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From Briefing.com: 4:21PM Rudolph Tech misses by $0.02; guides Q4 below consensus (RTEC) :Reports Q3 (Sep) earnings of $0.07 per share, $0.02 worse than the Reuters Estimates consensus of $0.09; revenues fell 7.5% year/year to $20.2 mln vs the $20.4 mln consensus. Co issues downside guidance for Q4, sees EPS of $0.00-0.06, ex items vs. $0.13 consensus; sees Q4 rev down 15% sequentially or roughly $17.17 mln vs. $21.73 mln consensus.

4:11PM Innovex reports $0.03 below consensus, ex-items (INVX) :Reports Q4 (Sep) loss of $0.11 per share, excluding non-recurring items, $0.03 worse than the Reuters Estimates consensus of ($0.08); revenues rose 28.0% year/year to $47.5 mln vs the $47.2 mln consensus.

Close Dow +55.47 at 10586.23, S&P +2.67 at 1222.81, Nasdaq +8.81 at 2178.24: The market managed to continue its streak, closing the major indices higher and beginning the third consecutive week of gains. Although trading was choppy and left the S&P vacillating around the flat line for most of the session, the 1.8% pullback in crude that accompanied reports that gasoline has dropped $0.48 per gallon over the past month ultimately helped ignite buying action. While the subsequent selling across the Energy complex capped overall advances, the sector's afternoon bounce from its worst levels of the day enabled the broader market to trek higher. Leadership was lackluster over the course of the session, but the solid stances of the Financials (+0.7%) and Technology (+0.5%) sectors served as the strongest sources of support. After hitting three-year lows last Friday, the Treasury market staged a recovery that left it on positive turf and took the 10-year up five ticks and down to a 4.64% yield. Rate-sensitive banks were a particular bright spot, with Citigroup (C 46.50+0.90) leading the way higher after a high-profile investor issued bullish comments on the Dow component's profit prospects. Allstate (ALL 55.77 +0.62) lent additional upside after Bear Stearns upgraded the stock. With respect to Tech, semiconductors' performance and a respectable rise in Microsoft (MSFT 27.01 +0.35) shares, upon reports that the company is the front-runner in the potential buyout of Time Warner's (TWX 17.63 +0.02) AOL, can be credited. Intel's (INTC 24.50 +0.51) jumped 2.0%, and Advanced Micro Devices (AMD 24.89 +0.26), benefiting from Hewlett-Packard's (HPQ 28.73 +0.20) decision to use its chips in new HP blade PCs, contributed further upside. While the corporate and economic fronts were quiet ones, reports of Qualcomm's $2.5 bln share buyback and Yahoo's (YHOO 37.90 +0.3) plans to launch new services with both Google (GOOG 395.03 +4.60) and TiVo (TIVO 5.30+0.18) directed some attention to the sector. Speaking of buybacks, Northrop & Grumman (NOC 55.24 +0.09) and TXU Corp. (TXU 101.74 +7.41) made similar announcements. TXU, for its part, also increased its divided by 43%, announced a 2-for-1 split, and reaffirmed FY05 guidance; soaring shares could not lift the Utilities sector (-0.2%), though, which joined Telecommunications Services (-0.7%) and Energy (-1.6%) in the red. Energy price action prompted further profit taking in the latter sector, and a disappointing Q3 report from pipeline company El Paso (EP 11.31 -0.70) did not help matters. Separately, other corporate news included Guidant's (GDT 57.52 -1.40) lawsuit against Johnson & Johnson (JNJ 61.43 +0.55). A plunge in Guidant shares, the extended result of Johnson & Johnson's assertion that it intends to rescind the $25.4 bln merger agreement to which it had previously agreed, weighed heavily upon the sector, but a reversal in JNJ shares and GDT's halved loss allowed the Healthcare sector to close 0.2% higher.NYSE Adv/Dec 1816/1417, Nasdaq Adv/Dec 1703/1335

2:40PM Nokia responds to reports of QUALCOMM GSM patent infringement suit (NOK) 17.13 -0.03:Co recently learned from a QUALCOMM press release that QUALCOMM has filed a complaint for alleged patent infringement against the co in San Diego apparently involving some 12 alleged essential patents. The co is yet to receive a copy of the complaint, and analyze the details, and therefore cannot comment on the substantive aspects of the claims. The co is disappointed QUALCOMM has taken this step given they have yet to engage in any licensing negotiations concerning these matters. With respect to the patents alleged to be essential to the GSM/GPRS/EDGE standards, QUALCOMM has a duty to license those patents on fair, reasonable and non-discriminatory terms. QUALCOMM has not provided Nokia with any proposed terms for a license in compliance with its obligations.

