NYSE Pre-Open Rundown (Nov. 12, 2007)

US

U.S. equity indices finished sharply lower on Friday on further weakness in tech stocks after disappointing results and guidance from Qualcomm (-4.1% to $38.1) after the close on Thursday and following a much weaker than expected reading in the University of Michigan’s Index of Consumer Sentiment for Nov.(75 vs. 80 expected). However, financial shares rebounded somewhat after several days of heavy selling in the sector even though Wachovia Bank (+0.1% to $40.65) announced before the open that it would be increasing its loan loss provisions by $500 - $600M more than chare-offs and said that its ABC CDOs experienced a decline in pre-tax value of $1.1B in October. Additionally, late in the day Bank of America (+1.0% to $43.98) revealed in a SEC filing that its subprime and CDO positions could be negatively affected in Q4, while J.P. Morgan (-0.8% to $42.31) said in a filing that it may boost credit its provisions for loan losses and that further mark downs could result if the markets worsens. The DJI fell 223.55 pts (-1.7%) to 13,042. Weighing on the DJI today was a downgrade of 3M (-4.0% to $79.51) to Sell by Goldman Sachs. The S&P 500 Index fell 21.07 (-1.4%) to 1453.70 and the Nasdaq 100 Index dropped 71.8 pts (-3.4%) to 2034. Shares of Biogen (-3.6%) fell late in the day to end at session lows on comments by DealReporter.com that interest in the company may be waning after Roche and Sanofi Aventis supposedly have away way from the auction.

DJIA

AIG - The co has emerged as a surprise bidder for RBS' GBP 3.6bln train leasing co, Angel Trains. (Sunday Telegraph)

Boeing BA – Boeing and LCAL announced the leasing company has placed an order for six additional 787-8 Dreamliners. The deal is worth $972 million at list prices.
Yesterday, Boeing and Emirates announced an order for 12 777-300ERs on the opening day of the Dubai Air Show. The approximate value of the airplane deal is $3.2 billion at list prices. Also, Boeing and Qatar Airways confirmed 30 787s and 5 777 Freighters order in a deal valued at over $6.1B at list prices. (theflyonthewall.com)

Citigroup C – The FT wrote that Citigroup's board will reportedly let its new CEO decide whether to sell off a few of the firm's units, or even break up the financial services giant. Citigroup's board is reportedly making that commitment to candidates for the CEO post. (FT) Barron’s wrote that while shares of Citi could drop further,
the stock looks like a bargain for long-term investors, and within a few years they could top $60. (theflyonthewall.com)

Disney DIS – The company is planning to launch a cellphone service in Japan next spring on Disney-branded phones with animated content. (WSJ)

General Electric GE – The company has won a $1.4B contract to overhaul Saudi Arabian Airlines engines and to supply materials. (RTRS)

Honeywell HON – The company signed a $1B deal with AirTran Airways to supply
Honeywell announced that it has signed a $1 billion contract with AirTran Airways to avionics on new aircraft and provide maintenance on AirTran's entire fleet through the year 2030. (theflyonthewall.com)

IBM Corp IBM – The company is to acquire Cognos, a publicly-held company based in Ottawa, Ontario, Canada, in an all-cash transaction at a price of approximately $5 billion USD or $58 per share. It is expected to close in the first quarter of 2008. (theflyonthewall.com)

JPMorgan JPM, Citigroup C and Bank of America BAC – The companies have agreed on a simpler structure for a $75 billion fund to steady credit markets (NY Times)

S&P 500

Bank Of America BAC - The company said on Friday that it has a net USD 9.8 billion in CDO commercial paper backed by subprime mortgages, collateralized debt exposure will negatively impact Q4 results. (DJ)**

Countrywide Financial CFC – The company said in its 10Q filing, that " In the event our credit ratings were to drop below "investment grade," our access to the public corporate debt markets could be severely limited.” (theflyonthewall.com)

Goldman Sachs GS - Fears are growing about the health of Goldman Sachs which many believe will have to admit to sub-prime losses of as much as USD 11bln. (Sunday Express)** Goldman Sachs has begun to cut its exposure to emerging markets as they believe the turmoil in the global credit markets could trigger a correction in assets of Latin America, Eastern Europe and parts of Asia. (theflyonthewall.com)

Lehman Brothers LEH – The company and the Carlyle Group are to sell Firth Rixson for $1.97B. (theflyonthewall)

