• Kohl's (NYSE:KSS) reported results of 63 cents a share, above Zacks estimates of 61 cents, on revenues of $4.1 billion, above Zacks projections of $4 billion

• Banking analyst Richard Bove strongly advised purchase of Bank of New York Mellon (NYSE:BK) shares, saying the firm's multiple should be twice current levels due to growth prospects

• Motorola (NYSE:MOT) is considering sale of its Home and Networks Mobility division as part of its turnaround plan. Analysts value the unit at $3-$5 billion

• Hewlett-Packard (NYSE:HPQ) said it agreed to acquire 3Com (NASDAQ:COMS) for $7.90 per share, in a deal valued at about $2.7 billion in cash. The company also posted preliminary fiscal fourth quarter results and raised 2010 guidance

• United Technologies (NYSE:UTX) agreed to purchase GE's (NYSE:GE) security business for $1.82 billion

• Reports said Microsoft's (NASDAQ:MSFT) new Bing search engine has been gaining market share against competing Google (NASDAQ:GOOG) and Yahoo (NASDAQ:YHOO)

• According to a WSJ report, News Corp's (NASDAQ:NWSA) Dow Jones is close to a sale of stake in its stock indexing unit, Stoxx Ltd, for $309 million

• Applied Materials (NASDAQ:AMAT) reported better-than-anticipated fiscal fourth quarter earnings of 13 cents, 10 cents above projections, on revenues of $1.53 billion, which topped estimates of $1.32 billion. The firm anticipates 30% 2010 revenue growth; layoffs of 1300-1500 over the next year are planned

• Clearwire (NASDAQ:CLWR) posted a third quarter loss of 43 cents a share, versus Zacks estimates of a 45 cents loss as revenues increased 13.2% to $68.8 million, slightly ahead of Zacks estimates of $68 million.  The firm maintained 2009-2010 guidance, and plans new $1.564 billion in equity financing

• Ralcorp (NYSE:RAH) reported earnings of $1.14 a share ex-items, versus Zacks estimates of $1.24, on revenues of $983.2 million, up 12.6% YoY, off Zacks estimates of slightly above $1 billion

• JP Morgan (NYSE:JPM) plans to reinstate 401K matching programs starting with 2009 as well as plans to hire 1,200 mortgage officers

• Yahoo (NASDAQ:YHOO) CEO Bartz said the company is hiring again as the firm expects to increase its operating profit margin to the 15-20% range on cost cutting and sales growth

• Adobe Systems (NASDAQ:ADBE) said it plans to cut 680 jobs, or about 9% of its workforce, as part of a restructuring plan.  The company said the move would result in pre-tax charges of $65 million to $71 million, with $18 million to $20 million to be taken in the fourth quarter

• Monsanto (NYSE:MON) confirmed its full-year 2010 earnings outlook and said it still sees a 2012 gross profit of at least $8.6 billion, claiming an accelerated launch of new corn and soybean products

• Bond insurer, Ambac Financial Group (NYSE:ABK) warned of a possible bankruptcy protection filing in its 10-Q

• Reports said General Electric (NYSE:GE) is in talks with United Technologies (NYSE:UTX) to sell its security systems unit for over $1.5 billion

• Wells Fargo (NYSE:WFC) upgraded Toll Brothers (NYSE:TOL) with a price target range of $24-$26

• Deutsche Bank (NYSE:DB) upgraded Smithfield Foods (NYSE:SFD) raising the price target from $12 to $20 due to an improving pork market

• Flowers Foods (NYSE:FLO) reported inline earnings of 34 cents a share on revenues of $603 million, off Zacks estimates of $617 million

• International Paper (NYSE:IP) reported third quarter results of 37 cents a share, 14 cents above Zacks estimates, on inline revenues of $5.92 billion, off 13.1%. According to the company, at the end of its third quarter, "we began to see some modest improvements in demand in some segments of our paper and packaging businesses"

• Yahoo's (NASDAQ:YHOO) analyst meeting is due to be held at 11:00 ET

• Arcelor Mittal (NYSE:MT), the world's largest steel company, reported a $903 million third quarter profit, noting "We have seen the first signs of recovery in the third quarter...We should continue to see further gradual improvement through 2010, although the operating environment remains challenging"

• United Microelectronics (NYSE:UMC) reported third quarter earnings of 8 cents a share, 5 cents above Zacks estimates on revenues of $853 million, above Zacks estimates of $801 million, up 11.1%

• WellPoint (NYSE:WLP) reported third quarter earnings of $1.78 a share, 38 cents above Zacks projections on inline revenues of $15.21 billion

Bove of Rochdale Securities said earnings at Well Fargo (NYSE:WFC) were helped by mortgage-servicing fees rather than improving business trends, and trimmed his rating on the bank to “sell" from “hold."  However, Well Fargo and Morgan Stanley (NYSE:MS), which reported its first quarterly profit in a year, were behind the market’s strength earlier in the session.  Bove also cited accelerating loan losses at the firm for the downgrade.  After Bove’s cut, FBR slashed its rating on the firm to "underperform," questioning Well Fargo's earnings quality.

The Dow Jones industrial average fell below the psychologically important 10,000 level, declining 92.12 points, or 0.9%, to close at 9949.36.  Earlier in the session, the index had risen to as high as 10,119.47.  The broader S&P 500 index declined 9.66 points, or 0.9%, to 1081.40 and the tech-laden Nasdaq was off 12.74 points, or 0.6%, to 2150.73.  The Treasury’s 10-year note fell 12/32, to 101 31/32. The yield rose to 3.39%, from 3.34% late Tuesday.

Meanwhile, China said its economy grew 8.9% during the third quarter, up from 7.9% in the second quarter and 6.1% in the first.

Eight of the ten S&P500 sectors finished lower, led by declines in consumer services (-1.8%), financials (-1.8%), health care (-1.4%) and industrials (-0.9%). Utilities remained flat, and telecommunications edged up 0.01%.  Selling was broad-based.  The weakness in financial sector saw shares of JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corp. (NYSE:BAC) and Goldman Sachs Group Inc. (NYSE:GS) each declining at least 2.9%.  Merck & Co. (NYSE:MRK) led the Dow average lower, declining 3.1% to $32.68. 

The greenback fell to fresh 12-month lows against a basket of currencies, falling through $1.50 against the euro for the first time in 14 months.  The greenback's fall sent crude prices higher, with prices touching an intraday high of $82 yesterday, its highest since October 9, 2008.  Government inventory figures showed a large drawdown in US gasoline stockpiles to 2.3 million barrels last week - more than the 800,000 anticipated.  Price cuts from Wal-Mart (NYSE:WMT) also dampened holiday sales hopes.  Wal-Mart declined 2.1% to $50.63.

Today's calendar covers another heavy dose of corporate reports including before-the-open releases from: 3M (NYSE:MMM), Black & Decker (NYSE:BDK), Bristol-Myers Squibb (NYSE:BMY), Dow Chemical (NYSE:DOW), McDonald's (NYSE:MCD), Schering-Plough (NYSE:SGP), and UPS (NYSE:UPS). Also reporting are American Express (NYSE:AXP), Amazon.com (NASDAQ:AMZN), and AT&T (NYSE:T).