12:48PM Kopin announces $750K contract from the Department of Defense (KOPN) 6.68 +0.23:Co announced a $750,000 contract from the Department of Defense to develop an advanced display driver chip for its full-color CyberDisplay SXGA Active-Matrix Liquid Crystal Display.

10:43AM Diodes announces 3 for 2 stock split (DIOD) 37.04 +0.13:

9:57AM TRX (TRXI) Sun Trust Rbsn Humphrey initiates BUY. Target $10.5. Firm believes that co is a beneficiary of three primary travel industry trends: 1) a shift to online reservations and customer care systems; 2) rapid consolidation of travel agencies; and 3) an intensifying use of data and analytics to track and optimize travel spending habits. However, firm notes that its biz remains in transition and is materially dependent on one significant customer for more than 50% of its revs.
9:56AM SanDisk (SNDK) Robert W. Baird downgrades Outperform to NEUTRAL. The firm believes supply imbalances in NAND flash are peaking, while pricing trends should revert downward late this year/early next year. They also say weak seasonality and potential consumer hangover post-Christmas, what they view as a rich valuation, and incrementally negative consumer confidence/spending outlook in Europe lead them to take a more cautious stance on the stock.

9:55AM Check Point Sftwr (CHKP) Jefferies & Co downgrades Buy to HOLD. Target $22. The firm says Q4 guidance looks aggressive, even considering seasonal strength. They expect continued tepid new product sales in 2006 and growth mostly via acquisition.

9:53AM Genzyme (GENZ) Bear Stearns downgrades Outperform to PEER PERFORM. Firm has discovered that Medicare plans to dramatically cut reimbursement for Genzyme's Synvisc in 2006, which represents 8% of revenue and 10% of EPS. Under the new J-code, all four FDA-approved HA derivatives will be reimbursed at $7.20/mg. According to this formula, 2006 reimbursement rates for Synvisc will fall by ~42%, while rates for its competitors will rise by 12%-69%. As such, Genzyme may need to cut prices so that physicians do not lose money prescribing the drug. Firm believes the EPS impact of declining Synvisc reimbursement will likely be incremental rather than catastrophic. Nevertheless, the increased uncertainty warrants a downgrade at this point given the stock's ~30% upward move since Feb 2005.

9:52AM Allstate (ALL) Bear Stearns upgrades Peer Perform to OUTPERFORM. Firm cites: 1) coversations with insurance commissioners in key coastal states that have made them more constructive on the regulatory environment 2) continuing exceptional personal auto profitability should lead to multiple expansion and 3) ALL's higher-end customer base, strong brand and profit vs. growth strategy should lead to consistent results and continued robust ROEs.

9:32AM EchoStar (DISH) Kaufman Bros upgrades Hold to BUY. Target $35 to $33. Firm thinks DISH is poised for strong financial gains in 2005 and 2006 and that its new agreement with SBC will help it continue to generate strong subscriber growth. At current levels, they believe DISH is trading at a discount that reflects overstated concerns about its competitive position.

9:27AM Sunesis Pharma (SNSS) Needham & Co initiates BUY. Target $8. Firm expects the co to report encouraging data from the first Phase 1 trial of lead compound SNS-595 with respect to dosing and clinical activity at the upcoming AACR/EORTC Meeting in Philadelphia (Nov 14-17). Firm believes these data will be important in understanding SNSS' development plans going forward. They say additional news flow relating to the initiation of various Phase 1 and Phase 2 trials of its proprietary drug candidates may provide momentum to the stock in the coming months.

9:26AM Central European Media (CETV) Morgan Joseph initiates BUY. Target $63. Firm believes this reasonably valued stock has excellent growth potential. On an organic basis, they expect CETV to grow by 22.3% in 2005 and 14.4% in 2006. After factoring the Czech Republic and Croatian acquisitions, they estimate revenue growth of 92.1% and 29.2% in 2005 and 2006, respectively. As CETV continues to strengthen itself organically and through a series of near-term acquisitions, they believe it will become a highly attractive long-term takeover candidate, especially for a co looking to gain entry into the high-growth Central European market.

12:01PM Guidant (GDT)
56.37 -2.55: Guidant Corp. announced on Monday that it is initiating a lawsuit against Johnson & Johnson (JNJ), demanding that the company is obligated to complete its $25.4 billion acquisition of the Indianapolis, IN-based medical device maker. The lawsuit comes after J&J said it received conditional approval for the deal from the Federal Trade Commission, but was not required to proceed with the transaction under the original terms of agreement since it believes recent recalls and other developments have materially affected both Guidant's short and long-term outlook.

