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From Briefing.com: Close Dow +30.15 at 10804.51, S&P +6.75 at 1206.83, Nasdaq +9.44 at 2051.04: Late-day buying, prompted by breaking biotech news and falling bond yields, coupled with new M&A deals and key CEO changes, were enough to counter higher oil prices... Upbeat news in Biotech (+5.0%), during a day that saw few market-moving catalysts, provided a strong leg of buying support heading into the close as market breadth turned modestly bullish...

The Biotech industry, which earlier held modest gains amid upbeat remarks about Genzyme Corp. (GENZ 57.80 +2.20), regarding stronger EPS growth and improving margins, soared following an interim analysis of Phase III trials from Genentech (DNA 54.83 +10.75)... Confirmation that DNA's Avastin drug (in combination with chemotherapy) aids in lung cancer survival was exactly what the doctor ordered to improve sentiment enough to return sellers to the sidelines and help the Dow climb back into positive territory for the year... While Treasurys were relatively unchanged most of the day, with yields above 4.5% contributing to the overall cautious sentiment, bonds attempted to rally amid uncertainty ahead of event risks tied to upcoming economic data...

The benchmark 10-year note closed up 8 ticks to yield 4.5%, somewhat offsetting interest-rate worries that loomed last week when bonds got hammered and recorded their worst weekly sell-off in 10-months... Pressuring equities most of the day, however, were rising crude oil prices ($54.95/bbl +$0.52), amid uncertainty of OPEC raising output quotas at this Wednesday's meeting in Iran... Meanwhile, IBM (IBM 91.89 +0.38) agreed to acquire Ascential Software (ASCL 18.29 +2.59) for $1.1 bln while Altria Group (MO 65.30 +0.16) expanded its presence into the world's fifth largest cigarette market with a $5.2 bln bid for Indonesian tobacco firm PT HM Sampoerna...

Walt Disney (DIS 28.00 +0.41) also made headlines when it named current President and COO Robert Iger as the successor to CEO Michael Eisner while AIG (AIG) announced that CEO Maurice "Hank" Greenberg could resign as early as this week... Fueled by both resurgence in M&A and new CEO appointments was OfficeMax (OMX 34.47 +0.31)... While OMX - the only notable earnings report today - handily missed Q4 expectations due to weak holiday sales, the market arguably ignored their disappointing results in favor of a statement from rival Office Depot (ODP 20.76 +1.57)...

ODP appointed former AutoZone (AZO 85.79 -12.51) CEO Steve Odland as Chairman and CEO, arguably increasing speculation that OMX could be acquired... Strength in Software and Semiconductor offset losses in Hardware and Disk Drive while Financial, Health Care and Consumer Staples were influential leaders to the upside... A JP Morgan upgrade on Williams Companies (WMB 18.60 +0.71) helped fuel widespread buying interest in Utility while strong gains in Delta Air Lines (DAL 4.62 +0.32), which announced a flurry of new low sales fares, provided a boost to Transportation...

Even the Materials sector, under pressure most of the day due to profit taking in Steel and a rebound in the dollar, eked out a slim gain... Potentially oversold conditions in the greenback lifted the currency to its best levels in more than a month against the euro (1.3365) and strengthened it against the yen (104.93) following news of a 28% year-over-year contraction in Japan's Jan. current account surplus...DJTA +0.6, DJUA +1.9, DOT -0.7, Nasdaq 100 +0.6, Russell 2000 0.6, SOX +0.6, S&P Midcap 400 0.8, XOI +0.5, NYSE Adv/Dec 1754/1587, Nasdaq Adv/Dec 1661/1453

3:20PM Previewing Jabil Circuit (JBL) 26.34 +0.26: After Thursday's close Jabil Circuit will report its fiscal Q2 (Feb) results. The company's track record suggests its should be able to at least match the Reuters Estimates consensus EPS estimate of $0.27. For perspective on the report and a glimpse of JBL's trading history leading up to, and following, its results for the past 7 quarters, be sure to visit Briefing.com's Looking Ahead page.

8:11AM LSI Logic ups guidance (LSI) 6.06: Company issues upside guidance for Q1 (Mar), sees revenues of $420-435 mln, consensus $408 mln, previous company guidance called for revs of $400-415 mln.

