Jim Cramer Blog

Here are 7 trading ideas for today. This list comes directly from the TradingMarkets Stock Indicators page and is based upon our latest quantitative research.
Bullish
5+ Consecutive Down Days: These are stocks that have closed down for five or more consecutive days and are trading above their 200-day moving average. Our research shows that stocks trading above their 200-day moving average that close down for five or more days have shown positive returns, on average, 1-day, 2-days and 1-week later. Historically, these stocks have provided traders with a significant edge.
Mastercard (NYSE:MA - News) & Brasil Telecom (NYSE:BTM - News). MA's PowerRating (for Traders) is 9, and BTM's PowerRating (for Traders) is 8.
5+ Consecutive Lower Lows: These are stocks that have made a lower low for five or more consecutive days and are trading above their 200-day moving average. Our research shows that stocks trading above their 200-day moving average that make lower lows for five or more days have shown positive returns, on average, 1-day, 2-days and 1-week later. Historically, these stocks have provided traders with a significant edge.
Suncor Energy (NYSE:SU - News). SU's PowerRating (for Traders) is 7.
2-Period RSI Below 2: These are stocks that have a 2-period RSI reading below 2 and are trading above their 200-day moving average. Our research shows that stocks trading above their 200-day moving with a 2-period RSI reading below 2 have shown positive returns, on average, 1-day, 2-days and 1-week later. Historically, these stocks have provided traders with a significant edge.
Wellpoint (NYSE:WLP - News). WLP's PowerRating (for Traders) is 6.
Stocks Down 10% or More: These are stocks that have lost 10% or more over the past five days and are trading above their 200-day moving average. Our research shows that stocks trading above their 200-day moving average that have lost 10% or more over the past five days have shown positive returns, on average, 1-day, 2-days and 1-week later. Historically, these stocks have provided traders with a significant edge.
JA Solar Holdings (NasdaqGM:JASO - News). JASO's PowerRating (for Traders) is 6.
Bearish
5+ Consecutive Up Days: These are stocks that have closed up for five or more consecutive days and are trading below their 200-day moving average. Our research shows that stocks trading below their 200-day moving average that close up for five or more days have shown negative returns, on average, 1-week later. Historically, these stocks have provided traders with a significant edge.
Liberty Global (NasdaqGS:LBTYA - News). LBTYA's PowerRatings (for Traders) is 3.
Stocks Up 10% or More: These are stocks that have gained 10% or more over the past five days and are trading below their 200-day moving average. Our research shows that stocks trading below their 200-day moving average that have gained 10% or more over the past five days have shown negative returns, on average, 1-week later. Historically, these stocks have provided traders with a significant edge.
D.R. Horton (NYSE:DHI - News). DHI's PowerRating (for Traders) is 4.
Published By TradingMarkets.com

Labels: BTM, DHI, JASO, LBTYA, MA, SU, Trading Ideas, WLP

It was a rollercoaster ride on Wall Street, as stocks attempted to balance a solid Hewlett-Packard (NYSE: HPQ - News) earnings report with mortgage sector concerns and a report by the Fed predicting slowed economic growth in 2008. The Dow finished up 52 points on the day to close at 13,010. Meanwhile, the Nasdaq and S&P each posted small gains to finish at 2,597 and 1,440, respectively. Light, sweet crude surged in trading to close at $97.69 per barrel for December delivery. Treasury prices traded relatively flat, while gold prices gained on the day to close at $794.50 an ounce. The dollar hit a new low versus the euro, but gained against the yen.

