April 5th 2011

PFE to Drop Capsugel

The Dow Jones Industrial Average settled at 12,400.03 on Monday, adding another 23.31 points or
0.19% from last Friday’s close. The S&P 500 index also ended higher, rising 0.46 points or 0.03% to
1,332.87 while the Nasdaq Composite slipped to 2,789.19 or down 0.41 points (-0.01%).

JNJ led the pack with 1.11% of gains, while WMT at second spot with 1% gains. At the third was GE
as it rose 0.93%. HPQ and INTC were in the doghouse again as both shed 1.56% and 1.17%,
respectively. DIS also ended 0.51% lower on Monday.

On the background, energy prices kept rising with Brent crude for May delivery gained $1.99 or 2%
to $121.06, while the US light sweet crude for May delivery ended at $108.47, up $0.53 or 0.5%.
Middle East tensions remain with Gadhafi refused the rebels’ truce offer in Libya, delayed election in
Nigeria due to ballot problem, while in Algeria the protests and strikes continue. In Yemen, clashes
resulted in 12 deaths and in Bahrain, the opposition’s newspaper Al-Wasat has been shut down by
the government.

Gold price for June delivery added $4.1/oz. or 0.3% to $1,433/oz. as the market concerned over
the rising inflation expectations due to high energy prices.

Corporate News
PFE was in the spotlight as the drug giant announced that it would sell Capsugel to an affiliate of
Kohlberg Kravis Roberts (KKR) for $2.4B in cash. Capsugel manufactures capsules for oral
medicines and dietary supplements. The proceeds from the sale are expected to be used in shares
repurchases by PFE, in addition to an already announced $5 billion planned in 2011. PFE also
aims to identify and invest in other opportunities. PFE expects FY11 revenue to be between
$65.2B and $67.2B from previous forecast of $66B-$68B. Market consensus was $66.95. FY12 is
seen between $62.2B and $64.7B, down from previous forecast of $63B to $65.5B. The market
consensus lies at $63.1B.
T raised upgrade prices for iPhone by $50 for all models.
VZ has completed Terremark Worldwide deal for $1.1 billion. Terremark provides “cloud
computing” services.
MCD will hire additional 50K workers in April while simultaneously redefining the McJob by
describing advantages of working at MCD. Such advantages are flexible hours, medical benefits
and opportunities for advancement.
US’ FAA ordered inspections on 737 crafts after the Southwest Airline’s jet incident. Meanwhile,
BA delivered Qatar Airways’ 25th 777 on Monday.
BAC announced preferred dividends while on the same day cut their own first quarter growth
forecast to 1.5%. Rising commodity prices and flat wages were considered overwhelming and put
pressures on consumer spending.

1 .DJI 12,400.03 (+22.31 ● +0.19%) .SPX 1,332.87 (+0.46 ● +0.03%) .IXIC 2,789.19 (-0.41 ● -0.01%)
 April 5th 2011

WMT plans to sell large appliances in Texas. Sales of appliances from GE could start in 100
stores as part of the program. GE itself along with Hitachi plan to work together with Exelon and
Bechtel Corp. to recover the cooling functions and later scrap the reactors at the damaged nuclear
plant in Japan. Elsewhere, GE will have to compete with CIT Group, SJB National Bank and
Capital One Financial for its bid for ING Groep’s ING Direct. Other than large appliances, WMT
also indicates that it would sell groceries online.
HPQ said that it has agreed with the Angel Capital Association to provide its members and their
5,000 portfolio companies access to business opportunities, developer programs and discounts on
the company’s products.
IBM’s experimental nanoparticle drug may be capable in countering superbugs resistant to
antibiotics.
JPM is to add 100 branches in California in 2011.
After lengthy negotiations with the UAE Ministry of Health, MRK and PFE agreed to cut the prices
of 67 drugs by 5% to 40%.
MSFT and Nokia talks are on schedule and the negotiations have been progressing well. As a
result, a large number of Nokia Windows phones should be in stores by 2012. Earlier, comScore
reported that GOOG’s Android share increased 0.7% to 33%, RIMM lost 4.6% from 33.5% to
28.9%, while MSFT’s fell from 9% to 7.7%. AAPL’s share rose marginally from 25% to 25.2%.

2 .DJI 12,400.03 (+22.31 ● +0.19%) .SPX 1,332.87 (+0.46 ● +0.03%) .IXIC 2,789.19 (-0.41 ● -0.01%)
 April 5th 2011

Stock Focus: 3M, Co.