Tyson Foods TSN – Reported Q4 EPS of $0.09 vs. $0.09e on revenues of $6.88B vs. $6.73Be. The company guided FY08 EPS $0.30 - $0.70 vs. $1.06e. (theflyonthewall.com)

Nasdaq 100

Google GOOG - The company is facing a federal patent infringement lawsuit by Northwestern University over technology used in its core web search system. (FT) Also, according to TMCnet.com, the recent news of Sprint Nextel (S) no longer working with Clearwire (CLWR) only adds to the rumors of an acquisition by Google. (theflyonthewall)

Intel INTC - Plans to roll out its newest generation of processors today. (AP)

Celgene CELG's – The company’s oral cancer drug, Revlimid, received recommendation for approval in Australia for use in combination with dexamethasone as a treatment for patients with multiple myeloma whose disease has progressed after one therapy. (theflyonthewall.com)

Other

BHP Billiton BHP - CEO Marius Kloppers is using a $30B share buyback proposal to entice Rio Tinto's board into negotiations, after Rio rejected BHP's all-stock merger proposal last week. BHP forecasts that a merger between the two mining companies would save $3.7B annually. Kloppers declined to say whether BHP would consider launching a hostile bid for Rio Tinto. (FT)

HSBC Holdings – The WSJ wrote in its “Heard on the Street” that some analysts say the firm may have to increase its reserves against bad subprime loans by as much as $2.4B, bringing its total to $4.5B, increasing concerns that the subprime crisis is far from over. (theflyonthewall.com)

Broker Actions

Positive

Abbott Lab ABT - Banc of America expects a positive FDA Panel recommendation for Xience on November 29 and final FDA approval in Q2 2008. (theflyonthewall.com)

BAE Systems BAESY - Added to Conviction Buy List at Goldman Sachs. (theflyonthewall.com)

Baker Huges BHI & Halliburton HAL - Upgraded to Outperform from Market Perform at Bernstein. (theflyonthewall.com)

Intel INTC – Added to Conviction Buy List at Goldman Sachs. (theflyonthewall.com)

Monsanto MON – Price target raised to $114 from $95 at Citigroup, reiterated Buy. (theflyonthewall.com)

Wyeth WYE - Upgraded to Buy from Neutral at Merrill Lynch. (theflyonthewall.com)

Negative

Aflac AFL - Downgraded to Sell from Hold at Citigroup, citing valuation. (theflyonthewall.com)

Apache APA - Downgraded to Market Perform from Outperform at Bernstein. (theflyonthewall.com)

Fannie Mae FNM and Freddie Mac FRE – Downgraded to Equal Weights from Overweight at Lehman Brothers. Fannie’s price target was lowered to $49 from $67 and Freddie’s to $42 from $60. (theflyonthewall.com)

Home Depot HD – EPS estimates and price target lowered to $27 from $36 at Piper Jaffray. (theflyonthewall.com)

Juniper JNPR - Downgraded to Market Perform from Outperform at Bernstein. (theflyonthewall.com)

Lowe's LOW – EPS estimates and price target lowered to $26 from $36. (theflyonthewall.com)

Microsoft MSFT, Oracle ORCL and Red Hat – Downgraded to Neutral from Buy at Merrill Lynch. (theflyonthewall.com)

Procter & Gamble PG - Oppenheimer met with the company's top executives, and the firm reports that the executives are negative about color cosmetics, hair care, and pet health. The firm is maintaining its Neutral rating, due to the slowing of organic growth to 5% and the stock's recent increase. (theflyonthewall.com)

Starbucks SBUX – Price target lowered to $24 from $32 at Deutsche Bank, maintains Hold. (theflyonthewall.com)

Target TGT – Oppenheimer believes that the company's stock may drop if Q3 EPS is below 63c, which the firm thinks is a likely scenario. (theflyonthewall.com)

U.S. Banks sector - Downgraded to Underweight from Market Weight at CIBC. (theflyonthewall.com)

Wachovia WB – Cut to Market Perform from Outperform at KBW. (theflyonthewall.com)

Wyeth - WYE downgraded to Peer Perform from Outperform at Bear Stearns. (theflyonthewall.com)

Pre-Open Movers

Citigroup C (+1.4% to $95.29)

Boeing BA (+1.1% to $95.29)

Intel INTC (+1.0% to $25.40)

Countrywide Financial CFC (-1.6% to $13.61)

Fannie Mae FNM (-2.0% to $48.00)

Juniper Networks JNPR (-3.6% to $30.08)


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