• Credit Suisse (NYSE:CS) reported net profits of $2.33 billion on a surge in investment banking operations and strength in its private banking arm. Its tier one capital ratio rose to 16.4%, the highest of any of the world's major banks

• UPS (NYSE:UPS) reported third quarter results of 55 cents, three cents above Zacks estimates, on revenues of $11.15 billion, versus Zacks estimates of $11.17 billion. The company said it sees fourth quarter earnings of 58 cents to 65 cents a share

• Merck's (NYSE:MRK) third quarter results of 90 cents beat Zacks estimates by 8 cents on inline revenues of $6 billion. The firm set full year guidance at $3.20-$3.30

• Dow Chemical (NYSE:DOW) reported earnings of 24 cents ex-items, versus last year's 59 cents and Zacks estimates of 9 cents as revenues dropped 22% to $12.05 billion, off estimates of $12.79 billion

• AT&T (NYSE:T) reported flat third quarter profits at 54 cents on revenues of $30.86 billion, down 1.6%, iPhone sales rose sharply.  Zacks analysts had anticipated earnings of 50 cents on revenues of $30.88 billion

• McDonald's (NYSE:MCD) reported earnings of $1.15 a share versus Zacks estimates of $1.11 as global same-store-sales grew 3.8%

• Travelers (NYSE:TRV) reported estimate-topping results, a 10% dividend hike, $6 billion added to its share buyback program, and increased full-year guidance on operating income.  Third quarter earnings of $1.61 beat Zacks estimates of $1.30, versus 55 cents a year ago. Guidance for 2009 operating results was raised to $5.30 to $5.50 from prior $4.80 to $5.05

Chicago, IL – September 30, 2009 – Zacks.com releases the latest Zacks Industry Rank. Stocks featured in this week’s analysis include Agrium (AGU), CF Industries (CF), Intrepid Potash (IPI), Mosaic (MOS), Potash of Saskatchewan (POT) and Market Vectors Agribusiness (MOO).

Zacks Industry Rank Analysis is written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com.

This week: Fertilizer's Farming Problem

During the past 90 days, the Zacks Consensus Estimates have been revised downwards on several fertilizer companies, including Agrium (AGU), Intrepid Potash (IPI), Mosaic (MOS) and Potash of Saskatchewan (POT).

The most recent cuts were related to a warning from POT. The company predicted that its full-year profits would be in the range of $3.25 to $3.75 per share, instead of the prior guidance of $4 to $5 per share. The company blamed "continued slow demand and limited restocking by fertilizer distributors" as the reasons for the revised forecast.

All Is Not Well on the Farm

The big reason why profit projections for fertilizer companies have been falling is not weaker demand for fertilizer, but rather why demand is down. After enjoying very strong profits in 2007 and 2008, many farmers are now seeing their incomes drop. Even after adjusting for a recent rebound, corn futures are down substantially from the start of the year. Wheat prices are also down. Soy prices have plunged over the past few months.

Supply is a big reason why. Though the spring planting season was delayed, favorable weather patterns resulted in bumper crops throughout the summer. At the same time, a decline in oil prices hurt demand for ethanol, which, in turn, impacted farmers.

Compounding matters is the economy. The worldwide contraction likely reduced food consumption. (Did you notice how there were not any headlines about food shortages this year?) Plus, consumers have looked for cheaper ways to feed their families. These factors have kept cattle prices weak, which contributed to weaker demand for grains.

Then there is the banking crisis. Bank closures affect rural areas worse than urban areas because of a lack of competition. In some rural communities, the only nearby bank was seized by the FDIC. Not to mention the increased difficulty of securing loans.

The net result is lower farm profitability. In late August, the Department of Agriculture forecast that farm profits would fall 38% this year. There has been relatively little since then that would cause a big, positive revision to that forecast.

Mergers Are the One Positive

The one positive for the group are the proposed deals.

CF Industries (CF) announced on Monday that it bought 7% of Terra Industries' outstanding stock over the past 2 weeks. CF wants TRA shareholders to accept a merger agreement that would represent an approximate 15% premium over TRA's current share price.

However, Agrium wants to purchase CF. AGU recently extended the deadline for its acquisition offer of CF to Oct 22. (The offer represents approximately a 4% premium over CF's current price.) It is probable that if AGU were to buy CF, CF's acquisition of TRA would be called off.

Compounding matters is the fact that TRA recently announced a special $7.50 per share dividend, payable in the fourth quarter. CF's offer for TRA would be adjusted to reflect this dividend.

The merger activity makes shorting these stocks risky over the very near-term, even with the falling estimates. On the other hand, much of the upside from the proposed deals appears to be priced in. Overall, the downside risks outweigh probable short-term upside, particularly if neither acquisition offer is accepted.

Zacks Rank

IPI, MOS and POT are Zacks #5 Rank ("strong sell") stocks. AGU and CF are Zacks #3 Rank ("hold") stocks. They are all classified in Fertilizers, which has a Zacks Industry Rank of 206, placing the group near the bottom of the Industry Rank List.

Fertilizers stock also account for a significant portion of Market Vectors Agribusiness (MOO), something to consider when evaluating this ETF.

Zacks "Profit from the Pros " e-mail newsletter offers continuous coverage of the industries and the stocks poised to outperform the market. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=5611.

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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 3:1 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 by going to http://at.zacks.com/?id=5610.

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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: Charles Rotblut, CFA
Company: Zacks.com
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Visit: www.zacks.com

Potash said sales volumes continue to lag as distributors are slow to replenish depleted inventories. The Canadian fertilizer seller now expects 3rd quarter earnings to come in at the low end of the range between $1.20 and 80 cents per share.

2009 full-year earnings are now projected to fall between $3.25 and $3.75, down from the company's July guidance between $4 and $5. Potash added that it does see a return to growth in 2010 as lower levels of potash in farm soil curtails yields and production.

Shares of POT, a Zacks #4 Rank Stock (Sell), have spent most of the last 6 months trading sideways, under pressure from continued downward estimate revisions.

The Midlands, Michigan-based chemical company stated that the divestiture will increase its financial flexibility, improve cash flow and will help pay down debt. The company plans to use the proceeds from the deal to pay down debt, which was raised for the Rohm and Haas acquisition.

The Rohm and Haas acquisition increased Dow’s net debt from $8 billion to $22 billion in the first half of 2009. This resulted in a significant net cash deficit of $19 billion during the period. However, Dow Chemical has become the world’s leading specialty chemicals and advanced materials company after acquiring Rohm and Haas for a total investment of $16.3 billion.
 
