Tuesday, June 12, 2007

Morning Market Comment

5.20% is likely the biggest stumbling block for the bulls this morning and it's reflected in a decent sized drop in stock futures. 5.20% is the yield on the 10 year treasury, rising in the absence of major economic data today.

Texas Instruments is the other stumbling block for the stock market: Texas Instruments narrows sales forecast for Q2. The stock is down 2% and sure to keep the chip sector weak today. This news will also pressure chips: Intel reported ready to slash prices of some processors..

Lehman has kicked off a strong earnings season for the brokers: Lehman Brothers quarterly earnings rise. LEH is up 2%, but the news is not enough to keep stock futures from falling.

Dow Jones family lay down the law to Murdoch. This should be interesting. The stock has been holding slightly above $60 indicating the market still thinks Murdoch wins... keep an eye for any sagging below $60.

As suspected, puts indeed were the wrong way to go on Take-Two (TTWO): Take-Two Posts 2Q Net Loss. The headline is actually misleading. TTWO managed to beat top and bottom line estimates and announced a restructuring including job cuts, which Wall Street always loves. TTWO is up 6%.

Piper this morning maintains a Market Perform on Netflix (NFLX), but sounds a cautionary note that Apple iTunes may start offering movie rentals next year which could eventually bite into NFLX.

Gabelli has research out on MGM saying the sum of the parts is $108 a share and that any number of options could develop with Tracinda including sale of the company.

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