05 January 2011 The Intelligent Investor

U.S.
The Economic Monitor Series. Free Edition.

INSIDE THE REPORT MARKETS AT A GLANCE

 Stock recommendations and price targets from top
brokerage firms
 Analysis and views on National debt looms large
over Washington
 Economic Indicator Watch along with Graphs
 U.S. stocks ended higher after data showed the creation of three
times as many private-sector jobs as expected in December. The
DJIA was up 31.71 points, or 0.27 percent, at 11,722.89.
 Treasuries yields rose, as strong private employment data led to
higher expectations for Friday's key payroll report. Benchmark 10-
year Treasury notes were last trading 1-6/32 lower in price to
yield 3.48 percent, up from 3.33 percent late on Tuesday.

 The dollar leaped higher and could continue to outperform other

 List of companies earnings which hit and miss the major currencies after a slew of optimistic U.S. data indicated that
analysts’ expectations the world's largest economy was on a steady path to recovery. The
dollar surged 1.4 percent against the yen to 83.21 yen.
 Important Events Scheduled on January 06
 Oil prices bounced back to above $90 a barrel as unexpectedly big
gains in U.S. private sector jobs spurred optimism the economy
Economic Events was recovering at a faster pace. NYMEX February crude ended up
92 cents at $90.30.
 No economic events scheduled
 Gold fell but off its earlier lows, as the dollar surged after a strong
U.S. private-sector employment report, which reinforced an
Corporate Events improving economic outlook and dented safe-haven buying. Spot
gold fell 0.3 percent to $1,376.20 an ounce at 12:27 p.m. EST.
 Monsanto and Constellation Brands will release its
quarterly earnings results
STOCK INDICES
Top Stories
INDEX LAST CHNG % CHNG
 U.S. private sector jobs surge: ADP DJIA* 11722.89 31.71 0.27
Nasdaq* 2702.2 20.95 0.78
 Goldman's Facebook fund spurs SEC inquiry
S&P 500* 1276.56 6.36 0.5
 Qualcomm to buy Atheros NYSE Composite* 8040.04 17.86 0.22

Global Dow* 2105.34 -7.61 -0.36

 Family Dollar posts low quarterly profits
* CLOSING VALUES

 BJ's to close five stores

CURRENCIES
 Time Warner, KKR,TPG on Dogan Yayin short list
INDEX LAST PRIOR
 Google wins lawsuit against Interior Department Euro (EUR/USD) 1.3149 1.3297

U.K. Pound (GBP/USD) 1.5511 1.5585

Japanese Yen (USD/JPY) 83.24 82.04

All prices are at 04:38 PM EST

FUTURES
LAST CHANGE

Crude Oil, Feb. 90.34 0.96

Natural Gas, Mar. 4.452 -0.18

Gold, Dec, Feb. 1376.6 -2.2

Copper, Mar. 440.6 3.7

All prices are at 04:27 PM EST

The Intelligent Investor - U.S.

STOCK RECOMMENDATIONS BY BROKERAGE HOUSES

BROKERAGE/COMPANY ACTIONS RATING

Barclays

Boyd Gaming Corp Raises to overweight from equal-weight Overweight

Goldman Sachs

Check Point Software Raises price target to $48 from $42 Neutral

Concur Technologies Raises price target to $65 from $51 Neutral

Community Health Raises price target to $46 from $40 Buy

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 NEXT TRADING DAY

Economic Events
 No economic events scheduled

Company Events
 Monsanto Co. will report its first quarter results. Analysts expect an EPS of 2 cents per share, up from a loss of 2 cents reported in the
year-ago quarter. Total net sales for the fourth quarter increased 4% to $1.95 billion from $1.88 billion in the comparable period. Ten
analysts estimated revenues of $1.82 billion for the quarter.

 Analysts expect Constellation Brands to report a profit of 62 cents per share for the third quarter, which is up from 54 cents reported
in the same quarter last year. Company's second-quarter net income declined 8% to $91.3 million from $99.7 million last year. Earnings
per Class A share decreased 4% to 43 cents from 45 cents last year. Earnings per share Class B convertible stock also dropped to 40
cents per share from prior year's 41 cents per share.

DAILY EARNINGS HITS & MISSES AS ON 05 JANUARY, 2011

No company earnings reported

ECONOMIC INDICATOR WATCH ON 06 JANUARY 2011

Initial Claims (Weekly)

Forecast: 400k, Prior: 388k

4 Week Average

Forecast: N/A, Prior: 414k

Continuing Claims

Forecast: 4.10 million, Prior: 4.128 million

The U.S. Labor Department will release weekly data on jobless claims at 0830 EST. New applications for unemployment benefits
dropped from 34,000 to 388,000 in the last week report, the lowest level since July 2008. The report on jobless claims showed the
number of people still receiving benefits under regular state programs after an initial week of aid rose 57,000 to 4.13 million in the
week ended December 18. The claims for four-week average were lowest in more than two years at 414,000.

