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From Briefing.com: 4:17PM Dell reports in-line Q1 results, guides Q2 in-line (DELL) :Reports Q1 (Apr) earnings of $0.37 per share, in line with the Reuters Estimates consensus of $0.37; revenues rose 16.0% year/year to $13.39 bln vs the $13.42 bln consensus. DELL reports gross margin 18.6% vs 18.4% street expectations. Co issues in-line guidance for Q2, sees EPS of $0.37-0.39 vs. $0.38 consensus; sees Q2 revs of $13.6-13.8 bln vs. $13.64 bln consensus.

4:05PM Westell Tech reports in-line, ex items; guides in-line (WSTL) :Reports Q4 (Mar) earnings of $0.12 per share, excluding non-recurring items, in line with the Reuters Estimates consensus of $0.12; revenues rose 26.0% year/year to $78.2 mln vs the $75.9 mln consensus. Co issues in-line guidance for Q1, sees EPS of $0.10-0.12, ex items vs. $0.11 consensus; sees Q1 revs of $73-76 mln vs. $74.52 mln consensus.

Close Dow -110.77 at 10189.48, S&P -11.75 at 1159.36, Nasdaq -7.67 at 1963.88: Stocks were weak across the board as investors struggled to decide which piece of data to use as the better indicator of broad consumer spending - strong monthly retail sales or a discouraging quarterly report from Wal-Mart... April retail sales rose a much stronger than expected 1.4% (consensus +0.7%) and retail sales, excluding autos, surged 1.1% (consensus +0.5%), as the March data were revised slightly higher...
However, even though April's sales data turned in the best showing in seven months, providing strong support to the argument that the weak March economic data reflected a temporary soft patch rather than the start of a trend, Wal-Mart's (WMT 47.65 -0.95) disappointment underpinned a sense of caution that helped close every economic sector in negative territory... Wal-Mart posted a record $70.9 bln in Q1 revenues, but the retail giant missed analysts' earnings forecasts by a penny, issued downside Q2 EPS guidance and said that its FY05 outlook is "still possible, but far more difficult to achieve."...

Rival Target (TGT 48.82 +0.62), however, beat analysts' Q1 estimates by a penny and surged more than 1.0%; but with only one-fourth of the influence that Wal-Mart's top-ten weighting has on the S&P, Target's impact was barely noticed... Meanwhile, crude oil futures ($48.54/bbl -$1.91) got hammered, falling 3.8% amid slowing demand in US and China coupled with builds in crude oil supplies and natural gas inventories... But today's tumbling in oil, instead of providing the relief it has so often, merely invited aggressive selling interest in Energy (-4.3%) - a leading sector in terms of earnings growth... Also weighing on Energy, as well as Materials (-2.8%), was a stronger dollar...

The greenback climbed to a six-month high against the euro (1.2704) and gained against the yen (106.78) following the strong retail sales report - surging 2.1% and 2.3%, respectively, since last Friday's strong employment report... The fact that Energy and Materials, which have paced profit growth on the S&P with year-over-year Q1 earnings growth of 42% and 64%, respectively, were the worst performing economic sectors only added to the bearish bias... Not even falling bond yields were enough to lift interest-rate sensitive areas like Financial, Utility and Homebuilding...

Treasurys, which were weak most of the day following the strong retail sales figures and ahead of an upcoming bond auction, turned the corner about two hours before the market closed... A flight-to-quality bid fueled by the sell-off in stocks and commodities, plus a strong $14 bln 10-year auction, closed the benchmark 10-year note up 8 ticks to yield 4.17%... Technology also traded lower, but losses were minimized as Semiconductor posted a modest gain ahead of Dell's (DELL 36.61 +0.07) Q1 earnings after the close...

