30 November 2010

The Intelligent Investor U.S.
The Economic Monitor Series. Free Edition.

INSIDE THE REPORT

MARKETS AT A GLANCE

Stock recommendations and price targets from top brokerage firms Analysis and views on US consumer confidence hits five-month high

U.S. stocks fell in a choppy session, but showed resilience in the face of Europe's debt crisis, recovering some of their losses on more encouraging signs from the U.S. economy. The DJIA fell 46.47 points, or 0.42 percent, to end at 11,006.02. Benchmark 10-year Treasury notes last traded up 6/32 in price for a yield of 2.80 percent, down from 2.83 percent late Monday. The euro was last down 1 percent against the dollar at $1.2988 from $1.3002 before the news broke, though it remained well off the session low of $1.2968 touched earlier in the global trading day. Oil fell, as concerns that Europe's debt crisis will widen battered the euro and added to worries about Chinese oil demand. U.S. crude oil for January delivery fell $1.62, or 1.89 percent, to settle at $84.11 a barrel, then extended its losses to $83.55 in postsettlement trade. Gold rallied over 1 percent to a 2-1/2 week peak and euro-priced bullion set a fresh record high as concern over sovereign debt levels in the euro zone fuelled buying of the metal as a safe store of value. Spot gold was trading at $1,385.50 an ounce at 1643 GMT against $1,368.09 late in New York on Monday.

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Economic Indicator Watch along with Graphs List of companies earnings which hit and miss the analysts’ expectations Important Events Scheduled on December 01
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Economic Events

Federal Reserve Bank of Dallas President Richard Fisher speaks on Federal Reserve operations and economic update before a community forum hosted by the Federal Reserve Bank of Dallas 1800 GMT Federal Reserve Vice Chair Janet Yellen speaks on "Fiscal Responsibility and Global Rebalancing" before the Committee for Economic Development 2010 International Counterparts Conference - 1410 GMT Federal Reserve to release periodic Beige Book survey of U.S. economic conditions - 1900 GMT Senate Banking hearing on Problems in Mortgage Servicing From Modification to Foreclosure. U.S. FDIC Chairman Sheila C. Bair, Federal Reserve Governor Daniel K. Tarullo, Acting Director of Federal Housing Finance Agency Edward DeMarco and Others to participate in a Panel - 1430 GMT

STOCK INDICES
INDEX LAST 11006.02 2498.23 1180.55 7430.94 1949.81 CHNG -46.47 -26.99 -7.21 -52.4 -12.96 % CHNG -0.42 -1.07 -0.61 -0.7 -0.66

DJIA* Nasdaq* S&P 500* NYSE Composite

Corporate Events

Global Dow * CLOSING VALUES

No earnings scheduled for release

Top Stories

CURRENCIES
INDEX LAST 1.298 1.5551 83.69 PRIOR 1.3123 1.5574 84.24

Consumer, manufacturing data shows gains Google close to its largest acquisition ABB to buy Baldor Electric FDA raises concern on AstraZeneca cancer drug Morgans seeks new CEO Merck elevates Frazier to succeed Clark as CEO Lowe's affirms its outlook U.S. oil falls toward $85 as dollar rises

Euro (EUR/USD) U.K. Pound (GBP/USD) Japanese Yen (USD/JPY)

All prices are at 04:16 PM EST

FUTURES
LAST Crude Oil Natural Gas Gold, Dec. Copper Wheat 83.78 4.212 1385.7 380.95 690.5 CHANGE -1.95 0.002 18.2 4.2 0