Dow Chemical also noted that it expects to close its sale of the salt producing company, Morton Salt under Rohm and Haas to the Germany-based K+S AG for $1.68 billion in second half of 2009. K+G AG is an agricultural chemical and salt company and the largest supplier of Potash in Europe. The company is also divesting its stake in Optimal Group of Companies to Malaysia's state-controlled oil company for $660 million by the end of the year.

This apart, media reported that Dow Chemical and Saudi Aramco are expecting cost synergies of about $4 billion on their joint petrochemical complex as the slowing economy reduces project cost. The estimated cost of the plant was at least $20 billion before reduction. Saudi Aramco is the state-owned national oil company and the biggest oil corporation in the world with the largest proven crude oil reserves and production.

We maintain our Neutral recommendation on the stock.

* Quantas Airlines cancelled orders for 15 Boeing (NYSE:BA) 787 Dreamliners scheduled for 2014-2015 delivery, and deferred orders for 15 more, citing the tough economic environment

* Potash (NYSE:POT) lowered its earnings guidance for the second quarter from $1.10-$1.50 to 70 cents, citing substantially lower than expected potash sales volume on deferrals by its global customers and lower realized prices for phosphate fertilizers

* UBS (NYSE:UBS) warned of a second quarter net loss, announcing $3.48 billion in capital-raising with a 293.3 million share offering at $11.91, a 6.9% discount to yesterday's close

* Goldman Sachs (NYSE:GS) lowered its 2010 earnings estimate and price target on Monsanto (NYSE:MON), citing lower glyphosate profits and lower seed price gains. The 2010 estimate was cut 50 cents to $4.30, and 45 cents for 2011 to $4.65, with the price target lowered to $80. The firm held its "neutral" rating

Zacks Industry Rank Analysis is written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com.

This Week: Commodities Rally; Profit Forecasts Don't

Commodity prices have been soaring. Oil, gold, copper, wheat and corn all recently hit multi-month highs. Even the Duke Brothers are making a mint on orange juice futures.

A steady stream of economic data showing a slower pace of deterioration in the U.S. has been the primary driver behind the recent surge. Also playing a role is the combination of a higher tolerance for risk, weekly fluctuations in inventories, the spring planting season, the dollar and sustained growth in China.

What's interesting about the rally is that it has yet to translate into higher earnings estimates for commodity-related companies.

Agriculture Companies

Wheat and corn futures recently set 8-month highs. Other agricultural-related futures have also soared, such as coffee. Profit forecasts for agricultural companies, however, have been trending lower.

There are 2 reasons for the disconnect.

The first is the credit crisis. Though the Treasury Department has deemed some banks too big to fail, many smaller banks have been seized. This has created big problems for some rural communities that depend on just 1 or 2 banks. Furthermore, tighter credit conditions have made it harder for farmers to get the financing they need for planting season.

The second is the weather. Cool and wet weather systems delayed the planting of crops such as corn and soybeans. Monsanto (MON) recently blamed the weather for hurting herbicide sales and causing it to lower full-year guidance. Obviously, the late planting season also has implications for fertilizer companies.

One glimmer of light, however, is Potash of Saskatchewan (POT). Two analysts recently raised their full-year forecasts. The changes were not enough to move the consensus earnings estimate, but they were a step in the right direction.

MON is a Zacks #4 Rank ("sell") stock and is classified in Agricultural Operations. POT is a Zacks #3 Rank ("hold") stocks and is classified in Fertilizers.

Metal Stocks

Since January, gold has consistently stayed above $860 per ounce. After pulling back in April, the precious metal is once again nearing the $1,000 mark.

Gold mining stocks have also rallied lately, though profit forecasts remain unchanged. In fact, the number of positive and negative revisions is about even for Mining-Gold. This was essentially the same scenario we saw in February.

The lack of changes reflect a combination of uncertainty about where gold prices are headed, the impact of other metals on mining company profits (e.g. zinc) and lower production levels.

For other metals, the economy is the big issue. The worldwide recession has led to lower demand. Though optimism about a forthcoming recovery has helped send copper prices and other metals higher, the rise has not translated into better profit forecasts. Rather, the consensus estimates for AK Steel (AKS) and other metal producers are holding steady or declining.

One notable exception is Freeport McMoRan (FCX). Within the past month, positive revisions have pushed the full-year consensus earnings estimate 2 cents higher to $1.02 per share.

AKS and FCX are Zacks #3 Rank stocks. AKS is classified in Steel-Producers. FCX is classified in Mining-Non Ferrous.

Oil & Gas Companies

Most of the profit forecast changes occurring among energy stock prices are in reaction to better-than-feared first-quarter earnings, not an improved outlook for commodity prices.

Natural gas is a big reason why. Even with the recent rally, natural gas prices are down considerably for the year. As a result, many companies are focused on controlling costs. Furthermore, they are only expanding to the extent that cash flows allow them to. Though this helps the bottom line, we have yet to see analysts truly adjust their forecasts to account for the higher commodity prices.

After last year, it's not hard to blame brokerage analysts for being a bit cautious. During the first-half of 2008, they underestimated how high crude would climb. After the bubble peaked in July, many brokerage analysts incorrectly judged how quickly energy prices would plunge.

Our energy analyst, Sheraz Mian, advocates looking at oilfield service companies as a way to play the rise in energy prices. Among the stocks he has long-term buy ratings on is Weatherford (WFT).

WFT is a Zacks #3 Rank stock classified in Oil Field Machine & Equipment.

Commodity-Related Stocks Now Riskier

The lack of positive revisions implies that the risk of owning commodity-related stocks is high.

Valuations have increased notably as the higher stock prices have not been matched by a better earnings outlook. At the same time, commodities have staged a strong rally and it's hard to say how much upside is left. Though agriculture commodities may be influenced by the late planting season, energy and metal futures may need actual signs of higher demand to extend their rally.

Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of the industries and the stocks poised to outperform the market. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=2564.

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 3:1 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 by going to http://www.zacks.com/performance.

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

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

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: Charles Rotblut, CFA
Company: Zacks.com
Phone: 312-265-9352
Email: pr@zacks.com
Visit: www.Zacks.com

What's interesting about the rally is that it has yet to translate into higher earnings estimates for commodity-related companies.

Agriculture Companies

Wheat and corn futures recently set 8-month highs. Other agricultural-related futures have also soared, such as coffee. Profit forecasts for agricultural companies, however, have been trending lower.

There are 2 reasons for the disconnect.

