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MORGAN KEEGAN KEEPS OUTPERFORM ON RESEARCH IN MOTION

Morgan Keegan analyst Tavis McCourt notes Research In Motion Limited (RIMM) sees fourth be stationed revenues at the midpoint of guidance, season gross margin and EPS are expected to be at the low period of 40%-41% and $0.83-$0.91 forecasts, attached continued strength in the U.S. dollar.

McCourt notes RIM’s commentary is remarkably similar to February 2008; he expects this implies May resoluteness shape up to be another strong quarter. He notes subscriber growth did not revert in May 2008 and channel inventory was rebuilt, leading to responsible uptick in financial trends in May vs. February. He notes although this is not in his estimates, it’s a separate possibility.

He keeps $3.37 fiscal year 2009 (February) and $3.61 financial year 2010 EPS estimates.

CITIGROUP KEEPS BUY ON XL CAPITAL

Citigroup analyst Joshua Shanker says he believes XL Capital (XL) needed to prove remarkably little to court speculative investors.

Shanker notes that the company needed to show investing. portfolio decline equal to or less than third part quarter losses, and to show itself to be a going-concern with client loyalty in the form of retaining a significant amount of duty into 2009. He says it succeeded on both counts, despite excessive losses and financial discord.

The analyst expects the stock to mount this morning, although notes that the company sees low- to mid-teen ROE for 2009. He has a $14 price target on the stock.

Original text: http://www.businessweek.com/investor/content/feb2009/pi20090211_573463.htm?campaign_id=rss_null

Analysts’ opinions on stocks in the news Wednesday

From Standard & Poor’sitting Equity Research

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S&P MAINTAINS HOLD OPINION ON SHARES OF RESEARCH IN MOTION (RIMM; 50.08):

RIMM provided updated February-quarter guidance this morning that includes net subscriber adds 20% above prior guidance, but EPS and gross margin at the low end. We are lowering our EPS value for the quarter by $0.03 to $0.83. However, we are raising our fiscal year 2010 (February) EPS estimate by $0.06 to $3.81 on tough subscriber adds and modest gross margin improvement we look for. We believe subscriber net adds in February-quarter highlight the strong demand by reason of RIMM products despite weak consumer spending, but we are cautious about gross margins. We keep our 12-month target price of $51 on p-e analysis. -J. Moorman, CFA

S&P KEEPS BUY RECOMMENDATION ON SHARES OF MORGAN STANLEY (MS; 22.30):

An unconfirmed relate from Forbes says that MS and Mitsubishi UFJ (MTU) may merge their Japanese securities units. The pair have been discussing strategic cooperation inasmuch as MTU took a 21% ownership stake in MS, which may be seeking such a bestow to allow it to better focus on family operations, particularly its pending brokerage tie-up with Citigroup’s (C) Smith Barney. Separately, we apprehend the government’s great number plans to stimulate the economy could have explicit implications in succession the fellowship, but details remain scarce, and we expect emporium weakness to continue. -M. Albrecht

S&P REITERATES HOLD RECOMMENDATION ON SHARES OF GREAT PLAINS ENERGY (GXP; 15.93):

The shares are down 19% this morning after GXP cuts the dividend 50% and further reduces 2009 earnings guidance to bring reproach a worse-than-expected economic prospect as being 2009 and higher financing costs. Current 5.2% yield from the reduced dividend is still above peer average. Fourth quarter operating EPS of $0.08, vs. $0.32, is $0.14 below our value. Both fourth quarter and full-year operating EPS of $1.37 vs. $1.48, were hurt by the agency of higher operating costs and more shares. We depress our 2009 EPS estimate by $0.15 to $1.25, and our mark price by dint of. $5 to $16, a discount-to-peers p-e of 12.8 times our 2009 estimate. -J. McCann

S&P DOWNGRADES SHARES OF PETSMART TO BUY FROM STRONG BUY (PETM; 19.79):

PETM shares have risen nearly 50% within the past three months, and are approaching our DCF-based target price of $22. We continue to project January-quarter EPS of $0.60, driven by dint of. a 3.5% comp-store sales become greater, when the company releases results we look for on March 4. While we continue to favor demographic trends and PETM’s long-term growth, we await comps in fiscal year 2010 (January) will have existence pressured by easing price over-issue and a slowdown in consumer spending put on pet services and supplies. As a result, we are trimming our fiscal year 2010 EPS estimate to $1.52 from $1.55. -M. Souers

S&P REITERATES STRONG BUY RECOMMENDATION ON ADRS OF NICE SYSTEMS (NICE; 21.47):

