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From Briefing.com: 4:11PM Solectron reports in-line, ex-items; guides Q4 EPS in-line and Q4 Revs below consensus (SLR) :Reports Q3 (May) earnings of $0.04 per share, excluding non-recurring items, in line with the Reuters Estimates consensus of $0.04; revenues fell 14.4% year/year to $2.6 bln vs the $2.7 bln consensus. Co issues guidance for Q4, sees EPS of $0.03-0.05 vs. $0.04 consensus; sees Q4 revs of $2.4-2.6 bln vs. 2.71 bln consensus.

4:08PM OmniVision misses by a penny; guides below consensus (OVTI) :Reports Q4 (Apr) earnings of $0.30 per share, $0.01 worse than the Reuters Estimates consensus of $0.31; revenues rose 3.3% year/year to $103 mln vs the $99.8 mln consensus. Co issues downside guidance for Q1, sees EPS of $0.22-0.27 vs. $0.30 consensus; sees Q1 revs of $90-100 vs. $102.52 mln consensus.

Close Dow -166.49 at 10421.44, S&P -13.15 at 1200.73, Nasdaq -21.37 at 2070.66: The market closed near session lows, erasing much of last week's strong performance in just one day, as surging oil prices helped fuel broad-based consolidation efforts that closed virtually every sector in negative territory... The Dow and S&P had been relatively steady all week long, holding onto gains of about 5.4% (since bottoming out on April 20), and 6.8% (from April lows), respectively...
However, aggressive buying in crude oil futures ($59.42/bbl +$1.33), which lifted the commodity (+2.3%) to record levels (touching the psychological $60/bbl barrier) amid ongoing supply concerns, provided enough of an impetus for investors to lock in some profits... Prior to oil's record run, however, investors digested more good news than bad... Initial claims fell 20K decrease to 314K (consensus 330K) - the lowest level since the 299K reported in mid April - further validating a strong labor market and expectations of a good nonfarm payroll gain for the month of June...

Investors also sifted through the latest read on May existing home sales, which fell 0.7% to an annual rate of 7.13 mln (consensus 7.15 mln), down from 7.18 mln in April, but still reinforced the understanding that low mortgage rates and strong price gains continue to fuel the housing market... General Electric (GE 34.66 -0.84) reaffirmed Q2 and FY05 earnings guidance and announced plans to streamline its businesses (to six units from 11) - an initiative that could save GE as much as $200-300 mln... Also, China's CNOOC (CEO 55.15 +1.84) confirmed its plans to acquire Unocal (UCL 65.02 +0.16) for $18.5 bln...

However, speaking of China, Fed Chairman Alan Greenspan testified before the Senate Finance Committee, saying that imposing punitive tariffs on Chinese imports would harm U.S. consumers, protect "few if any American jobs" and put the U.S. economy "at risk."... Not something investors were hoping to hear of course, especially after a blue chip like FedEx (FDX 80.77 -7.35) missed analysts' Q4 earnings expectations by $0.02 and issued downside Q1 and FY06 guidance, blaming of all things, higher fuel costs, overall nervousness heading into the end of the quarter, with stock prices near the higher end of their trading ranges, was merely exacerbated...

Of the nine economic sectors that lost ground, Materials paced the way lower, led by a drubbing in Steel - the worst performing S&P group - as well as Diversified Materials & Mining and Diversified Chemicals... Steel was under pressure after Steel Technologies (STTX 17.31 -3.39) issued downside Q3 earnings and revenue guidance, citing increased margin pressure amid continued price declines... The Industrials sector was weak across the board, with huge losses coming from Construction & Farming to Transportation, as the Dow Jones Transportation Average closed at its worst level since mid May...

Unlike many other averages, which were also under pressure after having recently touched three-month highs, the Transports - off roughly 8.0% from its early March highs - lost ground largely on the disappointment from FDX... Despite decent follow-through buying efforts in Brokerage, the interest-rate sensitive Financial sector was also an influential leader to the downside... Providing some of the weakness was a rebound in benchmark yields, as the Treasury market finally retreated following its largest two-day rally in about three weeks... The 10-year note finished down 4 ticks to yield 3.95%...

Reports that Citigroup (C 46.88 -0.56) and Legg Mason (LM 84.99 -0.21) may announce a deal to swap roughly $4.0 bln in assets also weighed on the sector, offsetting a 2.1% gain in shares of Morgan Stanley (MWD 51.72 +1.20)... Morgan Stanley reached a settlement with Parmalat and reports suggested Morgan may bring back ex-president John Mack to become CEO... Technology, which was the best performing sector midday, failed to hold onto early gains, as losses of more than 1.0% in Software and Hardware overshadowed modest gains in Semiconductor... Not even Energy, despite news of the Unocal deal and rising oil prices, could eke out a gain...

