Filed under: Before the bell, Earnings reports, Analyst reports, Analyst upgrades and downgrades, Deals, Google (GOOG), Microsoft (MSFT), Wal-Mart (WMT), Walgreen Co (WAG), Sony Corp ADR (SNE), Adobe Systems (ADBE), Research in Motion (RIMM), QUALCOMM Inc (QCOM), Palm Inc (PALM)

Before the bell: Stocks sluggish as subprime woes continue

Sony Corp (NYSE: SNE) said it will launch an ultra-thin flat TV in December, the world’s first television based on organic light-emitting diode (OLED) technology.

According to the Wall Street Journal, Microsoft (NASDAQ: MSFT) and Adobe Systems (NASDAQ: ADBE) will launch free document-sharing systems mirroring Google’s (NASDAQ: GOOG) move with its Google Apps. Adobe is also about to acquire Virtual Ubiquity Inc.

It seems that Christmas comes earlier every year. Well, at least the Christmas shopping season. Wal-Mart Stores Inc (NYSE: WMT) jump-started the holiday shopping by cutting prices on toys in its stores yesterday and will be introducing special price cuts on hot toys each week during October. It remains to be seen parents’ reaction after all the toy recalls.

Telecommunications company Telefonica SA and Yahoo Inc. (NASDAQ: YHOO) announced they entered an agreement making Yahoo’s oneSearch the main search service on Telefonica’s mobile portals in 15 countries in Europe and Latin America.

European Union antitrust regulators are investigating Qualcomm (NASDAQ: QCOM) for possible abusive business practices. Qualcomm may have violated EU competition rules by refusing to share licensing terms for its mobile phone technology, the EU said as its EU investigators had upgraded their probe to “priority status.”

Reporting today:

An RBC Capital Markets analyst downgraded Research in Motion Ltd. (NASDAQ: RIMM) to Outperform from Top Picks, mostly on valuation, and lowered price target to $110 from $115. The BlackBerry makers is launching new products and winning a bigger piece of the smartphone market, he said, but the stock, which has already doubled this year, may have trouble getting higher. RIMM shares are down 0.85% in premarket trading.

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Filed under: Before the bell, Earnings reports, Analyst reports, Analyst upgrades and downgrades, Deals, Google (GOOG), Microsoft (MSFT), Wal-Mart (WMT), Walgreen Co (WAG), Sony Corp ADR (SNE), Adobe Systems (ADBE), Research in Motion (RIMM), QUALCOMM Inc (QCOM), Palm Inc (PALM)

Before the bell: Stocks sluggish as subprime woes continue

Sony Corp (NYSE: SNE) said it will launch an ultra-thin flat TV in December, the world’s first television based on organic light-emitting diode (OLED) technology.

According to the Wall Street Journal, Microsoft (NASDAQ: MSFT) and Adobe Systems (NASDAQ: ADBE) will launch free document-sharing systems mirroring Google’s (NASDAQ: GOOG) move with its Google Apps. Adobe is also about to acquire Virtual Ubiquity Inc.

It seems that Christmas comes earlier every year. Well, at least the Christmas shopping season. Wal-Mart Stores Inc (NYSE: WMT) jump-started the holiday shopping by cutting prices on toys in its stores yesterday and will be introducing special price cuts on hot toys each week during October. It remains to be seen parents’ reaction after all the toy recalls.

Telecommunications company Telefonica SA and Yahoo Inc. (NASDAQ: YHOO) announced they entered an agreement making Yahoo’s oneSearch the main search service on Telefonica’s mobile portals in 15 countries in Europe and Latin America.

European Union antitrust regulators are investigating Qualcomm (NASDAQ: QCOM) for possible abusive business practices. Qualcomm may have violated EU competition rules by refusing to share licensing terms for its mobile phone technology, the EU said as its EU investigators had upgraded their probe to “priority status.”

Reporting today:

An RBC Capital Markets analyst downgraded Research in Motion Ltd. (NASDAQ: RIMM) to Outperform from Top Picks, mostly on valuation, and lowered price target to $110 from $115. The BlackBerry makers is launching new products and winning a bigger piece of the smartphone market, he said, but the stock, which has already doubled this year, may have trouble getting higher. RIMM shares are down 0.85% in premarket trading.

