Intelligent Investor US edition January 10 2011

8/8/2019 Intelligent Investor US edition January 10 2011

1/5

10 January 2011 The Intelligent InvestorU.S.

The Economic Monitor Series. Free Edition.

The Dow Jones industrial average fell 37.31 points, or 0.32percent, to 11,637.45. The Standard & Poor's 500 Index dipped1.75 points, or 0.14 percent, to 1,269.75. The Nasdaq Composite

Index gained 4.63 points, or 0.17 percent, to 2,707.80.

U.S. Treasuries prices rose on Monday, helped by new FederalReserve bond purchases and a safe-haven bid sparked byconcerns over new debt sales by some of the weakest Europeannations. Benchmark 10-year Treasury notes rose 5/32 in price. Five

-year notes increased 5/32 in price to yield 1.94 percent from 1.96percent on Friday, while 30-year bonds rose 3/32 to yield 4.48percent from 4.49 percent on Friday.

The euro last traded up 0.4 percent at $1.2952. Against the yen,the dollar slipped 0.5 percent to 82.72 yen.

Gold rose above $1,370 an ounce on Monday as the dollar movedinto negative territory versus the euro. Spot gold was bid at$1,370.75 an ounce at 1635 GMT, against $1,368.80 late in NewYork on Friday. U.S. gold futures for February delivery rose $1.90an ounce to $1,370.80.

U.S. crude oil for February delivery rose $1.22, or 1.39 percent, tosettle at $89.25 a barrel, trading from $88.13 to $89.98.

MARKETS AT A GLANCE

STOCK INDICES

CURRENCIES

INDEX LAST PRIOR

Euro (EUR/USD) 1.2947 1.2954

U.K. Pound (GBP/USD) 1.5573 1.5579

Japanese Yen (USD/JPY) 82.70 82.73

All prices are at 05:44 PM EST

FUTURES

INDEX LAST CHNG % CHNG

DJIA* 11637.45 -37.31 -0.32

Nasdaq* 2707.8 4.63 0.17

S&P 500* 1269.75 -1.75 -0.14

DJ Total Stock Market* 13424.38 -4.56 -0.03

Global Dow* 2083.38 -9.42 -0.45

* CLOSING VALUES

LAST CHANGE

Crude Oil, Feb. 89.35 1.22

Natural Gas, Mar. 4.38 -0.013

Gold, Dec, Feb. 1375.80 5.2

Copper, Mar. 428.00 -1.80

All prices are at 05:30 PM EST

INSIDE THE REPORT

Stock recommendations and price targets from topbrokerage firms

Analysis and views on Why is the SEC eyeing

Facebook?

Economic Indicator Watch

Important Events Scheduled on January 11

Economic Events

Federal Reserve Bank of Philadelphia PresidentCharles Plosser speaks on the economic outlookbefore the RMA Philadelphia Chapter Meeting - 1330GMT

Corporate Events

Supervalu Inc. is scheduled for quarterly results

Top Stories

DuPont to buy Danisco at $5.8 bln

Duke Energy to buy Progress Energy

Genzyme shares up as Sanofi revealed talks

iGate buys majority stake in Patni computers

Morgan Stanley to spin off prop trading unit by2012

Oil up on Alaska pipeline leak

Gas to sell at $3.50/gal: Toyota exec
http://online.wsj.com/mdc/public/npage/2_3051.html?mod=mdc_h_dtabnk&symb=$COMPQhttp://online.wsj.com/mdc/public/npage/2_3051.html?mod=mdc_h_dtabnk&symb=SPXhttp://online.wsj.com/mdc/public/npage/2_3051.html?mod=mdc_h_dtabnk&symb=DWChttp://online.wsj.com/mdc/public/npage/2_3051.html?mod=mdc_h_dtabnk&symb=GDOW&page=intlhttp://online.wsj.com/mdc/public/npage/2_3051.html?mod=mdc_h_dtabnk&symb=GDOW&page=intlhttp://online.wsj.com/mdc/public/npage/2_3051.html?mod=mdc_h_dtabnk&symb=DWChttp://online.wsj.com/mdc/public/npage/2_3051.html?mod=mdc_h_dtabnk&symb=SPXhttp://online.wsj.com/mdc/public/npage/2_3051.html?mod=mdc_h_dtabnk&symb=$COMPQ


2/5

The Intelligent Investor - U.S.

http://www.europac.net/special_report/whats_ahead_canadian_energy_trusts?s=ibt1
http://www.europac.net/special_report/whats_ahead_canadian_energy_trusts?s=ibt1http://www.europac.net/special_report/whats_ahead_canadian_energy_trusts?s=ibt1


3/5


STOCK RECOMMENDATIONS BY BROKERAGE HOUSES

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 beforetaking any investment decisions.

