Pre-Market - Nov 26 2007 12:18PM
Following Friday's strong gains during the holiday-shortened session, futures indicate a slightly higher open for the mkt as early reports show consumers were in a spending mode over the holiday weekend. According to ShopperTrak RCT, there was an 8.3% gain in sales on Black Friday, higher than their estimated 4-5% increase. However, shoppers seemed to spend about 3.5% less per person. CIBC noted that on Black Friday, traffic was heaviest at consumer electronics retailers, though there was not much observed interest in higher-end TVs. It's also worth mentioning the gains overnight in Asia, especially in Hong Kong where the Hang Seng index closed up 4.1%. But U.S. futures show only slight gains as negative news out of the financial sector continues. HSBC Holdings (HBC) announced it will add $45 bln of assets to its balance sheet by consolidating two structured investment vehicles it manages. But the co added it doesn't expect any "material impact" on its earnings or capital strength. Also, CNBC just reported that Citigroup (C) is preparing for "massive" layoffs, not just in one division, but across the board. Lastly, UBS downgraded both Fannie Mae (FNM) and Freddie Mac (FRE) this morning to Neutral from Buy based on their outlook for EPS compression, deriving primarily from credit pressures. The latter also plans to sell $5 bln of preferred stock in a deal to be launched as early as next week, WSJ reported. Dow futures are currently +11; Nasdaq futures are currently +4.3; S&P futures are currently +1.4. ... Notable pre-market Calls include Upgrades: BA at Wachovia; Downgrades: FNM and FRE at UBS... On the Earnings calendar, CTRN and DCI are the only cos confirmed to report after the close... Today's Economic calendar is empty.Gapping up: On strong earnings/guidance: SKIL +5.9%...M&A: GLYT +49.9% (PHG to acquire GLYT for $95.50 per share), AYI +4.3%(up in sympathy with GLYT)...Other news: HOKU +40.2% (signs $306 mln polysilicon supply contract), CFSG +11.9% (announces $31 mln contract with Shougang Jingtang Steel and Iron), GBT +11.1% (announces $3.2 mln contract with Jilin Jinao Mining Equipment), TGEN +7.5% (announces FDA removed hold on its Phase I/II clinical trial of tgAAC94 for inflammatory arthritis), BRLC +6.7% (announces co will provide outlook for Fiscal 2008 this Wednesday), QGEN +5.1% (still checking), PTR +3.9% (still checking), MICC +3.8% (still checking), GOLD +3.2% (spot gold prices are higher by 8.30 at 832.10 this morning), CHINA +2.7% (discloses co has presented proposal for investment in and restructuring of Linktone), ERIC +2.4% (announces co has been selected by Algerie Telecom as sole supplier and system integrator for its network upgrade), RTP +2.1% (invests $2.4 bln in 2 new iron ore mines and increases dividend 30%)...Select retailers seeing pre-mkt strength following reports of better than expected Black Friday: CC +7.4%, BBY +1.4%, GLW +1.6% (may be picked up as beneficiary of flat panel sales)...Analyst upgrades: SGP +2.5% (hearing reinstated to Buy at tier-1 firm), BA +1.5% (upgraded to Outperform at Wachovia), CELG +1.4% (upgraded to Buy at BofA), MA +1.0% (target raised to $260 at Calyon)...Gapping down: In reaction to weak earnings/guidance: NWL -10.8%, CRME -7.8%...Other news: TSO -5.2% (Tracinda expresses concern about TSO rights plan), ETFC -3.4% (WSJ article says sale of co may hinge on its mortgage portfolio)...Analyst downgrades: FNM -3.9% (downgraded to Neutral at UBS), FRE -2.8% (downgraded to Neutral at UBS, also plans to raise $5 bln in preferred stock sale), SSL -1.8% (downgraded to Peer Perform at Bear Sterns), HBC -1.5% (hearing downgraded to Sell at tier-1 firm).Gapping up: GLYT +49.9%, CFSG +11.9%, SKIL +5.9%, QGEN +5.1%, GOLD +4.8%, MICC +3.8%, CHINA +2.7%, SGP +2.5%, ERIC +2.4%, CDE +2.4%, BHP +2.3%, RTP +2.1%, EWBC +1.7%, GLW +1.6%, MA +1.6%, BA +1.5%, CELG +1.4%, GLD +1.0%...Gapping down: NWL -10.8%, VVTV -5.9%, FXP -3.7%, ETFC -3.4%, SLXP -2.4%.
Stocks that are overbought include: SKF. Stocks that are oversold include: ZINC, CECO, XL, KHD, TROW, JNS, TOL, DDUP, GM, CRDN, FED, IGR, R, ERIC, MS, YGE, WM, KBH, C, RYL, STV, LEN, USTR, PWRD, HRZ, & OSTK.
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