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23 September 2010

THE ECONOMIC MONITOR U.S.
Free Edition
MARKETS AT A GLANCE

INSIDE THE REPORT

Stock recommendations and price targets from top brokerage firms Forecasts on Economic Indicators List of companies earnings that hit and miss the analysts’ Important Events Scheduled on 24 September

The Dow Jones fell 76.89 points, or 0.72 percent, to 10,662.42 The dollar fell 0.2 percent to 84.38 yen after hitting 84.26 The benchmark 10-year Treasury note was up 1/32 in price, its yield easing to 2.56 percent from 2.57 percent late on Wednesday Gold rose to near $1,300 an ounce on Thursday On the New York Mercantile Exchange, November crude rose 47 cents, or 0.6 percent, to settle at $75.18 a barrel, trading from $73.58 to $75.61.

 

Economic Events

Federal Reserve Chairman Ben Bernanke "Implications of the Financial Crisis for Economics"

speaks

on

Treasury Secretary Timothy Geithner speaks before the United States Hispanic Chamber of Commerce 31st Annual National Convention & Business Expo at 1245 GMT

Corporate Events
 

STOCK INDICES
INDEX DJIA* LAST 10662.42 2327.08 1124.83 11729.17 648.84 1922.63 7141.51 1982.15 4382.93 1124.83 CHNG -76.89 -7.47 -9.45 -97.3 -7.87 -9.6 -69.34 -0.61 -84.71 -9.45 % CHNG -0.72 -0.32 -0.83 -0.82 -1.2 -0.5 -0.96 -0.03 -0.82 -0.83

KB Homes will announce its Q3 results Comtech Telecommunications and Finish Line will host the earnings conference call

Nasdaq* S&P 500*

Breaking News

DJ Total Stock Market* Russell 2000* Global Dow*
NYSE Composite* Nasdaq 100* DJ Transportation Avg* S&P 100* * CLOSING VALUES

Petrobras all set for record share sale Airgas CEO back on board McDonald's raises quarterly dividend Novell shares fall Rite Aid posts loss Jobless claims rise AstraZeneca pill waits for approval Glaxo's Avandia under scanner Blockbuster files for bankruptcy

CURRENCIES
INDEX Euro (EUR/USD) U.K. Pound (GBP/USD) Japanese Yen (USD/JPY) LAST PRIOR

1.3309 1.5678 84.33

1.3393 1.5668 84.55

All prices are at 04:11PM EDT

FUTURES
SETTLE Crude Oil (Oct) Natural Gas (Nov) Gold (Dec) Copper ( Dec) Wheat (Dec) CHANGE

74.85 4.159 1293.1 357.2 698

0.14 0.063 1 0.7 0

All prices are at 04:02 PM EDT

THE ECONOMIC MONITOR - U.S.
STOCK RECOMMENDATIONS BY BROKERAGE HOUSES
BROKERAGE/COMPANY ACTIONS RATING

Credit Suisse Entergy Corp Firstenergy Corp Allegheny Energy Carmax Inc Goldman Sachs Mylan Inc Jefferies Raymond James Red Hat Inc Family Dollar Stores Inc Patterson-Uti Energy Inc Citigroup Progress energy Energy transfer equity Southern company Bed bath & beyond XL Group Barclays Red hat inc Philip morris JA Solar Raises price target to $36 from $33 Raises price target to $59 from $54 Raises price target to $8 from $6 Equal weight Overweight Equal weight Raises target price to $45 from $40 Raises target price to $43.50 from $37 Raises target price to $38 from $36 Target price to $59 from $54 Target price to $25 from $23 Hold Rating buy Hold Buy Buy Raises target price to $43 from $36 Raises target price $49 from $45 Raises to strong buy from Outperform Outperform Outperform Buy Adds to conviction buy list Removes from Americas conviction sell list Buy Sell Cuts to neutral from Outperform Raises to outperform from neutral Raises to outperform from neutral Raises price target to $28 from $23 Neutral Outperform Outperform Neutral

Disclaimer: The views and investment tips expressed by investment experts are their own, and not that of IBTimes or its management. We advise users to check with certified experts before taking any investment decisions.

