Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Big Lots Inc. (NYSE: BIG) Q2 profits topped expectations, but it warned of weak sales in the second half.
• China Petroleum and Chemical Corp. (NYSE: SNP) first-half profits tanked due to government price controls.
• Dell Inc. (NASDAQ: DELL ) fell short of Q2 earnings estimates, surprising even Jim Cramer.
• Dillard's Inc. (NYSE: DDS) beat analysts' expectations despite widening its Q2 net loss.
• Gilat Satellite Networks Ltd. (NASDAQ: GILT) missed Q2 expectations and a merger fell through.
• J. Crew Group Inc. (NYSE: JCG) Q2 net income slipped on lower sales and gross margins.
• JP Morgan & Chase Co. (NYSE: JPM) earnings have been hurt by investments in Fannie Mae/Freddie Mac.
• LDK Solar Co. (NYSE: LDK) raised its 2009 revenue guidance on reaching peak silicon wafer capacity.
• Marvell Technology Group (NASDAQ: MRVL) beat Q2 expectations but gave a conservative Q3 outlook.
• Rio Tinto Group (NYSE: RTP) first-half profits more than doubled on its acquisition of Alcan.
• Sanderson Farms Inc. (NASDAQ: SAFM) swung to a Q3 loss due in part to rising commodities prices.
• Sears Holdings Corp. (NASDAQ: SHLD) Q2 earnings plunged more than expected on further sluggish sales.
• SkillSoft PLC (NASDAQ: SKIL) beat Q2 expectations and offered Q3 and full-year guidance.
• Smithfield Foods Inc. (NYSE: SFD) swung to a Q1 loss due in part to rising commodities prices.
• Talbots Inc. (NYSE: TLB) nearly doubled its Q2 loss due to lower sales and restructuring charges.
• Thornburg Mortgage Inc. (NYSE: TMA) posted a Q2 profit but warned of possible collapse on margin calls.
• Tiffany & Co. (NYSE: TIF) doubled its Q2 profit on strong international sales, and raised its guidance.
• TiVo Inc. (NASDAQ: TIVO) unexpectedly swung to a Q2 profit but forcast another loss in Q3.

Upcoming quarterly reports include Guess (NYSE: GES), Collective Brands (NYSE: PSS), H&R Block, (NYSE: HRB), Staples (NASDAQ: SPLS), Ciena (NASDAQ: CIEN), Toll Brothers (NYSE: TOL); and National Semiconductor (NASDAQ: NSM).

Visit AOL Money & Finance for more earnings coverage.

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Rising commodities prices led both Smithfield Foods Inc. (NYSE: SFD), the nation's largest pork producer and processor, and poultry producer Sanderson Farms Inc. (NASDAQ: SAFM) to report quarterly losses on Tuesday.

Smithfield Foods said it lost $12.6 million, or 9 cents per share, in its fiscal first quarter due in part to a $20.1 million write-down in the value of commodity contracts. The Smithfield, Va.-based company had reported a profit of $54.6 million, or 41 cents per share, a year ago.

Revenues rose 20% to $3.14 billion in the quarter. Analysts surveyed by Thomson Reuters had forecast a loss of 4 cents per share on $2.87 billion in sales.

In addition to hurting from high costs for such ingredients as grain and fuel, Smithfield also faces an oversupply of meat on the market, which is keeping prices for pork lower. To help push prices up, meat producers such as Smithfield have announced intentions to cut supply.

Shares of Smithfield fell 88 cents, or 3.7%, to $22.71 in morning trading. That's up from a 52-week low of $16.61 in early July, but shares have fallen about 21% since the beginning of the year.

Sanderson Farms reported a fiscal third-quarter loss of $3.6 million, or 18 cents per share, on revenue of $466.9 million, due in part to high feed costs and declining restaurant traffic. The Laurel, Miss.-based company reported a year-ago third-quarter profit of $30.7 million, or $1.51 per share, on revenue of $394.8 million. Analysts surveyed by Thomson Financial had expected a break-even quarter with revenue of $464.8 million.

For the first nine months of 2007-08, Sanderson said it earned $8.8 million, or 43 cents per share, on revenue of $1.26 billion. For the same period of the previous year, the company earned $54.8 million, or $2.70 per share, on revenue of $1.05 billion.

The company also reported that corn meal prices increased 30.7% from a year ago, while soybean meal prices rose 52.4%.

