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Tuesday, August 15, 2006

Market Wrap (August 15, 2006)

Stock Tickers: WMT, HD, DE, PHM, DELL, KONG, SPLS, OPWV, BJ, JNY, CD, LEAP, OCCF, GNVC, REDE, CSCO, RBAK, GOOG.

DJIA 11,230.26; Up 132.39 (1.19%)
NASDAQ 2,115.01; Up 45.97 (2.22%)
S&P 500 1,285.57; Up 17.36 (1.37%)
10YR-Bond 4.931%

The cease-fire is supposedly holding into its second day. The markets really appreciated the wholesale inflation report measured by the PPI, which posted a -0.3% on an ex-food and energy basis and +0.1% on a full PPI basis. Home builder confidence was the lowest level in a decade and sales in 28 states plus D.C posted sales drops.

We had a couple key DJIA components report earnings. Wal-Mart (WMT) met earnings and the future seems slow, so its shares fell 1.3% down to $44.50. Also, Home Depot (HD) gave slightly ahead of estimates earnings with a "lower-end of the range" guidance; so HD rose 3.4% to $34.41.

Despite a crummy housing number, the largest home maker in the US by market cap- Pulte Homes (PHM) rose 2.8% to $28.32.

Deere (DE) rose 0.5% to $69.01 after it beat earnings, but gave lower production targets for the end of the year.

Dell (DELL) actually rose 3.9% to $22.07 despite being victim of a 4 million laptop battery recall.

Kongzhong (KONG) rose about 22% to $6.80 after beating earnings expectations.

Staples (SPLS) posted 19% earnings gains, but the shares only rose 0.6% to $23.67.

Openwave Systems (OPWV) rose 1.1% to $7.00 after being down most of the day after it managed to post earnings that didn't signal the end of the company yesterday.

BJ's Wholesale (BJ) earnings showed that EPS fell over 10% to $0.39 and guided lower; BJ fell 6% to $25.73.

Jones Apparel (JNY) cancelled its auction process after disclosing that bidding interest was not where they wanted to sell the company. SEE OUR PREDICTION FOR WHAT WILL COME out of Jones Apparel in the coming months. JNY fell 1.5% more to $29.08.

Cendant (CD) actually rose 7% to $1.87, signalling they can actually go up one day.

Leap Wireless (LEAP), operator of Cricket Wireless, fell 1.8% to $42.60 ahead of its planned secondary offering.

Optical Cable Corp (OCCF) rose well over 50% at the end of the day to $5.71 after Superior Essex offered $6.00 cash per share in a buyout.

GenVec (GNVC) fell 8% to $1.02 after its CFO announced his resignation as of August 31, 2006.

Red Envelope (REDE) gained a sudden 9% to $8.85 after it was disclosed that one of the directors of the company purchased over 700,000 shares of company stock.

Cisco (CSCO) continued its post-earnings climb by finishing up 2.5% at $20.61.

Redback Networks (RBAK) rose another 13% to $18.61 after it filed its quarterly report that disclosed no material impact from its options review and after RBC upgraded the stock.

Google (GOOG) rose 3% to around $380.00 after announcing a new coupon clipping format for advertisers that want to go local for Google earth mapping.

Jon C. Ogg
August 15, 2006
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