The spike in bond prices came even as the Treasury announced plans to auction a record $118 billion in new notes next week – an auction schedule of $44 billion 2-year notes on Monday, $42 billion 5-year notes Tuesday, and $32 billion 7-year notes on Wednesday.

The Dow, which had plunged as much as 170 points during the session, ended down 93.87 points, or 0.9%, to 10,332.44.  The broader Standard & Poor's 500 index fell 14.90 points, or 1.3%, to 1,094.90, while the tech-heavy Nasdaq composite index dropped 36.32 points, or 1.7%, to 2,156.82.  Wall Street’s fear gauge, the CBOE Vix, jumped more than 4%.  Crude prices dropped $1.93 to $77.46. Gold prices rose to their fifth straight record close, up 70 cents to $1141.90.

As glimmers of a full-blown economic recovery fade, investors have increasingly become intolerant, locking in profits at every opportunity.  Also, a lack of conviction on part of the market to push beyond the current rally has been a dampener and concerns of an asset bubble build-up due to accommodative monetary policies have diminished risk appetites, sending daily average volume to levels of only about 1 billion.   

Nevertheless, to show not all is bad, the OECD raised its growth estimates for its 30-country members to 1.9% in 2010 from June's estimate of a 0.7% growth, and to a 2.5% GDP expansion in 2011.

Tech shares, already up 54.3% year-to-date, fell 1.7% Thursday, after Merrill's analyst slashed 2010 global growth targets, and downgraded ten companies in the semiconductor sector.  Intel (NASDAQ:INTC) shares fell 4.1%, and Texas Instruments (NYSE:TXN) retreated 3.4% after the downgrade.  Dell (NASDAQ:DELL) shares plunged 6.1% in premarket trading, after the company reported earnings that missed analysts’ projections.

Among the S&P 500 industry groups, energy producers, off 2.1%, were the biggest decliners.  ConocoPhillips (NYSE:COP) fell 1.9% and Chevron Corp. (NYSE:CVX) dropped 2% as crude prices fell for the first time in four days. Schlumberger Ltd. (NYSE:SLB) shares fell 3.3%.

Chicago, IL – November 4, 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: Marathon Oil Corporation (MRO), Exxon (XOM), ConocoPhillips (COP), Chevron (CVX) and Enterprise Products Partners L.P. (EPD).

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Here are highlights from Tuesday’s AnalystBlog:

Marathon Beats, Production Up

Marathon Oil Corporation’s (MRO) third-quarter 2009 results came in better-than-expected, helped by the contribution from increased oil and natural gas production. Earnings per share, excluding mark-to-market and divestment losses, came in at 61 cents, above the Zacks Consensus Estimate of 56 cents.

However, as has been the case with the other oil majors that have already reported -- Exxon (XOM), ConocoPhillips (COP) and Chevron (CVX) -- earnings and revenue comparisons with the year-earlier period were quite ugly, severely hampered by lower realized commodity prices and weak refining margins. Marathon’s adjusted earnings per share plunged 77.9%, while sales declined 37.9% to $14.5 billion.

Income from the upstream segment totaled $491 million during the quarter, down 43.5% from the year-ago level.

The company reported production (available for sale) of 393,000 oil-equivalent barrels per day (BOE/d), slightly below its interim guidance last month. However, this represents a 5% year-over-year production growth, reflecting the timing of international oil liftings.

Lower realized oil and natural gas prices offset the upstream volume gains. Marathon's worldwide realized crude oil price (from continuing operations) of $64.12 per barrel was 42.1% below the year-earlier level, while natural gas realizations (also from continuing operations) dropped 56.8% to $2.20 per thousand cubic feet (Mcf).

Enterprise Raises Dividend

Enterprise Products Partners L.P. (EPD) reported its third quarter earnings per limited partners unit at 43 cents, in line with the Zacks Consensus Estimate and year-ago earnings of 49 cents. Before adjusting one-time items, earnings per limited partner unit reached 36 cents.

Importantly, Enterprise increased its quarterly distribution by 5.7% year-over-year to the annualized run rate of $2.21 per unit. This was the 21st consecutive quarterly distribution increase. Following the merger, Enterprise and TEPPCO generated distributable cash flow of $359 million and $43 million, respectively, in the quarter. Total distributable cash flow (DCF) for Enterprise and TEPPCO provided 1.03X distribution coverage.

Revenue for the quarter decreased nearly 27% year-over-year to $4.6 billion, due primarily to lower commodity prices. However, gross operating margin increased more than 17% to $561 million, driven by volume growth and strong natural gas processing margins.

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ConocoPhillips has an equal interest in Merey Sweeny L.P., a limited partnership that owns a 65-million-barrels-per-day delayed coker unit and related facilities at the Sweeny refinery. Used in refineries, a delayed coker unit is a plant that cracks heavy, long-chain hydrocarbon molecules of the residual oil into gas, oil and petroleum coke. PDVSA supplies the refinery with Venezuelan crude oil.

Since the beginning of this year, PDVSA has not supplied enough crude oil to meet contractual specifications. Thus, ConocoPhillips’ deliveries from Venezuela fell to 146,000 barrels a day in the first half of 2009 from 210,000 barrels a year earlier. Following this, ConocoPhillips plans to take full control of the unit.

The takeover follows a year-long battle between the two companies. PDVSA had seized operating control of a joint venture in Venezuela’s Orinoco Belt from ConocoPhillips in May 2007. ConocoPhillips left the country, filed for arbitration and wrote off $4.5 billion rather than accepting a non-operating stake.

Although the expropriation of projects in Venezuela has been temporarily hindering ConocoPhillips’ growth objectives, we believe this shortfall will be made up in the medium-to- long-term with this takeover and through production ramp-up in other areas.

ConocoPhillips also anticipates strong growth in the Asia-Pacific, Russia and Caspian, and the Middle East regions to offset natural declines in its North American and North Sea assets. We currently rate the company as a Neutral.

Chicago, IL – August 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: Marathon Oil Corporation (MRO), Exxon (XOM), ConocoPhillips (COP), Chevron (CVX) and WellPoint Inc. (WLP).

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 Tuesday’s Analyst Blog:

Marathon Misses on Lower Prices

Marathon Oil Corporation (MRO) second-quarter 2009 results came in sharply weaker-than-expected, with the contribution from increased oil and natural gas production and improved refining margins more than offset by lower realized commodity prices. Earnings per share, excluding mark-to-market and divestment gains, came in at 35 cents, below the Zacks Consensus Estimate of 53 cents.

As has been the case with the other oil majors that have already reported -- Exxon (XOM), ConocoPhillips (COP) and Chevron (CVX) -- earnings and revenue comparisons with the year-earlier period were even worse. Marathon’s adjusted earnings per share plunged 71%, while sales declined 40% to $13 billion.

Income from the upstream segment totaled $220 million during the quarter, down more than 73% from the year-ago level.

The company reported production (available for sale) of 411,000 oil-equivalent barrels per day (BOE/d), in-line with its interim guidance last month. This is a 12% year-over-year production growth, reflecting strong operating performance from the company's Alvheim/Vilje oil field in the North Sea and natural gas assets in Equatorial Guinea.

Lower realized oil and natural gas prices offset the significant upstream volume gains. Marathon's worldwide realized crude oil price of $55.49 per barrel was more than 50% below the year-earlier level, while natural gas realizations dropped 57% to $2.21 per thousand cubic feet (Mcf).

WellPoint Profit Declines

Health insurer WellPoint Inc. (WLP) reported second quarter GAAP results of $693.5 million or $1.43 per share that were in-line with the Zacks Consensus Estimate. Non-GAAP earnings, excluding net investment losses of 7 cents per share, came in at $1.50 per share. On a GAAP basis, profits declined 7.6% from the year-ago period.

Total operating revenues declined 1.4% to $15.265.8 million. Operating gains from the Commercial Business segment declined 31.2% to $582.8 million. Results were affected by the increasing unemployment rate. The Consumer Business reported an operating gain of $382.1 million, up 67.7% from the year-ago period. Operating improvements in the Senior business helped drive growth in this segment. The Other segment reported a 12.5% year-over-year increase in operating gain, which was driven by growth in the company’s NextRx pharmacy benefit management operation.

We were disappointed to see a significant decline in medical enrollment in the reported quarter. Medical enrollment fell by 1.1 million people, or 3%, to 34.2 million members. Rising unemployment led to the decline in enrolment. With the increasing trend in unemployment rates, we expect medical enrolment to decline further. The company cut down its year-end membership expectations to 33.6 million.

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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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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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Chicago, IL – July 31, 2009 – Zacks Equity Research highlights Hanesbrands, Inc. (HBI) as the Bull of the Day and CEMEX, S.A. de C.V. (CX) the Bear of the Day. In addition, Zacks Equity Research provides analysis on ConocoPhillips (COP), ExxonMobil (XOM) and Chevron (CVX).

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:

Hanesbrands, Inc. (HBI) management's business model requires only modest sales growth to create substantial EPS growth. Earnings are being driven by brand-building and cost-reduction initiatives.

Since the spin-off in September 2006, the company has reduced debt by $511 million, lowering interest expense from the post spin-off financial structure. However, management is reporting non-GAAP EPS, which excludes unusual actions, which may be distorting perceived earnings.

The Buy rating is maintained due to valuation. Currently, our six-month target price is $20.50 per share.

Bear of the Day:

We are keeping our Sell rating on CEMEX, S.A. de C.V. (CX). The company posted weak results in the second quarter of 2009 with more than 50% decrease in net income year over year.

The continued weak cement volumes in Spain and the U.S. are problematic. The short-term outlook for the company remains highly uncertain based on the prolonged downturns in the residential sector and tight credit conditions coupled with fall in the real estate prices throughout the world.

Moreover, the continuous increase in net debt is extremely concerning. Our six-month target is $8 per share.

Latest Posts on the Zacks Analyst Blog:

Conoco Beats Despite Slump

ConocoPhillips (COP) reported second-quarter earnings of $0.87 per share, above the Zacks Consensus Estimate of $0.83 per share.

However, earnings per share were well below from the year-earlier figure of $3.50. This significant downfall was mainly due to significantly lower commodity prices and a steep decline in worldwide marketing margins, which more than offset production improvements and lower costs.

While turnaround in crude oil prices is beneficial to the entire sector, we are maintaining our Hold recommendation on ConocoPhillips shares given the company’s competitive disadvantages relative to its super major peers. These disadvantages include a high-cost OECD-centric asset base and heavy exposure to the relative tentative outlook for U.S. natural gas (more than a third of total volumes) and refining markets. Our preferred names in the integrated space remain ExxonMobil (XOM) and Chevron (CVX).

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.

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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.

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Visit: www.zacks.com

However, earnings per share were well below from the year-earlier figure of $3.50. This significant downfall was mainly due to significantly lower commodity prices and a steep decline in worldwide marketing margins, which more than offset production improvements and lower costs.

