Wall Street to Main Street: News, Views and Commentary: June 15, 2006
It’s Thursday June 15, 2006, and finally we had an up day, the market showed some strength pretty much for the entire trading session, granted it was modest but definitely a welcome sight. The Nasdaq avoided making history by being down for a ninth day in a row and the S&P 500 broke that 7-month slide.Yesterday morning the Labor Department reported that the May Consumer Price Index aka the CPI rose 0.4 percent, after a 0.6 percent rise in April. This is beyond the comfort level of the inflation fighting Fed. These latest numbers are pretty much an indication that the Fed will raise interest rates on June 29, 2006. So we may have to prepare ourselves for another bump up in August but lets not get too ahead of ourselves just yet.Political FrontIt looks like Iran’s master plan may be coming to light as Iran’s President Mahmoud Ahmadinejad stated that he wants to increase cooperation with a central Asian security group that includes China and Russia and that the region needs a solid wall against any outside interference. This was said at the S’hanghai Cooperation Organization Summit, which consisted of Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. China has publicly said that they will not be a member of the group, that is the story today anyway, as we know tomorrow always brings another element into the mix.Now sticking to the Shanghai Cooperation Organization Summit or the SCO Summit, Russia’s president Vladimir Putin made a proposal while he spoke at the SCO, he proposed the creation of an energy club within the SCO and mentioned that Russia could actually finance some economic projects pursued by the six-nation regional forum. And the plot thickens.President Bush spoke on Wednesday, this comes on the heels of a surprise visit that he made to Baghdad. He looked confident as he stated that he senses something very different happening in Iraq. He predicted that the progress in the region will be steady and he looks for the violence to subside.The Bank of Japan’s Governor Toshihiko Fukui issued a public apology to the Japanese parliament on Thursday as it related to an investment that he made in a fund run by an ex-bureaucrat arrested for suspected insider trading, he said he would not keep any profit. He invested approximately $87,000 back in 1999 and held it since then, so this was not a recent investment and was prior to the arrest of the high profile fund manager Yoshiaki Murakami.Tid BitsBoeing (NYSE: BA) should be the recipient or better yet the beneficiary of the recent slide of Airbus. The credibility of EADS, who is the majority owner of Airbus, was questioned after the company reported substantial delays of their A380 super jumbo planes. This just sliced over 30% of the company’s stock value off the top. Now keep in mind that these delays may be contract breakers and Boeing could begin to receive a slew of orders for their latest plane that was created to compete with Airbus. The street liked what they heard and that pushed Boeing up $5.03 as it closed at $82.01 on Wednesday.Goldman Sachs (NYSE: GS) is not taking any prisoners on this one, they have raised their offer for largest port operator, Associated British Ports Plc, by 3.7% or US$4.76 billion (2.58 billion pounds). This is in an effort to trump a potential offer from Macquarie Bank Ltd. The acquisition of this company puts Goldman Sachs in an interesting position as they could now be granted U.S. port deals with ease. A recommendation from the new Treasury Secretary Hank Paulson doesn’t hurt their cause either.Crude oil futures got a boost yesterday on the heels of a report from the United States that showed US crude stocks suffered a larger-than-expected fall as US refineries boosted production rates to meet peak summer fuel demand. So we may see follow through today.As we mentioned on Wednesday, precious and base metals seems to have come close to hitting a bottom, but we need follow through before we can be sure of that. Gold, Silver, Copper and other metals rose yesterday and could possibly rise today as the demand is coming into play once again. The precious metals are potentially closer to a bottom than the base metals so be aware of that going in. Of course this trickle down to the metals stocks, companies like Rio Tinto (NYSE: RTP), BHP Billiton (NYSE: BHP), Crystallex International (AMEX: KRY), Phelps Dodge (NYSE: PD) Newmont Mining (NYSE: NEM), Peru Copper (AMEX: CUP) and Bema Gold (AMEX: BGO) should move higher as the metals begin to rebound. So lets look at this carefully today and going into the weekend.Lehman Brothers (NYSE: LEH) is