Sunday, June 14, 2009

6/14 Ny Times Mag. re: Microsoft

The following is brought to you by Intellivest Securities Research, Inc. The following is not intended as advertising by a broker-dealer and is not a research report.

The NY Times Magazine (newly formatted and reduced in physical size) has a long aritcle about Datatecture which describe massive Intenet data centers. The article portends increasingly large, powerful, energy-intensive, always-on and essentially out-of-sight data centers that will run enormously scaled software applications with millions of users. This vast, dispersed networok of interdependent data systems is now referred to as "The Cloud." The article describe Miscrosoft's MSFT's data center in Tukwila, Wash. It also describes MSFT's center in Chicago that will have plug and play shipping containers that will contain servers.

In another article at P. 20 in the NYTimes mag., there is an article about America's shopping infrastructure. It criticizes big box retailers such as Wal-Mart WMT and Home Depot HD for abandoning locations often vacated not because of failure but because of expansion into larger locations nearby. The article describes Home Depot as a "category killer" that contributes to the travails of traditional indoor shopping malls.

Today's Atlanta Journal-Const. AUJC lists the top 20 highest-paid executive at Georgia Public Companies putting KO Coke's Neville Isdell at the top with $23,132,324 for total compensation.

The rest of today's blog is a reprint of yesterday's blog from Sat. June 13, 2009.

The Dow closed yesterday, June 12, 2009 at 8799.26, up $28.34 up 0.32%. This is the first time in 2009 it closed in positive territry. Still, the Dow is down 38% from its 2007 record high of 14164.53. It was the Dow's highest close since Jan. 6. Scroll down for closing info re: Friday's numbers for all 30 Dow components.

The current divisor for the Dow found at today's page B4 of The Wall St. Jrnl is
.132319125. During the week the divisor is found at p. C4.

Yesterday's the closing Dow numerator was 1,164.31 up 3.75 from Thursday's Dow numerator which was 1,160.56. This is the sum of all 30 closing prices. A short cut to the Dow numerator is to multiply the closing Dow by the Divisor.

Now, if you divide the increase of 3.75 in the Dow numerator by the divisor you get $28.34, the increase in yesterday's Dow.

The average closing price of yesterday's Dow Jones was $38.81 up .12 from Thursday's average closing price of $38.69. The median closing price of Friday's Dow Jones was $35.13 up .19 from Thursday's median closing price of $34.94.

The highest closing price Friday again was IBM at $108.31 up from Thursday's close $109.40 up $1.05 and the lowest closing price Friday again was AA Alcoa at $11.99 down .23 from Friday's close of $12.22.

The lowest volume is the same as Thursday's - MMM $61.40 at 3,187,622 shares and the highest volume was BAC Bank of America BAC $13.72 +0.75 5.78 at 445378,383 shares.

If Friday morning before the market opened you had purchased $100 of each of the Dow 30 shares (assuming you could buy fractional shares and assuming no transaction costs) and sold at the close you would have made $374 ($116,430 - $116,056).

BAC Bank of Am., GE and JPM were among the 15 most active of yesterday's 15 most active NYSE stocks. As usual, the three NASDAQ Dow stocks, INTC Intel, MSFT Microsoft, and CSCO Cisco were among the 15 most active NASDAQ stocks.

Barron's June 15 issue out today at p. 19 says that PG Procter & Gamble is still a buy under its new leader Robert McDonald. Also, the same article talks about the two Dow stocks, MCD McDonald's and WMT WalMart, that finished 2008 higher. It says that MCD should benefit from the dollar's newer stability since almost half of its profits are earned overseas.

Today's Wall St. Jrnl 6/13/09 at p. B3 notes in its Large Stock Focus that AA Alcoa was the weakest stock on the Dow off 23 cents or 1.9% to $11.99 but it was the strongest stock in the Dow for the past 30 days up 27% for that period. The article also calls out new Dow member TRV Travelers as finishing its first week in the Dow with a loss of 1.3% closing yesterday down 37 cents or 0.9% to$43.20. Its fellow new member, Cisco Systems, CSCO lost 19 cents to 19.91 but gained 0.2% fo the week.

