THE ECONOMIC MONITOR

21 September 2010

U.S.
Free Edition

INSIDE THE REPORT MARKETS AT A GLANCE

 Stock recommendations and price targets from top  The S&P 500 slipped 0.26 percent to 1,139.78. The Dow Jones
brokerage firms Industrial Average rose 7.41 points, or 0.1 percent, to 10,761.03.

 Forecasts on Economic Indicators
 Important Events Scheduled on 22 September
Economic Events
 Prime Minister of Greece, George Papandreou, Speaks at
Lunch Meeting of the Economic Club of New York
 Assistant Treasury Secretary for Financial Institutions
Michael Barr speaks before a biennial conference
 The dollar was last 0.7 percent lower at 85.09 yen. In late
afternoon trading in New York, the euro was up 1.3 percent at
$1.3238.
 Benchmark 10-year notes rose a point in price to yield 2.59
percent, the lowest since early September and down from 2.70
percent.
 November crude fell $1.22, or 1.6 percent, to settle at $74.97 a
barrel.
 U.S. gold futures for December delivery slipped $6.50 during the
trading session to settle at $1,274.30.

 U.S. Commerce Secretary Gary Locke gives speech to

services industry conference
STOCK INDICES
Corporate Events INDEX LAST CHNG % CHNG

DJIA* 10761.03 7.41 0.07

 Bed Bath & Beyond, Red Hat second quarter results
NYSE Composite* 7245.95 -20.07 -0.28
 Darden Restaurants, General Mills first quarter 2011 results Nasdaq* 2349.35 -6.48 -0.28
S&P 500* 1139.78 -2.93 -0.26
Breaking News DJ Total Stock Market* 11891.6 -40.46 -0.34
Russell 2000* 664.66 -5.32 -0.79
 ConAgra profit misses expectation
Global Dow* 1928.44 -0.82 -0.04
 Carnival beats Street Nasdaq 100* 1989.11 -0.32 -0.02

 Potash bid seen running into next year DJ Transportation Avg* 4511.27 36.15 0.81

S&P 100* 515.53 -0.83 -0.16

 Textron to lay off 700 at Cessna
* CLOSING VALUES

 Abbott to cut 3,000 jobs

CURRENCIES
 Delay in Nokia’s N8 phone again
INDEX LAST PRIOR
 Weight-loss drug effective over 2 years: Vivus Euro (EUR/USD) 1.3241 1.3062

 Fed on possible further easing U.K. Pound (GBP/USD) 1.5614 1.5552

Japanese Yen (USD/JPY) 85.06 85.75
 Housing starts at 4-mth high
All prices are at 04:14PM EDT
 Student Loan shareholder sues to bar Citi deal
FUTURES
 iStar may seek pre-packaged bankruptcy: Report
SETTLE CHANGE

Crude Oil (Oct) 72.96 -1.34

Natural Gas (Nov) 4.089 0.084

Gold (Dec) 1289.70 8.90

Copper ( Dec) 348.35 -2.10
Wheat (Dec) 717.00 0.00

All prices are at 04:04 PM EDT

THE ECONOMIC MONITOR - U.S.

STOCK RECOMMENDATIONS BY BROKERAGE HOUSES

BROKERAGE/COMPANY ACTIONS RATING

JP Morgan
Cameron International Starts with overweight rating Overweight
FMC Technologies Starts with neutral rating Neutral
National Oilwell Varco Starts with overweight rating Overweight
BMO
CSX Corp Starts with $72 target price Outperform
Norfolk Southern Starts with $70 target price Outperform
Union Pacific Corp Starts with $95 target price Outperform
Stifel
Coca-Cola Raises price target to $65 from $5 Buy
Qualcomm Raises price target to $49 from $47 Outperform
Sterne Agee
Micron Technology Cuts to neutral from buy Neutral
SanDisk Corp Cuts to neutral from buy Neutral
Longbow
Nucor Corp Cuts to sell from neutral Sell
United States Steel Cuts to neutral from buy Neutral
Macquarie
Owens Illinois Cuts to neutral from outperform; lowers price target to $32 from $34 Neutral
Citigroup
Progressive Corp Raises price target to $25 from $22 Buy
Jefferies
Vulcan Materials Raises to buy from hold on valuation Buy

Credit Suisse
Raises to buy from hold on valuation Cuts to underperform from neutral; price target to $30 from $40 Underperform

Disclaimer: The views and investment tips expressed by investment experts are their own, and not that of IBTimes or its management. We advise users to check with
certified experts before taking any investment decisions.

