EchoStar (NASDAQ: DISH) closed at $26.70 Monday, near five-year low. DISH August option implied volatility of 57 is above its 26-week average of 45 according to Track Data, suggesting larger price movement.

Financial Select Sector-XLF overall volatility at 43; 26-week average is 34

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

MAJOR PAPERS:

• Three years into its $35B takeover of Nextel, the Wall Street Journal reported that Sprint Nextel Corporation (NYSE: S) is considering selling or spinning off the troubled unit. Few details were available and a deal is not imminent.
• The Wall Street Journal also reported that pressure is mounting on Citigroup Incorporated's (NYSE: C) CEO Vikram Pandit to show that he can turn around the troubled bank. Executives believe Pandit, who has been praised for his cautious and deliberate approach, has been taking "too long" to make crucial decisions.

WEB SITES:

• According to a person close to Google Inc (NASDAQ: GOOG), Reuters reported that Google and Yahoo! Inc (NASDAQ: YHOO) are still "hammering out the intricacies" of a potential advertising and search deal. The source said no final agreement has been reached yet.
• ABC News learned that if Rupert Murdoch does not testify in a lawsuit accusing one of his companies of "corporate espionage," it may cost News Corporation (NYSE: NWS) hundreds of millions of dollars, a federal judge overseeing the trial said. News Corp has denied any wrongdoing, and lawyers maintain Murdoch had no direct knowledge of the unit's alleged hacking into EchoStar Corporation's (NASDAQ: SATS)/DISH Network Corporation's (NASDAQ: DISH) security code and posting it on the Internet.

TheStreet.com's Jim Cramer says this major player's lowered guidance shows why its whole sector is uninvestible.

Is it EchoStar (NASDAQ: DISH) (Cramer's Take)? Or is it foreclosures? Is it DirecTV (NYSE: DTV) (Cramer's Take) or is it bills that are too high? Is it Verizon (NYSE: VZ) (Cramer's Take) or is it house poor fears?

We will debate the Comcast (NASDAQ: CMCSA) (Cramer's Take) blowup -- it just cut its forecasts for 2007 sales, new subscribers and cash -- for a long time. Trying to figure out how a monopoly utility that we used to regard as a utility that could no more be shut off than Con Ed, has become a totally discretionary competitive item that needs to be sold and can't be pulled.

The implications either way show you the limits of this former wonder industry. For all of the years I have been in the business, investing in cable stocks worked. The companies always grew with consistent cash flow and that was enough. They were utilities that always talked about how dividends weren't tax-advantaged and instead focused on the broad expansion and cash flow growth.

Technology insider blog, TechCrunch, ran a thought-provoking post yesterday about Google (NASDAQ: GOOG) entitled, The Google Set-Top Box. The article speculates that the search-engine giant may leverage its new open-source operating system, Android, to address TV advertising in a revolutionary way. Google is already testing a new ad platform for TV with Echostar (NASDAQ: DISH), being propped up with data provided by a recent deal with Nielsen. But this just addresses the way ads are bought and sold. According to TechCrunch, almighty Google's ambitions for television go way beyond just ad delivery.

In short, the article posits that Google's aspirations for the mobile phone can be applied to the set-top box, itself essentially a computer. Android's open-source application platform can be used to help promote and support new developments that would turn TV watching more like Internet browsing. "In many ways," says Google's head of TV development, Vincent Dureau, "we think that television is becoming like the Internet in that there is a multiplication of channels. This creates challenges for viewers, advertisers and creators."

So, what does this mean in practice?

The rumor mongers on Wall Street took the bait on the EchoStar Communications (NASDAQ: DISH) buyout by AT&T (NYSE: T). The satellite TV company's shares rallied from just above $39 on Friday to a high of $50.29 yesterday.

Never give a sucker an even break. After the close of the market, The Wall Street Journal said that it was all just speculation. The paper says, "one person close to AT&T says the two sides aren't even talking about an M&A deal."