On the economic front, the Federal Reserve revealed that it's cut its growth expectations for the U.S. economy for the coming year. According to newly released forecasts, the central bank now expects growth to slow to between 1.8%-2.5% in 2008, down sharply from previously unreleased estimates in June that had forecasted growth of 2.5%-2.75%.
In earnings news, shares of Freddie Mac (NYSE: FRE - News) plunged -28.7% today after posting a net loss and announcing it would write down nearly -$8.1 billion in lending-related assets. For the third quarter, the mortgage company reported a loss of -$2.03 billion, or -$3.29 per share, compared with a loss of -$715 million, or -$1.17 per share, a year earlier. The firm said it has hired an adviser to help study capital-raising options and said it is considering slashing its dividend by -50%.
After the bell last night, Hewlett-Packard reported a fourth-quarter surge in net income to $2.16 billion, or 81 cents a share, up 28% from $1.69 billion, or 60 cents per share, last year. Excluding one-time items, the company posted a profit of 86 cents per share. Sales in the quarter jumped to $28.3 billion, up 15% from $24.6 billion a year earlier. Analysts, on average, had been looking for a profit of 82 cents per share on revenue of $27.4 billion. Shares of Hewlett-Packard traded up fractionally on the day.
Shares of Target (NYSE: TGT - News) were down -4.1% in trading as the discount retailer posted a drop in net earnings to $483 million, or 56 cents per share, down from $506 million, or 59 cents per share, a year ago. Quarterly revenue rose to $14.82 billion, up 9.3% from $13.57 billion in 2006. On average, analysts were looking for EPS of 62 cents on $14.8 billion in revenue. The company also said its board had authorized a new $10 billion share repurchase program. Subscribers can read our take on Target in today's edition.
Homebuilder D.R. Horton (NYSE: DHI - News) reported a swing to a loss in the fourth quarter. For the period ended September 30th, the company posted a loss of -$50.1 million, or -16 cents per share, versus a profit of $277.7 million, or 88 cents per share, last year. Sales in the quarter fell to $3.12 billion, down -35% from $4.8 billion in 2006. Despite the loss, results still beat Wall Street estimates, as analysts had predicted a loss of -66 cents per share on sales of $2.9 billion. Shares of D.R. Horton closed up 2.5% on the day.

By the BullMarket.com Staff

Labels: DHI, DR Horton Inc., FRE, HPQ, TGT

Homebuilder D.R. Horton Inc. said Tuesday it swung to a loss in the fourth quarter as the company again wrote down the value of unsold homes and land options, and the housing market showed few signs of improvement.
Donald R. Horton, chairman of the nation's largest homebuilder by deliveries, said tighter lending standards and more cautious consumers contributed to further decline in housing during the late summer, with the numbers of unsold homes remaining high.
Horton said the housing market would "remain challenging" and that next year is likely to be worse. Horton said his company was cutting prices.
The results still topped the forecast of analysts surveyed by Thomson Financial, who predicted a loss of 66 cents per share on sales of $2.9 billion.
Analysts said they were surprised that Horton generated $800 million in cash flow during the September quarter by cutting costs, and they said the builder's write-downs were smaller in relative terms than those of other builders. 11.03 -0.22 -1.96

Labels: DHI, DR Horton Inc.

Doomsday Scenario: MDC Holdings (NYSE: MDC - News), DR Horton (NYSE: DHI - News), Pulte Homes (NYSE: PHM - News) and Toll Brothers (NYSE: TOL - News)
Cramer created a doomsday scenario which probably will not happen, since the bank crisis in 1990 was "ten times worse" than the problems of today. However, he would avoid any companies which deal with borrowing and lending money, particularly housing: DHI, PHM and TOL. The only housing stock that isn't hopeless now is MDC, but Cramer would still not buy. He would also avoid financials amid bearish fears that loans will not be repaid and yields will shrink; "You can't own anything that even walks by a mortgage," Cramer warned. He would not touch companies which need financing for deals. However, Cramer added; "the worst-case scenario will be derailed," and the doom and gloom will not really materialize
If Ben will Budge: Centex (NYSE: CTX - News), Lennar (NYSE: LEN - News), Bear Stearns (NYSE: BSC - News), Goldman Sachs (NYSE: GS - News), Citigroup (NYSE: C - News)
Cramer discussed two scenarios which could reverse doomsday: overseas buyers and an interest rate cut. He is confident that if the Federal Reserve reduces rates by only one percent, housing will make a comeback (especially DHI, PHM, CTX, LEN), financials GS and C will recover and the Dow will jump to 15.
Playing it Safe: Celgene (NasdaqGS: CELG - News), Kellogg (NYSE: K - News), Schlumberger (NYSE: SLB - News), Medco Health Solutions (NYSE: MHS - News), Kimberly-Clark (NYSE: KMB - News), Amazon.com (NasdaqGS: AMZN - News), Google (NasdaqGS: GOOG - News), Apple (Other OTC: APPL.PK - News) and Research in Motion (NasdaqGS: RIMM - News)
Even if the Fed doesn't budge rates, investors can still create a safe portfolio consisting of CELG, K, SLB, MHS and KMB. He also directed viewers to his six wild bull markets: oil and oil services, agriculture, machinery, aerospace, infrastructure and minerals, and his four horse men of tech: AMZN, GOOG, APPL and RIMM.
Mad Mail: Brookfield Asset Management (NYSE: BAM - News), Rite Aid (NYSE: RAD - News), ValueClick Inc. (VLCK)
Cramer urged a mailer not to sell BAM, because it is an international company, unaffected by subprime woes, and is similar to Warren Buffet's Berkshire Hathaway; "If you sold Warren Buffet because of a housing problem, forget it!" To a mailer concerned about RAD, Cramer said, "The integration is going very well. I'm holding your hand on RAD, and begging you not to sell it." Concerning VLCK's bad quarter, he commented, "I don't have my arms around it yet. To me, the stock looks like it's going to see $18, before you see a bottom."
Published By SeekingAlpha

