Extreme Delays: Which Flights Are the Worst

Extreme delays that leave passengers trapped on airplanes for hours may seem as random as the weather. But those on-board nightmares that have garnered so much attention are more predictable than you think.

An analysis of extreme-delay data from last year shows clear patterns: Certain airlines and certain airports were more prone than others to long delays before takeoff and very late arrivals. Even certain flights had repeated trouble with very long delays.

When storms are forecast, for example, you might be wise to pack some food and tote your own water if traveling on Delta Air Lines Flight 133 from New York's Kennedy Airport to Los Angeles International Airport. That flight sat for more than three hours waiting to take off after pushing back from a gate on seven different days last year, according to data from the Bureau of Transportation Statistics. That was more than any other flight.

Delta's Flight 31 on the same route had "taxi-out" times longer than three hours on six occasions, as did Continental Express Flight 2450 from Syracuse, N.Y., to Newark, N.J. Eight other flights ended up with taxi-out delays of three hours or more five different times.
Airlines say some flights simply end up at the end of long lines more often than others because they try to depart at the airport's busiest time. But it can be more than just unfortunate timing. Airline operations managers can juggle departures because of factors like which crews may run out of duty time first, which planes are more urgently needed for their next scheduled flight, which flights have the most high-dollar business travelers who they least want to be canceled, and which flights are headed to destinations with late-night curfews -- where airlines can be fined for flights arriving after a certain hour.

Delta says its flights sat in the JFK "penalty box" -- a remote parking area for jets -- on days when thunderstorms west of New York caused air-traffic controllers to suspend westbound departures for long periods of time. The carrier will cancel flights headed to airports with weather trouble to thin out arrivals, but is more reluctant to cancel departures in bad weather cities because those flights can wait on the ground, said Neil Stronach, vice president of operations. The result is occasional long waits.

"We don't cancel to manage departure banks unless there's bad weather in the place we're going," he said.

ExpressJet, the airline that operates that Continental Express flight, says Syracuse is the closest airport it serves to Newark -- so close that Flight 2450 has a hard time getting a space in the stream of airplanes headed for Newark. "Unfortunately, the way the air-traffic-control system is designed, flights from close proximity get unfairly penalized," said spokeswoman Kristy Nicholas.

Another factor that affects extremely long sitting: Airlines are less likely to cancel flights that move on to other hubs in their systems rather than turn around and go back to the same airport they just left. If a plane is going out and back to the same hub, canceling the trip just impacts those two flights. But if the aircraft is scheduled to move on to numerous cities, canceling that flight could disrupt many more customers. As a result, aircraft that aren't scheduled for "turns" are more likely to sit and wait long periods before the flight gets canceled. (Unfortunately there's no way for travelers to get this information about their flight.)

Extreme delays are rare, but the problem escalated dramatically last year, becoming the focus of Congressional hearings and legislation. The number of flights with taxi-out times of more than three hours totaled 1,598 for the first 11 months of 2007, according to the Bureau of Transportation Statistics. (The agency hasn't released December data yet.) That's a 23.4% increase over the entire year of 2006, and December 2007 clearly added to the total for 2007 with widespread delays over the holiday season.

It's important to note that those 1,598 flights are only part of the extreme-delay problem. BTS doesn't record flights that land and then sit for prolonged periods, or flights that divert to another airport and sit.

What we do know is that of those taxi-out problems for planes waiting to take off, they often are bunched up at a few big hub airports.

JFK had 316 flights that waited more than three hours to take off last year after pushing back from a gate, according to BTS data. Newark had 202; Dallas-Fort Worth had 159, and Philadelphia, New York LaGuardia and Chicago's O'Hare each had 100 or more. Many big airports performed much better, such as Atlanta with only 31, Boston with 20, Detroit with six and Minneapolis with five.

Certain routes out of those problematic airports found themselves more often in taxi-out jail than others. From JFK, 60 of those 316 flights that sat more than three hours were bound for either Los Angeles or San Francisco. Planes flying the other direction didn't have the problem -- not a single flight in Los Angeles or San Francisco waited more than three hours to take off for JFK.

Why? To be sure, there are lots of flights from JFK to LAX and SFO, both heavily traveled routes. But airline officials say they are loath to cancel those high-revenue flights, often full of business travelers. Better to wait it out than try to rebook a big planeload of people.

Other routes with repeated problems: New York LaGuardia-to-Chicago O'Hare had 20 flights sit waiting more than three hours, and 14 in the other direction; Philadelphia-to-O'Hare also had 20 flights with taxi-out times greater than three hours, and five headed from O'Hare to Philadelphia.

Certain airlines also were more willing to wait than cancel. JetBlue Airways customers were the most likely to suffer taxi-out more than three hours, based on the percentage of the airline's flights that suffered three-hour taxi-out nightmares, followed by Continental and ExpressJet.
JetBlue also had the longest average delay last year, according to FlightStats. When a JetBlue flight was late, it arrived 67 minutes past its scheduled arrival time at the gate on average, according to FlightStats.

