From Briefing.com: 4:57PM Market Wrap :The market's major averages ceded opening gains mid-day, but recovered from session lows and closed around the flat line. The Dow was unable to join its counterparts on gaining ground, however, largely due Merck's (MRK 28.41 -0.72) 2.5% plunge following a mistrial in its latest Vioxx case. A round of upbeat corporate news, along with OPEC's decision to keep oil production at a 25-year high, sent the indices higher in early trading, but investors' cautious stance ahead of what is expected to be the Fed's 13th consecutive rate hike and jitters over its accompanying policy statement kept buying action in check. More...
4:15PM Intel to Offer $1.4 bln Junior Subordinated Convertible Debentures (INTC) 26.62 +0.54: -Update- Co announced its intention to commence an offering, subject to market conditions and other factors, of $1.4 billion principal amount junior subordinated convertible debentures. The debentures would be due in 2035 and are to be offered and sold to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. Intel intends to use the proceeds of the offering for general corporate purposes. The company may use a portion of the proceeds to purchase shares of its common stock concurrently with pricing of the debentures.
4:11PM KEMET agrees to acquire EPCOS Tantalum Capacitor business (KEM) 7.82 +0.10:Co announces it has entered into a definitive agreement to purchase the Tantalum Capacitor Business of EPCOS AG for approx $101.9 mln. The transaction is expected to close in the spring of 2006, subject to standard closing conditions and receipt of required regulatory approvals. KEMET is excited about the opportunities that this acquisition will provide. After the integration is complete and the synergies are realized, it is expected that the business will be accretive to the co's earnings per share by approx $0.06 to $0.10. The co expects to complete the majority of the operational integration by the end of calendar year 2006, at which time most of the synergies will begin to be realized.
Close Dow -10.81 at 10767.77, S&P +1.06 at 1260.43, Nasdaq +4.22 at 2260.95: The market's major averages ceded opening gains mid-day, but recovered from session lows and closed around the flat line. The Dow was unable to join its counterparts on gaining ground, however, largely due to Merck's (MRK 28.41 -0.72) plunge following a mistrial in its latest Vioxx case. A round of upbeat corporate news, along with OPEC's decision to keep oil production at a 25-year high, sent the indices higher in early trading, but investors' cautious stance ahead of what is expected to be the Fed's 13th consecutive rate hike and jitters over its accompanying policy statement kept buying action in check. Alongside a 3.2% surge in the price of crude, and on account of merger activity, the Energy sector (+1.0%) led the session. Oil and gas exploration was the sector's best-performing industry, with Burlington Resources (BR 82.45 +6.36) serving as the muscle behind the advance. Reports that ConocoPhillips (COP 61.16 -1.91) is nearing a $30 billion acquisition of the company sent BR shares soaring, and reflected the recurring theme of consolidation within the sector. Despite the energy price uptick, Consumer Discretionary maintained positive footing throughout the day. Retailers were an especial bright spot, benefiting from Wal-Mart's (WMT 48.68 +0.60) reassuring reaffirmation of 2-4% same-store sales growth for December, which evidences solid holiday spending. Separately, Viacom (VIA-B 34.65 +0.24) lent further upside after announcing its bid for DreamWorks SKG that trumped General Electric's (GE 35.54 +0.01). The Consumer Staples sector (+0.2%), boosted by WMT, also closed higher. Technology wavered, but ultimately closed 0.2% higher on account of rising semiconductors and relative strength in Apple (AAPL 74.91 +0.58) following CSFB's raised price target and increased Q1 estimates. The Nasdaq outperformed the blue chip averages over the course of trading, further benefiting from rises in newly-added issues that include GOOG, EXPE, NVDA, ATVI, DISCA, and MNST. Healthcare also vacillated today, as MRK and relative weakness in HMOs challenged follow-through buying interest in Eli Lily (LLY 54.43 +1.02). Late-day recoveries in several pharmaceutical bellwethers helped pull the sector to the flat line, a move that contributed to the broader market's rise. Of the three declining sectors, Financial (-0.3%) weighed heaviest. While the sector also managed to somewhat pare its intra-day loss, its submerged state effectively capped the indices' advances. Selling pressure was broad-based, but banks served as particular sore spot and overshadowed strength in brokers. The Treasury