The first is the credit crisis. Though the Treasury Department has deemed some banks too big to fail, many smaller banks have been seized. This has created big problems for some rural communities that depend on just 1 or 2 banks. Furthermore, tighter credit conditions have made it harder for farmers to get the financing they need for planting season.

The second is the weather. Cool and wet weather systems delayed the planting of crops such as corn and soybeans. Monsanto (MON) recently blamed the weather for hurting herbicide sales and causing it to lower full-year guidance. Obviously, the late planting season also has implications for fertilizer companies such as Agrium (AGU).

One glimmer of light, however, is Potash of Saskatchewan (POT). Two analysts recently raised their full-year forecasts. The changes were not enough to move the consensus earnings estimate, but they were a step in the right direction.

MON is a Zacks #4 Rank ("sell") stock and is classified in Agricultural Operations. AGU and POT are Zacks #3 Rank ("hold") stocks and are classified in Fertilizers.

Metal Stocks

Since January, gold has consistently stayed above $860 per ounce. After pulling back in April, the precious metal is once again nearing the $1,000 mark.

Gold mining stocks have also rallied lately, though profit forecasts remain unchanged. In fact, the number of positive and negative revisions is about even for Mining-Gold. This was essentially the same scenario we saw in February.

The lack of changes reflect a combination of uncertainty about where gold prices are headed, the impact of other metals on mining company profits (e.g. zinc has hurt profits for Agnico-Eagle Mines (AEM)) and lower production levels.

For other metals, the economy is the big issue. The worldwide recession has led to lower demand. Though optimism about a forthcoming recovery has helped send copper prices and other metals higher, the rise has not translated into better profit forecasts. Rather, the consensus estimates for AK Steel (AKS), Alcoa (AA) and other metal producers are holding steady or declining.

One notable exception is Freeport McMoRan (FCX). Within the past month, positive revisions have pushed the full-year consensus earnings estimate 2 cents higher to $1.02 per share.

AEM, AKS, AA and FCX are Zacks #3 Rank stocks. AEM is classified in Mining-Gold. AKS is classified in Steel-Producers. AA and FCX are classified in Mining-Non Ferrous.

Oil & Gas Companies

Most of the profit forecast changes occurring among energy stock prices are in reaction to better-than-feared first-quarter earnings, not an improved outlook for commodity prices.

Natural gas is a big reason why. Even with the recent rally, natural gas prices are down considerably for the year. As a result, companies like Apache (APA) are focused on controlling costs. Furthermore, they are only expanding to the extent that cash flows allow them to. Though this helps the bottom line, we have yet to see analysts truly adjust their forecasts to account for the higher commodity prices.

After last year, it's not hard to blame brokerage analysts for being a bit cautious. During the first-half of 2008, they underestimated how high crude would climb. After the bubble peaked in July, many brokerage analysts incorrectly judged how quickly energy prices would plunge.

Our energy analyst, Sheraz Mian, advocates looking at oilfield service companies as a way to play the rise in energy prices. Among the stocks he has long-term buy ratings on are Weatherford (WFT) and Ensco (ESV).

APA, WFT and ESV are Zacks #3 Rank stocks. APA is classified in Oil-U.S. Exploration & Production. WFT is classified in Oil Field Machine & Equipment. ESV is classified in Oil & Gas Drilling.

Commodity-Related Stocks Now Riskier

The lack of positive revisions implies that the risk of owning commodity-related stocks is high.

Valuations have increased notably as the higher stock prices have not been matched by a better earnings outlook. At the same time, commodities have staged a strong rally and it's hard to say how much upside is left. Though agriculture commodities may be influenced by the late planting season, energy and metal futures may need actual signs of higher demand to extend their rally.

Zacks Premium and Zacks Elite subscribers can view the Zacks Industry Rank List at http://www.zacks.com/zrank/zrank_inds.php. This interactive list allows you to see all of the companies, and their Zacks Rank, within more than 200 industries. Shown below is the Zacks Sector Rank List, which shows the trend in estimate revisions on a broader scale.

Sector Rank as of Jun 3
Sector	This Week's Zacks Rank	Last Week's Zacks Rank	FY09 Revisions Ratio	FY09 Estimates Revised Up	FY09 Estimates Revised Down
Retail-Wholesale	2.51	2.56	3.24	762	235
Consumer Staples	2.81	2.82	1.76	274	156
Conglomerates	2.86	2.93	1.10	22	20
Consumer Discretionary	2.88	2.83	1.08	302	279
Medical	2.89	2.86	1.33	716	537
Computer and Technology	2.95	2.92	1.14	873	764
Auto-Tires-Trucks	2.96	2.94	1.00	59	59
Utilities	3.01	3.02	0.91	173	191
Business Services	3.05	2.93	0.82	102	124
Oils-Energy	3.07	3.09	0.91	616	679
Basic Materials	3.09	3.08	0.62	174	280
Construction	3.14	3.20	0.55	83	150
Aerospace	3.15	3.25	0.80	41	51
Finance	3.18	3.20	0.77	698	902
Industrial Products	3.23	3.22	0.70	167	237
Transportation	3.26	3.33	0.44	99	224

Charles Rotblut, CFA, is the senior market analyst for Zacks.com. He can be reached at crotblut@zacks.com.

Zacks Investment Research

The U.S. equity markets will be closed on Monday, Jan 19, in observance of Martin Luther King, Jr. Day. The markets will be open on Tuesday, Jan 20, though volume could be light because of the inauguration.

This will be the first busy week of fourth-quarter earnings season, with 149 companies scheduled to report. Large-cap stocks will dominate the news with 53 S&P 500 members releasing results. Dow components will include General Electric Company (GE), International Business Machines (IBM), Johnson & Johnson (JNJ), Microsoft (MSFT) and United Technologies Corporation (UTX).

The economic calendar is very light.

• Wednesday: Weekly crude inventories
• Thursday: December housing starts, December building permits, weekly initial jobless claims

No Fed officials are scheduled to give speeches. The Fed will hold a 2-day meeting starting on Jan 27.

Companies That Could Issue Positive Earnings Surprises

NetScout Systems, Inc. (NTCT) recently raised its fiscal third-quarter guidance. Citing strong demand from wireless carriers and growth in other markets, the company now anticipates having earned between 16 cents and 18 cents per share. Half of the 4 covering analysts raised their forecasts in response, pushing the consensus earnings estimate 5 cents higher to 16 cents per share. The most accurate estimate is far more bullish at 22 cents per share. NTCT has topped expectations for 4 consecutive quarters. NetScout is scheduled to report on Thursday, Jan 22, after the close of trading.

