 2009 EPS of $1.10-1.40 vs. $1.22. Shares +13.3% AH. (PR, earnings call transcript)
• ONEOK (OKE): Q4 EPS of $0.65 misses by $0.02. Revenue of $2.84B (-28.7%) vs. $3.49B. Shares +1.6% AH. (PR)
• St. Mary Land (SM): Q4 EPS of $0.43 misses by $0.11. Revenue of $258M (-6.2%) vs. $264M. Shares -2.1% AH. (PR)
• Whiting Petroleum (WLL): Q4 EPS of -$0.07 misses by $0.01. Revenue of $224M (-3.7%) vs. $220M. Shares +2.5% AH. (PR)

Today's Markets

• Asia markets declined Tuesday, largely a reaction to the lack of buying in Monday's U.S. session. Nikkei -1.46% to 7,269. Hang Seng -2.86% to 12,798. Shanghai -4.56% to 2,201. BSE Sensex -0.24% to 8,882.
• In Europe markets opened down and moved lower, but are off from their lows at midday. London -1.1%. Paris -1.35%. Frankfurt -2.1%.
• U.S. futures are up in the overnight session. Dow +0.6% to 7,160. S&P +0.6% to 749. Nasdaq +0.4%. Crude +0.3% to $38.56. Gold -0.5% to $989.40.

Tuesday's Economic Calendar

• 7:45 ICSC Retail Store Sales
  8:55 Redbook
  9:00 S&P/Case-Shiller Home Price Index
  10:00 Consumer Confidence
  10:00 Bernanke speaks to Senate Banking Committee
  10:00 Richmond Fed's Manufacturing Index
  5:00 PM ABC Consumer Confidence Index
• Notable earnings before Tuesday's open: FE, FWLT, GTI, HD, HNZ, M, MGA, MHS, ODP, PCG, PKD, PWR, RDN, RSH, SRE, TGT, THC, VPHM, VRX
• Notable earnings after Tuesday's close: CBI, CCI, FSLR, HCN, HLX, IAG, NBR, QCOR, RRC, WYNN, XCO

Seeking Alpha editor Eli Hoffmann contributed to this post.

(One of the event organizers at the World Money Show arranged an interview with Tobin Smith. Tobin is known for his regular appearances on Fox New Channel's program Bulls & Bears on Saturdays at 10:00 AM EST. He's also a contributor on the relatively new Fox Business Channel. Before last week, I only knew him as another talking head on an investing-news-entertainment television program, but I was truly impressed with his knowledge of the markets and analytical ability. Tobin's day job is as the founder and chairman at ChangeWave Research, part of InvestorPlace Media, but he's also written a new book called Billion Dollar Green: Profit from the Eco Revolution. We spoke briefly about a couple of trends that he sees and discusses in his book, as well as individual companies that will be significantly impacted.)

Mandates Drive Behavior

Toby emphasized the role of government mandates in dictating how green technologies will be adopted. One of these mandates is a ban of the traditional incandescent light bulbs that so many of us have used all our lives. It is widely known that incandescent bulbs produce a lot of heat and don't last particularly long. Many countries currently have restrictions in place and bans in Europe will begin in 2012. The United States is expected to follow in 2014. This has led to increased sales of the coiled CFL (compact fluorescent light) bulbs, particularly at leaders like Wal-Mart (WMT). According to Mr. Smith, CFL (~75% light efficient) is the first step and LED (light-emitting diode) technology (~95% efficient), despite its present cost, is next. To capitalize on this trend, one of the ideas that Toby likes (and owns a small position in), is Durham, North Carolina-based CREE (CREE). He is "thoroughly amazed that Philips hasn't bought them yet." Philips did decide to buy Color Kinetics in the summer of 2007, so perhaps the company feels that its LED portfolio is complete. Adding to his thesis is the feeling that Cree's LED intellectual property is deep and offers a lucrative license revenue stream. If the company stays independent, its China-based manufacturing capabilities acquired from Cotco should help it compete in production with larger LED rivals Philips (PHG) and General Electric (GE).