The deal, which was announced on December 15, 2004, has been under considerable pressure in recent months as Guidant faces multiple lawsuits arising from a host of malfunctions and recalls for its implantable heart devices. Despite its troubled operations, however, Guidant claims that J&J remains obligated to complete the transaction. While J&J said the two companies were in discussions to restructure the deal, an agreement was not reached before Friday's self-imposed deadline to close the deal.

Separately, Guidant on Monday reported lower-than-expected third quarter results as sales for its medical devices fell 14%, due in large part to the recent series of recalls. For the latest quarter, the company posted earnings of $65 million, or $0.20 per share, compared with $161 million, or $0.50 per share, in the year ago period. Excluding non-recurring items, Guidant would have earned $0.32 per share. Meanwhile, revenue for the period fell to $795 million from $925 million last year, with worldwide implantable defibrillator sales down 26% to $331 million and worldwide pacemaker sales down 15% to $153 million. Analysts, on average, had been expecting earnings of $0.48 per share on revenue of $888.53 million, according to Reuters Estimates.

On account of the news, shares of both companies have dropped during the regular trading session. JNJ shares have dipped as much 1.1%, while Guidant has seen its shares drop by more than 6%. While the acquisition of GDT was expected to expand JNJ's presence in the medical devices market and bolster growth prospects, the absence of the deal will not determine the financial success of the company. However, the outcome should be more severe for Guidant as it continues to struggle from recalls and regulatory investigations, as evidenced by it recent earnings report.

--Richard Jahnke, Briefing.com

10:15AM TXU Corp. (TXU)

98.70 +4.87: As part of its growth and financial strategy reviews, TXU Corp. on Monday updated its outlook for fiscal 2006 and offered a preliminary outlook for fiscal 2007. In addition, the company announced that its board of directors authorized a two-for-one stock split and approved the repurchase of up to 34 million shares through 2006.

The company, which reported third quarter earnings last week that fell short of analysts' expectations, said it expects fiscal 2006 operational earnings, on a split-adjusted basis, in the range of $5.50 to $5.75 per share, with the midpoint representing a 70% increase over the midpoint of the fiscal 2005 outlook of $3.25 to $3.35 per share. This compares with the consensus estimate of $4.92 per share and $3.32 per share for fiscal 2006 and fiscal 2005, respectively. Furthermore, the company expects fiscal 2007 operational earnings between $5.60 and $5.90 per share - a 2 percent improvement relative to the midpoint of the fiscal 2006 outlook - and projects a five-year earnings per share growth rate of 3% to 5%.

Separately, TXU Corp.'s board of directors declared a two-for-one stock split in the form of a 100 percent stock dividend, and increased the regular quarterly dividend by 47% to 41.25 cents per share. At the same time, the board authorized the repurchase of up to 34 million shares, on a split adjusted basis, through the end of 2006.

These actions are consistent with TXU's recent performance and follow the completion of the company's comprehensive review of its financial and growth strategies. Furthermore, these actions signal management's confidence in the performance of its stock and confirms its plans to drive operational improvements, as well as increase shareholder value. While a stock split has no direct effect on the fundamental value of the stock, it is often a positive indicator that the company's share price is increasing, and therefore performing well. Meanwhile, the announced share repurchase program, which should bolster earnings per share, further indicates that management perceives shares to be undervalued.

Consequently, investors have pushed shares sharply higher in early trading. Demand for electricity is expected to be strong and natural gas prices are expected to remain high. Combined with the company's upbeat outlook and announced plans to bolster shareholder value, TXU shares are poised to continue their strong upward momentum.

--Richard Jahnke, Briefing.com

9:37AM El Paso Corp. (EP)

11.58 -0.43: The owner of the US's largest network of natural gas pipelines posted a wider than expected loss in the third quarter despite higher natural gas and oil prices. El Paso reported a quarterly loss after preferred dividends of $321 mln, or $0.50 per share compared to $214 mln, or $0.33, in the prior year. EPS incorporated a bevy of items that included a $159 mln impairment charge, a $31 mln contract buyout charge, a $390 mln loss on derivatives, a $109 mln gain on sale, and a $1 mln gain. Net-net, the earnings figure was not comparable to the Reuters Estimates consensus of $0.15.

Higher natural gas and oil prices created non-cash losses to the tune of $390 mln in non-cash mark-to-market losses on derivates used to managed the price risk for energy production in the quarter. Revenues plummeted 43.3% year/year to $810 mln. The CEO stated, "we have significant earnings and cash flow upside as the percentage of our hedged production declines going forward." He added that the company's core pipe and production businesses are "performing well" and that he believes 2006 "will be a breakout year for the company."

