Chicago, IL – November 24, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Las Vegas Sands (LVS), Citigroup (C), Goldman Sachs (GS), Barclays PLC (BCS) and UBS AG (UBS).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday’s Analyst Blog:

Sands China Raises $2.5B in IPO

Las Vegas Sands (LVS) Macau unit, Sand China raised $2.5 billion through its Hong Kong initial public offering (IPO). The company has priced the IPO for 1.87 billion shares at HK$10.38 per share, the low end of the expected HK$10.38-HK$13.88 range.

The proceeds from this offering, combined with $1.75 billion in bank financing, would aid Sands China to restart its Macau's Cotai Strip construction projects. Last year, the company was forced to halt its casino expansion projects in Macau due to financial constraints, at which time it laid off 11,000 workers.

The IPO is being handled by five investment banks. Citigroup (C) and Goldman Sachs (GS) are the joint global coordinators for the offer while Barclays PLC (BCS), BNP Paribas SA and UBS AG (UBS) are the underwriters.

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About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

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Visit: www.zacks.com

• Tyson Foods (NYSE:TSN) reported better-than-expected earnings of 28 cents a share, beating Zacks estimates by 2 cents, on revenues of $7.2 billion, which exceeded Zacks estimates of $6.85 billion

• India’s Reliance Industries bid $12 billion in cash for Lyondell Bassell when it exits bankruptcy

• Microsoft (NASDAQ:MSFT) is reportedly in discussions with News Corp. (NASDAQ:NWSA) to "de-index" the firm's news websites from Google (NASDAQ:GOOG)

• Coca-Cola (NYSE:KO) announced plans to more than double the number of its bottling plants in China over the next ten years as part of its goal to triple sales to the country

• Hershey (NYSE:HSY) trust encouraged the firm to counter Kraft's (NYSE:KFT) hostile, $16.2 billion bid with its own, $17 billion offer

• According to S&P most US banks are failing to meet adequacy standards comfortably enough to avoid ratings downgrades. Both HSBC (NYSE:HBC) and Goldman Sachs (NYSE:GS) showed stronger-than-average balance sheets, with UBS (NYSE:UBS) and Citigroup (NYSE:C) well below average

The Dow, which had slid as much as 77 points in the morning trading, closed down 11.11 points, or 0.1%, to 10,426.31.  The broader S&P 500 index slipped 0.52, or 0.1%, to 1,109.80, while the Nasdaq, hurt by the weakness in tech shares, fell 10.64, or 0.5%, to 2,193.14.  Bond prices fell, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.37% from 3.33% late Tuesday.  Crude prices advanced 44 cents to settle at $79.58 per barrel.  Volume remained light, with only 1.063 billion shares trading on the NYSE, and declining issues ahead of advancers by an 8 to 7 margin.

Technology shares were under pressure after Autodesk Inc. (NASDAQ:ADSK) and Salesforce.com (NYSE:CRM) gave grim forecasts and BMO Capital Markets noted Research in Motion (NASDAQ:RIMM), the maker of Blackberry phones, faces increased pressure as consumers opt for cheaper phones.  However, shares in Sprint Nextel(NYSE:S) continued their forward run, jumping 6.7% after the previous session's 13% surge, on reports the company had paid off $1 billion in debt.

A weak housing report fuelled recovery concerns but shares in the sector managed to move higher after Citigroup (NYSE:C) raised Pulte Homes (NYSE:PHM) to “buy," saying the shares are "undeservedly out of favor." Citigroup raised its price target on the firm to to $12 from $11.  DR Horton (NYSE:DHI) rose 1.9% and Ryland (NYSE:RYL) advanced 0.8%, while Toll Brothers (NYSE:TOL) fell 0.9%. 

Financials also helped stem the retreat as hedge fund operator John Paulson noted in a quarterly post to shareholders that Bank of America shares will reach $29.81 by the end of 2011.

Seven of the ten S&P500 industry sectors moved lower Wednesday.  Tech shares slipped 0.6%, followed by 0.5% declines in basic materials, industrials, and utilities, 0.4% drops in oil and gas, 0.2% retreat in consumer services, and a 0.01% fall in consumer goods.  Stemming the retreat in the sector were financials, up 0.8%, and telecommunications, up 0.2%.  In a quarterly post to shareholders, hedge fund operator John Paulson said he expects Bank of America (NYSE:BAC) shares to double over the next few years.

• Citigroup (NYSE:C) plans to sell Bellsystem 24, a Japanese telemarketing company, to Bain Capital for $1 billion, bringing to $10.8 billion the dollar amount Citi has raised from sales of Japanese assets

• Hedge fund Paulson & Co. reported in a September 30 filing Citigroup (NYSE:C) holdings of 300 million shares, valued at $1.45 billion

• Cisco (NASDAQ:CSCO) raised its bid for Tandberg ASA to $3.4 billion, or about an 11% increase, and extended its offer to December 1

• According to a Bloomberg report, Mitsubishi UFJ has hired JP Morgan (NYSE:JPM) and Morgan Stanley (NYSE:MS) to manage an $11 billion secondary offering, Japan's largest ever. The company plans to sell about 2.5 billion common shares

• Bristol-Myers Squibb (NYSE:BMY) said it plans to spin off its 83% stake in Mead Johnson Nutrition Company

• JP Morgan (NYSE:JPM) said it is offering to purchase the remaining 50% of stockbroker Cazenove, placing a valuation on the firm of $3.32 billion

• General Motors (NYSE:GM) plans to start repaying its Treasury loan early, beginning by yearend with $1 billion quarterly installments to the US and $200 million quarterly to Canada

• General Motors' (NYSE:GM) third quarter revenues bettered estimates at $28 billion versus $22.9 billion expected, rising $4.9 billion from the second quarter. Inventories dropped 158,000 to 424,000

• Lowe's (NYSE:LOW) reported inline third quarter earnings of 24 cents on revenues of $11.38 billion, versus Zacks estimates of $11.27 billion.  The company said, "We are beginning to see signs of improved performance in some of the hardest-hit housing markets including California, Florida and areas of the desert Southwest."

Chicago, IL – November 16, 2009 – Zacks Equity Research highlights Infosys (INFY) as the Bull of the Day and Myriad Genetics Inc. (MYGN) the Bear of the Day. In addition, Zacks Equity Research provides analysis on American International Group (AIG), Citigroup (C) and Bank of America (BAC).

Full analysis of all these stocks is available at http://at.zacks.com/?id=5506

Here is a synopsis of all five stocks:

Bull of the Day:

We are upgrading Infosys (INFY) to an Outperform rating with a target price of $57. Through the ongoing economic downturn, the company has invested in Research & Development as well as intellectual property-based solutions. It continues to focus on large deals targeted at organizational transformation where there is a dearth of vendor talent.

The company continues to win new customers and manages to keep its order book healthy. It is increasing its presence in the emerging markets of Mexico, Brazil, China and India from where an increasing proportion of revenue can be sourced in the coming years.

Finally, its solid balance sheet and cash flow generation provides support to our estimates.

Bear of the Day:

Myriad Genetics Inc. (MYGN) reported first quarter fiscal 2010 earnings of 31 cents per share, which was below the Zacks Consensus Estimate by a penny. The company had earned 25 cents per share in the year-ago period.

Myriad Genetics spun off its therapeutics business in July 2009 to focus on molecular diagnostics going forward. Although the molecular diagnostics business is performing well, we remain concerned about the slowdown in revenue growth in recent quarters.

The competition confronting Myriad Genetics products in the biotechnology and genetics testing field is also a concern. We have an Underperform rating on the stock.

Latest Posts on the Zacks Analyst Blog:

Pay Czar to Allow Competitive Pay

The U.S. Treasury's pay czar, who oversees compensation for the highest-paid employees at the firms that received U.S. taxpayer assistance, said on Thursday that he is concerned that pay cuts could obstruct the ability of these firms to retain and attract top talent. However, the pay czar would be open to requests to hire new executives at competitive industry rates.

The pay czar, Kenneth Feinberg, decides compensation packages for the highest-paid employees at the seven firms that have received substantial support from the Troubled Asset Relief Program (TARP). The pay restrictions were imposed on these firms to enable them to repay government money by controlling excessive pay.

The seven firms, whose top 25 earners received an average 50% lower pay last month by the order of the pay czar, are American International Group (AIG), Citigroup (C), Bank of America (BAC), Chrysler Financial, Chrysler Group LLC, General Motors and GMAC Inc.

Though all seven firms that are subject to such scrutiny have expressed concerns about the impact of pay limits, none of them has appealed to the pay czar.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About the Analyst Blog

Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=5508.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5509.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

After the house vote, financials slumped 1.5% and led the decliners among the S&P 500 industry groups.  Analyst Meredith Whitney noted the biggest U.S. banks may face declining values on home-loan bonds with government backing as the Fed moves towards ending its $1.25 trillion purchase program.  Whitney said bank earnings are far from approaching "normalcy," and will reflect regulatory changes for an extended period.  JPMorgan (NYSE:JPM) fell 1.2% to $42.21 and Wells Fargo (NYSE:WFC) retreated 3.1% to $26.82.  Citigroup (NYSE:C) slipped 1.7% to $3.97.