All prices are at 04:06 PM EST

The Intelligent Investor - U.S.
STOCK RECOMMENDATIONS BY BROKERAGE HOUSES
BROKERAGE/COMPANY RBC Altera Corp Camden Property Trust Post Properties Seagate Technology UDR Simmons & Co. Diamond Offshore drilling Rowan Companies Macquarie Dow Chemical Co Eastman Chemical Bernstein Emerson Electric Barclays Altera Corp eBay Raymond James Altera Corp Semtech Corp Credit Suisse International Game Technology Stifel Altera Corp NuPathe Janney Capital Markets Kimberly Clark BofA Merrill Verisign Inc Argus Chesapeake Energy Jefferies Altera Corp ITW Beacon Roofing Supply Brightpoint Bravo Brio Restaurant Coresite Realty Corp Caris Western Digital Deutsche Bank Western Digital UBS Wynn Resorts Raises price target to $133 from $129 Buy Raises price target to $38 from $32 — Raises price target to $40 from $36 Above average Raises price target to $35 from $29 Recommends price target of $60 Raises price target to $18 from $16 Cuts to hold from buy Recommends price target of $22 Recommends price target of $17 Hold Buy Hold Hold Buy Buy Cuts to sell from hold Sell Raises price target to $37 from $34 Neutral Recommends price target of $75 Buy Raises price target to $42 from $36 Recommends price target of $13 Buy Buy Adds to U.S. focus list — Raises price target to $54 from $48 Raises price target to $28 from $22 Strong buy Outperform Raises price target to $38 from $34 Raises price target to $29 from $27 Equal-weight Equal-weight Raises price target to $62 from $60 Market perform Recommends price target of $38 Recommends price target of $95 Outperform Outperform Cuts to underweight from neutral Cuts to neutral from overweight Underweight Neutral Raises price target to $34 from $30 Raises price target to $59 from $54 Raises price target to $40 from $32 Cuts price target to $13 from $15 Raises price target to $24 from $22 Sector perform Top pick Outperform Sector perform Sector perform ACTIONS RATING

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.

The Intelligent Investor - U.S.
TOP STORIES

Consumer, manufacturing data show gains
U.S. consumer confidence rose in November to its highest in five months, said the Conference Board. Meanwhile, U.S. Midwest business activity grew faster than expected. The Conference Board said its index of consumer attitudes increased to 54.1 in November, the strongest since June, from a revised 49.9 in October. In another report, the Institute for Supply ManagementChicago's business barometer rose to 62.5 in November, up from 60.6 in October. Standard & Poor's/Case-Shiller composite index on Tuesday showed home prices in 20 metropolitan areas declined 0.8 percent in September from August on a seasonally adjusted basis, more than the decline of 0.3 percent expected by economists.

Google close to its largest acquisition
Google is inching towards its largest acquisition to date as it is going to buy e-commerce coupon website Groupon Inc for as much as $6 billion, the New York Times said on Tuesday. Sources familiar with the matter tell the New York Times and All Things Digital that Google has offered between $5 and $6 billion for the acquisition of online daily deal site Groupon. Groupon, a privately held, Chicago-based company was launched about two years ago. The site offers daily discounts on services, goods, and food from local retailers with a catch: to get the deal, a minimum number of users must sign up for the sale, introducing a social element to the bargain shopping.

ABB to buy Baldor Electric
Swiss engineering group ABB is to buy U.S. industrial motors firm Baldor Electric Co for a deal of $3.1 billion or £2 billion. The deal will give ABB a chance to capitalize on a global push for energy efficiency and boost its North American presence. ABB will pay $63.50 a share, a 41 percent premium to Baldor's closing price on November 29. Under the deal, ABB also assumes $1.1 billion in net debt. ABB expects the deal to yield more than $200 million annually to earnings before interest, tax, depreciation and amortization (EBTIDA) by 2015. A deal termination fee was set at $105 million.

FDA raises concern on AstraZeneca cancer drug
The U.S. Food and Drug Administration staff reported concerns on the cancer drug by AstraZeneca. The staff said the cancer medicine carries "substantial toxicity" for patients with inoperable thyroid cancer. The U.S. Food and Drug Administration staff said they would ask an advisory panel to consider heart-related risks and other potential side effects from the drug, vandetanib.

Morgans seeks new CEO
U.S. boutique hotel operator Morgans Hotel Group said it is looking for a new chief executive officer to succeed Fred Kleisner. Kleisner has indicated his willingness to serve beyond the expiration of his term which is due on December 31.