BROKERAGE/COMPANY ACTIONS RATING

Goldman Sachs

3M Co Raises price target to $101 from $93 NeutralCSX Corp Raises price target to $71 from $63

Dow Chemical Raises to buy from neutral Buy

FedEx Corp Raises price target to $107 from $105

GE Raises price target to $22 from $21 BuyHoneywell Raises price target to $65 from $57 NeutralInternational Paper Raises price target to $33 from $30

Wal Mart Cuts to neutral from buy NeutralFBR

Broadcom Corp Raises price target to $52 from $49 OutperformNVIDIA Corp Raises price target to $16 from $14 Market performQualcomm Inc Raises price target to $55 from $51 OutperformWells Fargo Cuts to market perform from outperform Market performBarclaysConocophillips Raises price target to $75 from $63 Equal-weightExxon Mobil Cuts to equal weight from overweight Equal-weight

Ford Motor Raises price target to $23 from $17 OverweightGM Raises price target to $48 from $42 Overweight

ECONOMIC INDICATOR WATCH ON 11 JANUARY 2011

ICSC Chain Stores (weekly)

Forecast: N/A, Prior: 0.4%

ICSC Chain Stores (YoY)


The International Council of Shopping Centers and Goldman Sachs will issue their weekly report on U.S. chain store sales at 0745 EST. Wholesale Inventories(MoM)

Forecast: 1.0%, Prior: 1.9%

Wholesale sales (MoM)

Forecast: 1.5%, Prior: 2.2%

TheCommerce Department will release its report on wholesale inventories and sales for the month of November at 1000 EST.

Redbook (Weekly)


Redbook Research will release weekly report for U.S. chain store sales at 0855 EST.

EST/GMT Indicator Period Unit Fcast Prior

1000/1500 IBD Consumer Conf Jan -- -- 45.8

1700/2200 ABC CCI Weekly -- -- -45


4/5


Why is the SEC eyeing Facebook?

By Hao Li, IBTimes

Facebook shares are hot, but they're starting to behave like publicly-traded shares, which has attracted the

scrutiny of the Securities and Exchange Commission (SEC).

Shares of the social-networking giant have been traded in the secondary market as employees and formeremployees sell their shares to eager investors. These shares can then be resold and traded similar to theway public stocks are traded.

SecondMarket is a part of the secondary market that offers a platform to trade Facebook shares. In addition to Facebook, it also has

allowed the trading ofTwitter, LinkedIn, Zynga, and Tesla shares.

But the SEC's main concern is about something else.

Ever since Facebook gained traction among internet users, institutional investors have been itching to get their hands on a piece ofthe company's bright future. Microsoft (Nasdaq: MSFT), Goldman Sachs (NYSE: GS), Interpublic Group (NYSE: IPG) and a whole

bunch of venture capital/investment firms all own a part of Facebook.What alarmed the SEC, however, is that Goldman Sachs is setting up a special-purpose vehicle to allow some of its wealthy clients toinvest as much as $1.5 billion in Facebook shares, reported the Wall Street Journal.

In order to protect public investors, the SEC requires companies that publicly raise money through equity offerings to disclose certainfinancial information. For public companies, required disclosures include quarterly and annual earnings reports. For companieswishing to issue initial public offerings, they are required to draft up prospectuses.

Back when corporate and professional entities were investing in Facebook, the SEC had no problem. Now, as wealthy individualclients of Goldman Sachs invest in the company, the line between the public investors and sophisticated private investors is blurred.

Combine that blurred line with the fact that one can get price quotes for Facebook shares from the secondary market, Facebook isstarting behave more and more like a publicly-traded company.

If Facebook is indeed being treated as a public company, the SEC may also force it to make financial disclosures like any other publiclytraded company.

Currently, Goldman Sachs' latest investment in Facebook and the value of Facebook shares traded on the secondary market indicatethat the company has a total value of around $50 billion, placing it above Yahoo! (Nasdaq: YHOO) and eBay (Nasdaq: EBAY), but

below Amazon.com (Nasdaq: AMZN) and Google (Nasdaq: GOOG).