• Yahoo (NASDAQ:YHOO) results beat Zacks estimates of 7 cents, coming in at 13 cents, as the company’s operations benefitted from cost-cutting measures; revenues held steady with last quarter's at $1.13 billion.  According to CFO Morse, "There's a change occurring in Yahoo, that will value that kind of work - that good old-fashioned, get-your-hands-dirty kind of find ways to take costs down or make sure that they don't go up as much as they otherwise would have - type work"

• SanDisk (NASDAQ:SNDK) results also beat projections on earnings of 75 cents, well ahead of the Zacks estimates of 14 cents, on revenues of $935 million, which topped $783 million expected. The company CEO and Chairman Eli Harari noted, "Our outstanding Q3 results reflect major gains in our OEM business with strong orders continuing into Q4. We are encouraged by improved industry fundamentals and our increasingly diversified global markets, which bode well for further growth in Q4 and in 2010"

• US Bancorp (NYSE:USB) reported fourth quarter earnings of 49 cents ex-items beating estimates of 26 cents on record revenues of $4.3 billion, which topped estimates of $4.13 billion

The Dow Jones industrial average rose 96.28 points, or 0.96%, to close at 10,092.19.  The broader S&P 500 index jumped 10.23 points, or 0.94%, to 1,097.91 and the tech-heavy Nasdaq climbed 19.52 points, or 0.91%, to 2,176.32, its highest point since September 26, 2008.  Market breadth was positive, with advancing shares ahead of decliners by a margin of three-to-one.  Only five of the DJIA thirty declined in price.

After the close, iPhone maker Apple Inc. (NASDAQ:AAPL) and Texas Instruments (NYSE:TXN) reported better-than-estimated numbers, fuelling hopes for the technology industry.  Last week Google Inc. (NASDAQ:GOOG) and Intel Corp’s (NASDAQ:INTC) numbers had come in above expectations.

Although there were some jitters last week after some major banks reported higher loan losses during the quarter, expectations that companies across a broad range of industries would report numbers above projections kept the momentum going.   Nevertheless, companies could find it relatively easy to beat analyst’s lowered bars of expectations and then turn in splendid performance in the future quarters as the economy moves into a recovery mode.

This week is likely to be decisive with 13 of the Dow 30 and more than 130 of the S&P 500 slated to report their results.  The numbers could well be the fodder for the next rally – or a downward spiral – even as a call for a 10-15% correction has gone unmet.  This morning's lengthy list of key corporate results, however, continues to surprise on the upside, adding fuel to the rally's fire.

On Monday, the S&P 500 broke above the 1100 mark before retreating a little to settle at 1097, its highest close since October 2, 2008. All ten industry sectors rose, led by gains in basic materials (+1.7%), utilities (+1.4%), oil and gas (+1.2%) and consumer services (+1.2%). 

Caterpillar (NYSE:CAT), due to report its earnings today, led the gainers with a 6% jump as analysts upgraded shares of Bank of America (NYSE:BAC) and RBC Capital that took price targets on the stock to $65 per share.  American Express (NYSE:AXP), due to report after the close Thursday, climbed 2.3% after FBR lifted its price target on the firm to $37 from $25.  On the downside, General Electric (NYSE:GE) shares fell 1.5% as questions continued regarding the price of the 20% stake Vivendi owns in NBC Universal.

Today's market action will be interesting to watch to find how the better-than-expected results from Apple (NASDAQ:AAPL) and Texas Instruments (NYSE:TXN) are seen by the broader indices.  Both companies posted strong results, beating top and bottom line expectations. Apple (NASDAQ:AAPL) said results were helped by record quarterly sales of Macintosh computers and iPhones, permitting earnings of $1.82 on strong sales of $9.87 billion.  The shares hit an all-time high of $204.  TI (NYSE:TXN) also bettered projections, reporting strong demand across all business segments.  The company reported earnings of 42 cents a share, ahead of estimates of 39 cents, as revenues of $2.88 billion beat estimates of $2.82 billion, and presented a sequential quarterly gain of 17%.

Today’s list includes Coca-Cola (NYSE:KO), SanDisk (NASDAQ:SNDK), Caterpillar (NYSE:CAT), DuPont (NYSE:DD), Pfizer (NYSE:PFE), Untied Technologies (NYSE:UTX), Yahoo (NASDAQ:YHOO), State Street (NYSE:STT), and Bank of New York Mellon (NYSE:BK).

ValueClick is one of the largest online display advertising network operators in the industry. We believe the rebound in the company’s Comparison Shopping and Search segment and positive display ad trends in the U.S. will drive growth in the near-term.
 
The company’s second quarter earnings were above expectations, demonstrating its focus on driving bottom-line growth. However revenue was down year over year in the most recent quarter, impacted negatively by weakness in the lead generation business, which pulled down the Media segment’s revenue significantly. The lead generation business continues to deteriorate and has been taken into account in the subdued outlook for the third quarter.
 
ValueClick directly competes only with Marchex (MCHX) for placing web advertisements on affiliate networks. Moreover large Web portals such as Google (GOOG), Yahoo! (YHOO) and MSN will increase competition for ValueClick’s display ad business.
 
Over the long-term, we are very positive on online advertising growth; however, current economic conditions are creating significant headwinds for ValueClick and others in the industry.
 
Although there is a likely upside to the company’s shares over the longer term as Internet growth still looks healthy, we believe it is not advisable to get involved with the stock in the six-month time frame.
 
Thus, we have a Neutral rating on the stock.

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

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

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

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

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

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

The print App software is designed to work with HP’s high-end printers. To improve the speed and reduce cost of digital printing, the company had earlier unveiled graphic arts technologies and products to support its Print 2.0 strategy. HP’s Photosmart Premium with TouchSmart Web is already available in the market. The company is manufacturing commercial and specialty digital printers to work with the Photosmart and TouchSmart.

HP’s Photosmart Premium printer with TouchSmart Web will be available for $399. The new Photosmart printers feature touch technology that help users to display as well as edit and print photos and enable them to copy and scan documents. Other wireless printers are available within the range of $129 to $199 through Staples Inc. (SPLS), Best Buy (BBY), Office Depot (ODP), OfficeMax (OMX) and Amazon.com (AMZN) stores.

Hewlett-Packard also announced a host of partnerships with AOL to get Tabbloid publishing services to its sites. Moreover, it entered into an agreement with Yahoo’s (YHOO) Flickr to expand print services through Snapfish by HP.

HP's most profitable business is the Imaging and Printing Group, which boosted revenue by 6.4%, resulting in an operating margin of 15.6% in fiscal 2008 — the highest across all segments. The company is also the largest seller of printers (31% of total sales), with a 41% share of the global market. HP’s new printing solution bolsters its efforts to target the estimated $663 billion print production page value opportunity projected for 2010.

While printing is a growth area for the company, we believe the significant pricing pressure on the hardware for printers may hurt its profitability in future. We thus remain concerned about the long-term growth prospects of the printing unit.

Moreover, HP faces intense competition in its printer business from Lexmark International Group (LXK), Epson and Canon (CAJ). It is also up against Kodak (EK), which plans to increase its share in the printer market with the launch of a new digital-inkjet printer, Stream, next year. Therefore, we maintain our Neutral rating on HP.

• Apple's (NASDAQ:AAPL) San Francisco event once again saw the shares move lower, this year off 1%, despite the welcome appearance of Jobs, and iPod price cuts and improvements.  An 8 GB iPod Nano will include built-in video and an FM radio; price cuts of as much as $120 were made.  This morning JP Morgan (NYSE:JPM) upped its rating on Apple to "outperform" from "market perform," with a $200 price target

• Texas Instruments (NYSE:TXN) raised its third quarter earnings and sales guidance, with third quarter guidance increased to 37 cents to 41 cents a share from prior range of 29 cents to 39 cents a share; revenues guidance was lifted to $2.73 billion to $2.87 billion from prior $2.5 billion to $2.8 billion, with estimates at $$2.68 billion

• Vivus (NASDAQ:VVUS) noted its experimental obesity drug showed dramatic results in two late-stage clinical trials

• Disney (NYSE:DIS) reported improvements in local ad markets with increased activity from automakers nationally, although still anticipating lower theme park hotel bookings for the September quarter

• Monsanto (NYSE:MON) said it continues to see 2009 results from continuing operations at the lower end of its prior guidance of $4.40-$4.50; the Street has expected $4.41. For 2010 the company expects $3.10-$3.30, off consensus estimates of $4.12

• Yahoo (NASDAQ:YHOO) shares were upgraded by Bank of America (NYSE:BAC) to "buy," with a price target hike to $19 from $17

• BP (NYSE:BP) shares were lowered to "neutral" by analysts at HSBC (NYSE:HBC). The company's Tiber Field, last week's "giant discovery" 9km beneath the Gulf seabed, is unofficially estimated to contain 500m-1 billion recoverable barrels of oil

The mobile app enables photo and video searching, sharing, uploading and emailing. It also allows automatic geotagging of photos and videos (depending on the model) and allows the user to add personal commentary.