Health Care, Industrials, Consumer Discretionary and Consumer Staples were also influential leaders to the downside, with Wal-Mart's disappointment preventing investors from getting more defensive about the latter (staples) in a down market... Also weighing on sentiment Thursday was the fact that Moody's downgraded Ford's (F 9.36 -0.28) debt to its lowest investment grade rating (to Baa3 from Baa1) - exactly one week after Standard & Poor's downgraded Ford and General Motors' (GM 30.69 -0.31) credit ratings to junk status...

Separately, initial claims rose 4K to 340K (consensus 325K), but since the weekly data have been extraordinarily volatile and provide a weak read on payroll growth, as hiring (not firing) provides the direction, the Labor Dept.'s report was overshadowed by the stronger than expected retail sales data... DJTA -2.7, DJUA -1.0, DOT -0.4, Nasdaq 100 -0.3, Russell 2000 -1.5, SOX +0.3, S&P Midcap 400 -1.4, XOI -3.7, NYSE Adv/Dec 936/2358, Nasdaq Adv/Dec 1138/1902

11:03AM Ameritrade Holding (AMTD) $13.10 -0.66 (-4.8%) "The lady doth protest too much, methinks." Today's strong statements by Ameritrade Chairman and founder Joe Ricketts that the company is not for sale bring the old Shakespeare adage to mind. It also brings another old quotation to mind: "Don't be silly, everything's for sale."

The primary fiduciary duty of all boards is to protect and maximize shareholder value. While there is a wide range of discretion in fulfilling that duty, at some point, at the right price, all companies are for sale. It is simply a question of price.

That's what makes today's statement so interesting. In the same breath that the company strongly "confirmed" that it is not for sale, they also stated "We will continue to explore strategic opportunities, basing our decisions on whether a transaction will enhance shareholder value." In addition, they admitted that "there will likely be further consolidation in the industry."

What it all adds up to, in our view, is not that the company is "not for sale." Instead the real message is "the current price is too low." E*Trade's offer, which was never officially put forth as a legal tender offer, valued Ameritrade at a slightly higher valuation ($6.2 billion) than ET ($4.5 billion), but Ameritrade shareholders would only have 47% of the resultant company. As compensation for taking "the back seat," Ameritrade shareholders would get $1.5 billion in cash, or about $3 per share of AMTD. The current market capitalization value for AMTD is $5.4 billion.

Taking all this into consideration, then, begs the question. If Ameritrade's statements are really "posturing" for a better price, is E*Trade willing to raise their offer for Ameritrade? We think they could certainly afford to pay more. E*Trade has $2.7 billion in cash and has free cash flow of $1.5 billion (TTM). Ameritrade's cash is just $189 million and their free cash flow is just one-sixth that of E*Trade's (at $232 million). E*Trade's market cap might be smaller than Ameritrade's, but their cash cow position makes them a much "larger company." We also think the combination makes strategic sense.

That makes today's situation an interesting one to ponder. AMTD is down, as the market begins to take the company at its word that they are "not for sale." But with the AMTD market cap down today, it is now below the first ET offer by more than $1 billion. If E*Trade is serious, and we think they are, they might increase their bid by an additional $1 billion. That would put AMTD shares around $18 a share. Since we think that AMTD will be acquired eventually (it is just a question of when and by whom), the $13 level of today seems like a very reasonable low-risk level at which to make an investment premise based on acquisition. Never mind what the company actually says; at the right price everyone stops "protesting too much." Note: Briefing.com has a business relationship with both Ameritrade and E*Trade. - Robert V. Green
10:12AM Wal-Mart Stores, Inc. (WMT) 47.01 -1.58: It was a miss from the world's largest retailer as Wal-Mart's first quarter earnings came in a penny shy of expectations. The result, coupled with substantially lower guidance for the second quarter, sent pre-market futures lower. Yet Wal-Mart was trumped by the strongest retail sales report in months. Consumers kept spending in April generating retail sales of 1.4% and 1.1% ex-autos indicating the economy remains strong. This piece of economic data along with an upward revision for March and a positive result from Target (00C) over shadowed WMT's disappointment.