On Wednesday, the 30-stock Dow Jones industrial average closed up 30.23 points, or 0.31%, at 9,802.14.  The broad Standard & Poor's 500-stock index edged was up 1.09 points, or 0.10%, at 1,046.50.  The tech-heavy Nasdaq ended the day almost unchanged.  On the New York Stock Exchange, eight stocks advanced for every seven that declined as volume slowed to 1.35 billion shares.

Meanwhile, gold prices continues their upward run and hit an intraday record high of $1098.50, before giving up most of that gain to settle at $1087.30.  The US dollar retreated 0.5% against a basket of currencies.

Yesterday, investors breathed a sigh of relief after the Fed’s announcement to keep interest rates near historically low levels for an extended period.  The Fed, in its policy assessment, noted the economic activity was likely to remain weak for some time and ruled out any plans of a premature exit.  As it continued with its highly accommodative monetary stance, the Fed offered a reminder that the current recovery still lacks strength to be self-supportive.

Healthcare shares Wednesday rose 1% and led the gainers within the S&P500 industry sectors as Republican gubernatorial wins were seen as votes against President Obama's healthcare initiative, likely to result in further delays to changes to the healthcare program. The Senate unanimously voted to extend jobless benefits and broaden homebuyer tax breaks, with the Congress expected to vote before week's end. Helped by the news housing shares finished higher, with Pulte Homes (NYSE:PHM) up 3.5%, Lennar (NYSE:LEN) up 3.4%, and DR Horton (NYSE:DHI) adding 3.2%.

Chicago, IL – November 5, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Time Warner Inc. (TWX), Fannie (FNM), Freddie (FRE), Citigroup (C) and Bank of America (BAC).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Wednesday’s AnalystBlog:

Time Warner Tops Zacks Consensus

Despite tough macro-economic conditions, Time Warner Inc. (TWX), the global leader in media and entertainment businesses, reported better-than-expected third-quarter 2009 results that topped the Zacks Consensus Estimate.

The quarterly earnings of 61 cents a share beat the Zacks Consensus Estimate of 52 cents, but dropped 6% from 65 cents delivered in the prior-year quarter. On a reported basis, including one-time items, quarterly earnings came in at 55 cents a share, sharply down by 38% from 89 cents posted in the year-ago quarter.

On account of better-than-expected results at its Content Group -- comprising Networks, Filmed Entertainment, Publishing and Corporate segments -- Time Warner boosts its business outlook. The company now expects its full year 2009 earnings to be $2.05 per share, up from $1.98 previously anticipated.

The Fed Stays on Easy Street

The Fed did back off its quantitative easing program slightly. It is done with the program of buying $300 billion of longer-term T-notes, and is continuing its program of buying $1.25 trillion of mortgaged-backed securities. It did, however, slightly reduce its planned purchases of Fannie (FNM) and Freddie (FRE) debt, from $200 billion down to $175 billion. In the overall context of the quantitative easing program, the reduction is trivial. It is, however, a sign that the program will not be expanded, nor is it likely to be renewed after the current program is completed by the end of the first quarter.

There had been a few Fed types who had been making speeches about the need to bring things back to normal sooner rather than later, but when the rubber hit the road, they are still on board with the program.

Overall, the Fed seems to understand that the weak economy is the overriding problem. Yes, things are getting better, but given the sluggish pace of improvement, this is not the time to be taking away the punch bowl.

This would be in keeping with historical precedent. Following the end of the 2001 recession, the Fed waited 32 months before it started to raise rates, and then it did so at a very gradual 25 basis points at a time. Following the 1991 recession it waited 35 months.

So assuming that the NBER eventually determines that the recession ended in July 2009, history suggests that the Fed will not begin to raise rates until the first quarter of 2012. The last two recessions were far milder than this one, which would argue that the Fed should stay on easy street for even longer this time around.

The problem is that keeping rates so low for so long the last time was a key factor in allowing the housing bubble to form. Still, the balance of risks seems to be on the side of an economic relapse, not of an overheating that causes inflation to soar.

Keeping rates low means that we will have a steep yield curve. A steep yield curve allows banks to make a lot of money, since their economic function is to borrow short term, and lend long term. The idea is that if the curve is kept steep enough long enough, even basket-cases like Citigroup (C) and Bank of America (BAC) will be come solvent again.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

• Alcatel-Lucent (NYSE:ALU) reported its twelfth straight quarterly loss of $269 million. The firm said it expects operating results to break even by yearend

• Duke Energy (NYSE:DUK) reported third quarter earnings one cent above Zacks estimates at 40 cents, as revenues of $3.4 billion were below Zacks estimates of $4.25 billion. The company noted, "Industry sales volumes continued to show signs of stabilization"

• ITT Industries (NYSE:ITT) reported third quarter beat Zacks estimates by 14 cents a share, coming in at $1.03 on inline revenues of $2.7 billion, down 6.3%

• Coventry Health Care (NYSE:CVH) reported its third quarter of 68 cents topped Zacks estimates by 14 cents, on inline revenues of $3.44 billion, up 17.7%

• Aon (NYSE:AOC), reported third quarter results of 65 cents a share, a penny miss, on revenues of $1.81 billion. The firm set full-year guidance at $3.25-$3.45

• Constellation Energy (NYSE:CEG) posted third quarter earnings of $1.23, 16 cents above Zacks estimates, on revenues of $4.03 billion. The firm said it expects 2009 results of $3.25 to $3.45 a share

• Citigroup (NYSE:C) raised its rating on Toll Brothers (NYSE:TOL) to "buy" and maintained $23 price target

Chicago, IL – October 30, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Bank of America (BAC), Citigroup (C), Motorola Inc. (MOT), China Mobile Ltd. (CHL) and Mylan, Inc. (MYL).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Thursday’s AnalystBlog:

Contributions to GDP Growth

While residential investment is still near a record low share of the overall economy, I have serious questions about the sustainability of the increase. The extension and expansion of the the tax credit by Congress might keep things going for the next few quarters, but after that things are likely to fall apart again. Just like we saw with the "Cash for Clunkers" (C4C) program, it is probably just encouraging those folks who might have bought later to buy now.

It is also tricking people into thinking that a house is more affordable that it really is -- just the way that teaser-rate ARM’s did, and we saw just how well that worked out. The FHA is handing out mortgages with only 3.5% down, and people can use the tax credit for that ridiculously small down payment. This has future disaster of biblical proportions written all over it. The next bailouts will not be of the banks like Bank of America (BAC) and Citigroup (C) but of the FDIC and the FHA.

Direct Government spending had a small but positive impact on overall growth in the 3Q, adding 0.48 points -- a fairly significant slowdown from the 1.33 contribution in the 2Q, but better than the 0.52 point drag in the 1Q. All the help came from Washington, not City Hall or the Statehouse.

Motorola Shows Signs of Revival

Motorola Inc. (MOT) today declared financial results for the third quarter 2009. Quarterly net income from continuing operations was $12 million or 1 cent per share, compared to a net loss of $397 million or 18 cents per share in the prior quarter. Third quarter adjusted (excluding special items) EPS was 2 cents, easily beating the Zacks Consensus Estimate of a break-even quarter.

Improvement in net income was primarily due to the huge reduction in operating expenditure. Quarterly total revenue was $5,453 million, down 27.1% year-over-year and also below the Zacks Consensus Estimates of $5,564 million.

Gross margin in the third quarter was 33.2% compared to 24.1% in the prior-year quarter and 31.1% in the previous quarter. Quarterly operating expenditure was $1.68 billion compared to a massive $2.26 billion in the year-ago quarter.

Quarterly revenue was $2 billion, down 15% year-over-year. Operating income was $199 million compared to an operating income of $263 million in the year-ago quarter. During the third quarter, Motorola conducted the world's first live 2.6GHz TD-LTE mobile demonstration for China Mobile Ltd. (CHL) and shipped 3.3 million digital entertainment devices.

Mylan Beats, Raises Outlook

Mylan, Inc. (MYL) reported third quarter earnings per share of 32 cents, above both the Zacks Consensus Estimate of 27 cents and 23 cents in the prior-year period. The company reported revenues of $1.26 billion, a 24% decline from the year-ago period.

However, the year-ago period included $455 million of revenue related to the sale of the product rights of Bystolic. Excluding this, total revenues increased 5.2% over the third quarter 2008. Revenues would have increased 9%, but for the unfavorable movement of foreign currency.

From this quarter onwards, Mylan has decided to report its results in two segments -- Generics and Specialty -- following the acquisition of approximately 24% of the remaining interest in Matrix and the related de-listing. The former Matrix segment has been included in the Generics segment. The Generics Segment, accounting for about 88% of total revenues during the quarter, increased marginally (3.7%) to $1.12 billion. Revenues from Specialty recorded a huge increase of 20.3% to $150.9 million.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

Bank of America (NYSE:BAC) said it lost $2.2 billion during the quarter after it wrote down almost $10 billion in bad loans and General Electric’s (NYSE:GE) revenue numbers were below Street projections.  Higher loan losses aggravated investors’ concerns as Citigroup (NYSE:C) and JP Morgan (NYSE:JPM) had also reported higher loan losses during the quarter.  General Electric’s (NYSE:GE) results were impacted by lower earnings at its GE Capital unit.    

The 30-share Dow Jones industrial average fell 67.03 points, or 0.67%, to close at 9,995.91. The broad Standard & Poor's 500-stock index retreated 8.88 points, or 0.81%, at 1,087.68.  The tech-heavy Nasdaq composite index lost 16.49 points, or 0.76%, to 2,156.80.