looking to make a slash in Asia, as they are prepared to invest US$20 to $30 million in Shenzhen Development Bank, which is one of only five banks listed in China. As we have been speaking about on “Wall Street to Main Street” the expansion in both China and India will continue because the market is so great. The inflation worries that have been dragging on the markets globally cannot curb what is on tap to happen. If companies like Citigroup (NYSE: C), JP Morgan (NYSE: JPM), Goldman Sachs (NYSE: GS), Bear Sterns (NYSE: BSC), Lehman Brothers (NYSE: LEH) and UBS AG (NYSE: UBS) plan on competing in the future they have to solidify themselves as global players now so they can be well established for the future. This is beyond the financial industry, this holds true for retail, food, beverage, manufacturing and the automobile industry. General Motors (NYSE: GM) amidst their bumps in the road are growing nicely overseas, and believe it or not that is where the continued growth will be for a lot of industries. So investors should look deeper into global market conditions and take a good look at the companies that stand to benefit.Movers and ShakersSome major movers in yesterdays trading session included Hansen Natural (NASDAQ: HANS) this seems to be a main stay on WSMS but the stock continues to swing almost on a daily basis, it traded up $7.81 to close at $157.76 on Wednesday.As the base metals saw some light yesterday so have the companies involved in the industry, Carpenter Technology (NYSE: CRS) rose $4.19 to close at $99.37, the stock has fallen from their May 2006 high of $142.11. Keep in mind that prior to the spike in base metals the stock was hanging in the $60 range, as we said precious metals seem to have hit a relative bottom, more so than base metals.In a move that will put certain issues to bed for both German companies, Bayer (NYSE: BAY) and Merck (NYSE: MRK) have come to terms and Bayer will pay Merck US$4.6 billion for its share of Schering, a move that clears the way for Bayer to acquire Schering. This was good news for the street as Bayer rose $3.07 to close at $41.28 on Wednesday/After slipping from the $72 range in May 2006 and closing as low as $56.86 in June, Nutrisystem, Inc (NASDAQ: NTRI) on the heels of bump up from Lazard Capital, rose $$2.84 to close at $59.70. The stock shot up in April from the mid $40 range to its 52 week high of $76.33 on a positive quarter and the launch of a marketing campaigned geared towards males. Now this quarter will tell the story of Nutrisystem and show whether this campaign met the expectations of not only the company but of the street.Other stocks that made nice moves on Wednesday include Casey’s General Stores (NASDAQ: CASY) traded up $4.04 to close at $24.83, PetroChina (NYSE: PTR) traded up $3.84 to close at $94.47, Oil Services HOLDR’s (NYSE: OIH) traded up $3.57 to close at $135.67, Monster Worldwide (NASDAQ: MNST) traded up $3.36 to close at $38.94, Kookmin Bank (NYSE: KB) traded up $3.45 to close at $76.65 and SouthWestern Energy (NYSE: SWN) traded up $3.25 to close at $28.05 on Wednesday.Under TenOther stocks that made moves on the upside under ten bucks include Gold Reserve Inc (AMEX: GRZ), the stock moved up as the precious metals started to rise, if this should continue they are one of a few companies that stand to make nice movement. Gold Reserve traded up 84 cents to close at $4.80 on Wednesday. Other stocks to look at under ten bucks that stand to benefit for the bounce include Silver Wheaton (NYSE: SLW), Crytallex International (AMEX: KRY) and Bema Gold (AMEX: BGO).Taser International (NASDAQ: TASR) made some movement on the upside as its Chairman Phillips W. Smith bought $762,000 worth of the company’s stock. This usually gives a boost to the level of investor confidence in the stock. Even though that pushed the stock to close up 55 cents at $$8.02, you have to understand that back in December of 2004 this was a $31 stock. Now I haven’t had the opportunity to look deep into the company so I am not aware if it split or not while it was at its highs, but from my initial look, it doesn’t seem so. So proceed with caution on this one.Chinese telephone maker Qiao Xing Universal Telephone Inc. (NASDAQ: XING) moved higher yesterday even after they raised US$40 million in a convertible bond offering. The company made some bold statements ahead of the release of their 2005 earnings on June 20, 2006,. The company stated that the their 2005 basic earnings per share, before one-time gains, will “increase significantly” to well above $1, that is compared to 17 cents per share in 2004. Now that is a bold statement but what are those