THE ECONOMIC MONITOR

17 September 2010

U.S.
Free Edition

INSIDE THE REPORT MARKETS AT A GLANCE

 Stock recommendations and price targets from top  The Dow Jones Industrial Average gained 13.02 points, or 0.12
percent, to 10,607.85. The S&P 500 added 0.93 points, or 0.08
brokerage firms percent, to 1,125.59.

 Forecasts on Economic Indicators
 Important Events Scheduled on 18 September
Economic Events
 OECD Economic Survey of the United States.
 United States to host a meeting of the world's
biggest economies to discuss climate change
 The Dollar was unchanged at 85.78 yen, while the euro was down
0.2 percent at $1.3041, well off a session peak of $1.3159.
 The benchmark 10-year Treasury note was up 12/32 in price, its
yield falling to 2.72 percent from 2.76 percent on Thursday.
 U.S. crude for October delivery with expires on Tuesday fell 91
cents, or 1.22 percent, to settle at $73.66 per barrel, trading from
$72.75 to $75.25.
 U.S. December gold futures settled up $3.70 at $1,277.50 an
ounce.

Corporate Events
STOCK INDICES
 Discover Financial Services, Lennar Corporation third
quarter results INDEX LAST CHNG % CHNG

DJIA* 10607.85 13.02 0.12

Breaking News NYSE Composite* 7154.65 -14.83 -0.21

Nasdaq* 2315.61 12.36 0.54

 J&J to buy Crucell
S&P 500* 1125.59 0.93 0.08
 Petrobras expands huge stock offer DJ Total Stock Market* 11740.42 18.44 0.16
Russell 2000* 651.44 3.63 0.56
 HP close to naming Hurd's successor: Bloomberg
Global Dow* 1904.55 0.87 0.05

 Carlyle eying stake in hedge fund manager Nasdaq 100* 1955.83 7.72 0.40

DJ Transportation Avg* 4433.66 4.58 0.10

 SouFun shares jump 64 pct on debut
S&P 100* 509.04 0.11 0.02

 BP relief well intercepts ruptured Gulf well * CLOSING VALUES

 Oracle profit beats forecast CURRENCIES

 Kinross buys Red Back Mining INDEX LAST PRIOR

Euro (EUR/USD) 1.3040 1.3079

 Consumer prices rise in August
U.K. Pound (GBP/USD) 1.5618 1.5629

 Consumer sentiments weak Japanese Yen (USD/JPY) 85.76 85.84

All prices are at 04:36 PM EDT

 Obama appoints Warren for consumer watchdog

 Arena blames FDA FUTURES

SETTLE CHANGE
 U.K’s OFT initiates price-fixing probe on truck makers
Crude Oil (Oct) 73.62 -0.95
 U.S. EPA investigates release of benzene at BP Natural Gas (Nov) 4.182 -0.056
refinery
Gold (Dec) 1275.3 1.50
Copper ( Dec) 351.5 2.15
Wheat (Dec) 737 20.00

All prices are at 04:25PM EDT

THE ECONOMIC MONITOR - U.S.

STOCK RECOMMENDATIONS BY BROKERAGE HOUSES

BROKERAGE/COMPANY ACTIONS RATING

Credit Suisse
Anadarko Petroleum Cuts price target to $69 from $71 --
Chesapeake Energy Cuts price target to $22 from $23 --
Denbury Resources Cuts price target to $21 from $22 --
Devon Energy Corp Cuts price target to $66 from $69 --
EOG Resources Raises to neutral from underperform Neutral
EQT Corp Cuts price target to $43 from $45 --
Murphy Oil Corp Raises price target to $68 from $66 --
National Oilwell Varco Raises target price to $54 from $50 --
Nike Raises target price to $95 from $85 --
Noble Energy Cuts price target to $83 from $85 --
Occidental Petroleum Cuts price target to $92 from $94 --
Oracle Corp Raises target price to $32 from $30 --
Pioneer Natural Resources Cuts price target to $79 from $82 --
Range Resources Cuts price target to $45 from $50 --
Goldman Sachs
CenturyLink Raises to buy from neutral Buy
Jabil Circuit Starts with buy rating Buy
Windstream Corp Raises price target to $11 from $10.50 --
Qwest Raises to buy from neutral Buy
Jefferies
Darden Restaurants Starts with buy ratings Buy
McDonald's Starts with hold ratings Hold
Yum Brands Starts with hold ratings Hold
Howard Weil
FMC Technologies Downgrades to market perform from market outperform Market-perform
Massey Energy Cuts price target to $40 from $50 --
UBS
Micron Technology Cuts price target to $7 from $9 Neutral
Noble Energy Cuts to neutral from buy Neutral
BoFA Merrill
Oracle Corp Raises price target to $34 from $30 Buy
Red Hat Raises price target to $43 from $36 Buy
RBC
Allergan Starts with price target of $77 Outperform
Oracle Corp Raises price target to $32 from $28 Outperform
JP Morgan
Autozone Raises price target to $210 from $198 Neutral
Janney Capital Markets
International Game Technology Cuts to neutral from buy Neutral
S&P Equity
Oracle Corp Raises target price by $2 to $31 Strong Buy