Wal-Mart earned a net profit of $2.5 billion, or $0.58 per share up from $2.2 bln, or $0.50 per share in last year's period. There were some exclusions including gains from a tax resolution and legal developments. Removing these non-recurring items, earnings came in at $0.55. Sales were also below estimates with revenues up 9.5% year/year to $70.9 bln vs. the $71.8 bln consensus. Wal-Mart stated back in April that its quarterly earnings would likely be around the low end of its forecast of $0.56-0.58, which prompted analysts to lower estimates.

Wal-Mart's base is mainly comprised of low to middle income levels consumers, which are more impacted by high gasoline prices restricting discretionary spending. Also, there is a rural factor at play here. With gas prices well above $2 per barrel, consumers may take less trips to their local Wal-Mart store. The company stated on its prerecorded conference call that steep gasoline prices would continue to hurt spending trends in the current quarter. It's hopeful that the environment will turn around in the latter half of the year, but much of its optimism lies at the gas pump. Management also noted a wet and cool weather cut into spring sales in Q1.

Stores opened at least a year, otherwise known as same-store sales, rose 2.9% below its forecast range of 3-5%. Sales at Sam's Club also missed targets. Quarterly sales rose 9.5 percent to $70.9 billion. Total same-store sales from December through April have been +3%, +2.5%, +4.1%, +4.3%, and +0.9%, respectively. Gross margins gained 20 basis points assisted by global sourcing. But higher expenses weighed on profitability as operating margins fell 15 basis points to 5.4% excluding the legal gain. Inventories looked okay up 10.7% and 1% in comps inventories.

Wal-Mart's guidance for the second quarter was almost 10% behind the consensus estimates. It sees earnings coming in between $0.63-0.67 vs. consensus of $0.70. This was the largest negative revision in some time and took the market by surprise as WMT typically telegraphs earnings expectations quite well. On the plus side, it noted that seasonal merchandise has responded to periods of better weather. Comps are expected to range between 2-4% in the US. Management stated it was optimistic about the economy, but that the first half of the year will be the most difficult, but does expect the momentum to pick up in the second. Looking further out, WMT's initial earnings outlook for the full year of $2.70-2.74 is still possible, but says it's "far more difficult given our current outlook for the 2nd quarter."

Wal-Mart faces a challenging year and despite shares reaching a new low, we suggest it's too early to step in. As gas prices continue to pressure the consumer, Wal-Mart's fate is less than optimistic with higher costs and weaker demand. WMT also highlighted non-operating issues which will be headwinds throughout the year, namely higher interest expenses due its increased cost of borrowing given its half fixed/floating liability structure, and the absence of last year's LIFO credits. Shares are now trading at a level not seen since the beginning of 2003. The price to earnings multiple is 17.9x forward earnings well below its five-year average of 31.6x. We see a Retailer like Target as a much better investment due to its operating performance and sales growth, or prehaps on the other end of the price specturm, one of the luxury retailers whose customers are less impacted by gas prices. ---Kimberly DuBord, Briefing.com

9:07AM Page One - Retail Sales Supports Long-Term Value Theme : April retail sales data support the argument that weak March economic data reflected a temporary soft patch. It hasn't given much of a boost to futures this morning, but eventually the recognition that the economy is on track will provide support to the market.

April retail sales rose a much stronger than expected 1.4%. Excluding autos, the gain was 1.1%. The March numbers were revised slightly higher. These gains indicate that the concern exhibited from weak March retail data was overdone. March clearly was a slow month, but it now appears that it was simply a case of a normal fluctuation within a growing economy.

Even with the economic boom of last year, the economy hit a soft patch late in the summer. Similar concerns about a significant slowdown were expressed at that point. Those proved unfounded. Now, it is clearly recognized that the overall growth in the economy has slowed from a trend last year of about 4 1/2% to about 3%. It is therefore fully rational to expect soft patches this year as well. The strong April payroll and retail sales data suggest that March was exactly that.

