The Wall Street Journal reported that worries are deepening among regulators, executives and consumers about the U.S. banking industry following the federal government's seizure of IndyMac Bancorp Inc (NYSE: IMB).
According to a person familiar with the situation, the Wall Street Journal reported that Banco Santander SA (NYSE: STD) is nearing an agreement to buy Alliance & Leicester for around $2.38B.
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Yahoo! Inc (NASDAQ: YHOO) chairman Roy Bostock called Microsoft Corporation's (NASDAQ: MSFT) proposal "ludicrous". Bostock said that "while this type of erratic and unpredictable behavior is consistent with what we have come to expect from Microsoft, we will not be bludgeoned into a transaction that is not in the best interests of our stockholders." Yahoo reaffirmed that it is open to a sale of the company for $33 a share, the New York Times reported.
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CNet reported that the price of the Xbox 360 Pro model with a 20GB hard drive was cut by Microsoft to $299 from $349. The company also introduced introduced a 60GB model to go on sale in the U.S. and Canada in August for $349.
MOST NOTEWORTHY: European banks, the Paper and Forest Products sector, Kindred Healthcare and Convergys were today's noteworthy upgrades:
Keefe Bruyette upgraded the European Banks sector to Neutral from Underweight on valuation as they see limited downside from current levels. Included in the firm's top picks are HSBC Holdings Plc (NYSE: HBC) and Banco Santander SA (NYSE: STD).
Credit Suisse upgraded the Paper and Forest Products sector to Overweight from Underweight citing valuations and expectations that fundamentals will bottom this fall. The firm raised shares of Temple-Inland Inc (NYSE: TIN) and Smurfit-Stone Container Corporation (NASDAQ: SSCC) to Outperform from Neutral.
Friedman Billings upgraded shares of Kindred Healthcare Inc (NYSE: KND) to Outperform from Market Perform on valuation following the recent pullback and believes the company is well-positioned to beat modest expectations over the remainder of the year. The firm raised their target to $36 from $29.
Oppenheimer raised Convergys Corporation (NYSE: CVG) to Outperform from Perform on valuation, as they believe investors should look at the company's business lines separately. Their sum of parts valuation yields an $18 target.
OTHER UPGRADES:
Suncor Energy Inc (NYSE: SU) was upgraded to Overweight from Neutral at JP Morgan and to Outperform from Market Perform at Friedman Billings.
UBS upgraded BT Group Plc (NYSE: BT) to Neutral from Sell.
On American exchanges, the banking and financial sectors are not preferred sectors right now, to say the least, but one bank worth a review is Banco Santander SA.
That's because Banco Santander, S.A. (ADR) (NYSE: STD) is one of Europe's leading banks, offering retail banking and consumer finance services in Spain, Portugal, the United Kingdom, Germany, Italy and other parts of Europe. The company also operates subsidiaries in Argentina and Mexico, and in 15 other Latin American countries.
Hence, it goes without saying that analysts like Banco's geographic footprint, lending base, and customer breadth. Most important, Banco appears to have been unaffected by the August 2007 subprime-driven financial turmoil.
For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.
In referring to her conservative favorite for 2008 she explains, "While the big ships of the financial industry struggled to weather a storm of their own creation in the credit markets, a solidly built craft sailed full speed ahead undeterred by the turbulence, proudly flying the Spanish flag into new and old markets.
"Banco Santander, which trades as an ADR in the US, apparently managed to tack clear of the siren call of easy subprime money in America. Instead, following in the tradition of the conquistadors, it went in search of new riches in the old world and the new.
"With branches in Europe, Africa, and the Americas, Grupo Santander has grown to become the largest bank in Europe by market capitalization, even as its competitors see their market cap wither during difficult times.
MOST NOTEWORTHY: Suntech Power, First Solar, Banco Santander, Internap and NetGear were today's noteworthy initiations:
Merriman initiated shares of Suntech Power (NYSE: STP) with a Buy rating and believes the company is benefiting from strong worldwide demand for solar PV technology. The firm suggests a potential 12-month stock price range of $56-$64.