MARKET BRIEFING
 U.S. stocks fell, dragging down S&P 500 from a four-month high, as investors bought Treasuries amid speculation the Federal Reserve will purchase
more government debt to buoy the economy. While, the Nasdaq ended modestly lower, with the Federal Reserve inching closer to further steps
designed to support the recovery. The S&P 500 slipped 0.26 percent to 1,139.78. The Dow Jones Industrial Average rose 7.41 points, or 0.1 percent, to
10,761.03. The Nasdaq Composite was down 6.48 points, or 0.28 percent, at 2,349.35.

 The dollar fell sharply against the yen and euro after the Federal Reserve suggested it stood ready to further stimulate the U.S. economy, raising fears it
may print more dollars to do so. The euro surged to a 6-week high against the dollar and broke above its 200-day moving average for the first time
since January, suggesting more gains were ahead. The yen powered higher against the greenback as well, breaking through the 85 level for the first time
since Japanese authorities intervened to weaken the currency last week. In late afternoon trading in New York, the euro was up 1.3 percent at $1.3238
after climbing as high as 1.3281. The dollar was last 0.7 percent lower at 85.09 yen. It fell to 84.97 yen on EBS. In late afternoon trading in New York, the
euro was up 1.3 percent at $1.3238 after climbing as high as 1.3281.

 U.S. Treasury prices rallied after the Federal Reserve signaled it was open to more policy easing in an effort to support the economy and prevent it from
slipping back into recession. The yield on two-year government notes posted a series of record lows on expectations the Fed would hold short-term
rates near zero even longer than previously thought, while long-dated yields declined on the Fed's acknowledgment that inflation will stay subdued and
deflation is a threat. Bonds briefly pared previous gains as the Fed disappointed some traders who had bet the U.S. central bank would immediately buy
more government debt and/or engage in other quantitative easing measures after its latest policy meeting. Benchmark 10-year notes rose a point in
price to yield 2.59 percent, the lowest since early September and down from 2.70 percent. The 30-year bond was up 1-24/32 for a yield of 3.77 percent,
down from 3.88 percent on Monday.

 Crude oil prices fell for the fifth time in six days on Tuesday, wilting amid high oil inventories and the Federal Reserve's continued concern about
sluggish economic recovery. Crude futures extended losses right before the close of the oil's open outcry trading session in New York after the U.S.
Federal Reserve said it would keep interest rates exceptionally low and that the central bank was prepared to provide additional accommodation if
needed to support recovery. The October U.S. crude contract expired on Tuesday, helping keep pressure on the front month and nearby months,
industry sources said. U.S. crude for October delivery fell $1.34, or 1.79 percent, to settle at $73.52 a barrel as it expired and went off the board. Trading
ranged from $72.81 to $74.60. U.S. November crude fell $1.22, or 1.6 percent, to settle at $74.97 a barrel. ICE Brent for November fell 90 cents to settle at
$78.42.