Fourth allot EPS of $0.50, vs. $0.39, is above our $0.45 estimate on 12% sales growth. We view $141-$151 million first quarter sales guidance, compared with our $157 million estimate, as conservative in order to reflect the weakening household climate. Internal business metrics perpetuate strong, with a record backlog and an increasing peace pipeline. We see meaningful sequential sales growth starting in the second quarter as venture budgets are finalized and several large security projects arrive underway. Still, based upon revised relative analysis to contemplate peer multiple contraction, we lower our 12-month target price by $4 to $27. -A. Bensinger

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Indexes recouped some of Tuesday’s large losses as investors eyed news that a final deal on stimulus legislation was near

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U.S. stocks closed higher Wednesday as indexes staged a prepossessed rebound from Tuesday’s major emporium sell-off. Investors were keeping a wary eye on Washington, as news reports indicated the White House and Congress are near a deal on a trimmed-down, $789 billion version of President Obama’s housekeeping stimulus program.

On Wednesday, the 30-stock Dow Jones industrial medium ended higher through 50.65 points, or 0.64%, at 7,939.53. The broad S&P 500 index was up 6.58 points, or 0.80%, at 833.74. The tech-heavy Nasdaq composite index added 5.77 points, or 0.38%, to 1,530.50.

On the New York Stock Exchange, 18 stocks were higher in price for every 12 that declined. Nasdaq breadth was 15-12 dogmatic.

Treasuries were higher higher following a successful $21 billion 10-year note vendue. The relax on the 10-year note was 2.77%. The dollar hand was higher. Crude oil futures fell in New York trading following a mixed U.S. inventory mention.

The goad news lifted the market thoroughly of an earlier mixed execution, where banks outperformed technology and energy issues debt, particularly, to a profit warning from Research in Motion (RIMM) and a drop in energy futures. Financials rose as bank CEOs provided their first testimony in Washington on how they’re spending TARP money.

Gold futures surged to through $940 per ounce on technical buying, and a flight to safety from uncertainties spawned by Treasury Secretary Timothy Geithner’session failure to provide details Tuesday on financial rescue plan and the congressional battle over President Barack Obama’s economic stimulus devise.

There was little reaction to a report the December U.S. trade deficit fell to $39.93 billion from $41.58 billion in November.

House and Senate negotiators agreed Wednesday to pare housekeeping stimulus legislation below $800 billion and reached for a final deal with the White House on a bill designed to create millions of jobs in a nation reeling from recession. Several Democratic officials said there was every informal deadline of Wednesday afternoon according to at least tentative agreement on an overall broadside, a time that coincided with a scheduled innate meeting of House and Senate negotiators. The principal components of the emerging measure included riches to help victims of the recession, as much as $44 billion in give support to for states, that face cuts of their own as a result of lower make necessary receipts, and the president’s proposed tax cut as being lower and middle-income wage earners. Officials related there was agreement to accept the White House’s call to provide the tax break to workers who be remunerative Social Security taxes if it were not that do not earn enough to owe income taxes, although it was potential the amount would be scaled back somewhat. The president sought $500 for individuals and $1,000 for couples.

Working to accommodate the new, decrease overall limit of the bill, negotiators effectively wiped out a Senate-passed provision for a new $15,000 tax credit to pay the require to be paid of buying a home, these officials said. The agreement would put up with taxpayers to withdraw the sales tax paid on new car purchases, but not the authority onward loans for the identical vehicles. It also appeared a compromise was in the works on the administration’s demand for school construction funds.

Chicago Fed President Charles Evans reported Wednesday the U.S. economy faces a protracted period of weakness nevertheless policy actions taken by U.S. authorities and efforts by the private sector should back development pick up later in 2009. However, Evans, in prepared remarks to the CFA Society of Iowa, cautioned that the full size and impact of the government’s stimulus package are inert unclear, so his forecast may need to be revised as more information becomes available. Treasury Secretary Timothy Geithner’s plan, outlined on Tuesday, to move illiquid assets off banks’ balance sheets should in like manner help “attract besides private capital and ease balance sheet restrictions on banks’ lending capacity,” he said. There are also signs that the U.S. central rowing-beam’s various emergency lending programs that target key credit markets, coupled with rock-bottom authority rates, are commencement to avoid credit market functioning and ease pecuniary strains, Evans said.

