When you have a trading day like today and it comes after a week like this week, it is hard to determine if you are happier that the rally came on at the end of the day or if you are happier that the closing bell came to end the week. The markets closed down today but today felt like a win when you consider the 400 point move higher off of late day lows in the last hour. There are hopes of a coordinated G7 announcement this week along with some fresh hopes that the Treasury will make new banking injections and help in the LIBOR woes. The bond traders left at 2:00 PM early for Columbus Day, and the bond market is closed Monday.
Here are the unofficial closing bell levels, and remember that the exchange takes much longer to find actual close levels right now: DJIA 8,477.40 -101.79 -1.19% NASDAQ 1,649.51 +4.39 +0.27% S&P500 901.24 -8.68 -0.95% 10YR T-NOTE 3.861% +0.027% Top Analyst Upgrades
Barclays plc (NYSE: BCS) fell on reports that the financial bank giant is considering raising capital as part of the government's bailout package in the UK. Shares were down 9% at $14.66 in the final minutes before the close.
Shares of Biogen Idec Inc. (NASDAQ: BIIB) plummeted on news that its multiple-sclerosis drug Tysabri was linked to brain infections causing death, leaving 4.3% shareholder Carl Icahn with a hefty paper loss.
But Icahn didn't back down. Having already pushed for one unsuccessful effort to sell the company, and having lost a bid for three seats on the board of directors, Icahn filed a 13-D announcing that he had raised his stake to 6.1%, buying in the wake of the brain infection announcement.
As one of the smarter activist value investors going, Carl Icahn's moves are closely watched by investors looking to piggyback off his ideas.
Biogen (NASDAQ: BIIB) was trading at $54.71 in pre-open trading, below its close of $69.76 Thursda. BIIB and Elan (NYSE: ELN) announced their multiple sclerosis treatment Tysabri, was linked to brain infection. BIIB August option implied volatility was at 42, September at 39; near its 26-week average of 39 according to Track Data, suggesting non-directional price movement.
ELN was trading at $10.78 in pre-open trading, below its close of $20.05. ELN August option implied volatility was at 65, October at 58; below its 26-week average of 70, suggesting decreasing price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
The Hershey Co. (NYSE: HSY) is recently up 98 cents to $37.49. HSY has a market cap of $8.4 billion with long term debt of $1.5 billion. HSY call option volume of 12,177 contracts compares to put volume of 1,008 contracts. HSY June option implied volatility of 37 is above its 26-week average of 27 according to Track Data, suggesting larger price movement.
Biogen's (NASDAQ: BIIB) recent volatility has collapsed after Carl Icahn proposed a slate of directors.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
Ten years after taking the reins at eBay Inc (NASDAQ: EBAY), CEO Meg Whitman is making plans to retire, reported the Wall Street Journal. Company president John Donahoe is the leading candidate to replace her.
According to the Financial Times, Biogen Idec Incorporated (NASDAQ: BIIB) CEO Jim Mullen said the company could make a "large-scale acquisition" this year after it failed to sell itself.
WEB SITES:
Finance companies including Citigroup Incorporated (NYSE: C) could sell proprietary investments in India as they struggle to shore up their capital after suffering losses in the subprime sector in the U.S., LiveMint.com reported.
Biogen Idec Inc. (NASDAQ: BIIB) will continue on its present course as an independent company after BIIB's Board of Directors completed a review of strategic alternatives to maximize shareholder value:
BIIB recently traded at $56.60 in after market trading, below its close of $75.88. BIIB December straddle went out at $6.35. BIIB January option implied volatility of 55 is above its 26-week average of 37 according to Track Data, suggesting options traders expected movement.
Daily Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
Biogen (NASDAQ: BIIB) announced on 10/12/07 that its board of directors authorized management to evaluate whether third parties would have an interest in acquiring the company at a price and on terms that would represent a better value for stockholders. BIIB is recently up $3.06 to $77.05. BIIB December 90 calls are bid 50 cents. BIIB December 75 straddle is priced at $7.20, above a level of $5.55 from two hours ago. BIIB January option implied volatility of 53 is above its 26-week average of 36 according to Track Data, suggesting options traders expect movement.
Volatility Index (VIX) up 0.36 to 21.03; FOMC lowers Fed Funds rate 25 basis points to 4.25%.
MOST NOTEWORTHY: Kenneth Cole, Tempur Pedic, Biogen Idec, Cubist Pharma and ShoreTel were today's noteworthy initiations:
B. Riley started shares of Kenneth Cole (NYSE: KCP) with a Neutral rating and $21 target, citing a lack of near-term catalysts and the challenging environment for footwear companies.
William Blair resumed coverage of Tempur Pedic International (NYSE: TPX) with an Outperform rating, and finds the current valuation attractive for long-term investors.
Banc of America assumed coverage of Biogen Idec (NASDAQ: BIIB) with a Neutral rating and $79 target, as they see less than 50% probability of a sale at current prices and expect shares to trade back to pre-announcement levels in the mid-to-high $60s if no sale is made.
Cubist Pharmaceuticals (NASDAQ: CBST) was initiated with a Sector Performer rating at CIBC, citing competitive headwinds.
ShoreTel (NASDAQ: SHOR) was initiated with a Neutral rating at Nollenberger on valuation.
OTHER INITIATIONS:
UBS initiated CVS Caremark (NYSE: CVS) with a Buy rating and Rite Aid (RAD) and Walgreen (WAG) with Neutral ratings.
Caris initiated Starent Networks (NASDAQ: STAR) with an Average rating and $23 target.