Today, EchoStar shares may well go back below $40 and a lot of people will lose money. DISH traded close to 22 million shares yesterday.

The incident is a hard lesson in buying on rumors. The AT&T deal seemed to be such a clear "win" for both companies. Having a national TV play would make it easier for the telephone company to compete with cable. No one bothered to mention that a partnership between the two companies would probably work nearly as well as AT&T spending $25 billion to buy DISH.

Listen for some cries of pain at the open today.

Douglas A. McIntyre is an editor at 247wallst.com.

EchoStar (NYSE: DISH) closed at $39.83 Friday.

• Smith Barney upgraded DISH from Hold to Buy on: "1) attractive valuation, and 2) our ongoing conviction that there's a 65% chance that AT&T (NYSE: T) acquires DISH over the next 12 months. We still view $52 as fair value for DISH shares. Maintain $52 target price DISH within 12-month."
  
• DISH announced on 9/26/07 the proposal to spin off its technology and infrastructure assets.
  
• DISH overall of 50 is above its 26-week average of 34 according to Track Data, suggesting larger price risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

MAJOR PAPERS:

• According to people familiar with the situation, the Wall Street Journal reported that Hurray! Holding Co Ltd (NASDAQ: HRAY) and Enlight Media have agreed to a merger valued at about $160M, that could be announced as early as Monday afternoon.
• The Financial Times reported that anti-corruption investigators are probing payments by Chevron Corporation's (NYSE: CVX) ChevronTexaco and Royal Dutch Shell PLC (NYSE: RDS.A) to a company owned by powerful Nigerian politician James Ibori, whom they suspect has laundered tens of millions of dollars in British banks, cars and property.
• The Financial Times also reported that Vodafone Group Plc (NYSE: VOD) is looking to increase its presence in China through a government-led restructuring of the country's telecommunications industry.
• According to Barron's "The Trader," there is speculation that the decline in the shares of Echostar Communications Corporation (NASDAQ: DISH) last week has reinvigorated AT&T Inc's (NYSE: T) interest in buying the company.

OTHER PAPERS:

• Citigroup Incorporated (NYSE: C) is said to have "informally" approached The Royal Bank of Scotland Group Plc's (NYSE: RBS) CEO, Sir Fred Goodwin, the Telegraph reported.

Google (NASDAQ: GOOG) has cut a deal with TV ratings service Nielsen that will give the search company access to demographic data for ad targeting. Reuters says that, "Google will combine the data it receives from television set top-boxes with information that Nielsen, the dominant TV ratings company in the United States, provides on viewers by gender and age."

Google hopes that the additional layer of targeting will make its TV advertising sales package even more effective at aiming marketing messages at people who are most likely to respond to them. Today the company has access to a relatively small part of the country's ad inventory, about 14 million homes, through a deal with Echostar (NASDAQ: DISH).

Adding the Nielsen data to its current ad target system, which is used primarily on the internet, is likely to make network TV executives and sales organizations a bit tense. If the system works well, it could take the marketing and the pricing of inventory out of the hands that traditionally hold it. In other words, Google could destroy a system for selling TV ads that has been in place for decades.

It may not matter that networks and cable systems do not want Google to take away their roles as middlemen. If the new systems works, they are out of luck, and time.

Douglas A. McIntyre is an editor of 247wallst.com.

Looking at some of the 52-week highs from a week in the market is often indicative of its direction.

Last week Echostar (NASDAQ: DISH) was moving over $52. Its 52-week low is $33.55. The high signals a couple of critical points. The first is that strategic M&A is far from dead. There were a number of rumors and analyst reports that said AT&T (NYSE: T) would be a buyer of the satellite TV company to allow the telco to more effectively compete with cable in the television market. The other reason Echostar has been moving up is that it has been able to add HDTV channels at a more rapid rate than cable because it does not have the bandwidth constraints that cable does. Satellite TV was viewed as dying just a year ago. HDTV demand has changed that. And, while private equity buying may be moribund, a critical technology and customer base is still attractive to another corporate buyer.