MMM
Last Apr 4th Resistances 94.33 98.07 99.65 104.97 118.61
$93.64 0.55% Supports 92.58 91.50 90.62 89.74 88.66
WTD MTD Outlook
1.48% 0.15%
POSITIVE
YTD 12-Month
8.51% 5.61% Strategy LONG, PT $99.65, risk <$89.74

One of the solid performers of the Dow 30, MMM had a deep setback when Japan was hit by the
massive quake on mid-March. Since then, the stock recoils higher and just two days ago it set a new
peak at $94.33. As the chemical giant rise is accompanied by rising MACD, EMAs and not-so-
overbought RSI, the stock seems to be on track once again to reach our last month’s target of $99.65.
Risk is seen below $89.74.

3 .DJI 12,400.03 (+22.31 ● +0.19%) .SPX 1,332.87 (+0.46 ● +0.03%) .IXIC 2,789.19 (-0.41 ● -0.01%)
 April 5th 2011

Price Performance - as of Apr 4th 2011

Code Last Dy WTD MTD YTD 12-Mos
AA 17.56 0.52% 2.75% -0.57% 14.10% 30.75%
AXP 45.42 0.13% -0.37% 0.49% 5.82% -1.52%
BA 73.95 -0.08% 0.83% 0.03% 13.32% 2.10%
BAC 13.44 0.52% 0.75% 0.83% 0.75% -24.62%
CAT 113.38 0.23% 3.93% 1.82% 21.05% 66.51%
CSCO 17.06 0.12% -1.27% -0.52% -15.67% -36.65%
CVX 108.23 -0.08% 1.36% 0.69% 18.61% 32.90%
DD 55.59 0.72% 2.75% 1.13% 11.45% 39.53%
DIS 42.63 -0.51% -0.79% -1.07% 13.65% 15.72%
GE 20.53 0.93% 3.95% 2.39% 12.25% 8.85%
HD 37.47 -0.24% 0.13% 1.11% 6.87% 6.36%
HPQ 40.34 -1.56% -5.15% -1.54% -4.18% -22.38%
IBM 164.25 -0.01% 1.28% 0.72% 11.92% 27.33%
INTC 19.49 -1.17% -4.32% -3.42% -7.32% -14.67%
JNJ 60.15 1.11% 1.98% 1.52% -2.75% -6.45%
JPM 46.34 -0.02% 1.05% 0.52% 9.24% 8.83%
KFT 31.51 -0.32% 0.80% 0.48% 0.00% 6.45%
KO 67.66 0.65% 3.74% 1.99% 2.87% 26.59%
MCD 76.39 0.53% 1.51% 0.39% -0.48% 8.22%
MMM 93.64 0.55% 1.48% 0.15% 8.51% 5.61%
MRK 33.27 0.60% 2.15% 0.79% -7.69% -5.05%
MSFT 25.55 0.27% -0.27% 0.63% -8.46% -16.34%
PFE 20.54 0.79% 0.93% 1.13% 17.30% 22.85%
PG 62.26 0.29% 2.27% 1.07% -3.22% 0.16%
T 30.77 0.49% 6.66% 0.52% 4.73% 18.07%
TRV 59.63 -0.13% 1.10% 0.25% 7.04% 17.52%
UTX 85.23 -0.11% 2.05% 0.69% 8.27% 13.72%
VZ 38.61 0.36% 3.54% 0.18% 7.91% 33.60%
WMT 52.65 1.00% 0.57% 1.15% -2.37% -1.85%
XOM 84.87 0.22% 1.49% 0.88% 16.07% 25.23%

4 .DJI 12,400.03 (+22.31 ● +0.19%) .SPX 1,332.87 (+0.46 ● +0.03%) .IXIC 2,789.19 (-0.41 ● -0.01%)
 April 5th 2011

Analysts' Upgrades & Downgrades

Ratings Price Target
Code House
Previous Current Previous Current
BA Morgan Stanley Long Research Tactical - -
INTC Sterne Agee - Buy - $28.00
INTC UBS Buy Buy - $27.00
JPM Deutsche Bank - Buy $52.00 $54.00
VZ Argus - Buy $39.00 $44.00
VZ RBC Capital - Outperform $39.00 $41.00
n Sector-wide n Upgrade n Downgrade n Initiation
US Economic Calendar
Date Time Report Period Actual Forecast Previous
5-Apr 10:00 AM ISM Non-Manufacturing Mar 60.0% 59.7%
5-Apr 2:00 PM FOMC Minutes 15-Mar
7-Apr 8:30 AM Jobless Claims 2-Apr 388K
7-Apr 3:00 PM Consumer Credit Feb n/a $5B
8-Apr 10:00 AM Wholsesale Inventories Feb n/a 1.1%

Disclaimer: This report is provided for information purposes only. It is not an offer to sell or to buy any securities. This
report has been prepared based on sources believed to be reliable, but there is no assurance or guarantee regarding its
completeness and accuracy. The author accepts no responsibility or liability arising from any use of the report.

5 .DJI 12,400.03 (+22.31 ● +0.19%) .SPX 1,332.87 (+0.46 ● +0.03%) .IXIC 2,789.19 (-0.41 ● -0.01%)