THE ECONOMIC MONITOR

08 September 2010

U.S.
Free Edition

INSIDE THE REPORT MARKETS AT A GLANCE

 Stock recommendations and price targets from top
brokerage firms
 Detailed analysts' expectations on companies’ earnings
 Analyses and views on consumer chief delay, Nevada
economy
 Forecasts on Economic Indicators
 List of companies earnings that hit and miss the analysts’
expectations
 The Dow Jones Industrial Average rose 46.32 points, or
0.45 percent, at 10,387.01. The S&P 500 added 7.03 points,
or 0.64 percent, at 1,098.87.
 The greenback closed around 83.87 yen, up 0.1 percent.
 Benchmark 10-year notes trading on the open market
were last down 17/32 in price.
 U.S. crude for October delivery rose 58 cents, or 0.78
percent, to settle at $74.67 a barrel, having traded from
$73.37 to $75.39.

 Special report on BP blames itself and partners for the oil  U.S. gold futures for December delivery rose $0.80 to
spill $1,260.20.

 Important Events Scheduled on 09 September

STOCK INDICES
Economic Events INDEX LAST CHNG % CHNG

 Labor Department issues weekly Jobless Claims DJIA* 10387.01 46.32 0.45

NYSE Composite* 6999.94 40.00 0.57

 Commerce Department issues International Trade for July
Nasdaq* 2228.87 19.98 0.90

 Freddie Mac issues weekly U.S. mortgage rates S&P 500* 1098.87 7.03 0.64

DJ Total Stock Market* 11453.35 72.36 0.64

 ICI weekly money market mutual fund data
Russell 2000* 634.25 4.96 0.79

Corporate Events Global Dow* 1855.98 4.02 0.22

Nasdaq 100* 1880 23.50 1.27

 National Semiconductor first quarter results DJ Transportation Avg* 4400.4 58.98 1.36

 Smith & Wesson, Korn/Ferry International first quarter S&P 100* 496.78 3.10 0.63
results * CLOSING VALUES

Breaking News CURRENCIES

 Sanofi’s $71per share offer to Genzyme INDEX LAST PRIOR

Euro (EUR/USD) 1.2718 1.2692

 Talbots miss Q2 sales
U.K. Pound (GBP/USD) 1.5467 1.5367
 Oracle’s lucrative offer to Hurd Japanese Yen (USD/JPY) 83.91 83.75

All prices are at 04:32 PM EDT

 JA Solar sets solar cell deals

 Navistar profit jumps FUTURES

 Former AIG CEO to joins Willis SETTLE CHANGE

Crude Oil (Sept) 74.61 0.52

 Report shows widespread signs of growth
Natural Gas (Oct) 3.822 -0.03
 Job openings rise in July Gold (Dec) 1257 -2.30
Copper ( Dec) 349.4 2.35
 Basel Committee approves new capital rules
Wheat (Dec) 710.5 0.00
 UnitedHealth may be fined upto $9.9 billion
All prices are at 04:22 PM EDT
THE ECONOMIC MONITOR - U.S.

