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Contributors: Douglas McIntyre Jon C. Ogg

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Thursday, October 26, 2006

Market Wrap (Oct, 26, 2006)

DJIA 12,163.66; Up 28.98 (0.24%)
NASDAQ 2,379.10; Up 22.51 (0.96%)
S&P500 1,389.08; Up 6.86 (0.50%)
10YR-Bond 4.721%
NYSE Volume 2,737,266,000
NASD Volume 2,301,620,000

The markets responded positively on weak economic news today, one day after the FOMC kept rates steady and gave us their official "inflation is still worrisome" rhetoric.

The Commerce Department reported median prices for New Homes sold in September was $217,100, a drop of -9.7% from September 2005. It was the lowest median price for a new home since 2004 and the sharpest yearly decline since 1970. Yet KB Homes (KBH) rose 1.5% to $46.30, D.R.Horton (DHI) rose 2.2% to $24.50, and Pulte Homes (PHM) rose 1.4% to $32.66. They rose on lower inventories.

Exxon Mobil (XOM) almost earned $10 Billion in the quarter. Its shares rose 0.9% to $71.62 after it posted EPS at $1.77 compared to $1.59 estimates.

Home Inns & Hotels Management (HMIN) had a killer IPO. We noted it would be a good one, but this one blew the doors of the hinges. It priced 7.9 million shares above the range up at $13.80, but it closed up at $22.50 on the day.

Renovis (RNVS) fell a massive 75% to $3.43 after its stroke study in phase III with AstraZeneca was cancelled after failing to meet primary endpoints. AtraZeneca (AZN) fell a sharp 7.5% to $61.38 with RNVS.

NighhHawk Radiology (NHWK) rose a sharp 11% to $20.85 after pricing its telegraphed 5.5 million share secondary offering at $18.50.

Sony (SNE) saw its ADR's in the US trade up 3.9% to $42.36 after it posted earnings in Japan.

Bristol-Myers Squibb (BMY) fell 0.5% to $24.52 despite beating earnings with $0.22 EPS vs $0.20 estimates and even after giving higher guidance. Unfortunately generic Plavix caused a sharp 65% drop in its bottom-line.

Sirius (SIRI) rose 5.2% to $3.84 after launching a new NBA line-up product. XM Satellite (XMSR) also rose 3.9%.

Arena (ARNA) gave back almost 5% to close at $15.52 on profit taking after the company posted its expected loss.

Comcast (CMCSA) rose 3% to $40.00 after handily beating earnings estimates after a powerful Triple Play win from its cable operation.

Time Warner (TWX) closed up at 0.81% at $19.99, and it went over $20.00 today for the first time since May 2002.

Kellogg (K) rose 1.1% to %50.19 after its profit rose 3%.

Harman (HAR) rose 19% to $105.50 after it blew past earnings estimates again.

Harris Corp (HRS) fell 2.6% to $43.99 after posting what appeared good earnings.

Kanbay (KBAY) rose 14% to $28.60 after it is being acquired for $29 per share.

Clear Channel (CCU) rose over 9% to $35.48 after it hired Goldman Sachs to evaluate alternatives, after we noted what Faber said about the Mays family being receptive to an LBO now.

Tribune (TRB) rose 2.3% to $33.79 after the company has more private equity firms circling.

Despite Sprint NexTel (S) posting lower numbers, its positive guidance and WiMAX forecasts helped shares rally 6.6% to $18.90.

GM (GM) fell a sharp after Merrill Lynch gave it a mid-day downgrade to Sell.

JetBlue Airways (JBLU) rose 3.3% to $12.05 after the company won a route into Chicago's O'Hare....hope you guys enjoy wind and flight delays there.

Jon C. Ogg
October 26, 2006

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