El Paso's two main businesses, pipelines and production, generated earnings before interest expense and taxes of $41 mln. The pipeline business generated $272 mln in EBIT, up from $268 mln last year, while production earned $159 mln before taxes, an increase of 13% y/y. The upside in production was achieved through higher realized commodity prices, offsetting lower production volumes, and increased costs. EP was paid an average of $6.22 mcf for its gas and $50.17 for crude, up 17% and 38%, respectively, over the last year. EP signed a new pipeline project connecting its western pipelines with its eastern and southeastern lines. The hurricane-related shut-ins reduced Q3 production by 39 mln cubic feet equivalent per day. The quarter's production averaged 759 MMcfe/d. EP's debt, net of cash, was $17.0 bln at quarter's end.

EP expects pipeline earnings to be "significantly below expectations" as a result of the storm, but its production unit is expected to meet earnings and cash flow projections for the year. Sustained high energy prices should continue to increase earnings and cash flows, allowing the company to further pay down debt. The stock has gained almost 16%, still less than its peers Kinder Morgan (KMI) and Williams Cos (WMB), which have returned 23% and 34%, respectively.

--Kimberly DuBord, Briefing.com

9:27AM Qualcomm (QCOM)

44.80: Reiterating its confidence in future profitability, and complementing an existing dividend program, Qualcomm announced plans to expand its stock repurchase program. Effective immediately, QCOM's Board of Directors approved a new $2.5 bln stock buyback program to replace a previous repurchase initiative which had roughly $1.0 bln of remaining availability.

Prevailing market conditions and other factors will dictate the timing of the buyback activity and the precise number of shares to be repurchased. As of October 31, 2005, Qualcomm had about 1.6 bln shares of common stock outstanding.

Separately, Qualcomm also announced Monday the filing of a lawsuit against Nokia Corp. (NOK), alleging the world's #1 maker of cell phones is infringing 11 of its patents by making or selling products in the U.S. that comply with the global system for mobile communications (GSM). GSM is the worlds most popular cell phone standard and competes against code-division multiple access (CDMA) technology, the North American standard pioneered by Qualcomm.

Shares of San Diego-based Qualcomm are up 17% over the last 12 months, 6.4% of which has come in 2005, and are just 3.0% away from touching a new 52-week high.

--Brian Duhn, Briefing.com

8:55AM Walt Disney Co. (DIS)

24.81: This weekend's box office certainly wasn't the chicken feed most critics predicted. Disney's Chicken Little gobbled up $40.1 mln in ticket sales, opening up number 1 in the North American markets. The market was swarming with predictions last week that the legendary animation studio needed a big hit in order to increase leverage in its ongoing negotiations with Pixar Studio (PIXR). Chicken Little was far from the blowout of The Incredibles, which brought in $70 mln its opening weekend, but in-line with Disney's other successful venture The Lion King, which took in $40.9 mln in 1994.

Chicken Little was more on target with its prediction that the sky was falling than the consensus ticket estimates for the film of $36.6 mln. The story about an alien invasion was Disney's first fully computer-animated series. Robert Iger, Disney's new CEO, may have more to crow about when it comes to a possible distribution deal with Pixar. For a little background on this ongoing saga, in January 2004 Pixar ended discussions with Disney to extend their existing five-picture deal. The animation studio, known for its mega-blockbuster Finding Nemo, said it would begin discussions with other studios. In the original agreement, Disney retained the right to distribute Pixar's first seven films and would continue to receive a share of the profits in perpetuity. Disney also owned the rights to sequels, if Pixar declined to co-finance and produce them. A deal is expected to be hatched by year-end.

For Disney, the sky was falling, as its position as the premier animator has been long tarnished. The success of Chicken Little may finally provide some illumination on Disney's long dormant franchise. What Disney needed to show was its ability to render a high quality film that connected with a broad audience. Disney's position at the bargaining table rests on its ability to show Pixar that it needs the dominance of Disney's distribution system far more than it needs its creative talent. With only one film in the box, clearly it's a bit early to conclude Disney is back on par with Pixar, but it's certainly off to a good start. A final box office tally well above the benchmark $150 mln is achievable at this point.

The market has held a "show me the movie" type attitude towards Disney, sending shares down over 10% year-to-date. Buyers have been waiting for evidence that Disney can, once again, create characters to drive its multi-tier growth strategy of licensing, retail, games, books, video and TV. The stock remains a suggested holding in our active portfolio due to its discounted valuation and double-digit earnings growth driven by its Cable and Networks division. The stock is also entering its seasonally strongest period. Shares are trading at 19.5x - a 36% discount to its historical average.

--Kimberly DuBord, Briefing.com