Labels: AAPL, AMZN, BAM, BSC, CELG, CTX, DHI, GOOG, GS, Jim Cramer, K, KMB, LEN, Mad Money, MDC, MHS, PHM, RIMM, SLB, TOL

Here are 7 options to watch for today. This list comes directly from the TradingMarkets Options Indicators page. The list is created using OptionVue options analysis software.
Most Underpriced Calls: These are the most under priced calls of all stocks in our database. While the Equities Explosion List finds groups of calls for individual equities that are under priced, this list finds the most under priced individual calls. Thus, the options listed here will tend to be more severely under priced.

Pozen Inc. Sep 22.5 Calls (NasdaqGM:POZN - News). POZN's PowerRating is 7.
Most Underpriced Puts: These are the most under priced puts of all stocks in our database. While the Equities Explosion List finds groups of puts for individual equities that are under priced, this list finds the most under priced individual puts. Thus, the options listed here will tend to be more severely under priced.
Frontline Ltd. Aug 50 Puts (NYSE:FRO - News). FRO's PowerRating is 7.
Most Overpriced Calls: These are the most overpriced calls of all stocks in our database. While the Equities Implosion List finds groups of calls for individual equities that are overpriced, this list finds the most overpriced individual calls. Thus, the options listed here will tend to be more severely overpriced.
Perini Corp. Aug 60 Calls (NYSE:PCR - News). PCR's PowerRating is 9.
Most Overpriced Puts: These are the most overpriced puts of all stocks in our database. While the Equities Implosion List finds groups of puts for individual equities that are overpriced, this list finds the most overpriced individual puts. Thus, the options listed here will tend to be more severely overpriced.
Mastercard Inc. Aug 135 Puts (NYSE:MA - News). MA's PowerRating is 7.
Stocks with Abnormal Call Volume: These are stocks which showed unusual call option volume not easily explained by arbitrage operations. The appearance of a stock on the Call Volume Alerts list suggests a possible takeover, extraordinarily good earnings report, or other news which may favorably affect the stock.
Union Pacific Corp. (NYSE:UNP - News). UNP's PowerRating is 7.
Stocks with Abnormal Put Volume: These are stocks which showed unusual put option volume not easily explained by arbitrage operations. The appearance of a stock on the Put Volume Alerts list suggests an extraordinarily negative earnings report, or other news which may negatively affect the stock.
Netgear Inc. (NasdaqGS:NTGR - News). NTGR's PowerRating is 7.
Abnormal Put/Call $ Volume: These stocks have the highest dollar put volume in relation to their call volume. These high ratios are indicative of extreme bearish sentiment in the underlying stock.
DR Horton Inc. (NYSE:DHI - News). DHI's PowerRating is 6.
PowerRatings are courtesy of TradingMarkets.com