According to antitrust attorneys, a possible merger with a Big Pharma company may result in Biogen Idec (NASDAQ: BIIB) having to divest some overlapping assets or licensing deals in order for the deal to get approval from the Federal Trade Commission, reported the Financial Times "MergerMarket" blog.
The Financial Times reported that Gilat Satellite Networks (NASDAQ: GILT) is working with UBS to evaluate "several strategic and private equity buyers" in buying Gilat, which could get over $500M in a sale, according to people familiar with the matter. Bids for the company are due by the end of the week, said the sources.
OTHER PAPERS:
The New York Times reported that Chinese investment bank Citic Securities is planning to invest $1B in Bear Stearns Companies (NYSE: BSC), according to sources.
The New York Times reported that the head of the Federal Trade Commission, or FTC, has rejected numerous requests to open an investigation into Intel Corporation (NASDAQ: INTC) for anticompetitive conduct, according to inside sources.
The Guardian reported that world oil production peaked last year, and production will fall by half as soon as 2030, according to a report by Germany-based organization Energy Watch Group.
MOST NOTEWORTHY: Ericsson, Alcatel-Lucent, General Motors and Anglo American were today's noteworthy downgrades:
Ericsson (NASDAQ: ERIC) was downgraded to Reduce from Buy at WestLB and to Neutral from Outperform at Credit Suisse following the company's Q3 profit warning.
WestLB downgraded shares of Alcatel-Lucent (NYSE: ALU) to Reduce from Hold following Ericsson's profit warning, as they believe Alcatel-Lucent's mobile business will face top-line and margin issues.
Bear Stearns downgraded shares of General Motors Corporation (NYSE: GM) to Underperform from Peer Perform after learning that benefits from the new union contract will be lower than expected in 2008 and 2009. The broker recommends swapping into Ford Motor Company (NYSE: F).
HSBC downgraded shares of Anglo American (NASDAQ: AAUK) to Neutral from Overweight on valuation. Morgan Stanley downgraded shares of Anglo to Equal Weight from Overweight also on valuation, as they see better value elsewhere in the sector.
MOST NOTEWORTHY: STMicroelectronics, Biogen Idec, American Community Bank and Crosstex Energy were today's notable downgrades:
Lehman downgraded STMicroelectronics (NYSE: STM) to Underweight from Overweight, as they expect the company to underperform its peers.
UBS downgraded Biogen Idec Inc (NASDAQ: BIIB) to Sell from Neutral, citing valuation and their belief that there would be no significant premium if the company was bought.
MOST NOTEWORTHY: American Home Mortgage (AHM), Biogen Idec (BIIB), Bebe Stores (BEBE), Ingersoll-Rand (IR) and SK Telecom (SKM) were today's more noteworthy downgrades:
RBC Capital cut American Home Mortgage (NYSE: AHM) to Sector Perform from Outperform citing the deterioration in the global debt markets for the downgrade.
Morgan Stanley downgraded shares of Biogen Idec (NASDAQ: BIIB) to Underweight from Equal Weight citing risk to Rituxan growth.
Merriman downgraded Bebe Stores (NASDAQ: BEBE) to Neutral from Buy as they believe new fall merchandise is not performing well enough to improve sales trends.
Robert W. Baird downgraded shares of Ingersoll-Rand (NYSE: IR) to Neutral from Outperform citing higher risk premium due to the IRS challenge and tighter credit markets that could impact the Bobcat divestiture.
OTHER DOWNGRADES:
Children's Place (NASDAQ: PLCE) was cut to Neutral from Positive at Susquehanna.
Thomas Weisel downgraded LoopNet (NASDAQ: LOOP) to Market Weight from Overweight.
ThinkEquity cut Kyphon (NASDAQ: KYPH) to Accumulate from Buy.
Needham downgraded QLogic (NASDAQ: QLGC) to Hold from Buy.
JMP Securities downgraded ValueClick (NASDAQ: VCLK) to Market Perform from Outperform.
Verizon Communications Inc (NYSE: VZ) to report Q2 earnings; conference call at 8:30am. Analysts will look at Verizon's marketing strategy [particularly for FiOS], infrastructure improvements, and operating expenses. Above-average debt remains a blemish, but Wall Street will overlook that if Verizon registers impressive subscription and market share statistics, and demonstrates that its fiber optic-based FiOS Internet/TV network roll-out timetable for major markets remains on schedule.
Monster Worldwide Inc (NASDAQ: MNST) to report Q2 earnings; conference call at 10am. Monster is expected to register adequate, albeit decelerating revenue growth in Q2 compared to Q1, hence the grade for the company's performance may hinge on analysts' projection regarding the likely revenue scenario moving forward.
Tuesday July 31
Federal District Court Hearing to decided whether to approve the FTC's application for injunction blocking the proposed merger between Whole Foods Market Inc (NASDAQ: WFMI) and Wild Oats Markets Inc (NASDAQ: OATS).
FDA 8am Gastrointestinal Drugs and Drug Safety and Risk Management Joint Advisory Committee Hearing on Biogen Inc's (NASDAQ: BIIB) Tysabri for Crohn's Disease.
Starbucks Corporation (NASDAQ: SBUX) to report Q3 earnings; conference call at 5pm. After recent sluggish stock performance, some analysts see Starbucks snapping back in the quarters ahead: Starbucks is expected to add a breakfast sandwich at 4,000 stores/coffee houses, which could increase per-store revenue by $70K annually.
Thursday August 2
Eastman Kodak Company (NYSE: EK) to report Q2 earnings; conference call at 11am. Note that the volatility in Kodak is elevated going into its earnings report.
Shares of 
Biogen
The Hershey Co.
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Biogen Idec Inc.
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