• Analog Devices (NYSE:ADI) reported better-than-expected fiscal fourth quarter earnings of 36 cents a share, 10 cents above Zacks estimates, on revenues of $572 million, which beat projections of $523 million, but fell short of last year's $660.7 million. The firm expects fiscal first quarter results of 36 cents to 37 cents a share

• Heinz (NYSE:HNZ) reported fiscal second quarter earnings of 76 cents a share, beating estimates of 69 cents, on revenues of $2.67 billion, above estimates of $2.63 billion. Full-year guidance was raised to $2.72-$2.82 from earlier expectations of $2.60 to $2.70 a share

• Medtronic (NYSE:MDT) reported better-than-expected third quarter results of 77 cents ex-items, 3 cents above estimates, on revenues of $3.84 billion, which topped estimates of $3.75 billion. The company expects fiscal 2010 adjusted earnings of $3.17-$3.22, above Street projections of $3.15

• Reports said Citigroup (NYSE:C) is selling its Diners Club credit card enterprise to Bank of Montreal for about $1 billion

• UBS (NYSE:UBS) downgraded Union Pacific (NYSE:UNP) to "neutral" but maintained a $67 price target

• National Semiconductor (NYSE:NSM) was added to Citigroup's (NYSE:C) Top Picks Live List, with a $20 price target

• JP Morgan (NYSE:JPM) reiterated its "overweight" rating on General Electric (NYSE:GE) on improvements in fundamentals

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

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

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

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

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

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

• Saks (NYSE:SKS) reported a surprise quarterly profit

• Microsoft (NASDAQ:MSFT) shares rose 3.0%, and led the gainers on the DJIA, after Morgan Stanley (NYSE:MS) and UBS (NYSE:UBS) recommended the shares.  Morgan Stanley's analyst raised the price target on the stock due to encouraging demand for Windows 7 and upbeat expectations for holiday season demand.  UBS' analyst placed a $34 price target on the shares

• Barclays Capital (NYSE:BCS) raised ExxonMobil (NYSE:XOM) to "overweight"

• Autodesk (NASDAQ:ADSK) offered a slightly downside fourth-quarter guidance of 24 cents a share ex-items

• Salesforce.com (NYSE:CRM) said it sees fourth-quarter earnings of 14 cents to 15 cents a share, versus Street estimates of 15 cents a share

• BMO Capital downgraded Research in Motion (NASDAQ:RIMM) to "market perform" from "outperform," cutting the price target to $64 from $100

• A counter-offer to Kraft's (NYSE:KFT) hostile, $16 billion Cadbury (NYSE:CBY) offer may be in the works from Hershey (NYSE:HSY) and Ferrero

• ExxonMobil (NYSE:XOM) shares were upgraded to "overweight" at Barclays Capital (NYSE:BCS)

• A regulatory filing showed Berkshire Hathaway (NYSE:BRK.A) nearly doubled its Wal-Mart (NYSE:WMT) holdings; added almost 112 million Wells Fargo (NYSE:WFC) shares; the filing showed a 1.28 million holding of ExxonMobil (NYSE:XOM) shares; and 3.2 million shares of SunTrust Banks (NYSE:STI)

• UBS (NYSE:UBS) CEO Grubel outlined an ambitious goal of annual pre-tax profits of $14.89 billion over the next 3-5 years

• Dillard's (NYSE:DDS) reported a smaller than expected third quarter loss, with a non-GAAP loss of 3 cents, versus estimates of a 51 cent loss on revenues of $1.36 billion, off estimates of $1.38 billion. Same-store-sales fell 9%

The Dow Jones industrial average, which hit an intraday high of 10,341, advanced 44 points, or 0.4%, to close at 10,291.26. The S&P 500 added 6 points, or 0.5%, to close at 1,098.51, and the tech-laden Nasdaq composite rose 16 points, or 0.7%, to end the day at 2,166.90.  On the New York Stock Exchange, 19 stocks were higher in price for every 11 that declined

Nine of the ten S&P500 industry groups ended in the green, with financials (+1.3%), basic materials (+1.0%) and technology (+0.7%) leading the gainers.  Utilities fell 0.2%.  On the DJIA, Bank of America (NYSE:BAC) led the advancing issues as the firm’s CEO noted the integration of Merrill was running ahead of schedule, and will result in greater-than-anticipated cost savings in 2009.  Wal-Mart (NYSE:WMT) advanced 1.3% ahead of this morning's results.

Shares in home building companies rose after Toll Brothers (NYSE:TOL) said late Tuesday that signed contracts for new homes in its latest quarter jumped 42%.  Toll rose $3.02, or 16.4%, to $21.41.  Pulte Homes Inc. (NYSE:PHM) advanced 77 cents, or 8.1%, to $10.23, while Beazer Homes (NYSE:BZH) advanced 63 cents, or 12.4%, to $5.73.

Meanwhile, the greenback plunged to its lowest level since 2008 and ended the day just below $1.50 against the euro.  The steady decline in the greenback has been precipitated by continuing suggestions from the Fed that interest rates will remain low for an extended period as the recovery strengthens.  Across the globe, markets have interpreted this language as suggesting a mid-2010 timetable for raising rates. 

However, gold prices steered clear of wavering sentiment and hit an all-time high Wednesday at $1114.60 per troy ounce, up $12.10.  China reported greater-than-expected industrial output and retail sales, sending resource-related shares higher. Commodity prices also rose, with the broad-based, DJ-UBS index up 0.6% to 133.408. Crude prices gained, up 0.3% to $79.28.

Today's retailers' results will be an indication of consumers' appetites for goods.  Although the third quarter is seasonally slow, the current quarter numbers will be closely watched as the holiday season approaches.  Yesterday's reported loss at Macy's (NYSE:M) was less than anticipated; however, its raised fourth quarter guidance failed to meet expectations. Companies reporting results today include: Kohl's (NYSE:KSS), Nordstrom (NYSE:JWN), Urban Outfitters (NASDAQ:URBN) and another key consumer-driven firm, Disney (NYSE:DIS).
 

According to the National Stock Exchange, U.S. ETNs had $6.9 billion in assets at the end of September. ETFs were literally 100 times more prevalent, with $697 billion in assets. That included $62 billion just in long commodity ETFs.