Labels: DHI, FRO, MA, NTGR, PCR, POZN, stock options, UNP

On Not Feeling at Home with Housing: D.R. Horton (NYSE: DHI - News), Pulte Homes (NYSE: PHM - News), Lennar (NYSE: LEN - News), Centex (NYSE: CTX - News)
Cramer would not touch DHI, PHM or LEN, at least not with a long pole, after reading a report by Ivy Zelman of Credit Suisse during which she discussed her downgrade of Pulte and Horton and upgrade of Centex. Cramer comments DHI is "the most dangerous homebuilder" because it bought a gigantic amount of property in its quixotic delusion of "endless demand" and has the least written down on its property. Cramer would approve of shorting DHI and being long Centex. He says the problem with homebuilders is while "the rigor of the writedowns is clearly there, all the price targets are still way too high." He sees the potential of another leg down, and until more is written down on Horton and Pulte homes, he would not touch them on the long side.
Published by SeekingAlpha

Labels: CTX, DHI, Hot Stocks, Jim Cramer, LEN, PHM, Wall Street Confidential

Stocks traded aimlessly again today as investors waited for the start of earnings season, which traditionally kicks off with an announcement from aluminum producer Alcoa (NYSE: AA - News). The major market averages all managed to post modest gains. Oil prices were also higher, as was the 10-year Treasury note, which saw its yield drop to 4.72%.
Housing was once again in the spotlight as homebuilder D.R Horton (NYSE: DHI - News) announced that is Q2 sales orders fell 37% overall, paced by even steeper declines in the formerly booming California and the Southwest markets. The company's net orders totaled 9,983 homes, down from 15,771 homes last year. Horton's Q2 ended March 31st. The stock closed -1.5% lower.
In corporate news, Swedish telecom equipment maker LM Ericsson (Nasdaq: ERIC - News) signed a deal to manage a portion of the European network of Vodafone (NYSE: VOD - News). Ericsson's shares added 3.6% on the news. Citigroup (NYSE: C - News) was up 1.6% as investors waited for the results of its long-anticipated cost review. Generic drugmaker Mylan Laboratories (NYSE: MYL - News) rose 2.8% after it raised its 2007 profit forecast to a range of $1.60 to $1.63 a share, up from its previous guidance of $1.50 to $1.55 per share. Mylan cited strength in its generics business, including new product launches, for its upbeat forecast.
The flip side of the drug business was exemplified by biopharmaceutical company Adolor (Nasdaq: ADLR - News), which saw its shares plunge -58.7% after it announced that it stopped a study of a new drug to treat opioid-induced (OIC) constipation over safety concerns. The drug, Entereg, was being developed in association with British drugmaker GlaxoSmithKline (NYSE: GSK - News). Several analysts swiftly issued downgrades for Adolor, while Brean Murray Carret reiterated its "sell" recommendation. Progenics Pharmaceuticals (Nasdaq: PGNX - News), which submitted its own OIC compound for FDA approval last Friday along with partner Wyeth (NYSE: WYE - News), added 1.5% today.
Shares of ImClone Systems (Nasdaq: IMCL - News) also slid -6.4% on poor trial results. The company said a late-stage trial of its cancer drug Erbitux failed to extend survival in patients with pancreatic cancer. Erbitux is already approved for treatment of colorectal cancer, and head and neck cancer.
In M&A news, Biosite (Nasdaq: BSTE - News) said it will enter merger talks with Inverness Medical Innovations (NYSE: IMA - News), which last week offered $90 a share for the maker of medical diagnostic tests. IMA's bid topped an earlier offer from Beckman Coulter (NYSE: BEC - News) of $85. All three companies are in the business of making medical test products.