JetBlue says JFK, its home base, struggled with lengthy delays last year on stormy days, and delays were exacerbated for flights that departed in the early evening when international flights to Europe were also trying to take off.

Flight-crew and curfew issues can affect JetBlue's departures, a spokesman noted. Flights destined for airports like Long Beach and San Diego in California, both of which have late-night curfews, can move ahead of other aircraft, leaving others to wait longer, so that the airline doesn't get fined for curfew violations, spokesman Bryan Baldwin said. "We might prioritize different departures based on a variety of factors," he said.

JetBlue also says it has shifted its strategy to cancel more flights in advance to reduce long delays rather than trying to operate every trip, no matter how long it takes

YahooSoft Bid Shakes The Start-Ups

Among the scenarios that have filled the daydreams of Silicon Valley's Internet start-ups are two happy endings: being acquired by Microsoft or being acquired by Yahoo!. So when those giants threaten to merge, as Microsoft proposed Friday with its $44.6 billion bid for Yahoo!, do the hopes of innovative young firms looking for buyouts get squashed in the melee?

The dreams may, at least, be put on hold. According to Microsoft's (nasdaq: MSFT - news - people ) most recent quarterly Securities and Exchange Commission filing, the company had about $21 billion in liquid assets--down from a peak of $60.6 billion in 2004. The layout for Yahoo! (nasdaq: YHOO - news - people )--which is a half cash-half equity deal--won't leave the $51 billion (annual revenue) software maker broke, but it may sate its appetite for acquisitions for a while.

A more likely reason that a YahooSoft deal could slow down further acquisitions is the red tape involved in a complex integration of bureaucracies. (See "A Messy Marriage.") If the deal closes, it could be months before Yahoo! and Microsoft sort out each other's businesses and are ready to begin integrating new ones, says Aaron Patzer, founder of online accounting start-up Mint.com.

"Right now, everything is going to be in flux," he says. Patzer says he had hoped to foster a partnership with Yahoo! Finance to distribute his free online accounting service. Since winning $50,000 in the TechCrunch 40 start-up, Patzer's Mint.com has also been an attractive buyout target, despite Patzer's claims that he intends to keep the business independent. Regardless, those kinds of deals may be on hold, he says.

"If you're a start-up, you need your own good revenue model now," he says. "If you were depending on getting acquired, combined with a looming recession, you could be in serious trouble in a year."

Patzer worries that even once the dust settles, a YahooSoft conglomerate won't be very friendly to start-ups. "Overall, I don't think it's great for the culture of the Valley. Yahoo! needs young, talented innovators, and the prospect of becoming part of a really large company like Microsoft is not very appealing to start-ups," he says. "They might want to be acquired, but they won't want to join an organization approaching 100,000 people." (Microsoft's head count is approximately 78,500 worldwide, while Yahoo! before the recently announced layoffs had 14,300.)

In recent months, both tech giants have been busy snapping up smaller companies. Microsoft paid $1.2 billion for enterprise search firm Fast Search & Transfer last month. It also bought a London-based Web geolocation company called Webmap in December and invested $250 million for a 2.5% stake in Facebook in October. Jerry Yang's takeover as Yahoo!'s chief executive had some startups predicting a new round of acquisitions. (See "Yahoo's Geek-Speaking CEO.") In September, Yahoo! bought up news aggregator Buzztracker, online ad network BlueLithium and e-mail client Zimbra.

But the merger and acquisition teams at Microsoft and Yahoo! might be "looking inward rather than outward" for the next months, says Jeff Clavier, founder of venture capital firm SoftTech VC, who has sold two Internet start-ups to AOL and one to Yahoo! in the last two years. "Figuring out an integration plan, who stays and who goes, what's important and what's redundant--it takes a long time," says Clavier. "They'll be stretched, and I have a hard time seeing how they could be looking at new talent and ideas."

Longer-term, Clavier says that integrating Yahoo! could make Microsoft a more appealing destination for young firms, partly due to the simple facts of geography. Owning Yahoo! would offer Microsoft better integration with Silicon Valley, and give start-ups an alternative to moving to Washington, he says. "The idea of buying a company, moving it to Redmond, making it part of 'the Borg' is no longer the model," he says, referring to Microsoft's unflattering corporate nickname.

In the meantime, the integration of the two companies may offer a competitive boost to start-ups living in the shadow of Microsoft and Yahoo!. Clavier points out that consolidation means layoffs, and layoffs mean talent that can be snapped up by start-ups. Scott Rafer, the former chief executive of MyBlogLog, a start-up acquired by Yahoo!, says that the YahooSoft deal means the two companies will be bogged down for months while his new firm, called Lookery, continues to innovate.