MARKET BRIEFING

The Dow Jones fell 76.89 points, or 0.72 percent, to 10,662.42. S&P 500 was also down by 9.34 points, or 0.82 pct, at 1,124.94. Nasdaq closes down 7.47 points, or 0.32 percent, at 2,327.08 The dollar fell 0.2 percent to 84.38 yen after hitting 84.26, the euro was down 0.4 percent against dollar on the day at $1.3345 after hitting a five month-high on Wednesday. U.S. Treasury debt prices rose on Thursday, though a bout of corporate hedging kept price gains in check for much of the afternoon. Treasury prices continued their upward march and yields headed lower, with the 10-year yield briefly touching a 3-week low, as traders continued to focus on the prospects for more quantitative easing by the Federal Reserve. The benchmark 10-year Treasury note was up 1/32 in price, its yield easing to 2.56 percent from 2.57 percent late on Wednesday. The 30-year bond was up 5/32, yielding 3.74 percent, down from 3.75 percent on Wednesday. Gold rose to near $1,300 an ounce on Thursday, on track for a fourth day of gains as uninspiring U.S. jobless claims and housing data renewed desire to buy bullion as a hedge against economic uncertainty. Spot gold rose 0.3 percent to $1,292.95 an ounce at 1:45 p.m. EDT (1745 GMT). U.S. gold futures for December delivery rose $2.50 to $1,294.60. U.S. crude oil futures settled higher on Thursday, led higher by RBOB gasoline futures that were lifted by news that ConocoPhillips' New Jersey refinery is undergoing major maintenance and also helped by Wall Street paring its losses. On the New York Mercantile Exchange, November crude rose 47 cents, or 0.6 percent, to settle at $75.18 a barrel, trading from $73.58 to $75.61. NYMEX front-month October RBOB gasoline rose 1.60 cents, or 0.84 percent to settle at $1.9174 a gallon, well above an early low of $1.8747.

THE ECONOMIC MONITOR - U.S.
COMPANY NEWS ECONOMY NEWS

Petrobras all set for record share sale
Brazilian state oil company Petrobras could raise up to $79 billion, in what would be the world's biggest share offering. Brazil's government will use oil reserves to buy $43 billion in new Petrobras stock, while minority shareholders including institutional investors and state pension funds will pay cash for as much as $36 billion in shares. The offering will help raise funds the company needs to pay for the world's largest oil exploration plan -- which aims to turn Brazil into a global energy powerhouse.

Jobless claims rise
Breaking two straight weeks of declines the initial claims for state unemployment benefits increased 12,000 to a seasonally adjusted 465,000, the Labor Department said today. Financial markets had forecast claims steady at 450,000. New U.S. claims for unemployment benefits rose unexpectedly highlighting continued labor market weakness. The four-week average of new jobless claims, considered a better measure of underlying labor market trends, fell 3,250 to463,250, the lowest since July 31.

Airgas CEO back on board
A week after shareholders ousted the chief executive of industrial gas supplier Airgas Inc, now he is back on the board of the company but he will not regain his title of chairman. Directors unanimously reappointed Peter McCausland to the Airgas board, effectively increasing its size to 10 from nine. The board chose John C. van Roden, a former executive at paper producer P.H. Glatfelter, for company chairman. At its annual shareholder meeting last week, Airgas shareholders replaced McCausland and two other directors with a slate favored by Air Products.

We're still in a recession: Warren Buffett
Warren Buffett said the U.S. economy remains in recession. Buffett told CNBC television in an interview broadcast on Thursday, "We're still in a recession.” ""We've used up a lot of bullets," Buffett said. "And we talk about stimulus. But the truth is, we're running a federal deficit that's 9 percent of GDP. That is stimulative as all get out." Buffett said he defines a recession differently from the NBER. A great majority" of these businesses are "coming back slowly," he said. Shipments at Burlington Northern are "61 percent of the way back," Buffett said. "Our carpet business, our brick business, our insulation business, they're not back 61 percent, but they are moving back."