In economic information Wednesday, the U.S. trade shortage. shrunk further to $39.9 billion in December, a size not seen since February 2003, though it was less narrow than the -$36.5 billion expected by dint of. markets. It comes after narrowing $16 billion to $41.6 billion in November. Exports fell 6.0%, the identical as in November. Imports dropped 5.5% after a 11.9% be impaired in November, largely on falling oil prices. Excluding petroleum, the trade deficit narrowed to $21.1 billion vs. $21.9 billion in November. The deficit with OPEC narrowed to $4.66 billion from $5.6 billion in November, while the deficit with China narrowed to $19.9 billion from $23.1 billion before.

“The trade report reflects weaker global occupation flows that are being exaggerated by falling prices,” notes S&P senior economist Beth Ann Bovino.

The Mortgage Bankers Association before-mentioned it’s seasonally adjusted home bargain applications index slid 9.8% in the week ended Feb. 6 to 235.9, its lowest level since the end of 2000. Average 30-year mortgage rates slipped to 5.19% from 5.28 percent a week earlier, the trade group said. Reuters reported the rate has fallen more than a full percentage point in three months, but is up about 3/8 point from at daybreak this year and seen heading lower. Expectations that government steps could yank 30-year hearth loan rates near 4 percent, a proposed $15,000 home-buying tax credit and the lookout on account of mute lower house prices has raised the incentive to wait.

Among stocks in the news Wednesday, Nike Inc. (NKE) says it may cut up to 4% of its workforce as part of a restructuring of its business to further increase its consumer focus and drive innovation else quickly to market. Nike currently employs nearly 35,000 people worldwide.

Research in Motion expects fourth-quarter EPS and gross margin to be at the low cessation of previously guided ranges, and revenue to be at or near the mid-point of its earlier guided range. The company moreover expects trap subscriber account additions for the fourth place to be over 20% higher than 2.9 million net subscriber account additions earlier forecasted. RIM notes it had enroll levels of net subscriber account additions everywhere the month of December and continued to understand healthy levels following the holiday buying prepare.

Anadarko Petroleum (APC) sees 2009 lump capital expenditures, including expensed geology and geophysics (G&G), of $4.0 billion-$4.5 billion. It sees average daily sales volumes of 208 million-212 very great number barrels of oil equivalent (BOE). Anadarko says that even with reduced year-over-year capital expenditures, it expects to increase its total sales volumes in 2009, under which circumstances overcoming the impact of OPEC cuts, uncertainty of processing margins, and continued production shut-ins in the Gulf of Mexico from lingering third-party infrastructure issues related to 2008 hurricanes.

Original text: http://www.businessweek.com/investor/content/feb2009/pi20090211_278710.htm?campaign_id=rss_null

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NEW YORK — A daytime after a steep selloff on Wall Street, investors are looking for the sake of bargains and sending stocks moderately higher, bound are still cautious about the banking industry and the overall economy.

Some rebound was to be expected after the major stock indexes fell more than 4 percent Tuesday on disappointment in the government’sitting announcement of a plan to overhaul the $700 billion financial rescue package passed by Congress be unconsumed fall.

Financial stocks, the hardest strike against on Tuesday, are leading the resilience today.

The move higher comes of the same kind with CEOs of the nation’s top banks are appearing before a Senate committee to answer questions about how they have expand more than $160 billion in taxpayer money.

At midday, the Dow Jones industrials were up 60 at 7,949. The Standard & Poor’sitting 500 fore-finger was up 8 at 835, and the Nasdaq composite index was up 9 at 1,533.

Original text: http://seattletimes.nwsource.com/html/businesstechnology/2008732306_webstox11.html?syndication=rss

PALO ALTO, Calif. —

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A jurisprudence immovable is claiming Palo Alto-based Facebook Inc. paid $65 a thousand thousand to settle a suit accusing Facebook founder Mark Zuckerberg of stealing the concept towards his social network.

The jurisprudence firm that represented ConnectU, a smaller social network, included the settlement amount Facebook purportedly paid ConnectU’s founders in a newsletter.

The settlement was supposed to be confidential. Attorney Peter Calamari of Quinn Emanuel Urquhart Oliver & Hedges told the Los Angeles Times the information was included by public relations employees and didn’t be in possession of caught before it was released. He says the firm had a policy not to discuss the case.

The news was first weakened by The Recorder, a legal promulgation.

An after-hours call to Facebook was not immediately returned.

Original text: http://seattletimes.nwsource.com/html/businesstechnology/2008732050_apfacebooksettlement.html?syndication=rss

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WASHINGTON — The U.S. trade deficit fell to the lowest horizontal in nearly six years in December as the recession depressed demand for imports. The trade deficit in 2008 cut down conducive to a second straight year and economists expect one likewise bigger fail this year.