The Flicker app is available in English, French and traditional Chinese languages for users in the UK, France, Singapore, Hong Kong, the U.S. and Canada.

Yahoo has modified its growth strategy this year by increasing focus on the mobile segment. The company revamped the Yahoo Mobile service as a combined application, using mobile versions of Yahoo OneSearch, OnePlace and OneConnect. It makes available search, news, e-mail, social networking, finance, weather, sports scores and other RSS feeds. The company has made the service available as a special app for the iPhone, as well as a browser-based app on more than 400 other mobile devices.

Yahoo also separated the development of mobile applications into general and special categories. The general applications, such as travel, personals or some entertainment sites are available through the browser option. Special applications can be downloaded on specific phones, such as the recently announced Flickr app. The company has also introduced Yahoo Finance and Fantasy Football apps for the iPhone and BlackBerry Bold, Tour and 8900 series.

Yahoo has chosen phones that have the largest number of interactive users, since developing special applications is an expensive affair. Sandeep Gupta, senior director of mobile applications, said that development of applications for other phones like Palm’s (PALM) Pre and Google’s (GOOG) Android-based phones was also underway.

The company has fallen behind third-party application developers that have already launched Mobile Fotos, Darkslide and Flickit. While these Flickr-based apps are likely to increase competition for the company, we expect the Yahoo mobile strategy to be ultimately more successful.

Chicago, IL – August 26, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Microsoft (MSFT), Yahoo (YHOO), Google (GOOG), Nokia (NOK) and Research In Motion (RIMM).

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

Here are highlights from Tuesday’s Analyst Blog:

Microsoft Doing Everything Right

When I read the first article about the Microsoft (MSFT)/ Yahoo (YHOO) combo, I did not fully realize how it would change my search experience. But when I checked my Yahoo mail this morning, I was pleasantly surprised to see a Bing bar at the top. One of the things that crossed my mind was how could a regular Googler like me be enticed into using Bing?

It now appears that I have to do nothing, I just open a Yahoo finance/mail/or any other Yahoo page and there it is. But would I still continue using Google (GOOG)? I think not, especially if Google is not my home page and the content is more or less the same. This basically means that the focus has now shifted from use to content.

Microsoft has also introduced a freely downloadable version of MS Office, facilitating the use of the company’s word processing, spread sheet and PowerPoint products. Although Google already offers similar products, it was more of a defensive measure to protect the company’s market share.

The company recently signed an agreement with Nokia (NOK) to offer Word, Excel and PowerPoint features on select mobile phones from 2010. The revenue potential could be substantial, considering Nokia’s market share. While the deal should generate incremental earnings, many observers feel that it would mark the end of the Windows-based mobile operating system.

But Microsoft came up with yet another strategy to prove its adaptability to changing market dynamics. The company’s newly announced OneApp feature will use clouds to offer programs on GPRS phones in emerging markets. While smartphone penetration in these markets has been limited, feature phones have huge potential.

Microsoft has already entered into an agreement with South Africa’s Blue Label Telecoms, offering a dozen OneApp-powered applications. The initial package includes popular programs like Facebook, Twitter, Windows messenger and games. It would soon add other useful programs to enable bill payments and even health diagnosis.

The existing mobile operating systems from Research In Motion (RIMM) among others have made headway in the U.S. and other developed markets. Microsoft’s intention to target emerging markets makes sense to us.

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

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

About Zacks

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

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Contact:
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Visit: www.zacks.com

Chicago, IL – August 26, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Research In Motion (RIMM), Google (GOOG), Yahoo (YHOO), Apple Inc. (AAPL) and Palm Inc. (PALM).

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

Here are highlights from Tuesday’s Analyst Blog:

RIMM Bolsters Web Browser

Research In Motion (RIMM) yesterday announced that it acquired Torch Mobile, a web-based software and application developer. Torch Mobile uses the open-source web browser layout engine WebKit to develop web applications for mobile phones. The company’s flagship Iris Browser product is a web browser for mobile phones with a customizable interface and touch-screen control. Iris browser can be used on many devices and platforms. The browser contains software components for web services compatible with Google (GOOG) gadgets, Yahoo (YHOO) widgets, and several other web platforms.

RIMM has been able to successfully differentiate its BlackBerry products from other offerings in the communications market. BlackBerry smart-phones are admired globally for their best e-mail functionality. However, its web browsing capability is not as powerful as iPhone of Apple Inc. (AAPL), Pre of Palm Inc. (PALM) and Google Android. All of these browsers are based on the WebKit ecosystem. In order to remain competitive, RIMM has decided to strengthen its browser that will be able to support Flash and Silverlight Technologies.

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

About Zacks Equity Research

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

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

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

About Zacks

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

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

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

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

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

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

RIMM has been able to successfully differentiate its BlackBerry products from other offerings in the communications market. BlackBerry smart-phones are admired globally for their best e-mail functionality. However, its web browsing capability is not as powerful as iPhone of Apple Inc. (AAPL), Pre of Palm Inc. (PALM) and Google Android. All of these browsers are based on the WebKit ecosystem. In order to remain competitive, RIMM has decided to strengthen its browser that will be able to support Flash and Silverlight Technologies.

The smart-phone mobile market is growing continuously. As a result, this market is getting increasingly crowded with new players and is expected to witness intense competition going forward. In addition to RIMM, Apple, and Palm, Nokia Corp. (NOK), Sony-Ericsson, a joint-venture between Sony Corp. (SNE) and L.M. Ericsson (ERIC) and Samsung have launched a series of innovative products. Motorola (MOT), Google, HTC, and LG Electronics are other new entrants in this market.

The next-generation technology of converged mobile computing enables a smart-phone to function like a fully operational computing device with the help of a strong web browser. Consumers are increasingly using their mobile handset to browse the Internet. This creates a growing market for third party software. Acquisition of Torch Mobile will now give RIMM a solid foothold in the WebKit development community.

It now appears that I have to do nothing, I just open a Yahoo finance/mail/or any other Yahoo page and there it is. But would I still continue using Google (GOOG)? I think not, especially if Google is not my home page and the content is more or less the same. This basically means that the focus has now shifted from use to content.

Microsoft has also introduced a freely downloadable version of MS Office, facilitating the use of the company’s word processing, spread sheet and PowerPoint products. Although Google already offers similar products, it was more of a defensive measure to protect the company’s market share.

The company recently signed an agreement with Nokia (NOK) to offer Word, Excel and PowerPoint features on select mobile phones from 2010. The revenue potential could be substantial, considering Nokia’s market share. While the deal should generate incremental earnings, many observers feel that it would mark the end of the Windows-based mobile operating system.

But Microsoft came up with yet another strategy to prove its adaptability to changing market dynamics. The company’s newly announced OneApp feature will use clouds to offer programs on GPRS phones in emerging markets. While smartphone penetration in these markets has been limited, feature phones have huge potential.

Microsoft has already entered into an agreement with South Africa’s Blue Label Telecoms, offering a dozen OneApp-powered applications. The initial package includes popular programs like Facebook, Twitter, Windows messenger and games. It would soon add other useful programs to enable bill payments and even health diagnosis.

The existing mobile operating systems from Research In Motion (RIMM), Apple (AAPL), Google and Nokia have made headway in the U.S. and other developed markets. Microsoft’s intention to target emerging markets makes sense to us.

As Google’s Android-based phones are just making their appearance felt, the new Microsoft solution could divert some buyers. The deal with Nokia, which is firmly entrenched in these regions, would play a key role in bringing Microsoft applications a superior foothold. We believe that offering the smartphone experience to existing cell phones is a smart strategy, as users are allowed to continue using handsets of their choice.