Labels: AA, ADLR, BEC, BSTE, C, DHI, ERIC, GSK, IMA, IMCL, MYL, PGNX, VOD, WYE

Stocks were narrowly mixed Tuesday as investors refrained from major moves ahead of first-quarter earnings reports that begin with Alcoa Inc.'s results after the closing bell.
The aluminum producer is expected to post a profit of 75 cents per share. Wall Street looks to results from the component of the Dow Jones industrial average to not only gauge the pace of earnings for the quarter but as a proxy for the health of the overall economy.
Stocks also showed little overall movement Monday as investors awaited news of how companies fared during the first quarter, and also their expectations for the coming quarters. In the fourth quarter, Standard & Poor's 500 companies snapped an 18-quarter streak of double-digit profit gains, and Wall Street expects profit growth to remain in the single digits for the first three months of the year. In midday trading, the Dow fell 13.17, or 0.10 percent, to 12,555.97.
Broader stock indicators were slightly higher. The S&P 500 edged up 0.44, or 0.03 percent, to 1,445.05, and the Nasdaq composite index rose 2.75, or 0.11 percent, to 2,471.93.
Bonds continued to recover, with the yield on the benchmark 10-year Treasury note falling to 4.71 percent from 4.75 percent late Monday. Gold prices rose, while the dollar was mixed against other major currencies after the United States filed two complaints against China at the World Trade Organization over copyright policy. The currency is at a two-year low against the euro.
Oil prices rose after selling off Monday following doubts about Iran's comments about its uranium-enrichment achievements. A barrel of light, sweet crude for delivery on the New York Mercantile Exchange rose 36 cents to $61.87. Investors were also awaiting minutes from the Fed's most recent meeting at which it left short-term interest rates unchanged for the sixth straight time. In corporate news, Dow Chemical Co. fell $1.23, or 2.6 percent, to $45.40 after the chemical and plastics maker said it has had no discussions about a leveraged buyout. Citigroup Inc. rose 52 cents to $52.10 ahead of a major restructuring announcement, where some 26,000 workers will be reassigned or their jobs eliminated, according to a report in The New York Times. D.R. Horton Inc., the nation's largest homebuilder by deliveries, said its second-quarter sales orders fell 37 percent, led by even steeper declines in California and the Southwest. Shares fell 33 cents to $21.71.
Adolor Corp. fell $5, or 57.3 percent, to $3.72 after the biopharmaceutical company stopped clinical studies and withdrew an application for a constipation-relief drug, leading to a series of downgrades.
Shares of drug maker Mylan Laboratories Inc. jumped 65 cents, or 3.1 percent, to $21.85 after the company raised its profit forecast, citing continued strength in its generics business and new product sales.
Declining issues outnumbered advancers by about 9 to 5 on the New York Stock Exchange, where volume came to 551.4 million shares.
The Russell 2000 index of smaller companies rose 2.61, or 0.32 percent, to 814.25.
Overseas, Japan's Nikkei stock average closed down 0.45 percent. In afternoon trading, Britain's FTSE 100 rose 0.32 percent, Germany's DAX index rose 0.94 percent, and France's CAC-40 rose 0.43 percent.
Source: AP

Labels: AA, ADLR, C, DHI, DOW, MYL

Dynegy (NYSE: DYN - News), Mirant (NYSE: MIR - News), NRG (NYSE: NRG - News), Foster Wheeler (NasdaqGS: FWLT): Cramer predicts DYN will go to $13 from $10 and comments CEO Bruce Williamson is "fabulous" and doesn't get enough credit. Although DYN has doubled, people are still not paying attention. He also likes FWLT as a great way to play nuclear and notes stocks like DYN and FWLT are no longer hostages to oil, which is declining while these names are on the rise. News that Mirant is for sale will bring up NRG, which is also doing well on a positive note from Jeffries, notes Cramer.
D.R. Horton (NYSE: DHI - News) and Pulte (NYSE: PHM - News): Cramer praised Ivy Zelman of Credit Suisse for her downgrade of DHI and PHM and called her report "eye opening." In brief, her research indicated DHI and PHM "could go much lower, and book value seems to mean nothing." Zelman predicts a 15%-20% decline for homebuilders who haven't sufficiently reduced their land holdings.
Published by SeekingAlpha

Labels: DHI, DYN, FWLT, Jim Cramer, MIR, NRG, PHM, Stop Trading

Home builder D.R. Horton Inc. said Tuesday second-quarter sales orders fell 37 percent, hurt by continued challenges in the housing market, particularly in California.
Net sales orders for the quarter ended March 31 totaled 9,983 homes, down from 15,771 homes during the prior-year quarter. The value of the orders dropped to $2.6 billion from $4.4 billion in the previous year.
Net sales orders for the first six months fell to $4.9 billion, or 18,754 homes, from $7.5 billion, or 27,234 homes during the same period in fiscal 2006.