 Gold prices climbed to a fourth consecutive record high near $1,300 an ounce after the U.S. Federal Reserve inched nearer to taking new steps to
stimulate the U.S. economy and expressed concerns about low inflation. As expected, the U.S. central bank did not move to extend the purchases of
government debt, or quantitative easing, which helped fuel gold's 17 percent gain this year. But its renewed attention on the risk of deflation was
sufficient to put gold into the black. Spot gold, which had hit five record highs in the past six days, reversed early losses and rose to a new record of
$1,290.70 an ounce by 3:56 p.m. EDT from around $1,272 prior to the Fed announcement. U.S. gold futures for December delivery slipped $6.50 during
the trading session to settle at $1,274.30, but after the Fed announcement the price jumped to a peak at $1,292.40 an ounce.
THE ECONOMIC MONITOR - U.S.
COMPANY NEWS
ConAgra profit misses expectation
ConAgra Foods Inc posted lower-than-expected quarterly earnings and cut its
full-year forecast. ConAgra cited material costs that rose faster than the
company's efforts to curb expenses and promotions that were more aggressive
than anticipated. ConAgra forecast a rise in full-year profit of 5 to 7 percent from
the $1.74 per share it earned in fiscal 2010, which ended May 30. ConAgra raised
its dividend by 15 percent and affirmed its long-term target for annual earnings
growth of 8 to 10 percent.
Carnival beats Street
World’s largest cruise company, Carnival Corp & Plc posted better-than-
expected third-quarter results. Excluding one-time items, Carnival reported a
profit of$1.65 per share. The number of bookings in the third-quarter rose 8
percent compared with last year.
Potash bid seen running into next year
BHP Billiton, a global miner extended its offer period
for its $39 billion takeover of Canada's Potash Corp,
after it failed to win immediate backing from Canadian
authorities. The Anglo-Australian miner also said it had
no plan to change its $130-a-share offer and shrugged
off talk of a China-backed rival bid emerging.
Textron to lay off 700 at Cessna
Citing soft demand for business jets, the diversified U.S. manufacturer Textron
Inc said it is cutting back production at its Cessna unit.
It will lay off about 700 workers at Cessna, which currently employs 8,400 people,
as well as cutting operating hours, a spokesman said. It held its full-year profit
target steady. The company expects to reduce outstanding receivables at its
finance arm by about $2.4 billion this year, ahead of its initial target of $1.6 billion.
Abbott to cut 3,000 jobs
Following the purchase of Solvay SA's pharmaceuticals business, Abbott
Laboratories Inc plans to cut 3,000 jobs. The cuts will take place over the next
two years. The job cuts are part of "a series of recent strategic announcements
designed to position Abbott's pharmaceutical business for sustained and future
growth," Abbott spokesman Scott Stoffel said.
Delay in Nokia’s N8 phone again
Nokia said it would delay again its flagship smartphone N8 model. The N8 is
seen as Nokia's first top-range model to challenge Apple's iPhone more than
three years after its launch. It was originally scheduled to reach consumers in
June.
"In some markets, we had planned to start delivering the N8s to our pre-order
customers by the end of September. To ensure a great user experience, we have
decided to hold the shipments for a few weeks to do some final amends," the
company said in a statement, adding that the N8s would reach consumers in
October.
Weight-loss drug effective over 2 years: Vivus
Vivus Inc said that the second year of an experimental weight loss drug trial
found that patients taking the highest dose of its drug, Qnexa, lost an average of
26 pounds, or 11.4 percent of their body weight. Vivus officials declined to
comment on the latest trial results, citing the sensitivity of discussions with the
FDA. Although safety details were scant for the drug, which in July was turned
down by a panel of U.S. experts.
ECONOMY NEWS
Fed on possible further easing
The Federal Reserve’s policy-setting panel made no shift in monetary policy at
the end of a one-day meeting but it opened the door wider to pumping more
money into the economy.
It said in a statement, "The committee will continue
to monitor the economic outlook and financial
developments and is prepared to provide
additional accommodation if needed to support
the economic recovery and to return inflation, over
time, to levels consistent with its mandate."
The Fed said, "With substantial resource slack continuing to restrain cost
pressures and longer-term inflation expectations stable, inflation is likely to
remain subdued for some time."
Housing starts at 4-mth high
The Commerce Department said that housing starts rose 10.5 percent, the
largest increase since November, to a seasonally adjusted annual rate of 598,000
units. The residential construction rose more than expected suggesting the
embattled housing market was starting to stabilize following the end of a
homebuyer tax credit.
July's residential construction was revised down to show a 0.4 percent gain,
which was previously reported as a 1.7 percent increase. New building permits
for future home construction rebounded 1.8 percent to a 569,000-unit pace last
month, lifted by a 9.8 percent rise in permits for multi-family units, after an
unrevised 4.1 percent drop in July.
Residential construction in August was up by a 32.2 percent jump in
groundbreaking activity in the volatile multi-family segment to an annual rate of
160,000 units. Single-family starts increased 4.3 percent to a 438,000-unit pace,
the highest since June. Home completions increased 5.6 percent to a 603,000-
unit pace.
REGULATORY NEWS
Student Loan shareholder sues to bar Citi deal
According to a lawsuit, a shareholder of Student Loan Corp has sued to block
the sale of the company by majority owner Citigroup Inc because it benefits the
Wall Street bank at the expense of minority
investors. Citigroup, which owns 80 percent of the
stake, agreed last week to sell it to Discover
Financial Services for $600 million.
The complaint by Alan Kahn seeks class action
status, said Student Loans directors were acting to
benefit Citigroup by selling the Wall Street bank
the best loans. The shareholder said that at $30
per share, the deal is priced at a significant discount to the company's book
value of $65.74 per share, even though most of the student loans are
guaranteed by the U.S. government.
iStar may seek pre-packaged bankruptcy: Report
iStar Financial may look to a pre-packaged bankruptcy after creditors blocked it
from amending loans, Bloomberg reported on Tuesday citing people with
knowledge of the plan.
The Commercial real-estate lender company expects to meet with creditors in
coming weeks to discuss potential terms of a so-called pre-packaged
bankruptcy, paper said.
The bankruptcy may not occur until sometime next year, the report said. It has