This is not all. Management also expects to launch a windows mobile apps store for cell phone users by the end of this year. Apple’s app store is very popular, although the most frequently downloaded applications are the ones that cost 99 cents. Microsoft’s ploy is to allow developers to fix their own prices, encouraging them to continue writing programs for Win Mo. We are encouraged by the company’s recent initiatives as we believe these are likely to improve its competitive position in both the search and mobile markets.

The first is the expansion of its sales force in Southeast Asia. Internet usage in the region has been growing rapidly over the last few years, driving increasing interest in online advertising. Online advertising industries in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam are expected to grow around 60% between 2008 and 2010.

The newly appointed direct sales team will join forces with the existing Singapore-based team to develop localized marketing campaigns in Malaysia, the Philippines and Vietnam. The idea is to sell online advertising in form of display, search or through a mobile platform. We think this is a pertinent move and it is time Yahoo started cementing relationships in the region.

The second initiative is designed to attract U.S. customers who have been hit hard by the recession. It is a new website called Yahoo Deals (http://deals.yahoo.com) that provides a host of information about bargain agreements. It also offers coupons for groceries, local stores and online printable form for a large number of products, such as clothing, beauty, baby, computers, video games, flowers, gifts, automotive products, electronics and gardening.

A separate tab called Weekly Ads directs users to special offers by big local brands. The website also enumerates special offers for Visa card holders at local restaurants, retailers and service providers. Customers who wish to purchase coupons and take a print out later can save the coupons to their own account. Yahoo recently conducted a survey that proved the growing demand for coupons and limited availability. We believe this website is likely to attract many customers in the current market environment.

New CEO Carol Bartz seems to know what she wants. Despite weak results for some time now, Yahoo had been clinging on to all business lines. Bartz was quick to generate cash from the search business and is now giving the company the much-needed direction. We think the above measures will strengthen Yahoo’s revenue opportunities and provide the company with tools to generate cash in a weak environment.

Chicago, IL – August 6, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Microsoft (MSFT), Yahoo (YHOO), Google (GOOG), Capital One (COF) and American Express (AXP).

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

Here are highlights from Wednesday’s Analyst Blog:

Microsoft: The Bing Thing

Recent numbers put out by analytics firm StatCounter indicate that Microsoft’s (MSFT) new search engine, Bing, gained market share in July. The company’s share of U.S. search engine users increased 14.3%, mostly at the cost of Yahoo (YHOO) and smaller players. Google (GOOG) continues to dominate, with a three-quarter’s share of the market.

Last month, Microsoft announced a ten-year agreement with Yahoo that allows it to power, control and process search-related information. Yahoo gets to collect advertisements and keep 88% of the revenue. While management of both companies expressed enthusiasm on the deal, investor responses varied.

Microsoft shareholders were happy since the company was not making any upfront payment, while Yahoo shareholders were disappointed for the same reason. Meanwhile, shareholders of market leader Google appeared concerned at the prospect of increased competition.

Consumer Bankruptcies Soar

Since the start of the year, 802,000 individuals have filed for bankruptcy. The July rate would equate to 885,000 people going bankrupt, so clearly we are still in an uptrend, and historically the number of bankruptcies peaks well after a recession is over.

The report did not specify the causes of the bankruptcies, but clearly the rapidly rising unemployment rate and uninsured medical expenses are likely to be significant factors. The ABI is predicting there will be 1.4 million filings this year. I suspect it will be higher than that.

One of the major problems in the economy is that the consumer has too much debt. If there is not enough income to service and repay the debt, then debt will come down through bankruptcy. Rising levels of delinquencies on all forms of consumer credit, such as mortgages and credit cards indicate that there will be more filings in the future. This is not good news for the credit card heavy banks like Capital One (COF) and American Express (AXP).

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On Tuesday, stocks had declined after a weaker-than-anticipated consumer confidence report and a lackadaisical response to the auction of 2-year notes drew investors to the selling table.  The trend continued Wednesday and treasuries moved lower as the auction of 5-year notes failed to elicit enough interest.  The 10-year declined 6/32 and the corresponding yield rose to 3.664%. 

At the day’s end, the Dow Jones industrial average lost 26 points, or 0.3% and the S&P 500 index eased 4 points, or 0.5%. The tech-heavy Nasdaq gave up 8 points, or 0.4%.  Yesterday, a 5% plunge in Shanghai Composite index also had an impact on US markets.  However, the decline was arrested after Bank of China Vice Governor remarked this morning that the central bank will "unswervingly continue to apply appropriate loose monetary policy and consolidate the economic recovery momentum."  The index closed the day up 55 points or 1.7%.

On Wednesday, share prices reflected the concerns prevailing in the market, with Caterpillar (NYSE:CAT) shares declining 2.5% and Alcoa (NYSE:AA) down 2.2%. Demand concerns also impacted energy stocks as EIA weekly petroleum statistics demonstrated a 5.1 million barrel build in crude stockpiles, well ahead of the expected 1.1 million increase. Chevron (NYSE:CVX) shares fell 1.8%.

Among the ten S&P500 industry sectors, oil and gas and basic material shares led the decliners, easing 2.1% and 2.6%, respectively. Only two sectors showed some strength, with health care up 0.2% and consumer goods up 0.1%, reflecting their defensive appeal. Yesterday's release of the Fed's Beige Book of regional anecdotal data offered a balanced basket of good news and bad. Manufacturing, residential property and some employment data showed improvement, while commercial property, consumer spending and labor remaining under pressure.

Nevertheless, investors are not entirely giving up hope for a return to growth in the second half.  US GDP data for the second quarter, due out tomorrow, could provide a glimpse into what lies ahead.  Expectations are that it will show a moderation of the economy's contraction, with a 1.5% drop, down from the first quarter's 5.5% contraction.  Furthermore, Dow Chemical (NYSE:DOW) appeared confident of US recovery prospects, noting, "The economic outlook for the rest of 2009 appears to be stabilizing with strong growth in Asia Pacific, especially China, where domestic stimulus programs have created demand. In our view, the U.S. economy has found bottom, but will be slow in recovering as unemployment continues to be a drag on consumer spending."

Today's key post is the weekly jobless filing, which is expected to show claims rose to 575,000 from 554,000, while continuing claims increased to 6,300,000 from 6,225,000. The earnings calendar remains heavy, with earnings reports due from the likes of: Disney (NYSE:DIS), ExxonMobil (NYSE:XOM), Wynn Resorts (NASDAQ:WYNN), International Paper (NYSE:IP), Monster Worldwide (NYSE:MWW), Goodyear Tire (NYSE:GT), Becton Dickinson (NYSE:BDX), MasterCard (NYSE:MA), Travelers (NYSE:TRV), and Dow Chemical (NYSE:DOW).

• Time Warner (NYSE:TWX) reported second quarter adjusted earnings 45 cents a share, ahead of consensus estimates of 37 cents a share, on revenues of $6.81 billion, versus estimates of $6.97 billion. The firm maintained its 2009 earnings guidance of flat adjusted results from continuing operations versus $1.98 a year ago

• Moody's (NYSE:MCO) second quarter earnings exceeded estimates by 3 cents at 43 cents as revenues fell 7.6% to $451 million

• Medco Health Solutions (NYSE:MHS) reported second quarter earnings of 69 cents, 4 cents ahead of estimates

• Qwest Communications (NYSE:Q) reported earnings of 13 cents, 3 pennies above estimates, on in-line revenues of $3.1 billion, that was off 9% from a year ago

• Textron (NYSE:TXT) reported second earnings of 8 cents ex-items, 11 cents above Street estimates of a loss as revenues fell 29.1% to $2.61 billion. The firm said it now sees full-year earnings of 33 cents to 63 cents a share, compared with its prior view of 45 cents to 75 cents a share and ahead of consensus estimates of 22 cents

• General Dynamics (NYSE:GD) reported earnings of $1.60, topping estimates of $1.57 and upped its guidance for the full year by a nickel to $6.05-$6.15

• Sprint Nextel (NYSE:S) reported a second-quarter loss of 13 cents a share, an 11-cent miss, on in-line revenues, down 10%, to $8.1 billion

• ArcelorMittal (NYSE:MT) reported a 57 cent per share, or $792 million, second quarter loss versus $4.19 a year ago and estimates of a $336 million profit, as revenues fell 60% to $15.18 billion from $37.84 billion

It also surpassed the year-ago result by a penny. Net income rose 8% to $141 million from $131 million.

Revenue, however, declined 13% year over year to $1.573 billion from $1.798 billion. Currency rate fluctuations, the sale of Kelkoo in late 2008 and lower fees revenue from voice-over IP services and subscription music offerings effected total revenue in the quarter which otherwise would have declined just 6%.

Marketing services revenue from Owned and Operated sites fell 16% to $858 million from $1.016 billion in the second quarter of 2008. The decline was primarily due to the slide in search advertising revenue, which fell 15% from the year-ago period. Display advertising revenue also tumbled 14%.

The company saw its cash hoard increase in the last 6 months, with cash, cash equivalents and investments in marketable debt securities of $4.197 billion at the end of the quarter, compared to $3.522 billion as of Dec 31, 2008.

Yahoo expects revenue for the third quarter to be in the range of $1.45 billion to $1.55 billion.

We expect the company to continue with its share repurchase program, which will also help boost its bottom line in future quarters. Marchex generated $4.2 million cash from operating activities and ended the March quarter with $25.8 million in cash and zero long-term debt. It also expects to generate positive cash flow in every quarter of 2009.
 
A strong balance sheet, sustainable dividends and focus on reducing operating expenses facilitate the company’s efforts to weather economic volatility. Marchex is poised to benefit from the shift in demand to performance-based advertising as the company differentiates itself from other search providers focusing on local advertisers. The company continually improves its operating leverage through increased investment in new products.
 
On a negative note, large companies such as Yahoo! (YHOO) and Google (GOOG) limit Marchex’s competitive advantage. Additionally, global advertising spending for 2009 is expected to be much lower than expected, which is expected to hurt MCHX’s advertising business, going forward.
 
Discounting all the above factors, we maintain our Hold rating on the shares.

On Monday stocks hit their highest levels since November 5, as all ten industry groups on the S&P500 moved higher during the session, led by consumer, commodity and industrial stocks.  The gains were led by basic materials (+2.4%), industrial (+1.9%) and oil and gas (+1.5%).  The DJIA added 1.2% or 104 points to close at 8,848 points.  The NASDAQ rose 1.2% to finish at 1,909; the S&P500 index rose 1.1% to 951.  The US dollar fell to six-month lows against a basket of foreign currencies as its safe-haven appeal lost its allure.

Helping the gains yesterday was Goldman Sachs which raised its forecast for the S&P 500 index, saying better earnings will spur the steepest second-half rally since 1982.  The bank raised its year-end target for the index to 1,060.  Nevertheless, the firm pointed out that "the US economic backdrop represents the most significant risk to our equity market forecast," and "the risk of a double-dip recession is significant." Sentiments also got a boost from reports that said small and mid-sized corporate lender CIT Group (NYSE:CIT) avoided an imminent bankruptcy with $3 billion rescue financing from some major bondholders, following last week's collapse of a government bailout.

Also buoying sentiments were a number of analyst upgrades, including a Bank of America/Merrill (NYSE:BAC) report on Caterpillar (NYSE:CAT), asserting demand for its construction machinery likely bottomed in the second quarter, with a recovery expected to begin next year.  After the close, Texas Instruments (NYSE:TXN) beat projections for the second quarter, but CFO March warned, "The global economy is, by all indications, still declining," ..."What we are seeing here is that the rate of inventory depletion slowed down quite a bit."

Twelve DJIA components are scheduled to report this week, and among S&P500 stocks 145 are due to report their earnings during the week.  According to Bloomberg, on average, S&P500 firms have topped estimates by 15% since July 8; Thomson Reuters' numbers show S&P500 results, boosted by last week's strong financial firm numbers, fell 35.2%, compared with a prior second-quarter estimates of a 35.7% decline.

Monday's economic post of three straight months of improvements in the Conference Board's Index of Leading Economic Indicators, also helped sentiments on the Street, with its 0.7% rise in June, which beat estimates of a 0.5% increase.

As Federal Reserve Chairman Bernanke presents his semi-annual economic report to Congress at 10:00 AM ET, he may point to weak economic conditions as evidence that the inflation outlook remains subdued, paving the way for the Fed to maintain current low interest levels. While most expect Bernanke will mention exit strategy options, few expect clear details and timing to be offered.

Today's earnings calendar is heavy with numbers due from Apple (NASDAQ:AAPL), Caterpillar (NYSE:CAT), Coca-Cola (NYSE:KO), DuPont (NYSE:DD), Merck (NYSE:MRK), United Technologies (NYSE:UTX) and Yahoo (NASDAQ:YHOO).

However, the company notified that the move was undertaken to help the company manage its key international intellectual property rights effectively, including the licensing of those rights to its franchisees.
 
McDonald’s headquarters has been in London for a very long time.  The company’s first outlet in the U.K. was opened in London in 1974.  With this transition, the company joins Kraft Foods (KFT), Procter & Gamble (PG), Google (GOOG), Yahoo (YHOO) and Colgate Palmolive (CL), who have shifted operations to Switzerland to take advantage of the country's congenial tax regime.
 
The changes in the U.K. tax laws on taxation of foreign profits from intellectual property rights, such as patents and trademarks will require McDonald’s pay twice as much tax on foreign profits from intellectual property.  
 
McDonald’s European operations have grown rapidly in recent years, compared to its core US division operations and is now the largest region by sales.  McDonald’s now operates in more than 40 markets in Europe.  Comparable sale for the month of May 2009 jumped 7.6% in Europe compared to a rise of 2.8% in the U.S.
 
McDonald’s Corporation operates in the Quick Service Segment, which has been resilient to the economic turmoil to some extent.  With lower disposable income, the consumers are shifting base to Quick Service Restaurants from Upscale and Casual Dining segments because of their lower priced menu.  McDonald’s in the Quick Service Segment competes with Krispy Kreme Doughnuts (KKD), Yum! Brands (YUM), Papa John's International (PZZA) and Chipotle Mexican Grill (CMG).
 
We maintain our Buy rating on the stock with a six-month price target of $59.00.

But countries south of the border have also seen an emerging middle class and sometimes are overlooked on the world stage.

Buy Individual Companies or Buy a Basket

There are two ways to invest in Latin America: through individual companies that trade on the American exchanges or through a basket of companies in an exchange traded fund (ETF).

If you want to take the no hassle approach there are several ETFs available to capture the Latin American market.

You can buy a basket of companies from many countries in the iShares Latin America 40 ETF (ILF). Or you can buy individual countries such as with the popular iShares Brazil (EWZ), iShares Mexico (EWW), or iShares Chile (ECH).

But a more interesting investment opportunity, with the possibility of bigger returns, lies in buying the individual companies.

Finding Latin America Companies

You might be confused as to where to even begin in finding individual companies. But one shortcut is to look at the holdings in the ETFs. Financial sites such as Yahoo Finance list the top 10 holdings in ETFs.

These will be the largest holdings and usually are large cap companies with a long earnings history. But this is a good place to start.

Using this method, I easily discovered several companies with well-known name brands.

Companhia de Bebidas Das Americas (otherwise known as AmBev) (ABV) is the world's 5th largest brewer and one of the largest in Latin America. Based in Brazil, it distributes beer, soft drinks and other non-alcoholic beverages in the Americas. It also is PepsiCo's largest bottler outside of the United States.

AmBev trades with a forward P/E of 14.8 and has an outstanding 1-year return on equity (ROE) of 29.73%.

Read the Zacks Analyst Research Report from May 8, 2009.