one-time gains?, this one is tricky as the company touting their earnings prior to the earnings announcement scheduled to be release in a few days just raises a red flag for me, but I could be wrong. The stock traded up 55 cents to close at $8.02 on Wednesday.Other stocks that moved higher yesterday under ten bucks included Emcore Corp (NASDAQ: EMKR) which traded up 84 cents to close at $8.69, Internet Initiative Japan (NASDAQ: IIJI) traded up 50 cents to close at $6.99, Sunopta ((NASDAQ: STKL) traded up 45 cents to close at $7.92, Anadigics (NASDAQ: ANAD) traded up 44 cents to close at $6.64 and Arm Holdings (NASDAQ: ARMHY) traded up 42 cents to close at $6.18.DownersSome stocks that traded down yesterday included OYO Geospace (NASDAQ: OYOG) which traded down $6.74 to close at $47.50, Teleflex (NYSE: TFX) traded down $4.66 to close at $53.38, OptionsXpress (NASDAQ: OXPS) traded down $3.81 to close at $22.23, Regional Bank Holders (NYSE: RKH) traded down $2.08 to close at $143.55, Pegasus Wireless (NASDAQ: PGWC) traded down $1.97 to close at $6.70, Apollo Group (NASDAQ: APOL) traded down $1.73 to close at $52.61 and Sunrise Senior Living (NYSE: SRZ) which trade down $1.62 to close at $28.80.Now some stocks under ten bucks that received the royal smack down yesterday include Terremark Worldwide (AMEX: TWW) drops like a rock on a wider quarterly loss. The stock traded down $2.42 to close at $3.69,of course the downgrades didn’t help the situation but this is a big drop and could flag a ton of margin calls if it has not already. So this drop could continue today.Now this is a recent IPO that has fallen from its IPO price, Basin Water (NASDAQ: BWTR) sells systems for the treatment of contaminated groundwater, which is their line of business. The stock opened at $15.70 when it came public in May, that’s $3.70 above its IPO price of $12. The stock traded as high as $16.55 but that was then and this is now, the stock traded down $2.35 to close at $9.65 yesterday. The stock may get a little bounce to keep it about the $10 mark this week.Others under ten bucks that traded down yesterday include InvesTools (NASDAQ: IEDU) traded down $1.07 to close at $7.79, Hurley Industries (NASDAQ: HRLY) traded down 85 cents to close at $9.21, National Coal (NASDAQ: NCOC) traded down 79 cents to close at $6.82, SunTerra Corp (NASDAQ: SNRR) traded down 66 cents to close at $9.02 and UQM Technologies (AMEX: UQM) traded down 60 cents to close at $3.32.Analyst Upgrades/DowngradesRecent Analyst upgrades include Wabtec Corp (NYSE: WAB) was upgraded to a Buy from a Neutral by Janney Montgomery, Ladish Inc (NASDAQ: LDSG) was upgraded to a buy from a Neutral by Sidoti & Co, Sycamore Networks (NASDAQ: SCMR) was upgraded to a Hold from a Sell by Citigroup Investment Research, Celestica (NYSE: CLS) was upgraded to a Buy from a Neutral by UBS, Suez (NYSE: SZE) was upgraded to a Buy from a Hold by Deutsche Bank Securities, Barr Labs (NYSE: BRL) was upgraded to an Overweight from a Neutral Weight by Prudential Equity Group and Black & Decker (NYSE: BDK) was upgraded to a Buy from a Hold by Citigroup Investment Research.Recent Analyst downgrades include General Mills (NYSE: GIS) was downgraded to a Hold from a Buy by Citigroup Investment Research, Volt Information Sciences (NYSE: VOL) was downgraded to a Neutral from a Buy by Sidoti & Co, Alexander & Baldwin (NASDAQ: ALEX) was downgraded to a Buy from an Average by Caris & Company, Maverick Tube (NYSE: MVK) was downgraded to an Under Perform from a Market Perform by Raymond James and to a Sell from a Hold by AG Edwards, and New Century Financial (NYSE: NEW) was downgraded to a Market Perform from a Market Outperform by JMP Securities.Recent analyst coverage initiations include Cognizant Technology (NASDAQ: CTSH) was initiate with a Hold rating by Clear Asset Management, Saxon Capital, Inc (NYSE: SAX) was initiated with a Hold rating and a $10.25 price target by Deutsche Bank Securities, Brown Show Inc (NYSE: BWS) was initiated with a Buy rating by Sidoti & Co, Northstar Neurosciences (NASDAQ: NSTR) was initiated with an Outperform rating by Cowen & Co and Mobility Electronics (NASDAQ: MOBE) was initiated with a Buy rating by Sidoti & co.FURIOUS FIVEFor our outlook, and other vital information on the companies that we feature as the “FURIOUS FIVE” on Wall Street to Main Street just subscribe for FREE at http://www.namcnewswire.comWe cannot stress enough that investors need to do their due diligence, call the companies, get the information, consult with your investment advisor and if you do not have one consider getting one. 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