Companies That Could Issue Negative Earnings Surprises

Profit forecasts for Burlington Northern Santa Fe Corporation (BNI) have been falling lately, with 6 brokerage analysts reducing their fourth-quarter projections during the last 30 days. Though the railroad company does have a history of topping expectations, a recent warning from a competitor could end the streak. The consensus earnings estimate calls for fourth-quarter profits of $1.78 per share. The most accurate estimate is more bearish at $1.75 per share. Burlington Northern Santa Fe Corporation is scheduled to report on Wednesday, Jan 21, before the start of trading.

General Electric Company (GE) reaffirmed its fourth-quarter EPS guidance of 50 to 52 cents per share in mid-December. Since that time, 5 brokerage analysts have cut their quarterly projections. The negative revisions caused the consensus earnings estimate to fall to 44 cents per share. The most accurate estimate is more bearish at 42 cents per share. The conglomerate has missed once in the past 3 quarters. General Electric Company is scheduled to report on Friday, Jan 23, before the start of trading.

Charles Rotblut, CFA is the senior market analyst for Zacks.com. He can be reached at crotblut@zacks.com.

Earnings Calendar

Here is a list of companies that we have confirmed will report during the week of Jan 19 - 23¹. Prices are as of Thursday's, Dec 18, market close.

Company	Ticker	Zacks Consensus Estimate	Year Ago Actual	Last Qtr Surprise	Report Date	Report Time	Price
First Defiance	FDEF	$0.30	$0.50	(34.8%)	1/19/2009	AMC	$8.00
Fuller(Hb) Co	FUL	$0.24	$0.53	0.0%	1/19/2009	N/A	$14.19
Logitech Intl	LOGI	$0.44	$0.71	(15.8%)	1/19/2009	AMC	$13.75
Macatawa Bank	MCBC	($0.15)	($0.16)	37.5%	1/19/2009	AMC	$2.50
S&T Bancorp Inc	STBA	$0.57	$0.54	(9.5%)	1/19/2009	BTO	$30.51
Candela Corp	CLZR	($0.17)	($0.13)	(350.0%)	1/20/2009	AMC	$0.48
Capital Bank	CBKN	$0.14	$0.13	(10.0%)	1/20/2009	N/A	$6.50
Commerce Bancsh	CBSH	$0.62	$0.74	(8.5%)	1/20/2009	BTO	$37.82
Cree Inc	CREE	$0.10	$0.08	0.0%	1/20/2009	AMC	$16.98
Csx Corp	CSX	$0.90	$0.85	(2.2%)	1/20/2009	AMC	$30.18
Fastenal	FAST	$0.41	$0.38	4.0%	1/20/2009	BTO	$33.20
Forest Labs A	FRX	$0.76	$0.96	15.9%	1/20/2009	BTO	$26.00
Fulton Finl	FULT	($0.55)	$0.22	(8.7%)	1/20/2009	AMC	$8.05
Hancock Hldg Co	HBHC	$0.57	$0.60	(24.2%)	1/20/2009	AMC	$35.85
Iberiabank Corp	IBKC	$0.72	$0.81	(2.5%)	1/20/2009	AMC	$41.22
Intl Bus Mach	IBM	$3.03	$2.80	0.5%	1/20/2009	AMC	$84.12
Jefferies Gp-Nw	JEF	($2.38)	($0.17)	(216.7%)	1/20/2009	BTO	$12.67
Johnson & Johns	JNJ	$0.92	$0.88	5.4%	1/20/2009	BTO	$57.62
New Oriental Ed	EDU	$0.07	$0.10	7.3%	1/20/2009	BTO	$54.47
Omnova Solution	OMN	$0.09	$0.09	33.3%	1/20/2009	BTO	$0.66
Pacific Contl	PCBK	$0.27	$0.28	(7.4%)	1/20/2009	AMC	$12.32
Packaging Corp	PKG	$0.26	$0.46	(7.3%)	1/20/2009	AMC	$13.37
Parker Hannifin	PH	$0.85	$1.23	7.1%	1/20/2009	BTO	$39.77
Petmed Express	PETS	$0.20	$0.18	25.0%	1/20/2009	BTO	$16.43
Raymond Jas Fin	RJF	$0.35	$0.47	5.4%	1/20/2009	AMC	$16.26
Regions Finl Cp	RF	($0.02)	$0.24	(46.4%)	1/20/2009	BTO	$6.10
State St Corp	STT	$1.16	$1.38	3.3%	1/20/2009	BTO	$38.00
Suncor Energy	SU	$0.39	$0.66	0.0%	1/20/2009	BTO	$21.11
Supertex Inc	SUPX	$0.20	$0.26	6.1%	1/20/2009	AMC	$21.65
Td Ameritrade	AMTD	$0.31	$0.40	(3.3%)	1/20/2009	BTO	$12.63
Tessco Tech Inc	TESS	$0.33	$0.29	N/A	1/20/2009	AMC	$10.35
West Cst Bcp/Or	WCBO	($0.09)	($0.49)	140.0%	1/20/2009	N/A	$4.39
Westell Tech-A	WSTL	($0.05)	($0.04)	22.2%	1/20/2009	AMC	$0.28
Woodward Govnr	WGOV	$0.38	$0.36	0.0%	1/20/2009	AMC	$21.06
Abbott Labs	ABT	$1.06	$0.93	2.6%	1/21/2009	BTO	$49.22
Actions Semicon	ACTS	$0.05	$0.23	(10.0%)	1/21/2009	AMC	$1.40
Adtran Inc	ADTN	$0.28	$0.27	0.0%	1/21/2009	BTO	$14.84
Air Prods & Che	APD	$0.98	$1.16	0.8%	1/21/2009	BTO	$56.07
Allegheny Tech	ATI	$0.89	$1.45	5.1%	1/21/2009	BTO	$25.55
Amdocs Ltd	DOX	$0.50	$0.50	(14.3%)	1/21/2009	AMC	$19.42
Amr Corp	AMR	($0.65)	($0.74)	4.8%	1/21/2009	BTO	$10.98
Blackrock Inc	BLK	$1.13	$2.52	(16.6%)	1/21/2009	BTO	$116.67
Burlngtn Nsf Cp	BNI	$1.78	$1.46	12.4%	1/21/2009	BTO	$63.37
Celadon Group	CLDN	$0.07	$0.08	8.3%	1/21/2009	AMC	$8.10
Charlotte Russe	CHIC	$0.11	$0.56	(93.3%)	1/21/2009	AMC	$4.74
Cnh Global Nv	CNH	$0.69	$0.50	36.3%	1/21/2009	AMC	$14.86
Coach Inc	COH	$0.67	$0.69	0.0%	1/21/2009	BTO	$16.81
F5 Networks Inc	FFIV	$0.26	$0.21	28.6%	1/21/2009	AMC	$23.20
Hudson City Bcp	HCBK	$0.27	$0.16	0.0%	1/21/2009	BTO	$13.16
Igate Corp	IGTE	$0.14	$0.09	15.4%	1/21/2009	BTO	$6.50
Kinder Morg Eng	KMP	$0.54	$0.53	(18.6%)	1/21/2009	AMC	$47.57
Labranche & Co	LAB	$0.17	$0.04	0.0%	1/21/2009	BTO	$5.68
Mcmoran Explor	MMR	($0.32)	$0.31	21.5%	1/21/2009	BTO	$8.79
Mts Systems	MTSC	$0.49	$0.47	26.9%	1/21/2009	AMC	$25.96
Noble Corp	NE	$1.50	$1.35	5.1%	1/21/2009	AMC	$21.44
Northern Trust	NTRS	$0.96	$0.97	(31.8%)	1/21/2009	BTO	$48.28
Nve Corp	NVEC	$0.40	$0.36	17.1%	1/21/2009	AMC	$23.66
Polycom Inc	PLCM	$0.32	$0.28	0.0%	1/21/2009	AMC	$14.02
Popular Inc	BPOP	($0.37)	($0.23)	39.7%	1/21/2009	BTO	$4.89
Precision Castp	PCP	$1.70	$1.73	(1.6%)	1/21/2009	BTO	$54.68
Progressive Cor	PGR	$0.35	$0.34	(412.1%)	1/21/2009	N/A	$13.99
Sanmina-Sci Cp	SANM	$0.01	$0.02	0.0%	1/21/2009	AMC	$0.38