FBR
Oracle Corp Raises price target to $32 from $30 Outperform
Citigroup
Oracle Corp Raises price target to $30 from $28 Buy
JMP Securities
Oracle Corp Raises to market outperform from market perform Outperform
Caris
Oracle Corp Raises price target to $35 Buy
Suntrust Robinson Humphrey
Vulcan Materials Cuts to neutral from buy Neutral

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 before taking any investment decisions.
THE ECONOMIC MONITOR - U.S.
COMPANY NEWS
J&J to buy Crucell
Johnson & Johnson is in talks to pay €1.75 billion (£1.46 billion ) to buy Dutch
biotech Crucell. J&J owns a 17.9 percent stake in vaccine maker Crucell. The U.S.
health care company is looking to catapult itself into the global vaccine market.
The potential cash offer by J&J is at €24.75 per share, a 58 percent premium to
Thursday's closing price of Cruecll shares.
Petrobras expands huge stock offer
Brazil's state oil giant Petrobras said it will increase the amount of shares
available to meet additional investor demand in its massive stock offering. The
company said it will go for the greenshoe option to 20 percent of the original
offer, up from 10 percent previously. The offer includes a $43 billion state-
backed swap of oil for shares.
HP close to naming Hurd's successor: Bloomberg
Citing a person familiar with the matter Bloomberg reported that Hewlett-
Packard is nearing a decision on a new chief executive to succeed Mark Hurd
and is likely to pick an internal candidate. According to the report the board of
HP, the world's largest computer maker, met this week to consider possible
successors to Hurd, who departed in August, and a decision could be
announced in the coming week. HP spokeswoman Mylene Mangalindan
declined comment on the matter. While the company hasn't ruled out hiring
from outside, HP may not be inclined to recruit from a rival, the report said.
Carlyle eying stake in hedge fund manager
According to the source, private equity firm Carlyle Group may buy a stake in a
hedge fund manager and is looking at raising two new debt funds as well as a
$1 billion pool to buy small companies. Bloomberg said in a report that Carlyle is
talking to several hedge fund firms.
SouFun shares jump 64 pct on debut
Shares of Chinese online real estate website SouFun Holdings Ltd soared on its
debut. The investors bet that growing interest in Internet advertising and a
booming real estate sector would boost earnings. According to its prospectus,
SouFun sells real estate-related marketing and listing services. As of June 30 it
covered 106 Chinese cities. Shares of the company opened at $67, 57.6 percent
above their IPO price on the New York Stock Exchange.
BP relief well intercepts ruptured Gulf well
According to a U.S. official efforts to permanently plug the world's largest
offshore oil spill reached a milestone when BP Plc's crucial relief well reached its
target. Retired Coast Guard Admiral Thad Allen, the top U.S. official overseeing
the spill response in the Gulf of Mexico, said in a statement, "The aggregate data
available supports the conclusion that the two wells are joined."
Oracle profit beats forecast
Oracle Corp posted a 25 percent surge in
software sales. Oracle said it expected non-
GAAP earnings per share of 45 cents to 47
cents for the second fiscal quarter which far
better than 45 cents expected by analysts.
New software sales were up 25 percent at
$1.3 billion. It reported a profit of 42 cents per
share and Revenue rose 50 percent to $7.6
billion on a non-GAAP basis. Oracle Chief
Executive Larry Ellison said, "We look at IBM as our No. 1 competitor."
Kinross buys Red Back Mining
The Toronto-based gold miner Kinross Gold said it has completed its $7.1
billion purchase of Red Back Mining. The gold miner said the combined
company would produce 2.6 million to 2.7 million gold equivalent ounces in