hired Lazard Ltd and Kirkland & Ellis LLP to advise on the debt restructuring,
the news agency said.
THE ECONOMIC MONITOR - U.S.
NEXT TRADING DAY
Economic Events
NEW YORK - Prime Minister of Greece, George Papandreou, Speaks at
Lunch Meeting of the Economic Club of New York - 1615 GMT
Greek Prime Minister George Papandreou
stressed on Monday, during a visit to the
New York Stock Exchange where he
attended a working lunch with the stock
exchange's president and leading Wall
Street members, that Greece has changed
dramatically over the past year, when the
country's new government promoted the
most ambitious monetary and structural reforms in the history of the
Eurozone, with the help of the IMF and EU. He said a debt default
would be a 'tragedy.'
The Prime Minister said it's hard to argue with a 'prophet' like the
famed 'Dr. Doom,' New York University professor, Nouriel Roubini,
who says an orderly restructuring of Greece’s public debt is required in
order to avoid an inevitable default. However, Papandreou said that a
default would have long-term consequences, which would hit the
poorer sections of Greek society in particular.
WASHINGTON - Assistant Treasury Secretary for Financial Institutions
Michael Barr speaks before the Corporation for Enterprise
Development (CFED) biennial conference, "The Assets Movement at Its
Moment: Creating the Save & Invest Economy" - 1800 GMT
WASHINGTON - U.S. Commerce Secretary Gary Locke discusses
challenges and opportunities of U.S. services trade with China and the
Asia-Pacific in speech to services industry conference -1800 GMT
Corporate Events
Analysts expect Bed Bath & Beyond to
report a profit of 63 cents per share, up
from 34 cents a year earlier for the
second quarter. The home furnishings
retailer posted a strong profit in the
recent first quarter as consumers
continued to splurge on their homes, but
the company forecast weak second-quarter earnings, sending its shares
down 7 percent. The company reported first quarter net income of
$137.6 million or $0.52 per share, compared to $87.2 million or $0.34
per share in the year-ago quarter. Net sales for the quarter increased
13.5% to $1.92 billion from $1.69 billion in the prior-year quarter.
Twenty-one analysts had a revenue consensus of $1.89 billion for the
first quarter. Comparable store sales in the first quarter of 2010
increased by about 8.4%, compared with a decrease of around 1.6% in
last year's fiscal first quarter.
WallStreet expects Darden Restaurants to report a profit of 77 cents
per share for the first quarter, down from 90 cents for the same period
a year ago. The casual dining chain, reported a profit that dropped
below estimates in the recent fourth quarter on pre-tax charges and
lower sales reflecting the absence of an extra week benefit in the prior
year. The company's net earnings from continuing operations dropped
to $116.0 million or $0.81 per share from $122.8 million or $0.87 per
share in the same quarter a year ago. Darden's sales from continuing
operations were down 5.7% at $1.86 billion, compared to $1.98 billion
in the prior year quarter, missing Street expectation of $1.89 billion. The
additional fiscal week contributed approximately $124 million of sales in
the fourth quarter of fiscal 2009. U.S. same-restaurant sales decreased
1.5% at Olive Garden and 4.6% at Red Lobster while LongHorn
Steakhouse's U.S. same-restaurant sales increased 1.8%
NEXT TRADING DAY (contd…)
General Mills is expected to post a profit of 63 cents per share for the
first quarter, up from 43 cents for the same period a year ago. The
company reported diminutive fiscal 2010 results in the recent fourth
quarter. For the quarter, adjusted earnings dropped 4.6% to 41 cents a
share compared with 43 cents in the year-ago period. For fiscal 2010,
adjusted earnings jumped 16% to $2.30 per share compared with the
year-ago earnings of $1.99. Net sales for the fourth quarter declined 2%
to $3.57 billion from $3.65 billion in the year-ago quarter. Total revenue
for the reported quarter dipped 2% year over year to $3.6 billion. The
quarter experienced positive currency translation, flat volume compared
with the year-ago period, but unfavorable price and product mix.
WallStreet expects Red Hat to report a profit of 18 cents per share for
the second quarter, up from 15 cents for the same period a year ago.
The provider of open source software services, reported higher earnings
for the recent first quarter helped by a 20 percent organic revenue
growth. Adjusted earnings came in line with analysts’ expectation, but
revenues exceeded consensus. The company's earnings increased to
$24.07 million or 12 cents a share from $18.51 million or 10 cents a
share in the previous year quarter. Excluding stock compensation and
amortization expenses, net income was $35.58 million or 18 cents a
share, compared to $28.71 million or 15 cents a share in the previous
quarter last year. Total revenues for the quarter rose 20 percent to
$209.14 million from $174.39 million in the comparable quarter of last
year.
ECONOMIC INDICATOR WATCH
Mortgage Applications (Weekly)
Mortgage Index - Forecast: NA Prior: 801.5
Refinancing Index - Forecast: NA Prior: 4396.1
U.S. mortgage applications for home loan refinancing fell last week for a
second straight week, dropping to its lowest level since early August, as
rock-bottom interest rates failed to boost demand. The Mortgage
Bankers Association on last Wednesday said its seasonally adjusted
index of mortgage applications, which includes both purchase and
refinance loans, for the week ended Sept. 10 decreased 8.9 percent. The
four-week moving average of mortgage applications, which smooths
the volatile weekly figures, was down 0.8 percent. The MBA's seasonally
adjusted index of refinancing applications decreased 10.8 percent,
reaching its lowest level since the week ended August 6. Borrowing
costs on 30-year fixed-rate mortgages, excluding fees, averaged 4.47
percent, down 0.03 percentage point from the previous week. The MBA
said fixed 15-year mortgage rates averaged 3.96 percent, down from
the previous week's 4.00 percent. Rates on one-year adjustable-rate
mortgage, or ARMs, decreased to 6.89 percent from 7.00 percent.
Source: Mortgage Bankers Association
FHFA Home Price (July)
Forecast: NA Prior: -0.3%
Prices of U.S. single-family homes fell for the first time in four months in
June, and by an adjusted 1.7 percent from a year earlier, the Federal
Housing Finance Agency said in last month's release. The index fell by
a seasonally adjusted 1.7 percent for the 12 months ending in June.
Home prices, however, gained on a quarter-over-quarter basis. The
gauge in the second quarter rose 0.9 percent from the first quarter, but
dropped 1.6 percent from the second quarter of 2009. The U.S. index as
of June is 12.6 percent below its April 2007 peak, the regulator said.
Source: Federal Housing Finance Agency
THE ECONOMIC MONITOR - U.S.

