MOST NOTEWORTHY: The airline sector, Siemens and Internap were today's noteworthy downgrades:
Lehman downgraded the airline sector to Neutral from Positive, citing higher fuel costs and the weakening economy. AirTran (NYSE: AAI) and U.S. Airways (NYSE: LCC) were downgraded to Equal Weight from Overweight. UBS said it can no longer recommend airline stocks due to weakening economy, high fuel prices, and less likely industry consolidation. The firm downgraded Continental Airlines (NYSE: CAL), Delta Air Lines (NYSE: DAL), Northwest Airlines (NYSE: NWA) and U.S. Airways to Neutral from Buy.
Goldman removed shares of Siemens (NYSE: SI) from their Conviction Buy List as they believe the company may book additional charges of $1.2B this year.
Jefferies cut Internap (NASDAQ: INAP) to Underperform from Buy as they believe the 10-K filing delay and revenue quality questions reduce visibility into the health of the business.
OTHER DOWNGRADES:
Wachovia lowered Amgen (NASDAQ: AMGN) to Market Perform from Outperform.
SI International (NASDAQ: SINT) was downgraded to Neutral from Outperform at Cowen.
If you wanted two situations to describe today's rally, first you can thank S&P and second you can thank Barney Frank. S&P and Moody's have had the markets by the you-know-whats, but today they issued a report calling "the end in sight" on write downs.
Congressman Barney Frank was out calling for the FHA to get involved as a mortgage backstop to help one or two million mortgage holders. It is pretty impressive that the market rallied when we simultaneously saw gold hit $1,000/ounce and oil hit $110/barrel. Below are the unofficial closing levels for the markets.
Target Corp (NYSE: TGT) said on Wednesday that it is in talks with an investment partner to sell some credit assets, namely credit-card receivables, for about $4 billion. Target's shares were up 1.7% in after-hours trading.
Microsoft (NASDAQ: MSFT) and General Electric (NYSE: GE) will be holding analyst meetings.
Amgen Inc. (NASDAQ: AMGN) and Johnson & Johnson (NYSE: JNJ) meet Thursday with regulators who will consider limiting the use of their anemia drugs after studies found they increase the risk of death and tumor growth in cancer patients.
Time Warner (NYSE: TWX)'s AOL said Thursday it will acquire social media network Bebo -- one of the largest social networks in Britain which has total global membership of more than 40 million -- for $850 million in cash.
On 3/13/08, the FDA Oncologic Drugs Advisory Committee (ODAC) is scheduled to review the use of Erythropoiesis stimulation agents, including Aranesp and JNJ's Procrit, to treat chemotherapy induced anemia.
AMGN March option implied volatility is at 51; April is at 41; above its 26-week average of 33 according to Track Data, suggesting larger price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
It is interesting to see how one piece of news can have a different impact on two stocks. The news? The Food and Drug Administration found that anemia drugs are tied to increased risks of death and faster-spreading tumors at high doses.
Amgen Inc. (NASDAQ: AMGN) makes Aranesp and Epogen, while Johnson & Johnson (NYSE: JNJ) makes Procrit, all used to help cancer and kidney disease patients overcome anemia. But now the FDA says these drug show greater risks for patients with certain cancers on tumor progression and survival, as well as blood clots. While both companies believe the risks were seen when the drugs were given for unapproved uses, including higher-than-recommended doses, it is possible that following the study, the FDA may recommend to end the use of these drugs for patients whose anemia is caused by cancer chemotherapy, or who are at greater risk, but still allow it for kidney disease patients.
Still, as some analysts believe, with the recent updates both companies had on product prescribing and labeling, it is unlikely the drugs will be completely inadvisable for use in cancer patients as they allow the cycle of chemotherapy to continue more smoothly, helping to strengthen them after each treatment. It is more likely the companies will work with the FDA for better regulation on these drugs.
On the news, Amgen shares fell nearly 2%, while JNJ shares climbed over 1%. Surprising? Not really.
On 3/13/08, the FDA Oncologic Drugs Advisory Committee (ODAC) is scheduled to review the use of Erythropoiesis stimulation agents, including Aranesp and Procrit, to treat chemotherapy induced anemia.
AMGN March option implied volatility is at 45; April is at 38; above its 26-week average of 32 according to Track Data, suggesting larger price risk.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
Amgen Inc. (NASDAQ: AMGN) stock is falling on news that a study appearing in the Journal of the American Medical Association argues that treating cancer patients with anemia drugs increases their risk of blood clots and death. This could be bad news for AMGN, whose drug Aranesp was used in the study along with Johnson & Johnson's (NYSE: JNJ) Procrit. Researchers said the drugs increased the risk of death by 10 percent. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on AMGN.
After hitting a one-year high of $66.06 last February, the stock hit a one-year low of $43.93 in January. This morning, AMGN opened at $46.90. So far today the stock has hit a low of $46.66 and a high of $47.15. As of 11:05, AMGN is trading at $46.79, down $1.03 (-2.2%). The chart for AMGN looks neutral and improving, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.
After Apple Inc. (NASDAQ: AAPL) announced Tuesday it was touching up its lineup of MacBook and MacBook Pro laptops. Meanwhile, Apple's iTunes digital media store became the second-largest U.S. music retailer, behind Wal-Mart Stores (NYSE: WMT), leaving Best Buy Co (NYSE: BBY) and Target Corp (NYSE: TGT) behind. Following all that, many analysts had something to say on the future of the company and Barron's Savitz rounded their comments. Mostly, they reiterate their rating and price targets.
New studies show that widely-used drugs for anemic cancer patients can increase the risk of blood clots anddeath rates. The drugs are mainly made by Amgen (NASDAQ: AMGN) and Johnson & Johnson (NYSE: JNJ).
