February 10, 2008

IBD's Top 10 - Friday

Recession Calls Grow Louder

1 The U.S. has entered a recession that'll be deeper and longer than recent slumps, said Richard Curtin, head of the Reuters/Univ. of Mich. consumer sentiment survey. Other economists aren't so sure. Several fed officials have said recession risks have risen, but it's not a done deal. The ECRI leading U.S. index's growth rate fell to -7.9%, the worst since the '01 recession.

Oil Soars On OPEC, Cold, Supply

2 March crude spurted $3.66 to $91.77 a barrel, the highest close since Jan. 31. Several OPEC members floated the idea of an output cut in March. Shutdowns in Nigeria and the North Sea raised supply questions. Arctic cold prompted Northeast consumers to crank thermostats. Also, courts in several countries backed Exxon and froze assets of Venezuela's PDVSA oil company.

Wheat Soars In Monster Squeeze

3 March wheat on the Minneapolis Grain Exchange leapt the daily 30-cent limit to $15.53 a bushel. Options trading, which has no limit, values the contract at $20 or $21 a bushel. The USDA cut its estimate of ending stocks to 272 mil bushels, the smallest in 60 years. Drought and a big ethanol-driven acreage switch to corn set the stage for a wheat shortage.

Voters Head To Polls In 5 States

4 Dem hopeful Barack Obama won the endorsement of Wash. Gov. Chris Gregoire while Hillary Clinton touted herself as the candidate of "dreams and practicality" heading into weekend battles for 185 delegates in Wash. state, La., Neb., Maine and the Virgin Islands. Likely GOP nominee John McCain continued to seek party unity.

Markets Mixed In Quiet Session

5 The Nasdaq rose 0.5%, with the big-cap Nasdaq 100 up 1.2%. But the Dow fell 0.5% while the S&P 500, NYSE composite and small-cap S&P 600 all lost 0.4%. Volume came in well below Thu.'s elevated level. Soaring oil prices helped energy firms and hurt transports. Retailers and financial firms also sold off. The 10-year Treasury yield fell 9 ticks to 3.65%.

ADS Drops Blackstone Lawsuit

6 The credit card transaction processing firm dropped a suit to force the private equity firm to complete its proposed $6.76 bil buyout. Alliance Data Systems (NYSE:ADS - News) said Blackstone (NYSE:BX - News) was committed to the deal, but added there's no guarantee. ADS shares rose early, but closed off 3% to 50. Blackstone, which fell 1%, has agreed to pay $81.75 a share.

Allergan Falls On Botox Review

7 Shares of the maker of Botox fell after the FDA said it's reviewing the drug because of reports of deaths and breathing problems in some patients. A handful of deaths occurred mostly among children treated for cerebral palsy-related limb spasticity, the FDA said. It hasn't OK'd Allergan's (NYSE:AGN - News) popular cosmetic drug for that purpose, but other countries have. Shares fell 6%.

Wholesale Stockpiles Jump 1.1%

8 Dec.'s gain was far bigger than expected and followed Nov. 0.8% rise. Boosting inventories can be sign that firms expect demand to pick up. But maybe not this time. Sales at the wholesale level slid 0.7%, though that followed several hefty gains. The inventory-to-sales ratio remained near record lows.

McDonald's U.S. Sales Improved

9 The fast-food giant's Jan. global same-store sales rose 5.7%, as Europe gained 8.2% and its Asia/Pacific, Mideast and Africa unit gained 7.8%. Domestic same-store sales grew 1.9%. That's not great, but better than Dec.'s flat comps. Analysts have been closely watching McDonald (NYSE:MCD - News)'s U.S. sales to see how much the struggling economy is affecting the industry. Its shares rose 2%.

Amazon Rises On Buyback Plan

10 Shares of the online retailer rose after it announced a plan to repurchase up to $1 bil in stock and $1.25 bil in debt. The 2-year stock buyback replaces a $500 mil program. Citigroup said the buyback underscores the health of Amazon's (NasdaqGS:AMZN - News) cash flow. Along with positive analyst comments on the company's business, shares rose almost 4%.

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