Wall Street to Main Street: News, Views and Commentary: June 8, 2006

It’s Thursday June 8, 2006, and the downward trend continues, as we are over the hump of the trading week and the Dow and Nasdaq are still seeing red. But before we head into the world of stocks lets stop on the political front.

President Bush said on Wednesday that all immigrants must learn English, this is a new proposal that he is pushing and looks to gain passage during this midterm election year, but he will have a long road ahead of him as he not only has to win over the Democrats but also members of his own party.

There was a surprise guest on Capitol Hill and that was the founder of Google (NASDAQ: GOOG) Sergey Brin. This trip was an important one as for the first time the company has admitted to compromising their principles when they agreed to censor the Chinese version of Google. He stated that they reluctantly agreed to the censorship once the Chinese Government blocked Google’s Chinese version site.

As we are in the heat of midterm elections the topic of gay marriage has popped up again, but is it just at the wrong time. The Senate rejected a gay marriage ban stating that both President Bush and the GOP’s lobbying for this passage was out of line. But because this is midterm election time you can expect this to topic to come back to life next month with more fuel on the fire than before.

Now, I’m going to say it again, as an investor you should not, better yet cannot get emotional. Stocks trade up, stocks trade down, and that is the nature of the stock market. It’s your job to do the homework that will put you on the right side of the movement. We will continue to lay out some ideas and our outlook, we’ll give you some insight into the company and its current situation but you still need to do your homework to insure that it is right for you. We want our readers/listeners to be well informed so that you can make informed decisions and not foolish trading mistakes.

So do not trade with emotion, use your head and focus on the game plan, now lets move on to some stocks that you will want to keep an eye on.

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Movers and Shakers

Some major movers in yesterdays trading session include Intuitive Surgical (NASDAQ: ISRG) which was knocked down from $116.35 to $107.70 on Tuesday but regained those loses to trade up $4.95 to close at $113.01 on Wednesday. This is the exact reason why it is crucial that you seek out companies that are being dragged down by the market , those companies that have not changed fundamentally.

U.S. Xpress Enterprises (NASDAQ: XPRSA), one of our “Furious Five” features, traded up $1.34 to close at $23.34. As we mentioned recently trucking, rail and transport in general will continue to grow, especially those companies that transport construction material. We mentioned TMM SPA (NYSE: TMM) a Mexico play yesterday and U.S. Xpress is one that will benefit here in the USA.

Target (NYSE: TGT) made some noise on Wednesday after an upgrade by Lazard Capital Markets. The company expects high gross margins in 2006 and basically the quality retail companies are beginning to shine, just look at Sears Holdings (NASDAQ: SHLD). Heavy News

Other stocks that made moves on the upside include L-3 Communications (NYSE: LLL) which traded up $3.44 to close at $76.93, Apollo Group (NASDAQ: APOL) which traded up $2.55 to close at $55.47, DSW, Inc (NYSE: DSW) traded up $2.50 to close at $31.65, Life Time Fitness (NYSE: LTM) traded up $2.39 to close at $44.38, Four Seasons Hotels (NYSE: FS) traded up $1.46 to close at $62.58, Las Vegas Sands, (NYSE: LVS) traded up $1.37 to close at $68.00 and Harley Davidson (NYSE: HDI) which traded up $1.34 to close at $49.30.

Under Ten

Now lets take a look at movers in the market under ten bucks, Home Solutions America (AMEX: HOM) traded up $1.14 to close at $7.94 after a rough day on Tuesday but the pressure will still be on the stock in today’s trading session.

Peru Copper (AMEX: CUP), this was a pick by our very own Larry Oakley from Wall Street Corner a few weeks back when it was in the low $4 range, so this was a good call, the stock traded up 56 cents to close at $6.72 but it gets better it was halted with news pending at 2.37pm yesterday. Well after the close Peru Copper stated that they requested the trading halt on both the Toronto and AMEX due to a “frivolous” bid that it received from Southern Copper (NYSE: PCU). They were concerned about the stocks unusually trading activity and wanted to stop this in its tracks, but you know what they say where there is smoke there is fire, so keep your eyes on Peru Copper.

American Italian Pasta Company (NYSE: PLB) , if the name doesn’t give it away let me tell you , they are a producer and marketer of dry pasta in North America, some brands include Mueller’s, Mrs. Grass, Pennsylvania Dutch and Anthony’s pasta . Everything from linguini to rigatoni, they do it all, some of their competitors include Barilla Holdings, which is by far the largest pasta maker in the world, yes surpassing the Ronzoni brand.

This has weighed on the company for some time. At one point this was a $51 stock and went as low as $3, it closed down in the $8 range yesterday, so for all intents and purposes this one fell out of bed. They currently have a 52 week low of $3 and a 52 week high of $23.64. Now I need to let you know that they company is losing money, they just reported that revenues dropped 7% in 2005, this is the first time in 12 months that they have given full disclosure of sales figures. But the stock had movement on Wednesday as it traded up 43 cents to close at $8.44, go figure.