Last week only 61 of the S&P500 released results, too early to signal trends, although the results were mainly above projections.  This week hundreds of companies report their earnings, and that could signal where the economy is headed in the times to come.  So far most earnings reports have beaten expectations.

Although nine of the ten S&P 500 industry sectors dropped Friday, on the week eight of the ten sectors managed gains.  Financials dropped 2.4% Friday, and ended off 0.2% for the week.  Oil and gas shares were the leading gainers during the week, up 5%, for a 20.2% year-to-date increase, as crude prices continued their advance, rising 95 cents Friday to $78.53 per barrel.  Crude prices have been rising on promising economic signs as well as the dollar's decline.  This morning China announced that its economy grew at a rate of more than 7% during the first nine months of the year and said it was comfortably placed to achieve its full-year target of an 8% GDP growth.  The greenback rose slightly Friday from a 14-month low.

This week 75 S&P500 firms are due to report their earnings, including today's results from Apple (NASDAQ:AAPL) and Texas Instruments (NYSE:TXN) after the close.  On Tuesday results are due from: Caterpillar (NYSE:CAT), Coca-Cola (NYSE:KO), DuPont (NYSE:DD), Pfizer (NYSE:PFE) and United Technologies (NYSE:UTX).  On Wednesday: Boeing (NYSE:BA), Freeport-McMoRan (NYSE:FCX), Morgan Stanley (NYSE:MS) and Wells Fargo (NYSE:WFC).  On Thursday: 3M (NYSE:MMM), AT&T (NYSE:T), Credit Suisse (NYSE:CS), Dow Chemical (NYSE:DOW), McDonald's (NYSE:MCD), Merck (NYSE:MRK), and Travelers Cos (NYSE:TRV). Microsoft (NASDAQ:MSFT) reports its numbers on Friday.

Chicago, IL – October 19, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Google Inc. (GOOG), Bank of America Corporation (BAC), American International Group (AIG), Citigroup (C) and GMAC Inc. (GJM).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Friday’s AnalystBlog:

Google Stuns the Market

Google Inc. (GOOG) reported third quarter results that blew away all estimates. Earnings beat the Zacks Consensus Estimate by a dollar and 20 cents. Revenue beat the consensus by around 40%.

Revenue

Gross revenue of $5.94 billion was up 7.6% sequentially and 7.3% year over year. Management stated that strength was broad-based, with all served markets showing signs of exiting the recession.

Traffic continues to improve, with traffic acquisition cost (the portion of revenue shared with Google’s partners) increasing 7.7% sequentially. However, traffic acquisition cost as a percentage of total advertising revenue was down 15 basis points. Net revenue, excluding traffic acquisition cost was flattish sequentially (down 0.6%).

Bank of America Disappoints

Bank of America Corporation’s (BAC) third quarter 2009 loss came in at 26 cents per share, substantially worse than the Zacks Consensus Estimated loss of 10 cents. This compares unfavorably with earnings of 15 cents in the prior-year quarter.

The worse-than-expected results came in due primarily to continued weakness in the U.S. and global economies as well as stress on the consumer, which continues to result in high credit costs. The results for the quarter were negatively impacted by $2.6 billion in pretax mark-to-market and credit valuation adjustments on certain liabilities, including the Merrill Lynch structured notes, and a $402 million pretax charge to pay the U.S. government for termination of its asset guarantee term sheet. However, strengthening reserves, capital position and liquidity were key positives during the quarter.

The results for the quarter exclude total preferred dividends of $1.2 billion. The preferred dividend paid to the U.S. government was $893 million. Net loss available to common shareholders was $2.2 billion, compared to earnings of $704 million in the prior-year quarter.

Fully taxable-equivalent revenue net of interest expense was $26.4 billion, up 32% from $19.9 billion in the prior-year quarter.

Net interest income on a fully taxable-equivalent basis was $11.8 billion, down from $10.9 billion in the year-ago quarter. The year-over-year decline was a result of securities sales and lower loan levels. The decrease was partially offset by a favorable rate environment, the addition of Merrill Lynch and higher deposit levels.

Net interest yield decreased 32 basis points (bps) year-over-year to 2.61%. The decrease was a result of the addition of lower yielding assets from Merrill Lynch.

Non-interest income almost doubled to $14.6 billion from $8.0 billion in the prior-year quarter. This increase is attributable to higher trading account profits, investment and brokerage services fees and investment banking income following the addition of Merrill Lynch. These increases were partially offset by $1.8 billion in losses related to mark-to-market adjustments related to the Merrill Lynch acquisition and $714 million in credit valuation adjustments on derivative liabilities.

Non-interest expense increased to $16.3 billion from $11.7 billion in the prior-year quarter. The increase in non-interest income reflects higher personnel and general operating expenses, driven partially by the recent acquisition of Merrill Lynch. The increase also due to a $402 million pretax charge related to the termination of its asset guarantee term sheet.

The efficiency ratio on a fully taxable-equivalent basis was 61.84% compared to 58.60% in the prior-year quarter. Book value per share of common stock was $22.99, compared with $30.01 at Sept. 30, 2008.

Credit quality significantly deteriorated during the quarter. Though the provision for credit losses decreased 12.5% sequentially to $11.7 billion, on a year-over-year basis it increased 81.5%. Nonperforming assets increased to $33.8 billion from $31.0 billion at June 30, 2009, reflecting a slower rate of increase than in recent quarters as a result of some early signs of economic recovery. Net charge-offs increased 10.6% sequentially to $9.6 billion. Net charge-off ratio deteriorated 49 bps sequentially to 4.13% and nonperforming assets ratio deteriorated 41 bps sequentially to 3.72%.

During the reported quarter, the company’s Tier 1 capital ratio improved to 12.46% from 11.93% in the prior quarter and 7.55% in the prior-year quarter. Tier 1 common ratio improved to 7.25% from 6.90% in the prior quarter and 4.23% in the prior-year quarter.

The U.S. pay czar Kenneth Feinberg revealed yesterday that Ken Lewis, who intends to retire as chief executive of BofA at the end of this year, will receive no pay or bonus for 2009. However, Lewis will still have $53 million in pension benefits along with other stock awards and deferred compensation of $69 million as Feinberg does not have the authority to modify compensation awarded before 2009.

Feinberg is in charge of deciding compensation packages for the highest- paid employees at all the firms that received bailout money. For seven firms the situation is critical, as these firms received substantial support from the Troubled Asset Relief Program (TARP).

The seven firms whose compensation plans are under scrutiny are American International Group (AIG), Citigroup (C), Bank of America, Chrysler Financial, Chrysler Group LLC, General Motors and GMAC Inc. (GJM).

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Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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The Dow Jones industrial average closed above the 10,000 level for the second-successive day, edging up 47 points, or 0.5%.  The S&P 500 index edged up 4 points, or 0.4% and the tech-heavy Nasdaq composite ended the day virtually flat.  The gains in the Dow average were led by Microsoft (NASDAQ:MSFT) whose shares jumped 2.9%.  The Windows 7 is slated for release on October 22.

Among energy stocks, Chevron (NYSE:CVX) and ExxonMobil (NYSE:XOM) shares climbed 1.6% and 1.5%, respectively, as crude prices jumped to their highest levels of the year.  Meanwhile, the US Department of Energy said gasoline stockpiles fell 5.2 million barrels per day last week, well below expectations of 700,000 decline.

Pfizer (NYSE:PFE) rose 1.7% after it completed its acquisition of Wyeth.

Nevertheless, weakness in financial sector shares, off 0.6%, hurt sentiment even as Goldman Sachs (NYSE:GS) reported estimate-topping numbers.  Citigroup's (NYSE:C) strong trading returns were overcome by increasing consumer loan losses.  Citi's (NYSE:C) CEO Vikram Pandit warned, "US consumer credit remains the number one issue affecting our near-term results." JP Morgan (NYSE:JPM) CEO Jamie Dimon warned that level of loan losses are likely to remain high. 

Tech shares also failed to advance, even as IBM (NYSE:IBM) raised its earnings outlook and reported numbers that were above Street projections.  Advanced Micro Devices' (NYSE:AMD) narrower-than-expected loss and the return of its core chip-making operations to profitability failed to lift sentiments either.  However, Google's (NASDAQ:GOOG) better-than-expected results were helped by return to sequential quarterly growth, a 5% increase in average cost-per-clicks over the second quarter, and a positive impact from the declining dollar.  Shares in Google (NASDAQ:GOOG) rose 3.6% in after-hours trading as CEO Eric Schmidt noted, "While there are a lot of uncertainties about the pace of [the] economic recovery, we believe the worst of the recession is behind us and now feel confident about investing heavily in our future."

Today's expected results include a number of significant results from companies such as Bank of America (NYSE:BAC), Genuine Parts (NYSE:GPC), General Electric (NYSE:GE), and Mattel (NYSE:MAT). Also reporting are: Halliburton (NYSE:HAL) and First Horizon National (NYSE:FHN).