The Exploration and Production segment reported earnings of $725 million during the quarter, down nearly 82% year over year. The fall was mainly due to lower commodity prices, partially offset by higher volumes and lower operating costs. Daily production from the E&P segment including Canadian Syncrude averaged 1.87 million barrels of oil equivalent per day (MMBOE/d), up from 1.75 MMBOE/d in the year-ago quarter.

The year-over-year increase in production from new developments in the U.K., Russia, Norway, Vietnam, China and Canada more than offset the impact of normal field decline. To some extent, production also increased due to less unplanned downtime and the impact of production-sharing contracts.

The Refining and Marketing segment reported a loss of $52 million, compared to a profit of $664 million in the year-ago quarter. The year-over-year decrease was primarily due to reduced refining volumes and worldwide lower marketing margins.

The domestic refining crude oil capacity utilization rate for the quarter averaged 93%, compared to 94% a year earlier. International capacity utilization rate averaged 72%, versus 88% last year. Worldwide utilization averaged 88%, compared to 93% in the year-ago period.

The Midstream segment (which includes the company’s 50% interest in DCP Midstream LLC) contributed $31 million to net income during the quarter, down approximately 81% year over year. The decline was due to lower realized prices and volumes.

ConocoPhillips’ earnings from its LUKOIL Investment segment came in at $682 million as against $774 million in the prior-year quarter. The year-over-year decrease came from lower realized prices, partially offset by lower taxes and higher volumes. LUKOIL’s estimated contribution to the company’s quarterly E&P volumes was 442,000 barrels of oil equivalent per day.

The Chemicals unit reported earnings of $67 million as against earnings of $18 million a year ago. The year-over-year improvement was mainly driven by lower operating costs.

At the end of the quarter, ConocoPhillips had $0.9 billion in cash and $30.4 billion in debt, with a debt-to-capitalization ratio of 34%. During the quarter, the company paid $700 million in dividends. ConocoPhillips generated $2.6 billion in cash from operations during the quarter and invested $2.9 billion in capital expenditures. The company maintained its total 2009 capital budget at $12.5 billion.

While turnaround in crude oil prices is beneficial to the entire sector, we are maintaining our Hold recommendation on ConocoPhillips shares given the company’s competitive disadvantages relative to its super major peers. These disadvantages include a high-cost OECD-centric asset base and heavy exposure to the relative tentative outlook for U.S. natural gas (more than a third of total volumes) and refining markets. Our preferred names in the integrated space remain ExxonMobil (XOM) and Chevron (CVX).

The Dow Jones industrial average lost 12 points, or 0.1% and the broader S&P 500 index declined 3 points, or 0.3% to 979.  The technology-focused Nasdaq rose 7 points, or 0.4%.  On the NYSE, 1.24 billion shares exchanged hands and 16 stocks ended lower for every 14 that advanced. 

Among the ten industry groups in the S&P 500, six ended in the red.  Leading the decliners were oil & gas equipment & services (-3.88%), followed by gold miners (-3.15%), industrial REITs (-3.15%), advertising (-2.86%), and agricultural products (-2.83%).  Leading the gainers were technology and health care issues that edged up 0.3%, with consumer services also on the plus side, up 0.1%.  Shares of Bank of America (NYSE:BAC) led the list of advancing issues on the DJIA with a 2.4% rise after the firm quashed media reports of its planned branch network retrenchment. Citigroup (NYSE:C) shares surged 10.4% to $2.97. The firm said it will deliver almost 6 billion new shares on Thursday, following its conversion of preferred stocks into common shares. General Electric (NYSE:GE) shares tacked on 1.6% on news that it expects profits next year from its financing unit even with increased loan-loss provisions, and will not need to tap its parent for funds until at least 2011.

The government’s sale of a record $42 billion in two-year notes, with the yield touching a higher-than-expected 1.08%, had a mixed reaction on treasuries.  However, in a note to clients this morning Goldman Sachs (NYSE:GS) slashed its estimate for Treasury auctions through September 2010 by 28% to $2.9 trillion based on economic recovery prospects.  The firm said, "The stabilization in financial conditions has occurred more quickly than most observers had anticipated."

BP (NYSE:BP) said its profits halved from a year ago, as declining oil prices and weaker refining margins hurt operations, even as its second quarter results topped estimates.  Further cost-cutting measures were prescribed as its CEO noted, "We see little evidence of any growth in demand and expect the recovery to be long and drawn out," as "demand may be stabilizing, but...well below previous year levels." Valero Energy (NYSE:VLO) results were also hurt by the impact of sizeable inventories and weak demand.

The latest data from Bloomberg puts the announced results from S&P500 firms reported since June 17 at an average decline of 27%, beating analysts' estimates by 9.9% on a per share basis, but ahead of revenue estimates by a mere 0.2%. Today's expected posts include results from: ConocoPhillips (NYSE:COP), General Dynamics (NYSE:GD), Sprint Nextel (NYSE:S), Time Warner (NYSE:TWX), WellPoint Health (NYSE:WLP), and Visa (NYSE:V).

The project includes development of natural gas condensate reservoirs within the onshore Shah field, construction of a new one billion cubic feet/day natural gas processing plant, as well as new natural gas and liquid pipelines and sulfur-exporting facilities at Ruwais Industrial City, UAE.

The Shah development, located approximately 180 km south-west of Abu Dhabi, would have the capacity of pumping 540 million cubic feet per day of gas. The project is expected to be completed by early 2015.

Under terms of the deal, both entities will equally share costs of the project and set up a new company to manage Shah facilities once it becomes operational. ADNOC will own 60% interest in the joint venture, while ConocoPhillips would own the rest.

We believe that this deal with ADNOC to develop the Shah field is another example of ConocoPhillips’ growing exposure to lucrative international regions. However, the outlook on U.S. natural gas and refining markets remains relatively cautious. And since the company has heavy exposure to domestic natural gas (about a third of total volumes) and refining segments, we are concerned.

As such, we maintain our Hold recommendation on ConocoPhillips’ shares given the company’s competitive disadvantages relative to its super-major peers such as Chevron (CVX) and Exxon (XOM).

ConocoPhillips cautioned about lower production in the quarter, compared to the year-earlier as well as the previous quarter. The company anticipates production from the E&P segment, including Canadian Syncrude and excluding LUKOIL, to be 1.86 million barrels of oil equivalent per day (MMBOE/d), while its first quarter 2009 and fourth quarter 2008 production were 1.93 MMBOE/d and 1.87 MMBOE/d, respectively. Before-tax exploration expenses are expected to be $225 million, essentially flat with the first quarter 2009 figure.

The Refining and Marketing segment is also expected to be impacted by low distillate margins and considerably squeezed light-heavy crude differentials. Anticipated worldwide average crude oil refining capacity utilization rate in the upper 80% range compared to 81% in the first quarter. International utilization rate is expected to be in the low 70% range, compared to 85% in the first quarter. This lower utilization rate reflects turnaround activity in Europe and production run cuts at the Wilhelmshaven, Germany refinery.

Despite the turnaround in oil prices, ConocoPhillips experienced sluggishness in market conditions for refined products as the increase in summer demand was hampered by the weak macro backdrop.

While this turnaround is beneficial to the entire sector, we are maintaining our Hold recommendation on ConocoPhillips shares, given the company’s competitive disadvantages relative to its super major peers such as ExxonMobil (XOM) and Chevron (CVX). These disadvantages include a high-cost OECD-centric asset base and heavy exposure to the relative tentative outlook for U.S. natural gas (about a third of total volumes) and refining markets.

The total-market Russell 3000 Index has seen some sizable changes in its sector weightings, although the top 10 remain very much the same. Figure 1 shows the new 2009 sector weightings according to the Russell sector classification system. Not surprisingly, financial services is no longer the largest sector: It now takes second place to technology, which is weighted at 16.19% versus financials at 15.27%. In 2008, those sectors were reversed, with financials at 17.24% and tech at 14.19%.

Health Care saw its weighting increase to 13.41% from 11.52%, popping it up to the third position from No. 5. It displaced energy, which fell from the third slot to the fourth, declining to 11.97% from 13.42%; presumably, declining oil prices had something to do with that. Consumer discretionary also fell: It was the fourth-largest sector after the 2008 rebalance, at 12.94%, but is now the fifth-largest, with a weighting of 11.86%. Producer durables, consumer staples, utilities and materials & processing maintained their same positions (six through 10, respectively).

The top 10 stocks in the Russell 3000 are by and large the same, except for one: ConocoPhillips was displaced by JPMorgan Chase & Co.—a financial company, of all things. Of course, JP Morgan did acquire two former giants in the field of finance last year: Bear Stearns and Washington Mutual. And it has been one of the least-scathed of the financial services companies.

While the other members of the top 10 remained largely the same, some of their positions did not. ExxonMobil is still at the top of the heap, like it was last year, but General Electric fell from the second-largest weighting in the Russell 3000 to the tenth-largest, with a weighting of 1.27%. Microsoft moved up from the third slot to the second, with a weighting of 1.87%. And Johnson & Johnson jumped to No. 3, befitting its strong performance.

Russell 2000

In the Russell 2000, financial services is still the top sector, increasing its weight to 21.10%. A surprising result, perhaps, but the sector was boosted by having hard-hit banks move out of the Russell 1000 and into the smaller index. Technology claims the second-largest slot, with a 16.75% weighting, displacing consumer discretionary, which falls to the No. 3 position, with a 14.68% weighting. That’s down from 17.65% in 2008. Energy only fell one spot, to No. 9, and saw its weighting nearly halved, falling from 8.60% to 4.52%, further emphasizing the differences between the large- and small-cap worlds.

On Monday, June 29, interim service began on REX East, the eastern section of Kinder Morgan Energy Partners' (KMP) 1,679-mile multi-state Rockies Express Pipeline (REX). With a capacity of 1.6 billion cubic feet per day (Bcf/d), natural gas started flowing on the 444-mile segment of the $6.6 billion pipeline that runs from Audrain County, Missouri, to the Lebanon interconnection point in Warren County, Ohio. Earlier, during May last year, the western section of the pipeline (REX West) came online. The 713-mile pipeline runs from the Cheyenne hub in Weld County, Colorado, to a major delivery point in Brown County, Kansas and has a capacity of 1.5 Bcf/d.

The remaining portion of the 639-mile 42-inch diameter Rex East pipeline, which will end in Clarington, Ohio, is expected to be operational by November 1, 2009. When fully completed, the entire 1,679-mile pipeline will be capable of transporting roughly 1.8 Bcf/d of natural gas and is backed by firm commitments from creditworthy shippers for nearly all of the capacity on the pipeline. Kinder Morgan is the operator of the REX project and has a 50% interest, with the other partners being ConocoPhillips (COP) and Sempra Energy (SRE).

REX is a key pipeline asset that will fully integrate the fast growing Rockies natural gas producing region with consuming markets in the Midwestern and Eastern U.S. The lack of adequate take-away capacity in the Rockies has been the bane for natural gas producers in the region due to its negative impact on local natural gas pricing. It is expected that with the completion of this pipeline, the Rockies basis spread (the discount at which Rockies natural gas gets priced relative to other regions in the country) will narrow significantly.