That’s just crazy. And it highlights investors’ irrational fear of the ETN product structure.

I remember when ETNs first came to market in 2006: Investors couldn’t get enough of them. Barclays Capital launched the iPath Dow Jones-UBS Commodity Index ETN (NYSEArca: DJP) and it quickly gathered assets.

The reason was simple: ETNs offered two huge advantages over commodity ETFs.

First, they promised perfect tracking. If you bought an ETN, you would receive the full return of the benchmark, minus the fund’s expenses. Period. That’s handy, since commodity ETFs have been more prone to tracking error than most equity funds.

But the real advantage of commodity ETNs was (and remains) their tax treatment. The prospectus said (and still says) that ETNs can be treated basically like zero-dividend stocks for tax purposes. If you hold a commodity ETN for longer than a year, you only pay 15 percent long-term capital gains taxes when you sell. What’s more, you don’t have to pay any taxes until you sell.

By comparison, futures-based commodity ETFs like the PowerShares DB Commodity ETF (NYSEArca: DBC) are treated like futures by the IRS. That means that gains are marked-to-market each year, and investors must pay taxes on those gains at a blended 60 percent/40 percent long-term/short-term capital gains tax rate. For a high-earning investor, that puts the blended tax rate at 23 percent, payable every year.

That’s a huge difference. An ETN investor pays a 15 percent tax rate, deferrable until the ETN is sold; the ETF investor pays a 23 percent tax rate, due annually.

Risk Factor

Why don’t we see more assets flow into ETNs? The only possible reason (short of simple ignorance) is the credit risk.

The N in ETN stands for note, and that’s what they are: unsecured debt notes. Like any other uninsured promise-to-pay, their entire value depends on the credit of the issuing bank. If you buy a Deutsche Bank ETN and Deutsche Bank goes bankrupt, you lose all your money.

It’s not a theoretical fear. The very few people who held the three Lehman Brothers ETNs to the bitter end lost their money when the firm went bankrupt. It’s obvious, looking at the numbers, that the credit crisis stopped the growth of ETNs in their tracks.

But let’s be honest: For an investor who is paying attention, the likelihood of losing money in an ETN is vanishingly small. Most ETNs offer daily redemptions at net asset value, meaning that (even ignoring the quoted market) an investor of size (50,000 shares in the case of iPath) can sell out of the product within 48 hours and get the full net asset value of the note from the issuer.

So ask yourself: How likely is it that Barclays Capital or Deutsche Bank, or whomever is underwriting a particular ETN, will go bankrupt with less than 48 hours’ warning? Or to put a margin of safety on it, how likely is it that they will go bankrupt in the next week?

The answer right now is: not very.

For taxable investors who pay attention to the market, read the newspaper, monitor stock quotes, etc., the likelihood of being caught out on an ETN is tiny. Meanwhile, the risk of overpaying the IRS if you buy and hold a commodity ETF is 100 percent.

ETNs don’t make sense for all investors. In nontaxable accounts, I actually prefer ETFs. If you want a truly fire-and-forget investment, where you can walk away for a year or two, ETFs are the way to go. But for taxable investors who pay close attention to their accounts, there’s a lot to be said for the ETN structure.

(One caveat here: There is a risk that the CFTC’s plan to enact new regulations in the commodities market will force some ETNs to shut down. If that happens, investors would get their money back, but they could be hit with short-term capital gains if they’ve held a note for less than a year. It’s tough to gauge how large a risk this is, but it’s legitimate.)

• UBS (NYSE:UBS) initiated coverage of VF Corp (NYSE:VFC) with a "buy" rating

• Pier 1 Imports (NYSE:PIR) reported a 9.9% gain in September same-store-sales, versus last year's 11.7% decline. The company expects inventory levels will peak at the end of the quarter at about $350 million

• According to the WSJ, Macau may draft rules within the next two months to impose age and table limits on casinos there

• AIG International (NYSE:AIG) agreed to sell its Taiwan life insurance unit to a Hong Kong investment group for $2.15 billion

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

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

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

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

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

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

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

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

We covered the story here.

The move wasn't that surprising. After all, when the CFTC revoked DB's position limits back in August, it was really just a matter of time before the two funds either got a makeover or shut down entirely.

But DB's restructuring plans are more than just a new coat of lipstick. The revisions, slated to take effect between Oct. 19 and 31, will significantly change the commodities exposure these funds can give investors.

DBA and DBC, currently worth $2.2 billion and $3.3 billion, respectively, are two of the most popular commodities ETFs. With their high concentrations in just a few key contracts, the funds are ideal for gaining exposure to the Big Guns of the commodity markets.

DBA, for example, tracks the world's staple crops—corn, wheat and soybeans—as well as everyone's favorite additive, sugar. DBC, on the other hand, tracks two staple crops (corn and wheat), two crucial energy sources (WTI crude and heating oil), the most widely used industrial metal (aluminum) and a universally beloved safe haven, gold.

Basically, the old versions of DBA and DBC cover only the A-List commodities, the ones with the highest liquidity and rock-solid, diversified demand pictures.

New-vintage DBA and DBC, however, will incorporate commodities with a little more volatility and a little less liquidity into their composition. DBA will halve its four core agricultural positions to make room for coffee, cocoa and livestock futures, while energy-heavy DBC will drop its current 35 percent weighting in WTI crude to just 12.4 percent, adding in contracts for gasoline, Brent crude and natural gas. (See the full weightings here.)

It's not like DB is dipping into something as illiquid as lumber or uranium here. And by diversifying the portfolio, they lessen the impact of a massive swing in one of the bigger commodity contracts.

But adding in these new markets also has the potential to pump more volatility into the mix, and potentially very different returns. We've all been paying attention to what's going on in natural gas lately, right? And what about livestock? It’s been on a straight path downward for more than two years now.

Even the impact on something like Brent crude will be interesting: Brent is a popular European contract, but it's by no means as widely traded as WTI crude. (By my count, this is the first time a major commodity ETF has invested in a non-U.S. energy contract. The first, but probably not the last.)

In short: DBA and DBC won't look much like themselves anymore. They’ll look more like the more diversified commodity ETFs that are already on the market, such as the iPath Dow Jones-UBS Commodity Index Total Return ETN (NYSEArca: DJP) and iShares S&P GSCI Commodity Indexed Trust (NYSEArca: GSG).