"We love this kind of stuff," he says. "The people who could actually do us some damage are going from slow to slower."

Lookery, an advertising network for ads that run on Facebook applications, is likely to find itself in direct competition with YahooSoft soon; Facebook struck a deal in August 2006 to place Microsoft ads on the site. Microsoft's latest deal, says Rafer, offers him a much-needed head start.

"We need to get big enough so that they can't just squash us like a bug," says Rafer. "The more time they spend worrying about which division gets merged with which division, the more time we have to grow."

Microsoft Eyes Yahoo to Topple Google

Unable to topple Google Inc. on its own, Microsoft Corp. is trying to force crippled rival Yahoo Inc. into a shotgun marriage, with a wager worth nearly $42 billion that the two companies together will have a better chance of tackling the Internet search leader

Microsoft's audacious attempt to buy Yahoo, spelled out in an unsolicited offer announced Friday, shows just how much Google threatens the world's largest software maker's grip on how people interact with computers.

For Yahoo, the bid represents another painful reminder of how missed opportunities and mismanagement combined to open the door for Google to supplant it as the Internet's main gateway, decimating its stock price in the process.

Redmond, Wash.-based Microsoft is trying to avoid a similar fate at Google's hands as more people access services and computer programs online instead of relying on packaged software applications.

Although Microsoft remains the world's most valuable technology company, its position will become more precarious unless it can cultivate a more loyal Internet audience and generate more online ad revenue to subsidize the free services taken for granted on the Internet.
Microsoft is acutely aware of the upheaval that can be caused by a pivotal shift in technology, having been the biggest beneficiary during the 1980s and 1990s of a transition from mainframe computers to personal computers that knocked IBM Corp. off its pedestal.

"Microsoft has to do this deal. It's a battle that Microsoft needs to win," said AMR Research analyst Jonathan Yarmis.

But there's no guarantee that Yahoo will be willing to sell to Microsoft -- or that the deal will win the necessary approvals from antitrust regulators in the United States and Europe if Yahoo capitulates.

Sunnyvale-based Yahoo had little to say Friday beyond a terse statement assuring its shareholders that its board will "carefully and promptly" study the bid.

In a conference call Friday, Microsoft Chief Executive Steve Ballmer indicated he won't take no for an answer after Yahoo rebuffed takeover overtures a year ago.

"This is a decision we have -- and I have -- thought long and hard about," Ballmer said. "We are confident it's the right path for Microsoft and Yahoo."

Yahoo will likely face intense pressure to accept, given its steadily sliding profits and a murky 2008 outlook that caused its stock price to drop to a four-year low earlier this week.

Microsoft's $31-per-share offer -- originally valued at $44.6 billion -- represented a 62 percent premium to Yahoo's closing price late Thursday, although it's below Yahoo's 52-week high of $34.08 reached less than four months ago. On Friday, the total value of the cash-and-stock deal fell to $41.7 billion, or $28.95 per share, because Microsoft's shares declined on the news.

Yahoo shares soared to a split-adjusted high of $118.75 in 2000 before the dot-com bust. That peak coincidentally also was just before Yahoo gave Google its first big break by hiring it to run its search engine.

Search engines are crucial tools because they have become a central hub in hugely profitable ad networks.

Advertisers around the world are expected to double their spending on the Internet during the next three years as more people get their news and entertainment on the Web instead of television, radio, newspapers and magazines. The trend is expected to create an $80 billion online ad market in 2010, up from an estimated $40 billion last year.

After realizing how much money Google was making from search, Yahoo introduced its own technology in 2004, but by then it was too little, too late.

Forrester Research analyst Charlene Li expects Yahoo to resist, predicting the company "will do everything possible to stay independent," even if it means swallowing its pride and rehiring Google to run its search engine and sell ads on its site.

Other analysts still think Yahoo might try to line up a white knight rather than fall into Microsoft's clutches. Analysts mentioned several other potential suitors, including News Corp. and InterActiveCorp.

Dinosaur Securities analyst David Garrity even thinks it's possible that China's search leader, Baidu.com Inc., or Chinese e-commerce conglomerate Alibaba.com Inc. might bid for Yahoo. Alibaba.com is 40 percent owned by Yahoo.

In what most analysts regard as a long shot, there was even some chatter that longtime Microsoft rival Apple Inc. and its CEO, Steve Jobs, might come to Yahoo's rescue.

If push comes to shove, most analysts believe Microsoft will raise its cash-and-stock bid.

Investors appear confident an agreement eventually will be reached. Yahoo shares climbed $9.20, or nearly 48 percent, to $28.38 while Microsoft shares fell $2.15, or 6.6 percent, to $30.45 -- a sign that Wall Street is skeptical about whether the acquisition makes sense.