Kinder Morgan is the largest independent owner and operator of petroleum product pipelines in the U.S., transporting nearly 2 million barrels per day of gasoline, jet fuel, diesel fuel, and natural gas liquids. The partnership also has capacity to transport 7 billion cubic feet/day (Bcf/d) of natural gas. It owns or operates more than 26,000 miles of pipeline and approximately 170 terminals.

We currently have a Buy recommendation on the partnership given its focus on stable, fee-based, well-diversified assets, and its strong balance sheet, which allows flexibility when raising capital for acquisitions/expansions. With a number of organic projects expected to come online over the next few years, we see favorable long-term growth profile for Kinder Morgan.

Chicago, IL - June 16, 2009 - Zacks Equity Research highlights Maxim Integrated Products (MXIM) as the Bull of the Day and Sonic Innovations (SNCI) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Valero (VLO), Tesoro (TSO) and ConocoPhillips (COP).

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:

Maxim Integrated Products (MXIM) is an OEM of semiconductor analog and mixed signal ICs. March quarter results were short of consensus estimates, although they were in-line with management's own expectations.

Forward guidance is for a revenue increase of 3-12% in the June quarter. Order rates started picking up in three of the four end markets, and the fourth market is expected to see increase in Q4.

We are reiterating our Buy rating on MXIM shares, given recent market share gains, healthy product pipeline, diversity in the company's markets, strong cash generating capabilities and cheap valuation.

Bear of the Day:

Sonic Innovations (SNCI) announced that its shareholders at the annual shareholder meeting approved a name change of the company to Otix Global, Inc, where Otix Global is to become the parent company of Sonic Innovations. SNCI filed with the Securities and Exchange Commission its Form 10-Q for the quarterly period ended March 31, 2009.

Revenue from SNCI's German subsidiary is at risk of declining from unsuccessful attempts at renegotiating insurance contracts that is required as a result of new legislation passed by the Federal Council of Germany in Nov. 2008 that became effective April 1, 2009.

Our price target of $0.80 per share is based on a price-to-sales multiple of roughly 0.3x our FY09 sales estimate.

Latest Posts on the Zacks Analyst Blog:

Refiners Lose Out in Cap & Trade

While there are many important changes that this 946-page tome is aiming to bring about, we are focusing here on one central part of the proposed legislation -- the Cap & Trade regime. The bill creates winners and losers among different energy producing and consuming sectors through its initial free awards of emission permits.

Approximately 85% of the permits are doled out for free, with the rest auctioned off. According to a preliminary estimate by the EPA, a permit to emit one ton of carbon dioxide or equivalent will be worth $11-$15 in 2012, with the value of all permits at around $60 billion in 2012. By the 2025, the value would be higher, according to EPA estimates, rising to $22-$28, with the total value at around $113 billion.

Oil producers and refiners, such as Valero (VLO), Tesoro (TSO) and ConocoPhillips (COP) are clearly on the losing side, having been allocated a very small portion of the permits (2%). This forces them to purchase permits on their own account. Electric utilities and other consuming industries such as steel, cement and paper manufacturers benefiting from the giveaways.

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.

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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:
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While there are many important changes that this 946-page tome is aiming to bring about, we are focusing here on one central part of the proposed legislation -- the Cap & Trade regime. The bill creates winners and losers among different energy producing and consuming sectors through its initial free awards of emission permits.

Approximately 85% of the permits are doled out for free, with the rest auctioned off. According to a preliminary estimate by the EPA, a permit to emit one ton of carbon dioxide or equivalent will be worth $11-$15 in 2012, with the value of all permits at around $60 billion in 2012. By the 2025, the value would be higher, according to EPA estimates, rising to $22-$28, with the total value at around $113 billion.

Oil producers and refiners, such as Valero (VLO), Tesoro (TSO) and ConocoPhillips (COP) are clearly on the losing side, having been allocated a very small portion of the permits (2%). This forces them to purchase permits on their own account. Electric utilities and other consuming industries such as steel, cement and paper manufacturers benefiting from the giveaways.

Here are the salient features of the Cap & Trade system as proposed in the bill:

• Starting in 2012, industries would be required to reduce their emissions to specific targets through the middle of the century. The cap-and-trade system comes completely into force by 2016.
• The bill aims to cut emissions by 17% below the 2005 level by 2020 and 42% by 2030. By 2050, emissions are expected to drop by 80% below the 2005 level.
• The bill requires companies to buy permits to be allowed to emit carbon dioxide and other polluting gases. If a company cuts its emissions by more than the statutory limit, then it can sell the extra permits. Conversely, a company needing extra permits can purchase those.
• If a company's emissions exceed its permits, it would be fined two times the value of the permits it should have purchased.

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=4579.

Here are highlights from Friday's Analyst Blog:

Exxon Throws Weight Behind Alaskan Pipeline

Exxon (XOM) has finally decided to throw its weight behind the TransCanada Corp. (TRP)-sponsored Alaska Pipeline project that will bring stranded Alaskan natural gas to consuming markets in the U.S. Lower 48. TransCanada's 1,700 mile, 48-inch diameter pipeline has the support of the Alaskan and Canadian governments. The Alaska government passed legislation last year that would subsidize the initial project costs by up to $500 million.

While details of the deal between the two companies were not released, it is expected that TRP will remain the project's operator. This pipeline, expected to cost approximately $26 billion to build, would be the largest civil engineering project in North America. The pipeline would stretch from the North Slope of Alaska through Yukon and British Columbia to the Alberta border, where it would be linked to existing infrastructure reaching the U.S. market.

While a number of companies have natural gas reserves in Alaska, three are the most important; Exxon, ConocoPhillips (COP) and BP (BP). The last two have been sponsoring their own rival pipeline project.

Without the inclusion of BP and COP, it would be difficult, if not altogether impossible for the XOM-TRP project to get off the ground. But with Exxon, the largest natural gas resource holder in Alaska, getting behind the project, its prospects have brightened significantly.

National Semi Results Digested

Yesterday afternoon after the bell, National Semiconductor (NSM) reported results for the fourth quarter of fiscal year 2009 ending May 2009. Revenue for the third quarter was $280.8 million, down -4.0% sequentially and down -39.2% year over year.

The gross margin was 59.3%, up 37 bps sequentially. The slight increase was mostly due to employee layoffs and cost reductions.

The utilization rate remained very low, increasing from 37% in Q3 to 38% in Q4. NSM is particularly hit by lower utilization rates as the company manufactures around 90% of its products in-house.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=2649.

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=2677

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=4580.

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

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

Stock futures point to a higher opening on the Wall Street, amid ECB and BoE interest rate decisions and weekly employment numbers and retailers' May same-store-sales figures, which is expected to have dropped 3.6%, according to Thomson Reuters (NYSE:TRI).

All ten industry groups on the S&P 500 lost ground Wednesday, with basic material and oil and gas shares, down 4.2% and 3.6%, respectively, leading the decliners. A sharp decline in oil prices also hurt energy stocks. Crude prices dropped 3.5% on an unexpected rise in weekly US inventory.  Valero Energy (NYSE:VLO), which said it expects to report a second quarter loss, plunged 18%; Alcoa (NYSE:AA) retreated 4.3%; Freeport-McMoRan (NYSE:FCX) shares dropped 5.7%. Among oil companies, Exxon Mobil (NYSE:XOM) declined 1.2% and Chevron (NYSE:CVX) declined 1.6%; Marathon Oil (NYSE:MRO) plunged 7.2% and ConocoPhillips stocks (NYSE:COP) registered a 4.8% decline.

In his prepared testimony to the House Budget Committee, Bernanke urged lawmakers that they should commit to control the nearly $2 trillion budget deficit.  The Fed Chairman also reiterated that the pace of economic contraction appears to be slowing.  The White House estimates that the budget deficit will reach around $1.8 trillion this year and decline to about $900 billion by 2011.

On Wednesday, ADP Employer Services reported US employers shed 532,000 jobs in May, more than the 525,000 expected.  The numbers, nevertheless, were fewer than last months' downward-revised 545,000.  Factory orders improved in 0.7% in April, versus expectations of a 0.9% gain, and up from the downward-revised 1.9% drop in March.

Credit Suisse's (NYSE:CS) equity analyst also cautioned against the current valuation levels given the recent spate of stock offerings and weak economic conditions.  Nevertheless, the analyst maintained a 920 S&P projection for 2009. According to Bloomberg data, the S&P currently is priced at 15.5 times earnings, its most expensive since last October, although below the 19.8 times monthly average of the past decade.

Will Berkshire Hathaway (BRK.A) devotees hear words of hope and promise from Warren Buffet at the annual meeting in Omaha, Nebraska this weekend? It seems unlikely. Yet, America's most respected investor is expected to draw an estimated 35,000 investors to the Midwest city for the event.

Shares of Berkshire Hathaway have slumped 40% to their lowest level since Buffet assumed office, and the net worth of the company shrank by 9.6% in 2008. As the world sank deeper into the worst downturn since the Great Depression, Buffet had warned investors that the economy would be in "shambles throughout 2009."

"Most of the Berkshire businesses whose results are significantly affected by the economy earned below their potential last year, and that will be true in 2009 as well," Buffett wrote in his annual letter to shareholders on Feb. 28.

Buffet has admitted to making some investment blunders of late. Of the more notable ones would be the move to buy into ConocoPhillips (COP) at a time when gas prices were near their peak, just before energy prices slumped. Such moves not only cost his business empire several billion dollars, but also stripped Berkshire of its triple-A credit rating.

However, Berkshire still has strong credit and plenty of cash. Moreover, with two-thirds of its businesses in utilities and insurance, Berkshire is expected to be more resilient in volatile times. The 78 year-old top boss of the group also played a key role in steadying the economy by injecting $8 billion into Goldman Sachs (GS) and General Electric (GE), calling them "the symbol of American business to the world."

While everyone has been wondering about who will eventually succeed Buffet, as long as the Oracle of Omaha is still around, investors would value his insight more than ever during these troubled times.

Will Berkshire Hathaway (BRK.A) devotees hear words of hope and promise from Warren Buffett at the annual meeting in Omaha, Nebraska this weekend? It seems unlikely. Yet, America's most respected investor is expected to draw an estimated 35,000 investors to the Midwest city for the event.

Shares in Berkshire Hathaway have slumped 40% to their lowest level since Buffett assumed office and the net worth of the company shrank by 9.6% in 2008. As the world sank deeper into the worst downturn since the Great Depression, Buffett had warned investors that the economy would be in "shambles throughout 2009."

"Most of the Berkshire businesses, whose results are significantly affected by the economy, earned below their potential last year and that will be true in 2009 as well," Buffett wrote in his annual letter to shareholders on Feb. 28.