STOCK RECOMMENDATIONS BY BROKERAGE HOUSES

BROKERAGE/COMPANY ACTIONS RATING

RBC
Boeing Starts with outperform rating Outperform
General Dynamics Starts with outperform rating Outperform
Honeywell Starts with sector perform rating Sector Perform
L-3 Communications Starts with underperform rating Underperform
Lockheed Martin Starts with sector perform rating Sector Perform
Northrop Grumman Starts with underperform rating Underperform
Precision Castparts Starts with top pick rating Top Pick
Raytheon Starts with sector perform rating Sector Perform
Rockwell Collins Starts with outperform rating Outperform
Wells Fargo
Baker Hughes Resumes coverage of with outperform ratings Outperform
Diamond Offshore Drilling Resumes coverage of with market perform ratings Market Perform
Halliburton Resumes coverage of with outperform ratings Outperform
Rowan Companies Resumes coverage of with outperform ratings Outperform
Schlumberger Starts with outperform ratings Outperform
Benchmark
Chevron Cuts target price to $94 from $98 Buy
ConocoPhillips Raises target price to $48 from $43 Sell
Exxon Mobil Raises target price on to $52 from $48 Sell
Time Warner Cuts price target to $34 from $40 Hold
Viacom Cuts price target to $37 from $42 Hold
UBS
Apple Raises price target to $350 from $340 Buy
Intel Cuts to neutral from buy Neutral
Teradyne Cuts to neutral from buy Neutral
Western Digital Cuts to neutral from buy Neutral
Goldman Sachs
Costco Wholesale Raises to buy from neutral Buy
Staples Raises to buy from neutral; adds to conviction list Buy
Jefferies
Altera Corp Cuts price target to $26 from $32 Hold
Citigroup
Baxter International Downgrades to sell from hold; cuts price target to $41 from $46 Sell
Raymond James
Huntington Bancshares Upgradesto strong buy from outperform Strong Buy
Oppenheimer
H&R Block Cuts to perform from outperform Perform
Janney Capital
Intuit Raises fair value to $50 from $45 Buy
BofA Merrill
Visa Cuts to underperform from neutral Underperform

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 PERFORMANCE

DJIA
A. Index opened with modest gains as Portugal's successful auction
of debt helped offset concern about European banks. The Dow
Jones gained 36.82 points to 10,377.51.

B. Dow Jones rose 52.9 points, or 0.5%, at 10,393.59. Twenty-five of

its 30 components rose, with aluminum giant Alcoa Inc. paving
the gains, lately up 2.7%. Hewlett-Packard Co. fell the most
among the blue chips after UBS AG downgraded the computer
manufacturer from buy to neutral.