2010, and that production would grow to up to 4.9 million gold equivalent
ounces in 2015.
ECONOMY NEWS
Consumer prices rise in August
Labor Department reported flat core consumer price index for the last month.
The core CPI, which excludes food and energy
prices, rose 0.1 percent in July. The overall CPI rose
0.3 percent, lifted by higher food and energy costs.
August's rise was above expectations of a 0.2
percent increase. In the 12 months to August, the
CPI rose 1.1 percent after a 1.2 percent increase the
prior month.
Last month energy prices rose 2.3 percent after
rising 2.6 percent in July, while gasoline prices were
up 3.9 percent. Food costs rebounded 0.2 percent from July's 0.1 percent drop.
Consumer sentiments weak
The Thomson Reuters/University of Michigan's preliminary September
reading shows the consumer sentiment unexpectedly worsened in early
September to its weakest level in more than a year. The reading on the overall
index on consumer sentiment came in at 66.6, down from 68.9 in August.
The survey's director Richard Curtin said, "Confidence edged downward in early
September, as consumers judged prospects for the national economy less
favorably." The survey's gauge of consumer expectations unexpectedly slipped
to 59.1, the lowest since March 2009. This was below August's 62.9 and a
predicted reading of 64.2.
REGULATORY NEWS
Obama appoints Warren for consumer watchdog
President Barack Obama announced Harvard law professor and outspoken
consumer advocate Elizabeth Warren to set up the powerful new consumer
financial protection agency, a centerpiece of the sweeping regulatory overhaul
Obama signed into law in July. The naming of Warren drew praise from liberals,
but an outcry from Republican opponents and the financial industry.
The President announced Warren not as head of the new agency but as special
adviser to oversee its establishment, allowing him to avoid a bitter Senate
confirmation fight. With the November mid term elections at its helm the
appointment have a populist appeal to voters resentful of Wall Street excesses
that are seen as a key cause of the financial crisis that drove the United States
into its deepest economic downturn since the Great Depression.
Arena blames FDA
Arena Pharmaceuticals Inc blamed a lack of understanding on the part of U.S.
reviewers for their failure to recommend approval of its experimental obesity
drug. An advisory panel to the U.S. Food and Drug Administration voted 9-5
against recommending the drug, lorcaserin. On a conference call with analysts
on Friday, Arena Chief Executive Jack Lief said it was a "shame" that there were
no experts in potential cancer-causing agents on the panel. "My view is they
were having difficulty understanding the presentation," he said.
U.K’s OFT initiates price-fixing probe on truck makers
The UK's Office of Fair Trading (OFT) contacted leading truck makers including
Scania, Daimler and MAN as part of a probe into suspected cartel activity. A
Daimler spokesman said the company has been cooperating with the
investigation. The OFT said investigations are at an early stage and it had not yet
determined whether the law was violated or not. Under OFT rules, companies
involved in price-fixing can be fined up to 10 percent of their annual turnover
and executives will be prosecuted and sentenced to an imprisonment of five
years.
U.S. EPA investigates release of benzene at BP refinery
The Environmental Protection Agency said it has started an investigation into
the release of benzene at BP's Texas City, Texas refinery earlier this year. EPA has
requested BP to provide information regarding the release of chemicals like
benzene at the plant between April 6 and May 16.
THE ECONOMIC MONITOR - U.S.

MARKET BRIEFING ECONOMIC INDICATOR WATCH

Economic Events NAHB Housing Market Index (September)