Petrobras (PBR) is a large Brazilian-based integrated oil company. It has more than 100 production platforms, 16 refineries and 6,000 gas stations.

Recently, the company announced a huge find in the giant Tupi oil field off the coast of Brazil which would rank the country ninth in oil reserves in the world.

The company is trading with a forward P/E of 17 and has a 1-year return on equity (ROE) of 24.01%.

Read the Zacks Analyst Research Report from June 10, 2009.

Coca-Cola FEMSA S.A. de C.V. (KOF) produces and distributes Coca-Cola products in nine Latin American countries. Headquartered in Mexico, the company is the second largest Coca-Cola bottler in the world by volume.

It accounts for 10% of Coca-Cola sales in the world and 40% in Latin America. Despite challenges including the global recession and the swine flu outbreak in Mexico, Coca-Cola FEMSA is benefiting from its strong brand.

The company is trading at just 13.6x forward estimates. It also pays a dividend, with a current yield of 1.24%.

Read the Zacks Analyst Research Report from May 5, 2009.

Expand Your Horizons South of the Border

These are just a few of the options investors have in expanding their portfolios to include Latin American exposure. In today's global economy, investors will find there can be faster growth and opportunities outside of the United States.

It pays to look.

Ways to Search for ADRs

Research Wizard - This sophisticated tool will allow you to search for a detailed list of companies that trade as ADRs.

Zacks Investment Research

* Microsoft's (NASDAQ:MSFT) new Bing browser gained market share from Google (NASDAQ:GOOG), during its first month of operation, surpassing Yahoo (NASDAQ:YHOO) as the number two search engine

* Pfizer (NYSE:PFE) said it is terminating its late-stage drug trial of Sutent, for first-time treatment of metastatic colorectal cancer

* AMAG Pharmaceuticals (NASDAQ:AMAG) announced FDA approval of its iron deficiency drug

* Goldman Sachs (NYSE:GS) upgraded shares of Yum! Brands (NYSE:YUM) to "buy"

* Constellation Brands (NYSE:STZ) reported fiscal first quarter earnings of 33 cents a share, one penny above estimates, versus 43 cents a share a year ago.  The company reiterated its full year guidance

Akamai Technologies, Inc. (AKAM) announced on June 26, offering of the Web Application Accelerator and IP Application Accelerator to IntraLinks, the leading provider of on-demand critical information exchange solutions. By tapping into Akamai's solution, Intralink will be able to accelerate its business application with Akamai's dynamic content. Additionally, its customers will be able to lower cost, increase productivity as well as speed up processes using its Web Application Accelerator and IP Application Accelerator platform.

According to the Chief Technology Officer of IntraLinks, using Akamai's global network routing and application acceleration services will help reduce the standard network latency over the Internet, helping customers run application within their data center. The company also anticipates that as the user base expands, users outside the U.S. will be able to access the platform at higher speeds - nearly twice the speed from previous generations.

Akamai's Web Application Accelerator service optimizes the delivery of Web-based business applications, delivering local network performance to remote users. Akamai's Web Application Accelerator solution includes a service level agreement assuring network availability, enhanced pre-fetching capabilities, strategic global deployments, as well as the addition of real-time application performance reporting.

Akamai's IP (Internet Protocol) Application Accelerator service improves the delivery of any enterprise IP-based application, delivered over the Internet to boost the speed and quality of e-mail, voice over IP services, and file transfers within an organization. Both solutions are delivered through Akamai's platform, which comprises 48,865 servers in hundreds of networks in approximately 70 countries.

Akamai's Web Application Accelerator solution has been selected by various on-demand solutions providers such as TradeBeam, the leading SaaS platform for Global Trade Management. The solution has helped TradeBeam report improved performance and accessibility of its Software as a Service (SaaS) offerings. It also helped the company to shun more than 20% in additional capital expenditures to build international data centers. In addition, Easy-Forex, a leader in online foreign exchange trading in more than 150 countries has seen application delivery performance improve by 50% using AKAM's Web Application Accelerator solution. Since implementing Akamai solution, over 70% of requests for Easy-Forex's services are now accelerated by Akamai's Web Application Accelerator.

We believe these deals will be positives for the company and will allow customers to provide a better experience to their users by addressing the challenges of bandwidth constraints and Internet traffic, help reduce network latency over the Internet, while delivering content closer to the end-user. Akamai is facing growing competition and pricing pressure as new competitors enter the market. Owners of large networks, such as AT&T (T), Google (GOOG), Yahoo (YHOO), and Limelight Networks, Inc. (LLNW) (LLNW) may decide to get more aggressive in the way they offer content and could enter the field of application accelerator solution.

We maintain our Hold rating on AKAM shares with a six-month price target of $21.00.

You can access the full report here. The data is from the National Stock Exchange.

There’s a lot of interesting information in the latest report, including a complete table showing assets and inflows by ETF provider. Of all the data points covered, however, one in particular caught my eye.

So far this year, the Direxion Financial Bear 3x ETF (NYSE: FAZ) has attracted the second-greatest inflow of any ETF on the market, at $4.6 billion. Only the SPDR Equity Gold (NYSE: GLD) has done better, pulling in $11.8 billion.

Despite the massive inflows, FAZ ended May with just $1.6 billion in assets. Such a gap suggests that investors in the fund have experienced terrible returns.

And they have. Since FAZ launched in November 2008, the security has lost 93% of its value, falling from $71.41 per share last November 6 all the way down to $4.83 per share on Wednesday.

The numbers look more extreme if you measure from the ETF’s peak-to-trough. Using end-of-day closing prices, FAZ rallied in the 10 days after its launch from $71.41 to $165.48 per share. The fund peaked intraday above $200 per share, according to Yahoo Finance. Using those measures, the fund is off either 97% or 98% from its high point.

Such a view makes the success of the fund in attracting assets all that more intriguing. Investors keep pouring money into the fund despite the massive losses.

Or, perhaps I should say, traders are flocking to FAZ. Despite having just $1.6 billion in assets at the end of May, $43 billion worth of FAZ shares traded hands in May. That’s $2.2 billion per day, meaning the fund turned over its entire portfolio every single trading day of the month.

What to draw from all this? The suggestion is that people are using this fund correctly, as a trading tool and not as a long-term investment. Let’s hope so. With the fund down 97%, a longer-term investment strategy just doesn’t seem to be working out.

As a trading tool, the fund is delivering on its promises, providing 3X the inverse daily return of the Russell 1000 Financial Index. But you wouldn’t want to own it for the long haul.

BTW: In case you’re wondering, FAZ’s mirror fund—the Direxion Financial Bear 3x ETF (NYSE: FAS)—is trading down 80% over the same time period.

If you’re wondering how a 3X bull and 3X bear ETF can both be down sharply over the same stretch, I encourage you to watch our recent webinar on how leveraged and short ETFs work.

The Biotech industry as a whole continues to underperform the market so far this year. As of May 26, 2009, Both the AMEX Biotech Index and the broader NASDAQ Biotech Index declined 6.8% (AMEX Biotech has 20 biotech companies while NASDAQ Biotech Index includes over 130 component companies), while the Dow Jones Biotech Index declined 3% (which includes 33 companies).

At the same time, both the NASDAQ Composite and S&P 500 have achieved positive returns. NASDAQ has made a gain of 11% as of 5/26/09 and the S&P 500 has gained 0.8%, while the Dow Jones Industrials reached a negative 3.5% return.

This constitutes a sharp contrast with last year when the Biotech industry as a whole achieved much better performance than the market. In 2008, all three biotech indices outperformed all three major market indices by a large margin. The three major indices declined as much as over 40% (34%, 41% and 38% for Dow, NASDAQ and S&P 500 respectively). While the NASDAQ Biotech Index declined only 12.6% and the AMEX Biotech Index was down 17.7%, the Dow Biotech Index actually had a positive 3.7% return in 2008.