market's negative stance served as a bearish backdrop for that sector, and the broader market, again today. Traders pushed the benchmark 10-year note (-07/32) to a 4.55% yield ahead of what is expected to be the Fed's 25 basis point increase in the Fed funds rate, to 4.25%, tomorrow. With respect to the accompanying policy statement, many participants anticipate a modification in language that may suggest an end to the current tightening cycle is near. We believe such a change is possible, but that it only provides the Fed an opportunity to cease raising rates. Inflation data will be the deciding factor; the CPI report, a well-followed inflation gauge, holds particular significance. The market awaits the November CPI data, which is due out on Thursday.NYSE Adv/Dec 1754/1552, Nasdaq Adv/Dec 1517/1550
10:27AM Merck (MRK)
28.87 -0.26: On account of a hung jury, the judge in the first federal lawsuit against Merck's painkiller Vioxx declared a mistrial. This decision comes hot on the heels of a recent, damaging editorial in The New England Journal of Medicine. According to the journal, Merck allegedly withheld relevant data about the cardiac risks associated with Vioxx in the Vioxx Gastrointestinal Outcomes Research (VIGOR) study, which has been a key part of Merck's testimony in its three lawsuits to date.
Merck voluntarily pulled Vioxx from the market in September 2004 after studies linked it to increased risk of heart attack and stroke in long-term users. Last August, a Texas jury ruled in favor of the plaintiff in the first civil case to go to trial. The jury found Merck negligent in the 2001 death of Robert Ernst and awarded his widow more than $250 million for damages. The company, however, plans to appeal that decision. In contrast, the drug maker was found "not guilty" in the second product liability suit, in which the plaintiff Frederick Humeston, a 60 year old postal worker from Boise, Idaho, alleged that he suffered a heart attack as a result of the use of the painkiller.
The company now faces more than 6,500 claims over its handling of the drug. Investors should look for more details regarding the company's operations and its ongoing legal issues in Merck's Annual Business Briefing on December 15.
--Richard Jahnke, Briefing.com
9:51AM Viacom (VIA)
34.90 +0.48: In an effort to accelerate its turnaround and growth, Viacom's Paramount Pictures said on Sunday that it has agreed to acquire DreamWorks SKG for approximately $1.6 billion in cash and the assumption of debt. Under the terms of the agreement, Paramount will acquire all of DreamWorks' current projects in development, television properties, and entire live-action library - which includes such notable titles as Gladiator and American Beauty. In addition, it will gain an ongoing partnership with Steven Spielberg and David Geffen. The deal, however, doesn't include publicly traded DreamWorks Animation (DWA).
Paramount noted that it is in advanced talks to sell DreamWorks' film library upon completion of the acquisition, but would continue to have distribution rights to the movies. The company said the sale would allow it to reduce its investment in the transaction, as well as enable it to focus on other key objectives, such as leveraging and strengthening its distribution network and creating stronger production partnerships.
Commenting on the acquisition, the company said "this is a major milestone in our efforts to reestablish Paramount as an industry leader and fuels the momentum for their emergence as a real global film company. The world-class production, development and sales teams we are gaining will certainly fuel the turnaround that Brad Grey (Paramount's Chairman and CEO) and his team are leading." Furthermore, it noted that the deal makes Paramount "a key contributor to new Viacom's revenue and earnings growth story."
On account of the news, Viacom shares have climbed slightly in early trading. The stock, however, is down nearly 6% since the beginning of the year.
--Richard Jahnke, Briefing.com
9:19AM Burlington Resources (BR)
76.09: There is yet another possible deal in the energy sector. According to The Wall Street Journal, ConocoPhillips (COP) may be buying the natural gas producer, Burlington Resources, for more than $30 bln in the largest takeover deal in four years. This has been one of the busiest years for takeovers in the energy sector in the last five to six years. Driven by the current market conditions, the recurring theme of consolidation will continue. Simply put, producers need to increase output and with production through the drill bit becoming increasingly difficult, not to mention costly (labor, equipment, materials), growth via acquisitions is often more economical.