Starbucks (NASDAQ: SBUX) has shut down most of its U.S. shops for three hours to retrain baristas on espresso basics Tuesday, and today it opened the stores with a new promise: "Your drink should be perfect, every time. If not, let us know and we'll make it right." Since Schultz took over the head post again, he's been trying to restore Starbucks to what it has been with the latest being a retraining of the staff and the upholding of the company's pledge. Time will tell if it will help.
New studies show that widely used cancer drugs can increase death rates in some patients. According toThe New York Times, the FDA "is planning to convene an advisory committee on March 13 to discuss whether to impose further restrictions on the use of the drugs, Aranesp from Amgen (NASDAQ: AMGN) and Procrit from Johnson & Johnson (NYSE: JNJ), with cancer patients."
One of the things the FDA is considering is putting new warning labels on the drugs, but is that enough?
New studies show that the two drugs can increase the risk of clots and may actually cause some tumors to grow.
It is always a difficult question to ask, but how much of this did the drug companies know? Lehman Brothers estimates that a cutback in the use of the Amgen drug could cost the company $1 billion a year. News of bad clinical and research results often send pharma stocks down.
While the drugs may be effective for some treatments, they clearly cause risks in others. Amgen and Johnson & Johnson shareholders are just going to have to live with that.
Douglas A. McIntyre is an editor at 247wallst.com.
While Michelle Obama's rather outlandish comment hasn't gotten a lot of mainstream media play, I would like to present two American stocks that even she would be proud of.
Michelle Obama said, "for the first time in my adult lifetime, I am really proud of my country." Now Michelle hasn't exactly led a life of your typical third world citizen. She graduated from Princeton University and Harvard Law School. While America may not be perfect, it is by far and away the greatest nation on earth. If she was so anti-U.S. for the last 25 years, why did she bother staying? The fact that millions of people are trying to enter the U.S. every year means something. You don't see people crowding into boats to be smuggled into Cuba (enjoy your retirement, Fidel).
I will not go into all the things that we can be proud of as Americans that have occurred over the last 25 years. What I will do is present two great U.S. companies that will make you proud. They have not only created products that have been an enormous help to people around the world, but also make for potentially intriguing investments.
Amgen, Inc. (NASDAQ: AMGN) recently trading up 15 cents to $46.87 on unconfirmed takeover chatter:
AMGN call option volume of 18,974 contracts compared to put volume of 3,607 contracts. AMGN March option implied volatility of 36 was above its 26-week average of 31 according to Track Data, suggesting traders are positioning for an upside move.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
Amgen Inc. (NASDAQ: AMGN) shares are trading higher this morning after the company reported a fourth-quarter profit of $835 million, or 76 cents per share, yesterday after market close. Excluding a mix of one-time buyout and restructuring charges, it earned $1 per share, beating analysts' expectations of 97 cents per share. However, 2008 forecasts were a little light, with the company expecting a slight dip in revenue due to FDA scrutiny over its erythropoiesis-stimulating agents, include Aranesp and Epogen, which depressed sales slightly in the fourth quarter. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on AMGN.
After hitting a one-year high of $75.01 last January, the stock hit a one-year low of $43.93 on Tuesday. AMGN opened this morning at $47.52. So far today the stock has hit a low of $47.49 and a high of $48.26. As of 10:20, AMGN is trading at $48.00, up $1.88 (4.1%). The chart for AMGN looks bearish but improving slightly, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider a March bull-put credit spread below the $40 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in just two months as long as AMGN is above $40 at March expiration. Amgen would have to fall by more than 16% before we would start to lose money.
AMGN hasn't been below $43 at all in the past year and has shown support around $45 recently. This trade could be risky if the one of the company's drugs gets in trouble with the FDA or something of that nature, but even if that happens, this position could be protected by the support the stock has recently found right at $45, where it has bounced twice in the past month.
Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in AMGN.
Amgen Inc (NASDAQ: AMGN) said on Thursday that fourth-quarter profit edged higher. The cost cut measure the world's largest biotechnology company by sales has taken helped it post a quarterly net profit of $835 million, or 76 cents per share, compared with a profit of $833 million, or 71 cents per share, a year ago. Excluding items, Amgen earned $1.00 per share, topping analysts' average expectations by 3 cents a share, according to Reuters Estimates. More importantly, though was Amgen's sales of the red blood cell booster Aranesp -- seen as its most important product -- which easily beat analysts expectation. Shares are up nearly 3.5% in premarket trading.
Caterpillar Inc. (NYSE: CAT) had just reported, saying its fourth-quarter earnings rose 11% to $975 million, or $1.50 per share on strong international growth, which offset weakness in the domestic market. Revenue rose 10% to $12.14 billion. Analysts were expecting a profit of $1.50 per share on revenue of $11.79 billion, according to a poll by Thomson Financial. Revenue outlook for 2008 was slightly below expectations. Stock is up 0.77% in premarket trading.
Honywell Internationl Inc. (NYSE: HON), also reported late Thursday, saying that fourth-quarter net income rose 18% to $689 million, or 91 cents per share, inline with analyst estimates. All its four business segments experienced growth. Fourth-quarter sales were up 12% to $9.3 billion. HON shares are up 1.4% in premarket trading.
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MOST NOTEWORTHY: The airline sector, Siemens and Internap were today's noteworthy downgrades:
Amgen
New studies show that widely used cancer drugs can increase death rates in some patients. 
While Michelle Obama's rather outlandish comment hasn't gotten a lot of mainstream media play, I would like to present two American stocks that even she would be proud of.
Amgen, Inc.
Just how high will U.S. gasoline prices rise?
Nordstrom and Kohl's post smaller-than-expected Q1 profit declines
Oil hits record $127.43 on supply concerns, raised Goldman forecast