Seagate Tech	STX	($0.03)	$0.76	13.0%	1/21/2009	AMC	$4.33
Somanetics Corp	SMTS	$0.23	$0.19	15.0%	1/21/2009	BTO	$16.31
Ual Corp	UAUA	($4.03)	($0.47)	17.8%	1/21/2009	BTO	$11.14
Us Bancorp	USB	$0.27	$0.66	(37.3%)	1/21/2009	BTO	$19.02
Utd Techs Corp	UTX	$1.23	$1.08	3.0%	1/21/2009	BTO	$49.69
Wipro Ltd-Adr	WIT	$0.14	$0.14	0.0%	1/21/2009	N/A	$7.19
Adv Micro Dev	AMD	($0.53)	($0.17)	132.5%	1/22/2009	AMC	$2.26
Amcore Finl Inc	AMFI	($0.30)	$0.33	(777.8%)	1/22/2009	BTO	$3.35
Amer River Bsh	AMRB	$0.33	$0.36	2.9%	1/22/2009	BTO	$9.90
Amerisourcebrgn	ABC	$0.69	$0.62	4.3%	1/22/2009	BTO	$36.85
Assoc Banc Corp	ASBC	$0.32	$0.55	2.8%	1/22/2009	N/A	$16.12
Au Optroncs-Adr	AUO	($0.53)	$1.24	47.4%	1/22/2009	BTO	$7.20
Avnet	AVT	$0.66	$0.89	(5.6%)	1/22/2009	BTO	$17.91
Avx Corp	AVX	$0.09	$0.22	0.0%	1/22/2009	BTO	$7.71
Bancorpsouth	BXS	$0.31	$0.39	(20.9%)	1/22/2009	AMC	$18.81
Bank Of Ny Mell	BK	$0.68	$0.67	43.6%	1/22/2009	BTO	$23.27
Baxter Intl	BAX	$0.89	$0.76	7.3%	1/22/2009	BTO	$53.56
Bb&T Corp	BBT	$0.53	$0.75	(3.0%)	1/22/2009	BTO	$20.99
Brinker Intl	EAT	$0.19	$0.31	0.0%	1/22/2009	BTO	$9.42
Cabot Microelec	CCMP	$0.06	$0.51	(21.7%)	1/22/2009	BTO	$22.33
Capital One Fin	COF	$0.39	$0.90	6.2%	1/22/2009	AMC	$25.47
Cdn Natl Ry Co	CNI	$0.85	$0.91	6.2%	1/22/2009	AMC	$34.45
Cit Group Inc	CIT	($0.39)	($0.69)	(11.8%)	1/22/2009	BTO	$3.24
City National	CYN	$0.62	$0.96	(11.0%)	1/22/2009	AMC	$37.08
Cobiz Finl Inc	COBZ	$0.16	$0.23	0.0%	1/22/2009	AMC	$7.89
Columbus Mckinn	CMCO	$0.41	$0.53	(11.3%)	1/22/2009	BTO	$13.04
Comerica Inc	CMA	$0.26	$0.77	57.1%	1/22/2009	BTO	$14.60
Commnty Bk Sys	CBU	$0.37	$0.39	0.0%	1/22/2009	AMC	$21.37
Cubist Pharm	CBST	$0.51	$0.16	29.4%	1/22/2009	AMC	$22.66
Cypress Semicon	CY	($0.31)	$0.10	(312.5%)	1/22/2009	BTO	$4.75
Deluxe Corp	DLX	$0.68	$0.77	(6.9%)	1/22/2009	BTO	$13.12
Digi Intl Inc	DGII	$0.03	$0.14	55.6%	1/22/2009	AMC	$7.47
Exelon Corp	EXC	$1.06	$1.02	(6.1%)	1/22/2009	BTO	$53.04
Ezcorp Inc Cl A	EZPW	$0.35	$0.29	0.0%	1/22/2009	AMC	$14.19
Federated Invst	FII	$0.51	$0.52	1.8%	1/22/2009	AMC	$18.26
Fifth Third Bk	FITB	$0.03	$0.07	(119.1%)	1/22/2009	BTO	$5.38
First Comw Finl	FCF	$0.16	$0.16	(22.2%)	1/22/2009	BTO	$10.17
First Finl Hldg	FFCH	$0.42	$0.36	8.0%	1/22/2009	BTO	$18.70
Franklin Resour	BEN	$0.86	$2.12	(12.2%)	1/22/2009	BTO	$52.97
Google Inc-Cl A	GOOG	$4.23	$3.79	3.9%	1/22/2009	AMC	$298.99
Huntington Banc	HBAN	$0.20	($0.65)	27.3%	1/22/2009	BTO	$4.29
Imation Corp	IMN	$0.13	$0.64	0.0%	1/22/2009	BTO	$12.96
Interactive Brk	IBKR	$0.54	$0.46	6.6%	1/22/2009	AMC	$18.08
Intl Game Tech	IGT	$0.27	$0.36	(9.7%)	1/22/2009	BTO	$12.45
Intuitive Surg	ISRG	$1.31	$1.24	13.4%	1/22/2009	AMC	$100.68
Itt Educational	ESI	$1.44	$1.20	11.3%	1/22/2009	BTO	$111.81
Janus Cap Grp	JNS	$0.05	$0.33	(7.7%)	1/22/2009	BTO	$6.74
Kelly Svcs A	KELYA	$0.12	$0.54	(74.1%)	1/22/2009	BTO	$11.92
Keycorp New	KEY	($0.02)	$0.06	(162.5%)	1/22/2009	BTO	$6.22
Knight Cap Gp	NITE	$0.37	$0.50	66.7%	1/22/2009	BTO	$15.85
Lockheed Martin	LMT	$1.89	$1.89	1.0%	1/22/2009	BTO	$79.48
Lsi Industries	LYTS	$0.02	$0.22	200.0%	1/22/2009	BTO	$6.89
M&T Bank Corp	MTB	$1.14	$1.52	(4.7%)	1/22/2009	BTO	$42.59
Matthews Intl-A	MATW	$0.48	$0.50	1.5%	1/22/2009	AMC	$34.55
Memc Elec Matrl	WFR	$0.62	$1.05	(9.8%)	1/22/2009	AMC	$14.11
Meredith Corp	MDP	$0.43	$0.73	2.5%	1/22/2009	BTO	$17.76
Microsoft Corp	MSFT	$0.49	$0.50	2.1%	1/22/2009	AMC	$19.24
Monro Muffler	MNRO	$0.28	$0.27	5.6%	1/22/2009	BTO	$24.14
Netscout Systms	NTCT	$0.16	$0.04	23.5%	1/22/2009	AMC	$13.77
Nokia Cp-Adr A	NOK	$0.39	$0.69	(15.4%)	1/22/2009	BTO	$14.05
Oceanfirst Finl	OCFC	$0.32	$0.26	(11.1%)	1/22/2009	AMC	$14.97
Old Rep Intl	ORI	($0.25)	($0.05)	(25.0%)	1/22/2009	BTO	$11.55
Peoples Utd Fin	PBCT	$0.13	$0.16	0.0%	1/22/2009	AMC	$16.65
Potash Sask	POT	$2.37	$1.16	10.7%	1/22/2009	BTO	$69.86
Sherwin William	SHW	$0.53	$0.88	18.1%	1/22/2009	BTO	$56.34
Smith (Ao) Corp	AOS	$0.24	$0.81	25.0%	1/22/2009	BTO	$31.61
Southwest Air	LUV	$0.07	$0.12	50.0%	1/22/2009	BTO	$8.28
Suntrust Bks	STI	$0.18	$0.02	(22.2%)	1/22/2009	BTO	$20.89
Synaptics Inc	SYNA	$0.50	$0.33	34.5%	1/22/2009	AMC	$20.60
Synovus Finl Cp	SNV	($0.44)	$0.28	(162.5%)	1/22/2009	AMC	$5.66
Taiwan Semi-Adr	TSM	$0.09	$0.20	0.0%	1/22/2009	BTO	$7.37
Tcf Finl Corp	TCB	$0.24	$0.50	(20.0%)	1/22/2009	BTO	$10.61
Technitrol Inc	TNL	$0.09	$0.52	(14.3%)	1/22/2009	AMC	$3.21
Twin Disc	TWIN	$0.25	$0.37	(52.2%)	1/22/2009	N/A	$6.70
Ucbh Hldgs Inc	UCBH	($0.08)	$0.19	(200.0%)	1/22/2009	AMC	$3.83
Union Pac Corp	UNP	$1.28	$0.93	6.2%	1/22/2009	BTO	$41.23
Unitedhealth Gp	UNH	$0.78	$0.92	0.0%	1/22/2009	BTO	$24.89
Valley Natl Bcp	VLY	$0.28	$0.22	(25.0%)	1/22/2009	BTO	$15.87
China Bak Batry	CBAK	$0.01	($0.02)	42.9%	1/23/2009	N/A	$1.68
Dime Comm Bncsh	DCOM	$0.25	$0.17	0.0%	1/23/2009	BTO	$12.45
Gatx Corp	GMT	$0.59	$0.62	35.7%	1/23/2009	BTO	$28.59
Genl Electric	GE	$0.44	$0.68	0.0%	1/23/2009	BTO	$13.77
Harley-Davidson	HOG	$0.58	$0.78	(10.1%)	1/23/2009	BTO	$13.95
Mb Financl Inc	MBFI	$0.27	$0.44	(11.6%)	1/23/2009	BTO	$21.34
Schlumberger Lt	SLB	$1.10	$1.11	2.4%	1/23/2009	BTO	$40.18
Webster Finl Cp	WBS	$0.18	$0.10	(37.0%)	1/23/2009	BTO	$9.80
Xerox Corp	XRX	$0.34	$0.41	0.00%	1/23/2009	BTO	$7.82