Buffett has admitted to making some investment blunders as of late. Of the more notable ones would be the move to buy into ConocoPhillips (COP) at a time when gas prices were near their peak, just before energy prices slumped. Such moves not only cost his business empire several billion dollars, but also stripped Berkshire of its triple-A credit rating.

However, Berkshire still has strong credit and plenty of cash. Moreover, with two-thirds of its businesses in utilities and insurance, Berkshire is expected to be more resilient in the recession. The 78 year-old top boss of the group also played a key role in steadying the economy by injecting $8 billion into Goldman Sachs (GS) and General Electric (GE), calling them "the symbol of American business to the world."

While everyone has been wondering about who will eventually succeed Buffett, as long as the Oracle of Omaha is still around investors will value his insight more than ever during these troubled times.

Zacks Investment Research
]]> http://www.straightstocks.com/stock-watch/buffett-calling-troubled-investors-zacks-tale-of-the-tape/feed/ 0 http://www.straightstocks.com/stock-watch/cvx-misses-on-refining-weakness-analyst-blog/ http://www.straightstocks.com/stock-watch/cvx-misses-on-refining-weakness-analyst-blog/#comments Fri, 01 May 2009 18:36:40 +0000 Zacks Market Commentaries http://www.zacks.com/stock/news/19759/CVX+Misses+on+Refining+Weakness+-+Analyst+Blog Highlights include Chevron Corp. (CVX), Exxon Mobil Corp. (XOM), BP plc (BP) and ConocoPhillips (COP).

Earlier today, Chevron Corp. (CVX) reported weaker-than-expected first-quarter 2009 recurring EPS of $0.72, significantly below the year-earlier level of $2.48. The reported EPS number of $0.92 included one-time gains on sales of downstream assets totaling $400 million or $0.20 per share, which we exclude from our recurring EPS estimate.

Contribution from increased production of crude oil and natural gas due to the start-up of new projects was offset by the sharp decline in commodity prices. This has been a recurring theme in oil company results this quarter, as we saw with Exxon (XOM) yesterday and BP (BP) and ConocoPhillips (COP) earlier.

Chevron's total production of crude oil and natural gas increased by 2.5% from the year-earlier level to 2.7 million oil-equivalent barrels per day (BOE/d), driven by new project start-ups and the impact of lower prices on production entitlements.

Partly offsetting these positives were factors such as OPEC quota restrictions and production still shut in due to last year's Gulf of Mexico (GoM) hurricanes. Approximately 35,000 barrels per day (Bbl/d) of GoM production still remains offline due to the lingering effects of last September's hurricanes.

Similarly, OPEC restrictions curtailed production by approximately 50,000 Bbl/d during the quarter. Gains on the production front were offset by lower realized oil and natural gas prices, resulting in a roughly 75% year-over-year drop in upstream earnings to $1.3 billion.

Chevron's production outlook remains one of the most robust in its peer group, with a number of major deepwater projects scheduled to come online later this year. These include the Tahiti in the GoM, Tombua-Landana in Angola, and Frade in Brazil.

Downstream earnings (excluding the $400 million gain associated with the sale of marketing assets in Brazil and Nigeria) increased 67% from the last year's depressed level, driven by margin improvements in the U.S. Earnings in the chemicals business were roughly half the year-earlier level, as margins were lower on lubricants and fuel additives.

Chevron spent $6.5 billion in capital expenditures during the quarter, up from last year's 5.1 billion. Approximately 85% of the total outlays pertained upstream projects. At the end of the quarter, the company had $9.2 billion in cash and long-term debt of $12.2 billion, with a debt-to-total capitalization ratio of about 12%.
Read the full analyst report on "CVX"
Read the full analyst report on "XOM"
Read the full analyst report on "COP"
Zacks Investment Research
]]> http://www.straightstocks.com/stock-watch/cvx-misses-on-refining-weakness-analyst-blog/feed/ 0 http://www.straightstocks.com/stock-watch/cree-inc-post-properties-marathon-conocophillips-and-bp-press-releases/ http://www.straightstocks.com/stock-watch/cree-inc-post-properties-marathon-conocophillips-and-bp-press-releases/#comments Fri, 01 May 2009 12:34:22 +0000 Zacks Market Commentaries http://www.zacks.com/stock/news/19728/Cree+Inc.%2C+Post+Properties%2C+Marathon%2C+ConocoPhillips+and+BP+-+Press+Releases For Immediate Release

Chicago, IL - May 1, 2009 - Zacks Equity Research picks Cree Inc. (CREE) as Bull of the Day and Post Properties (PPS) as Bear of the Day. In addition, the analysts at Zacks Equity Research discuss the latest on Marathon Oil (MRO), ConocoPhillips (COP) and BP (BP).

Full analysis of all these stocks is available at: http://at.zacks.com/?id=2678

Bull of the Day

Cree Inc. (CREE) is one of the leading producers of SiC and GaN-based LEDs. March quarter revenue was in-line with the consensus, while the EPS exceeded. Forward guidance is for a 5-9% revenue increase in the June quarter.

The global movement to energy-efficient lighting is prompting lighting companies and consumers to look at other options. Therefore, lighting will be the strongest end-market for Cree, likely followed by video displays and notebooks. Yield improvements, higher capacity utilization, larger wafers and offshore production will increasingly offset new product ramp up costs.

The LED market is hot in our opinion, and the LLF acquisition opens up new opportunity. We are reiterating our BUY rating on CREE shares.

Bear of the Day

Post Properties (PPS) has taken various cost-cutting steps to navigate through the national economic downturn, including layoffs and a freeze on new development starts. The company is also trying to sell more assets to increase liquidity.

As expected, the company cut its quarterly dividend to $0.20 per share, down from $0.45 per share in 3Q08. The current dividend is down to more realistic levels. The company has taken care of all 2009 debt maturities. While we like the moves the company is making, we maintain our sell rating due to macroeconomic factors.

Operationally, we think PPS will under-perform its peer group in 2009. We expect SS revenue and NOI growth to turn negative this year. As job losses mount, multi-family operators will continue to see occupancy and rental rate declines. Post reports 1Q09 results on May 4th.

Recent Analysis from the Analyst Blog

Marathon Beats on Strong Downstream

Marathon's (MRO) first-quarter 2009 results came in better than expected on the back of improved downstream margins and lower costs. As has been the case with the other oil majors that have already reported, such as ConocoPhillips (COP) and BP (BP), earnings and cash flow comparisons with the year-earlier period were ugly. We continue to like Marathon for its revitalized upstream business, top-tier Midwest-centered refining business, and very cheap valuation.

Marathon's recurring EPS of $0.34 was down from $1.07 in the year-earlier period, with the contribution from increased oil and natural gas production and improved refining margins offset by lower realized commodity prices. The company reported production (available for sale) of 429,000 oil-equivalent barrels per day (BOE/d), inline with its interim guidance earlier this month. This is a 7% sequential production growth, reflecting strong operating performance from the company's Alvheim oil field in the North Sea and natural gas assets in Equatorial Guinea.

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=2649.

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 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=2677.

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 InvestmentResearch 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=4582.

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

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 VickeryWeb Content Editor312-265-9380Visit: www.zacks.com

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=4579.

Here are highlights from Thursday's Analyst Blog:

COP Beats on Strong Production

ConocoPhillips' (COP) first-quarter results came in better than expected due to strong oil and natural gas production. Market expectations reflected the company's interim guidance provided on April 2. We have a Hold rating on COP shares, as we see better opportunities in this space through Exxon (XOM) and Chevron (CVX). Both of these are scheduled to report quarterly results next week.

The company reported recurring EPS of $0.56, down from $2.62 in the first quarter of 2008. The single largest contributor to the negative comparison is the price of crude oil, which will be a recurring theme this earnings season in the oil patch.

Linear Technology a Mixed Bag

Linear Technology Corp. (LLTC) has an attractive business model that features some of the most favorable margins within the technology sector. The company grew sales very strongly, coming off the last down-cycle. However, growth tapered off in later years, as management strategy involved focus on only those products that afforded company-standard gross margins.

This ensured very consistent cash flows. Linear has around $920 million in cash and short-term investments ($4.15 a share). Management continues to pay a dividend, and recently raised the amount to $0.22 per share. Historically, management execution has been extremely good during economic downturns. However, the current recession started from a credit crisis, which has a particularly strong impact on auto sales.

Xilinx: Cautious Beyond Q1

Shares of Xilinx Inc. (XLNX, Buy) are lower in early trading today following its release of Q4 and fiscal 2009 results yesterday after market close. Q4 revenues and EPS came ahead of consensus expectations and the lower end of the Q1 revenue guidance is also higher than the mid-point of current consensus estimates.

The company guided Q1 revenue of +/- 4% relative to Q4 revenues of $395 million with gross margin expectation of 61% - 63%, roughly flat with Q1 results. The company expects growth from the Asia-Pacific region and Japan, with declines in Europe and North America. XLNX is also implementing a two-phase restructuring during the current fiscal year, with Phase 1 having an immediate impact of $11-$13 million in charges in the June quarter.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=2649.

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=2677

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=4580.

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

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

Key Points:

• Earnings reports remain ugly, total net income running 37.9% below a year ago
• Surprise ratio of 1.70:1 and median surprise of 2.22% are both below "normal"
• Fourth-quarter total net income expected to be 32.7% below year ago
• Financials red ink is $18.9 billion versus $6.0 Billion black ink last year
• Excluding Financials, total earnings down 20.5% so far
• Still heading south as 2009 expectations fall 2.22% in a week
• More than 1/3 of all 2009 consensus earnings estimates down more than 10%; 1/6 down more than 25% over the last month
• Total net income in 2009 now expected to fall 10.0%, following 13.3% 2008 decline
• P/Es based on 2009 estimates will prove to be to low as "E" plunges
• Bottom up estimate for S&P 500 now $65.12 in 2009, down from $66.60 a week ago; I expect it to be less than $60.

Total Net Income Growth

For those that desperately search for silver linings in the earnings expectations data, the best that can be said is that the rate of decline has slowed somewhat.

The bottom-up consensus earnings estimate declined 2.2% over the last week, but at least that is a much slower decline than the 6.6% decline the week before. However, anyone who thinks that the earnings for the S&P 500 in 2009 will come in at anything close to the current figure of $65.12 is an absolute fool.

When looking at this data, the trend is always more significant than the level at any given date. While down 2.2% is better than down 6.6%, it is still awful any way you cut it. We are talking weekly changes here, not monthly.

If the rate of decline were to slow to 1.0% per week for the rest of the year, that would mean that earnings for the year would be only $41.01. I suspect that it will end up being somewhat higher than that, since I am optimistic that the economic stimulus package will get passed and will start to have some limited impact in the second half. Even so, earnings of $55 for the year seem like a fairly optimistic forecast, but in the right ball park.