Sanderson shares fell $4.63, or 11.7%, in morning trading. Shares are down about 17% from a year ago.

Visit AOL Money & Finance for more earnings coverage.

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Bob Evans Farms (NASDAQ: BOBE) owns and operates full-service restaurants, under the Bob Evans and Mimi's Cafe brand names. The Bob Evans chain consists of 571 stores in the Midwest, mid-Atlantic and Southeast regions of the United States. Mimi's Cafe runs 132 restaurants, primarily in California and other western states. The company is also a leading producer of pork sausage and complementary homestyle convenience foods, under the Bob Evans and Owens brand names. Smithfield Foods (NYSE: SFD) is a competitor.

The firm pleased investors last week, when it reported solid Q4 results and issued in-line guidance for its FY09 performance. The CEO attributed success to cost management on the restaurant side and better-than-expected numbers from the food products business. The shares were subsequently upgraded from "neutral" to "buy" at MKM Partners.

The stock popped on the news and has since been consolidating the gain in a bullish "pennant" pattern. Prices frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the issue with one "strong buy", one "buy" and two "holds". The BOBE P/E ratio (17.64), PEG ratio (1.26), Price to Sales ratio (0.59), Price to Book ratio (1.67), Price to Cash Flow ratio (7.27) and EPS Growth rate (23.81%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 97% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past 52 weeks, it has traded between $23.93 and $38.75. A stop-loss of $29.40 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in either of the stocks mentioned above.

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Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Big Lots Inc. (NYSE: BIG) beat Q1 expectations and offered Q2 and full-year earnings guidance.
• Brown-Forman Corp. (NYSE: BF.B) beat Q4 estimates on demand for Jack Daniels and Finlandia vodka.
• Collective Brands Inc. (NYSE: PSS) reported strong Q1 results despite a litigation charge.
• Del Monte Foods Co. (NYSE: DLM) Q4 earnings surged 37% but fell short of analysts' estimates.
• Dollar Tree Inc. (NASDAQ: DLTR) beat Q1 earnings expectations and offered Q2 and full-year guidance.
• Dr Pepper Snapple Group Inc. (NYSE: DPS) Q1 earnings surged 38% but fell short of expectations.
• Guess Inc. (NYSE: GES) reported strong Q1 results on strength in Europe and Asia.
• National Semiconductor Corp. (NASDAQ: NSM) posted better-than-expected Q4 results.
• Nucor Corp. (NYSE: NUE) raised its earnings outlook for the coming Q2 report, sending shares higher.
• SeaChange International Inc. (NASDAQ: SEAC) reported better-than-expected Q1 results.
• Smithfield Foods Corp. (NYSE: SFD) Q1 profits fell 94% on rising grain costs and falling hog prices.
• Toll Brothers Inc. (NYSE: TOL) reported a smaller-than-expected Q2 loss, lifting shares.
• Wimm-Bill-Dann Foods (NYSE: WBD) reported strong Q1 results that beat Wall Street expectations.

See also: Earnings highlights: Wal-Mart, Lehman Bros., Take-Two, Ciena, Trina Solar and others

Also, continued real estate losses are expected to hurt the quarterly reports of banks such as like Wachovia (NYSE: WB), Wells Fargo (NYSE: WFC), and National City (NYSE: NCC). And Steven Mallas wonders why Playboy (NYSE: PLA) shares have tanked since its last earnings report.

Upcoming results to watch for include Krispy Kreme (NYSE: KKD), Pall Corp. (NYSE: PLL), Pep Boys (NYSE: PBY), Korn Ferry (NYSE: KFY), and Casey's General Stores (NASDAQ: CASY).

Visit AOL Money & Finance for more earnings coverage.

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Here's a peek at what analysts surveyed by Thomson Financial are expecting from companies scheduled to report quarterly results in the first week of June, 2008.