Utilities, however, extended yesterday's strong performance, as investors seeking income flocked to dividend-paying stocks as a safe haven on a day that ended with little if anything to write home about...DJTA -3.1, DJUA +0.4, DOT -1.7, Nasdaq 100 -1.2, Russell 2000 -1.5, SOX +0.4, S&P Midcap 400 -0.9, NYSE Adv/Dec 1058/2219, Nasdaq Adv/Dec 917/2158

11:58AM Semiconductors Hldrs Trust pushes to highest level in 11 months (SMH) 35.56 +0.82: -Technical- The sector has recently extended the morning rally with the SMH reaching it highest level since the early July peak. Intraday resistance is between the July high and the June low at 35.58/35.63 followed by a minor barrier at 35.72.

3:47PM FedEx (FDX) 81.85 -6.27: Boasting the ability to deliver to 90% of the world's GDP in 48 hours, FedEx failed to deliver this time around closing the year on a sour note. The global shipment company released its fourth quarter and full year results Thursday showing continued margins deterioration by high fuel costs and decelerating volume trends. The market reacted in kind sending shares down over six dollars and with the obvious implications for United Parcel Service (UPS), its shares suffered a similar fate.

Getting right to the numbers, FDX reported earnings of $1.46 per share missing expectations by two cents. Revenues rose ten percent to $7.71 bln below the $7.82 bln consensus. The quality of the result was poor with the miss a function of higher costs weighing on overall profitability. EBIT margins were 9.6% down slightly from last year at 9.8%. Fuel costs, which accounts for 12% of total operating expenses, soared 51% from last year's period. FedEx stated during its conference call, quarterly margins will depend heavily on fuel volatility.

Also notable were comments regarding U.S. domestic base yield growth which was minimal in its package services business due to a competitive pricing environment. Morgan Stanley stated this was the first time it recalls a parcel company making this type of comment in print. Additionally to this point, during the conference call management stated that UPS had started to use discounting to get business back. Clearly UPS and FDX are competing on price which could lead to further margin pressure ahead. Its FedEx Express unit, which makes up almost 70% of the top line, generated revenue growth of 9%. Domestic average daily package volumes rose 2%, but enjoyed limited pricing growth as fuel surcharges made up the bulk of the yield increase.

Further exaggerating today's selling pressure was its forward guidance. FDX sees earnings for the first quarter in the range of $1.10-1.25 with the lower end well outside of the current consensus of. $1.26 per share. The full year also fell short with FDX's EPS guidance of $5.20-5.45 vs. $5.51 consensus. Even though management tends to take on a conservative view of guidance historically, we say they are right to do so considering difficult comps ahead and record high oil prices.

FedEx projects that if global economic growth remains stable, it can achieve 10-15% growth. But, we feel this level will be challenging given volume deceleration, coupled with continued pressure on the margin from competitors and again, fuel costs. With shares now down almost seven bucks, there comes a point where the value argument can be made. We would suggest since it's always difficult to catch a falling knife, better to wait for a bottom to be reached. ---Kimberly DuBord, Briefing.com
12:24PM Corinthian Colleges (COCO) 13.75 -2.44: Corinthian Colleges, one of the largest post-secondary education companies in the United States, issued downside guidance for the fiscal fourth quarter, stating that "revenues for the months of April and May were below expectations, primarily as a result of lower than anticipated new student starts". The company lowered its EPS forecast to $0.13 from the prior range of $0.20-0.22, ex-items, versus the consensus estimate of $0.21. While the company stated that it is making progress, it "continue(s) to experience lower productivity among new admissions personnel and inefficient processing of Internet leads".

Corinthian Colleges operates in a highly regulated and competitive environment, with such firms as Apollo Group (00C0), Career Education Corp. (CECO), ITT Educational Services (ESI), and University of Phoenix, vying for market share. As competitive and regulatory pressures mount, the ability to meet changing requirements, as well as attract and retain students and key employees, presents great challenges for the sector. Months of regulatory troubles continue to hinder the group, clouding growth prospects.

In recent months, Corinthian Colleges has been consumed by legal issues and a slew of regulatory concerns, including an SEC inquiry and a probe by the Department of Justice. Due to concerns over financial projections, performance, and communications during FY04, the SEC launched an informal inquiry into the company last year. While the investigation subsided in November, with the agreement that the company expand its disclosure related to the valuation of intangible assets with indefinite lives in future filings, regulatory concerns were exacerbated by the Department of Education's program review at the company's San Jose campus. The program review was initiated to examine the administration of Title IV program funds and its impact on financial performance. Resolution of the review was met in May, with no fines or penalties assessed. The final determination, however, required the return of a net amount $776,241 to the Department, the Perkins Fund, and the Federal Family Education Loan program lenders.

The ongoing risks associated with heightened regulatory scrutiny in the sector are readily apparent, however, Corinthian College has begun to pursue aggressive initiatives to improve operations and mitigate current issues. As the company's strategic efforts come to fruition and regulatory issues calm, the inherent value proposition in the company will become more clear. Despite a decline of more than 37% in the company's stock over the past twelve months, the current valuation multiple of 15.4x trailing earnings, relative to the average level of 37.8x over the past five years, arguably atones for the associated risks. As the company continues to react to the litany of bad news and works to improve financial trends and execution initiatives, the discount in long-term prospects should become evident. ---Richard Jahnke, Briefing.com

9:26AM Page One - Slow Start to Summer : It has been a very steady week. The change in the S&P 500 index has been less than 1 point on two of the three days this week. The other day was a 2 point decline. Futures indicate a slightly higher open.