• Citigroup (NYSE:C) reported a 27 cent per share loss for the quarter, inline with Zacks estimates, on revenues of $20.4 billion

• Baxter International (NYSE:BAX) reported third quarter earnings of 98 cents a share, one cent above Zacks estimates, on revenues of $3.15 billion

• Research in Motion (NASDAQ:RIMM) is due to launch its new version of a touchscreen Blackberry, the Storm2 today

• Singapore's Oversea-Chinese Banking Group agreed to pay ING Group (NYSE:ING) $1.46 billion for its private banking operations in Asia

• According to Gartner data Acer overtook Dell (NASDAQ:DELL) as the number 2 PC computer brand by market share, with 15.4% of the global market, versus Dell's 12.8% and Hewlett-Packard's (NYSE:HPQ) 20%

• Anheuser-Busch InBev (NYSE:BUD) passed its $7 billion divestment goal to help repay its $52 billion Anheuser-Busch takeover, agreeing to sell breweries to CVC Capital Partners for an initial $2.23 billion

• Google (NASDAQ:GOOG) announced plans to launch an online bookstore in 2010

Gains in commodity prices helped some mid-session buying in energy and material shares but the overall weakness in financial and healthcare stocks kept sentiment in check.  Shares of UnitedHealth Group Inc. (NYSE:UNH) and Aetna Inc. (NYSE:AET) fell more than 3% as the Senate Finance Committee approved an $829 billion plan to overhaul the U.S. health system.  Johnson & Johnson (NYSE:JNJ) fell 2.4% after the company reported revenue that was below the Street expectations.  However, the company reported higher quarterly earnings, helped by cost-cutting measures and a one-time tax benefit; Johnson &Johnson also raised its full-year guidance.  Nevertheless, shares of the company led the decliners on the DJIA.

The Dow Jones industrial average, which traded 70 points lower in the morning, recovered some ground to close at 9871.06, off 0.2% or 14.74 points, its first decline in four sessions.  The S&P500 retreated 0.3% from a new 2009 high set on Monday.  The tech-heavy NASDAQ, however, finished the day virtually unchanged.  On the NYSE, 1.14 billion shares exchanged hands with decliners ahead of advancing shares by a three-to-two margin.

After Whitney’s downgrade, shares of Goldman Sachs (NYSE:GS) fell 1.5%, with Bank of America (NYSE:BAC) easing 1.2%, and Morgan Stanley (NYSE:MS) down 2.0%.

However, after the close, Intel's (NASDAQ:INTC), a DJIA component, results offered to ease some worries.  The company reported third-quarter earnings of 33 cents a share, versus Zacks estimates of 27 cents a share; the company reported revenues of $9.4 billion that was off 8.1% from last year, but bettered Zacks estimates of $9.0 billion.

CSX (NYSE:CSX), joining Intel (NASDAQ:INTC) in painting an upbeat picture.  The company announced third quarter earnings of 74 cents a share, down from 94 cents a year ago, but above Zacks estimates of 71 cents a share as revenues of $2.36 billion bettered estimates of $2.33 billion.

This morning, however, JP Morgan’s (NYSE:JPM) results showed an upside surprise as losses from the firm’s credit cards and other consumer loans businesses were offset by strong underwriting revenues.  Third quarter results were well ahead of Zacks estimates at 82 cents and were sharply up from last year's 9 cents a share.

The US dollar remained under pressure, falling to a fresh 14-month low yesterday.  Strong demand for $30 billion in 3-month and $30 billion in 6-month notes helped support Treasury prices.  Gold prices jumped $7.50 to $1073 and crude prices hit $74.

Companies reporting their results include: Abbott (NYSE:ABT), WW Grainger (NYSE:GWW), Host Hotels and Resorts (NYSE:HST) and Xilinx (NASDAQ:XLNX).

The Dow Jones industrial average, which rose as high as 9931.82 points in the morning, gained 20 points to close at 9885.80.  The broad S&P 500 index rose 4.70 points, or 0.44%, to close at 1,076.19 and the tech-heavy Nasdaq ended the day little changed.  Bond markets were closed for the Columbus Day holiday.  On the New York Stock Exchange, 16 stocks were higher in price for every 14 that fell.

Eight of the ten S&P500 sectors finished higher in yesterday's session. Oil and gas shares led the gainers, adding 1.2% following a 2.1% rise in crude prices to $73.55, its highest since August 24.  DJIA components Chevron (NYSE:CVX) and ExxonMobil (NYSE:XOM) rose 1.3% and 1.2%, respectively.

Meanwhile, equity prices appear to be taking into consideration upside surprises in last quarter's numbers.  The National Association for Business Economics' survey of its members showed majority believed the recovery has begun, but concerns remain over federal debt and rising unemployment.  Nevertheless, the greenback’s decline is expected to help results of multinational firms with significant overseas exposure.

Also, news emerging from the geopolitical front appears to be less motivating as the head of Homeland Security noted Al-Qaeda members likely within US borders and North Korea reportedly shot off five missiles off its east coast; the reports said the country is preparing to fire more.  Although stocks have had their steepest rally in more than 70 years, doubts remain over an exit strategy from simulative policies amid increasing unemployment levels and housing worries.

Black & Decker (NYSE:BDK) jumped 7.6% Monday after the company's raised its third quarter earnings guidance to 91 cents a share from 35- 45 cents a share on better-than-expected sales, operating margins and tax rate. UBS (NYSE:UBS) downgraded SanDisk (NASDAQ:SNDK) shares to "sell" from "neutral," on concerns of peaking chip demand leaving little scope for price increases.  Ford (NYSE:F) shares jumped 7% after the automaker reported that European sales jumped 12% on strong sales of its subcompact models Ka and Fiesta. Google (NASDAQ:GOOG) shares rose 1.5% after Goldman Sachs (NYSE:GS) raised its price and earnings target, saying the firm will benefit from next year's recovery in online activity.

Financial shares continued their upward run, adding 0.7%.  A number of banks report their earnings in the coming sessions, including JP Morgan (NYSE:JPM), Goldman Sachs (NYSE:GS) and Citigroup (NYSE:C).  According to analyst Dick Bove, large-cap banks are expected to perform well, helped by strong trading activity, but Bove noted regional banks could be under pressure due to commercial real estate losses. 

Meanwhile, shares of Deutsche Bank (NYSE:DB) fell 1.6% yesterday after the company’s CEO Ackermann’s comments raised concerns of a capital raising.  This morning influential analyst Meredith Whitney took a cautious stance on Goldman Sachs (NYSE:GS) and lowered her rating on the bank to "neutral" from "buy" with a $186 price target. 

Today's list of releases includes quarterly earnings reports from companies such as Altera (NASDAQ:ALTR), CSX (NYSE:CSX), Intel (NASDAQ:INTC), and Johnson & Johnson (NYSE:JNJ).

After a two-week selloff, fueled in part by concerns that the seven-month old rally had gotten ahead of any economic recovery, stocks got a boost last week following better-than-estimated economic numbers and Alcoa’s (NYSE:AA) surprise quarterly profit.  That helped investors set aside worries and extend the rally.  Meanwhile, White House economic adviser Lawrence Summers reiterated the Obama administration’s commitment to a strong dollar, citing recent comments by U.S. Treasury Secretary Timothy Geithner.

This morning’s stock futures show markets are headed for a higher opening as the busy week of earnings commences. Ahead of the market's open, Dow Jones industrial average futures are up 59 points, or 0.6%, to 9,866.  Standard & Poor's 500 index futures gained 7.30 points, or 0.7%, to 1,075.40, while Nasdaq 100 index futures rose 11 points, or 0.6%, to 1,736.50.

On Friday, the Dow Jones industrial average rose 78 points, or 0.8%, to 9,864.94 -- its highest closing level in a year.  The S&P 500 index gained 6 points, or 0.6%, to 1,071.49 and the Nasdaq climbed 15 points, or 0.7%, to 2,139.28.  On the New York Stock Exchange, advancing issues beat those that declined in price by a three-to-two margin.  For the week, the DJIA rose 4% and the S&P 500 index gained 4.5% - their best performance since July.  The Nasdaq advanced 4.5% during the week.

Last week's rally saw all but one of the S&P500 industry sector recording gains.  Only telecommunications shares failed to advance, and fell 5.9%, following AT&T's (NYSE:T) announcement that it plans to allow internet-based phone calls on phones including Apple's (NASDAQ:AAPL) iPhones.  The gains last week were led by basic materials (+8.4%), oil and gas (+7.6%), financials (+6.3%), industrials (+5.0%), tech (+4.9%), consumer services (+4.5%), consumer goods as well as utilities (+2.9%), and health care (+2.7%).  Financials rose after a Goldman Sachs (NYSE:GS) report recommended large-cap banks. Gains in industrial shares were helped by last week’s fall in dollar and Caterpillar's (NYSE:CAT) announcement that it plans to hike prices globally in 2010.  Retail shares rose after firms reported better-than-expected comparable monthly sales numbers.

This week sees the release of the first big batch of third-quarter earnings.  Companies reporting their numbers include Johnson & Johnson (NYSE:JNJ), Intel (NASDAQ:INTC), JP Morgan (NYSE:JPM), Citigroup (NYSE:C), Goldman Sachs (NYSE:GS), Nokia (NYSE:NOK), Google (NASDAQ:GOOG), IBM (NYSE:IBM), Bank of America (NYSE:BAC), and General Electric (NYSE:GE).

Chicago, IL – October 8, 2009 – Zacks Equity Research highlights Guess? (GES) as the Bull of the Day and Washington Federal (WFSL) the Bear of the Day. In addition, Zacks Equity Research provides analysis on J.P. Morgan (JPM), Citigroup (C) and Costco Wholesale Corporation (COST).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2676

Here is a synopsis of all five stocks:

Bull of the Day:

Guess? (GES) reported better-than-expected results for the first half of 2010, thanks to strong North American sales, operating cost controls and smart inventory management. In addition, the company's strong cost-control efforts helped it maintain a lower operating cost structure, which in turn helped it navigate through the difficult economic conditions.