BMO = Before The Market Open, AMC = After Market Close

¹Some of the companies listed in the earnings calendar may not be in the Zacks Rank universe.

"NTCT" Free Stock Analysis: Buy? Sell? Hold?
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"JNJ" Free Stock Analysis: Buy? Sell? Hold?
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"MSFT" Free Stock Analysis: Buy? Sell? Hold?
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For the tale of the tape, the TSX Exchange added 1.03%, while the TSX Gold Index fell 4.1% and the TSX Venture Exchange, Canada’s largest junior exploration bourse, lost 4.73% with the declining issuers out pacing the advancers by a 650 to 266 margin on volume of 190 million shares traded.

Teck Cominco (NYSE:TCK) tabled earnings of C$432 million, or C$0.97 per share in the third quarter of 2008, compared with C$495 million, or C$1.16 per share tallied in the same period a year earlier. The bottom line was hit by lower…

• Urea prices fell by more than $70 in late September
• A strike is helping to support potash prices
• Some analysts are raising 2009 earnings forecasts
• Highlighted stocks include AGU, CF, MOS, POT and TRA

Fears that fertilizer companies could be losing pricing power sent their shares tumbling late last week.

The primary cause was a sharp drop in urea prices. A report published last Thursday on Farm Futures revealed a $70 decline in Black Sea prices over the previous 2 weeks. (Ammonia prices were weaker as well.)