PARIS - OECD Economic Survey of the United States.
On Monday September, 20 OECD will launch worldwide the 2010
Economic Survey of the United States. Angel Gurría, Secretary General
of the Organization for Economic Cooperation and Development will
release the document between 8:30-10:00 a.m. Paris local time.
NEW YORK - United States to host a meeting of the world's biggest
economies to discuss climate change (to Sept. 21).
The United States will host a meeting of the world's biggest economies
in New York to discuss climate change on Monday (September 20) and
Tuesday (September 21), the U.S. State Department said on Tuesday,
September 14. The Major Economies Forum will bring together 16 of
the world's biggest economies next week with the 27-nation European
Union to haggle over ways to fight global warming. It was formed to
augment U.N. climate change talks. A deal to curb greenhouse gas
emissions has so far eluded negotiators within the U.N. process. The 17
members of the forum include Australia, Brazil, Britain, Canada, China,
France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, Russia,
South Africa, the United States, and the EU.
Forecast: 14 Prior: 13
U.S. home builders' optimism hit a near 1-1/2 year low in August,
implied the economic slowdown to continue into the third quarter. The
National Association of Home Builders/Wells Fargo Housing
Market Index slipped one point to 13, defying market expectations for
a rise to 15. It was the third consecutive month of decline in the index. A
reading above 50 indicates that more builders view sales conditions as
good than poor, but the index has not been above that level since April
2006.
The NAHB survey showed the current sales conditions gauge for single-
family home sales slipped this month to its lowest level since June 2009.
The sales expectations measure for the next six months touched its
lowest level since March 2009.
Source: National Association of Home Builders
MARKET PERFORMANCE

WASHINGTON - Treasury Department announces weekly sale of 4- DJIA

week bills, 1100/1500

WASHINGTON - Treasury Department weekly sale of 3-, 6-month

bills, 1130/1530

Corporate Events
WallStreet expects Discover Financial Services to report a profit of 35
cents per share for the third quarter, down from 52 cents for the same
period a year ago. The Credit card Company posted higher-than-
expected earnings in the recent second quarter, as the company set
aside less money to cover bad loans. The sixth-largest U.S. credit card
issuer said customers spent more on their Discover cards during the
quarter, and defaulted less. Discover posted quarterly profit of $258
million for the fiscal second quarter ended May 31, up from $226
million in the same quarter a year earlier. Per-share earnings fell to 33
cents from 43 cents due to an increase in shares outstanding. Analysts
had on average expected the company to earn 11 cents a share,
according to Thomson Reuters I/B/E/S.

Lennar Corporation is expected to post a

profit of 5 cents per share for the third
quarter, up from the loss of 97 cents for
the same period a year ago. The third-
largest U.S. homebuilder reported higher-
than-expected earnings in the recent
second quarter and affirmed its goal of
profitability for the full year. Lennar
posted earnings of $39.7 million, or 21 cents a share, for the second
quarter ended May 31, compared with a year-earlier loss of $125.2
million, or 76 cents per share. Analysts had forecast break-even results,
according to Thomson Reuters I/B/E/S. But orders fell 10 percent, with
the entire decline occurring in May, after the federal home-buyer tax
credit expired, the company said in its June statement. Revenue fell 9
percent to $814.5 million as deliveries were off 8 percent.
CORPORATE RESULTS
DATE - 20/September2010
A. Stocks lapsed on Friday along with an index of consumer
confidence released by Reuters and the University of Michigan. Up
more than 50 points after Wall Street's open, the Dow Jones was
lately off 12.03 points at 10,582.80.
B. Stocks were on pace to put a quiet end to the week Friday as
cautious investors boosted both stocks and safe-haven assets
modestly higher. The Dow Jones added 21 points, or 0.2%, to
10616.
C. Stocks climbed Friday to notch a third straight weekly gain as
robust results from technology companies including Oracle Corp.
and BlackBerry maker Research In Motion Ltd. helped Wall Street
look past a decline in consumer confidence. The Dow Jones added
13.02 points, or 0.1%, to 10,607.85.

COMPANY NAME EVENT

Lennar Corporation Q3 2010

Discover Financial Services Q3 2010

THE ECONOMIC MONITOR - U.S.

DAILY EARNINGS HITS & MISSES AS ON 17 SEPTEMBER, 2010

DIFFERENCE REV ACT DIFFERENCE
COMPANY PERIOD CURRENCY EPS EST EPS ACT REV EST (mln)
EPS (mln) REV (mln)

Herman Miller Q1 USD 0.26 0.29 0.03 364.6 380.7 16.1

Oracle Corp Q1 USD 0.37 0.42 0.06 7272.4 7588 315.6

Research in Motion Q2 USD 1.35 1.48 0.13 4473.4 4621.3 148

MARKET BRIEFING

 The Nasdaq rose after reassuring earnings and an upbeat outlook from Oracle, with the broader market flat as the traditional trading volatility expected
by the expiration of options failed to materialize. Oracle Corp, the world's No. 3 software maker, jumped 8.3 percent to $27.46, and led the Nasdaq
higher after it posted better-than-expected results and gave an outlook that topped Wall Street's forecasts. The S&P 500 managed to overcome briefly
key technical resistance around 1,130, pushing through intraday highs from June and August. The DJIA gained 13.02 points, or 0.12 percent, to 10,607.85.
The S&P 500 added 0.93 points, or 0.08 percent, to 1,125.59. The Nasdaq Composite climbed 12.36 points, or 0.54 percent, to 2,315.61.