Labels: DHI, DR Horton Inc.

Here are 7 options to watch for today. This list comes directly from the TradingMarkets Options Indicators page. The list is created using OptionVue options analysis software.
Most Under Priced Calls: These are the most under priced calls of all stocks in our database. While the Equities Explosion List finds groups of calls for individual equities that are under priced, this list finds the most under priced individual calls. Thus, the options listed here will tend to be more severely under priced.
Advanced Magnetics Inc. May 70 Calls (NasdaqGM:AMAG - News). AMAG's PowerRating is 9.
Most Under Priced Puts: These are the most under priced puts of all stocks in our database. While the Equities Explosion List finds groups of puts for individual equities that are under priced, this list finds the most under priced individual puts. Thus, the options listed here will tend to be more severely under priced.
Sears Holdings May 175 Puts (NasdaqGS:SHLD - News). SHLD's PowerRating is 7.
Most Overpriced Calls: These are the most overpriced calls of all stocks in our database. While the Equities Implosion List finds groups of calls for individual equities that are overpriced, this list finds the most overpriced individual calls. Thus, the options listed here will tend to be more severely overpriced.
Heelys Inc. Mar 35 Calls (NasdaqGM:HLYS - News). No PowerRating available due to less than 200-day trading history.
Most Overpriced Puts: These are the most overpriced puts of all stocks in our database. While the Equities Implosion List finds groups of puts for individual equities that are overpriced, this list finds the most overpriced individual puts. Thus, the options listed here will tend to be more severely overpriced.
Lamar Advertising Apr 65 (NasdaqGS:LAMR - News). LAMR's PowerRating is 6.
Stocks with Abnormal Call Volume: These are stocks which showed unusual call option volume not easily explained by arbitrage operations. The appearance of a stock on the Call Volume Alerts list suggests a possible takeover, extraordinarily good earnings report, or other news which may favorably affect the stock.
Burlington Northern Santa Fe Corp. (NYSE:BNI - News). BNI's PowerRating is 7.
Stocks with Abnormal Put Volume: These are stocks which showed unusual put option volume not easily explained by arbitrage operations. The appearance of a stock on the Put Volume Alerts list suggests an extraordinarily negative earnings report, or other news which may negatively affect the stock.
D.R. Horton Inc. (NYSE:DHI - News). DHI's PowerRating is 7.
Abnormal Put/Call $ Volume: These stocks have the highest dollar put volume in relation to their call volume. These high ratios are indicative of extreme bearish sentiment in the underlying stock.
Atheros Communications (NasdaqGS:ATHR - News). ATHR's PowerRating is 8.
PowerRatings are courtesy of TradingMarkets.com

Labels: AMAG, ATHR, BNI, DHI, HLYS, LAMR, SHLD, stock options

Stocks opened higher this morning but quickly fell into a funk on their way to a mixed close. There seemed to be little in the way of a strong catalyst to encourage the bulls to remain in the market. Oil prices put some pressure on stocks, rising for the second-consecutive day to push close to the $61 a barrel mark. The 10-year Treasury note was also weak today, pushing the yield up to 4.73%.