Of course, from the fund's perspective, any weighting overhaul is better than liquidation, and as the CFTC crackdown continues, I'm sure we'll see many more funds try similar alchemy in the future.

But the change is not without consequences. Investors are losing a degree of choice in the commodities market, forfeiting the option of investing only in the biggest of big commodities. And by making a foray into more narrow contracts, DBA and DBC may be potentially exposing investors to added volatility—or at least a very different pattern of returns—as well.

Matt points out that as a closed-end fund, CAF currently trades at a premium. In addition, the Shanghai-listed Chinese A-shares that the fund invests in also trade at a premium, compared with equivalent shares listed abroad. Add it together and CAF ends up being 18 percent more expensive than a basket of similar Chinese company shares listed in Hong Kong or New York.

In other words, you are paying nearly a fifth extra for the hope that other international investors will, over time, attempt to flock to Shanghai. (Read the whole story here.)

For Matt, that’s too high a price for what seems like an outright gamble. There are few who would disagree.

The A-share premium ultimately works like initial repayments in a Ponzi scheme. If China opens up its domestic exchange to international investors, that premium will likely collapse.

But that might not happen for a long, long time. And in the meantime, the premium depends on what price investors in the domestic markets are willing to pay each other. As such, that’s the way I think you have to judge any investment in CAF.

I don’t think it’s very useful to use a year-to-date, or even 12-month, time horizon for CAF. This was a period of dynamic readjustment in global equity prices, where markets were more or less insularly focused.

Instead, mark the time horizon for the fund back five years, and compare the results with other China-related ETFs. When you do that, you can see that CAF easily beats competing ETFs such as GXC and FXI in terms of percentage-point gains.

Indeed, up until the beginning of the market fallout in late 2007, CAF was more than three times ahead of these two.

This was a period when China was implementing all sorts of new foreign-investor-based programs; there was also plenty of cheap money to channel into them. That hasn’t been the case this year.

Of China’s various qualified foreign institutional investor (QFII) quotas, only one bank (UBS) was at its $800 million maximum investment limit earlier this year (it has recently been expanded to $1.2 billion). The rest have around $400 million or less invested in the mainland through the program.

Placing a bet on CAF then is not just placing a bet on China; it’s placing a bet that foreign institutions will throw more cash China’s way. Judging from all the various trading notes I’ve seen recently citing emerging markets as the big profit area going forward, I think that’s a plausible scenario.

As banks become better capitalized again, and if China decides to keep most of its domestic market closed to foreign investors (extremely likely), there will be all sorts of creative ways in which firms try to get in the back door. That, in turn, will mean mainland equity prices begin to skyrocket.

So if you think loose global monetary policy will end up channeling much of today’s greenbacks eastward, CAF could well present a viable investment opportunity right now.

United States Commodity Funds LLC has launched a new exchange-traded fund designed to provide short exposure to the crude oil market.

The United States Short Oil Fund (NYSEArca: DNO) aims to capture the inverse of the daily return of the front-month West Texas Intermediate crude oil futures contract, as traded on the New York Mercantile Exchange.

On a one-day basis, the fund should mirror the returns of the popular United States Crude Oil Fund (NYSEArca: USO). Over longer time frames, the returns may diverge due to compounding. (For more on the impact of compounding on returns, check here or here.)

DNO will charge 0.60% in annual expenses.

Unlike most leveraged and inverse products, DNO will not use swaps to achieve its exposure. Instead, it will take short positions in the actual underlying futures contracts.

DNO will compete directly with the PowerShares DB Crude Oil Short ETN (NYSEArca: SZO), a short oil exchange-traded note with $27 million in assets under management.

SZO differs from DNO in two ways. First, it tracks a slightly different index: DNO exclusively focuses on the front-month futures contract, while SZO sometimes owns out-month contracts instead. More importantly, while DNO compounds its returns on a daily basis, SZO compounds them on a monthly basis.

The difference between monthly and daily compounding may seem like a technicality, but for long-term holders, the differences can be dramatic.

There are also two products that provide leveraged inverse exposure to the crude oil market: the PowerShares DB Crude Oil Double Short ETN (NYSEArca: DTO), which compounds returns monthly, and the ProShares UltraShort DJ-UBS Crude Oil ETF (NYSEArca: SCO), which compounds returns daily.

The prospectus for DTO is available here.

This morning’s stock futures indicate Wall Street is headed for a higher opening, helped by a rally in global stocks.  Ahead of the market’s open, Dow Jones industrial average futures rose 48, or 0.5%, to 9,766.  Standard & Poor's 500 index futures were up 6.20, or 0.6%, to 1,066.60, while Nasdaq 100 index futures rose 10.75, or 0.6%, to 1,738.50.  Ahead of the FOMC policy statement, trading is expected to remain range bound as traders look for more data before taking the plunge.  

Treasuries were mixed ahead of this week’s $112 billion note auction.  The 2-year rose 1/32 and the 10-year was off 3/32.  The dollar showed some strength, managing a 0.4% advance against a basket of currencies and sending the broad-based DJ-UBS commodity index down 1.8%, as crude prices went below the $70 level.  On the NYSE, declining shares were ahead of those that rose in price by a two-to-one margin on volume of 1.20 billion shares.

Seven of the ten S&P500 industry sectors declined, with health care (+0.6%), tech shares (+0.1%), and consumer services (+0.1%) ending the day in the positive territory.  The tech-heavy NASDAQ was the only outperformer among the major bourses, managing a 0.2% gain to 2138, helped by a Dell (NASDAQ:DELL) announcement to buy Perot Systems (NYSE:PER) in a $3.9 billion all-cash deal. Wal-Mart (NYSE:WMT) rose 1.6% as HSBC Holdings (NYSE:HBC) initiated coverage on the stock with an "overweight" rating and a price target of $61. Baird upgraded Celgene (NASDAQ:CELG) shares to "outperform," citing upside from strength of its Revlimid drug. Celgene shares closed up more than 5%.  General Electric (NYSE:GE) shares also rose, bucking the trend of both its financial and industrial counterparts, as Morgan Stanley (NYSE:MS) raised its price target on the stock $19, noting the company's improved risk profile.

