Before the Open (May 12)

Good morning. Happy Monday. Hope you had a nice weekend.
The Asian/Pacific markets closed mixed. India, Hong Kong and China posted solid gains, Singapore and Taiwan dropped. Europe is currently mostly up. Greece is down 3.4%; Italy, Spain, Stockholm and Germany are leading. Futures here in the States point towards a moderate gap up open for the cash market.

The dollar is down. Oil and copper are up. Gold and silver are up.
The story remains the same…with one exception. The Dow and S&P are in consolidation mode. They rallied nicely, and for the last two months have moved in a range near their highs. From a charting perspective, they look great. The Nas and small caps, on the other hand, have fallen well off their highs and could be considered in mini downtrends. Lower highs and lower lows are in place, and all of February’s gains have been wiped out.
If the large caps can continue holding up while the Nas and small caps find a bottom – even if it’s a local bottom – they’ll bust out and rally (eventually). But there’s always the risk that they have to spend so much energy just to hold their gains that they’ll succumb to selling before the Nas and small caps can find a bottom.
The one thing that has changed is analyst sentiment. Big losses among internet stocks (YELP, P, LNKD, TWTR and many others) have been at the heart of the Nasdaq’s weakness, but some of those stocks are starting to look attractive to analysts. Twitter has been upgraded a couple times. So has Pandora. The slight change in sentiment combined with high short interest in many names could boost stocks and free the Dow and S&P to break out. We’ll see. The fact that the market hasn’t broken down yet is a positive sign. More after the open.
Stock headlines from barchart.com…
Travelers (TRV +0.07%) was upgraded to ‘Buy’ from ‘Neutral’ at Guggenheim.
Twitter (TWTR +0.28%) was upgraded to ‘Buy’ from ‘Neutral’ at SunTrust.
Hillshire Brands (HSH +0.65%) will acquire Pinnacle Foods (PF +0.69%) for $6.6 billion.
Deere (DE +0.06%) was downgraded to ‘Underperform’ from ‘Neutral’ at Longbow.
Actavis (ACT -0.44%) was upgraded to ‘Top Pick’ from ‘Outperform’ at RBC Capital.
Chrysler (FIATY +1.16%) is recalling 780,000 2010-2014 Dodge Grand Caravan and Chrysler Town & Country minivans due to reports of overheating.
Pandora (P +1.89%) was upgraded to ‘Buy’ from ‘Neutral’ at MKM Partners.
M&T Bank (MTB +0.37%) was upgraded to ‘Buy’ from ‘Neutral’ at Goldman Sachs.
Core Laboratories (CLB -0.18%) lowered guidance on fiscal 2014 EPS view to $5.80-$6.00 from $6.00-$6.25, below consensus of $6.20.
Logitech (LOGI -2.49%) was upgraded to ‘Outperform’ from ‘Neutral’ at Credit Suisse.
Barclays (BCS -1.07%) was downgraded to ‘Neutral’ from ‘Outperform’ at Exane BNP Paribas.
Standard General reported a 9.8% passive stake in RadioShack (RSH -9.52%) .
Gabelli reported a 9.1% stake in National Fuel (NFG +0.74%) .
Amarin (AMRN -3.21%) was downgraded to ‘Neutral’ from ‘Buy’ at Citigroup.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
12:00 PM Fed’s Plosser: “Labor and Economic trend”
2:00 PM Treasury Budget
Notable earnings before today’s open: BPI, CXO, EVEP, GOGO, HNR, HRG, NIHD, PHMD, SCLN, TICC, ZINC
Notable earnings after today’s close: AMBC, ARNA, BWC, CALL, CARA, CVG, DXPE, FTEK, HALO, HMIN, INWK, LMNS, MBI, MCK, MNKD, NOAH, PDLI, PTLA, PVA, RAX, RDEN, RNET, SUPN, TCRD, TRQ, VGR
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers