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Two Ways To Play: Lehman Gets Cold Shoulder


Strengthen your portfolio in good times and bad.

Goldman Cuts Lehman

Bloomberg reports analysts at Goldman Sachs cut their recommendation on Lehman Brothers (LEH) after the firm posted a $3.9 billion loss for 3Q, its biggest in history. Analysts including New York-based Prashant Bhatia wrote in a note to clients that there was an increased likelihood that Lehman would have its credit rating cut.

"Confidence and perception issues are overwhelming" Lehman, they said, and capital-raising in the near-term would likely be the most effective option in addressing its issues. See Professor Andrew Jeffery's Lehman Averts Disaster – For Now.

From the Bull Pen: Professor Krueger has mentioned a bullish play in the financial sector, Northern Trust (NTRS). One can consider entry on a pullback to $80.

From the Bear Cave: Bears can consider the Ultrashort Financials (SKF). Sell stops can be set below $116.

High on ImClone

Bloomberg reports a report in the New England Journal of Medicine said that ImClone's (IMCL) Erbitux prolonged the survival for patients with recurring head and neck cancer more than just chemotherapy alone. A study of 442 patients found patients receiving both treatments lived 10.1 months, compared with 7.4 months for those that didn't receive the medication. The report from the prestigious journal may help ImClone market the drug. Erbitux, which is used to fight head, neck and colon cancer, is ImClone's only drug and generated revenue of $1.3 billon last year.

From the Bull Pen: This news highlights the biotech sector. Notice how stocks like Amgen (AMGN) and Celgene (CELG) bounced off of their support levels. Sell stops can be set below $60, and $65 respectively.

From the Bear Cave: Bears can consider riding the downtrend in Merck (MRK). Buy stops can be set above $35.

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 -3.06%, Nikkei -1.98%, Sensex -2.31%, Taiwan -3.19% and Shanghai -3.34%.

Over in Europe, we see the CAC -0.86%, DAX -1.24%, FTSE -1.05%

As of 8:30 AM EST, S&P futures are down 17 points to 1215, and Nasdaq Futures are off 24 points to 1713.

A Look At Commodities

Commodities are mostly lower. Crude oil is down -0.68 to 101.88, Gold -13.90 to 745.00, silver -0.132 to 10.685, and copper -2..35 to 310.00.

The dollar index is higher +0.285 to 80.131.

On the Radar


8:30 Trade Balance: -$58.0 bln
8:30 Import Price Index (m/m): -1.4% cons.
8:30 Import Price Index (y/y):
8:30 Initial Jobless Claims:
8:30 Continuing Claims:
8:30 Monthly Budget Statement: -$105 bln

Click here for the full trading radar.

Thirsty Thursday! Good luck!
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