ECONOMIC CALENDAR MARKET PERFORMANCE

WED 09/22 0700 Mortgage Index NA 801.5

0700 Refinancing Index NA 4396.1
DJIA
1000 FHFA Home Price (Jul) NA -0.3%
THU 09/23 0830 Initial Claims 450 k 450 k
0830 4 Week Average NA 464.75 k
0830 Continuing Claims 4.46 mln 4.485 mln

Existing Home Sls

1000 4.1 3.83 mln
(Aug)

Existing home sls

1000 8.40% -27.20%
(Aug)

1000 Lead Indicators (Aug) 0.10% 0.10%

FRI 09/24 0830 Durable Goods (Aug) -1% 0.40%
0830 Ex-Transportation 1% -3.70%

0830 Ex-Defense -0.40% 0.40%

0830 Nondefense ex-air 2% -7.20%

New Home Sales
1000 0.29 mln 0.276 mln
(Aug)
1030 ECRI Weekly Index NA 122.6
A. Stocks were cautious as Wall Street refrained from decisive moves
MON 09/27 0830 Chicago Fed Index NA NA
ahead of learning later on whether the Federal Reserve takes
1200
Chicago Midwest
NA 81.4 further action to jolt the economy. The Dow Jones climbed 5.28
(Aug)
points to 10,758.88.
TIME TBA Building Permits NA NA
B. Stocks attempted to swing higher Tuesday as Wall Street offered a
volatile take on the Federal Reserve's decision to hold rates
CORPORATE RESULTS unchanged, with the U.S. central bank saying it is ready to do more
if needed. Dow Jones rose 32.77 points to 10,786.39.
DATE - 22/September2010

COMPANY NAME EVENT

C. Stocks lost most of their afternoon gains by the close of trading.
The Dow Jones still eked out fractional gains, helped by a 2.2%
General Mills Q1 2011 advance in shares Caterpillar Inc. The blue-chip average finished
Lyris Q4 2010 up 7.41 points, or 0.1%, at 10,761.03.
Versar Q4 2010
Psivida Q4 2010

Bed Bath & Beyond Q2 2010

PHC Q4 2010
Darden Restaurants Q1 2011

Steelcase Q2 2011
IHS Q3 2010
Red Hat Q2 2011

eGain Communications Q4 2010

Carmax Q2 2011

Jefferies Q3 2010

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