MIDDAY LUNCH

Dow	10428.65	+99.76	(+0.96%)
Nasdaq	2237.23	+25.54	(+1.14%)
SP 500	1114.88	+12.41	(+1.11%)
10-yr Note	-33/32	3.66%
NYSE	Adv 2177	Dec 821	Vol 566 mln
Nasdaq	Adv 1730	Dec 958	Vol 1.18 bln

Broad based buying has led the markets higher today.  A weaker dollar helped the markets sustain their gains from last week.  The dollar has since recovered and is up 0.2%.

The commodity and materials sectors have been the leaders today.  The material sector is up 1.4% mostly on news that Morgan Stanley upgraded Alcoa (AA) 15.84 +1.26.

The NASDAQ reached a new 52 week high today.  Part of the rise today is based on an upgrade on Intel (INTC) 20.13 +0.50 by Barclays.

Chattem (CHTT) 92.98 +23.00 +32.80% is the biggest mover so far today after it was announced that Sanofi-Aventis (SYN) 39.17 +0.06 +0.15% would be purchasing the company for 1.9 billion. 

Both Walgreen (WAG) 36.66 +0.025 and ConAgra (CAG) 21.12 -0.039 beat their earnings estimates this morning. Walgreen’s Reported earnings of 0.52 per shares the street was looking for 0.48.  ConAgra reported earnings of 0.52 and the street was looking for 0.47 per share.  The company did miss their revenue projections.

MORNING COFFEE

Healthcare Bill Passes.  The Senate voted 60-40 along party lines to advance healthcare legislation in a procedural vote at 1:30AM Monday morning.  The Senate bill, is likely to form the core of any final bill, and leaves existing employer-based health-insurance benefits largely intact. Last-minute additions toughened restrictions on insurers, including barring them from denying coverage to children with pre-existing conditions. Insurers say the bill will increase costs, but note modest improvements.

Yelp says no to Google.  Yelp reportedly said no to an all-but-signed deal to be acquired by Google (GOOG) for about $550M plus earnouts over the weekend. 

Saab still has life.  GM said it received inquiries from "several parties" after announcing that it would be closing down Saab after negotiations with Spyker fell through of Friday. One of the inquiries was again from Spyker, which submitted a revised bid.

Sanofi-Aventis Buys Chattem.  Sanofi-Aventis (SNY) will acquire consumer healthcare firm Chattem (CHTT) for $1.9B, or $93.50/share in cash - a 34% premium to Friday's close. The transaction creates the world's No. 5 consumer healthcare company by revenues.  Chattem has over two dozen products, including Aspercreme, Icy Hot joint, Pamprin , Gold Bond and Unisom.

Earnings

ConAgra (CAG) Est. 0.47

Jabil Circuit (JBL) Est. 0.29     

Walgreen (WAG) Est. 0.48

·        Futures: Dow +0.3% to 10301. S&P +0.4% to 1102. Nasdaq +0.4%.

     Crude +0.7% to $74.95. Gold +0.3% to $1,114.70.   

     30-year Tsy -0.48% to 117-22. 10-year -0.21%. 5-year -0.11%.

     Euro flat vs. dollar. Yen flat. Pound -0.1%.

·         Asia: Nikkei +0.4% to 10183. Hang Seng -1.1% to 20948. Shanghai+0.3% to 3123. BSE -0.7% to 16601.

·         Europe at midday: FTSE +1% to 5249. CAC +0.7% to 3823. DAX +0.7%to 5870.

CLOSING BELL

Dow	10328.89	+20.63	(+0.20%)
Nasdaq	2211.69	+31.64	(+1.43%)
SP 500	1102.47	+6.39	(+0.58%)
10-yr Note	-17/32	3.54%
NYSE	Adv 1774	Dec 1242	Vol 3.16 bln
Nasdaq	Adv 1663	Dec 1094	Vol 2.86 bln

All three indices posted gains today led by the tech and financial sectors.

Research In Motion (RIMM) 69.99, +6.53 and Oracle (ORCL) 24.34, +1.46 and both announced yesterday after the market closed earnings results that exceeded analysts' expectations for the latest quarter.

Accenture (ACN) 41.37, -0.29 and Nike (NKE) 64.42, +1.17also reported earnings the beat estimates 

yesterday after the close.