The question then becomes, what sort of multiple should one put on those earnings. As of Friday lunchtime, the S&P 500 (SPX) was trading at 868.10, which based on earnings of $55 would put the P/E at 15.8x. To make money holding the S&P 500 then one of two things has to happen. Either I have to be all wet about the $55 earnings level, or the multiple has to expand from this level. Granted interest rates are low and they are depressed earnings, but north of 16x is a pretty princely multiple.

The earnings declines are very widespread. When we combine those that have already reported with the expectations for those yet to report (implicitly assuming no surprises for the yet to report group), 8 of the 10 economic sectors are expected to earn less in the fourth quarter of 2008 than they did in the fourth quarter of 2007, and 7 of those sectors have expected declines of over 19%. The outlook for the first quarter is just as bad, with an expected drop of 28.5% and nine sectors down and one essentially unchanged.

Total Net Income Growth (Reported)
Sector	Q2 '08 A	Q3 '08 A	Q4 '08 A	Q1 '09 E	2007 A	2008 A	2009 E	2010 E
Health Care	8.80%	6.06%	8.07%	-4.81%	20.11%	8.99%	-0.47%	11.61%
Utilities	3.13%	-8.96%	4.41%	-1.18%	8.44%	2.70%	2.29%	12.13%
Cons. Stap.	10.02%	13.74%	-4.52%	-10.49%	2.80%	9.53%	6.75%	6.20%
Telecom	7.03%	-5.85%	-10.07%	-25.47%	24.79%	3.24%	-15.61%	7.02%
Industrials	5.92%	0.48%	-20.54%	-32.13%	10.29%	0.99%	-18.29%	7.82%
Technology	21.06%	10.73%	-23.31%	-34.38%	10.84%	15.29%	-16.25%	22.25%
Energy	14.58%	57.43%	-25.36%	-53.83%	8.93%	19.49%	-45.51%	35.18%
Cons. Disc.	-30.06%	-39.34%	-79.33%	-54.75%	-3.35%	-37.48%	7.03%	65.20%
Materials	5.35%	5.50%	-86.21%	-66.46%	12.46%	-10.17%	-43.05%	39.59%
Financials	-50.17%	-65.39%	-416.79%	-47.22%	-18.90%	-75.50%	68.66%	72.40%
S&P	-5.77%	-3.68%	-37.87%	-34.26%	2.89%	-10.36%	-14.27%	25.26%

Total Net Income (Reported)
Sector	Q4 '08	Q4 '07	Q3 '08	Q3 '07
Energy	$22,803	$30,549	$41,794	$26,547
Health Care	$22,702	$21,008	$22,904	$21,596
Technology	$18,446	$24,051	$20,909	$18,882
Industrials	$18,051	$22,719	$21,048	$20,948
Cons. Stap.	$10,140	$10,620	$11,889	$10,453
Telecom	$5,634	$6,265	$5,908	$6,275
Utilities	$3,496	$3,349	$5,121	$5,625
Cons. Disc.	$1,319	$6,379	$4,654	$7,672
Materials	$673	$4,883	$5,869	$5,563
Financials	($18,904)	$5,967	$11,818	$34,150
S&P	$84,361	$135,788	$151,915	$157,712

Total Net Income Growth (Not Reported)
Sector	Q2 '08 A	Q3 '08 A	Q4 '08 E	Q1 '09 E	2007 A	2008 E	2009 E	2010 E
Financials	-69.07%	-186.93%	636.57%	1926.89%	-13.08%	-90.34%	483.10%	9.89%
Health Care	9.07%	14.69%	12.56%	7.27%	17.17%	7.44%	9.86%	14.36%
Utilities	5.50%	-1.40%	11.07%	-7.59%	14.04%	4.64%	3.89%	7.97%
Industrials	9.51%	7.84%	1.90%	17.24%	7.43%	11.54%	-10.26%	-0.06%
Cons. Stap.	-6.10%	13.11%	-1.44%	11.67%	12.43%	14.28%	5.29%	9.48%
Technology	7.86%	-2.37%	-23.80%	-26.68%	14.21%	12.07%	-11.74%	13.78%
Energy	32.54%	47.46%	-32.20%	-32.32%	10.67%	19.11%	-29.06%	24.18%
Materials	13.01%	-16.31%	-54.85%	-26.94%	-3.67%	-3.98%	-15.00%	30.70%
Cons. Disc.	-80.17%	-48.21%	-61.14%	-53.30%	4.70%	-62.10%	3.48%	116.18%
Telecom	-40.48%	-63.43%	-66.71%	-41.87%	-6.35%	-49.52%	-28.00%	-11.34%
S&P	-28.45%	-39.27%	-13.71%	-7.54%	4.56%	-23.24%	7.39%	21.23%

Total Net Income Growth (Not Reported)
Sector	Q2 '08 A	Q3 '08 A	Q4 '08 E	Q1 '09 E	2007 A	2008 E	2009 E	2010 E
Health Care	8.84%	7.07%	8.60%	-3.40%	19.76%	8.81%	0.72%	11.96%
Utilities	4.11%	-5.99%	7.22%	-3.70%	10.62%	3.48%	2.94%	10.43%
Cons. Stap.	2.04%	13.45%	-3.14%	0.04%	7.23%	11.82%	6.03%	7.81%
Telecom	-1.11%	-15.97%	-19.08%	-27.00%	18.24%	-5.56%	-16.72%	5.61%
Industrials	6.23%	1.08%	-19.11%	-28.63%	10.07%	1.75%	-17.65%	7.14%
Technology	17.37%	7.46%	-23.42%	-32.32%	11.67%	14.48%	-15.14%	20.09%
Energy	16.25%	56.44%	-26.09%	-51.51%	9.12%	19.45%	-43.78%	33.72%
Cons. Disc.	-58.72%	-43.68%	-69.01%	-53.80%	1.06%	-51.47%	5.45%	87.40%
Materials	6.18%	2.03%	-80.94%	-61.98%	10.15%	-9.40%	-39.33%	37.94%
Financials	-53.87%	-89.80%	-324.04%	-22.16%	-17.78%	-78.53%	106.81%	56.18%
S&P	-10.95%	-11.57%	-32.67%	-28.53%	3.26%	-13.26%	-9.95%	24.30%

Scorecard and Median EPS Growth Rates

• Median EPS growth of 326 firms reporting so far is -6.8%
• Surprise ratio 1.70, median surprise 2.2%, both below normal
• Health Care still healthy with 10.1% growth, others anemic or down
• Health Care, Industrials doing well on Surprise front
• Nine sectors expected to be negative in 1Q
• Remaining firms expected to be down 9.5% in 4Q

Positive surprises still out number disappointments, but at only about half the ratio that we became accustomed to seeing during the good times. CEOs learned long ago that it is better to under promise and over deliver, and thus keep the guidance to the analysts conservative.

The overall picture when we measure earnings based on median year-over-year EPS growth is not quite as bleak as on a total net income basis. During the first three quarters of 2008, firms were still buying back stock at a fairly aggressive pace (although not as aggressively as in 2007, fourth-quarter data is not out yet), which helps boost EPS by shrinking the denominator, where that effect is not present in the total net income data. Also the decline in total net income is in part been driven by some huge losses at some mega firms, most notably in the financial sector.

Fourth-Quarter Scorecard (Reported)
Sector	4Q '08 Growth (A)	1Q '09 Growth (E)	2008 Growth (A)	2009 Growth (E)	2010 Growth (E)	% Report	Median % Surprise	# Pos Surprise	# Neg Surprise	# Match
Healthcare	10.13%	6.36%	13.73%	4.37%	10.84%	68.52%	4.11%	25	4	8
Utilities	2.45%	-1.81%	3.60%	3.10%	8.46%	41.18%	3.12%	8	4	2
Energy	1.81%	-24.88%	20.30%	-37.69%	20.43%	66.67%	3.04%	14	10	2
Industrial	0.89%	-18.53%	13.32%	-11.29%	9.12%	81.36%	2.39%	30	8	10
Tech	-6.00%	-26.60%	19.09%	-15.15%	11.04%	76.00%	4.00%	35	17	5
Cons. Stap.	-6.98%	-3.13%	11.11%	3.28%	8.31%	55.00%	2.24%	14	6	2
Telecom	-9.86%	-11.11%	3.03%	-5.10%	3.16%	33.33%	-1.61%	0	2	1
Cons. Disc.	-31.13%	-17.39%	-7.88%	-7.58%	9.01%	52.50%	3.83%	26	14	2
Financial	-39.83%	-38.86%	-21.79%	-0.91%	11.99%	69.14%	-12.13%	17	35	4
Materials	-55.00%	-60.99%	-4.89%	-27.83%	16.80%	72.41%	6.45%	13	7	1
S&P 500	-6.82%	-15.47%	7.25%	-5.79%	10.39%	65.20%	2.22%	182	107	37

Fourth-Quarter EPS Growth (Yet-to-Report)
Sector	4Q '08 Growth (E)	1Q '09 Growth (E)	2008 Growth (E)	2009 Growth (E)	2010 Growth (E)
Healthcare	5.13%	4.44%	17.86%	16.89%	13.75%
Cons. Stap.	3.95%	0.40%	10.10%	12.56%	7.30%
Utilities	3.41%	5.62%	-0.78%	9.18%	8.19%
Telecom	-1.23%	-10.09%	29.51%	5.31%	4.79%
Industrial	-3.70%	0.00%	9.71%	15.29%	10.62%
Energy	-11.05%	-28.21%	30.91%	13.31%	25.57%
Financial	-13.28%	-13.10%	11.52%	6.87%	12.97%
Cons. Disc.	-26.10%	-21.45%	15.09%	10.61%	12.68%
Tech	-28.35%	-10.17%	8.71%	22.02%	11.93%
Materials	-42.18%	-29.84%	11.72%	4.80%	13.58%
S&P 500	-9.51%	-6.06%	12.27%	12.89%	11.71%

The Zacks Revisions Ratio: 2009

• Revisions ratio for full S&P 500 up to 0.19, unchanged from last week
• Health Care the "strongest" as positive surprises help it
• 9 sectors have at least 3 cuts for every increase
• 34.4% of all firms see consensus earnings estimate decline by more than 10%, 22.4% more than 20%
• Ratio of firms with rising to falling consensus earnings estimates at 0.18, unchanged
• Total number of revisions (4 week total) up to 3,594 from 2,626 last week (36.8%)
• Increases up to 578 from 410 (40.9%), cuts up to 3,016 from 2,216 (36.1%)
• Estimate activity picking up sharply, nearing seasonal peak

Despite five of the sectors recording at least twice as many positive surprises as disappointments, it is not translating into upward estimate revisions for 2009. Granted, unlike the other quarters, there is no automatic reason for 2009 estimates to rise due to a positive surprise in the fourth quarter of 2008, the way there is if there is a positive surprise in the first quarter of 2009. However, the disparity is pretty stark.

The Health Care sector is the best of the bunch, but even there, estimate cuts are running at almost 2x estimate increases despite positive surprises outnumbering disappointments more than five to one. There are a few names where positive surprises have translated into higher estimates, like McKesson Corporation (MCK) and Forest Laboratories (FRX), but they are the exception, rather than the rule.

