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Buzz Bits: Dow Climbs, Nasdaq Dips


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

Earnings Report - MV News

  • Palm (PALM) reports 2Q EPS of $0.17 on revs of $392.9 mln. PALM guides 3Q EPS to $0.11-$0.13 vs. $0.17 cons on revs of $400-$410 mln vs. $411.5 mln cons.

Why didn't the Thai stick? - Todd Harrison - 3:34 PM

And so it is, another trip down Flickering Tick Lane is eyeing the end of the road. As it stands and as I sit, the steady chorus of "Can't get 'em down!" is drowning out the belly-aching nameless intern, Clapton's rendition of Old Love and the whisper soft sound of my hair follicles hitting the desk.

Action speaks louder than words, particularly as they pertain to performance, and the "eyes" say a lot today. What are they screaming? Correlation, more than anything. The metals are up, Crude is rude (+1.5%) and, last but not least, stocks are following suit.

How and why? See the greenback--it's the fuel for the asset class fire.

Despite the palpable performance anxiety, I don't see 'em rippin' to the upside from here. At least not today. Market internals aren't confirming (they're still flattish) and the brokers are muttering, sputtering ticks. What I will say is that Boo had every change to issue a Code Red today and, despite his best efforts, Santiago lived.

So while the global liquidity train and our collective risk appetites may be in grave danger (is there any other kind?), the bovine continue to whistle while they work.

Fare ye well into the bell.


Position in metals

Reality Check - Fil Zucchi - 3:22 PM

Last week as Akamai (AKAM) was making new high after new high, I cautioned that the trading in the stock suggested that 100-share type players were behind the action. Nothing wrong with that, and Minyans know I am a big fan of AKAM, but usually, and particularly when dealing with high beta names at all time highs, this is the type of action that can reverse rather quickly.

Contrast that with what we saw in General Electric (GE) on Friday and Monday, and what's happening in UnitedHealth (UNH) today. In GE, the average trade size for those two days was in excess of 600 shares; UNH's average trade size today is about 450 shares. These stocks are coming off good technical bases, they are extremely liquid and hence very difficult to "move," and are hardly the names mo-mo players like to fool with.

Bottom line? My sense is that gorillas are buying into GE and UNH for cyclical moves. I am not sure what that means (if anything) for the economy as a whole, or if the much vaunted migration out of small caps and into big caps is starting in earnest. But I am rather convinced that what we are seeing is more likely than not to have legs.

Position in UNH

What happened in Thailand? - John Succo - 9:39 AM

Thailand raised reserve requirements and their stock market is down almost 15% overnight.

This is one of those market tells that many may ignore, but I believe has great implications.

All the world's securities markets are tied together as liquidity generated by new credit from central banks has washed over everything and created an atmosphere of low growth and no risk.

But that perception is incorrect. Low growth yes but not low risk. Risk has grown (debt) by definition with more liquidity.

Now Thailand's leaders are saying they are worried about speculation. Thailand is only generating a small amount of liquidity and is not a major influence, but they trade with the ones who are and these things are all tied together.

If central banks balk at the amount of credit in the system you will see the liquidity come out much faster than you saw it go in.

Does anyone remember where the last contagion started in 1998?

What you need to know... - Jon Doctor J Najarian - 8:20 AM

Thai Central Bank Places Penalties on Foreign Investment – The move has sent Thai shares down at least 14% as emerging markets were shaken by the announcement. The action hit Asian shares and is now working its way to Europe as the news follows the sun.

Oracle (ORCL) Matches Street, Growth Disappoints - The database giant reported higher quarterly earnings and revenue from a year earlier, but shares fell as investors had hoped for ORCL to beat, and/or guide higher for the upcoming quarter.

Citi Cuts Station Casinos (STN) - The broker told clients that the potential takeout price for the company is unlikely to yield the required 15% upside to the current trading price of the shares. Paraphrasing, Citi said the management led takeout is too strong to displace and thus, that group will get the deal for a good price. Go figure!

JP Morgan Ups ITT To Overweight – The defense electronics contractor should benefit from operating leverage and what JPM called low hanging fruit! "We think the commercial margin here is under-appreciated," said the analyst.

Positions in STN, ORCL

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