Coca-Cola (NYSE: KO) hit a 52-week high last week at $59.75, and it hit it Friday and the market collapsed. But, when investors get nervous, a big global company with a strong balance sheet becomes a haven. Coke has more than a billion in cash and little debt. Its earnings were good. And, perhaps most important, it has a worldwide customer base for inexpensive products. Not the kind of things people will cut out in a tight economy.

MAJOR PAPERS:

• The Wall Street Journal (subscription required) reported that the SEC is investigating Countrywide Financial Corporation (NYSE: CFC) CEO Angelo Mozilo for selling $130.6M in stock in the first half of the year.
• While all eyes have been on a possible AT&T (NYSE: T) play for EchoStar Communications (NASDAQ: DISH), the Wall Street Journal's "Deal Journal" says AT&T may go after DirecTV Group (NYSE: DTV), and may be more likely, and could be a better deal for AT&T.

OTHER PAPERS:

• The U.S. Department of Veteran Affairs has decided to sharply limit the use of GlaxoSmithKline's (NYSE: GSK) once-popular drug for Type 2 diabetes, Avandia. The decision is likely to further reduce revenue from Avandia, whose sales have dropped in the U.S. by an estimated 60% in the last five months, reported the New York Times.
• Goldman Sachs Group (NYSE: GS) said it would pay $172M for a majority stake in Indian metal castings maker Sigma Electricals and its affiliated companies, reported the Business Standard.
• A molecular diagnostic test for HPV developed by Digene, which is now part of Qiagen (NASDAQ: QGEN), has been found to be almost 40% more accurate than traditional cytology in identifying women with advanced cervical disease, according to a report published today in The New England Journal of Medicine.

EchoStar (NASDAQ: DISH) is recently up .64 to $48.82 on unconfirmed chatter the DISH really might be purchased by AT&T (NYSE:T). DISH & T have been frequently chattered over the last seven years as possible transaction partners. DISH announced on 9/26/07 the proposal to spin off its technology and infrastructure assets. DISH October 50 straddle is priced at $3.15. October option implied volatility of 50 is above its 26-week average of 32 according to Track Data, suggesting larger price fluctuations.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

MOST NOTEWORTHY: Wal-Mart Stores, Magna International, EchoStar Communications, Westell Technologies and SiRF Technology were today's noteworthy upgrades:

• Rochdale upgraded shares of Wal-Mart Stores (NYSE: WMT) to Buy from Hold citing improved outlook for margins and ROIC.
• CIBC World Markets resumed coverage and upgraded shares of Magna International (NYSE: MGA) to Sector Outperformer from Sector Performer as they believe higher multiples are warranted due to the company's improving earnings power and cash flow generation.
  
• Oppenheimer upgraded shares of EchoStar Communications (NASDAQ: DISH) to Buy from Neutral as they believe recent events add $4-$6 per share to their valuation analysis.
  
• Westell Technologies (NASDAQ: WSTL) was upgraded to Outperform from Neutral at Baird. The firm believes Westell is taking the right steps to improve its market position and financial performance.
  
• Credit Suisse upgraded SiRF Technology Holdings (NASDAQ: SIRF) to Outperform from Neutral, expecting the stock to benefit from a strong holiday season at electronic retailers.

OTHER UPGRADES:

• Goldman upgraded Campbell Soup Company (NYSE: CPB) to Neutral from Sell and Emerson Electric (NYSE: EMR) to Buy from Neutral.
  
• Keefe Bruyette upgraded Oriental Financial Group (NYSE: OFG) to Outperform from Market Perform.
  
• Prudential plc (NYSE: PUK) was raised to Outperform from Peer Perform.
  
• Wachovia upgraded Kindred Healthcare Inc (NYSE: KND) to Market Perform from Underperform.

As Doug mentioned this morning, EchoStar (NASDAQ: DISH) has purchased SlingBox for $380 million in its quest to gain some kind of interactivity with its customers. You see, although EchoStar's DISH Network is popular along with DirecTV as standalone satellite services, cable and telecom companies are pushing harder than ever into two-way services meant to hook customers to more and more product offerings.