Management also issued optimistic guidance for the third quarter, although it declined to provide guidance for fiscal year 2010. For the third quarter, Guess expects revenue of $465-$485 million and EPS of 46-49 cents.

Given the company's positive outlook and strong control mechanisms, we upgrade the shares of Guess Inc. from Neutral to Outperform.

Bear of the Day:

Washington Federal’s (WFSL) third quarter earnings were in line with the Zacks Consensus Estimate. However, the results significantly deteriorated from the prior-year quarter due to a huge increase in provision for loan losses, primarily in response to a deteriorating residential land and construction portfolio.

Credit quality drastically worsened during the quarter. However, declining deposit rates helped improve funding concerns to a great extent and capital position remained strong.

Though margin expansion and increased market share through acquisitions will be a great support going forward, we are concerned about the company's significant exposure to real estate markets and suspect that it will continue to experience credit quality deterioration. Therefore, we recommend the shares as Underperform.

Latest Posts on the Zacks Analyst Blog:

Fed to Be On Hold a Long Time

There is a chance, however, that this policy could start to develop a bubble in stocks. There is a lot of money that has been pushed into the system. There is not that much demand by corporations -- especially the solvent ones that the banks would like to lend to -- to borrow lots of money to build new plants, or even take on more inventory. That money will try to find a home, and if it can't find it in the real economy, it will gravitate to the financial economy.

Thus, while keeping rates low does pose a risk, that risk looks mostly theoretical at this point. The very low Fed Funds rate means that there will also be a very steep yield curve.

This is good news for the banks, since their core economic function is to borrow short term -- for example by taking in checking deposits -- and to lend long term, for example making commercial and industrial loans. This will help big banks like J.P. Morgan (JPM) and Citigroup (C) earn enough from their current loans to help offset the massive losses they have hidden on other books of previous loans that have gone bad.

Costco Beats Zacks Estimates

Costco Wholesale Corporation (COST), the fifth largest general retailer in the U.S., has reported better-than-expected fourth quarter fiscal 2009 results with net income of $374 million or 85 cents per share, compared to $398 million or 90 cents in the year-earlier quarter. The quarterly earnings well surpassed the Zacks Consensus Estimate of 77 cents per share.

For fiscal year 2009, net income was $1.09 billion or $2.47 per share compared to $1.28 billion or $2.89 per share in the previous fiscal year. The year-over-year decrease in the fiscal results was primarily due to the continuing softness in the U.S. economy, higher employee benefit costs and negative impact of foreign currency translation.

Net sales during the quarter totaled $21.89 billion compared to $22.63 billion in the year-ago quarter, while net sales in fiscal 2009 were $69.89 billion compared to $70.98 billion in fiscal 2008. Although both the quarterly and yearly sales declined year over year, the figures were comparatively better than analysts’ expectations, suggesting an overall improvement in the weak U.S. retail environment.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About the Analyst Blog

Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=5508.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5509.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

Chicago, IL – October 8, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Bank of America Corporation (BAC), JPMorgan Chase & Company (JPM), Discover Financial Services (DFS), Citigroup (C) and Capital One Financial Corp. (COF).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Wednesday’s Analyst Blog:

BofA Vows Not to Hike Card Rate

Bank of America Corporation (BAC) said on Tuesday that it will not raise rates or change terms on consumer credit card accounts before the new law (CARD Act) intended to reform industry practices takes effect early next year.

To manage costs in light of the sweeping new reforms to the credit card industry, in August 2009, BofA along with JPMorgan Chase & Company (JPM) switched most fixed-rate cards to variable rates. Discover Financial Services (DFS) moved some of its cardholders from fixed to variable rates in June.

Since most of the cards of Bank of America carry a variable rate, customers could still see rising interest rates as the interest is tied to the rise and fall of the prime rate.

BofA also said that it will continue to re-price customers who are late on two or more payments in a one-year period.

The CARD Act will restrict credit card issuers to raise fees and interest. As a result, many companies have started increasing charges and rates in the recent months. However, Bank of America said that it will not implement any change in terms of consumer credit card accounts between now and the effective date of the Act. Last month, U.S. Representatives Carolyn Maloney and Barney Frank introduced a legislation that could speed up the implementation of new credit card rules to December 2009.

The new CARD Act will negatively impact major credit card issuers including JPMorgan Chase & Company, Citigroup (C) and Capital One Financial Corp. (COF).

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

The chart below shows the Counterparty Risk Index (CRI) history since the beginning of 2008. The index is an unweighted average of the credit default swap spreads of 14 major financial institutions. The left-hand scale gives the cost (in basis points) of insuring against default for a five-year term.

The three big spikes on the chart mark the near-failure of Bear Stearns (in March 2008), the Lehman default (September 2008) and renewed concerns over bank safety at the market’s nadir in March 2009.

If crises appeared at six-monthly intervals since last spring, this time we appear to have broken out of the cycle.

What about the individual banks that make up the index? Here is a chart, courtesy of CMA Datavision, of the CDS spreads of the U.S. bank members of the index, plus Barclays and Deutsche Bank, the leading players in the U.S. exchange-traded note market.

Citigroup now ranks as the riskiest U.S. bank, and JP Morgan as the least risky, though it’s fair to say that the CDS spreads have converged significantly and there is far less difference between individual names than there was a year ago.

For the record, here are the levels from earlier today, ranked from least to most expensive to insure against default: JP Morgan (72bp), Barclays (76bp), Deutsche Bank (82bp), Goldman Sachs (107bp), Bank of America (120bp), Merrill Lynch (137bp), Morgan Stanley (140bp) and Citigroup (200bp).

(The fact that the Merrill Lynch CDS trades at a slight premium to that of Bank of America, its owner, is interesting.  This reflects speculation that the broker may yet be spun off from the parent bank, in which case the CDS would follow the reference entity, Dave Klein of Credit Derivatives Research told me.)

The levels should matter to exchange-traded product investors: All of these banks except Citigroup underwrite exchange-traded notes.

Is the worst now over? As Gillian Tett noted in a column in last week’s Financial Times, the concentration of overall (gross) risk in the credit derivatives market amongst the leading banks has actually risen since the AIG bailout of last September, and regulators are still finding it difficult to assess whether banks are handling their net risk exposures sensibly.

And, in what sounds like the ultimate reinsurance spiral, banks have become net sellers of protection on sovereign debt; hardly reassuring if one remembers that the banks are themselves propped up by the governments concerned. Lloyd’s, anyone?

So, while the reduction in overall default risk so far this year will come as a reassurance to investors, these are charts that are worth keeping an eye on.

Every component of the index slowed, except for Supplier Deliveries and Backlog of Orders. More troubling, though, was the fact that the Employment component worsened to 46.2 from 46.4.

Nonetheless, the survey did signal that the economy is growing. If extrapolated, the September reading equates to GDP growth of 3.6%. However, the pace of recovery remains uneven, as was evident by the responses included in the survey:

"Business is picking up - lots of opportunities." (Primary Metals)

"Business remains slow, with no sign of improvement again this month." (Nonmetallic Mineral Products)

The ISM report comes out just as the IMF raised its projection for economic growth. The organization now expects the U.S. to increase output by 1.5% next year, slightly more than double the prediction made in July.

It is also worth noting that brokerage analysts have been raising their profit forecasts on several cyclical companies. During the past 4 weeks, the 2009 Zacks Consensus Estimate has been raised for 3M (MMM), DuPont (DD) and Packaging Corporation of America (PKG).

The upward revision in profit projections is even more widespread for 2010, with forecasts being raised on United Technologies (UTX) and Caterpillar (CAT).

Despite the bullish tone to forecasts, it is important to realize that the U.S. economy continues to rely on government support. New car dealers are suffering a severe Cash for Clunkers hangover. Taxpayers still own Citigroup (C), Bank of America (BAC) and AIG (AIG). Realtors are clamoring for an extension of the first-time homebuyers credit. And the Fed recently lengthened its program for purchasing agency-backed debt.

Therefore, while there is reason for optimism, investors should not let hope turn into euphoria. The recovery won't feel like a recovery to many Americans. It will also be marked by an uneven pace of growth, as the September ISM survey signals.

Every component of the index slowed, except for Supplier Deliveries and Backlog of Orders. More troubling, though, was the fact that the Employment component worsened to 46.2 from 46.4.

Nonetheless, the survey did signal that the economy is growing. If extrapolated, the September reading equates to GDP growth of 3.6%. However, the pace of recovery remains uneven, as was evident by the responses included in the survey:

"Business is picking up - lots of opportunities." (Primary Metals)

"Business remains slow, with no sign of improvement again this month." (Nonmetallic Mineral Products)

The ISM report comes out just as the IMF raised its projection for economic growth. The organization now expects the U.S. to increase output by 1.5% next year, slightly more than double the prediction made in July.

It is also worth noting that brokerage analysts have been raising their profit forecasts on several cyclical companies. During the past 4 weeks, the 2009 Zacks Consensus Estimate has been raised for 3M (MMM), DuPont (DD) and Packaging Corporation of America (PKG).

The upward revision in profit projections is even more widespread for 2010, with forecasts being raised on United Technologies (UTX) and Caterpillar (CAT).