Casey's investors reject Couche-Tard board picks
Casey's General Stores shareholders voted against a slate of directors proposed by Canadian convenience store operator Alimentation Couche-Tard , a result that supported management efforts to fend off Couche-Tard's hostile takeover bid. Couche-Tard's nominees for the board of directors garnered less than 10 percent of the shareholder vote. Japanese-owned 7-Eleven, which operates more than 31,400 stores around the world, made a late, nonbinding proposal to buy Casey's for $2.03 billion, or $40 a share, earlier this month. That trumped Couche-Tard's latest offer of $2 billion, or $38.50 a share.

REGULATORY NEWS

AstraZeneca pill waits for approval
An AstraZeneca pill has submitted for regulatory approval as a treatment for thyroid cancer, offering the drugmaker a smaller sales opportunity. The company failed last year in treating lung cancer. AstraZeneca said that the agency will make a decision by Jan. 7, 2011, as FDA has granted priority review status. It also stated that the U.S. Food and Drug Administration and the European Medicines Agency had accepted submissions for vandetanib.

McDonald's raises quarterly dividend
McDonald's Corp has raised its quarterly cash dividend by 11 percent now the quarterly dividend is equivalent to $2.44 per share annually. It said it will now pay a dividend of 61 cents a share, and sees total cash returned to shareholders of about $5 billion in 2010, split between dividends and share repurchases. The dividend is payable on December 15 to shareholders of record as of December 1.

Glaxo's Avandia under scanner
European regulators asked GlaxoSmithKline to take out the diabetes drug Avandia from the market but U.S. officials allowed it to stay. In Europe, officials at the EMA said the drug's suspension was expected to be formally endorsed by the European Commission within two weeks. Although, in separate but coordinated statements, the U.S. Food and Drug Administration in Washington and the European Medicines Agency (EMA) in London said they agreed on the risks associated with the drug but had reached different conclusions on action.

Novell shares fall
Shares of software maker Novell Inc fell 6 percent in early morning trading hour after news that the company's auction process was facing setbacks. Gilman, a Capstone Investments analyst said, "There's some chatter that Novell is having problems closing the deal." People familiar with the matter revealed that Los Angeles-based Platinum Equity had been among the private equity firms participating in the auction, has dropped out.

Blockbuster files for bankruptcy
Video chain Blockbuster Inc filed for bankruptcy protection. According to the court document, a group of bondholders led by billionaire Carl Icahn and hedge funds have signed off on a restructuring deal that gives them a controlling stake in the company. The bankruptcy allows the company to break leases. Blockbuster filed its Chapter 11 petition with the U.S. bankruptcy court in Manhattan. According to its plan, Blockbuster would cut its debt to about $100 million from nearly $1 billion. Icahn and hedge funds that together hold 80 percent of Blockbuster's senior notes agreed to support the plan and provide $125 million of debtor-in-possession (or DIP) financing to help it operate while in bankruptcy.

Avis raises offer for Dollar Thrifty
Topping the deal offered by rival Hertz, Avis Budget group raised its bid to acquire Dollar Thrifty more than 10 percent to $1.51 billion, topping the latest deal Dollar Thrifty. Avis said that it was increasing the cash portion of its offer to $45.79 per share from $40.75 a share. The stock portion of the offer remains unchanged at 0.6543 Avis shares for every Dollar Thrifty share. Earlier this month, Dollar Thrifty accepted Hertz's increased offer, currently worth around $1.44 billion, or $50.36 in cash and stock for each Dollar Thrifty share.

THE ECONOMIC MONITOR - U.S.
NEXT TRADING DAY NEXT TRADING DAY (contd…)
Oxygen Biotherapeutics will conducts its shareholders meeting at 13:00 GMT.
Graham Corp will participate in Western New York Investors Conference at 13:30 GMT. Ultralife Corp will participate in Western New York Investors Conf at14:00 GMT.