Both tech stocks and financial stocks led the market today with respective gains of 1.6% and 1.4%. The two sectors were the best two performing sectors and combine to make up nearly 35% of the total weight in the S&P 500.    

Stocks came under pressure midday today as the dollar rallied against other currancies.  The rally could not 

be sustained and the dollar closed today unchanged.

Trading volume on the NYSE hit its highest level of the year by trading over 3 billion shares, but that was largely the result of this year's last quadruple witching options expiration. The S&P 500 is also due to be rebalanced. 

Advancing Sectors: Tech (+1.6%), Financials (+1.4%), Consumer Discretionary (+0.5%), Utilities (+0.5%), Energy (+0.3%), Health Care (+0.3%), Telecom (+0.2%), Materials (+0.1%)

Declining Sectors: Consumer Staples (-0.3%), Industrials (-0.2%)

Midday Lunch

Dow	10298.66	+18.13	(+0.18%)
Nasdaq	2198.11	+19.88	(+0.90%)
SP 500	1098.39	+2.32	(+0.21%)
10-yr Note	-9/32	3.51%
NYSE	Adv 1248	Dec 1682	Vol 1.03 bln
Nasdaq	Adv 1286	Dec 1289	Vol 1.2 bln

All three indices are in positive territory on very heavy volume due to Quadruple witching options expiration.

Losses are steepest among consumer staples stocks, which are now down 1.2%. Campbell Soup (CPB) Co 32.74, -0.57 has been a primary drag on the sector this session.

Positive earnings from Research In Motion (RIMM) 70.00 +6.54, Oracle (ORCL) 24.31 +1.43 are helping the  tech sector to fare the best this session. The sector is up 0.8%. Financials (+0.3%) and energy (+0.2%) make up the only other two sectors to sport gains.

Crude oil is higher this session trading at 73.54 +0.89 off from the session highs at $74.69 per barrel. 

There are unconfirmed stories that Iranian troops have entered a disputed area of Iraq and seized an oil well.  Well number 4 is the largest producing well in Iraq.  Iran is denying the reports.  

MORNING COFFEE

RIM not affected by iPhone and Droid

Research In Motion (RIMM) The maker of Blackberry cell phones reported earnings of 1.10.  Analyst had estimated earnings of only 0.69.  The 59 percent increase in third-quarter income was boosted by new subscribers and record sales of its smart phones.  

Oracle beats estimates

Oracle (ORCL) beat earnings estimates by 8.33% reporting earnings of 0.39. Revenues rose 4% from the year-ago period.  President Safra Catz said on the earnings call “We're really seeing a recovery,".

Accenture reports mixed results

Accenture PLC (ACN) reported earnings of 0.67 which beat estimates of 0.65.  The company future guidance was mixed.  The company raised their full year earnings to 2.67-2.75 per share, above estimates of 2.64-2.72 citing improving momentum.  The company did say it expects their second quarter revenues to come in below Wall Street’s estimates.  

Nike running strong

Nike (NKE) reported better than expected earnings on cost cutting, streamlining operations and reduced marketing.  The company reported earnings of 0.76, traders were looking for earnings of only 0.71. 

Banks troubles continue

There is more trouble for banks as FINRA investigating information from Citigroup (C), JPMorgan (JPM), Morgan Stanley (MS) and other securities firms. The regulatory body is looking at how the firms disseminate stock ratings and research. The probe is an expansion of one of the one at Goldman Sachs (GS), in which FINRA  their largest clients may have received trading tips that benefited certain clients.

Earnings Before the Bell

Carmax (KMX) Carmax reported earnings of 0.24 per share beating estimates by 0.08.  Revenues came in at 1.73B.  The shares are up 4% in the premarket.

·     Futures: Dow +0.3% to 10306. S&P +0.4% to 1098.50. Nasdaq +0.3%.

    Feb. crude +1.6% to $75.30. Gold +0.3% to $1,111.

    30-year Tsy +0.11% to 119-02. 

    Euro +0.2% vs. dollar. Yen flat. Pound+0.3%.

·    Asia: Nikkei -0.2% to 10142. Hang Seng -0.8% to 21176. Shanghai -2%to 3114. BSE -1% to 16720.

·    Europe at midday: FTSE +0.6% to 5250. CAC +0.1% to 3836. DAX+0.6% to 5877.