Despite the bullish tone to forecasts, it is important to realize that the U.S. economy continues to rely on government support. New car dealers are suffering a severe Cash for Clunkers hangover. Taxpayers still own Citigroup (C), Bank of America (BAC) and AIG (AIG). Realtors are clamoring for an extension of the first-time homebuyers credit. And the Fed recently lengthened its program for purchasing agency-backed debt.

Therefore, while there is reason for optimism, investors should not let hope turn into euphoria. The recovery won't feel like a recovery to many Americans. It will also be marked by an uneven pace of growth, as the September ISM survey signals.

• MBIA's (NYSE:MBI) main bond insurance unit was downgraded by S&P to non-investment grade status

• Dell (NASDAQ:DELL) revealed a new, high-end, ultra thin PC

• Cameron International (NYSE:CAM) reported a $500 million subsea equipment deal with Petrobras

• Howard Shultz, CEO of Starbucks (NASDAQ:SBUX), offered high hopes for its Via Ready Brew instant coffee product, claiming it "perhaps the biggest opportunity" in the company's history, amid today's North American launch

• Walgreens' (NYSE:WAG) reported fiscal fourth quarter results of 47 cents ex-items, topping estimates of 39 cents, on sales of $15.7 billion

• Goldman Sachs (NYSE:GS) lifted price targets on several retailers, including conviction buys on Target (NYSE:TGT) and Macy's (NYSE:M)

• Citigroup (NYSE:C) started coverage of Dr. Pepper Snapple (NYSE:DPS) and Coca-Cola (NYSE:KO) with "buy" recommendations

• Bank of America (NYSE:BAC) upgraded Phillips-Van Heusen (NYSE:PVH) to a "buy" with a price target of $54

The Dow Jones industrial average jumped 124 points, or 1.3% and the broader S&P 500 index rallied 19 points, or 1.8% and the Nasdaq composite index advanced 40 points, or 1.9%.  The share gains were broad based with 28 of the 30 Dow components advancing.  On the New York Stock Exchange, four stocks rose for each one that declined in price.  Only 978 million shares exchanged hands on the NYSE.  Trading was light due to the Jewish holiday of Yom Kippur.     

In a spate of big corporate merger announcements, Abbott Labs (NYSE:ABT) said it will pay $6.5 billion for Solvay's pharmaceutical business, and Xerox (NYSE:XRX) offered to pay $6.4 billion in cash and stock for Affiliated Computer Services (NYSE:ACS).  Johnson & Johnson (NYSE:JNJ) said it will pay $444 million for an 18% stake in Crucell (NASDAQ:CRXL).  The announcements signaled corporations’ belief that equity markets still offer values, while economic conditions support a growth environment for purchases made.

The financial, basic materials, and oil & gas sectors were among the leading gainers yesterday.  Even as stock prices rose, Treasuries advanced and the corresponding yields fell, with the yield on the 10-year notes declining to 3.28% from 3.32%.

Yesterday's strength was broad-based with 28 of the DJIA's 30 components moving higher, and all ten S&P 500 industry sectors marking gains.  Financials (+3.4%) were the leading gainers, with American Express (NYSE:AXP) up 4.1% and Bank of America (NYSE:BAC) rising 3.7%.  Morgan Stanley (NYSE:MS) said it expects banks' credit losses to decline over the next 12-18 months, and noted large-cap banks are "largely done with capital repair."

Analyst upgrades also helped much of the rally yesterday, with Citigroup (NYSE:C) shares jumping 4.3% on an analyst upgrade. Cisco (NASDAQ:CSCO) rallied 4.4% after Barclays' (NYSE:BCS) upgraded the stock to "overweight" from "equal weight," citing prospects in Europe and momentum in the US. Applied Materials (NASDAQ:AMAT) jumped 3% on a Citigroup (NYSE:C) upgrade to "buy" on opportunities in its solar-power operations.  However, MEMC Electronic Materials (NYSE:WFR) shed 3.1% after Citigroup (NYSE:C) cut its rating to "hold" from "buy", noting recent poly production problems remain unresolved.

The 30-share Dow Jones industrial average finished higher by 51 points, or 0.52%, at 9,829.87. The broad Standard & Poor's 500-stock index gained 7 points, or 0.66%, at 1,071.66 and the technology-laden Nasdaq composite index gained 8.26 points, or 0.39%, to 2,146.30.  Treasury prices rallied after the government’s successful auction of $43 billion in two-year notes.

Meanwhile, dollar continued its downward spiral against other major currencies, sending energy and material shares higher.  Gold and crude prices also advanced.  Gold reached $1014 per ounce, up $12.50, and oil, after a 3.3% plunge Monday, went above the $70 level, rising 2.6% to $71.55.  Volume on the NYSE was a modest 1.27 billion shares, with advancing shares ahead of decliners by a seven-to-three margin.

Among the ten S&P500 industry sectors, seven closed higher, led by financial shares (+2.2%), basic materials (+1.9%), industrials (+0.8%).  On the downside, telecommunication shares fell 0.6%, health care stocks eased 0.3%, and utilities edged 0.1% lower.

Twenty of the DJIA's thirty components finished higher yesterday.  On the Dow average, JP Morgan (NYSE:JPM) was the leading gainer, rallying 4.3% to $46.47 after analysts at Bank of America (NYSE:BAC) lifted their third-quarter earnings estimate on the firm to 49 cents per share from 46 cents per share.  Caterpillar (NYSE:CAT) shares jumped 3.6%, following the expected weak dollar benefit to foreign sales.  Bank of America (NYSE:BAC) rose 2.1% after Rochdale Securities’ Richard Bove raised the shares' price target to $25 from $19 due to the firm's recent moves to exit two federal guarantee programs.  However, rumors that CEO Ken Lewis might resign over the Merrill bonus saga kept the stock’s move in check.  Alcoa (NYSE:AA) rose 2.3% after analysts at Goldman Sachs (NYSE:GS) raised price target on the firm, citing projections for higher aluminum prices.

Analyst upgrades also benefited shares of Macy's (NYSE:M) (+5.1%); Citigroup (NYSE:C) lifted its rating on the shares to "buy" from "hold" on higher revenue expectations.  US Steel (NYSE:X) shares increased 4.6% after Bank of America (NYSE:BAC) changed its recommendation on the stock to "neutral" from "underperform," citing expectations the firm should return to profitability in 2010. Clorox (NYSE:CLX) shares gained 2.6% on speculation of a potential Procter & Gamble (NYSE:PG) bid.  AIG (NYSE:AIG) shares fell 5.4% in a late-session sell-off on talks of a possible secondary offering.  Goldman (NYSE:GS) shares rose 1.7% to $185.52, closing at its highest level since July 2008.

Of key interest today would be the much-expected FOMC policy report, due out at 2:15 ET.  Expectations that the Fed will maintain record low interest rate levels of zero to 0.25% are intact. Most expect the Fed language to support an ongoing accommodative stance.  Moreover, President Obama cautioned that unemployment could even get a little worse in coming months. Therefore, the Fed's $1.75 trillion asset purchase program is likely to remain in place to encourage the recovery's traction.

• The CEO of Cadbury (NYSE:CBY) noted "complementary elements" of Kraft (NYSE:KFT) and Cadbury, but said he would still advise rejecting the deal at the current $16 billion bid

• Oracle's (NASDAQ:ORCL) CEO noted dangers of the European regulatory delay of its proposed $7 billion acquisition of Sun Microsystems (NASDAQ:JAVA), saying Sun Micro is currently losing about $100 million a month

• AMR (NYSE:AMR) announced a 30 million common and $250 million convertible senior notes offering

• Louisiana-Pacific (NYSE:LPX) said it is planning a public offering of 18 million shares of its common stock

• TJX (NYSE:TJX) said its board approved a $1 billion share buyback, reflecting 6.2% of the company's outstanding shares

• Microsoft's (NASDAQ:MSFT) Bing search engine managed to grab more share from Google (NASDAQ:GOOG), reaching 9.3% of market share in August, according to reports

• Harbinger Capital Partners said it sold 5 million shares of its total stake in the New York Times (NYSE:NYT), reducing its stake in the New York Times (NYSE:NYT) to 16.38% from 19.94%

• Credit Suisse (NYSE:CS) downgraded Dell (NASDAQ:DELL) to "neutral" and advised adding to positions in Hewlett-Packard (NYSE:HPQ), Apple (NASDAQ:AAPL) and EMC Corp (NYSE:EMC).  The analyst raised concerns of Dell's risky acquisition path

• Valero Energy (NYSE:VLO) topped the list of yesterday's S&P500 gainers, up 6.6%, as Credit Suisse's (NYSE:CS) analyst asserted US refiners likely to see renewed interest based on the increase expected in energy demand

• Citigroup (NYSE:C) analysts upgraded Procter & Gamble (NYSE:PG) shares to "buy" from "hold," lifting the price target to $66 from $54 

• Piper Jaffray raised its rating on Starbucks (NASDAQ:SBUX) to "overweight" nad upped the price target to $24 from $13. The analyst expects earnings to grow at least 17% over the next two years

• JP Morgan (NYSE:JPM) raised its rating on KB Homes (NYSE:KBH) to "overweight" and its price target to $25.50 from $10

• Texas Instruments (NYSE:TXN) increased its quarterly dividend 9% to 12 cents from 11 cents a share

• Best Buy (NYSE:BBY) projects comparable sales for the year will be flat to off 2%, up from its earlier projected drop of up to 5%.  The firm raised its full-year guidance to $2.70 to $3.00 from $2.50 to $2.90, based on "increased optimism" for its second half

• EBay (NASDAQ:EBAY) shares rose 1.3% on an upgrade from Piper Jaffray

• Yahoo (NASDAQ:YHOO) shares gained 5.4% after Sanford Bernstein upgraded the shares to "outperform"

• Johnson & Johnson (NYSE:JNJ) lowered its bid for an 18.4% stake in Elan by $115 million to $885 million

• Kraft (NYSE:KFT) advised of plans to enter talks with Cadbury, and said the company does not need to sell operations to afford its $16 billion bid

• Citigroup (NYSE:C) sold $5 billion in 2- and 3-year bonds backed by the government, leading many to question the firm's ability to reduce the US' 34% ownership any time soon
• Rogers Corp (NYSE:ROG) raised its third quarter outlook

Today, we're fortunate to have Simon van Norden, Professor of Finance at HEC Montréal (École des Hautes Études Commerciales), as a guest blogger.