ECONOMIC EVENTS
Federal Reserve Chairman Ben Bernanke speaks on "Implications of the Financial Crisis for Economics" before a conference co-sponsored by the Center for Economic Policy Studies and the Bendheim Center for Finance at Princeton University at 2030 GMT . Federal Reserve Board Governor Elizabeth Duke gives welcome and opening remarks before the final of four Federal Reserve public hearings on potential revisions to the Board's Regulation C at 1300 GMT, the regulation which implements the Home Mortgage Disclosure Act (HMDA). HMDA requires mortgage lenders to provide detailed information about their mortgage lending activity to federal agencies and the public. Treasury Secretary Timothy Geithner speaks before the United States Hispanic Chamber of Commerce 31st Annual National Convention & Business Expo at 1245 GMT Bank for International Settlements chair Jaime Caruana addresses the Chicago Fed's International Banking Conference at 1715 GMT . Federal Reserve Bank of New York First Vice President Christine Cumming participates in "Structuring Macroprudential Regulation Theory, Governance and Informational Needs" panel at the Federal Reserve Bank of Chicago International Banking Conference at 1315 GMT . Federal Reserve Bank of Richmond President Jeffrey Lacker speaks about reflections on economics, policy and financial crisis before the Kentucky Economic Association's annual conference at 700 GMT . President Barack Obama will host a meeting with leaders of the Association of South East Asian Nations (ASEAN). President Barack Obama due to attend a U.N. organized high-level meeting on Sudan on the margins of the U.N. General Assembly. President Barack Obama meets Azerbaijan President Ilham Aliyev and Colombian President Juan Manuel Santos on the sidelines of the United Nation's General Assembly. House of Representatives Ways and Means Committee expected to vote on a bill that would allow the U.S. Commerce Department to apply duties against China's "undervalued" currency. U.S. appeals court to hold rare oral arguments over whether to temporarily allow federal funding of human embryonic stem cell research.

ECONOMIC INDICATOR WATCH

Durable Goods (August)
Forecast -1% Prior 0.3%

Ex-Transportation (August)
Forecast 1% Prior -3.80%

Ex-Defense (August)
Forecast -0.4% Prior 0.3%

Nondefense ex-aircraft (August)
Forecast 2% Prior -8.0%
The U.S. Census Bureau will release numbers on Durable Goods, ExTransportation, Ex-Defense, Nondefense ex-aircraft for the month of August at 0830 EDT. New orders for manufactured durable goods in July increased $0.6 billion or 0.3 percent to $193.0 billion. This increase followed two consecutive monthly decreases including a 0.1 percent June decrease. Excluding transportation, new orders decreased 3.8 percent. Excluding defense new orders increased 0.3 percent. Transportation equipment also up following two consecutive monthly decreases, had the largest increase, $6.1 billion or 13.1 percent to $52.6 billion. Nondefense ex-aircraft orders fell 8.0%

Source: U.S. Census Bureau (Department of Commerce)

New Home Sales (August)
Forecast 0.29 mln Prior 0.276 mln The U.S. Census Bureau will release numbers on new home sales at 1000 EDT, new houses in July 2010 were at a seasonally adjusted annual rate of 276,000, according to estimates released jointly Census Bureau and the Department of Housing and Urban Development. This is 12.4 percent (±10.8%) below the revised June rate of 315,000 and is 32.4 percent (±8.7%) below the July 2009 estimate of 408,000. The median sales price of new houses sold in July 2010 was $204,000; the average sales price was $235,300. The seasonally adjusted estimate of new houses for sale at the end of July was 210,000. This represents a supply of 9.1 months at the current sales rate.