6:37AM Asyst Wins Multi-Million Dollar Spartan Sorter Order From Hynix Semiconductor (ASYT) 4.83: Hynix Semiconductor Inc. has selected Asyst's Spartan Integrated Sorter for Hynix's new 300mm fab in Ichon, South Korea. The multi-million dollar order from Hynix marks the first win for the Spartan Sorter in South Korea and the fifth major 300mm customer penetration for the Spartan Sorter since its first shipment less than one year ago.

6:31AM Powerwave to Acquire Selected Wireless Assets of REMEC Inc for $118 mln in cash/stock (PWAV) 7.76: Co has signed a definitive agreement with REMEC (REMC) to acquire certain product lines of REMEC's Wireless Systems business. The purchase includes certain selected assets and liabilities related to REMEC's Wireless business. These specific product lines include RF conditioning products, filters, tower-mounted amplifiers and RF power amplifiers. PWAV estimates it will achieve in excess of $50 mln in annual cost savings and that transaction will be accretive to EPS in the first qtr following completion of the integration activities.

6:27AM Research In Motion and Yahoo! Announce Worldwide Relationship to Bring Yahoo! Services to BlackBerry (RIMM) 60.63: Cos announce a new relationship to provide Yahoo! Messenger service to BlackBerry users around the world. Through this relationship, the companies plan to pre-install full-color, graphical Yahoo! Messenger clients on BlackBerry devices in the coming months. This new relationship builds on Yahoo!'s strategy of extending its core services beyond the desktop and RIM's strategy to provide a robust and expandable wireless platform in order to give customers a truly integrated communications experience. The companies also intend to provide a further enhanced Yahoo! Mail offering in the future.

4:07PM The Walt Disney Co (DIS) 27.97 +0.38: On Sunday, The Walt Disney Co announced Robert Iger will succeed Michael Eisner as chief executive. The timing of the news took the market by surprise as the Board was expected to vote in June, however, Iger's unanimous vote was not, as his name appeared to be at the top of a very short list. Eisner will step down in September a year earlier than expected, although remaining on the Board till 2006 after serving the company for 21 years. We added the stock as a suggested holding in our Active Portfolio on Friday, but in light of the news, felt compelled to outline the leadership issues at hand.

The news has sparked much conjecture with some agreeing that Iger is the best person for the job, while others suggest Eisner continues to pull the puppet strings at the company. The naysayers argue over the appearance of a lack of independence with regard to the search process. Former board members, Roy Disney and Stanley Gold, released a letter to the Board just last week alleging Eisner inappropriately participated in the interview process resulting in the withdrawal of some external candidates. The only name that has surfaced to date is current CEO of eBay (EBAY), Margaret Whitman, who withdrew her name on Friday after being interviewed.

The announcement came under direct fire from the former board members, who said in a letter, "We find it incomprehensible that the board of directors of Disney failed to find a single external candidate interested in the job and thus handed Bob Iger the job by default." Also stating, "The need for the Walt Disney Company to have a clean break from the prior regime and to change the leadership culture has been glaringly obvious to everyone except this board." Chairman George Mitchell said, Eisner was never present during any interviews with Iger and attended only part of a meeting with an external candidate.

So who is this man in the middle of a fire storm? Robert Iger, 54, was the president of Capital Cities/ABC, which Disney purchased back in 1995. He went on to head ABC Group and Disney International. To his credit, Iger took the flailing ABC network fourth in the ratings and turned it into a powerhouse. ABC, now poised to turn a profit, boasts some of top shows on TV today including "Desperate Housewives" and "Lost." Iger appears to be a good replacement for Eisner as a seasoned executive and with 10 years under his belt at Disney, he clearly understands its unique corporate culture. The new CEO is also credited with soothing sour relations between Eisner and Pixar's (00C0) CEO, Steve Jobs.

When Iger takes over the helm on October 1st, he faces numerous challenges. The new CEO must emerge from Eisner's shadow, staking his claim by laying out a clear long-term plan for growth. Two key issues on which he will be judged surround Pixar and ESPN. Pixar is the driving force behind Disney's character development over the past few years, therefore it is essential for Disney to repair relations and make a deal with the animation studio. Steve Jobs is in a great position as Disney's most important content generator, hence a possible deal may be costly. Additionally, after stealing the NFL from NBC back in 1998 for $9.2 bln, Disney's eight year contract is fast approaching the October 2005 deadline. The NFL is critical programming for ABC and ESPN driving subscriber fees and advertising revenue.