While the revisions ratio has improved from what we were seeing a month ago, it is still in horrendously negative territory. Furthermore, negative revisions are occurring on a far higher overall volume of estimates.

The size of the estimate cuts is awful, with more than one third of all S&P 500 firms seeing their consensus earnings estimate fall by more than 10% over the last month and more than one-fifth seeing greater than a 20% decline. The economy is still accelerating to the downside, so it seems unlikely that the cutting will stop anytime soon.

Not surprisingly the relatively defensive Health Care and Consumer Staples sectors are holding up better than the cyclical sectors like the Industrials and Materials. Financials they are in their own separate hell.

SECTOR	Avg. 4wk Change FY1	Revisions Ratio: #ests up/# ests dn 4 wk	# Of Firms with FY1 EPS 4wk Increase	# Of Firms with FY1 EPS 4wk Decrease
Health Care	-2.76%	0.52	17	37
Consumer Staple	-4.33%	0.28	9	30
Technology	-12.41%	0.26	11	62
Consumer Disc	-10.30%	0.21	11	68
Utilities	-3.56%	0.21	8	26
Energy	-20.68%	0.14	2	37
Telecom	-4.65%	0.11	1	8
Materials	-18.64%	0.11	2	26
Financial Services	-12.97%	0.10	10	71
Industrials	-11.65%	0.08	5	51
S&P 500	-10.56%	0.19	76	416

The Zacks Revisions Ratio: 2010

• Revisions ratio rises to 0.22 from 0.20 last week
• More than 3 cuts per increase for 9 sectors, more than 4 per increase in 6 sectors
• Telecom, Health Care the "strongest"; Industrials, Energy, Materials, Financials and Tech all very weak
• Only 21 total revisions in Telecom
• Ratio of rising to falling consensus earnings estimates falls to 0.20 from 0.26
• Total number of revisions rises to 1,479 from 1,127 (31.2%)
• Estimate increases rise to 264 from 184 (43.5%), cuts rise to 1215 from 943 (28.8%)
• Sample size of 2010 revisions is thin, but starting off weak
• Mean estimates to be affected by new estimates as much as revisions

While the total net income table above shows expectations of a very healthy rebound in profits in 2010 of 24.3%, don't start counting those chickens. Analysts are cutting their 2010 estimates at almost the same pace that they are cutting their 2009 estimates. If the two fall in tandem, the growth rate will not change, but it will be off a much lower base.

As with 2009, the estimate cuts are widespread, with Health Care being the only place where cuts are running at less than 2:1 over increases, in every other sector they are running at more than 3:1.

The size of the cuts is also very substantial. In 5 sectors, the average change in the consensus earnings estimate over the last month is in the double digits, and that is after we have removed all the declines of greater than 100%. The declines in the Energy sector look particularly bad, with major firms like Exxon Mobil Corporation (XOM), Chevron Corporation (CVX) and ConocoPhillips (COP) all registering double digit declines. Given the scale of their operations that translates to billions of dollars of lower expected earnings.

SECTOR	4wk Change FY2	(Sum[FY2 Rev 4wk Increase]) / (Sum[FY2 Rev 4wk Decrease)	# Of Firms with FY2 EPS 4wk Increase	# Of Firms with FY2 EPS 4wk Decrease
Health Care	-2.92%	0.54	12	39
Telecom	-5.69%	0.31	2	6
Consumer Discr	-10.02%	0.31	15	58
Consumer Staples	-2.94%	0.29	7	25
Utilities	-3.37%	0.23	7	20
Materials	-15.20%	0.22	6	22
Technology	-14.88%	0.18	7	62
Energy	-16.25%	0.13	3	35
Financial Services	-15.42%	0.11	10	67
Industrials	-9.36%	0.08	7	47
S&P 500	-10.44%	0.22	76	381

Earnings Shares and P/Es

• P/Es are too low since earnings estimates are too high
• Earnings Shares, including historical, based on current make up of S&P 500
• Disappearance of losers like Merrill, Wachovia and National City distorts Financials 2008 earnings share, with them it is under 4%.
• Health Care expected to take earnings crown from Energy in 2009, keep it in 2010
• Energy's earnings share expected to plunge to 14.2% from 21.4%
• Financials expected to dramatically grow earnings share in 2009 from depressed 2008 levels, but more write-offs are likely, and expected share is shrinking
• Consumer Discretionary market cap share far above earnings shares (overvalued?)
• S&P 500's P/E of 12.99 equates to earnings yield of 7.69%, very attractive relative to 10 year T-note yield of 2.98%.
• T-note rates are rising and more realistic earnings yields of near 6.50% based on lower earnings means the spread, while still attractive is not overwhelming.

Earnings Shares and P/Es
Sector	2008%	2009%	2010%	Market Cap%	P/E 08	P/E 09	P/E 10
Technology	15.13%	14.72%	14.23%	17.30%	13	15.27	12.73
Health Care	14.80%	17.22%	15.54%	15.63%	12.01	11.79	10.53
Energy	21.35%	13.93%	15.02%	13.80%	7.35	12.86	9.62
Cons Staple	11.83%	14.19%	12.33%	13.72%	13.19	12.56	11.65
Industrials	12.75%	12.08%	10.35%	10.09%	9	10.85	10.21
Financials	8.13%	11.69%	14.72%	9.90%	13.84	11	7.04
Cons Disc.	4.29%	5.02%	7.58%	8.47%	22.46	21.92	11.7
Utilities	4.17%	4.91%	4.32%	4.44%	12.12	11.75	10.77
Telecom	3.97%	3.76%	3.20%	3.59%	10.3	12.43	11.77
Materials	3.59%	2.47%	2.71%	3.06%	9.7	16.09	11.82
S&P 500	100.00%	100.00%	100.00%	100.00%	11.37	12.99	10.47

Neil Malkin contributed significantly to this report.

Data in this report, unless stated otherwise, is through the close on Thursday 1/29/2009

"CVX" Free Stock Analysis: Buy? Sell? Hold?
"COP" Free Stock Analysis: Buy? Sell? Hold?
"XOM" Free Stock Analysis: Buy? Sell? Hold?
"FRX" Free Stock Analysis: Buy? Sell? Hold?
"MCK" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Key Points:

• Early reports (51 total) are ugly with total net income of -$3.6B so far
• 27% of reported firms have red ink
• 75% of Financials in the red and the losses are more than 3x year ago levels.
• Fourth-quarter total net income is now expected to be 29.4% below year ago
• The trends remain terrible with 2009 expectations falling 1.6% in 2 market days
• The revisions ratio is falling for both 2009 and 2010; the ratio for both years is extremely low
• Total 2009 net income is now expected to be 1.7% below 2008; in reality, it will most likely be down much more (perhaps just move the decimal point)
• P/Es based on 2009 estimates will prove to be to low as "E" plunges
• The bottom-up estimate for S&P 500 is now $72.41 in 2009, down from $73.62 last Thursday. I expect it to be less than $60.

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Total Net Income Growth

• Total net income is expected to fall 29.4% in the fourth quarter from a year ago; was -23.7% on Thursday
• Negative year-over-year growth in the fourth quarter is now expected for 6 sectors
• Financials expect high growth due to easy comps, but gush red ink in early going
• Full-year net income in 2009 is expected to be down 1.7% from 2008 levels, following a 11.6% decline in 2008
• First-quarter total net income now expected to be 15.1% below a year ago, was -13.7% on Thursday
• Energy, Materials and Discretionary all expected to be down over 40%
• Excluding Financials, total net income is down 15.5% from a year ago
• The early returns are very ugly - the 51 companies that have reported are showing red ink of $3.7B aggregate versus total earnings of $11.2B a year ago and $20.2B in the third-quarter
• Early 2010 expectations looks for 19.4% growth over 2009
• Index changes mask size of earnings decline in 2008 (Merril, Wachovia, National City and AIG are gone)

Total Net Income Growth (Reported)
Sector	Q2 '08 A	Q3 '08 A	Q4 '08 A	Q1 '09 E	2007 A	2008 A	2009 E	2010 E
Health Care	8.52%	6.14%	3.22%	-5.19%	12.27%	10.62%	-0.81%	9.10%
Cons. Stap.	11.41%	2.99%	-1.47%	-9.96%	12.21%	4.68%	4.96%	7.09%
Industrials	0.19%	2.65%	-3.66%	-24.60%	30.45%	4.71%	-12.38%	13.15%
Technology	28.54%	18.76%	-22.33%	-32.94%	19.59%	12.36%	-14.79%	21.06%
Cons. Disc.	-14.49%	31.61%	-24.91%	-20.92%	-16.04%	2.92%	-2.70%	18.18%
Materials	5.97%	-25.96%	-47.67%	-30.82%	4.97%	-9.44%	-17.74%	40.48%
Financials	-63.97%	-80.59%	-236.47%	-23.71%	-31.28%	-109.81%	-523.61%	89.70%
S&P	-33.44%	-35.58%	-132.59%	-22.04%	-15.16%	-51.57%	44.31%	38.60%

Total Net Income (Reported)
Sector	Q4 '08	Q4 '07	Q3 '08	Q3 '07
Technology	$6,630	$8,536	$7,121	$5,996
Health Care	$2,942	$2,850	$3,554	$3,349
Cons. Stap.	$1,623	$1,647	$1,528	$1,483
Industrials	$1,380	$1,433	$1,438	$1,401
Cons. Disc.	$924	$1,231	$2,874	$2,183
Materials	$393	$751	$507	$685
Financials	($17,551)	($5,216)	$3,147	$16,213
S&P	($3,660)	$11,231	$20,169	$31,310

Total Net Income Growth (Not Reported)
Sector	Q2 '08 A	Q3 '08 A	Q4 '08 E	Q1 '09 E	2007 A	2008 E	2009 E	2010 E
Financials	-45.26%	-99.31%	27.07%	15.26%	-7.10%	-50.21%	35.43%	19.99%
Utilities	4.11%	-5.99%	24.85%	-11.23%	10.62%	3.50%	4.44%	11.09%
Health Care	8.89%	7.21%	4.64%	4.04%	21.00%	7.23%	7.20%	9.82%
Cons. Stap.	1.29%	14.31%	0.64%	6.24%	6.82%	11.32%	8.32%	6.89%
Telecom	-1.11%	-15.97%	-16.30%	-7.54%	18.24%	-4.85%	-2.69%	4.65%
Technology	13.77%	3.92%	-29.59%	-15.25%	9.22%	16.16%	-7.89%	16.81%
Industrial	6.66%	0.98%	-31.93%	-4.27%	8.91%	1.64%	-10.58%	6.75%
Materials	6.23%	5.26%	-40.97%	-41.41%	11.14%	-8.70%	-32.35%	36.14%
Energy	16.25%	56.44%	-48.60%	-42.91%	9.10%	18.70%	-32.90%	22.70%
Cons. Disc.	-64.06%	-56.48%	-57.56%	-45.03%	3.89%	-49.31%	12.00%	68.99%
S&P	-6.02%	-7.80%	-22.21%	-15.05%	7.45%	-4.28%	-5.97%	16.68%