The takeover would increase ConocoPhillips's reserves, making it the second largest US gas producers behind BP Plc. The Houston-based Burlington Resources is one of the best positioned natural gas producers, making it an ideal choice for COP. The economics of the deal are quite attractive for Conoco. A price tag of $30 bln equates to $13.88 paid for Burlington's 2.16 billion barrels of oil and gas reserves. This compares to $10.15 per barrel Chevron (CVX) paid for Unocal, $10.66 China National Petroleum paid for PetroKazkhstan, and $18.99 per barrel Norsk Hydro spent on Spinnaker Exploration.
Roughly 70% of Burlington's total production reserves are natural gas. Last week, futures hit an all time high of $15.57 per billion cubic feet on concerns falling temperatures will boost demand for heating fuel. Inventories fell last week, as below normal temperatures drove utilities and gas storage companies to make large withdrawals from underground storage supplies. If the cold snap continues, draw-downs will force prices even higher. Supplies are built up from April to November each year ahead of the winter heating season.
The potential deal will increase speculation over other possible targets heavily weighted in gas, which include Devon Energy (DVN), Apache (APA), XTO Energy (XTO), and EOG Resources (EOG), which have roughly similar proven reserves profiles.
--Kimberly DuBord, Briefing.com
9:11AM Ford (F)
8.18: Finally, after months of negotiations, it has been reported that Ford Motor Company reached a tentative agreement with the United Auto Workers. According to The Wall Street Journal, Ford has come to terms with the union on a health-care agreement that will enable it to make much-needed cost cuts for more than half a million U.S. workers, retirees and their families -- costs that continue to weigh heavily on the bottom lines of the Big Three auto makers. While the union did not spell out exactly what concessions would be made, the structure of Ford's agreement is allegedly the same as the one confirmed two months ago between the UAW and Ford rival General Motors (GM).
On October 17, GM said it expected to cut health care expenses for hourly workers by $15 bln, or about 25% of the total, which would save roughly $1.0 bln in cash beginning next year. Ford, which expects to spend roughly $3.5 bln on healthcare benefits this year (compared to GM's $5.6 bln 2005 health-care budget), reported a $1.2 bln pre-tax loss from its North American operations in the third quarter.
UAW leaders said over the weekend that the deal with Ford "asks every UAW member, active and retired, to make sacrifices so that everyone can continue to receive excellent health care coverage." Further details are expected following a tentatively scheduled meeting of union leaders at Ford plants on Wednesday. Now that a possible deal with Ford has been reached, the UAW has indicated that it will begin negotiations with DaimlerChrysler AG's Chrysler Group (DCX), whose health care costs per vehicle amount to roughly $1,044. GM's costs per car remain the highest, at a staggering $1,500, while Ford's $1,309 per vehicle is a not-too-distant second. According to the Associated Press, estimated health care costs per vehicle at competitors BMW AG, Volkswagen AG, Toyota Motor Corp. (TM) and Honda Motor Co. (HMC) stand at $449, $418, $201 and $151, respectively.
--Brian Duhn, Briefing.com
9:00AM Google (GOOG)
409.20: The Nasdaq Stock Market announced last Friday that it will add Google, among others, to its Nasdaq 100 index. Changes in the index, which represents the largest non-financial domestic and international issues listed on the Nasdaq stock market, will take effect on December 19.
Google's stock has more than doubled year-to-date and is up nearly five-fold since its initial public offering at $85 per share. Despite the two-year waiting period required for inclusion in the Nasdaq 100, Google is being added now due its rapid growth. The Mountain View, CA-based search engine will be joined by 11 other companies, including Expedia (EXPD), Nvidia (NVDA), Red Hat (RHAT), and Urban Outfitters (URBN). Among those being removed are Novellus (NVLS), Sanmina (SANM), Synopsys (SNPS), and Career Education (CECO).
As a result of the index change, Google shares are trading higher in the pre-market. With the Nasdaq 100 one of the most closely followed indexes in the world, and often used as a benchmark for Nasdaq-listed companies, changes are usually accompanied by increased buying interest as fund managers adjust their portfolios to replicate the new index.