COMPANY EVENTS
KB Homes will announce its Q3 results at 1530 GMT, analysts expect the company to report a profit of $0.155 per share, down from $0.870 reported for the corresponding period a year ago. In second quarter it reported revenues of $374.1 million, down from $384.5 million reported for the same quarter in 2009 on lower housing revenues. The Company's net loss narrowed 61 percent to $30.7 million, or $.40 per diluted share, in the second quarter of 2010, compared to a net loss of $78.4 million, or $1.03 per diluted share, in the year-earlier quarter. Comtech Telecommunications will host the earnings conference call for the fourth quarter at 1230 GMT, analysts expect the company to report earnings of $0.576 per share, against $0.210 reported for the same period a year earlier. In third quarter net sales rose to $216.3 million compared to $128.5 million for the third quarter of fiscal 2009. The period-over-period increase in net sales contributed to higher sales in both mobile data communications and telecommunications transmission segments. GAAP net income was $21.8 million for the third quarter of fiscal 2010. Finish Line will host the earnings conference call for the second quarter at 1230 GMT, analysts expect the company to report profit of $0.354 per share, against $0.210 reported for the same quarter a year earlier, net sales increased 9 percent to $282.4 million in the first quarter compared to $259.1 million a year ago.

Source: U.S. Census Bureau (Department of Commerce), Department of Housing and Urban Development

ECRI Weekly Index
Forecast N/A Prior 122.6 The Economic Cycle Research Institute will release its weekly index performance at 1030 EDT, the index increased to 122.6 for the week ending September 10 from an unrevised 122. The smoothed, annualized growth rate increased to 9.2% from an unrevised -10.1%. With the latest gain, it appears that the index has resumed a modestly upward trend, though is not yet consistent with a stable recovery.

Source: Economic Cycle Research Institute

THE ECONOMIC MONITOR - U.S.
DAILY EARNINGS HITS & MISSES AS ON 23 SEPTEMBER, 2010
COMPANY Ameron International Park Electrochemical PERIOD Q3 Q2 CURRENCY USD USD EPS EST 0.84 0.45 EPS ACT 0.96 0.46 DIFFERENCE EPS 0.12 0.01 REV EST (mln) 130.9 59.3 REV ACT (mln) 134.2 54.5 DIFFERENCE REV (mln) 3.3 -4.8

ECONOMIC CALENDAR
DATE FRI 09/24 EDT 0830 0830 0830 0830 1000 1030 MON 09/27 0830 1200 TIME TBA TUE 09/28 0745 0855 0900 0900 0900 1000 1000 1000 1000 1700 INDICATOR Durable Goods (Aug) Ex-Transportation Ex-Defense Nondefense ex-air New Home Sales (Aug) ECRI Weekly Index Chicago Fed Index Chicago Midwest (Aug) Building Permits ICSC/GS Report ww Redbook mm S&P CS 20 mm sa S&P CS 20 mm nsa S&P CS 20 yy Consumer Conf (Sep) Richmond Fed Mfg (Sep) Mfg Shipments Service Revenues ABC CCI F’CAST -1% 1% -0.40% 2% 0.29 mln NA NA NA NA NA NA NA NA 3.20% 54 NA NA NA NA PRIOR 0.30% -3.80% 0.30% -8.00% 0.276 mln 122.6 NA 81.4 NA NA NA 0.30% 1% 4.20% 53.5 11 11 -10 NA

MARKET PERFORMANCE

DJIA

A. Stocks pared losses after another round of economic data offered more positive readings, with U.S. existing home sales rebounding 7.6% and leading indicators rising 0.3% in August. After an 80-point fall, the Dow Jones was off 28.53 points to 10,710.78. B. Natural gas stocks moved into positive territory at midday on bullish supply data and strength in shares of National Fuel Gas Co., while petroleum producers and oil service shares remained in the red. The Dow Jones rose 4 points, after moving into negative territory earlier in the session. Index components Exxon Mobil Corp. and Chevron Corp. dropped 0.2% and 0.1%, respectively. After a mild rise, the Dow Jones Industrial Average was off 81 points at 10,658 with all but four of its 30 components declined.

CORPORATE RESULTS
DATE - 24/September2010
COMPANY NAME EVENT

KB Home Comtech Telecommunications Finish Line Oxygen Biotherapeutics

Q3 2010 Q4 2010 Q2 2011 Shareholders Meeting

C.

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