Total Net Income Growth (Combined)
Sector	Q2 '08 A	Q3 '08 A	Q4 '08 E	Q1 '09 E	2007 A	2008 E	2009 E	2010 E
Utilities	4.11%	-5.99%	24.85%	-11.23%	10.62%	3.50%	4.44%	11.09%
Health Care	8.84%	7.07%	4.47%	2.65%	19.76%	7.68%	6.10%	9.73%
Cons. Stap.	2.04%	13.45%	0.46%	4.75%	7.23%	10.78%	8.06%	6.91%
Telecom	-1.11%	-15.97%	-16.30%	-7.54%	18.01%	-4.85%	-2.69%	4.65%
Technology	17.37%	7.46%	-27.60%	-19.36%	11.74%	15.17%	-9.65%	17.82%
Industrial	6.23%	1.08%	-30.26%	-5.64%	10.08%	1.84%	-10.69%	7.16%
Materials	6.18%	2.03%	-41.82%	-39.39%	10.15%	-8.81%	-30.13%	36.92%
Energy	16.25%	56.44%	-48.60%	-42.91%	9.10%	18.70%	-32.90%	22.70%
Cons. Disc.	-58.72%	-43.68%	-54.83%	-41.86%	1.07%	-43.18%	8.87%	59.33%
Financials	-53.83%	-92.21%	-138.10%	6.39%	-18.11%	-72.98%	113.02%	39.23%
S&P	-10.97%	-12.09%	-29.37%	-15.85%	3.20%	-11.60%	-1.71%	19.40%

Scorecard and Median EPS Growth Rates

• Median EPS growth of 51 firms reporting so far is -3.6%
• The surprise ratio is 1.71 with a median surprise of 2.2%. Both are far below normal.
• Consumer Sectors are doing well on surprise front; Financials disappointing
• Remaining firms expected to be down 8.3% in 4Q
• Median EPS expected to fall in 1Q, but be up for all of 2009
• Only Health Care, Staples and Utilities expected to be positive for both quarters
• Median and surprise numbers will be volatile in early going

Keep in mind that median growth rates are inherently equally weighted, so the growth rate for smaller companies is just as significant to the results for the large companies.

Share repurchases were still very significant in the fourth quarter of last year and the first quarter of this year (the data is not out yet for the second quarter) and the reduction in share count also boosts EPS growth.

Currency translation gains will be less of a factor this quarter due to the rebound in the dollar. However, the strong overseas demand that the previously very weak dollar stimulated will still prove to be a boost to the earnings of many firms. The delay is because in the third quarter they will be shipping goods ordered previously. With both the rebound in the dollar, and the very significant economic slowdown abroad, look for the export boom to fade in 2009.

Fourth-Quarter Scorecard (Reported)
Sector	4Q '08 (A)	1Q '09 (E)	2008 (A)	2009 (E)	2010 (E)	% Reported	Median % Surprise	# Pos Surprise	# Neg Surprise	# Match
Healthcare	7.05%	-6.35%	16.62%	-2.83%	7.06%	3.70%	18.85%	2	0	0
Cons. Disc.	4.76%	-9.78%	7.51%	2.20%	6.66%	13.75%	3.90%	8	2	1
Industrial	1.59%	-8.12%	13.05%	-6.65%	9.77%	10.17%	1.17%	3	1	2
Cons. Stap.	-0.53%	-2.75%	9.04%	5.77%	7.72%	15.00%	3.27%	5	1	0
Tech	-8.57%	-38.46%	21.05%	-22.07%	9.01%	14.67%	0.00%	5	4	2
Materials	-65.25%	-42.06%	-9.65%	-14.18%	4.70%	10.34%	2.50%	2	1	0
Financial	-82.29%	-47.25%	-49.98%	59.98%	26.79%	14.81%	-174.70%	4	8	0
S&P 500	-3.64%	-13.75%	8.57%	-3.12%	9.01%	10.20%	2.17%	29	17	5

Fourth-Quarter EPS Growth (Yet-to-Report)
Sector	4Q '08 (E)	1Q '09 (E)	2008 (A)	2009 (E)	2010 (E)
Healthcare	7.23%	6.59%	12.33%	17.60%	12.04%
Cons. Stap.	2.70%	4.15%	9.69%	11.30%	9.32%
Utilities	2.20%	4.84%	3.92%	9.18%	8.74%
Telecom	0.00%	-5.75%	30.38%	-2.94%	3.92%
Industrial	-10.58%	-7.51%	18.33%	16.43%	8.00%
Tech	-12.50%	-8.95%	11.30%	18.55%	12.05%
Financial	-14.86%	-10.29%	10.58%	8.42%	14.13%
Cons. Disc.	-16.33%	-17.65%	14.58%	8.83%	7.78%
Energy	-18.18%	-27.54%	22.61%	12.83%	10.77%
Materials	-37.09%	-28.29%	23.08%	11.52%	15.58%
S&P 500	-8.28%	-3.33%	13.04%	13.27%	11.06%

The Zacks Revisions Ratio: 2009

• The revisions ratio for full S&P 500 down to 0.14, from 0.16 last week
• All sectors have at least 4 cuts per increase
• 9 sectors have at least 5 cuts for every increase
• 17.2% of all firms are seeing a mean estimate decline of more than 10%; the decline for nearly 10% of firms is more than 20%
• Ratio of firms with rising to falling mean estimates at 0.23, up from 0.16 from last week
• Total number of revisions (4-week total) down to 1,876 from 1958 (-4.2%)
• Increases down to 237 from 268 (-11.6%), cuts down to 1,639 from 1,690 (-3.0%)
• Near low of seasonal revisions activity, will pick up sharply over next few weeks

Stocks with Positive Revisions:

AFLAC Incorporated (AFL) had 4 upward revisions and 1 cut. The revisions resulted in a 1.96% increase in the company's consensus earnings estimate.

Six analysts raised their profit projections on Monsanto Company (MON). The consensus earnings estimate rose 0.81%.

Stocks with Negative Revisions (These are representative of their areas):

Bank of America (BAC) saw 8 analysts cut their forecasts. The consensus earnings esitmate fell 27.6%.

ConocoPhillips (COP) had 8 cuts and 0 increases. These revisions resulted in a 14.0% drop in the consensus earnings estimate

Intel Corporation (INTC) suffered 23 cuts. The revisions caused the consensus earning estimate to plunge by 43.6%.

To help gauge the direction of the market, we take note of what analysts are thinking. By tallying their EPS changes, we can determine our revisions ratio. This ratio simply divides the total number of positive estimate revisions by the total number of estimate cuts. Thus, a high ratio is a bullish indicator and a low ratio is bearish.

For the S&P 500 as a whole, a number below 0.80 or above 1.25 is generally significant. With smaller totals for any given sector than the S&P 500 over all, the ratio should be farther away from 1.0 to be truly significant. However, for the sake of consistency, we refer to readings above 1.25 as being in positive territory and below 0.80 as being in negative territory.

Avg. 4wk EPSChange (FY09)	Avg. 4wk EPS Change (FY09)	Revisions Ratio	Firms With FY09 EPS Increase	Firms With FY09 EPS Decrease
Consumer Disc	-2.74%	0.25	17	59
Health Care	-1.70%	0.20	13	40
Energy	-9.61%	0.19	2	37
Consumer Staple	-2.24%	0.14	15	25
Utilities	-1.62%	0.14	4	30
Telecom	-5.61%	0.13	1	8
Financial Services	-8.46%	0.10	14	65
Materials	-11.58%	0.10	5	23
Technology	-7.12%	0.09	12	55
Industrials	-4.39%	0.08	8	47
S&P 500	-5.34%	0.14	91	389

The Zacks Revisions Ratio: 2010

• The 2010 revisions ratio fell to 0.17 from 0.18
• More than 3 cuts per increase for 9 sectors and more than 4 per increase in 8 sectors
• The size of cuts horrific: 19.6% of all S&P firms with 2010 estimates down more than 10% over last 4 weeks, 8.0% down more than 20%
• Utilities the "strongest;" Industrials, Energy, Materials and Tech are all very weak
• The ratio of rising to falling mean estimates rose to 0.31 from 0.30
• The total number of revisions fells to 774 from 777, -0.4%
• Estimate increases rose to 121 from 86 (40.7%) and cuts rose to 656 from 647 (1.4%)
• Mean estimates will be affected by new estimates as much as revisions
• Sample size of 2010 revisions is thin, but starting off weak

Avg. 4wk EPSChange (FY10)	Avg. 4wk EPS Change (FY10)	Revisions Ratio	Firms With FY10 EPS Increase	Firms With FY10 EPS Decrease
Utilities	-1.14%	0.67	9	9
Health Care	-2.28%	0.28	12	32
Consumer Staples	-1.53%	0.23	9	19
Consumer Discr	-5.33%	0.22	16	50
Telecom	-0.67%	0.20	1	2
Financial Services	-7.96%	0.13	13	60
Technology	-8.61%	0.12	14	48
Materials	-8.42%	0.12	4	21
Energy	-10.67%	0.09	1	33
Industrials	-2.76%	0.05	14	30
S&P 500	-5.54%	0.17	93	304

Earnings Shares and P/Es

• P/Es are too low since earnings estimates are too high
• S&P P/E of 11.12 equates to earnings yield of 8.99% and is very attractive relative to 10 year T-note yield of 2.53%
• Health Care expected to take earnings crown from Energy in 2009
• Energy's earnings share expected to plunge to 14.9% from 21.4%
• Financials expected to almost double earnings share in 2009 from depressed 2008 levels, but more write-offs are likely
• Disappearance of losers like Merril, Wachovia and National City distort Financials' 2008 earnings share; with them include, it is under 4%.
• Consumer sectors market cap shares far above earnings shares (overvalued?)
• Earnings Shares, including historical, based on current make up of S&P 500

Earnings Shares and P/Es
Sector	2008%	2009%	2010%	Market Cap%	P/E 08	P/E 09
Technology	15.11%	14.25%	14.03%	16.51%	11.73	12.89
Health Care	14.68%	16.16%	14.89%	15.41%	11.27	10.61
Cons Staple	11.56%	12.90%	11.58%	14.77%	13.71	12.74
Energy	21.39%	14.87%	15.32%	13.36%	6.7	9.99
Industrials	12.76%	11.80%	10.50%	10.73%	9.03	10.11
Financials	7.98%	13.53%	15.82%	9.19%	12.38	7.56
Cons Disc.	4.85%	5.46%	7.30%	8.77%	19.43	17.87
Utilities	4.14%	4.48%	4.14%	4.47%	11.57	11.08
Telecom	3.95%	3.98%	3.50%	3.69%	10.04	10.32
Materials	3.58%	2.58%	2.93%	3.11%	9.31	13.42
S&P 500	100.00%	100.00%	100.00%	100.00%	10.74	11.12

Neil Malkin contributed significantly to this report.