Disney's shares recently have been hampered by the negative publicity surrounding this issue, by announcing the succession ahead of schedule, the Board has eliminated this uncertainly in the financial markets. The stocks' reaction was favorable, although muted, as Iger was seen as a clear frontrunner and favored by Eisner. Both men will share the CEO position until September. The road ahead will be challenging. For the near term, Iger will need to ensure a smooth transition and maintain the positive momentum in operations. Iger's vision is likely to include improving Disney's creative capability by retaining top animation talent, international expansion, technological innovation, and developing new franchises. Looking further out, the new CEO's ability to realize growth from Disney's vast assets will be key to creating a legacy of his own. ---Kimberly DuBord, Briefing.com
11:39AM Ascential Software (ASCL) $18.29 +2.59 (+16.5%) The consolidation of the enterprise application software market continues. IBM's announcement that it will buy Ascential (for $18.50 per ASCL share) is a logical extension of the strategy that IBM has adopted as their core focus for almost ten years now: consulting and customized enhancement of an enterprise client's IT system. Ascential has become one of the premier vendors of integration software for complex IT systems. Already a reseller of Ascential products, IBM clearly knows the value of Ascential products in selling integration services.

IBM made the strategic decision to shift away from selling hardware and software as their core focus and towards becoming a consulting and contract software shop in the very early days of Louis V. Gerstner's term as Chairman and CEO. In retrospect, it was an absolutely essential shift to make and Gerstner's realization of the need was brilliant. The key idea driving the shift was the observation that the biggest challenge faced by enterprise clients was making all of their disparate systems interact efficiently and smoothly. The bigger the client company, the bigger this problem was (and still is). Legacy mainframe systems running COBOL programs first written 30 years ago needed to be integrated with the network of desktop PCs and, later, with servers that could provide internet access and instant updating. These technical challenges were extremely hard ten years ago - and, although more tools exist today, are still big challenges for enterprises.

Ascential's value in this space is their product line that essentially turns any and all data in an enterprise system into "metadata." The Ascential product line does this by acting as a sort-of "interpreter" standing in the middle of computer systems that cannot directly communicate with each other. Installing Ascential provides a standardized data format for the entire IT system that allows data to be collected by one system, stored in a database by another, and analyzed by yet another.

Since IBM's core strategy is now helping clients integrate their entire systems, adding Ascential as one of their own products makes very solid strategic sense. IBM has been a reseller of Ascential for several years and was even Ascential's largest customer in 2001, accounting for more than 10% of revenue.

We have been following the theme of consolidation in the enterprise software space for more than a year. Although we believe that, ultimately, the highest value will accrue to software vendors at the application level, the integration level also has competitive strength and the ability to retain pricing power. Once an enterprise successfully installs an integration software product, if it becomes essential to the daily "data flow" of the firm's operations, it is very hard for a customer to replace it easily. That puts pricing power on the side of the vendor, instead of on the customer's side. With pricing power shifting to the customer at all other levels of software, from operating systems, networking, and databases, the integration tools level and the application level are where the future of software profits lie.

Stocks of other large integration software vendors are also moving today, on the idea that the other integrators that compete with IBM will now need to acquire their own integration platform. These include the following companies: Informatica (INFY) +3%, Tibco (TIBX) +3%, BEA Systems (BEAS) +2.5%, Compuware (CPWR), Altiris (ATRS) +1.5%, Progress Software (PRGS) +1%, Quest (QSFT) +1%, BMC Software (BMC) +1%, and even the comparatively small SeeBeyond (SBYN) +2.3%. - Robert V. Green

11:13AM Lockheed Martin (LMT) 59.71 +0.22: The recent note authored by Defense Secretary Donald Rumsfeld outlined what should be the focus of the military. The new focus should be heading off threats prior to hostilities and serving a larger purpose of enhancing US influence around the world. This is certainly not a new idea in the post September 11 world we live in.

One of the issues at hand is the F/A-22 jet, which is dubbed the Raptor. It is probably the most advanced fighter that the US Air Force has in its arsenal, but the cost of each fighter is something that could choke a horse. The PBS show "Nova" noted that the cost of a F-22 would be about $100 million each.

A web site (www.f-22raptor.com) noted that if the Pentagon reduced the number of ordered planes to 160, the production cuts would start taking effect after the 2007 budget year and production could end by about 2010. The cutbacks, however, may be muted due to the expected build of the F-35 joint strike fighter.

The note also mentioned that there was something of a "dream capability" which would be an AC-130 gunship that would be unmanned and capable of hovering for several hours over a hostile area. The AC-130 is plane that Lockheed had been making for more than 40 years, but then retired the aircraft in 1995. Recent use of the plane in Dessert Storm and Operation Freedom has brought a renewed interest in the aircraft.