Urea is a key ingredient used in fertilizer. Traders are concerned that the recent drop is an early signal of slipping demand for fertilizer. Any weakness would call into question fourth-quarter and 2009 profit forecasts for Agrium (AGU), CF Industries (CF), Mosaic (MOS), Potash of Saskatchewan (POT) and Terra Industries (TRA).

It is possible that some farmers are choosing to work through current supplies, rather than pay elevated prices. Certainly, the ongoing credit crunch is affecting spending. However, there is a difference between purchases being delayed and a trend of reduced demand.

Keep in mind that both global economic growth and increased use of ethanol played material roles in higher aggregate demand for agricultural products. People in developing nations continue to eat better, as their incomes enable them to enjoy meals that are beyond a subsistence diet, and ethanol is still being looked at as an alternative fuel source.

Potash Strike

A discernable trend in potash prices would provide more clarity. However, there is an ongoing strike at 3 of POT's mines. The mines account for approximately 30% of the company's potash production.

The strike is providing some artificial support to potash prices.

Adding to the uncertainty is the fact that supplies of potash are abnormally low.

Profit Forecasts

Nearly all of the covering brokerage analysts are keeping their 2008 profit forecasts for fertilizer companies unchanged heading into third-quarter earnings season. (One analyst did cut his forecast on AGU last week, but the consensus earnings estimate of $9.43 is still 7 cents above the average forecast of a month ago.)

Looking ahead to 2009, a couple of brokerage analysts have raised their profit projections over the past few weeks. There is currently no expectation that demand destruction will occur next year.

Brace for Further Volatility

Though nearly all of the fertilizer stocks continue to trade at discounts relative to their projected earnings growth, they are very volatile. Investors should expect more large price swings in the future.

Depending on the resolution to the Potash of Saskatchewan strike, other work stoppages could occur. On the other hand, if the company holds its stance firm, the current strike could continue for an extended period of time. Either occurrence would cause sustained supply disruptions.

On the demand side, farmers are likely to continue maximizing crop yields. This said, farming communities are not immune from the ongoing credit crunch. Furthermore, a global economic slump could adversely impact emerging countries, such as China, which would cause some drop in demand.

However, given the food shortages that occurred earlier this year, it would seem a significant global recession would have to occur for demand to drop significantly.

AGU, POT and TRA are Zacks #1 Rank ("strong buy") stocks. CF is a Zacks #2 Rank ("buy") stock. MOS is a Zacks #3 Rank ("hold") stock. All five are classified in Fertilizers.

Related ETFs

No ETF focuses solely on the fertilizer stocks.

Market Vectors Agribusiness (MOO) may be the best option, since it holds shares in companies such as MOS and POT. The fund, however, also has exposure to farm equipment makers like Deere (DE) and CNH Global (CNH).

Zacks Premium and Zacks Elite subscribers can view the Zacks Industry Rank List at http://www.zacks.com/zrank/zrank_inds.php. This interactive list allows you to see all of the companies, and their Zacks Rank, within more than 200 industries. Shown below is the Zacks Sector Rank List, which shows the trend in estimate revisions on a broader scale.

Sector Rank as of Oct 1
Sector	This Week's Zacks Rank	Last Week's Zacks Rank	FY08 Revisions Ratio	FY08 Estimates Revised Up	FY08 Estimates Revised Down
Aerospace	2.56	2.62	0.69	18	26
Conglomerates	2.77	2.81	0.29	7	24
Medical	2.83	2.81	0.75	117	156
Oils-Energy	2.86	2.88	0.31	103	329
Industrial Products	2.92	2.91	0.33	39	119
Transportation	2.92	2.86	1.61	100	62
Retail-Wholesale	2.94	2.96	0.62	133	216
Basic Materials	2.97	2.91	0.35	59	167
Utilities	2.99	2.97	0.42	25	59
Computer and Technology	3.02	3.02	0.31	163	534
Consumer Staples	3.05	3.09	0.61	72	119
Business Services	3.05	2.97	0.43	27	63
Construction	3.07	3.08	0.56	29	52
Consumer Discretionary	3.07	3.10	0.43	50	116
Finance	3.22	3.26	0.26	126	483
Auto-Tires-Trucks	3.52	3.17	0.36	17	47

Charles Rotblut, CFA, is the senior market analyst for Zacks.com. He can be reached at crotblut@zacks.com.

"DE" Free Stock Analysis: Buy? Sell? Hold?
"AGU" Free Stock Analysis: Buy? Sell? Hold?
"CF" Free Stock Analysis: Buy? Sell? Hold?
"MOS2" Free Stock Analysis: Buy? Sell? Hold?
"POT" Free Stock Analysis: Buy? Sell? Hold?
"HD" Free Stock Analysis: Buy? Sell? Hold?
"MOO" Free Stock Analysis: Buy? Sell? Hold?
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Company Description

Agrium Inc. (AGU) produces and sells agriculture products in North and South America.

Headquartered in Calgary, Alberta, the company is the largest direct-to-grower agricultural retailer in the United States. AGU also supplies materials to the industrial sector which produces goods such as mining explosives, household products, pulp and paper and fiberboard.

Agrium has three segments. The Wholesale segment produces and distributes fertilizers, including nitrogen, phosphate and potash, as well as micronutrients from 12 production facilities in North America and Argentina.

The company produces ten million tonnes of fertilizer products annually, including about 6.1 million tonnes of nitrogen, 2.1 million tonnes of potash and 1.3 million tonnes of phosphate.

Approximately 15% of Agrium's Wholesale sales are to the industrial market, which uses the same ingredients as farmers in many of its products.

The Retail segment sells seed, fertilizers and crop protection chemicals and services from 500 retail centers in the United States, Argentina and Chile.

The Advanced Technologies segment produces controlled-release nutrients, micronutrients and plant protection products to agriculture, professional turf and ornamental markets in North America.

Impact of Potash of Saskatchewan's Strike

500 miners are currently striking at 3 of Potash of Saskatchewan's (POT) mines in Canada. The strike began on Aug 7 and, from press reports, looks no closer to being settled as there are no contract talks planned. The 3 mines produce 30% of Potash's potash production.

Why should Agrium investors care about a competitor's strike? Because the tight market is about to get even tighter.

About 5% of Potash's customers are industrial, as compared with 15% of Agrium's. Already, Potash has put its industrial customers on allocation due to supply shortages. If the strike continues, farming customers may also soon see allocation.

Prices of phosphates and potash for industrial usage has soared. It's unclear to what extent Agrium is benefiting from the supply shortage- in terms of being able to raise its own prices on these products.