--Richard Jahnke, Briefing.com
8:45AM OPEC Stays the Course
OPEC, which supplies 40% of the world's oil, announced it will keep production levels close to a 25-year high in order to avoid "scaring" the market as temperatures in the Northern Hemisphere plunge. OPEC is currently pumping out oil at a record place of 30 mln barrels per day, above its current production quota of 28 mln barrels, which will remain in place until it meets again on January 31st.
Oil prices are rising in early trading after the Saudi Oil Minister, Ali al-Naimi, alluded to a possible production cut as the second quarter nears in order to "keep the market in balance." There are a slew of headlines coming out of the meeting today, including comments that the global oil market is "well supplied" and that "stockpiles are growing," that should make for a busy day in the energy markets.
After trading under $60.00 per barrel for only two weeks, crude prices are heading north, in line with temperatures. OPEC's president Sheikh Ahmad Fahd al-Sabah said oil at $50 per barrel will do little to hurt the world economy. The cartel agreed to produce as much oil as possible in September after Hurricane Katrina made landfall. That agreement expires on Dec. 31st.
Soaring prices are creating a windfall of cash for OPEC, which it said will be used to boost production by 1 mln barrels a day next year. Ahmad also stated that OPEC's spare capacity will reach 2.5 mln barrels per day by the end of the year. OPEC estimates total production capacity will reach 38 mln barrels a day by 2010.
--Kimberly DuBord, Briefing.com
10:08AM SafeNet (SFNT) Stifel Nicolaus reiterates BUY. Target $39 to $43. Firm believes Q4 is tracking to plan. Firm believes the co continues to experience solid demand in its classified security biz and it sounds as if the outlook for its borderless security and digital rights management businesses is positive as well. The stock was weak last week on the heels of the $225 mln convertible debt deal as it may have signaled to some that more acquisitions are on the horizon. Firm does not expect any drastic moves.
10:08AM Casey's General (CASY) KeyBanc Capital Mkts / McDonald initiates BUY. Target $30. Firm believes ongoing consolidation of the convenience store industry favors CASY's strategy as most acquisitions are quickly accretive.
10:07AM Website Pros (WSPI) Friedman Billings initiates OUTPERFORM. Target $15. With Internet usage continuing to accelerate, they believe that S.M.B.s are increasingly looking to establish an online presence, as they are cognizant that the Web has become an effective medium for reaching out to current and potential customers. They believe that WSPI can offer an attractive value proposition for the S.M.B. market with its subscription-based, turnkey Web site design solution.
10:06AM MedImmune (MEDI) CIBC Wrld Mkts upgrades Sector Underperform to SECTOR PERFORM. Upgrade follows positive, statistically significant phase III results showing CAIV-T was superior to injectable flu vaccine in preventing culture-confirmed flu. They say these results were a surprise, as they had been concerned that the trial was underpowered based on the number of mismatched strains last season.
10:05AM ICT Group (ICTG) Adams Harkness initiates BUY. Target $20. Firm is saying deep vertical expertise in financial services, wireless telecom, and healthcare separates I.C.T. from its competitors, drives new business wins, and is a barrier to entry. The firm anticipates the co will add 1,200 seats in 2006, with 900 of these in Manila and says I.C.T. successfully rebounded from the impact of 2001 do-not-call legislation, driving more inbound business, while maintaining its outbound business.The firm says the offshore component is expanding with growth in Manila, Philippines.
10:03AM Focus Media Holding (FMCN) Citigroup initiates BUY. Target $40. Firm believes the co is the leader in the "out-of-home" advertising space, an emerging alternative to TV and, ultimately, Internet brand advertising in China They say FMCN enjoys sustainable competitive advantages over its competitors in China's large and fastgrowing advertising market.
9:57AM Website Pros (WSPI) Piper Jaffray initiates OUTPERFORM. Target $12. Price target increase is based on their increased estimate for net asset valuation potential, noting that the co is accumulating acreage in the Illinois Basin and plans to drill 30 wells in the New Albany Shale "play." Given its low operating risk, they believe a target price that equates to 90% of our estimate of net asset valuation is reasonable.
AI
Market Data 
Markets 