C. The stocks were heading into the high end note as a successful
sovereign debt auction in Portugal helped ease concerns about
Europe, but with gains capped after the Federal Reserve confirmed
the U.S. economy is slowing. The Dow Jones rose 40.12 points, or
0.45%, to 10,380.01, with 24 of its 30 components ending higher,
led by a 2% gain in shares of Alcoa Inc.
THE ECONOMIC MONITOR - U.S.
COMPANY NEWS
BP blames contractors
A BP Plc investigation of the Gulf of Mexico disaster played down the company's
role in the world's worst offshore oil spill, seeking to share the blame with its
contractors.
The investigation of the Gulf of Mexico disaster by BP blamed its contractors for
the spill. The 193-page internal report drew fire from U.S. lawmakers and one of
the contractors, Transocean, called it a "self-serving" attempt by the British
energy giant to escape responsibility for the "fatally flawed" design of its deep-
sea Macondo well.
Sanofi’s $71per share offer to Genzyme
Sanofi-Aventis SA placed a new offer to acquire U.S. biotechnology company
Genzyme Corp for $71 a share. According to the DealReporter the $71 offer is
likely Sanofi's last and "top-end" informal proposal without getting additional
information about the company's finances. DealReporter said the $71-a-share
number "was thrown around in phone conversations the two companies held
late last week."
Talbots miss Q2 sales
Talbots Inc reported fall in sales for the second quarter. Its sales fell 1.3 percent
to $300.7 million in the second quarter that ended July 31. Sales at stores open
at least a year fell 1.4 percent while the company reduced total inventory 10.4
percent. The women's clothing retailer issued a weaker-than-expected profit
forecast in the current quarter.
Oracle’s lucrative offer to Hurd
Oracle Corp offered its new president, Mark Hurd a
salary of $950,000 and a bonus of up to $10 million
for fiscal 2011, plus stock options. Hurd can buy 5
million Oracle common shares each year for the next
five years. Meanwhile, HP sued Hurd, asking a
California court to block him from taking a job with
a rival to whom he could reveal HP trade secrets.
JA Solar sets solar cell deals
China's JA Solar Holdings Co said that it had signed deals to sell 500
megawatts of solar cells in 2011. Under the contracts signed with several
customers, JA Solar will supply solar cells from January through December 2011
and receive prepayments for committed delivery. It did not disclose the
customers involved or the dollar value of the contracts. The company sold about
311 MW of solar equipment in the second quarter.
Navistar profit jumps
Truck maker Navistar International Corp posted higher-than-expected
quarterly profit on strong sales of armored fighting vehicles to the U.S. military.
Sales rose 28 percent to $3.2 billion. Navistar reported a profit of $137 million, or
$1.83 a share, for the quarter. A year earlier it posted a loss of $12 million, or 16
cents a share. Meanwhile, Its full-year earnings forecast indicated a weaker-than-
expected fiscal fourth quarter.
Former AIG CEO to joins Willis
Former AIG Chief Executive Martin Sullivan is going to join insurance broker
Willis Group Holdings PLC, the Financial Times said. Sullivan will lead a new unit
that is focused on winning more large and complex multinational clients.
According to the FT, Sullivan will also be the deputy chairman of the group.
Jackson Hewitt may seek RAL funding
Jackson Hewitt Tax Service Inc said it may seek an extension with its lenders to
submit a plan on funding its refund anticipation loans (RALs). CFO Dan O'Brien
said in a post-earnings call, "Our amended credit agreement contains a series of
RAL milestone dates that if we fail to meet, could lead to an event of default. The
first such milestone date is coming up on September 15."
ECONOMY NEWS
Report shows widespread signs of growth
The Federal Reserve said in its Beige Book compilation that the economy has
shown "widespread signs" of slowing over recent weeks suggesting the recovery
was faltering along the East Coast and in the Midwest. The Fed said that modest
growth was the most common characterization of economic activity in Fed
districts, primarily those in the western and middle portions of the country such
as San Francisco, Dallas and Kansas City. "The reports suggested ample supply of
qualified applicants for open positions," the Beige Book said. The Fed said
consumer spending appeared to increase although shoppers were limiting
themselves to essential items. The hard-hit housing sector showed further
declines after an initial drop following the expiration of a popular tax credit, the
Fed said.
Kocherlakota on jobs
Minneapolis Fed President Narayana Kocherlakota said a mismatch between
workers' skills and location and the jobs available may account for more than a
quarter of U.S. unemployment, and monetary policy is ill-equipped to tackle this
problem.
He said more than 2.5 percentage points of the U.S. unemployment rate --
currently at 9.6 percent -- appears to be due to workers not being able to find
appropriate jobs. The unemployment rate will likely stay above 8 percent in 2012,
he said.
"GDP is growing, but more slowly than we would like," he said. He said he
expects U.S. economic growth at about 2.5 percent in the second half of 2010
and three percent next year.
Job openings rise in July
The Labor Department said U.S. job openings
increased in July. Job openings climbed 178,000
to a seasonally adjusted 3.04 million, the Labor
Department said in its monthly Job Openings
and Labor Turnover Survey. But revisions to
June's data showed there were about 73,000
fewer openings than previously reported. In July,
the job openings rate rose to 2.3 percent from
2.1 percent in June. Although layoffs fell 21,000
to 2.12 million the month, the layoff and discharge rate remained at a seven-
month high of 1.6 percent. After tapering off early this year, layoffs picked up
between April and July.
REGULATORY NEWS
Basel Committee approves new capital rules
Central bank and regulatory officials approved tougher new global bank capital
rules on Tuesday. Formal endorsement of the approval is expected on Sunday.
The Basel Committee ended the meeting after making recommendations on
how much extra capital banks will have to hold in future to avoid governments
having to bail out the sector in the next crisis, according to a source familiar with
the process.
It also agreed arrangements for phasing in higher standards on the quality of
capital banks must hold in future.
UnitedHealth may be fined upto $9.9 billion
California regulators may fine a unit of health insurer UnitedHealth Group Inc
up to $9.9 billion. The California Department of Insurance alleges that PacifiCare
violated state law nearly a million times from 2006 to 2008 after it was purchased
by UnitedHealth. According to department spokesman Ioannis Kazani each
violation is punishable by a fine of up to $10,000.
THE ECONOMIC MONITOR - U.S.