ANALYSIS AND VIEWS

THE NEXT TRADING DAY

Economic Events

Federal Reserve Bank of Philadelphia President Charles Plosser speaks on the economic outlook before the RMA

Philadelphia Chapter Meeting - 1330 GMT

Federal Reserve Bank of Philadelphia President and CEO Charles I. Plosser will speak on the perspectives on issues affecting theprogress of U.S. economic recovery at RMA Philadelphia Chapter Meeting. He is supposed to shares his views on current businessconditions, unemployment, and inflation.

Company Events

Supervalu Inc is expected to post a profit of 32 cents per share for its third quarter, down from the profit of 46 centsprevious year for the same quarter. It reported second quarter 2011 earnings of $0.28 per share on October 19, 2010.


5/5


This report is produced byInternational Business Times

For questions or commentsreach us [email protected]

For more information aboutour products visit

TOP STORIES

DuPont to buy Danisco at $5.8 bln

DuPont has agreed for $5.8 billion takeover ofDanisco, the Danish food company. Danisco shares rose as high as 670.50 crownsearly trading hours, above DuPont's cash bid, but then fell back to 660 crowns. DuPont will pay $5.8 billion in cash, assuming $500million of Danisco debt. DuPont will use $3 billion in existing cash to pay for the deal, and raise the rest in debt. The deal is expected

to cut Duponts 2011 earnings by 30 to 40 cents per share. In its previous outlook before the deal DuPont had forecast 2011 e arningsof $3.30 to $3.60 per share. Danisco's Chairman Jorgen Tandrup said he and did not expect any anti-trust problems with the

acquisition. In a statement, DuPont CEO Ellen Kullman called Danisco a "premium entity."

Duke Energy to buy Progress Energy

Duke Energy confirmed its deal to buy Progress Energy Inc for $13.7 billion in stock. Its offer was a 6.4% premium over the last 20trading days, creating the largest US power company. Progress Energy shareholders would receive 2.6125 shares of common stock ofDuke Energy for each share held, or $46.48 per share. The deal would create an industry giant with approximately 7.1 millionelectricity customers in North Carolina, South Carolina, Florida, Indiana, Kentucky and Ohio, and 57,000 megawatts of generatingcapacity.

Genzyme shares up as Sanofi revealed talks

The confirmation by French drugmaker Sanofi-Aventis that it is in direct talk with Genzyme Corp send Genzyme Corps share up formore than 3 percent in the market. Sanofi revealed about the proceedings and said that representatives from both companies hadentered discussions about ways to value key Genzyme drug Campath, which the U.S. biotech hopes to market as a multiple sclerosis(MS) treatment under brand name Lemtrada.

iGate buys majority stake in Patni computers

Software firm iGate will buy majority of stake in Patni Computer Systems for $1.2 billion. Backed by private equity firm ApaxPartners, iGate said it has agreed to pay 503.50 rupees a share for a 63 percent stake in Patni, valuing the deal at $921 million. It willbuy an additional 20.6 percent stake through an open offer to Patni minority shareholders for $301 million afterwards.

Morgan Stanley to spin off prop trading unit by 2012

Morgan Stanley will spin off its proprietary trading business into an independent firm in 2012 as the bank will act under new financialrule passed by congress. Morgan Stanley's proprietary trading chief, Peter Muller will run the unit along with 60 employees fromMorgan Stanley's global proprietary trading business. The unit will be named as PDT Advisers. During a two-year transition period, itwill continue to manage Morgan Stanley's proprietary trading and will expand its business to include third-party investors.

Oil up on Alaska pipeline leak

Oil rose over 1 percent after a leak shut an Alaskan pipeline that carries 12percent of U.S. crude output. The Trans Alaska Pipeline wasshut down on Saturday because of a leak in Prudhoe Bay, forcing oil companies to cut output to5 percent of their daily average of630,000 barrels. Although the price was capped down by the strong dollar as it rose in the market due to the euro worries.

Gas to sell at $3.50/gal: Toyota exec

According to a top Toyota Motor Corp executive, the price of gasoline will rise to an average of about $3.50 a gallon. Bob Carter, theToyota brand chief for the United States, told Reuters at the North American International Auto Show in Detroit that states with hightaxes and other costs, such as California, prices could hit $4 a gallon. "What we see is national average gas prices will remain above $3a gallon through 2011, approaching $3.50," he said.

Documents

Intelligent Investor US edition January 10 2011