Leading the indices lower yesterday were financials (-1.0%), oil and gas (-0.9%), commodities (-0.7%), as well as industrials (-0.6%) and consumer goods (-0.6%).  The Dow Jones industrial average, which was down 94 points in the morning session, closed down 41 points, hurt by its financial components, with American Express (NYSE:AXP) down 2.9% and Bank of America (NYSE:BAC) retreating 2.2%. Bank of America (NYSE:BAC) said it agreed to pay $425 million to terminate a tentative loss-sharing agreement with the government that had been established to facilitate its purchase of Merrill Lynch. However, the firm skipped a deadline to provide documents regarding that merger to a House panel.   Shares in AIG (NYSE:AIG) spiked 22% after a report from the Government Accountability Office noted the company is seeing stabilization following the government's bailout measures.  However, the report said it remains unclear when AIG would be able to repay those funds.

A $2.33 decline in crude prices also hurt share of commodity-related companies even as the greenback showed some resistance against a basket of currencies.  Alcoa (NYSE:AA) shares lost almost 1% after Macquarie warned of an unfavorable aluminum demand/supply outlook over the next six to twelve months.  Caterpillar (NYSE:CAT) declined 1.8% after reporting its global machinery sales plunged 48% in the three months to August.

The Dow Jones industrial average declined 7.79 points, or 0.08%, to end the day at 9,783.92. The broad Standard & Poor's 500 Index retreated 3.27 points, or 0.31%, at 1,065.49 and the tech-heavy Nasdaq Composite Index eased 6.40 points, or 0.30%, to end at 2,126.75.  On the New York Stock Exchange, declining shares beat those that advanced by eight to seven on volume of 1.52 billion shares.  At Wednesday's close, the DJIA stood almost 50% above its 12-year low of last March; the S&P500 at 58%, with the NASDAQ up 68% from its 6-year low.

Shares of FedEx (NYSE:FDX) and Oracle (NASDAQ:ORCL) declined after the companies’ lower-than-expected results. FedEx’s CEO noted plans to up shipping rates by almost 6% in January, a bullish signal of expected volume growth.  FedEx fell 2.2% to $76.46 and Oracle declined 2.8% to $21.52.  A decline in natural gas prices sent shares of Chesapeake Energy (NYSE:CHK) and Nabors Industries (NYSE:NBR) lower.  Chesapeake fell 3.3% to $27.97.  Eastman Kodak (NYSE:EK) fell more than 11% after the company announced plans to raise more than $700 million in senior secured notes.

Among the ten S&P 500 industry groups, telecom companies were the biggest decliners, retreating 1.6%, following UBS' (NYSE:UBS) analyst comments suggesting pressure in wireless business.  Verizon Communications (NYSE:VZ) retreated almost 3% to $29.51.  Moreover, yesterday Verizon's (NYSE:VZ) CEO suggested its wireless operations would consider dividend payments only after debt reductions.  Companies that receive a significant portion of their revenues from overseas operations showed strength, with Caterpillar (NYSE:CAT) up 2.4% and Coca-Cola (NYSE:KO) rising 1.4%.  Basic materials shares declined 0.8%, oil and gas was down 0.7%, and financials retreated 0.5%  

American Airlines parent AMR Corp. (NYSE:AMR) was a major gainer Thursday as its shares surged 19.7% to $8.80 after the company said it secured $2.9 billion in new financing.  AMR also said it is working on its flying schedule and would shift flying to more profitable routes.

Today’s calendar contains little of market-moving interest, with the day's quadruple witching expected to results in volatility.  Lacking a firm catalyst for the next upward move, the demand for increased risk eased, with the greenback backing off its one-year high against the euro, oil prices down $0.68 to $71.79, and gold up $2.20 to $1015.70.

• According to the WSJ, China's sovereign wealth fund is in talks to acquire a minority share of AES Corp (NYSE:AES)

• Johnson & Johnson (NYSE:JNJ) is reportedly in talks to lower the price tag of its $1.5 billion Elan (NYSE:ELN) bid

• Salix Pharmaceuticals (NASDAQ:SLXP) reported the successful outcome of two late-stage trials of the efficacy and safety of its rifaximin drug in relieving irritable bowel syndrome symptoms

• Bank of America (NYSE:BAC) lowered its rating on Campbell Soup (NYSE:CPB) to "neutral"

• UBS (NYSE:UBS) upgraded Motorola (NYSE:MOT) to "buy"

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

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

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

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

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

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

• Baker Hughes (NYSE:BHI) announced plans to purchase rival BJ Services (NYSE:BJS) for $5.5 billion in a cash-and-stock deal to expand its international business

• Los Angeles-based Capital Group Companies has accumulated a 4.38% stake in UBS (NYSE:UBS) at an undisclosed price

• Huntsman Corp (NYSE:HUN) said it agreed to acquire certain assets of bankrupt Tronox (TRXAQ.PK) for $415 million

• Sun Microsystems (NASDAQ:JAVA) reported a fourth quarter loss of 20 cents a share, a 14 cent miss, on revenues of $2.6 billion versus $2.9 billion

The Dow Jones industrial average retreated 32 points, or 0.3%. The S&P 500 index fell 3 points, or 0.3%. The Nasdaq dipped 8 points, or 0.4%. On the New York Stock Exchange, 1.09 billion shares exchanged hands and losers were ahead of winners by a narrow margin.

The two-day Fed meet that begins today is expected to keep interest rates near close to zero.  However, Bernanke and Co’s assessment of how the economy is faring could be decisive and therefore its moves would be closely watched. 

Seven of the ten S&P500 industry groups ended in the red, led by declines in basic material shares (-1.7%), industrials (-0.9%), financials (-0.8%), and technology stocks (-0.6%).  Health care (+0.7%) and utilities (+0.3%) showed strength as investors snapped up defensive plays.  Material stocks declined as the US dollar gained against a basket of currencies.  Basic material shares fell due to a decline in commodities.  Alcoa (NYSE:AA) shares retreated 2.4% and Freeport-McMoRan Copper & Gold (NYSE:FCX) dropped 1.6%.  Retailers also headed lower in the face of upcoming earnings reports by the majors, including Abercrombie & Fitch (NYSE:ANF), JC Penney (NYSE:JCP), Macy's (NYSE:M), and Nordstrom (NYSE:JWN). However, yesterday McDonald's (NYSE:MCD) reported a stronger-than-expected 4.3% rise in July same-store sales, reflecting its appeal to the value-conscious consumer.