Other stocks under ten bucks that made nice moves yesterday include Nitromed (NASDAQ: NTMD) which traded up 40 cents to close at $4.64, Cardica (NASDAQ: CRDC) traded up 37 cents to close at $7.26, DUSA Pharmaceuticals (NASDAQ: DUSA) traded up 36 cents to close at $4.90 and Lattice Semiconductor (NASDAQ: LSCC) which traded up 32 cents to close at $6.05.

Downers

Some Downers in yesterdays trading session include USG Corp (NYSE: USG) , they are being dragged down with the building materials sector as the stock traded down $8.09 to close at $76.20 on heavy volume.

Veritas DGC (NYSE: VTS) traded down $6.25 to close at $45.37, this is a company that is involved in the information end of the oil business as they supply integrated geophysical information and services to the petroleum industry. Now the stock ran up during the final week of May from $44.81 to close as high as $51.62 on Tuesday. So this pullback could be attributed to market conditions as nothing has really changed with the company. Actually it should be in better shape now as increased drilling in the U.S. is about to ramp up. So use this downturn as an opportunity to find a good entry point.

Diamond Offshore Drilling (NYSE: DO) traded down $4.09 to close at $78.16. Now nothing dramatic has happened with the stock, it is being dragged down by market conditions just like Veritas. Now the stock broke the $79.23 mark and could slip to high $75 to the low $76 range, but you need to keep an eye on the trading on this as it could drop to the mid $77 range and pop back up. Now keep in mind that the stock traded as high as $95.65 in May 2006, so the potential is there. Keep this one on your stock watch.

Other stocks that traded down but shouldn’t be down there include U.S. Steel (NYSE: X) which traded down $3.30 to close at $60.61, Schlumberger Ltd (NYSE: SLB) traded down $3.45 to close at $60.51,
Steel Dynamics (NASDAQ: STLD), which traded down $3.26 to close at $53.74, Petroleo Brasileiro (NYSE: PBR) traded down $3.53 to close at $81.80 and Occidental Petroleum (NYSE: OXY) which traded down $3.07 to close at $94.72.

Now some stocks under ten bucks that received the royal smack down on Wednesday include International coal Group (NYSE: ICO) which traded down $1.40 to close at $7.10 on heavy volume, Polyone Corp (NYSE: POL) traded down 54 cents to close at $9.09, Movie Gallery (NASDAQ: MOVI) the stock that shot up on rumors traded down 49 cents to close at $7.01 on over 5.3 million shares traded, Input/Output Inc (NYSE: IO) traded down 46 cents to close at $8.74 on heavy volume and Grey Wolf (AMEX: GW) which traded down 40 cents to close at $7.28 on over 3 million shares traded.

Analyst Upgrades/Downgrades

Recent Analyst upgrades include American Woodmark (NASDAQ: AMWD) which was upgraded to a Buy from a Neutral by Sidoti & Co, Aeroflex Inc (NASDAQ: ARXX) was upgraded to an Above Average from an Average by Caris & Co, Broadcom Corp (NASDAQ: BRCM), a company that we just spoke about on Wall Street to Main Street, was upgraded to a Buy from an Above Average by Caris & Co, Boeing (NYSE: BA) was upgraded to a Buy from a Neutral by Banc of America and Target Corp (NYSE: TGT) was upgraded to a Buy from a Hold by Lazard Capital Markets.

Recent Analyst downgrades include Prosperity Bancshares (NASDAQ: PRSP) which was downgraded to a Hold from a Buy by Sanders, Morris and Harris, Lamar Advertising (NASDAQ: LAMR) was downgraded to an Inline by Goldman Sachs, Herley Industries (NASDAQ: HRLY) was downgraded to an Underperform from a Market Perform by Raymond James, Northrop Grumman (NYSE: NOC) was downgraded to a Neutral from a Buy by Banc of America and Johnson Controls (NYSE: JCI) was downgraded to a Neutral from an Outperform by Robert W. Baird.

Recent analyst coverage initiations include Regis Corp (NYSE: RGS) which was initiated with a Peer Perform by Bear Stearns, Ethan Allen Interiors (NYSE: ETH) was initiated with an Outperform by Raymond James, Bancshares Florida (NASDAQ: BOFL) was initiated with an Outperform ratings and a $26 price target by Raymond James, RCN Corp (NASDAQ: RCNI), which by the way I’ve been seeing a lot of those RCN Vans in New York City lately, but the company was initiated with a Hold rating by Morgan, Joseph & Co, and Ingersoll-Rand (NYSE: IR) was initiated with a Neutral rating and a price target of $45 by Banc of America Securities.

 

 

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