Genentech Misses But Redeems on Outlook

Genentech (DNA) announced its earnings for its second quarter. According to Bloomberg the largest maker of cancer drugs in the U.S. said earnings increased to 73 cents a share, or $782 million.

The company missed analysts estimates by 4 cents due to an increase in spending on research, marketing, as well as stock-based compensation. Revenues jumped 8% in the quarter to $3.2 billion, lead by Avastin which gained from a new use in breast cancer. Further, shares were up in the premarket after the company raised its 2008 forecast from the $3.35-$3.45 range to $3.40-$3.50 range. See Professor Kevin Depew’s recent comments in DepewTube.

From the Bull Pen: Those bullish DNA can set sell-stops below $75. Professor Depew also mentioned the biotech index ETF (IBB); near-term sell-stops can be set below $79.

From the Bear Cave: One downside play could be in Merck (MRK); bears could fade rallies towards the $40 mark.


Waste Wars

The Wall Street Journal reports Waste Management (WMI) has offered to buy No.3 rival Republic Services (RSG) for $6.3 billion. The figure amounts to $34 per share and represents a 22% increase over RSG’s Friday closing price. It is an apparent attempt to thwart the deal announced last month involving Allied Waste Industries (AW) and RSG for $6.24 bln. A deal between WMI and RSG would leave just under half the country’s permitted landfill capacity in the control of the company. Republic said it will review WMI’s proposal.

From the Bull Pen: The waste industry has been strong despite the weakness in the broad markets, so bulls have another upside alternative in Covanta Holding (CVA); entry near the 50 DMA ($27.40) may be an option.

From the Bear Cave: Bears might see further weakness in WMI in the near term; buy-stops can be set above $35 on downside tries.

For more ideas in real time throughout the trading day, check out Minyanville’s Buzz & Banter.


Quick Check Around the World

Asian trading closed with the Hang Seng -3.81%, Nikkei -1.96%, Sensex -4.91%, Taiwan -4.51% and Shanghai -3.43%.

A quick check across the pond finds the CAC -2.20%, DAX -2.95%, FTSE -2.66%

As of 8:30 AM EST, S&P futures are lower -13.5 points to 1214 , and Nasdaq futures are down -17 points to 1785.


A Look At Commodities

In commodities, crude oil is up +1.31 to 146.50. Gold is higher +12.80 to 986.50. Silver is up +0.2000 to 19.375, and copper is lower -0.65 to 376.30.

The dollar index is down -0.546 to 71.369.


On the Radar

Producer price index (m/m): 1.8% vs. 1.4% cons.
Core PPI (m/m): 0.2% vs. 0.3% cons.
PPI (y/y): 9.2% vs. 8.7% cons.
Core PPI (y/y): 3.0% vs. 3.2% cons.
Advance Retail Sales: 0.1% vs. 0.4% cons.
Retail Sales Less Autos: 0.8% vs. 1.0% cons.
Empire Manufacturing: -4.9 vs. -8.0


10:00 Business Inventories: 0.5% cons, 0.5% prior

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Good luck today!