The following companies are expected to post earnings growth, compared to the same period in the previous year:

• Take-Two Interactive (NASDAQ: TTWO) up 136.6% (from a loss) to $1.12 per share, on $499.1 million in revenue
• Lululemon Athletica Inc. (NASDAQ: LULU) up 58.3% to 12 cents per share, on $71.8 million in revenue
• Vimpelcom Communications (NYSE: VIP) up 54.2% to 59 cents per share, on $2.1 billion in revenue
• Focus Media Ltd. (NASDAQ: FMCN) up 36.4% to 33 cents per share, on $161.3 million in revenue
• Ciena Corp. (NASDAQ: CIEN) up 29.7% to 37 cents per share, on $238.4 million in revenue
• Greif Inc. (NYSE: GEF) up 24.1% to 87 cents per share, on $839.9 million in revenue
• Vail Resorts Inc. (NYSE: MTN) up 18.4% to $2.44 per share, on $474.8 million in revenue
• Guess? Inc. (NYSE: GES) up 17.4% to 46 cents per share, on $451.6 million in revenue
• Del Monte Foods Co. (NYSE: DLM) up 15.4% to 26 cents per share, on $1.0 billion in revenue
• Cooper Companies Inc. (NYSE: COO) up 14.6% to 48 cents per share, on $256.7 million in revenue
• Jackson Hewitt Tax Service Inc. (NYSE: JTX) up 1.9% to $2.08 per share, on $161.6 million in revenue

These companies are expected to report declines in earnings:

• Collective Brands Inc. (NYSE: PSS) down 1.7% to 58 cents per share, on $935.9 million in revenue
• National Semiconductor Corp. (NYSE: NSM) down 3.6% to 27 cents per share, on $449.5 million in revenue
• Midas Group Inc. (NYSE: MDS) down 4.0% to 24 cents per share, on $48.9 million in revenue
• Bob Evans Farms Inc. (NASDAQ: BOBE) down 4.7% to 40 cents per share, on $441.5 million in revenue
• Comtech Telecommunications (NASDAQ: CMTL) down 21.1% to 56 cents per share, on $129.5 million in revenue
• Rex Stores Corp. (NYSE: RSC) down 50.9% to .25 cents per share, on $57.0 million in revenue
• Smithfield Foods Inc. (NYSE: SFD) down 82.4% to 6 cents per share, on $3.5 billion in revenue
• Williams-Sonoma Inc. (NYSE: WSM) down 93.8% to 1 cent per share, on $778.8 million in revenue

And these companies are expected to report losses:

• Hovnanian Enterprises Inc. (NYSE: HOV) $2.68 per share, on $778.8 million in revenue
• Amerco (NASDAQ: UHAL) $1.15 per share, on $485.5 million in revenue
• Toll Brothers Inc. (NYSE: TOL) 86 cents per share, on $808.9 million in revenue
• IDT Corp. (NYSE: IDT) 28 cents per share, on $470.5 million in revenue
• Plato Learning Inc. (NASDAQ: TUTR) 18 cents per share, on $16.3 million in revenue

For a more thorough look at what to expect from the results of some of these companies, check out Andrew Horowitz's The week in preview: No place like home.

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Reuters reports that workers at Quality Pork Processors Inc in Austin, MN have contracted a new disease -- symptoms include inflammation of the spinal cord, mild weakness, fatigue, numbness and tingling in the arms and legs. The source of these symptoms appears to be these workers' use of compressed air to blow pork brains out of the skull cavity.

Why is this happening? A doctor has been studying 18 Minnesota patients, all of whom have evidence of nerve involvement, typically affecting the legs. He said tests showed patients had damage to the nerves at the root level near the spinal cord, and at the far reaches of their motor nerves, where the nerves connect with muscle.

Why should investors care about this? It's worth looking at whether any publicly traded pork processors use the same technique that Quality Pork Processors does for blowing out pork brains. One candidate for further study is Smithfield Foods (NYSE: SFD), a global pork processor. So far the pork workers have not sued their employer for the disease. But if the problem becomes more severe and widespread, it could affect pork processor profits.

And that would cause nerve problems for investors as well as workers.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

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Smithfield Foods (NYSE: SFD) is the largest hog producer and pork processor in the world, offering fresh pork, smoked and boiled ham, bacon, sausage, hot dogs and ready-to-eat foods. Products are sold under such brand names as Smithfield, John Morrell, Cumberland Gap, Patrick Cudahy, Cook's Ham and Armour-Eckrich Meats. Smithfield is also the fifth-largest beef processor in the United States. Hormel Foods (NYSE: HRL) and Tyson Foods (NYSE: TSN) are major competitors.

The company surprised the Street late last month when it reported fiscal Q2 EPS of 24 cents and revenues of $3.46 billion. Analysts had been looking for 21 cents and $3.28 billion. Management noted that packaged meat profit margins more than doubled and earnings from international meat processing rose sharply. The SFD price popped on the news and then moved into a bullish "flag" consolidation pattern. Stocks frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.