Overall, the story here is one that cannot be a total surprise to the investors in defense stocks. The huge price tag on each of the F-22s was always a point of contention, but the Air Force remains a proponent of the plane. A cutback should not effect the stock too much as it would not really begin to hit earnings until 2009 or 2010, as the total number would just likely cut the production at the end of the cycle.

So while this news might have inspired some analysts to trim some estimates, it would be estimates that are well off into the future and not the estimates for next year or even the year after. In this day and age of "what have you done for me lately?" and our incredibly short term focus, this news shouldn't be of great concern to shareholders.

10:31AM OfficeMax Inc. (OMX) 34.37 +0.20: The number three office supplies retailer finally released its fourth quarter results, which had been delayed due an accounting probe. The company reported fourth-quarter FY04 net income of $.7 million, or a loss of $0.02 per diluted share down from a profit of a nickel last year. Before the net impact of the sale of its paper, forest products, and timberland assets, and related financings, OfficeMax reported a net loss of $24.2 million, or $0.30 per diluted share. The bottom line, the results are fairly in-line with its preannouncement on Feb. 14th. Operating income for the year was $129 mln compared to $135 mln pre-announcement and $125 mln last year.

OfficeMax previously announced its would restate income for the first three quarters of last year after completing a probe that found employees fabricated $3.3 mln in rebates billed to suppliers. The probe resulted in the overstatement of operating income by $7 mln and the resignation of the CEO and the CFO, along with six employees. Shares have been on a wild ride over the past six months finally bottoming at the beginning of January. On March 1st, shares jumped over 3% on news the company completed its internal probe, which had begun in December.

During the fourth quarter, revenues rose 14.3% year/year to $2.69 bln, vs. the $2.37 bln consensus. Retail comps were 0.4%, with contract sales up 16% in total - stronger than expected. Operating margins sank from 3.5% last year to 1.8% for the quarter. Co noted higher promotional sales and lower vendor income. Last July, OMX announced it was selling its paper and timberland assets, along with changing its name to OfficeMax from Boise Cascade completing the transformation from a paper company to an office supply retailer. Assets were sold to Boise Cascade LLC, which OMX retains a 10% stake.

On the positive side, OMX said it intended to go ahead with a previously-announced plan to buy back $775-815 mln of common shares, but provided no timing. Interest in shares heightened recently on news a major shareholder sent a letter to the Board, urging a sale or break up of the company. Today, the market is likely to look past these results, focusing on the announcement from Office Depot (ODP) that Steve Odland will take over as Chairman and CEO. Odland, formerly of AutoZone, has a history of making acquisitions, which may increase conjecture that OMX may be sold. For now, we would urge caution as volatility is likely to continue. There remain a lot of unanswered questions, not to mention the company is operating without a CEO, CFO, and President of Retail. ---Kimberly DuBord, Briefing.com

9:45AM Page One - Market Still Languishing : There are no major mergers today. That has been rare for Mondays recently. Nevertheless, stock futures suggest a modest bounce following Friday's sharp drop.

Just for the record, there are a couple of less significant mergers. IBM will buy Ascential Software (ASCL) for $1.1 billion. That isn't a large deal, but does support the trend of consolidation in the software industry. Altria is also offering to buy an Indonesian tobacco company for $5 billion.

The bigger news is that Walt Disney Company has named a new CEO. The choice apparently has not pleased dissident shareholders, so the market reaction is uncertain.

Oil prices are still over $54 a barrel despite a statement this weekend from OPEC President Sheikh Ahmad Fahd al-Sabah that OPEC may raise production limits at its March 16 meeting. Bond yields are pushing higher again this morning as the 10-year yield is up to 4.56%. Both remain of concern to the stock market.

There are no economic releases today and the only major earnings release is from OfficeMax, which had a mixed report. The week ahead brings retail sales data tomorrow, and housing starts and industrial production on Wednesday. The major reports on the earnings calendar are from brokers such as Lehman, Bear Sterns, and Goldman Sachs.

The best news this morning is that there are not many earnings warnings. Briefing.com's Big Picture column today takes a look at a possible pickup in earnings warnings this quarter and in 2005. Earnings growth is slowing, particularly in key sectors such as financials, health care, and consumer discretionary. That increases the risk of warnings. Our overall view remains neutral. There will come a time when the market will have greater appeal. That time isn't quite yet. Dick Green, Briefing.com

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