Merck elevates Frazier to succeed Clark as CEO
Merck & Co president Kenneth Frazier will succeed Richard Clark as the chief executive officer. Clark will continue as board chairman. Frazier, who joined Merck in 1992, will serve his new position effective from 1 January, 2011.

Lowe's affirms its outlook
In a statement issued ahead of analyst and investor conference, Lowe's again confirmed its previous forecast for sales and profit outlook for its current fiscal 2010 fiscal year. The home improvement chain said it would announce new strategies to serve what it called more exacting consumers. Lowe's also said it is still forecasting earnings per share of between $1.37 and $1.40 for the fiscal year ending January 28, 2011. It still expects sales at stores open at least a year to rise between 1 and 2 percent. It plans to open 42 new stores in all. Chief Executive Robert Niblock said the company has contended with an uncertain housing environment and a "declining industry."

U.S. oil falls toward $85 as dollar rises
Oil fell towards $85 on Tuesday as the dollar hit a 10-week high on concerns about Europe's debt crisis. U.S. crude for January CLc1 slipped 50 cents to $85.23 a barrel by 1458 GMT after rising $1.97 on Monday, when it briefly touched $85.90, the highest price since Nov. 12. ICE Brent LCOc1 lost 30 cents to $87.04 after rising more than 2 percent on Monday.

The Intelligent Investor - U.S.
ANALYSIS AND VIEWS

US consumer confidence hits five-month high
Consumer confidence in the U.S. improved in November to reach the highest point in the last five months, suggesting the economy is still expanding, albeit it slowly. The Conference Board said on Tuesday its consumer confidence index rose to 54.1 in November from 49.9 in October. The rise in the index was better than analyst consensus of a reading of 52. “Consumer confidence is now at its highest level in five months, a welcome sign as we enter the holiday season. Consumers’ assessment of the current state of the economy and job market, while only slightly better than last month, suggests the economy is still expanding, albeit slowly," said Lynn Franco, Director of The Conference Board Consumer Research Center. "Expectations, the main driver of this month’s increase in confidence, are now at the highest level since May (Exp. Index, 84.6). Hopefully, the improvement in consumers’ mood will continue in the months ahead,” he added. However, analysts played down the surge in the confidence indicator, suggesting that the further rebound in consumer confidence may not translate into a sustained acceleration in consumption growth when the jobless rate runs high and housing worries continue to persist. "Although it is encouraging that confidence is edging higher, consumers remain remarkably downbeat. If households were on the cusp of spending more significantly, confidence would now be well above the long-run average of 94," Capital Economics analyst Paul Dales wrote in a note. Consumers’ assessment of current-day conditions was virtually unchanged from October, the survey revealed. Those claiming business conditions are “bad” increased to 43.6 percent from 42.3 percent, while those claiming business conditions are “good” edged down to 8.1 percent from 8.3 percent. Consumers’ appraisal of the job market, however, was more positive than last month, according to the survey, which was based on a representative sample of 5,000 U.S. households. Those stating jobs are “plentiful” rose to 4.0 percent from 3.5 percent, while those stating jobs are “hard to get” edged up to 46.5 percent from 46.3 percent. Consumers were more optimistic about the short-term outlook than in October, the survey said. Those anticipating an improvement in business conditions over the next six months rose to 16.7 percent from 15.8 percent, while those anticipating business conditions will worsen declined to 12.1 percent from 14.4 percent. "Consumers were also more upbeat about future job prospects. Those expecting fewer jobs in the months ahead declined to 18.8 percent from 22.3 percent, while the percentage expecting more jobs rose to 15.5 percent from 14.5 percent. The proportion of consumers expecting an increase in their incomes increased to 10.6 percent from 9.7 percent," Conference Board said in a statement.