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The market made small gains Thursday, but took time to hold on the huge gains over the previous two trading sessions. Third Quarter Gross Domestic Product was revised higher to 4.9%, up significantly from the 3.9% estimate released earlier. While it will take some time to work through all of the issues related to the credit crunch, 4.9% GDP indicates an economy that is firing on all cylinders and one nowhere near a recession.

The NYSE had volume of 3.5 billion shares with 1,472 shares advancing while 1,779 declined for a loss of 17.48 points to close at 9,773.57. On the NASDAQ, 2.1 billion shares traded, 1,376 advanced and 1,638 declined for a gain of 5.22 to 2,668.13.

Stocks moving Thursday included Sears Holdings (NASDAQ: SHLD), which fell $12.25 (-11%) to $104.09 as earnings fell. CIT Group (NYSE: CIT) lost $2.24 (-9%) to $24.00. Countrywide Financial Corp (NYSE: CFC) rose $0.58 (7%) to $9.30. Smithfield Foods (NYSE: SFD) rose $1.39 (5%) to $29.57 on earnings.

In options there were 4.9 million puts and 5.3 million calls traded for a put/call open interest ratio of 0.92. Sirius Satellite Radio (NASDAQ: SIRI) saw heavy volume on the January 4 calls (QXOAH) with over 48,300 options trading. Sirius Satellite Radio (NASDAQ: SIRI) moved 33,700 of the March 4 calls (QXOCH). E*Trade Financial (NASDAQ: ETFC) saw heavy volume on the January 7.5 calls (EUSAU) with over 36,300 options trading. E*Trade Financial Corp. (NASDAQ: ETFC) also had heavy volume on the December 5 (calls (EUSLA) with over 22,500 options trading. Mirant (NYSE: MIR) saw very heavy volume on the January 40 puts (MIRMH) with over 148,900 options trading; there was also very heavy volume on the Mirant (NYSE: MIR) March 40 puts (MIROH) with over 125,200 options crossed.

Kevin Kersten is an Options Analyst with InvestorsObserver.com. Disclosure note: Mr. Kersten owns and or controls a diversified portfolio of long and short positions that may include holdings in companies he writes about.

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There is an outfit headquartered in Columbus, Ohio that got its start as a twelve-stool diner owned by a local farmer. He said he could not get any decent sausage for the diner and began making his own back at the farm. That was fifty-nine years ago. Both the diner and the sausage-making businesses have since prospered.

Bob Evans Farms (NASDAQ: BOBE) owns and operates full-service restaurants, under the Bob Evans and Mimi's Cafe brand names. The Bob Evans chain consists of 579 stores in the Midwest, mid-Atlantic and Southeast regions of the United States. Mimi's Cafe runs 118 restaurants, primarily in California and other western states. The company is also a leading producer of pork sausage and complementary home-style convenience foods, under the Bob Evans and Owens brand names. Smithfield Foods (NYSE: SFD) is a competitor.

The firm had good news for investors last Monday evening, when it announced Q2 EPS of 45 cents and revenues of $426.3 million. Analysts had been expecting 39 cents and $425.5 million. Management also guided FY08 EPS to $1.77-$1.84 ($1.72 consensus). The stock popped through 30-day and 50-day moving average resistance on the news and began consolidating the gain in a bullish "flag" pattern. Then, on Thursday evening, the board authorized a two million share addition to its stock buyback program. That boosted the current fiscal year authorization to five million shares and took the stock price to the top of the flag. Further upside is expected.

Brokers recommend the shares with four "holds." The BOBE P/E ratio (16.83), Price to Sales ratio (0.62), Price to Book ratio (1.56) and EPS Growth rate (25.00%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 88 percent of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past 52 weeks, it has traded between $24.58 and $39.83. A stop-loss of $26.75 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.

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Beef, pork and turkey producer Smithfield Foods, Inc. (NYSE: SFD) recently released 4Q 2007 earnings (June 7). Sales were up 10% to $3.1 billion, but income from continuing operations was up to just under $40 million or diluted EPS of $.35, six times the amount from 4Q 2006. Net income for the quarter was $37 million. Too bad that's not the whole story. Smithfield is in the midst of restructuring its pork raising and processing operations. Restructuring costs for that totaled $10 million for the quarter. Also, Smithfield incurred a pretax charge of $8.2 million in its beef segment, as well as losses associated with shedding it Quik-to-Fix Foods and its bioenergy business unit.