The Commerce Department said Wednesday that the deficit in December fell 4 percent to $39.9 billion, from $41.6 billion in November. It was slightly higher than the $36 billion deficit economists expected.

For the year, the deficit shrank by 3.3 percent to $677.1 billion. It was the secondary short annual inflect posterior five straight years of record deficits.

The 2008 imbalance was the lowest annual total since 2004, and many economists believe the deficit for 2009 will be moiety the size of last year’s gap. However, the improvement is due to a painful recession that is cutting demand for imports of oil, autos and other foreign-made products.

The politically sensitive deficit with China continued rising in 2008, hitting an all-time high of $266.3 billion, the highest imbalance eternally recorded with any country. The deficit with China has set records everywhere the decade, triggering a political backlash with growing calls on account of trade sanctions against Beijing for what critics assert are unfair trade practices that have cost American manufacturing jobs.

Still, Chinese exports are not immune to the movables of recession. China’s exports plunged in January amid collapsing global inquire, according to customs facts released Tuesday. Exports fell 17.5 percent last month compared with the year-ago period, and a sharper drop than December’s 2.8 percent.

The Bush administration resisted pressure in Congress to fire-brand China a currency manipulator, a denomination. that could lead to manual occupation sanctions. However, Treasury Secretary Timothy Geithner told Congress last month that President Barack Obama believes China is manipulating its circulation, raising the possibility that the new administration will take a harder line.

During the presidential campaign, Obama pledged to do a better job than Republicans at protecting American workers from unfair trade practices. There are concerns the U.S. recession and downturns in many other countries could lead to rising protectionism worldwide that will occasion the global recession worse.

The back-to-back annual declines in the U.S. trade deficit were the primary time that has occurred since it fell for four vertical years in the late 1980s and early 1990s.

The $39.9 billion December imbalance was the smallest deficit since the gap totaled $39.7 billion in February 2003.

Exports of U.S. goods and services in December dropped 6 percent to $133.8 billion, the fifth straight monthly decline. Sales of till products, domestic cars, medical equipment and computers all fell.

Exports of skilled in commerce aircraft rose in December, reflecting a reverberate subsequent the end of a strike at Boeing Co. But economists be persuaded exports will continue to fall in coming months as the recession that began in the U.S. spreads to more countries, crimping exact for American products.

Original text: http://seattletimes.nwsource.com/html/businesstechnology/2008732310_webtrade11.html?syndication=rss

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WASHINGTON — The banks are getting another dose of bailout money. It’session probably not enough.

That seems to be the consensus among investors and financial analysts after the Obama administration unveiled its in a high degree. anticipated bailout overhaul Tuesday.

Even through the of recent origin measures, experts warned that extending bank losses mean the giving volition almost certainly need more money — likely hundreds of billions or more — to finally unlock the deliquesce of credit and bring into use the economy.

“They will definitely have to rollicking time on the frontier for more money,” said Christopher Whalen, thrifty director of Institutional Risk Analytics. “There’sitting doubt that this plan isn’t plenty.”

The revised bailout is destructive in scope but light onward specifics. In announcing it, Treasury Secretary Timothy Geithner pledged to “fundamentally reshape” the bailout program to “come by credit flowing again to businesses and families.”

The plan relies on a complex approach, including more capital injections for banks and a fivefold increase in bailout funding to $100 billion.

An additional $100 billion in funding could unlock up to $1 trillion in lending through the Fed’s support program, known as the Term Asset-Backed Securities Loan Facility.

The administration also said it would create a public-private partnership to encourage investors to buy banks’ toxic estate.

Then there’s the matter of size. Banks have at in the smallest degree another $1 trillion in losses to come, experts give faith to, due to souring mortgage debt and other risky assets.

Before banks can start lending, they have to offload these property — or take on colossal sums of fresh capital to dilute their effect.

But less than half of the $700 billion government bailout is left for the Obama administration to spend. That raises questions about how estranged the government plans to be about to prop up ailing banks.

“The only way to do that is to spend more money, and you have to ask to which place it’s going to come from,” said Edward Yardeni, one independent market analyst.

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ATLANTIC CITY, N.J. A helicopter search of pair New Jersey rivers Tuesday failed to appropriate time up a glimpse of the dolphins that had been living there since last summer, perhaps an indication the mammals have safely swum away.

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The U.S. Coast Guard’s Atlantic City office and scientists from the National Oceanic and Atmospheric Administration surveyed the Shrewsbury and Navesink rivers in Monmouth County for any auspice of the bottlenose dolphins. They didn’t light upon at all.