But outside of the SlingBox acquisition, EchoStar looks to be spinning off non-core assets at the same time. The company is reportedly looking at spinning off its non-Pay TV services into a different company. Along with the "view anywhere" technology it will gain from the SlingBox purchase, does EchoStar foresee large changes coming to its industry? Some would say yes, or that it is just implementing some type of preventative maintenance to remain competitive.

At the same time it would be rolling out cool services like SlingBox to its customers, the company would spin off the division of EchoStar responsible for set-top boxes, manufacturing, and its satellite centers into a new publicly traded company. Oddly, the SlingBox product line would remain with the core company, even though it is a "set-top box" of sorts. The reason? EchoStar Chief Charlie Ergen says that separating the consumer and wholesale businesses would unlock shareholder value, and the SlingBox product is most definitely a consumer product. Ergen also stated that he would serve as CEO of both companies.

The last question is this: what is DirecTV doing? It's had problems rolling out HDTV channels through its satellite network so far, so it could be the one left floundering here if EchoStar's position as two separate companies with a hot-company acquisition all goes through soon.

Major League Baseball has called the technology illegal. The NFL uses it to reach new viewers. Whichever position attorneys take, Echostar (NASDAQ: DISH) bought Slingbox for $380 million, according to Reuters. The company allows consumers to take signals from their TVs and move them to other devices like PCs. It is called "place-shifting TV."

The SlingBox connects to the back of a TV and streams the signal over the internet, where it can be watched on some mobile devices and almost all computers. Slingbox can pull in over-the-air TV, cable, satellite, and DVD content.

Why buy that company? Echostar and its rival DirecTV (NYSE: DTV) are under pressure from cable companies and the new fiber-to-the-home video products being offered by AT&T (NYSE: T) and Verizon (NYSE: VZ). Satellite's big disadvantage is that it does not work two-way like the rest of the technologies. So, it can't offer phone and broadband services. It is, in essence, a one-legged chair.

But, having the capacity to move home video to a device many miles away may appeal to consumers. An Echostar customer will now be able to watch a favorite TV show in a hotel room in LA while it runs on his home TV in New York.

It is the kind of edge the satellite TV companies need.

Douglas A. McIntyre is a partner at 24/7 Wall St.

The FCC's upcoming auction for the 700-Mhz radio spectrum could give Google (NASDAQ: GOOG) and other tech giants the power to change the world of wireless technology.

The current draft rules would set aside space in the new spectrum for an "open" network, void of the current restraints telecom operators like AT&T (NYSE: T) and Verizon Communications (NYSE: VZ) normally put on their networks. The space for sale would be large enough to create a nationwide network "that will open the door to a lot of innovative services for consumers," FCC chairman Kevin Martin told USA Today. Estimates suggest that the auction could yield $20 billion to $30 billion for the government.

The point of an "open" platform is to allow consumers to use any combination of devices, software, content or services on the new network. The proposal for an open network would be a huge setback for the likes of AT&T and Verizon, among other major telecoms, because they wouldn't be able to control what phones and services would be used in their networks. Carriers have been critical of the draft rules which they feel favor Google, while consumer advocates complain that the rules are too timid and fail to create actual competition for the market, according to The Wall Street Journal.

Google, along with Yahoo! (NASDAQ: YHOO), eBay (NASDAQ: EBAY), Intel (NASDAQ: INTC), EchoStar (NASDAQ: DISH) and DirecTV (NYSE: DTV) are part of the "Coalition for 4G in America," a group that has repeatedly called for the new bandwidth to be open to all devices and software. The Journal also said that Google and other tech giants have gone a step further to argue that the FCC should explicitly designate the new owner of the bandwidth to open up its network to a wider group of applications and mobile devices, unlike the existing system.

The FCC is expected to make a final decision on the draft rules over the summer.