NEXT TRADING DAY NEXT TRADING DAY (contd…)

Economic Events Corporate Events

WASHINGTON - Labor Department issues weekly Jobless Claims,
0830/1230
Last week's jobless claims data helped to quell fears the
economy could face a double-dip recession. There were
472,000 initial jobless claims filed in the week ended
August 28, down 6,000 from an upwardly revised
478,000 the previous week, according to the Labor
Department's weekly report. The 4-week moving
average of initial claims was 485,500, down 2,500 from
the previous week. Claims have been stuck in the mid-
to upper-400,000 range for about nine months, though last month they
spiked above 500,000 for the first time since November, before edging
lower again.
WASHINGTON - Commerce Department issues International Trade
for July, 0830/1230
S&P 500 Companies
WallStreet expects National Semiconductor to report a
profit of 34 cents per share for the first quarter, up from
13 cents for the same period a year ago. The
semiconductor maker reported strong results in the
recent fourth quarter, saying it swung to profit as
compared to a loss in the comparable period a year
ago, despite taking a one-time charge. The company,
which specializes in power management circuits, display
drivers, and communication interface products, said its Q4FY2010 net
income stood at $79.2 million compared to a loss of $63.7 million in
Q4FY09. Net income rose 48.8 percent. Net sales in the quarter surged
41.9 percent compared to the same quarter the year before.
Non-S&P 500 Companies
Analysts expect Investors Real Estate to report a profit of 2 cents per
share, unchanged from a year earlier for the first quarter.

Last month's report said the U.S. trade deficit widened in June by $7.9
billion as imports rose and shipments abroad declined. The $49.9 billion
gap was the biggest since October 2008 and followed a $42 billion
shortfall in May, Commerce Department figures showed. Exports
dropped by the most in more than a year. The U.S. trade gap widened a
surprising 18.8 percent in June on a wave of consumer imports from
China and other suppliers, suggesting U.S. second-quarter economic
growth was weaker than previously thought.
WASHINGTON - Freddie Mac issues weekly U.S. mortgage rates,
1000/1400
U.S. mortgage rates fell in the week ending August 28 to the latest in a
series of record lows as yields on government debt dropped, according
to a survey released on last Thursday by Freddie Mac. Interest rates on
U.S. 30-year fixed-rate mortgages, the most widely used loan, averaged
4.32 percent for the week ended Sept. 2, down from the previous
week's 4.36 percent and its year-ago level of 5.08 percent, according to
the survey. Thirty-year mortgage rates have fallen to fresh lows for 10
out of the past 11 weeks. The 15-year fixed-rate mortgages averaged
3.83 percent, down from 3.86 percent last week, the lowest since
Freddie Mac began surveying this loan type in 1991. Fifteen-year
mortgage rates have fallen to fresh lows for eight out of the past 11
weeks.
WASHINGTON - EIA issues weekly U.S. underground natural gas
stocks, 1030/1430
John Wiley & Sons is expected to post a profit of 55 cents per share
for the first quarter, up from 45 cents for the same period a year ago.
Analysts expect Korn Ferry International to report a profit of 20 cents
per share, up from the loss of 5 cents a year earlier for the first quarter.
The executive-search firm posted better-than-expected results in the
recent fourth quarter, helped by higher fee revenue and stronger
demand for permanent recruitment. For the fourth quarter ended April
30, the company earned $8.9 million, or 19 cents a share, compared
with a loss of $17.2 million, or 40 cents a share, a year earlier. The latest
quarter included restructuring expenses of $0.1 million. Total revenue
rose 55 percent to $176.9 million, while fee revenue was up 58 percent
at $168.7 million.
Smith & Wesson is expected to post a profit of 5 cents per share for
the first quarter, down from 16 cents for the same period a year ago.
For the fourth quarter ended April 30, the U.S. Gun maker earned $2.7
million, or 4 cents a share, compared with $7.4 million, or 14 cents a
share, a year ago. Net sales rose 4 percent to $103.8 million, beating
Wall Street expectations of $98.9 million. Firearm order backlog was up
45 percent at the end of the fourth quarter.
CORPORATE RESULTS
DATE - 09/September2010
COMPANY NAME EVENT