Few things are going well for Smithfield Foods. Profit margins improved in its pork segment which posted 31% volume gain in the sale of packaged pork products. Growth was especially good in the company's international markets. Gains in the hog segment were welcome given that hog production prices have gone up, while hog production was down 9% due to the effects of the hog circovirus, from which major hog producers are only now beginning to recover. Smithfield is currently reducing its domestic hog production facilities while simultaneously ramping up hog production capacity in Poland and Romania, where production costs are much lower.

The company's beef segment operated at a loss. Feeding costs (grain) were up as was the price for feeder cattle to bring to market, while severe winter weather domestically drove up production costs. The good news is that the losses in the beef segment this quarter were less than losses in the equivalent quarter a year ago.

Smithfield has a joint venture with Butterball Turkey, but this segment also operated at a loss due again to rising production and grain costs coupled with lower volume. All production segments were affected by higher prices for grain, freight and energy.

For FY 2007, Smithfield Foods reported sales of $11.9 billion, half a billion improvement over FY 2006. But net income was down $6 million to $166.8 million or diluted EPS of $1.68. Although Smithfield Foods IS NOT involved in the recall of 6 million pounds of possibly contaminated ground beef, all food stocks will get hammered in the next quarter. The stock closed down $0.29 at $32.11 on 12 June 2007.

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Almost six million pounds of ground beef suspected of harboring E. coli bacteria has been recalled by United Food Group LLC. The bad beef was sold throughout the West in groceries including Albertson's, Trader Joe's and Sav-A-Lot, under brand names Moran's All Natural (too natural, if you ask me), Miller Meat Company, Stater Bros., Trader Joe's Butcher Shop, Inter-American Products Inc. and Basha's. Fourteen cases of E. coli illness have been linked to the beef since April 25.

Last year, the U.S. population consumed 28 billion pounds of beef, from almost 34 million head of bovine, worth in excess of $37 billion. While the United Food Group is an LLC, the specter of contaminated beef could impact publiclly traded beef vendors such as Hormel Foods (NYSE: HRL) and Smithfield Foods (NYSE: SFD) as well.

To put the magnitude of this recall in perspective, if we assume the average American adult weighs 175 pounds, it represents the weight of 34,285 people -- the entire population of Beverly Hills, CA, or Panama City, FL or Rome, NY.

The news comes at a particularly vulnerable time for the U.S. export market, as China is vigorously responding to the criticism of its food processing in the tainted pet food scandal by placing American food imports under the microscope. Over the weekend, Chinese officials rejected a shipment of American pistachios because they found ants among the nuts.

United Food Group has set up a hot line to answer questions about the recall, 1-800-325-4164.

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After reading Tom Barlow's post on the Chinese Strategic Pork Reserve mentioned in the Wall Street Journal (subscription required), I couldn't resist throwing the new intern in to do a little more research on this exciting topic.

The US Strategic Oil Reserve has enough crude cover oil imports and run the entire country for about two months. How does the Strategic Pork Reserve stand up to that?

The numbers the intern pulled up indicated that there are 1.65 million hogs in the Chinese strategic pork reserve. Is it called the piggy bank? Wow that sounds like a lot of meat; but wait there are a lot of Chinese people too. And how big is a pig? An average hog dresses out at 133 pounds of edible meat. There are 1.3 billion people in China. This means that for every 788 Chinese there is one hog in the reserve. That comes out to about 2.7 ounces of bacon per Chinese person.

I was about to say I hope there is a strategic egg reserve to go with that -so one could have at least bacon and eggs- but eggs don't keep that well. Maybe there is a strategic pancake reserve so they can at least have a full meal for breakfast.

Maybe the Strategic Pork Reserve is just another pet pork project (Sorry, couldn't help it). That is simply not enough pork to make a big difference and could only cover one meal. It may make people -especially the politicians- feel good and the threat of dumping it all on the market at once might temporarily lower prices; but we are just not talking about that much meat.

High pork prices are good for farmers and lots of agriculture companies like Monsanto (NYSE: MON), Smithfield Foods (NYSE: SFD), Hormel (NYSE: HRL); hopefully there will be enough to go around and we won't be reading about Pork Riots in a few months. You may think I am crazy, but it wasn't that long ago when there were tortilla riots in Mexico.