DAILY EARNINGS HITS & MISSES AS ON 30 NOVEMBER, 2010
Company Name AVANIR PHARMA BARNES & NOBLE CHINA BAK BATTERY FUNTALK CHINA PATRIOT TRANSPORTATIO ROSETTA GENOMICS SIMULATIONS PLUS TRINA SOLAR Qtr Q4 Q2 Q4 Q2 Q4 Q3 Q4 Q3 Curr USD USD USD USD USD USD USD USD EPS Est -0.09 -0.08 0.01 0.17 0.65 -0.23 0.02 0.87 EPS Act -0.1 -0.22 -0.14 0.18 0.6 -0.2 0.02 1.08 Diff EPS -0.01 -0.15 -0.15 0.01 -0.05 0.03 0 0.21 Rev Est 0.9 1979.5 60.6 249.3 28.7 0.2 2.6 420.6 Rev Act 0.7 1905.6 55.6 260.4 28 0.1 2.2 508.3 Rev Diff -0.2 -73.9 -5 11.1 -0.7 0 -0.4 87.7

The Intelligent Investor - U.S.
ECONOMIC INDICATOR WATCH ON 01 DECEMBER 2010

ADP National Employment
Forecast: 69,000 Prior: 43,000
The ADP Employer Services will report data for jobs in private sector for the month of November at 0815 EST. According to the last report, the U.S. private employers’ added 43,000 jobs in October compared to a revised loss of 2,000 jobs in September. The September figure was originally reported as a loss of 39,000.

ISM
Forecast: NA Prior: 56.9

ISM Prices Paid
Forecast: NA Prior: 71.0
Institute for Supply Management will release its data for national factory activity for November at 1000 EST. The pace of growth in the U.S. manufacturing sector quickened unexpectedly in October. The Institute for Supply Management said its index of national factory activity rose to 56.9 from 54.4 in September. A reading above 50 indicates expansion in the sector. In October, the index of sector employment rose to 57.7 from 56.5 in September. The prices paid component edged up to 71.0 from 70.5 while new orders jumped to 58.9 from 51.1.

Domestic Car Sales (MoM)
Forecast: 3.73mln Prior: 3.74mln

Domestic Truck
Forecast: 5.33mln Prior: 5.44mln

Total Vehicle Sales
Forecast: 12.00mln Prior: 12.22mln
The Commerce Department will release data for Vehicle Sales for November.

EST/GMT 0700/1200 0700/1200 0730/1230 0815/1315 0830/1330 0830/1330 1000/1500 1000/1500 1000/1500 1400/1900 Time:TBA Time:TBA Time:TBA

Indicator Mortgage Ind Refinancing Index Challenger Layoffs ADP Nat Employment Productivity Unit Labor Costs Construct Spending ISM ISM Prices Paid Fed Beige Book Dom Car Sls Dom Truck Sls Total Vehicle Sls

Unit ---k pct pct pct ---

Forecast ---69 2.3 -0.2 -0.4 56.5 71

Prior 728.8 3793.6 37,986 43 1.9 -0.1 0.5 56.9 71

mln mln mln

3.73 5.33 12

3.74 5.44 12.22

The Intelligent Investor - U.S.
THE NEXT TRADING DAY

Economic Events

Federal Reserve Bank of Dallas President Richard Fisher speaks on Federal Reserve operations and economic update before a community forum hosted by the Federal Reserve Bank of Dallas - 1800 GMT Federal Reserve Vice Chair Janet Yellen speaks on "Fiscal Responsibility and Global Rebalancing" before the Committee for Economic Development 2010 International Counterparts Conference - 1410 GMT

Vice Chairman Janet Yellen will chair a subcommittee to review the FOMC’s “communication guidelines with the aim of ensuring that the public is well informed about monetary policy issues while preserving the necessary confidentiality of policy discussions until their scheduled release,” the minutes said.

Federal Reserve to release periodic Beige Book survey of U.S. economic conditions - 1900 GMT

The Beige Book, also called the Summary of Commentary on Current Economic Conditions, is a report published by the Federal Reserve Board eight times a year. It contains anecdotal information on current economic conditions. It also contains interviews with key business contacts, economists, market experts, and other."

Senate Banking hearing on Problems in Mortgage Servicing From Modification to Foreclosure. U.S. FDIC Chairman Sheila C. Bair, Federal Reserve Governor Daniel K. Tarullo, Acting Director of Federal Housing Finance Agency Edward DeMarco and Others to participate in a Panel - 1430 GMT

Company Events

No earnings scheduled for release

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