WASHINGTON - Energy Information Administration issues weekly C&D Technologies Q2 2011

petroleum stocks and output data, 1100/1500 Piedmont Natural Gas Q3 2010

WASHINGTON - Treasury Department weekly announcement of 3- Sparton Q4 2010

and 6-month bill sale offerings, 1100/1500 Peregrine Pharmaceuticals Q1 2011
John Wiley & Sons Q1 2011
WASHINGTON - Treasury Department sells 30-year bonds, 1300/1700
Stewart Enterprises Q3 2010
WASHINGTON - ICI weekly money market mutual fund data, after Oxygen Biotherapeutics Q1 2011
1600/2000
Smith & Wesson Holding Q1 2011
Total money market mutual fund assets decreased by $6.22 billion to Investors Real Estate Trust Q1 2011
$2.827 trillion for the week ended, September 1, the Investment Korn/Ferry International Q1 2011
Company Institute reported last week. Taxable government funds
decreased by $10.71 billion, taxable non-government funds increased Ulticom Q2 2010
by $7.26 billion, and tax-exempt funds decreased by $2.77 billion. The Hooker Furniture Q2 2011
assets of retail money market funds decreased by $470 million to
Ocean Power Technologies Q1 2011
$966.00 billion. The assets of institutional money market funds
decreased by $5.75 billion to $1.861 trillion. National Semiconductor Q1 2011
THE ECONOMIC MONITOR - U.S.