There is a fair amount of corporate news this morning. FedEx reported earnings slightly below expectations and warned of lower profits this quarter than Wall Street expected. Bed Bath & Beyond beat by a penny, and Family Dollar reported in line with expectations. Current quarter warnings came from Diamond Cluster, Steel Technologies, Corinthian Colleges, and Del Monte. Some warnings at this time are not unusual, however, and the fact that General Electric reaffirmed prior guidance for this quarter is supportive enough to offset any negative impact from the collection of smaller company warnings.

The 10-year note yield fell to 3.94% yesterday. It has bounced back up to 3.97% this morning, but that is still low enough to retain the attention of stock investors as a positive influence.

The dollar hasn't received as much attention, but it continues to rally and is now at 1.20 against the euro. The stronger dollar won't have much impact on second quarter earnings, because the quarterly average is about where it was in the second quarter of last year. But it will have a negative impact on corporate earnings in the third quarter if it holds near these levels. It is up sharply since then, and the impact will be to lower the dollar value of profits from Europe for US corporations.

Oil prices dropped yesterday, but are up a bit this morning and holding a little above $58 a barrel.

At 10:00 ET this morning, Federal Reserve Chairman Greenspan testifies to a Senate committee on economic issues related to China. The May existing home sales data will be released at that time as well. Neither is likely to generate much volatility or volume. NYSE volume has averaged below 1.3 billion shares so far this week and the S&P 500 index looks to open this morning about 1 point below where it closed last week. Dick Green, Briefing.com

9:24AM Harmonic (HLIT) Thomas Weisel initiates PEER PERFORM. Thomas Weisel initiates HLIT saying the co's strong position with cable, satellite, and telco operators should help it benefit from a new spending cycle driven by triple-play competitive dynamics and the transition to high-definition technology. At the same time, they are cautious on HLIT's near-term results given uncertainty over the timing of its customers' spending plans.
9:23AM TCF Financial (TCB) Moors & Cabot initiates BUY. Target $32. Moors & Cabot initiates TCB as they believe that non-interest income concerns could be short-lived, and the recent price decline represents an excellent buying opportunity for longer-term investors. Despite recent declines in non-interest income, firm notes that TCF's profitability measures remain among the best in the industry, and they think that mgmt could remain an active buyer of the stock, which could lend support to the share price.

9:22AM Portugal Telecom (PT) Goldman Sachs downgrades In-Line to UNDERPERFORM . Goldman Sachs downgrades PT saying despite underperforming the sector by over 8% in the past month following a profit warning related to the domestic mobile business, the co still trades on a premium valuation, which they believe is unsustainable given very poor earnings visibility.

9:21AM Cogent (COGT) Raymond James initiates OUTPERFORM. Target $31. Firm believes the co's intellectual-property-driven, highly-defensible and high-margin business model make it one of the most coveted addresses in the rapidly emerging biometrics mkt. While shares of the co do not come cheap, they believe the co's unique intellectual property, coupled with the recent 45% slide from its peak stock price late in 2004, provides an attractive risk/return profile for investors.

9:20AM Open Text (OTEX) KeyBanc Capital Mkts / McDonald downgrades Hold to UNDERWEIGHT. The downgrade is based on firm's belief that management is likely to guide its FY06 numbers below the consensus when the Company reports fiscal 4Q05 earnings in August. Firm's expectations for lower FY06 guidance are due to increasing macro concerns in Europe where OTEX is uniquely exposed, exacerbated by a mounting headwind from the falling Euro and continuing product and sales integration issues from prior acquisitions.

9:19AM Innovo (INNO) Fulcrum upgrades Neutral to BUY. Target $6. Fulcrum upgrades INNO saying the stock has dropped 33% since their initiation on absolutely no news, and at these levels, they believe the stock presents a good buying opportunity.

9:19AM Viacell (VIAC) Leerink Swann initiates OUTPERFORM. Target $15. Firm believes the co is well positioned to pioneer development of cell-based therapies with which to treat unmet medical needs. They think the usage of adult stem cells may avoid practical/ethical pitfalls that could impede commercial development of embryonic stem cells. In addition, they believe collaborations with AMGN and GENZ highlight the value of co's proprietary stem cell platform and potential strategic importance of cell-based therapies to big cap biotech.

9:18AM Ameritrade (AMTD) IRG Research upgrades Sell to NEUTRAL. IRG upgrades AMTD saying they can no longer justify a Sell rating on AMTD given the cost synergies projected for the AMTD/TD Waterhouse combination and the attractive $6 dividend being paid to shareholders. However, they say given that much of AMTD's potential upside, including the dividend, appears to be reflected in the current valuation while important questions still need to be answered, they cannot justify a Buy rating.