 The euro fell as European debt worries and weak U.S. consumer data enhanced the dollar's safe-haven appeal, while fear of Japanese intervention kept
the yen near a one-month low against the U.S. currency. The euro fell from session highs above $1.31 when a newspaper said Irish banks might need a
bailout and remained weaker on the day after Ireland's finance ministry said there was no truth to the report. The dollar, which fell to a 15-year low
beneath 83 yen before Japan intervened, was up 1.8 percent against the yen since Monday, its best week since late April. Today, it was unchanged at
85.78 yen, while the euro was down 0.2 percent at $1.3041, well off a session peak of $1.3159. The euro also fell 0.2 percent to 111.89 yen and 0.9
percent to 1.3169 Swiss francs.

 U.S. government securities prices climbed as weak consumer sentiment, soft inflation trends and European debt concerns argued for easier monetary
policy and enhanced the allure of safe-haven debt. The soft price trends evident in the government's Consumer Price Index and the sentiment survey
fortified arguments for more monetary easing. The Treasury market also benefited from concerns about European sovereign debt, particularly in Ireland.
Long-dated Treasuries have been weaker in recent days as the short end outperformed on the Japan intervention. The benchmark 10-year Treasury note
was up 12/32 in price, its yield falling to 2.72 percent from 2.76 percent on Thursday. The 30-year bond which fell 30/32 on Thursday was up 22/32 after
the CPI was released. Its yield eased to 3.89 percent from 3.93 percent on Thursday.

 Crude oil prices fell a fourth straight session after U.S. consumer sentiment data showed a surprise drop to the weakest level in more than a year. U.S.
crude futures ended with its worst percentage weekly loss in five weeks after being pummeled earlier in the week by the expected restart of a major
crude pipeline from Canada into the United States. U.S. crude for October delivery fell 91 cents, or 1.22 percent, to settle at $73.66 per barrel, trading
from $72.75 to $75.25. The October contract expires on Tuesday. For the week, front-month U.S. crude prices fell $2.79, or 3.65 percent. U.S.
November crude fell 82 cents, or 1.08 percent, to settle at $74.63 a barrel. ICE Brent for November fell 37 cents to $78.11 at 2:43 p.m. EDT. October Brent
expired on Wednesday.

 Gold hit a record high for the third time this week as poor U.S. consumer confidence and market talk of more quantitative easing helped the alternative
asset score its biggest weekly gain since May. The metal received a boost from data showing Thailand raised its gold holdings by a fifth in July through
open-market purchases, joining a growing list of Asian nations diversifying into gold amid volatility in other markets. Spot gold fetched $1,275.50 an
ounce at 3:11 p.m. EDT, compared with $1,272.20 late in New York on Thursday. It has gained more than $100, nearly 9 percent, since the start of August.
U.S. December futures settled up $3.70 at $1,277.50 an ounce.

ECONOMIC CALENDAR

MON 09/20 1000 NAHB Index 14 13

ICSC/GS Report (ww
TUE 09/21 0745 NA NA
w/e)

0830 Housing Starts (Aug) 0.55 mln 0.546 mln

0830 Build Permits (Aug) 0.56mln 0.559 mln

0855 Redbook (mm & w/e) NA NA

FOMC meeting result
1415 NA 0%-0.25%
FF rate
1700 ABC CCI (w/e) NA -43
WED 09/22 0700 Mortgage Index NA 801.5

0700 Refinancing Index NA 4396.1

1000 FHFA Home Price (Jul) NA -0.3%
THU 09/23 0830 Initial Claims 450 k 450 k
This report is produced by
0830 4 Week Average NA 464.75 k International Business Times
0830 Continuing Claims NA 4.485 mln For questions or comments
Existing Home Sls reach us at
1000 4.1 3.83 mln
(Aug) researchanalysis@ibtimes.com
Existing home sls
1000 8.60% -27.20%
(Aug) For more information about
1000 Lead Indicators (Aug) 0.10% 0.10% our products visit
www.ibtimes.com

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