This can partly be explained that when the recession gets deeper, even large-cap biotech companies will feel the pinch, while the smaller ones are still struggling with survival. Usually large-cap biotech companies, like large-cap pharma ones, have more resources to withstand economic downturns and financial crises than smaller biotech companies which have limited revenue and cash reserves. The current economic and financial environment has exerted negative impact on even large-cap biotech companies when patients curtail their out-of-pocket expenses.

Valuation is attractive though. The industry's average P/E (TTM) ratio has declined to 16x from a historical 35x to 40x. The five-year PEG ratio is less than 1 at 0.97, according to Yahoo Finance. But big pharma and biotech companies still face three major challenges: patent expiration, low research and development productivity, and generic competition.

We expect continued M&A activity in the remainder of the year after a series of mega deals in the first five months of the year. We believe the current market environment in the Pharma/biotech industry is favorable for M&A activity. With very active M&A's in the pharma/biotech sector, investors have every reason to speculate on buyout targets. Opportunity also exists in companies with decent pipeline which may attract big pharma or biotech companies for partnerships.

OPPORTUNITIES

Our best picks at this point include Myriad Genetics (MYGN), Onyx Pharmaceuticals Inc. (ONXX) and AMAG Pharmaceuticals Inc. (AMAG), Dendreon (DNDN) and 3SBio Inc. (SSRX). We have different reasons for a BUY rating for each of the four companies, but all of these companies have one thing in common -- strong balance sheets, which eliminates immediate financing needs.

Both MYGN and ONXX are already profitable. MYGN is a molecular diagnostic company. The company's molecular diagnostics business has been very strong and continued to grow impressively in fiscal third quarter of 2009 (ended March 31), and the outlook is bright even at the current economic environment. Our price target is $50.

Our BUY call on ONXX is based on strong performance of its cancer drug Nexavar partnered with Bayer Healthcare. Nexavar has been approved for kidney cancer and liver cancer, and sales remained strong in 1Q09 and will continue their momentum in the coming quarters. With profits at its back, ONXX recently in-licensed two cancer drug programs, while continuing to expand Nexavar labels. <P. With a cash balance of $467 million and no debt as of March 31, 2009, ONXX is well positioned for long-term growth. The company is also cooperating with Bayer for Nexavar, which makes it a potential and meaningful buyout target by Bayer. Our price target is $37.

For AMAG and DNDN, both are late-stage development companies. AMAG filed an NDA for its lead drug Feraheme (Ferumoxytol) in December 2007. Feraheme is indicated for the treatment of iron deficiency anemia, and we expect the FDA approval to come by the middle of 2009. AMAG is not profitable yet, but with Feraheme approval at its fingertips, the company should enjoy strong growth in the coming years. The balance sheet is strong. As of March 31, 2009, the company had $195 million in cash, cash equivalents and investments and no long-term debt. Our price target is $62.

DNDN's lead product candidate Provenge is indicated for the treatment of prostate cancer. The company reported positive results from its IMPACT phase III trial in April 2009 and will file a sBLA to the US FDA in fourth quarter of 2009. We estimate that the FDA will approve Provenge in 1H10. Our price target is $25.00. <P. We also have a Buy rating on 3SBio Inc. SSRX is an integrated, China-based biotech company focused on developing and marketing therapeutics for nephrology, oncology and cancer supportive care. The company's flagship product EPIAO is the number 1 brand in the Chinese EPO market. Its second lead product TPIAO has gained rapid physician acceptance for thrombocytopenia, and is making a meaningful contribution to the company's top-line growth. A recent deal with US-based AMAG Pharmaceuticals Inc. will boost its expansion into IV Iron market. Our price target is $10.

WEAKNESSES

We continue to be negative on SurModics Inc. (SRDX), Alkermes (ALKS) and Celera Group (CRA) based on financial performances from the most recent quarter ended March 31, 2009. The recession has finally taken a toll on both top line and bottom lines of these companies, and the outlook is not optimistic.

We also suggest investors avoid small biotech firms with weak balance sheets, particularly those which need immediate financing. Even with a promising pipeline, these small biotech firms may suspend operations and may be forced into survival mode without immediate new funds until current financial market and economic situations improve. We continue to suggest investors to avoid Genta Inc. (GNTA), Cell Therapeutics Inc. (CTIC), Decode Genetics (DCGN) and Cyclacel (CYCC). All these tiny biotech firms have great pressure for further financing in the next 6 to 12 months, and they have entered into survival mode in order to save cash. Zacks Investment Research

The list is long and varied, and ebbs and flows over time. But here are some of the sources (public, private and otherwise) that I turn to in my day-to-day reading. I'm sure I'm leaving out quite a few sites, but this at least is a partial list.

NATIONAL PUBLICATIONS

IndexUniverse.com and IndexUniverse.eu: It goes without saying that IndexUniverse.com and IndexUniverse.eu are the best sites on the Web for information about ETFs and how they are used in portfolios.

IndexUniverse.com

IndexUniverse.eu

Slate/The Big Money: Those two Web sites aside, I start my day at Slate.com, and its sister finance site The Big Money. I find the daily news summary (and weekly magazine summaries) the best meta-journalism on the Web. They offer quick, succinct and erudite summaries of the major national, international and business news of the day. Five minutes and I'm up to speed.

Today's Papers

Today's Business Press

Weekly Magazines

Wall Street Journal: After Slate, I usually turn to WSJ.com. Rupert Murdoch or no, the Wall Street Journal is still the organ of the finance industry, and has some great reporters. I read much of the paper, but make sure never to miss columns or articles by Jason Zweig, Shefali Anand, Eleanor Laise, John Spence or Ian Salisbury, among others.

For what it's worth, I stopped getting the paper version of the WSJ last year, after subscribing for nearly a decade. I miss it, but it seemed like a waste of trees.

http://www.wsj.com/

Financial Times: As good as the WSJ is, the FT is smarter about the markets, and I read it on a daily basis as well. I scan for ETF stories and read the commodity section in full; I also monitor the Lex columns. I don't follow their Alphaville section much, but I'm always impressed when I do get there.

http://www.ft.com/

MarketWatch: John Spence, as mentioned above, is one of the best ETF reporters out there (and an IndexUniverse.com alum). I keep an eye on his columns at MarketWatch, and also read Chuck Jaffe regularly.

http://www.marketwatch.com/

Barron's: I wish I read Barron's more than I do, but I check in periodically. When I do, I find that I like Tom Sullivan's column quite a bit. I've also started to regularly read Mike Santoli, who is smart, funny and to the point.

http://www.barrons.com/

OTHER SOURCES

Yahoo Finance: Yahoo Finance Is the go-to site for news aggregation and (most importantly) total-return data on ETFs and indexes. I love the charting features, and the fact that you can download historical total returns for any stock, index or ETF is simply invaluable.

Finance.yahoo.com

Pimco: If you're not visiting Pimco's Web site once a month, you're doing yourself a disservice. Bill Gross and Paul McCulley's commentaries are invaluable, and often fun to read. I read Mohamed El-Erian's commentary too, but less religiously.

http://www.pimco.com/

SEC.Gov: One of the least user-friendly Web sites in the world, but once you've cracked the code of the SEC search engine, you can find filings for any ETF that exists or is in registration. I'm on there five times a week reviewing prospectuses.

http://www.sec.gov/

Cumber.com: I keep pace with the commentary of the Cumberland Advisors crew, including David Kotok and Bob Eisenbeis. They're both smart and frank about how they're approaching the market, and use ETFs exclusively for the equity side of their business.

http://www.cumber.com/

Random Roger: Ditto Roger Nusbaum, who takes a nice real-world view of the markets, with just the right touch of detached irony.

randomroger.blogspot.com

Ed Yardeni: As a member of the press, I get Ed Yardeni's summary reports, which are extraordinarily useful. If you're not a member of the press, it costs big $$$.

http://www.yardeni.com/

Barclays Capital Research: Ditto the research reports from Barclays Capital. I read their weekly reports regularly, and devour their annual Equity Gilt study from cover to cover. Whenever I get my hands on one, I feel like I have received the blueprint to how the universe really works.

http://www.barcap.com/Client+offering/Research/Global+Asset+Allocation/Equity+Gilt+Study

Provider Web sites: Provider Web sites are often the best source of information on ETFs. iShares is probably the best, but nearly all of the providers do a good job and offer a lot of information.