Analysts’ adjustments also reflected on some stocks yesterday.  Eli Lilly (NYSE:LLY) dropped 3% after Goldman Sachs (NYSE:GS) downgraded the stock to "sell" from "neutral" and added the company to its Conviction Sell list, citing its risk at having the industry's largest "patent cliff." Merck (NYSE:MRK), however, rose 1.7% after being reinstated with a "buy" rating at Goldman Sachs (NYSE:GS).   Merck was also added to Goldman Sachs’ (NYSE:GS) American Conviction buy list on its current valuation and product pipeline.  Best Buy (NYSE:BBY) fell 5.3% after Goldman Sachs (NYSE:GS) downgraded the stock to "neutral." Research in Motion (NASDAQ:RIMM) shares plunged 4.9% as the possibility of an iPhone launch at Verizon (NYSE:VZ) led analysts at UBS (NYSE:UBS) to downgrade the shares from "buy" to "neutral."  UBS (NYSE:UBS) lowered its rating on Yum Brands (NYSE:YUM) to "neutral" from “buy" on concerns about "sluggish" sales.

Tuesday will also see the first of the $75 billion in Treasury auctions scheduled for the week. $37 billion in 3-years is slated for today, with $23 billion scheduled tomorrow and $15 billion on Thursday. The sales are not expected to find a lack of buyers.

• Xstrata, the world's fifth largest diversified mining group, reported a 77% fall in six month results to 38 cents a share adjusted from $1.66, although above estimates of 33.6 cents

• UBS (NYSE:UBS) reported a higher-than-expected second quarter loss of $1.32 billion, which was less than the prior quarter loss. The bank's Tier 1 capital ratio rose to 13.2% at quarter's end from 10.5% at the beginning of the quarter

• Vulcan Metals (NYSE:VMC) reported a second quarter earnings of 14 cents, ex-items, versus estimates of 20 cents a share, as revenues fell 29.3% from a year earlier to $721.9 million, off estimates of $759.1 million. The firm said it expects full-year earnings of 40 cents to 65 cents a share from continuing operations, versus Street estimates of 68 cents

• Emerson Electric (NYSE:EMR) missed by one penny, as fiscal third quarter numbers posted at 56 cents ex-items on a 22.5% y/y revenue drop to $5.09 billion, off consensus estimates of $5.34 billion. The firm, however, issued in-line fiscal 2009 guidance of $2.20 to $2.30 a share, versus Street projections of $2.28
 
• Progress Energy (NYSE:PGN) reported second quarter earnings of 64 cents a share, 5 cents below expectations, on in-line revenues of $2.3 billion

• Tenet Healthcare (NYSE:THC0 reported a loss of three cents a share, a 2 penny miss, on inline revenues of $2.2 billion

• Duke Energy (NYSE:DUK) reported second quarter earnings of 26 cents a share, one cent better than estimated, on revenues of $2.9 billion versus $3.2 billion a year ago

• DR Horton (NYSE:DHI) reported fiscal third quarter loss of 45 cents a share, a 22 cent miss, on revenues of $922.5 million versus $792 million

• CVS Caremark (NYSE:CVS) reported second quarter earnings of 65 cents a share, one penny above estimates, on revenues of $24.9 billion that beat estimates of $24.4 billion. The firm raised its full-year earnings guidance to $2.59 to $2.64 a share from its earlier view of $2.55 to $2.63 a share

• Europe's biggest bank, HSBC (NYSE:HBC) surprised with a first half profit of $3.35 billion, versus expectations of a $600 million loss, although down 57% from last year's $7.72 billion profit. According to the bank, "It may be that we have passed, or are about to pass, the bottom of the cycle in the financial markets"

• Tyson Foods (NYSE:TSN) reported third quarter earnings of 33 cents a share, 11 cents above estimates, on in-line revenues of $6.7 billion

• Humana (NYSE:HUM) reported second quarter earnings of $1.67 a share, three cents better than expected. For the year the company sees earnings of $6.10 to $6.20 a share

• James River Coal (NASDAQ:JRCC) reported a second quarter miss at 59 cents, off by 19 cents. The firm said it now sees earnings for 2009 of $2.25 to $2.60 a share, compared with its earlier projection of $3.30 to $3.80 a share

• Loews (NYSE:L) second quarter missed at 78 cents, 20 cents below expectations on revenues of$3.5 billion, down 10% y/y

The fund invests in the stocks of large companies with market-capitalization values generally of at least $6 billion at the time of purchase. In addition, it may invest up to 20% of its assets in foreign securities. The fund is non-diversified.

Allergan Inc. (AGN - Analyst Report), Visa Inc. (V - Snapshot Report) and Qualcomm Inc. (QCOM - Analyst Report) are among the top holdings at the fund.

UBS Global Equity A (BNGEX) seeks to maximize total US dollar return, consisting of capital appreciation and current income.

The fund invests in a diversified portfolio of US and foreign equities, primarily large capitalization stocks of major developed countries. It utilizes a globally integrated investment process intended to uncover undervalued markets, currencies, sectors and securities.

Nicholas Melhuish has been lead manager at the fund since January 2008. The fund has an expense ratio of 1.25%.

UBS PACE Government Securities Fixed Income A (PFXAX) seeks current income. The fund primarily invests in government fixed income securities.

While it can invest in US government and other bonds of varying maturities, the fund normally limits portfolio "duration" within two years of the effective duration of its benchmark index. As of January 2009, its portfolio turnover was 970%.

Unit holders have to make a minimum initial investment of $1,000 to enter this Zacks#1 Rank ("Strong Buy") fund. The fund has topped the total returns of its benchmark index in the last 1-, 3- and 5-year periods.