CLOSING BELL

Dow 10308.26  -132.86, Nasdaq 2180.05  -26.86, S&P 1096.08  -13.10,

The markets sold off today on a rally in the dollar against foreign currencies and weakness in the financial sector.  The dollar gained 1.1% against other currencies after S&P downgraded Greece’s debt to BBB+ from A- and traders decided to lock in profits for the year.  This led gold and commodities prices to fall today.  

The Financial sector fell 1.8% today after Citigroup’s (C) 3.20 -0.25 stock offering was priced at 3.15 a 9% discount to the previous day’s close.  

The led the Federal Reserve to put off selling their $5 billion dollar stake in the company.

Also pressuring Financials was analyst Meredith Whitney, when she lowered her earnings outlook on both Goldman Sachs (GS) 160.93 -4.06 and Morgan Stanley (MS) 29.12 -1.22.

FedEx (FDX) 84.47 -5.48 (-5.61%) announced earnings the beat the streets estimates coming in at 1.10, the street had estimated earnings of 1.06.  But traders were disappointed with the company’s guidance going 

forward.

Research In Motion (RIMM) 63.46 -1.21 The maker of Blackberry cell phones reported earnings of 1.10.  Analyst had estimated earnings of only 0.69.  The 59 percent increase in third-quarter income was boosted by new subscribers and record sales of its smart phones.  Shares surged more than 12% in after-hours trading.

Accenture PLC (ACN) 41.66 -0.18 reported earnings of 0.67 which beat estimates of 0.65.  The company future guidance was mixed.  The company raised their full year earnings to 2.67-2.75 per share, above estimates of 2.64-2.72 citing improving momentum.  The company did say it expects their second quarter revenues to come in below Wall Street’s estimates.  Shares were down 2.40% in the after hours.

Nike (NKE) 63.25 -0.80 reported better than expected earnings on cost cutting, streamlining operations and reduced marketing.  The company reported earnings of 0.76, traders were looking for earnings of only 0.71.  Nike shares rose 3.3% in afterhours trading.

For the eighth consecutive month, the Conference Board's Leading Indicators Index posted positive growth.  The index jumped 0.9% in November after increasing only 0.3% in October. Economists expected the index to increase 0.7%.  The index has now overtaken its July 2007 peak and signals a strong recovery in 2010. 

For the second consecutive week, new unemployment claims moved higher. The advance figure for initial claims for the week ending Dec. 12 increased 7,000 to 480,000.  Economists expected the figure to decline by 8,000 to 465,000.  The increase in initial claims shows that the labor sector is still strained.

The Philadelphia Fed Business Outlook rose to 20.4 in December from 16.7 in November. Economist had forecast the index would increase to 17.5.  The index has remained positive for five consecutive months and signals continued growth in the manufacturing sector.

Midday Lunch

12:00 ET Dow 10342.87  -98.25,   Nasdaq 2184.97  -21.94,    

S&P 1099.21  -9.97

The dollars strength today is the main cause for the decline in the market.  For weeks now the market has been moving in an inverse relationship to the Dollar Index.  Today’s strength in the dollar, I believe is a result of traders locking in profits of foreign currencies before year end.

The financial sector is also not helping the market after Citigroup (C) 3.20 -0.21 stock offering was met with 

a cold shoulder by Wall Street and the Fed.

Gold and commodities are also under pressure today from the stronger dollar.  Gold prices are down 2.7% to $1105.40 per ounce. Commodities are down 1.2%, as measured by the CRB Commodity Index.

Leading Indicators Better than Expected

For the eighth consecutive month, the Conference Board's Leading Indicators Index posted positive growth.  The index jumped 0.9% in November after increasing only 0.3% in October. Economists expected the index to increase 0.7%.  The index has now overtaken its July 2007 peak and signals a strong recovery in 2010.

Initial Claims Rise

For the second consecutive week, new unemployment claims moved higher. The advance figure for initial claims for the week ending Dec. 12 increased 7,000 to 480,000.  Economists expected the figure to decline by 8,000 to 465,000.  The increase in initial claims shows that the labor sector is 

still strained.

Philly Fed Index Shows Expansion

The Philadelphia Fed Business Outlook rose to 20.4 in December from 16.7 in November. Economist had forecast the index would increase to 17.5.  The index has remained positive for five consecutive months and signals continued growth in the manufacturing sector.