"Once you've seen one financial market crisis...you've seen one financial market crisis."

-- Attributed to Federal Reserve Board Governor Kevin Warsh by former US Treasury Assistant Secretary for Economic Policy Phillip Swagel in The Financial Crisis: an Inside View, March 2009, p. 4.

The financial crisis has set a lot of records so far; it's certainly the worst US banking crisis of my lifetime. Some, as suggested by the above quote, see such crises as unique events; each one is singular and there's not much to be learned about how to handle one from looking at past crises. For example, there's no precedent that I know of for a banking crisis involves the failure of the biggest counterparties for credit default swaps.

I think a much smaller number of people see the crisis differently; they think of it as another potato, a big one. No two potatoes are exactly alike in size and shape, but they all taste pretty much the same and you can use the same recipe for most of them. For that reason, it's interesting to see to what extent the current crisis behaves like other crises, even if it has some unique features.

I think there's some interesting parallels between the current crisis, the Savings and Loan (S&L) crisis of the 80s and 90s, and the Long-Term Capital Management (LTCM) Crisis of 1998. But before I talk about that, let me talk about what a "typical" banking crisis looks like.

The Basel View of "Typical" Banking Crises

If we set the way-back machine to 2004, a time long before terms like ARM, CDS, and AIG entered common conversation, we can see what people thought a typical bank crisis looked like. That's the year the guys in Basel who worry about such things published "Bank Failures in Mature Economies." They looked at the main banking crises in developed countries from 1980 to 2000 and asked themselves what they saw. To be sure, they saw some differences, but they also saw some patterns. Here's part of their main conclusions (note that "credit risk" is Banker for "bad loans").

Most of the widespread [banking] failures required some amount of public support, sometimes in very large amounts. All of the episodes that involved large amounts of public support were caused by credit risk problems. ...The widespread banking crises that involved credit risk were remarkably similar. A period of financial deregulation resulted in rapid growth in lending, particularly in real estate related lending. Rapidly rising real estate prices encouraged more lending, abetted by lax regulatory systems in many cases. When economic recessions occurred, inflated real estate prices collapsed, leading directly to the failures. (BIS, 2004, p.66)

That sounds a lot like what the US (and some other countries) experienced immediately afterwards. There had been some financial deregulation, which was followed by a period of very rapid growth in real-estate-related lending. Rapidly rising real estate values encouraged more lending. The biggest difference seems to be the last point; the recession did not cause real estate prices to collapse; they had peaked by 2006 and fell before the recession started. We could probably also argue about whether it was financial deregulation or "financial innovation that avoided regulations" that helped fuel the increase in real-estate lending. However, in this view the boom and bust cycle in real estate, the subsequent fallout for the banking sector, and the need for a major publicly-funded bailout is not remarkable; we've seen this kind of story before. In fact, Reinhart and Rogoff have gone so far as to tabulate what happens to government debt in the aftermath of a banking crisis. They find that real government debt increases by an average of 86% in the three years after the start of a crisis. So regardless of how you feel about the US government's spending during the crisis, it seems less remarkable when compared to what typically happens in a banking crisis.

Three American Financial Market Crises

More support for the view that banking crises follow similar patterns can be found by comparing the last three US banking crises; the S&L crisis of the late 80s and early 90s, the collapse of LTCM and the most recent crisis. The S&L crisis closely followed the pattern described by the BIS report quoted above; financial deregulation, followed by a rapid growth in real estate lending, creation of local speculative bubbles in real estate prices, and the failure of institutions as bubbles burst (For descriptions of the S&L crisis, see BIS (2004) or the GAO 1996 report). The General Accounting Office put the cost of the S&L bailout to US taxpayers at $132.1 billion, or a bit under 2% of GDP (United States General Accounting Office (1996) "Financial Audit: Resolution Trust Corporation's 1994 and 1995 Financial Statements," Table 3 and author's calculations). That may seem small compared to the size of TARP or this year's projected federal deficit, but it was shocking at the time.

At first glance, the LTCM crisis appears quite different; no bank failed (LTCM was a hedge fund), its failure was unrelated to real estate investment or credit risk, and the crisis was resolved at no cost to the taxpayer. However, the LTCM crisis showed that, as a result of deregulation, a systemic crisis could start outside the regulated banking system. Another GAO study noted:

The LTCM case illustrated that market discipline can break down and showed that potential systemic risk can be posed not only by a cascade of major firm failures, but also by leveraged trading positions. LTCM was able to establish leveraged trading positions of a size that posed potential systemic risk primarily because the banks and securities and futures firms that were its creditors and counterparties failed to enforce their own risk management standards. (US GAO (1999) p. 29)

The same report noted:

• Gaps in [US Government agencies'] regulatory authority limits their ability to identify and mitigate systemic risk (US GAO (1999) p. 24)
• Regulators did not identify weaknesses in firms' risk management practices until after the crisis (US GAO (1999) p. 16)
• Monitoring did not reveal the potential systemic threat posed by LTCM (US GAO (1999) p. 17)

and provided a variety of proposals (some of which are mentioned below) to reform the financial system by reducing systemic risks.

The success of those reforms can be judged by role of similar factors in the most recent US banking crisis. An important factor in the latter has been the role of trading in derivative securities, primarily mortgage-based securities and credit default swaps (CDS). Again, government oversight of this market was limited due to faith in the market's ability to manage its exposure to risk, and was further weakened by divided responsibilities between multiple agencies. Regulators and private lenders alike were again unaware of major firms' exposure to losses on derivative securities; this time even the heads of major financial institutions were not aware of the extent of their own exposures. Again, this was in part due to the lack of transparency, lack of clearing and high leverage afforded by trade in Over-the-Counter (OTC) derivatives (particularly those traded at Bear Stearns.) Again, weaknesses in firms' risk management practices became apparent only in hindsight. Again, major financial firms that were not regulated as traditional deposit-taking banks took on highly-leveraged positions and posed major systemic threats to the banking system. These included several investment banks (such as Bear Stearns, Goldman Sachs, Lehman Brothers, and CitiGroup) and the insurance company AIG.

Conclusion

Looking at recent events from this perspective, I still see the size of the losses as breathtaking, but the causes and dynamics seem much more familiar. What bothers me is that some of the suggested solutions sound pretty familiar too; make derivative trading more transparent, improve coordination among the regulators, give regulators more power to control systemic risk in new places, and so on. Despite that, not only was there another crisis, but it was much larger than the two previous crises combined.

This post written by Simon van Norden.

• Citigroup (NYSE:C) analysts lowered their rating on Abercrombie and Fitch (NYSE:ANF) to "sell" from "hold" and cut the price target to $24 from $33

• Costco (NASDAQ:COST) received an upgrade from JP Morgan (NYSE:JPM)

• H&R Block (NYSE:HRB) reported fiscal first quarter loss from continuing operations of 39 cents a share, a bit worse than the Zacks expectations of a 37 cent loss, as revenues grew 1.3% to $275.5 million, off estimates of $281 million. The firm, however, maintained full year projections of $1.60-$1.80

• Cooper Companies (NYSE:COO) reported third quarter earnings of 54 cents a share ex-items, missing Zacks estimates of 62 cents a share, but up from last year's 39 cents, as sales gained to $285 million, though slightly off estimates of $287 million

• S&P upped ratings on Constellation Brands (NYSE:STZ) too BB from BB-, with outlook positive

• Collective Brands (NYSE:PSS) reported a fiscal second quarter earnings miss, with results of 29 cents a share, in line with Zacks projections, as revenues fell 8.3% to $836.3 million, missing estimates of $850 million

• FBR Capital raised its target for WW Grainger (NYSE:GWW) to $104 from $93, reiterating its "outperform" expectations

• Elan (NYSE:ELN) faced a Federal court ruling that its Johnson & Johnson (NYSE:JNJ) deal for multiple sclerosis drug Tysabri violates a joint marketing deal with Biogen Idec (NASDAQ:BIIB)

•   Employment continued to move lower through July, but the pace of job losses had slowed noticeably in recent months.
•   Consumer spending dropped only a little further in the first half of this year, on balance, after falling sharply in the second half of last year.
•   The decline in equipment and software (E&S) investment seemed to be moderating, although the incoming data did not point to an imminent recovery.
•   The contraction in industrial production slowed markedly in the second quarter, although the rate of decline remained rapid and the factory utilization rate recorded a new low in June.
•   The weak labor market continued to place significant strains on household income, and earlier declines in net worth were still holding back spending.
•   In May, the U.S. international trade deficit narrowed to its lowest level since 1999, as exports increased moderately and imports declined.
•   Recent indicators of economic activity in the advanced foreign economies suggested that the pace of contraction in those countries moderated further.
•   Functioning in short-term funding markets generally showed further improvement.
•   The staff expected core PCE inflation to slow substantially.