Data in this report, unless stated otherwise, is through the close on Tuesday 1/20/2009

"MON" Free Stock Analysis: Buy? Sell? Hold?
"BAC" Free Stock Analysis: Buy? Sell? Hold?
"INTC" Free Stock Analysis: Buy? Sell? Hold?
"AFL" Free Stock Analysis: Buy? Sell? Hold?
"COP" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

ConocoPhillips has significantly strengthened its upstream portfolio over the last few years through its Burlington and LUKOIL transactions, and remains a premier domestic refining player. Recent alliances with the Abu Dhabi National Oil Company (ADNOC), Saudi Aramco, and Australia's Origin Energy are catalysts for the company's future growth.

On valuation grounds, the stock is compellingly cheap, particularly following the recent sell-off. Our recommendation is Buy and our target price is $80 per share.
"COP" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

ConocoPhillips (COP) fell nearly 3% this morning to a short-term level of support at $51.52. COP is a Zacks #5 Rank (“Strong sell”) stock.

* While downside risks still remain, particularly if the global economic weakness turns out to be more protracted than currently anticipated, oil prices are expected to consolidate around current levels.
* We are strong believers in the secular underpinnings of the oil cycle -- the current downturn is just a pause in a long secular cycle that still has plenty of room to go.
* The large-cap integrateds remain the best positioned given their energy conglomerate business structures, stellar balance sheets, substantial free cash flows, and growing dividends.
* Growing domestic production and moderating demand, particularly from industrial consumers, is expected to weigh on natural gas prices for the remainder of this year and next.
* The tentative natural gas price outlook, which preceded the credit-market related turmoil of the past month, is expected to cap the upside in the exploration and production (E&P) space. This group also has credit market exposure.
* The underlying business fundamentals of integrated oilfield service companies and deepwater-capable drilling contractors still remain robust. Oil prices will need to drop even further and then stay there to materially impact their operating outlook.

This outlook reflects credit markets getting back to normal over the coming days, a three-to-four-quarter period of negative economic growth in the OECD markets, and decelerated growth in the emerging world. An outcome worse than this outlook represents a clear downside risk.

We believe that the large-cap integrated oil companies offer compelling values. Our best picks remain Exxon Mobil Corp. (XOM), Chevron Corp. (CVX) and ConocoPhillips (COP). These stocks are currently trading at multi-year lows, exceptionally cheap both in relative as well as absolute terms, and offer more upside potential than downside risk. These companies have fortress balance sheets (Exxon is AAA rated and has more cash on its balance sheet than debt), generate strong cash flows, and pay out growing dividends.

The global integrated oilfield service names are also very attractive. Our preferred names in this space are Halliburton (HAL), Baker Hughes (BHI), Smith International (SII) and National Oilwell Varco (NOV).

Another group hit hard by the recent turmoil is the offshore drillers, particularly those capable of drilling in the deepwaters. Our preferred deepwater drillers remain Transocean (RIG) and Diamond Offshore (DO). Another offshore driller with an underappreciated deepwater drilling portfolio is Pride (PDE).

All of these have been hit hard by the combination of commodity-price weakness and credit market turmoil. But these operators do not require peak-cycle commodity prices to generate stellar results and have limited or no credit-market exposure.

Sheraz Mian is a senior analyst covering the oil & gas industry for Zacks Equity Research.
"PRDE" Free Stock Analysis: Buy? Sell? Hold?
"NOI" Free Stock Analysis: Buy? Sell? Hold?
"SII" Free Stock Analysis: Buy? Sell? Hold?
"DO" Free Stock Analysis: Buy? Sell? Hold?
"SD" Free Stock Analysis: Buy? Sell? Hold?
"J" Free Stock Analysis: Buy? Sell? Hold?
"P" Free Stock Analysis: Buy? Sell? Hold?
"RIG" Free Stock Analysis: Buy? Sell? Hold?
"HAL" Free Stock Analysis: Buy? Sell? Hold?
"BKO" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

The current market turmoil has been particularly brutal in the oil space, with all sub-sectors getting down to levels not seen in years. While expectations of softening oil demand over the coming quarters and broad credit-market concerns have been the primary reasons for the sector's woes, the sell-off has by all measures been overdone.

This indiscriminate sell-off has made the risk-reward trade off of a number of sub-sectors very compelling, in our view. Our best ideas are in the integrated, oilfield service and offshore drilling sub-sectors.

• While downside risks still remain, particularly if the global economic weakness turns out to be more protracted than currently anticipated, oil prices are expected to consolidate around current levels.
• We are strong believers in the secular underpinnings of the oil cycle -- the current downturn is just a pause in a long secular cycle that still has plenty of room to go.
• The large-cap integrateds remain the best positioned given their energy conglomerate business structures, stellar balance sheets, substantial free cash flows, and growing dividends.
• Growing domestic production and moderating demand, particularly from industrial consumers, is expected to weigh on natural gas prices for the remainder of this year and next.
• The tentative natural gas price outlook, which preceded the credit-market related turmoil of the past month, is expected to cap the upside in the exploration and production (E&P) space. This group also has credit market exposure.
• The underlying business fundamentals of integrated oilfield service companies and deepwater-capable drilling contractors still remain robust. Oil prices will need to drop even further and then stay there to materially impact their operating outlook.

We believe that the large-cap integrated oil companies offer compelling values. Our best picks remain Exxon Mobil Corp. (XOM), Chevron Corp. (CVX) and ConocoPhillips (COP). These stocks are currently trading at multi-year lows, exceptionally cheap both in relative as well as absolute terms, and offer more upside potential than downside risk. These companies have fortress balance sheets (Exxon is AAA rated and has more cash on its balance sheet than debt), generate strong cash flows, and pay out growing dividends.

The global integrated oilfield service names are also very attractive. Our preferred names in this space are Halliburton (HAL), Baker Hughes (BHI), Smith International (SII) and National Oilwell Varco (NOV).

Another group hit hard by the recent turmoil is the offshore drillers, particularly those capable of drilling in the deepwaters. Our preferred deepwater drillers remain Transocean (RIG) and Diamond Offshore (DO). Another offshore driller with an underappreciated deepwater drilling portfolio is Pride (PDE).

All of these have been hit hard by the combination of commodity-price weakness and credit market turmoil. But these operators do not require peak-cycle commodity prices to generate stellar results and have limited or no credit-market exposure.

This from The Rude Awakening:

During times like these, it’s all too easy to become caught up in the moment. Fear is a powerful emotion. As the markets continue to crumble, many investors lose sight of their goals. They sell positions indiscriminately; they become irrational.

The sell-off we’re experiencing right now is global. And no stock or commodity has escaped the devastation. That’s why we’re looking at a scarce and valuable resource for steady long-term…

This from The Rude Awakening:

During times like these, it’s all too easy to become caught up in the moment. Fear is a powerful emotion. As the markets continue to crumble, many investors lose sight of their goals. They sell positions indiscriminately; they become irrational.

The sell-off we’re experiencing right now is global. And no stock or commodity has escaped the devastation. That’s why we’re looking at a scarce and valuable resource for steady long-term…

read more

"The timing is as interesting as the visit itself," said Chris Weafer, chief strategist at UralSib Financial in Moscow. "Gazprom's entire senior management goes into Sarah Palin's backyard during a contentious election. There's a message there."

Greg Guenthner isn't sweating it.

Oil prices have been caught up in widespread panic selling of recent months. It remains a scarce and essential commodity. This means it is only heading in one direction over the long term.

Greg recommends following oil guru Richard Rainwater's cue and buying into oil stocks with both hands.

This from Penny Sleuth:

When the markets go to hell, it’s all too easy to become caught up in the moment. Fear is a powerful emotion. We all witnessed this firsthand as the market’s decline accelerated. As the markets continue to crumble, many investors lose sight of their goals. They sell positions indiscriminately; they become irrational.

The sell-off we’re experiencing right now is global. And aside from some safe-haven gold buying, no stock or commodity has avoided the bears. That’s why we’re looking at a scarce and valuable resource for steady long-term gains: oil.

One energy guru has recently made a big bet on oil.

He bought back shares of Exxon (NYSE:XOM), ConocoPhillips (NYSE:COP), Pioneer Natural Resources (NYSE:PXD), BP (NYSE:BP) and Statoil (NYSE:STO) — all at rock-bottom prices. We say he bought these shares back because, in a prescient move, this sage sold off every oil stock he owned in May…back when oil was sitting atop $129 per barrel.

A Fresh Oil Investment

Richard Rainwater knew he would be a bit early to the party — and probably miss the top — when he sold his oil investments back in spring. But with a stellar track record including massive gains betting on everything from hospitals to cell phones, he knew gains from his $300 million invested in oil stocks and futures were in jeopardy.

“I just felt that America was not ready for $4 gas and we would see a pause here,” he told Time magazine in June.

Rainwater pulled his billions in profits just before oil’s peak in July. Now, he’s ready to do it all over again, spreading his millions across Exxon, ConocoPhillips and other big-name petroleum pushers.

***********************************

Oil at $150 per barrel and gasoline at $8 a gallon or more…

The oil is running out. It’s as simple as that.

But that’s not what you hear from so-called experts. If you ask government officials, our intelligence agencies and even powerful Wall Street financiers, they tell you the opposite.

They say the Saudis could quickly double their oil production from the current level if they wanted to. And given a few years, they think the Saudis could produce four times as much oil as they do now.

They are dead wrong. Check it out here…

***********************************

Overwhelming Demand Will Prop Oil Prices

Rainwater’s outlook is simple: Increased worldwide demand will continue to push the oil price up in the long term. Rainwater’s not alone, either. Analysts and industry experts — like oil tycoon T. Boone Pickens and OPEC President Chakib Khelil — have been making it perfectly clear…oil’s on the rise again.

On July 11, 2008, oil made a record ascent to $147.27 — a 123% jump in only 12 months.  With oil sitting around $80 right now, oil aficionados like Pickens are bracing for the run-up to come. “The Saudis claim they have more oil; they don’t. The president wasted his time to go to Saudi Arabia, to say, 'Give us more oil.' They can't give any more oil...they're stacking up the money as fast as they can stack it up," warned Pickens in an interview with CNBC.

The allure of oil is hard to refute.

With finite supplies and unquenchable demand, it’s clear why many investment houses put oil above $200 in the near future.

According to Pickens, it’s just a case of an oil-hungry economy overwhelming producers: “Eighty-five million barrels of oil a day is all the world can produce, and the demand is 87 million. It's just that simple. It doesn't have anything to do with the value of the dollar.”

Now is the time to buy oil. The third quarter of 2008 saw the largest drop in oil prices in 17 years.

Now with OPEC slashing its production outlook for the rest of 2008 and 2009, it’s unclear just how long prices will be able to stay under $100.

Source: Prevailing in the Midst of Paranoia