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Filed under: Google (GOOG), Microsoft (MSFT)

In a move to counter Google (NASDAQ: GOOG), Microsoft (NASDAQ: MSFT) will move some of its key Office funtions online so that they can be worked on using multiple PCs.

Douglas A. McIntyre is a partner at 24/7 Wall St.

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Filed under: Citigroup Inc. (C)

According to MarketWatch, Citigroup (NYSE:C) expects to report that third-quarter earnings will drop about 60% from a year earlier due to “dislocations in the mortgage-backed-securities and credit markets, and deterioration in the consumer-credit environment.”

The decline “was driven primarily by weak performance in fixed-income credit-market activities, write-downs in leveraged loan commitments, and increases in consumer-credit costs,” Chairman and Chief Executive Charles Prince said in a statement.

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Filed under: Bad news, Economic data, Housing

Overnight in London, Alan Greenspan made another stop on his book tour and was good enough to tell Reuters that the US housing market had much further to fall “All that I conclude is that the process of inventory adjustment has just started and we have a long way to go before residential housing and mortgage markets stabilize in the U.S.” In other words, let the bank take your house and move to New Zealand.

Greenspan may not be helping the US economy, and he may want to keep a lower profile.

Housing stocks and financial services operations with exposure to US mortgages are already well aware of the dangers that the current housing downturn presents. Saying more about it may sell Mr. Greenspan’s book, but it is hardly good for morale.

Of course, if the old man is right, and he often has been. a prolonged and deepening housing crisis would almost certainly drive consumer spending down sharply and damage industries from automotive to retail. This, in turn, would almost certainly cause a recession which could last for all of 2008.

If there is no one else to blame, we can always point a finger at Greenspan. His book sales should help him weather the recession.

Douglas A. McIntyre is a partner at 24/7 Wall St.

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Filed under: Bad news, Law, Pfizer (PFE)

In an example of just how dicey it can be to do business in the developing world, Pfizer (NYSE: PFE) finds itself in a lawsuit brought by the government in Nigeria for $8.5 billion. The suit claims that the company “deceived patients and caused the death of 11 children in 1996 when it performed clinical trials for a new drug,” according to Reuters. In 1996, the country was in the midst of a meningitis outbreak killed more than 12,000 children in six months.

Pfizer says it offered experimental drug Trovan because the government was pleading for help. Nigeria claims that Pfizer “failed to obtain all the required approvals for the test and did not get proper consent from the patients.” And, later the FDA found that the drug could cause liver problems in some patients.

The suit brings up a difficult moral dilemma. Assuming that Pfizer felt that the drug was safe, offering it in an emergency would appear to be almost noble. But, if the trouble in Nigeria was used to get further test data on the drug, the company is due for more PR trouble than it has faced in a long time.

It would appear that, since Pfizer was likely to be able to have clinical trials outside Nigeria, that testing the drug there was of little use.

The incident may effect how much help US companies will want to give when poorer nations ask for it.

Douglas A. McIntyre is a partner at 24/7 Wall St.

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Filed under: Google (GOOG), Microsoft (MSFT)

In a move to counter Google (NASDAQ: GOOG), Microsoft (NASDAQ: MSFT) will move some of its key Office funtions online so that they can be worked on using multiple PCs.

Douglas A. McIntyre is a partner at 24/7 Wall St.

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Filed under: Earnings reports, Bad news, Citigroup Inc. (C), Bank of America (BAC)

According to The Wall Street Journal, Swiss bank giant UBS (NYSE: UBS) will announce a tremendous loss for the third quarter. The problem is primarily in its fixed income division, which holds, among other things mortgage-related assets.

The loss will be in the $510 million to $600 million range, based on a write down of assets that could be six times that large. The Journal writes that the “losses resulted from applying sharply lower market values to asset-backed bonds.”

And, that is the core of the matter. Some of the fixed income instruments held by banks cannot be sold right now, or would have to be sold at a huge discount. Banking accountants use models to set asset values for reasons of earnings reporting, but those numbers are based to some extent on theory.

The problem is acute enough that it could spread to big U.S. money center banks like Citigroup (NYSE: C) and Bank of America (NYSE: BAC). After suffering sharp declines in August, Bank of America is now down only 5% for the year. Citi has not recovered as well and is off 15% over the same period.

Bad news out of a major U.S. bank would almost certainly cause the firms to test their lows again.

Douglas A. McIntyre is a partner at 24/7 Wall St.

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