ECONOMIC INDICATOR WATCH MARKET BRIEFING

Initial Jobless Claims
Forecast: 470k Prior: 472k
Why Investors Care ?
Initial Jobless Claims is a measure of the number of people filing first-time claims
for state unemployment insurance. In other words, it provides a measure of
strength in the labor market. A larger than expected number indicates weakness
in this market which influences the strength and direction of the U.S. economy.
Generally speaking, a decreasing number should be taken as positive or bullish
for the dollar.
Frequency: Weekly
Source: U.S. Department of Labor
Continuing Jobless Claims
Forecast: 4.45 million Prior: 4.456 million
Why Investors Care ?
The Continuing Jobless Claims measures the number of individuals who are
unemployed and are currently receiving unemployment benefits. It presents the
strength in the labor market. A rise in this indicator has negative implications for
consumer spending which discourage economic growth. Generally speaking, a
high reading is seen as negative, or bearish for the dollar, while a low reading is
seen as positive, or bullish.
Frequency: Weekly
Source: U.S. Department of Labor
International Trade/Trade Balance
Forecast: -$47.3 million Prior: -$49.9 million
Why Investors Care ?
The Trade Balance is a balance between exports and imports of total goods and
services. A positive value shows trade surplus, while a negative value shows trade
deficit. It is an event that generates some volatility for the dollar. If a steady
demand in exchange for U.S. exports is seen, that would turn into a positive
growth in the trade balance, and that should be positive for the dollar.
Frequency: Monthly
 U.S. stocks rose, as investors latched onto positive news out of Europe in
the latest in a string of low-volume sessions suggesting little confidence
in market direction. Bank stocks recovered from Tuesday's losses, with
JPMorgan Chase up 2.2 percent and the BKW bank index up 1.7
percent. A successful Portuguese debt offering as well as news that
nationalized Irish lender Anglo Irish Bank would wind down assets pulled
global equity markets higher. The Dow Jones Industrial Average rose
46.32 points, or 0.45 percent, at 10,387.01. The S&P 500 added 7.03
points, or 0.64 percent, at 1,098.87. The Nasdaq Composite climbed
19.98 points, or 0.90 percent, at 2,228.87.
 The euro rose against the U.S. dollar, buoyed by successful bond
auctions in Portugal and Poland that made the currency's fall on Tuesday
appear overdone. But investors remained concerned about the European
banking sector's lack of capital and pushed the safe-haven yen to a 15-
year high against the dollar and lifted the Swiss franc to an all-time peak
versus the euro during the session. The euro recovered to 106.67 yen
before ending up 0.3 percent at $1.2710 after earlier threatening to
revisit Augusts' nine-year low just below 105.50. Safe haven currencies
remained in vogue though with the U.S. dollar falling as low as 83.34 yen
on electronic trading platform EBS. The greenback closed around 83.87
yen, up 0.1 percent. The euro also fell to a record low versus the Swiss
franc of 1.2765 francs on EBS.
 U.S. Treasuries fell as rising stocks and easing concerns over Europe's
debt problems cut demand for safe-haven assets. But it was a tale of two
trading sessions as Treasuries made up losses significantly in the
afternoon after a well-bid U.S. government bond auction, with investors
snapping up an offering of 10-year notes and paying a premium to do
so. The 10-year U.S. note sale removed one of the major negatives for
Treasuries since looming supply had weighed on prices. Benchmark 10-
year notes trading on the open market were last down 17/32 in price,
yielding 2.66 percent versus Tuesday's close of 2.59 percent. They were
trading down 24/32 before bidding deadline for Wednesday's auction.
The 30-year Treasury bond was last down 1-5/32 in price yielding 3.73
percent versus Tuesday's close of 3.66 percent.
 Oil rose for the first time in three sessions, bouncing with equities and
supported by a weaker dollar as concerns over the European banking
system eased and investors cautiously bought riskier assets. The focus
late on Wednesday will shift to fundamentals and weekly inventory data,
with reports from industry and government expected to show crude
stocks rose for a third consecutive week. Distillate supplies, which
include diesel fuel and heating oil, were also expected to be higher. U.S.
crude for October delivery rose 58 cents, or 0.78 percent, to settle at
$74.67 a barrel, having traded from $73.37 to $75.39. The ICE Brent
contract witnessed active trade for a second day running as the October
contract rose 43 cents to settle at $78.17, having earlier hit a one-month
high of $78.85.

 Gold rose for a third day to verge on another record high and silver hit a
Source: Bureau of Economic Analysis and U.S. Census Bureau
2-1/2 year peak as the waves of nervousness over the global economy
steered investors into perceived safe-haven assets. Spot gold was bid at
$1,257.90 an ounce at 1500 GMT, against $1,253.10 late in New York on
Tuesday, having hit a session high of $1,262.25. U.S. gold futures for
ECONOMIC CALENDAR December delivery rose $0.80 to $1,260.20. Gold has risen by about 15
percent so far in 2010, marking ten years of continuous increases, and
DATE EDT INDICATOR F’CAST PRIOR looks set for its third all-time high this year. It last hit a record $1,264.90
in June.
THU 09/09 0830 Initial Claims 470k 472k

0830 4 Week Average NA 485.5k

0830 Continuing Claims 4.45 mln 4.456 mln

0830 International Trade -47.3 bln -49.9 bln

FRI 09/10 1000 Wholesale Invents, Jul 0.4% 0.1% This report is produced by
International Business Times
1000 Wholesale Sales 0.3% -0.7%
For questions or comments
1030 ECRI Weekly Index NA 120.6 reach us at
MON 09/13 1400 Federal Budget -$100 bln -$103.6 bln researchanalysis@ibtimes.com

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