• UBS (NYSE:UBS) initiated coverage of Valero Energy (NYSE:VLO) with a "buy" rating, citing the anticipated cyclical recovery in the industry as well as the firm's structural changes

• A news agency reported Brazilian mining firm Vale is eyeing Mosiac (NYSE:MOS) as a possible acquisition target

• Goldman Sachs (NYSE:GS) cut its rating on Motorola (NYSE:MOT) shares to "neutral" from "buy," citing the recent appreciation stock's price

• Ryder (NYSE:R) increased its quarterly dividend 8.7% to 25 cents

• According to Bank of America (NYSE:BAC) CEO Lewis, "Difficult challenges lie ahead from continued weakness in the global economy, rising unemployment and deteriorating credit quality that will affect our performance for the rest of the year and into 2010." The firm's second quarter, however, bettered estimates of 28 cents a share, posting at 33 cents versus 72 cents on revenues of $32.77 billion versus estimates of $33.1 billion

* 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

* Reuters reported 100,000 of Apple (NASDAQ:AAPL) iPhone 3Gs were sold via preorders, explaining away some of the launch's diminished excitement level. Some news reports said Steve Jobs underwent a liver transplant two months ago in Tennessee, and is still due back at month's end

* Walgreen (NYSE:WAG) is expected to report fiscal third-quarter earnings of 56 cents a share

* UBS (NYSE:UBS) upgraded Vulcan Materials (NYSE:VMC) to "buy," based upon housing and infrastructure recovery

* JP Morgan (NYSE:JPM) upgraded Verisign (NASDAQ:VRSN) to "overweight" from "neutral"

* According to a Wall Street Journal report, Amazon.com (NASDAQ:AMZN) may stop conducting businesses with some retailers in states, which would force sales tax payments on online transactions

The fund invests in the stocks of large companies with market-capitalization values generally of at least $6 billion at the time of purchase. In addition, it may invest up to 20% of its assets in foreign securities. The fund is non-diversified.

Allergan Inc. (AGN), Visa Inc. (V) and Qualcomm Inc. (QCOM) are among the top holdings at the fund.

UBS Global Equity A (BNGEX) seeks to maximize total US dollar return, consisting of capital appreciation and current income.

The fund invests in a diversified portfolio of US and foreign equities, primarily large capitalization stocks of major developed countries. It utilizes a globally integrated investment process intended to uncover undervalued markets, currencies, sectors and securities.

Nicholas Melhuish has been lead manager at the fund since January 2008. The fund has an expense ratio of 1.25%.

UBS PACE Government Securities Fixed Income A (PFXAX) seeks current income. The fund primarily invests in government fixed income securities.

While it can invest in US government and other bonds of varying maturities, the fund normally limits portfolio "duration" within two years of the effective duration of its benchmark index. As of January 2009, its portfolio turnover was 970%.

Unit holders have to make a minimum initial investment of $1,000 to enter this Zacks#1 Rank ("Strong Buy") fund. The fund has topped the total returns of its benchmark index in the last 1-, 3- and 5-year periods.

* Talbots (NYSE:TLB) announced plans to eliminate an additional 20% of its workforce after reporting a first quarter loss

* The Swiss government is reportedly in talks with several potential buyers for a $5.5 billion stake in UBS (NYSE:UBS)

* Former AT&T (NYSE:T) chairman and CEO Whitacre was named to head bankrupt automaker General Motors (OTC:GMGMQ)

* S&P lowered its credit rating on the world's largest steelmaker, ArcelorMittal (NYSE:MT), also issuing a negative outlook on the firm

* Malaysian gaming group, Genting, has bought a 3.2% stake in MGM Mirage (NYSE:MGM) for $100 million, as well as $100 million in MGM secured notes

* Goldman Sachs (NYSE:GS) raised its price target for Research in Motion (NASDAQ:RIMM) to $96 from $85 for shares, but maintained its "buy" rating

* McDonald's (NYSE:MCD) posted comparable sales numbers for May of 5.1%, which failed to equal April's 6.9% advance

* Goldman Sachs (NYSE:GS) downgraded shares of Burlington Northern (NYSE:BNI), and raised CSX (NYSE:CSX)

* Morgan Stanley (NYSE:MS) downgraded shares of Nucor (NYSE:NUE)

* Google (NASDAQ:GOOG) and eBay (NASDAQ:EBAY) will present at the Credit Suisse (NYSE:CS) convergence conference

* Qualcomm (NASDAQ:QCOM) will present at the UBS (NYSE:UBS) Tech and Service conference at 12:45 PM ET

* Procter & Gamble (NYSE:PG) and Coca-Cola (NYSE:KO) are due to present at the Deutsche Bank (NYSE:DB) global consumer and Food Retail Group

* Google (NASDAQ:GOOG) CEO Schmidt said the company has no plans to buy a newspaper.  Although, Schmidt  opined DreamWorks co-founder Geffen would be an "excellent owner" of the NYT

* Hormel (NYSE:HRL) reported earnings of 59 cents a share, beating estimates by 9 cents per share, on revenues of $1.6 billion.  The company said it expects full-year earnings of $2.15 to $2.25 per share, versus Street expectations of $2.24

* Brocade Communications Systems (NASDAQ:BRCD) reported better-than-expected fiscal second quarter earnings of 11 cents per share, beating estimates by 2 cents, as revenues jumped 42.7% year-over-year to $506 million, compared with Street estimates of $476 million

* Target (NYSE:TGT) received an upgrade from UBS (NYSE:UBS), with a price target increase to $52 from $45

* JP Morgan (NYSE:JPM) upgraded shares of Freeport-McMoran (NYSE:FCX)

The Commerce Department reported yesterday that U.S. retail sales declined 0.4% in April.  Economists had expected the number to remain unchanged.  Purchases at U.S. stores had tumbled 1.3% in March.

On Wednesday, U.S. stocks declined with the New York Stock Exchange witnessing the broadest sell-off in three weeks.  The Dow Jones Industrial Average shed 184.22 points, or 2.2%, to 8,284.89. The S&P 500 Index declined for the third straight session, wiping off most of the gains it made last week.  The benchmark declined 2.7% to 883.92, and has lost 4.9% since the beginning of this week.  The tech-heavy Nasdaq declined 3%, or 51.73 points, at 1,664.19. Shares of industrial producers and consumer-related businesses bore the brunt. On the NYSE, volume was heavy as 1.76 billion shares exchanged hands and losing stocks outpaced advancing issues by a sixteen-to-one margin.