The retail sales data won't turn this into a bull market. But it should help alleviate the concerns in the market that have led to a high risk premium on stocks. Six months ago, the S&P 500 was at 1173. Today, it opens at 1171. Over this same time, earnings have risen sharply. That has led to a decline in the price/earnings multiple from 20.2 six months ago to 16.8 today. This is discussed in greater detail today in Briefing.com's Big Picture column.

The other news this morning is mixed. Oil has dropped below $50 a barrel. Disney had a good earnings report and Target beat by a penny, but Wal-Mart missed by a penny and warned slightly for next quarter. After the close, Dell reports earnings.

Our view is still neutral, but we certainly aren't in the doomsayers' camp. Market action has been very disappointing, and virtually all the internals that the traders watch are bearish. There are few opportunities to ride a wave in this market. But the economy remains on track, and we believe the Fed will eventually bring inflation under control. Stocks represent good value, which long-term investors should recognize even as the short-term volatility persists. --Dick Green, Briefing.com

9:45AM Danaher (DHR) CSFB upgrades Neutral to OUTPERFORM. Following their dental industry review, firm thinks favorable demographics, new technologies and industry consolidation are likely to fuel growth for many years, and believe the co is looking to further expand its dental platform via bolt-on acquisition.
9:44AM Dow Jones (DJ) JP Morgan upgrades Neutral to OVERWEIGHT. JP Morgan upgrades DJ based on the likelihood of an imminent restructuring of the co's assets, as well as the repositioning of the flagship WSJ. Firm thinks the co will ultimately prevail in transitioning towards more consumer advertising, and believes that by 2007 the co should be able to garner an incremental $82 mln in consumer advertising from the Weekend Edition and Personal Journal.

9:44AM Primus Guaranty (PRS) Keefe Bruyette upgrades Mkt Perform to OUTPERFORM. Firm believes that credit and growth perceptions have driven the revaluation of the stock over the last 2 months, creating an oversold opportunity. They believe the fundamentals of the co are facing a period of acceleration, and the depressed valuation offers an opportunity to take advantage of this expected improvement.

9:43AM Micromuse (MUSE) Raymond James upgrades Outperform to STRONG BUY. Target $7.25. Firm believes co's end mkts are improving, and that visibility will accordingly increase and permit it to expand operating margins given its highly leverageable model. Firm believes recent acquisition multiples and peer group multiples suggest at least 35% upside in the stock.

9:42AM Teradyne (TER) Moors & Cabot upgrades Hold to BUY. Target $15. Moors & Cabot upgrades TER as they believe the stock has bottomed and the prevailing negative street sentiment towards the test sector is already priced in. They believe TER's competitive positioning has further strengthened and that it stands to benefit from its broad gaming platform test wins.

9:39AM Alaska Comms (ALSK) Raymond James downgrades Outperform to MKT PERFORM. They continue to believe the co has significan long-term earnings potential, as Risperdal Consta continues to post strong performance and with product A.I.R. Insulin targeting a sizable potential inhaled insulin mkt, advancing into late stage development.

9:39AM Arctic Cat (ACAT) Ryan, Beck & Co downgrades Mkt Perform to UNDERPERFORM . Target $27 to $18. Firm notes that results were impacted by sustained increases in raw material prices, a mild winter in many of the co's key snowmobile markets, and a late qtr snowmobile promotion to assist the co's dealers. Additionally, the company expects an unfavorable yen/dollar exchange to hinder results going forward. In firm's view, these issues are unlikely to subside over the near term.

9:38AM Columbia Sportswear (COLM) McAdams,Wright,Ragen upgrades Hold to BUY. Target $53. Firm notes that stock is trading near its 52-wk low and at the low-end of its historical P/E range, and firm believes there is the potential for both earnings and multiple expansion.