The longer this strike continues, the more price pressure there will be on potash. Stay tuned to see if Agrium can use this to its advantage in the third and fourth quarter.

Agrium Easily Beats Wall Street Estimates for the Second Quarter

Soaring fertilizer prices have boosted Agrium's earnings throughout 2008. The second quarter was no exception.

On Aug 6, Agrium reported second quarter earnings that surprised on estimates by 28.21%. Net income more than doubled to $636 million, or $4.00 per share, from $229 million, or $1.70 per share a year ago. Analysts expected $3.12, despite increasing estimates throughout the quarter.

Sales rose sharply in each of the company's segments. Retail saw sales of $2.506 billion compared to $1.147 billion a year ago. Wholesale's sales grew 57% to $1.397 billion compared to $890 million in the second quarter of 2007. Advanced Technologies', the smallest segment, saw sales rise to $107 from $81 million in the year ago period.

Agrium is Bullish About the Rest of the Year

Given the strong quarterly earnings for the first two quarters, the company is optimistic going into the second half of the year.

"We anticipate continued strong demand for our products and services that help farmers around the world improve both crop quality and yield," said Mike Wilson, President and CEO.

"Specifically, the outlook for the second half of the year remains solid with corn, wheat and soybean prices at two to three times historic levels. This should support crop input demand and continued strength in the nutrient markets benefiting our Retail, Wholesale and Advanced Technologies businesses," he said.

The company will provide full year earnings guidance when it releases its third quarter earnings on Nov 6.

Consensus Estimates Continue to Rise

Despite the commodities sell-off and the stock's decline, covering analysts continue to be bullish about Agrium's third quarter and full year earnings. Consensus estimates for the third quarter are up 7 cents in just the last week to $1.65 from $1.58. Estimates were at $1.31 only 90 days ago.

Full year estimates also continue to move higher, up 11 cents to $9.34 from $9.23 in the last month.

Value Fundamentals

Agrium was an attractive value stock even before the recent stock sell-off. Now, the company is trading with a forward P/E of only 5.82. Its price-to-book is 2.71. The company has an outstanding 5 year average return on equity (ROE) of 24.33%.

AGU also pays a small dividend. Its current yield is 0.10%.

[The author of this article owns shares of Potash of Saskatchewan.]
"AGU" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

For example, erratic deliveries of steel have caused an acquaintance of mine to put his employees on flexible work schedules. According to him, steel mills are not sticking to regular production schedules of the type of metal used for the packaging products that his company manufactures.

Not surprisingly, his customers are unhappy. But, because they lack a cost-effective alternative, they have no choice but to accept the higher prices and irregular production schedules.

Then there is fertilizer. Employees of fertilizer company Potash (POT) are on strike at a time when there continues to be a shortage of potash - a key ingredient for fertilizer. The company told Standard & Poor's that the strike should only affect non-agricultural customers. That may not sound like a big deal, until one considers that there is no room for supply disruptions across the entire industry.

Still, shares of CF Industries (CF) and other fertilizer stocks are getting knocked around because of the overall weakness in commodity stocks. For demand destruction to occur, one would have to assume that people are going to stop eating, ethanol is no longer going to be subsidized or a replacement for fertilizer has been found. I just don't see this happening.

Another example is natural gas. Natural gas prices have plunged by nearly 50% since early July. Yet, worldwide energy usage is growing. Plus, the Farmer's Almanac is predicting a "numbing" winter.

Perhaps traders think that the NOAA's forecast for above normal temperatures will be the correct one. My best guess is that those of us living in the northern states will be bundling up and complaining about our heating bills.

Of course, it is important to realize that even with the pullback, just about all commodities are still expensive. Here in the Chicago area, gas stations charge around $4 for a gallon of unleaded. Lake County, where I live, is coping with a dramatic increase in the price of road salt. Local officials say that this problem affecting many municipalities across the country.

Given the slowing economies of the Western World, some weakness in the commodity prices is logical, but we are a long way from the perceived demand destruction that seems be influencing some traders. This is why I am looking for the opportunity to add more commodity stocks to the Focus List.

The Financial Crisis

On Wednesday, I discussed the ongoing financial crisis in my Industry Rank column. In the second half of a podcast published on Thursday, I further discussed the banking industry's problems with Chuck Jaffe of Marketwatch.

In summary, I believe the financial crisis, and the housing slump, will continue into next year. Here are some reasons why:

• The FDIC's insurance fund's reserve ratio dropped so low, 1.01%, that it is being forced to develop a plan for replenishing the safety net for depositors.
• Banks will likely have to pay higher fees to the FDIC, at the same time they are coping with tighter net interest margins.
• Nearly 1 million petitions for bankruptcy have been filed during the past 12 months; personal bankruptcies are up 28%.
• Net charge-off rates for Capital One (COF), and probably many other credit issuers, have been rising for several quarters.

Staying on the subject of banks, I want to mention the creativity shown by National City (NCC).

NCC is offering customers $200 to close their home-equity lines of credit. The bank is also waiving the $350 early termination fee. It is an interesting attempt to avoid further charge-offs, but my guess is that it won't have any positive impact. Those who have the cash to pay off their home equity loans are not likely to default. And those who are at a risk of default probably don't have the cash to pay off their loans.

The more likely scenario is that NCC is trying to engage in a game of hot potato, by which its borrowers move their home equity lines to another lender. For someone who is cash strapped, $200 helps, but not enough to keep them from falling behind on their payments.

The Markets

Volume picked up this week, as was expected.

Rather than focusing on weakening inflationary pressures, traders instead viewed the falling commodity prices as another sign that the economy is having problems.

The Fed's observation that "economic activity has been slow" didn't help matters. Selling intensified on Thursday in response to lousy retail sales numbers and fears about Friday's employment numbers.

Last week, I called for choppy markets and this is what we are seeing.

My expectation is that the economic news won't be very good, on balance, for a while. But, also I think we are closer to a recovery than many other developed nations. It's a good market for long-term investors.

Remember, those who try to time the markets are often the ones who take large losses and miss out on the big gains. Conversely, the most successful investors never stop researching stocks.

Focus List Updates

We removed Central European Distributors (CEDC) from the portfolio. The fundamentals continue to look fantastic, but the selling pressure on the stock has been relentless.

The stock has been adversely affected by the Russian invasion of Georgia. Although CEDC is based in Pennsylvania and does a large amount of its business in Poland, it's still being adversely affected by the rotation away from Russian stocks.

Charles Rotblut, CFA, is the Senior Market Analyst for Zacks.com. He can be reached at crotblut@zacks.com.
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