Treasury prices rallied as the unexpected decline in U.S. retail sales pushed investors towards risk aversion.  Dollar rose 0.7% against a basket of currencies.  Copper prices fell 3.2%; The DJ-UBS commodity index was off 1.2%.

Premarket futures are almost flat as inline earnings from Wal-Mart (NYSE:WMT) provided little boost to sentiments. According to a Financial Times article by a former US comptroller general, David Walker, the US' AAA debt rating is imperiled by the government's current excessive spending levels.

Optimism on the Street related to yesterday's retail sales was short lived as analysts failed to adequately assess the one-time, positive impact of January and February rebates from Social Security, which had helped revive consumer spending early this year.  Excluding autos, sales declined 0.5%.  As investors turned to cut positions, retail shares suffered, with Saks (NYSE:SKS) dropping 11.9%, Macy's (NYSE:M) plunging 6.7%, Target (NYSE:TGT) declining 4.8%, Costco (NASDAQ:COST) losing 2.3%, and Wal-Mart (NYSE:WMT) declining 1.2%. Office Depot (NYSE:ODP) shares plunged 15% after Moody's (NYSE:MCO) lowered the firm's debt rating.  Citigroup (NYSE:C) raised Home Depot (NYSE:HD) to "buy" from "hold," saying it expects the company to exceed this year's estimates; although fellow retailers declined, the shares bucked the trend with a 0.8% gain.

Basic materials led the declining sectors, off 5.8%, after weak demand assumptions from any economic recovery in the near-term hurt prospects. Alcoa (NYSE:AA) shares declined 8.8% on reports China may have restarted up to 1.4 million metric tons of capacity in April. Industrial shares fell 4.2%.  Caterpillar (NYSE:CAT) shares declined 5.2%, General Electric (NYSE:GE) lost 5.6%, 3M (NYSE:MMM) fell 4.4%, and United Technologies (NYSE:UTX) lost 4.2%.

Financial shares were once again under renewed pressure, falling 5.0%, as investors pondered over the banks' ability to raise fresh capital from private sources. Among DJIA components, Bank of America (NYSE:BAC) plunged 9.5%, Citigroup (NYSE:C) lost 6.8%, and American Express (NYSE:AXP) declined 5.3%. BB&T (NYSE:BBT) joined the growing list of banks tapping the market to raise funds, selling 75 million shares at $20 apiece, a discount to Tuesday's close of $22.50.  SunTrust (NYSE:STI) declined 6.9%, even as Goldman Sachs (NYSE:GS) upgraded the stock to "neutral" from "sell," citing better-than-expected stress test capital-raising needs.

Technology stocks showed signs of strength.  IBM (NYSE:IBM) said it expects 2009 earnings to be at least $9.20, versus consensus projections of $9.11, and noted it is "ahead of pace" to meet 2010 earnings projections of $10 to $12 per share.

Treasury Secretary Geithner's positive comments of "welcome signs" in the housing markets failed to convince investors as RealtyTrac reported increased foreclosures in April, with one in every 374 US homes receiving notices. Beazer Homes (NYSE:BZH) shares plunged 21.8%, and Hovnanian (NYSE:HOV) declined 12.2%.

Today's economic news covers wholesale prices for April, expected to show prices increased 0.1%. Besides the Wal-Mart (NYSE:WMT) inline post, weekly initial jobless claims are also expected to rate high on sentiment's Richter scale, with traders hoping for a continued diminished pace of claims.

Today's expected releases include: Allergan (NYSE:AGN), Chevron (NYSE:CVX), Clorox (NYSE:CLX), Dean Foods (NYSE:DF), and MasterCard (NYSE:MA).

Aon (NYSE:AOC) reported a first quarter as earnings at 76, 12 cents less than expected, along with a 2.7% revenue decline to $1.85 billion.

Dean Foods (NYSE:DF) reported first quarter results of 52 cents, 10 cents better than expected, as revenues dropped 12.2% to $2.7 billion with indications of a solid start to the second quarter.

Fortune Brands (NYSE:FO) reported first quarter results of $1.03, ahead of estimates by 8 cents notwithstanding revenues plunged 20.3% to $1.44 billion, as was expected.

Research in Motion (NASDAQ:RIMM) received an analyst upgrade from UBS (NYSE:UBS).

Goldman Sachs (NYSE:GS) issued $2 billion 5-year notes lacking government guarantees and a $750 million stock offering.

Citigroup (NYSE:C) announced sale of its Japanese brokerage and investment unit to Sumitomo Mitsui Financial for about $7.9 billion.

Chevron Corp. (NYSE:CVX) announced first quarter profit fell 64 percent as it, along with competitors, was distressed by lower oil and natural gas prices.

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:

Credit Suisse Surprisingly Good

Today, Credit Suisse Group AG (CS) reported a surprisingly good first quarter, posting net earnings from continuing operations of CHF2.0 billion, well above the CHF2.1 billion loss in the prior-year quarter and our CHF297 million estimate.

This result largely reflected a CHF6.7 billion positive swing in trading revenues to CHF4.9 billion from a CHF1.8 billion loss a year ago as UBS had significantly higher fixed income trading revenues, record revenues in global rates and foreign exchange, and strong results in US RMBS and high-grade trading. This was partially offset by negative revenues from businesses the company is exiting, including valuation reductions of CHF1.4 billion for CMBS.

McClatchy Losses Widen

The McClatchy Company Inc (MNI) reported 1Q09 financial results that showed ad revenue in free-fall as the company scrambles to cut costs to plug growing losses. The report by the nation's third largest newspaper company reflects the dire state of the industry, where bankruptcies and closures occur almost weekly.

The publisher of 80 newspapers including the Miami Herald and Sacramento Bee, said adjusted EPS from continuing operations fell to a loss of $0.28 in 1Q09 from a small profit of $0.03 in 1Q08. The loss was far greater than expected but estimates have lost meaning in an industry in crises.

TriQuint Semi Guidance Upped

Triquint Semiconductor (TQNT, Hold), an original equipment manufacturer (OEM) of semiconductor communication integrated circuits (ICs), announced its fiscal Q1:09 results yesterday. Revenues and proforma EPS both exceeded our and consensus expectation: Proforma EPS for the quarter came in at $(0.07) compared to our estimate of $(0.08) and consensus of $(0.09), while revenues of $118.9 million exceeded consensus expectation of $114 million. The company stated that it is beginning to see signs of "inventory normalization in some of our markets" and issued guidance exceeding our and consensus expectations.