Makers of analog semiconductor chips were one of the day's most attractive sectors, spurred higher by a strong fiscal first-quarter profit report and encouraging guidance from Analog Devices (ADI, $xxxxx). The company, which makes chips used in cell phones, medical devices, and flat-screen TVs, reported a 26% increase in profits to $153 million, or 44 cents a share, up from $121 million, or 32 cents a share, in the year-ago period. The company said orders improved in the last month and it forecasted a strong current quarter. The results and a Citigroup upgrade to "buy" helped the stock climb 10%.
Other analog chipmakers moved higher on Analog Devices' profit report, including National Semiconductor (NYSE: NSM - News), up 6%; Maxim Integrated Products (Nasdaq: MXIM - News), which added 8%; and Linear Technology (Nasdaq: LLTC - News), up 10%. The strong showing helped the Philadelphia Semiconductor Index push 3% higher.
In other tech news, Apple (Nasdaq: AAPL - News) and Cisco Systems (Nasdaq: CSCO - News) agreed to share the iPhone name and to work together on "opportunities for interoperability in the areas of security, and consumer and enterprise communications." Neither company would elaborate on what that meant. Apple was sued by Cisco after the iPod maker introduced its iPhone smartphone product. Cisco said it owned the iPhone trademark and was already using it for a VoIP handheld phone. Both products will remain on the market under the iPhone brand name.
Luxury homebuilder Toll Brothers (NYSE: TOL - News) announced sharply lower fiscal Q1 earnings. The company's profit slumped -67%, driven lower by writedowns and other expenses as the slump in new home sales continued to hurt the builder's results. Toll Brothers said its profit declined to $54 million, or 33 cents per share, from $164 million, or 98 cents per share, a year ago. The results were better than the 29 cents EPS Wall Street expected, but the stock ended down -4%. Other companies in the new-home market slid on Toll Brother's report. Lennar (NYSE: LEN - News) was off -2%, while D.R. Horton (NYSE: DHI - News) and Centex (NYSE: CTX - News) both dropped -3%.
Retailer J.C. Penney (NYSE: JCP - News) slid -3% after it reported a weaker-than-expected fiscal Q1 and warned that it was seeing soft results this month. Penney's profit for the quarter ended February 3rd fell to $477 million, or $2.09 per share, from $551 million, or $2.34 per share, last year. Although February sales have been weak, the company predicted an upturn when it introduces its spring fashions.
In merger news, natural and organic foods supermarket operator Whole Foods Market (Nasdaq: WFMI - News) announced late yesterday that it would buy its smaller rival Wild Oats Markets (Nasdaq: OATS - News) for $535 million. Investors applauded the news, pushing shares of Whole Foods up 13%, while Wild Oats added 17%.

Published By Bullmarket.com

Labels: AAPL, CSCO, CTX, DHI, JCP, LEN, LLTC, MXIM, NSM, OATS, TOL, WFMI

Vulcan Materials (VMC, 111.81), the largest producer of construction aggregates - crushed stone, gravel, and sand - in the U.S., on Monday agreed to acquire Florida Rock (FRK) in a cash and stock deal valued at $4.6 billion.
The company said the acquisition will significantly enhance its strategic position and long-term growth opportunities by greatly expanding its presence in attractive Florida markets and in other high-growth Southeast and Mid-Atlantic states. While construction markets in the U.S. Sunbelt region, including Florida, have faltered over the past year with the slowdown the housing market, Vulcan is essentially making a long-term bet that the market is going to come back, especially as baby boomers begin to retire.
Although the housing market has not yet shown significant signs of improvement, with leading homebuilders such as Pulte Homes (PHM), DR Horton (DHI), and Toll Brothers (TOL) still struggling with a glut of inventory and undeveloped land, we believe the acquisition makes sense for Vulcan from a longer-term perspective, and should leave the company in a strong position to capitalize on the upturn in the housing cycle. As such, we would be buying shares of the company on the deal.
Under the terms of the agreement, Vulcan shareholders will receive one share of common stock in a new holding company, whose subsidiaries will be Vulcan Materials and Florida rock, for each Vulcan share. Florida Rock shareholders can elect to receive either 0.63 shares of the new holding company or $67 in cash for each Florida Rock share, with Vulcan seeking to ensure that an aggregate 70% of Florida rock shares will be converted into cash and 30% converted into stock.
Vulcan said it anticipates annual pre-tax cost synergies of about $50 million and expects the combined company to have aggregate reserves totaling about 13.9 billion tons. The acquisition, which should close in mid-2007, is expected to be neutral on Vulcan's earnings this year and accretive next year and beyond.
--Richard Jahnke, Briefing.com

Labels: DHI, Florida Rock, FRK, PHM, TOL, VMC, Vulcan Materials Co.