ETF News Aggregators: To gather some of the other stories that I would otherwise miss, I subscribe to a host of ETF news aggregators, including the LinkedIn ETF Group and ETF Express.

Chicago, IL - April 30, 2009 - Zacks.com releases the latest Zacks Industry Rank. Stocks featured in this week's analysis include Amazon.com (AMZN), CyberSource Corporation (CYBS), Equinix Inc. (EQIX), Google, Inc. (GOOG), Netflix, Inc. (NFLX), eBay Inc. (EBAY), Yahoo! Inc. (YHOO) and First Trust Dow Jones Internet Index Fund (FDN).

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

Not All Internet Stocks Are Attractive

The most important thing I look for when analyzing an industry is a discernable business trend. I want to find the factors that are driving earnings estimates higher or lower.

Unfortunately, such trends don't always exist. This is the case with Internet stocks.

On the surface, Electronic Commerce and Internet Services look good with Zacks Industry Ranks of 2.86 and 2.67, respectively. These strong ranks reflect the fact that both groups have more positive estimate revisions than negative revisions.

Beneath the surface, however, the waters are not completely calm. Not quite a case of the good, the bad and the ugly, but more of the good and the not-so good.

The Good

There are 5 companies that account for more than half of all the positive revisions within the 2 groups: Amazon.com (AMZN), CyberSource Corporation (CYBS), Equinix Inc. (EQIX), Google, Inc. (GOOG) and Netflix, Inc. (NFLX).

AMZN, EQIX, GOOG and NFLX all topped first-quarter earnings estimates, and CYBS matched. More importantly, brokerage analysts raised their full-year forecasts on all 5 companies following their recent reports.

There were good reasons for the optimism:

    
• AMZN saw sales rise, despite the recession. Its Q1 margins also widened.    
• CBYS delivered a double-digit increase in revenues and processed a record number of transactions.    
• EQIX said revenues rose both on a year-over-year and a sequential basis    
• GOOG reported an increase in aggregate paid clicks, a sign that the company is remaining the dominant player in search-term advertising    
• NFLX is still seeing growth in its subscriber count and raised its full-year EPS guidance.

NFLX is a Zacks #1 Rank ("strong buy") stock. AMZN, CYBS and EQIX are Zacks #2 Rank ("buy") stocks. GOOG changed this morning from a Zacks #2 Rank stock to a Zacks #3 Rank ("hold") stock.

The Not So Good

On the other side are companies like eBay Inc. (EBAY) and Yahoo! Inc. (YHOO).

The reaction to these companies' earnings reports has been decidedly mixed with approximately an equal number of analysts raising and cutting their full-year forecasts.

Net revenues for EBAY fell 8%. The decline was led by weakness in the company's marketplace segment, which includes the well-known auction web site. Margins also contracted.

Yahoo also saw revenues and profits fall. Declines in both display and search advertising hurt the company. (Though Google saw an increase in paid clicks, there was downward pressure on advertising prices.)

Both EBAY and YHOO are Zacks #3 Rank ("hold") stocks.

Be Selective

Though some of the reports were good, not all of the companies are enjoying positive business momentum. This is worrisome given the rally in Internet stocks.

Since early-March, First Trust Dow Jones Internet Index Fund (FDN) has soared by more than 30%. The magnitude of the rally over such a short period of time should be enough to give investors pause. The mixed reaction to first-quarter reports only adds to the probability that there isn't much short-term upside for some Internet stocks.

Certainly, there are opportunities in individual stocks - we hold NFLX in the Zacks Elite Focus List portfolio - but just not for the group as a whole, at least over the short-term.

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.

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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://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

Internet Company Earnings Have Been Mixed

The most important thing I look for when analyzing an industry is a discernable business trend. I want to find the factors that are driving earnings estimates higher or lower.

Unfortunately, such trends don't always exist. This is the case with Internet stocks.

On the surface, Electronic Commerce and Internet Services look good with Zacks Industry Ranks of 2.86 and 2.67, respectively. These strong ranks reflect the fact that both groups have more positive estimate revisions than negative revisions.

Beneath the surface, however, the waters are not completely calm. Not quite a case of the good, the bad and the ugly, but more of the good and the not-so good.

The Good

There are 5 companies that account for more than half of all the positive revisions within the 2 groups: Amazon.com (AMZN), CyberSource Corporation (CYBS), Equinix Inc. (EQIX), Google, Inc. (GOOG) and Netflix, Inc. (NFLX).

AMZN, EQIX, GOOG and NFLX all topped first-quarter earnings estimates, and CYBS matched. More importantly, brokerage analysts raised their full-year forecasts on all 5 companies following their recent reports.

There were good reasons for the optimism:

• AMZN saw sales rise, despite the recession. Its Q1 margins also widened.
• CBYS delivered a double-digit increase in revenues and processed a record number of transactions.
• EQIX said revenues rose both on a year-over-year and a sequential basis
• GOOG reported an increase in aggregate paid clicks, a sign that the company is remaining the dominant player in search-term advertising
• NFLX is still seeing growth in its subscriber count and raised its full-year EPS guidance.

NFLX is a Zacks #1 Rank ("strong buy") stock. AMZN, CYBS and EQIX are Zacks #2 Rank ("buy") stocks. GOOG changed this morning from a Zacks #2 Rank stock to a Zacks #3 Rank ("hold") stock.

The Not So Good

On the other side are companies like eBay Inc. (EBAY) and Yahoo! Inc. (YHOO).

The reaction to these companies' earnings reports has been decidedly mixed with approximately an equal number of analysts raising and cutting their full-year forecasts.

Net revenues for EBAY fell 8%. The decline was led by weakness in the company's marketplace segment, which includes the well-known auction web site. Margins also contracted.

Yahoo also saw revenues and profits fall. Declines in both display and search advertising hurt the company. (Though Google saw an increase in paid clicks, there was downward pressure on advertising prices.)

Both EBAY and YHOO are Zacks #3 Rank ("hold") stocks.

Be Selective

Though some of the reports were good, not all of the companies are enjoying positive business momentum. This is worrisome given the rally in Internet stocks.

Since early-March, First Trust Dow Jones Internet Index Fund (FDN) has soared by more than 30%. The magnitude of the rally over such a short period of time should be enough to give investors pause. The mixed reaction to first-quarter reports only adds to the probability that there isn't much short-term upside for some Internet stocks.

Certainly, there are opportunities in individual stocks - we hold NFLX in the Zacks Elite Focus List portfolio - but just not for the group as a whole, at least over the short-term.

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 Apr 29
Sector	This Week's Zacks Rank	Last Week's Zacks Rank	FY09 Revisions Ratio	FY09 Estimates Revised Up	FY09 Estimates Revised Down
Retail-Wholesale	2.62	2.74	1.99	447	225
Medical	2.70	2.65	0.97	423	438
Computer and Technology	2.85	2.85	1.08	742	689
Consumer Staples	2.94	2.94	0.83	144	174
Consumer Discretionary	2.94	2.93	0.92	241	262
Business Services	3.06	2.97	0.48	48	101
Utilities	3.07	3.14	0.34	56	166
Basic Materials	3.08	3.15	0.54	163	304
Auto-Tires-Trucks	3.17	3.17	0.41	31	75
Finance	3.18	3.22	0.35	502	1424
Construction	3.23	3.16	0.57	55	97
Aerospace	3.25	3.13	1.17	55	47
Oils-Energy	3.27	3.24	0.34	253	753
Industrial Products	3.37	3.33	0.22	68	306
Transportation	3.37	3.37	0.24	89	374
Conglomerates	3.61	3.54	0.16	12	77

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

Zacks Investment Research