Today's WSJ at p. B5 in an article discussing safety being the focus at this year's Paris Air Show stated that Airbus is trying to reassure airlines that its A330 model, the same type that killed 228 last month in the Atlantic, is a reliable plane. The article notes that over recent years, the A330 supplanted U.S. rival Boeing BA's 767 as the industry's top selling long-range model in the 250-seat range. Boeng officials have stated that the 767 had been their most profitable aircraft even more than the 747 jumbo jet.

At WSJ p. B7 "A Week in the Life of the DJIA" says that if at the beginning of the year you had invested $1,000 in each of the Dow this is how you would have done as of today: BAC 978; AA 1,091, MSFT 1,216, CVX 1,001, INTC 1,133, VZ 908, T 905; PFE 861; JPM 1,130; XOM 934; HPQ 1046; IBM 1,300; AXP 1,386; Dis 1,104; JNJ 953; CSCO 1,221; MMM 1,081; MRK 884; DD 1,102; HD 1,072; GE 858; UTX 1,058; KO 1,101; PG 863; TRV 971; CAT 865; BA 1230; WMT 899 MCD 955; and KFT 979.

Today's NY Times at p B2 says the Merck's MRK top-selling drug, the asthma medication Singular, should come with a caution that it may cause psychiatric problems in some patients according to the FDA.

Today's NYT at pB2 has an article titled "Microsfot Browser Offer Fails to Impress Eurpope" that is critical of its efforts to introduce a browserless Windows system in Europe saying MSFT did not go far enough as far as Eurpoean regulators are concerned.

The June 22 issue of Business Week at p. 62 says T AT&T and VZ Verison are trying to beef up their highly profitable wireless businesses, especially in the wireless data services.

BW at P. 44 says HPQ Hewlett-Packard and PFE Pfizer are the early practitioners of using bits and pices of previously successful products to come up with innovative new products and services. Their software to do this is clled "genetic programming."

BW at p.39 in a story about trolling distressed companies for investment opportunities talks about the Merrill debacle and BAC Bank of Am but gives a good example of how WMT Walmart bought Chile's Distribucion y Servicio last Dec.

BW at p. 35 says Pfizer PFE was one of the first to use simulation to show how diferent patients might respond to treatments. It also plugs Germany's MRK Merck efforts to launch the first oral treatment for multiplce sclerosis.

BW p. 10 in an article about PG Procter & Gamble's new CEO Robert McDonald says how hard it is to succeed rock stars of managment.

Yesterday's 6/12 Dow numbers:

Symb/Last/Change/% Change/Vol./Market

T $25.01 +0.22 0.89% 26,264,067 NYSE
AA $11.99 -0.23 1.88% 35,588,780 NYSE
AXP $25.16 -0.47 1.83% 14,659,068 NYSE
BAC $13.72 +0.75 5.78% 445,367,383 NYSE
BA $51.44 +0.78 1.54% 5,402,148 NYSE
CAT $37.73 +0.12 0.32% 8,479,430 NYSE
CVX $72.67 +0.77 1.07% 13,788,365 NYSE
CSCO $19.91 -0.19 0.95% 41,226,136 NASDAQ-GS
KO $48.89 +0.31 0.64% 8,569,874 NYSE
DIS $25.06 -0.17 0.67% 7,254,404 NYSE
DD $27 0.11 -0.41% 7,003,720 NYSE
XOM $73.78 -0.27 0.36% 21,435,516 NYSE
GE $13.51 +0.05 0.37% 57,213,172 NYSE
HPQ $37.76 +0.53 1.42% 13,410,607 NYSE
HD $24.15 -0.08 0.33% 18,192,099 NYSE
INTC $16.31 -0.04 0.24% 47,462,832 NASDAQ-GS
IBM $108.21 -1.19 1.09% 7,182,053 NYSE
JPM $35.13 +0.19 0.54% 41,038,497 NYSE
JNJ $56.06 +0.01 0.02% 11,814,290 NYSE
KFT $25.94 -0.01 0.04% 6,535,240 NYSE
MCD $58.36 +0.69 1.2% 7,010,187 NYSE
MRK $26.08 -0.11 0.42% 29,666,004 NYSE
MSFT $23.33 +0.50 2.19% 50,732,617 NASDAQ-GS
PFE $14.76 +0.13 0.89% 74,038,589 NYSE
PG $52.55 +0.54 1.04% 10,294,179 NYSE
MMM $61 +0.42 0.69% 3,187,622 NYSE
TRV $43.2 -0.37 0.85% 3,599,448 NYSE
UTX $55.84 +0.29 0.52% 3,568,905 NYSE
VZ $29.92 +0.17 0.57% 22,846,961 NYSE
WMT $49.84 +0.52 1.05% 15,284,555 NYSE