ICSC Monthly Chain (MoM)

Forecast: N/A, Prior: 5.8%

International Council of Shopping Centers will release report on U.S. comparable chain store sales for the month of December. In
the month of November the U.S. comparable chain store sales rose 5.8 percent from a year earlier.
The Intelligent Investor - U.S.

ANALYSIS AND VIEWS

National debt looms large over Washington

By Joseph Picard, IBTimes

The two houses of the 112th Congress commence business today at noon and both veteran lawmakers and newcomers are going to find many important national
issues on their collective plates - jobs and the economy, healthcare, last fiscal year's unattended budget, this fiscal year's developing budget, immigration, Afghanistan,
Pakistan and energy, to name some of the bigger ones.

But a larger, more encompassing, more challenging and more threatening issue is looming up and looking right at Congress and the American people like, as former
South Carolina Congressman Bob Inglis put it, a mountainside looks right at an approaching airplane. That issue is the mountainous national debt and the deficit
spending that adds to it every year.

Lawmakers ignore this giant at their, and the nation's, peril, according to many economists and policy mavens, including Maya MacGuineas, President of the
Committee for a Responsible Federal Budget.

"This is an issue that is not going to go away," she said. "It will be difficult for the White House or the Congress to focus on anything else until they deal with this."

According to U.S. Treasury figures, as of Jan. 4, 2011, the national debt was over $14 trillion -- $14,005,153,386,222.39 to be precise, although it's grown since.

If you were thinking of helping out with a check, that sum breaks down to $45,208 per citizen.

Treasury predicted in June 2010 that the debt would rise to $19.6 trillion by 2015. According to Treasury and the federal Office of Management and Budget, the
national deficit for fiscal year 2010, which ended on Sept. 30, 2010, was $1.294 trillion. It is the second biggest deficit in the nation's history, topped only by 2009. The
deficit currently eats up 8.9 percent of the Gross Domestic Product.

Early last year, President Obama appointed the 18-member bipartisan Commission on Fiscal Responsibility and Reform to study the problem and come up with
recommendations for cutting the debt down to manageable size. The commission, which was co-chaired by former Clinton chief of staff Erskine Bowles and former
Republican senator from Wyoming Alan Simpson, delivered its recommendations in December.

The commission's plan would trim the deficit to $382 billion by 2020 and balance the budget by 2037, with the subsequent yearly surpluses used to pay down the debt.
The plan would eliminate tax breaks, earmarks, farm subsidies and 200,000 federal jobs by 2020. It would freeze the defense budget, make cuts to Medicare and
Medicaid and raise the Social Security retirement age.

As Simpson quipped, there was something in the plan for everyone to dislike. Not everyone disliked it, but many did. Voices on the left objected to cuts to entitlement
programs, while voices on the right decried eliminating tax breaks. The commission itself could not muster the supermajority approval of the plan needed (14 of 18
votes) to present it to Congress as an official proposal.

But the plan still exists and is already being used by a number of senators who are preparing ways to attack the problem.

Bowles said the plan, and the idea driving the plan, would remain useful despite its failure to immediately become a legislative bill.

He said the commission attained its goal of starting "a sane conversation on the dangers of the debt."

MacGuineas, a supporter of the commission's plan, said it is there for lawmakers to use and build on, but how much energy they expend on it depends on the
administration. "What is the White House going to do? There is only so much Congress can do, if the White House does not take the lead," she said.

MacGuineas said that Obama's State of the Union address, slated for Jan. 25, would be an excellent opportunity for the President to motivate the nation and, thereby,
the Congress, to focus on the long-term problem of the debt and deficit.

"He could refer to the debt commission's plan. He could do something like make this the year to tackle Social Security reform," she said. "He needs to emphasize to the
nation that the government is serious about taking this on. In that way, he could build enough momentum for real reform to start taking place. Presidential leadership
is needed."

MacGuineas said that the Senate appears ready to tackle the issue, noting that Sens. Ron Wyden, D-OR, Bob Corker, R-TN, Saxby Chambliss, R-GA and Mark Warner, D
-VA are already working in that direction.

"Four of the senators who served on the commission, and who are still in office, are also focusing on fiscal responsibility," she said, referring to Sens. Dick Durbin, D-IL,
Mike Crapo, R-ID, Tom Coburn, R-OK and Kent Conrad, D-ND.

"This issue deserves consideration," Crapo said. "Inaction is unacceptable."