Inflation is not an immediate problem -- unemployment is. This is particularly true of core inflation; the huge amount of slack in the system will keep inflation in check.

The weak job market will prevent the wage side of a wage-price spiral from gaining any traction. The financial markets are largely back to normal in terms of credit spreads.

Fears about the solvency of major banks like Bank of America (BAC) and Citigroup (C) have largely subsided, although much of that is due to accounting rule changes.

However, unlike a year ago, banks are no longer afraid to lend to each other in the short-term funding markets. Banks are still tightening their lending standards, but not as quickly as they were earlier in the crisis.

• BP (NYSE:BP) announced a "giant" new oil discovery in the Gulf of Mexico, named "Tiber," one of the deepest wells ever drilled

• Acadia Pharmaceuticals (NASDAQ:ACAD) reported disappointing Phase III trail results for its primavanserin drug in treatment of Parkinson's disease psychosis

• Joy Global (NASDAQ:JOYC) announced fiscal third quarter earnings of $1.21 per share, beating estimates of 95 cents a share, on revenues of $956 million, up from projections of $902.4 million. The firm said it sees 2009 revenues to equal its prior $3.5 billion to $3.6 billion guidance, and raised its earnings guidance to $4.00 to $4.20 per share, from its view of $3.80 to $4.00 per share

• Textron (NYSE:TXT) was upgraded by Goldman Sachs (NYSE:GS) to "buy" from "neutral."  Goldman also added the firm to its conviction buy list with a price target of $23

• Citigroup (NYSE:C) upgraded Cooper Industries (NYSE:CBE) and cut the ratings on Rockwell Automation (NYSE:ROK) to "sell"

On Tuesday, the Dow Jones industrial average, after gaining over sixty points in the morning, nose-dived 185.68 points, or 2%, to 9,310.60.  Since Friday, the index has lost 270 points, or 2.8%.  The S&P 500 fell 22.58, or 2.2%, to 998.04, while the Nasdaq composite index fell 40.17, or 2%, to 1,968.89.  Treasuries, which usually benefit from a fall in stocks, could garner only moderate gains.  Volume picked up on the NYSE where 1.63 billion shares exchanged hands as declining stocks beat those that advanced five to one.  The market’s measure of volatility, the CBOE Vix, shot up 12.1% to 29.2.  

The decline in stocks was broad based as all but one DJIA component ended in the red.  Only Wal-Mart (NYSE:WMT) showed some resistance, edging up 0.2%.  Financial stocks took a beating, hurt by analyst comments and rumors of a bank failure.  Leading the Dow average lower was Bank of America (NYSE:BAC), which slipped 6.4% to $16.46.  American Express (NYSE:AXP) slid 5.4% to $31.98 while another Dow component JP Morgan Chase (NYSE:JPM) retreated 4.1% to $41.67.  Citigroup (NYSE:C), though not in the Dow average, was another notable loser as its shares lost 9.2% to $4.54.   

A Sanford Bernstein downgrade sent shares of AIG (NYSE:AIG) down 20.6%.  The plunge wiped off much of the recent gains in AIG stocks.  Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) lost 17.6% and 17.0%, respectively, as traders decided to book profits after the recent advance in the shares. Wells Fargo (NYSE:WFC) shares dropped 4.8% even as the company announced plans to repay government bailout funds "shortly," without selling shares; the firm received $25 billion in TARP funds.  E*Trade Financial Corp. (NASDAQ:ETFC) slid 15% to $1.50.

This afternoon’s release of the FOMC minutes could be of interest, as investors weigh its wording for recovery and growth expectations, as well as sign posts of exit strategy plans.

• AIG (NYSE:AIG) and its former CEO and CFO have reportedly agreed to terms of binding arbitration in settling claims from shareholders regarding lost investments due to financial restatements

• Apple (NASDAQ:AAPL) will host a September 9, music-themed media event in San Francisco, expected to include a new iPod line, with a Beatles' catalogue available on its iTunes store

• Sony (NYSE:SNE) will distribute Google's (NASDAQ:GOOG) Chrome browser on its Vaio PCs

• Media reports said Bank of America (NYSE:BAC) is planning to repay part of the $45 billion in government aid recovered from TARP, beginning with a $20 billion repayment.  The move would remove its status as a recipient of "exceptional aid," allowing certain government oversight measures to be lifted

• EBay (NASDAQ:EBAY) is expected to announce plans to sell its Skype Internet calling division to private investors.  The company has said it wants about $2 billion for the unit

• Wal-Mart (NYSE:WMT) began website sales of merchandise not carried in its stores in a revenue-sharing exchange similar to Amazon.com's (NASDAQ:AMZN)

• Citigroup (NYSE:C) said its sold $1.3 billion in credit-card assets to an undisclosed buyer.  Terms of the sale were also not revealed

• Credit Suisse cut its Nokia (NYSE:NOK) rating to "underperform" from "outperform," and removed the company from its focus list.  The firm also cut its estimate for 2010 by 28%. Credit Suisse expects Nokia to lose smart phone market share next year

• Robert W. Baird upped its price target for Wells Fargo (NYSE:WFC) to $33 from $30

The 30-stock Dow Jones industrial average shed 47.92 points, or 0.50%, to close at 9,496.28.  The broad Standard & Poor's 500-stock index was down 8.31 points, or 0.81%, at 1,020.62.  The tech-heavy Nasdaq composite index lost 19.71 points, or 0.97%, to 2,009.06.  Nevertheless, the Dow managed to end August up 3.5% for its fifth monthly gain in six months while the S&P 500-index recorded its sixth consecutive monthly advance.  The market's measure of volatility, the CBOE Vix "fear factor" index, jumped 5.1% to 26.01, as volume on the NYSE improved to 1.38 billion shares and breadth turned negative to about 11 to 4.

This morning’s stock futures are pointing to a lower opening.  Dow Jones industrial average futures declined 57, or 0.6%, to 9,429. Standard & Poor's 500 index futures fell 6.90, or 0.7%, to 1,012.80, while Nasdaq 100 index futures fell 11.75, or 0.7%, to 1,613.25.  

Besides the Dow average, the S&P500 index rose 3.4% during the month while the tech-heavy Nasdaq was up a modest 1.5%.  Year-to-date the DJIA has risen 8.2%, the S&P 500 is up 13.0% and the Nasdaq has recorded an impressive 27.4% run.    

Sentiments were jittery on the Street and a couple of big corporate mergers and a better-than-expected regional manufacturing report failed to arrest the slide.  The Walt Disney Co. (NYSE:DIS) announced that it would acquire Marvel Entertainment (NYSE:MVL) in a $4 billion cash-and-stock deal.  Disney shares fell 3% to $26.04 while shares of Marvel jumped 25% to $48.37.  In another cash and stock deal, oil field services provider Baker Hughes (BHI) said it had agreed to acquire BJ Services (BJS) for $5.5 billion.  Baker Hughes plunged 9.6% to $34.45 after it announced the deal.  Shares of BJ Services rose 4.1% to $16.06.  

The DJ-UBS commodity index declined 1.7%, sending shares of Alcoa (NYSE:AA) down 3.6%, and Freeport-McMoran (NYSE:FCX) 3.8%.  However, this morning, a report showing a sixth straight monthly expansion in China's manufacturing sector to a sixteen-month high of 54 helped Shanghai Composite regain some ground.

Among S&P 500 industry groups, energy shares were the leading decliners, off 1.8%.  Exxon (NYSE:XOM) slid 1.4% to $69.15.  Financials as a group retreated 0.4%.  Insurer AIG (NYSE:AIG) fell for the first time in 10 days, plunging 12% as investors wondered if the stock was fairly valued. Citigroup (NYSE:C) declined more than 4% to $5 while Morgan Stanley (NYSE:MS) eased about 2% to $28.96.

Chicago, IL – September 1, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: American International Group (AIG), Citigroup (C), Morgan Stanley (MS), Bank of New York Mellon Corporation (BK) and Goldman Sachs (GS).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday’s Analyst Blog:

Moody’s Confident About U.S.

According to the nonpartisan Congressional Budget Office, the U.S. government and the Federal Reserve have injected about $12 trillion to revive the economy and credit markets. As a result, the budget deficit is expected to reach $1.6 trillion this year and $1.4 trillion next year. In its mid-year economic review, the Office of Management and Budget increased its estimate of the 10-year deficit by almost $2 trillion from the previous level to $9.05 trillion.

The U.S. government has also invested hundreds of billions of dollars to rescue many financial institutions including American International Group (AIG) and Citigroup (C) as part of its goal to stimulate the economy. These spending programs have also increased debt.

Most banks still have short-term debt guaranteed by the government. However, some large financial firms have repaid the government funds, including Morgan Stanley (MS), Bank of New York Mellon Corporation (BK) and Goldman Sachs (GS), among others. The repayment of government money can be viewed as a sign of recovery of the institutions as well as the economy.

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