Merriman also started shares of First Solar (NASDAQ: FSLR) with a Sell rating, as they believe the company's market is limited to ground-based systems because of its cadmium-based technology, which they feel could lead to environment concerns over time.
Deutsche Bank resumed coverage of Banco Santander (NYSE: STD) with a Buy rating. The firm is positive on the bank's agreement with ABN Amro (NYSE: ABN) and feels the company has a lack of exposure to risky assets.
Jefferies believes Internap (NASDAQ: INAP) is well-positioned with its suite of services to address a rapidly growing market, starting shares off with a Buy rating and $20 target.
Nollenberger believes NetGear (NASDAQ: NTGR) provides a pure-play opportunity to capitalize on the global penetration of broadband connectivity. The firm resumed coverage with a Buy rating and $36 target.
OTHER INITIATIONS:
ThinkEquity initiated Google (NASDAQ: GOOG) with a Buy rating and $800 target and Yahoo! (NASDAQ: YHOO) with an Accumulate rating.
MOST NOTEWORTHY: Banco Santander, Solera, FTI Consulting and Blue Coat Systems were today's noteworthy initiations:
Societe Generale expects the Banco Santander's (NYSE: STD) strong organic growth in earnings to continue with the purchase of ABN Amro's (NYSE: ABN) assets in Brazil and Italy, starting shares off with a Buy rating. Shares were started at Merrill Lynch with a Neutral rating.
William Blair initiated Solera Holdings (NYSE: SLH) with an Outperform rating, as they believe underlying trends for auto insurance claims are favorable.
FTI Consulting (NYSE: FCN) was initiated at Deutsche Bank, as they believe the company is positioned to sustain double-digit growth, and with a Buy rating and $65 target and at Goldman with a Neutral rating and $62 target.
Pacific Crest initiated Blue Coat Systems (NASDAQ: BCSI) with a Sector Perform rating on valuation and estimates fair value at $50/share.
MOST NOTEWORTHY: Banco Santander, Acorda Therapeutics, Agruim, Annaly Capital and ImmunoGen were today's noteworthy upgrades:
UBS upgraded shares of Banco Santander (NYSE: STD) to Buy from Neutral as they expect the acquisition of ABN Amro Holding NV (NYSE: ABN) assets in Brazil and Italy to boost earnings in 2008 and 2009.
Friedman Billings added Acorda Therapeutics (NASDAQ: ACOR) to its Top Picks List, as they have confidence in fampridine-SR's safety profile.
Agrium (NYSE: AGU) was upgraded to Sector Outperformer from Sector Performer at CIBC on valuation, as they believe the outlook for wholesale and retail is robust with all three nutrients at historical high levels.
Annaly Capital Management (NYSE: NLY) was upgraded to Buy from Neutral at UBS, citing likely further FED cuts, benefits from recent secondary, and BVPS growth.
RBC Capital upgraded shares of ImmunoGen (NASDAQ: IMGN) to Outperform from Sector Perform based on valuation, growing pipeline, valuable technology platform, and potential as an acquisition candidate.
The Observer reported that a private equity consortium is considering a $15 billion offer for Virgin Media Inc (NASDAQ: VMED).
Cadbury Schweppes ADS (NYSE: CSG) is planning to return £5 billion to shareholders through a special dividend or share buyback, according to The Observer.
The Sunday Telegraph reported that UBS AG (NYSE: UBS) will offer to buy out the pension schemes of some of the leading FTSE100 companies next week.
Yahoo! Inc (NASDAQ: YHOO) may be looking to acquire British social networking site Bebo, the Sunday Telegraph reported.
The Bollywood film producer, Eros International, is expected to announce a partnership with Google Inc's (NASDAQ: GOOG) YouTube, the Sunday Telegraph reported.
The Orange County Register blog looked at a transcript from IndyMac Bancorp Inc's (NYSE: IMB) first quarter conference call, where the CEO Michael Perry said: "When you see that delinquency number in the press of 13% subprime delinquencies, it's hugely understated. It is absolutely hugely understated. And the prime delinquencies are overstated. The subprime delinquencies are more like 18, 20, 22% delinquencies and that's where I think you're going to see the problems."
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