The company continued to see lower inventory levels at its customers as a result of the global economic downturn, resulting in low factory utilizations rates during the quarter. However, TQNT is beginning to see signs of strength in some of its end customers as channel inventory has mostly been burned down.

Boeing Results Analyzed

The Boeing Co (BA) reported 2009 First Quarter results yesterday. The following is some analysis of those results.

While overall Sales were up by 3.2%, Product Sales were only up by 1.1%. Service Sales were up by 15.9%, which accounted for the difference. Within the segments, Commercial Airplane Revenues rose by 4.8%, Military Aircraft Revenues dropped by 6.0%, Network & Space Systems declined by 0.6% and Global Services & Support leaped by 21.0%.

Energy Conversion Slows Pace

Energy Conversion Devices Inc (ENER) is slowing the pace of its "demand-driven" production and expansion plans in order to protect the company from the adverse impact of credit availability on project flow in the global pipeline for solar power systems.

As a result, due to the lack of visibility caused by current weak economic conditions, the company withdrew its prior 3rd quarter of 2009 and fiscal 2009 guidance.

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

* Credit Suisse (NYSE:CS) received an upgrade to "neutral" from "sell" from UBS (NYSE:UBS), on expected stronger revenue momentum and capital generation at its investment banking unit

* Media reports said Chrysler is readying its Chapter 11 bankruptcy filing for submission as soon as next week

* Honeywell (NYSE:HON) reported inline first quarter results of 54 cents a share as revenues, as expected, fell 15% to $7.57 billion. For the full year, earnings are expected in a range of $2.85-$3.20. Street estimates are $3.03

* American Electric Power (NYSE:AEP) reported first quarter results of 89 cents, topping estimates by 2 cents, on in-line revenues of $3.5 billion. Corporate guidance matched Street projections

* Xerox (NYSE:XRX) reported better-than-expected first quarter results of 5 cents, a one penny improvement over estimates, as revenues fell 18% to $3.55 billion, in line. The company expects second quarter results of 10-12 cents versus 14 cents

* Ford (NYSE:F) topped Street estimates with a 75-cent loss, better than the anticipated loss of $1.23, as revenues fell 42.7% to $24.8 billion. The company maintained its target for a breakeven or improved 2011

* 3M (NYSE:MMM) reported a nickel miss, with earnings of 81 cents versus 86 cents as revenues came in at $5.09 billion, missing estimates of $5.22 billion. The company lowered 2009 full-year EPS to a range of $3.90-$4.30, vs. consensus estimates of $4.01

* Halliburton (NYSE:HAL) bettered estimates by 3 cents, reporting first quarter earnings of 44 cents a share versus 64 cents a year ago

* GlaxoSmithKline (NYSE:GSK) announced plans to acquire US skincare provider Stiefel Labs for up to $3.6 billion

* UBS (NYSE:UBS) said it will sell its Brazilian I-bank, Banco Pactual, for about $2.5 billion

* PepsiCo (NYSE:PEP) offered $29.50 in cash and stock for Pepsi Bottling (NYSE:PBG) and $23.27 per share for PepsiAmericas (NYSE:PAS), valuing the companies at about $6.4 billion and $2.9 billion, respectively

* Oracle (NASDAQ:ORCL) announced plans to acquire Sun Microsystems (NASDAQ:JAVA) for $9.50 per share, or about $7.4 billion

Investors can find such funds by checking out the entire list of the Zacks #1 Rank Income Equity Funds list.

3 Ideal Choices

ING MFS Total Return (IMTAX) seeks above-average income consistent with the prudent employment of capital. Its secondary objective is the reasonable opportunity for growth of capital and income.

The fund has a balanced portfolio and invests primarily in a combination of equity and fixed income securities. It may invest in companies of any size, but generally focuses on companies with large capitalizations. As of December 2008, it had a turnover ration of 59%.

ExxonMobil Corp. (XOM), Lockheed Martin Corp. (LMT) and AT&T Inc. (T) are among the fund?s key holdings.

UBS PACE Alternative Strategies A (PASIX) seeks long-term capital appreciation. It is non-divesrified.

The fund invests in equity securities of US and non-US companies of various market capitalizations. It also invests in fixed income securities issued by companies and government and supranational entities around the world. PASIX may invest a significant portion of assets in the stocks of companies in particular economic sectors.

The fund has outpaced its benchmark index in terms of total returns in the last 1-year period. It pays annual dividends.

DWS LifeCompass Retirement A (SUCAX) seeks current income and as a secondary objective, long-term growth of capital. It pays quarterly dividends.

The fund is designed for investors who are already in retirement or who plan to retire or begin withdrawing portions of their investments in the near future. It invests mostly in fixed-income mutual funds, with a complement of equity mutual funds.

The fund has an expense ratio of 0.69%. Unit holders have to make a minimum initial investment of $1,000 to enter the fund.

Discover Many More Funds

Learn more about the new Zacks Mutual Fund Rank and discover some of the best market-beating mutual funds by browsing our new mutual funds section. This part of Zacks.com offers a variety of tools, including mutual fund research, a new mutual fund screener, helpful answers to frequently asked questions and quick access to prospectuses and other information.

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward.

UBS (UBS) shares opened higher on Tuesday after the troubled Swiss bank said it would lay off about 8% of employees at its wealth management group in Asia Pacific to cut costs.

Zurich-based UBS already has plans to slash about 11,000 investment banking jobs to bring its total staff down to about 75,000 this year. The latest cut of 240 jobs represents about 3% of the bank's total Asia-Pacific workforce. These include 100 redundancies in Singapore.

After his appointment last February, Chief Executive Oswald Gruebel had indicated that he would not shy away from laying off employees to lower costs. UBS has amassed more than $50 billion in write-downs and taken aid from the Swiss government to combat the global economic downturn. As the recession deepens, the banking giant might shed jobs in other parts of the world soon.

Shares of UBS were up more than 4% to $11.34 in morning trade on the New York Stock Exchange.