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Contributors: Douglas McIntyre Jon C. Ogg

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Thursday, September 07, 2006

MarketWrap (September 7, 2006)

DJIA 11,331.44; Down 74.76 (0.66%)
NASDAQ 2,155.29; Down 12.55 (0.58%)
S&P500 1,294.02; Down 6.24 (0.48%)
10YR-Bond 4.795%

Inflationary fears pressured stocks today on rising labor costs. The Fed's Beige Book showed a broader slowdown. Oil and natural gas inventories caused further drops in oil and energy prices, but that is supposed to be anti-inflationary. natural gas prices fell some 4% and oil traded down another $0.18 to $67.32 per barrel. Gold even fell almost 4% more today. In short we just had a day where the sellers were more prevalent than buyers.

Abraxis Bio (ABBI) dodged a "stock bullet" as shareholders seemed not to mind that the FDA panel told the company they would have to conduct randomized trials despite the company's request for its breast cancer drug Abraxane to get expanded use; ABBI shares closed down only 0.3% at $24.97.

BP Plc (BP) fell 1.7% to $65.75 after oil prices slid again and after its former executive refused to testify under oath on Capitol Hill over the BP pipeline spill.

Jos. A. Banks (JOSB) rose a substantial 3.9% to $25.00 after beating earnings; note that is after the company posted crummy same store sales and margins in August.

Cryptologic (CRYP) fell 1.8% to $25.00 after another British online gaming company was arrested in the US.

New Oriental Education (EDU) rose a sharp after pricing its 7.5 million share IPO at $15.00, above the $11.00 to $13.00 range.

Boston Scientific (BSX) fell 3.3% to $16.70 after it confirmed reports of its drug coated Taxus stents increasing the risk of blood clots. Its drug coat polymer partner Angiotech Pharma (ANPI) fell 3.3% to $11.19 on this news.

Silicon labs (SLAB) rose 1.5% to $31.58 on continued takeover talk.

Homebuilders posted some pretty crummy numbers and the order cancellations coming in at 50% were pretty alarming. Much of the bad news has been priced in after these names have been cut 50%, so some actually rose. KB Home (KBH) rose $0.01 to $40.40; Beazer (BZH) closed down $1.00 $37.33; Hovnanian (HOV) rose 6% to $27.08.

Palm (PALM) saw its shares cut by 7.8% to $14.28 after it warned of lower unit sales. Motorola (MOT) rose 1.3% to $23.02 mainly because its new Q-Phone is deemed by the street as the thinner copycat version of the Palm Treo.

Sanford Bernstein analysts trimmed ratings on Budweiser (BUD) and Pepsico (PEP); BUD fell 1.4% and PEP fell 1%.

Despite Sharper Image (SHRP) having to delay its earnings and quarterly filing dates, its shares fell only 0.8% to $9.14.

BEA Systems (BEAS) fell 1.8% to $13.64 after it disclosed it would miss its filing extension date pending its options review.

TRW (TRW) fell 2.4% to $23.40 after it slightly lowered its fiscal 2006 EPS guidance.

OSI Systems (OSIS) rose 1.5% to $18.98 after securing $10.5 million in orders in California.

Despite Cramer saying this was his favorite of the California plays last night on Mad Money (because of their 1.6 gallon toilet flush commode), American Standard saw its shares slide 0.9% to $40.56.

Embarcadero (EMBT) rose 25% to $8.15 as Thoma Cressy Equity partners agreed to buy the stock for $8.38 per share.

Jon C. Ogg
September 7, 2006

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