Stock futures are down in early morning indicating to a similar start for stocks a day after stocks slumped, snapping an 8-day winning streak for the Dow Jones Industrials. March retail sales will be released throughout the morning with some mixed indication already out.

Yesterday, the minutes from the last Federal Reserve policy meeting hinted at possible rate hike, not rate cut as many in the market had expected for later in the year. The economy has weakened, the minutes said, but should recover later in the year, but inflationary pressures remain. Although no different than what Fed Chairman Bernanke has been saying, the minutes, for some reason, made it 'sink in.'

Many are waiting for tomorrow's PPI report, prices at the wholesale level, among other economic data points due tomorrow. Today, the economic calendar is thin with March import and export prices report and weekly jobless claims all due at 8:30 a.m., before the opening bell.

Yesterday the U.S. government reported a decline in domestic stockpiles. The decline was larger than expected and oil prices rose, and continued to do so today. While tensions with Iran have subsided somewhat, the situation still lends support to oil prices. I seems that oil production is also the lowest in over two years.

Several retailers have already reported March sales with mixed results:

• Costco Wholesale Corp. (NASDAQ: COST) surpassed Wall Street expectations of 4.7% rise in same-store sales, those from stores open at least a year, rising 6% in March.
• Claire's Stores Inc. (NYSE: CLE) said same-store sales rose 8%, beat the 3.1% expectations
• JoS A. Bank Clothiers Inc. (NASDAQ: JOSB) posted a 1.4% rise in sales that missed projections of 2.7%.
• Pier 1 Imports Inc. (NYSE: PIR) reported a larger quarterly loss and lower sales during the first quarter. The company also reported same-store sales tumbled 11% during the fourth quarter.

Research in Motion Ltd. (NASDAQ: RIMM) shares are down 6.7% in pre-market (7:15 a.m.) after the company reported fourth-quarter profit soared to $187.9 million, or 99 cents per share - in-line with/a penny under analyst estimates, as sales jumped 66% to $930.4 million - below analyst estimates. In addition, the company also said the Securities and Exchange Commission has upgraded an informal inquiry into the company's stock option granting practices to a formal investigation, shares have plunged.

MOST NOTEWORTHY: Palm, Inc (PALM), Reliant Energy, Inc (RRI) and Take-Two Interactive Software (TTWO) topped today's more notable downgrades:

• UBS cut Palm, Inc (NASDAQ: PALM) to Reduce from Neutral citing valuation. Bank of America downgraded shares to Neutral from Buy with an $18 target and considers the risk/reward less favorable at these levels.

• Bank of America also downgraded Reliant Energy (NYSE: RRI) to Sell from Neutral on valuation.

• Hillard Lyons cut Take-Two Interactive Software (NASDAQ: TTWO) to Neutral from Outperform.

OTHER DOWNGRADES:

• CIBC downgraded Jabil Circuit, Inc (NYSE: JBL) to Sector Performer from Outperformer following the company's disappointing outlook. Bear Stearns cut Jabil to Peer Perform from Outperform. BMO cut the company to Market Perform from Outperform.

• Friedman, Billings, Ramsey downgraded shares of FormFactor, Inc (NASDAQ: FORM) to Market Perform from Outperform to reflect increased risks in the logic market and long-term growth concerns.

• Matrix USA downgraded Knight Transportation (NYSE: KNX) to Hold from Buy.

• American Technology downgraded shares of Comverse Technology, Inc (NASDAQ: CMVT) to Neutral from Buy as the firm believes a retreat to the $17 range is likely given the company's disappointing margin trends.

• CL King cut Claire's Stores, Inc (NYSE: CLE) to Neutral from Strong Buy following the buyout offer.

• Goldman downgraded Atmos Energy Corp (NYSE: ATO) to Sell from Neutral and Liz Claiborne, Inc (NYSE: LIZ) to Neutral from Buy.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MAJOR PAPERS:

• According to the Wall Street Journal, Take-Two Interactive Software's (NASDAQ: TTWO) announcement that it is considering a sale is being considered a "ploy" by the company to hold off a shareholder revolt, according to analysts.
• The Wall Street Journal reported that Deutsche Bank AG (NYSE: DB) has agreed to buy Maher Terminals, the owner of the largest container operation at the Port of New York and New Jersey.
• The Financial Times reported that FedEx Corporation (NYSE: FDX) will launch guaranteed next day deliveries within China beginning in May.

OTHER PAPERS:

• The New York Post is reporting that Apollo Management is near a deal to acquire Claire's Stores Inc (NYSE: CLE) for $3B, according to sources familiar with the situation.
• The New York Times reported that two Home Depot Inc (NYSE: HD) directors will not seek re-election at the company's annual meeting in May.
• Investor's Business Daily's "New Issue America" column highlighted ETelecare Global Solutions (which will trade under the symbol ETEL on the NASDAQ), which is expected to price the week of March 26 with an offering price of $12.50-$14.50.

WEBSITES:

• A Palm Inc (NASDAQ: PALM) buyout could be finalized by Thursday at $20 a share, with Nokia Corporation (NYSE: NOK) as the leading bidder, reported Unstrung.com.
• CNet.com reported that Google Inc (NASDAQ: GOOG) will offer themes for its personalized homepages.

What is up is the theme of this week's merger talk, because there is lots of chatter, but no bold moves. Yet.


NEW CENTURY FINANCIAL CORPORATION (NYSE: NEW)

Down the tubes, and then what? With bankruptcy imminent, what next happens to the nation's second largest sub prime mortgage banker? Shares continue to fall today, recently at $3.18, a 69 cent fall, equal to almost 18%. Just two months ago the share price was over $30. The real estate investment trust isn't getting any help from lenders. Maybe reorganization is just what they need.

PALM INC (NASDAQ: PALM), DELL INC (NASDAQ: DELL)

Or should it be Dell, Palm? Either way, Palm is looking to sell, and Dell is looking to buy. Palm knows Apple Inc's (NASDAQ: AAPL) iPhone can really hit them with a number of body blows, hence, get out while the getting's good, or at least okay, seems to be the Palm plan. For Dell, they're looking at smart phones as a part of their consumer products future. And lord knows they have the cash to buy a Palm. It's a brand with international contacts and a retail distribution network. Let the bidding begin, say at $2B?

NOBLE DRILLING CORP (NYSE: NE)

A noble "no" to an LBO was sent out from high atop the corporate structure several weeks ago, but rumors keep a coming. Yes, they said they'd use their extra dough to buy their own stock, just like they did before, in 2006. And that's what they've been doing. Who knows, maybe there's nothing to it.


CLAIRE'S STORES INC (NYSE: CLE)

Private equity firm Apax seems to be in the lead to take the 3,000 stores-strong Claire's. Get this: Apax is said to be so anxious to get going that it's said they have new management "in waiting." Wow. Claire's has said it's exploring "strategic alternatives", including a sale. Goldman Sachs is helping. Must be serious stuff. By the way, same store sales were up but down recently. Up 1%, but 2.3% was expected. What do you think Apax feeds that management team in waiting, anyway?

ALLTEL CORPORATION (NYSE: AT)

Buy me, please. That's what the nation's fifth largest wireless operator (subscribers) has been saying. AT&T is kicking the tires, but because of antitrust and other issues, it may only be doing just that. Verizon Communications Inc (NYSE: VZ) may have a look-see, as well as private equity firms. Tepid seems to have been the response so far, but that can change quickly. Management says the rumors are nothing new. Is that a bad thing?