Teri Frady, a NOAA spokeswoman, says the lack of dolphin sightings could spiritless the last five have escaped from the copious flow.

“Clearly, the fact that there were none live animals in the rivers and that there were no carcasses spotted is a good sign,” she said.

The owner of a restaurant on the banks of the Shrewsbury says he and more of his employees saw the dolphins swim out into Sandy Hook Bay highest month.

Three of the type 16 dolphins spotted in the river last June have died. The fate of the others is unknown.

The dolphins had been at the center of a tug-of-war between treaty wildlife officials - who declared they would leave the dolphins alone unless they appeared to be in imminent danger - and animal rescuers, who wanted them either removed or coaxed out of the river and back out to sea.

Local rescuers worried that waiting too long could request a replay of a scenario that resulted in the deaths of four dolphins that lingered in the river in 1993. Ice eventually closed in on them, and they drowned.

The chop-house owner who said he saw the dolphins swim out to the bay said they did so right before the Shrewsbury froze into the bargain.

NOAA scientists say they believe the dolphins originally swam into the rivers to pursue fish they sustain upon the body.

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While S&P has a neutral outlook on the industry as a total, Computer Sciences, Global Payments, and Fiserv garner buy ratings

By Sam Stovall From Standard & Poor’s Equity Research

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Data Processing & Outsourced Services Index Standard & Poor’s Equity Research

The S&P 1500 Data Processing & Outsourced Services subindustry exponent recently experienced a pick-up in its relative pronoun strength ranking and is now mixed the top 30% of all subindustries in the S&P Composite 1500 index (the combined S&P 500, S&P MidCap 400, and S&P SmallCap 600 indexes) over the prior 52 weeks, as this clump declined 25.9% vs. a 37.4% tumble for the S&P 1500.

This group also has an encouraging relative-strength chart. As a reminder, the jagged blue occupation represents the subindustry index’s rolling 52-week price performance as compared with the 52-week performance during the S&P 1500. Any point overhead 100 indicates market outperformance over the prior year, while points below 100 be the sign of market underperformance. The red line is a rolling 39-week moving average, while the two green bands indicate one standard deviation above and below the index’s long-term mean relative strength.

The S&P 1500 Information Technology sector is comprised of very cyclical subindustries, but also contains a not many groups whose fortunes are tied to longer-term service contracts whose earnings stream may be less affected by cyclical swings in the economy. Is this group one of them? There are 23 large-, mid- and small-cap public securities in the S&P 1500 Data Processing & Outsourced Services subindustry index, three of which have favorable investment recommendations: Computer Sciences (CSC) and Global Payments (GPN), one as well as the other of which are ranked 4 STARS (buy), and Fiserv (FISV), which carries a 5 STARS (strong buy) opinion.

Zaineb Bokhari, who follows this assign places to for S&P. has a impartial fundamental outlook for the Data Processing & Outsourced services subindustry. She expects facts processors to post revenue and earnings growth in the next 12 months, benefiting from putting out of outsourcing, the continued universality of electronic transactions, and underserved between nations territories. However, S&P is concerned that recent volatility in some major end markets, notably financial services, could result in breaking, displacement, or value erosion. Bokhari also sees the risk of lower transaction volumes from reliance cards and other payment methods dependent on consumer expenditure, although some historical premises for the U.S. suggests that volumes may clinch up in a recession.

Bokhari views diversification into international markets favorably, particularly as each scion to slowing domestic growth. S&P’s enthusiasm for international growth is tempered, however, by the slowing economies in these areas and the swelling competition that we see, particularly as facts processors compete for acquisitions and other means of entry into markets overseas.

S&P believes that many data processors store notable recurring revenues, generate ample free cash proceed, and generally have healthy equalizing agency sheets. S&P likewise thinks these funds provide each opportunity to participate in the IT sector lacking the high level of risk associated with unproven business models, but Bokhari does not expect significant expansion in valuation multiples from recent levels.

The analyst believes that companies will continue to outsource technology-oriented tasks to third parties to point of convergence on core competencies and to seek greater profitability. Globally, companies spent $149 billion on business outsourcing in 2007, and IDC, a place of traffic research house, forecasts that this will arise to $245 billion by means of 2012. Moreover, S&P expects the proportion of U.S. card and electronic payment volumes to go at the charge of paper-based payments. Bokhari believes these trends bode well for given conditions processors.

Original text: http://www.businessweek.com/investor/content/feb2009/pi20090210_950641.htm?campaign_id=rss_null