Kevin Kersten is an Options Analyst with InvestorsObserver.com. Do you have any deadwood in your portfolio? Check out the 18 Warning Signs That Tell You To Dump A Stock.

Disclosure note: Mr. Kersten owns and or controls a diversified portfolios of long and short positions that may include holdings in companies he writes about.

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I was captivated when I read in yesterday's Wall Street Journal [subscription] that the Chinese government, in response to a growing pork shortage brought about by the country's growing prosperity, was considering tapping into its STRATEGIC PORK RESERVE. Really. Apparently, it has stockpiled frozen pork as well as pigs on the hoof against the day meat prices skyrocket.

After I quit giggling over the image, I began to wonder if our government was doing enough to protect us from similar shortfalls. I know, of course, about our huge strategic petroleum reserve, sufficient to fuel every SUV in the country for a dozen trips to Wal-Mart (NYSE: WMT). But petroleum isn't our only essential resource. Do we have a strategic beer reserve? A strategic disposable diaper reserve? And how about our supply of Starbucks (NASDAQ: SBUX) coffee? Can you imagine the riots if our supply of French roast is cut off for even a day? Don't threaten my freakin' coffee!

Of course, we aren't alone in the world in our dependence on life's essentials. One would think that Norway would have a substantial Strategic Herring Reserve. And where would Italy be without a Strategic Olive Oil and Garlic Supply? I'd guess Monaco has thousands of extra cases of Taittinger put aside, while the Saudis stockpile extra wives. Closer to home, you'd think Canada would stockpile pucks, Mexico tortillas.

If you want to take a flyer that the Chinese pork shortage might force them to shop internationally, you might look at leading U.S. pork producer Smithfield Foods (NYSE: SFD), which is taking over another large producer, Premium Standard.

I have no recommendations for plays in a puck shortage.

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The morning started with positive economic data as Consumer Spending and Personal Incomes were up 0.6% for February, beating expectations of 0.3% increases. Ultimately markets ended drifting sideways to close in mixed slightly positive territory. This was the last trading day of the first quarter; and although there was a big drop with the China jitters, the Dow Jones Industrial Average only lost 0.9% and the S&P 500 actually made a tiny 0.1% gain.

The NYSE had volume of 2.8 billion shares with 1,802 shares advancing while 1,456 declined for a loss of 17.26 points to close at 9,261.82. On the NASDAQ, 2.1 billion shares traded, 1,723 advanced and 1,315 declined for a gain of 3.76 to 2421.64.

Stocks moving today included: Dendreon Corp (NASDAQ: DNDN) shot up $7.71 (148%) to $12.93 after the FDA approved its prostate drug. Hansen Natural (NASDAQ: HANS) rose $1.9 (5%) to $37.88 on an upgrade by JP Morgan. Novartis (NYSE: NVS) fell $2.26 (-4%) to $54.63 on news it was stopping a constipation drug Zelnorm. Smithfield Foods (NYSE: SFD) gained $0.82 (3%) to $29.95.

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MOST NOTEWORTHY:

• Merriman initiated Callaway Golf Co (NYSE: ELY) with a Buy rating and believes new management could get the company back on track.
  

• Genentech (NYSE:DNA) was initiated at Prudential with a Neutral rating and $92 target. The firm believes the lack of a new product launch before 2010 is a concern for long-term growth.

• American Technology believes shares of LSI Logic (NYSE: LSI) are undervalued, initiating the company with a Buy rating and $13 target, given synergies and revenue opportunities from the merger with Agere Systems, Inc (AGR).

• Bank of America initiated Evergreen Solar Inc (NASDAQ: ESLR) with a Sell rating and $8 target to reflect the lack of visibility on its growth, which puts the company at a competitive disadvantage.

• Salary.com, Inc (NASDAQ: SLRY) was initiated at Pacific Crest and Wachovia with an Outperform rating and at Thomas Weisel with an Overweight rating.

• Prudential started Gilead Sciences, Inc (NASDAQ: GILD) with an Overweight rating and $90 target.

• BMO initiated Smithfield Foods, Inc (NYSE: SFD) with with an Outperform rating and $36 target.

• Kaufman Brothers started VeriChip Corp (NASDAQ: CHIP) with a Buy rating, believing the company's growth position is compelling given its patented, FDA-approved microchip that can be implanted into humans for a variety of applications.

• Citigroup started Amgen, Inc (NASDAQ: AMGN) with a Hold rating and $64 target.

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