Yahoo (NASDAQ: YHOO - News), Google (NASDAQ: GOOG - News), Sun Microsystems (NASDAQ: SUNW - News), AT & T (NYSE: T - News), Verizon (NYSE: VZ - News), Apple (NASDAQ: AAPL - News), Norfolk Southern (NYSE: NSC - News), Union Pacific (NYSE: UNP - News), Lennar (NYSE: LEN - News), Centex Corp (NYSE: CTX - News), Toll Brothers (NYSE: TOL - News), DR Horton (NYSE: DHI - News) and Pulte (NYSE: PHM - News)
Cramer described the "glass half full mode" in tech as the shorts were looking at options expiration last week. "We were confounded by the work off of the options hangover which then positioned tech to be too low and ready for a trade -- just a trade, but a trade is worth grabbing." He added that the fact that Yahoo is up even though the company "doesn't have a clue" will give hedge funds the impression that it will go up whether Yahoo is good or bad and will encourage the shorts to change their position. Cramer also noted that Google was up on Yahoo, and that SUNW is also up, but he doesn't think that the company is doing anything interesting. What Cramer does find interesting is AT & T's strategy, outlined in its conference call, to take customers away from Verizon wireless by offering free service for a 18 months to Apple's iPhone users. Cramer says that NSC's drop is a "false tell" because the company periodically messes up and then ramps. He predicts that UNP will reach $110 to $115 from a recent $97. The "infrastructure crumble" for trucks make the rails "superior to almost any other trend I've got." Cramer calls CTX a "bunch of idiots" because they, along with LEN, TOL, DR Horton and PHM were too bullish at the top. "None of these companies distinguished themselves as good businessmen," he said. "None of them turned out to be cautious." However, he likes the fact that these companies are not building more homes, and prefers being long land inventory than home inventory because land is selling.
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Labels: AAPL, CTX, DHI, GOOG, Jim Cramer, LEN, NSC, PHM, SUNW, T, TOL, UNP, VZ, YHOO

NEW YORK (Reuters) - Shares of U.S. home builders rose on Wednesday after a stronger-than-expected report on November new single-family home sales suggested to some analysts that the housing market may have bottomed.
New home sales rose 3.4 percent from the previous month to a 1.047 million annual rate, above economists' forecasts for a 1.018 million rate, according to the Commerce Department. But sales were down 15.3 percent from a year earlier.
Shares of home builders were each up more than 1 percent in morning trading, with the overall Dow Jones Home Construction index (^DJUSHB - News) gaining 10 points, or 1.4 percent, to 729.58. This index has lost 21 percent this year, and is down about 35 percent from its high in July 2005.
"The new home sales report did beat the consensus forecast and that, I think, provides further evidence to support the view that the worst of the housing downturn may have passed," said Alex Beuzelin, senior market analyst with Ruesch International in Washington.
But talk of a bottom may be premature since the government data doesn't capture cancellation rates, said John Tomlinson, home building analyst with Majestic Research in New York. Majestic's own survey of 36 top markets has showed high rates of cancellation, he said, as buyers demand higher incentives before closing on a home.
Many home buyers are willing to walk away from their deposits to seek a better deal.
"It's a quiet week in the market," Tomlinson said. "On the surface, the data may seem somewhat positive, but you need to take a deeper dive into the metrics before concluding that we've reached a bottom and things are picking up."
Among major companies in the sector, KB Home (NYSE:KBH - News) rose 73 cents to $51.52, Toll Brothers Inc. (NYSE:TOL - News) gained 57 cents to $32.26, and D.R. Horton Inc. (NYSE:DHI - News) was up 25 cents to $26.36. Shares of Lennar Corp. (NYSE:LEN - News), Ryland Group (NYSE:RYL - News) and Meritage Homes (NYSE:MTH - News) were also higher, all on the New York Stock Exchange.
(Additional reporting by New York Treasuries Desk)

Labels: DHI, KBH, LEN, MTH, RYL, TOL

Home builder D.R. Horton Inc. on Tuesday said its fiscal fourth-quarter profit fell 51 percent as less homes closed in a sagging market, but results still came in ahead of Wall Street expectations.
Quarterly net income for the three months ended Sept. 30 sank to $277.7 million, or 88 cents per share, compared with a profit in the year-ago quarter of $563.8 million, or $1.77 per share.
Revenue fell 4 percent to $4.8 billion, from $5.02 billion a year ago.
Analysts polled by Thomson Financial expected a profit of 69 cents per share on revenue of $3.93 billion.

Labels: D.R. Horton Inc., DHI, homebuilders