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Contributors: Douglas McIntyre Jon C. Ogg

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Wednesday, November 01, 2006

Market Wrap (Nov. 1, 2006)

DJIA 12,031.02; Down 50.91 (0.42%)
NASDAQ 2,334.35; Down 32.36 (1.37%)
S&P500 1,367.81; Down 10.13 (0.74%)
10YR-Bond 4.5610%; Down 0.045
NYSE Volume 2,854,765,000
NASD Volume 1,978,365,000

We had nothing but weak economic data to digest today, and now 10-year bond yields are down close to the 4.50% mark and the markets are expecting a Fed Ease around March 2007. Now the question is are we going toward a hard landing or a soft landing. Construction spending was down 3% in Spetember and home foreclosures went up 17%. The ISM also showed a weakening number.

Abercrombie & Fitch (ANF) and Ann Taylor (ANN) both fell after Credit Suisse cut both to Neutral. ANF fell 4% to $73.59 and ANN fell 4.8% to $41.91.

eBay (EBAY) closed down 2.1% at $31.43 after reports surfaced that a bomb went off outside of the PayPal unit offices in San Jose, CA.

Banta (BN) rose 17% to $52.16 after a $36.50 from R.R.Donnelley fater the company pays out a $16.00 dividend.

The street was puzzled after the merger between CVS (CVS) and Caremark (CMX) was confirmed. It is called a merger of equals but CVS is issuing shares and therefore the acquirer. CVS fell 7% to $29.06 and CMX fell 2% to $48.17.

CVRD (RIO) traded up over 2% to $26.03 after Cramer said this could go to $40 next year,

Hansen Natural (HANS) fell 5% to $30.05 after Cramer said it is scary and should be sold ahead of earnings next week. (BIDU) fell 2.8% to $84.81 after beating earnings but giving tepid growth that was a warning, and that was after a 9% drop yesterday. It is surprising the shares weren't hit worse considering ist triple-digit P/E and more than 12 times revenue valuation.

Dominion (D) rose 3% to $83.61 after it said it would sell some of its gas assets.

BCE (BCE) fell 12% to $24.82 after reports out of Canada said the government there would tax royalty trusts created after this year, and would tax the older trusts starting in 2011. Baytex Energy (BTE) also fell 16% to $18.15 on the same news. Telus (TU) fell 15% to $48.65 on the same news.

Garmin (GRMN) fell 15% to $44.98 after surprising the street by missing its targets.

Shares of SiRF (SIRF) also fell 8% to $25.80 after the ties to Garmin and GPS providers was too strong for traders to ignore.

Apple (AAPL) fell 2.3% to $79.12 after Cingular announced its own music download services to compete with ipod.

RRSat Global (RRST) rose to $15.03 after its IPO priced 3.8 million shares at $12.50. RRST is an Israeli company that distributes content to 265 television channels and 80 radio stations in more than 150 countries via satellite and is already profitable.

Time Warner (TWX) fell 1.2% down to $19.77 on 53.3 million shares after it posted EPS at $0.19 versus $0.20 estimates.

Reports that Satellite radio companies XM (XMSR) and Sirius (SIRI) would have to pay higher music royalties sent SIRI down 2.9% to $3.72 and XMSR down 6.8% to $10.86.

Golfsmith (GOLF) rose 20% to $9.50 after it beat earnings expectations.

Charter Communications (CHTR) rose a sharp 15% to $2.66, another yearly high on 53 million shares, after Citigroup raised it to a Buy.

Mastercard (MA) rose sharply by 14% to $85.07 after it handily beat EPS targets.

Fedders (FJC) lost a sharp 19% to $0.90 after the NYSE is booting the company over share price and capitalization minimum violations.

Jon C. Ogg
November 1, 2006

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