A read of yesterday's 6/12/09 print editions of: Wall Street Journal, New York Times, USA Today, Investor's Business Daily, Financial Times and Atlanta Journal Constitution yielded the following stories about Dow Jones 30 component companies:

The biggest story was that Bank of America BAC's CEO Ken Lewis got grilled by Congress yesterday and admitted that he was pressured by Fed. Res. Bernanke, former Treas. Sec'y Paulson and Chief Economic Advisor to Obama, Lawrence Summers, to keep quiet to BAC's shareholders about Merrill Lynch's losses. This story ran today at P.1 (related story at p.17) of Fin. Times; p. C1 of WSJrn; p. B1 of NYT; p. A14 of AJC; p. B7 USA Today; p. A1 of Investors Bus. Daily. Also a separate story appears at WSJ p. C1 about how the Obama team is being drawn into the mess because of pressuring by Obama insiders.

BAC is also in the news because of its ownership interest in BlackRock which announced yesterday it had agreed to buy Barclays Global Investors from the British banking giant Barclays for $13.5 billion. This story is at p. B3 of NYT; p. 17 of Fin. Times; p. C1 of WSJ; and p. 1B USA Today. WSJ at p. C1 mentioned BAC led the Dow up yesterday with a rise of 8.3% in its stock price. A related story at FT p. 17 said BlackRock's purchase of Barclays Global Investors will unleash a raft of similar deals. Also at p. 22 of WSJ, it says BAC's stock was upgraded by analysts at Keefe, Bruyette & Woods to outperform and Morgan Stanley raised their EPS estimates for BAC.

XOM Exxon-Mobil was in the news because of its switch decision to now join TransCanada to build a 1,700 mile natural gas pipeline from Alaska that would begin operations in 2018 and have a daily capacity of six billion cubic feet of natural gas. This story ran at p. B7 of NYTimes; p. B1 of WSJ & AJC p. A14. P. B9 also mentions XOM's and Chevron's CVX stock prices moving higher yesterday because of rising oil prices. A similar story is at p. B8 at "Market Gauges" saying XOM was a top five performer over the last year in the energy sector being down only -16.4 in its stock price.

MSFT Microsoft made news because it said Thursday it will ship its Windows 7 operating software in Europe without its Internet Explorer Web browser to appease Economic Union Commission regulators. This is at p. 13 of Fin. Times that also says the EU regulators are considering forcing MSFT to have prompts for users of their operating systems to be able to use competitors' browser. Also at B7 of FT there is a story that says MSFT's rivals are looking for a free ride. IBD's story on MSFT is at p. A2, USA runs it at p. B1 and WSJ's story about MSFT shipping Windows Operating system without Internet Explorer in Europe is at p. B7. Also, MSFT was mentioned at IBD p. A4 as possibly losing its security chief, Scott Charney, to Obama as Obama's cybercrime czar although Charney is quoted as saying he's not interested.

BA Boeing lowered its 20 forecast for the commercial airplane market citing the recession, declining air traffic and fuel prices. Last year Boeing said it expected a market for 29,400 aircraft over the next 20 years valued at $3.2 trillion but now they say there will be only 29,000 planes. This story ran at WSJ B1; USA Today p. 5B; and AJC p. A12. USA Today's Markets column at p. 5B said BA fell 1.64 to 50.66 as a result of this forecast revision.

KO Coke is mentioned at p. A2 as causing the shares of Plexus to rise as a result of their partnership with KO to produce a fountain dispenser that could serve 100 different beverages. Also WSJ at p. B8 said Venezuela is banning Coke Zero claiming health hazards.

Enjoy the rest of your weekend. Dan from Atlanta.