"But it's a different story in the House," MacGuineas said.

Five of the six Congress Members on the commission voted against its recommendations - Democratic Reps. Jan Schakowsky, IL and Xavier Becerra, CA, and
Republican Reps. Jeb Hensarling, TX, Paul Ryan, WI and Dave Camp, MI.

Two of those Republicans will be committee chairs in 2011 - Ryan, of the Budget Committee, and Camp, of the Committee on Ways and Means. Hensarling will serve
on the Budget Committee.

The three said they could not support the debt commission's recommendations because of proposed elimination of tax breaks.

MacGuineas noted that Republicans who control the House have a position of no new revenues through taxes, a position she believes is ultimately untenable. Senators,
on the other hand, appear ready to compromise to make progress on the issue, she said.

"Change is in the wind regarding this issue," MacGuineas said. "The nation knows that hard choices have to be made to get the debt down. It is Washington that needs
to get onboard. The questions are: will the White House take the lead, and will the Senate and House be able to compromise."
The Intelligent Investor - U.S.

TOP STORIES

U.S. private sector jobs surge: ADP

The private-sector employers added 297,000 jobs in December which was far better than the estimated figure and up from November’s figure of
92,000. ADP Employer Services report surprised the estimates along with economists and signals bullish trend in employment.

Goldman's Facebook fund spurs SEC inquiry

The approach by Goldman Sachs to create an investment vehicle that will allow some of the securities firm's richest clients to buy as much as $1.5
billion of equity in Facebook has drawn the attention of the Securities and Exchange Commission. SEC is determined if it can build an enforcement case cracking
down on investors and companies potentially skirting the rules on the books. According to people familiar with the matter, SEC officials plan to scrutinize special-
purpose vehicles like the one being created by Goldman and Facebook to determine if they are being designed primarily to circumvent the so-called 500-shareholder
rule. Now, SEC is re-examining a key dividing line between public and private companies.

Qualcomm to buy Atheros

Qualcomm Inc. has agreed to buy Atheros Communications Inc. for about $3.2 billion in cash. The world’s largest maker of mobile-phone chips will offer $45 a share
to Atheros’s investors, which is 22 percent more than Atheros’s closing price on January 3, 2011. Qualcomm Chief Executive Officer Paul Jacobs said that Atheros will
give him a sales force and products tailored for consumer electronics and home networking, helping the company expand beyond mobile phones as the deal will
broad its lineup of Wi-Fi networking technology.

Family Dollar posts low quarterly profits

Family Dollar Stores Inc posted a lower-than-expected quarterly profit as the discount chain said it got hurt by lower gross margins and higher freight costs. Its gross
margin dipped to 36.0 percent in the quarter Its sales during December, a key month for retailers, rose only 4 percent at stores open at least a year, below the 6.9
percent increase seen during the fiscal first quarter, which ended November 27. The retailer reported earnings of $74.3 million, or 58 cents per share, in the fiscal first
quarter, versus $67.6 million, or 49 cents per share, a year earlier. Now the company forecast second-quarter earnings ranging from 92 cents to 97 cents a share below
average expectation of $1 per share. Its first-quarter sales rose 9.5 percent to $2 billion.

BJ's to close five stores

BJ's Wholesale Club Inc will close five stores due to weak sales. BJ's, which operates 194 stores that sell goods at a discount to its members, said it was closing three
stores in Atlanta, one in Sunrise, Florida, and another in Charlotte, North Carolina. The retailer said comparable-store sales, including gasoline sales, rose 3.8 percent in
December and missed Wall Street forecasts for a 4.4 percent increase. Excluding gasoline, comparable sales were up 1.4 percent well below the 3.4 percent
expectations.

Time Warner, KKR,TPG on Dogan Yayin short list

Turkey's biggest media group, Dogan Yayin has short listed Time Warner, private equity funds KKR and TPG as its potential buyers for assets sale of around $1.6-$1.8
billion. Sources close to the matter said in another move, Dogan Yayin is also preparing to sell its flagship Hurriyet daily newspaper.

Google wins lawsuit against Interior Department

Google Inc. won a crucial lawsuit against the U.S. Interior Department. Google has accused the government agency of favoring rival Microsoft Corp. in a contract
bid to provide a new email system. Susan Braden, a federal judge in Washington, D.C. issued a preliminary injunction and confirmed that Google had made a
preliminary showing that the agency "violated the Competition in Contracting Act", that prevents the Interior Department from deciding to use Microsoft's email and
collaboration tools for its 88,000 employees. A spokesman for Google said in a statement, "As a proponent of open competition on the Internet and in the technology
sector in general, we're pleased with the court's decision."

This report is produced by

International Business Times
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