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Buzz Bits: Dow, Nasdaq Head Higher

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Your daily Buzz highlights...

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Editor's Note: This is a small sample of the content available on the Buzz and Banter.



Almost Bell Buzz - Todd Harrison - 3:07 PM

  • Pharma continues to intrigue me (as a safety play) but until the DRG clears resistance at 350, the technical metric is a headwind.

  • Charlie Mangano just walked into my digs to ask me if my gumball machine works. "Sure," I said as he put in his quarter. What I failed to tell him was that the gumballs pre-date NDX 5000...which is fine. He still thinks its a jawbreaker.

  • Note the transports as they quietly slink a percent lower. The next real resistance will come into play around TRAN 4600.

  • Minyan Doug Kass just pinged me to say "Tell Sloan I say whaddup!" Dougie, you can tell her yourself Friday night as she'll be at the CCA!

  • Best bet into the close? I don't think the bottom falls out (with the brokers bid) but I don't foresee S&P 1390 breached either.

  • Sippin' Crist-o, with some freaks from Frisco ...


R.P.



The Waffle House? - Jeff Macke - 2:54 PM

To answer a spate of "wow, how did they get those turned around so fast when I just posted the idea?" emails, the answer to the question of how I could still think sales for the season are going to be solid yet not be buying the retailers in light of the selling this week?

It's pretty simple, actually. The price action stinks and expectations are higher than they were when I started getting long and loud about the retailers last summer. Taking an example of a name I've spoken of but never actually owned: Kohl's (KSS) is expected to report 5.9% SSS on Thursday. Last year at this time, 5.9% would have shocked and delighted the Bulls. Even three months ago it would have been good enough to put another leg up in the stock.

With KSS up over 40% for the year and 20% just since August, 5.9% will be regarded as the least KSS can do to support the stock. Expectations have been raised (and, yes, I know the smarts hate the consumer (and probably the troops, mom and apple pie) but more people own retail stocks now than did last summer). Even if Kohl's goes as large as I think they could (my mental over/under is 10%), I'm not sure good results don't get drowned out in a sea of "but margins must be bad... and Wal-Mart (WMT) is so soft... and all those houses are still up for sale" Boo-Hooery.

Add it up and I'm sitting with my stock-buying bat frozen to my shoulder, just waiting for a better price before I swing.


Strange days... - John Succo - 1:34 PM

One of the world's largest hedge funds, Citadel, is planning on issuing $2 billion in bonds to the public to finance their hedge fund activities.

Apparently now the public can get in on the lucrative prime broker business at a tenth of the fees. What a deal.

It is difficult to even begin to explain how ridiculous this is. This is the most outrageous example of financial alchemy I can imagine.

Supposedly the S&P knows enough about Citadel's business to give them a BBB+ rating. That is until some portfolio manager decides to change the portfolio. This may happen, oh, five times a day?

Funding a hedge fund with bonds to the public is even worse than the State of Illinois issuing bonds to buy stocks a few years ago.

This financial structure could be indicating the top of financial hubris and the paper asset bull market.



Objects in motion had better stay in motion. - Rod David - 8:19 AM

The laws of physics caught up with the market Monday. S&Ps had surged to new highs two weeks ago, but failed to confirm. Almost every session since then has contained some degree of "ineffectual optimism" that reflected weak and weakening resolve among buyers.

Yesterday morning's comment here noted the USD had created a new reality that S&Ps needed to reflect.

But yesterday's drop was more than just a price adjustment. A retracement of the two-week old breakout attempt would have helped to refuel buying pressure - early last week. It's too late for that now. S&Ps already consolidated at new highs, so yesterday's single-session reversal under two prior highs reflected a rise in selling pressure, and not decreased buying pressure.

There might be one chance today to slow the decline, if not also limit its ultimate target. But S&Ps ranged overnight around Monday's close and have showed no interest in rejecting yesterday's drop. Any bounce will be considered a correction, and likely to resolve in the decline's resumption.


What you need to know... - Jon Doctor J Najarian - 8:12 AM

Altria's (MO) Philip Morris Wins in "Judicial Hellhole" – I'm quite sure the folks in Madison County Illinois take exception to that moniker, but the American Tort Reform Association gave them the title and it has stuck! Yesterday the U.S. Supreme Court let stand a ruling that dismissed a $10.1 billion verdict against Philip Morris USA, ending a case that became a windfall for the county where it originated.

Merrill (MER) Downgrades Palm (PALM) – Why not, it (PALM) did it to itself yesterday when it lowered guidance from $0.18 - $0.20 per share to $0.11, so who could blame mother Merrill for taking Palm to neutral from buy, citing the firm's lowered sales outlook for the fiscal second quarter.

Website Traffic Tops 2.1 Million/min in North America on Cyber Monday – It must be one hell of a wave to hold so many surfers! But here's the kicker; Cyber Monday isn't the biggest online shopping day anymore, as that goes to December 12th which is usually when the free shipping deals end. It also coincides with when folks get their December paychecks!

Goldman (GS) Downgrades Southwestern Energy (SWN) – GS took SWN to neutral from buy, citing relative valuation compared to peers. Goldman remains bullish on natural gas shares going into the winter, but it sees greater upside among peers such as Quicksilver Resources (KWK).

Position in MO

No positions in stocks mentioned.

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