"It's a classic case of a buyer overbidding to blow any potential competitors out of the water," said James Owers, a Georgia State University professor of corporate finance.

Shortly after Microsoft disclosed its intentions, the U.S. Justice Department said it is "interested" in reviewing antitrust issues. European Union officials declined to comment, but analysts said Microsoft probably will face more challenges getting a Yahoo acquisition approved in Europe than the United States.

Microsoft made its offer a few hours after Yahoo's chairman, Terry Semel, stepped down, removing a potential stumbling block. Semel had rejected Microsoft's takeover overtures a year ago while he was still Yahoo's chief executive, according to a letter released Friday.

Yahoo co-founder Jerry Yang replaced Semel as CEO nearly eight months ago while another Yahoo director, Roy Bostock, is now chairman.

Yang, a billionaire who is one of Yahoo's largest shareholders, isn't believed to have warm and fuzzy feelings about Microsoft. He has openly expressed his admiration for Jobs and last year even invited the Apple CEO to Yahoo's headquarters for a pep talk with employees.

Microsoft believes its technological expertise will be a good fit with Yahoo's knack for providing content and services that keep people coming back to its site. Combined, the two companies would reach a U.S. online audience of 142 million compared with 124 million for Google, according to Nielsen Online.

But Yahoo and Microsoft are so far behind Google in the lucrative search market that they still will have a lot of ground to make up even if they joined forces.

Google already controls 62 percent of the worldwide search market, and has been widening its lead, according to the latest data from comScore Media Metrix. By combining, Microsoft and Yahoo would have a 16 percent share of the worldwide search market, the Web traffic tracking company said.

Google shares fell $48.40, or 8.6 percent, to close at $515.90 Friday, but the downturn appeared to be driven more by a disappointing fourth-quarter earnings report than by Microsoft's bid for Yahoo.

Besides helping to boost its online ad revenue, Microsoft believes it could mine more profit from Yahoo by jettisoning workers and eliminating overlapping operations.

Microsoft said it sees at least $1 billion in cost savings if it buys Yahoo. Microsoft executives deflected questions about how many jobs might be lost, but the company emphasized retention packages will be offered to Yahoo engineers and other key employees, including some executives.

The fate of Yahoo's brand also is unclear if Microsoft takes over. Both Ballmer and Kevin Johnson, president of Microsoft's platforms and services division, hailed Yahoo's strong brand value but did not commit to keeping the name alive.

Microsoft Offers $44.6B for Yahoo

Microsoft Corp. has pounced on slumping Internet icon Yahoo Inc. with an unsolicited takeover offer of $44.6 billion in its boldest bid yet to challenge Google Inc.'s dominance of the lucrative online search and advertising markets. The Justice Department says it is interested in reviewing antitrust issues associated with it.

The surprise offer of $31 per share, made late Thursday and announced Friday, seizes on Yahoo's weakness while Microsoft tries to muscle up in a high-stakes battle with Google likely to define the technology landscape for years to come.

In a statement Friday, Yahoo said it will "carefully and promptly" study Microsoft's bid.
With its profits steadily sliding, Yahoo's stock slipped to a four-year low earlier this week and a new management team has been trying to steer a turnaround but sees more turbulence through 2008.

The announcement lifted Yahoo's share price by almost 50 percent in morning trading, while Google fell almost 8 percent, dragged down by a fourth-quarter earnings report that missed Wall Street expectations.

In conference call Friday morning, Microsoft Chief Executive Steve Ballmer indicated he won't take no for an answer after Yahoo rebuffed takeover overtures a year ago.
"This is a decision we have -- and I have -- thought long and hard about," Ballmer said. "We are confident it's the right path for Microsoft and Yahoo."

To underscore its resolve, Microsoft is offering a 62 percent premium to Yahoo's closing stock price Thursday. If the deal is consummated, it would be by far the largest acquisition in Microsoft's history, eclipsing last year's $6 billion purchase of online ad service aQuantive.
Since reaching a 52-week high of $34.08 in October, Yahoo shares have fallen 46 percent. Yahoo climbed $9.41 a share, or 49 percent, to $28.59 in morning trading. Microsoft shares fell $1.43, or 4.4 percent, to $31.17.

Microsoft publicly disclosed its cash-and-stock offer in hopes of rallying support from Yahoo's shareholders, making it more difficult for Yahoo's board to turn down the bid.

In a letter released Friday, Ballmer pointedly noted Yahoo's financial performance has deteriorated since Microsoft was spurned a year ago. At that time, Ballmer said he was told Yahoo believed it was better off on its own.

"A year has gone by, and the competitive situation has not improved," Ballmer wrote in his letter.

Microsoft's previous offer was rebuffed by Terry Semel, who stepped aside last year as chief executive under shareholder pressure.

Microsoft sent its latest takeover offer to Yahoo late Thursday, shortly after Semel resigned as the company's chairman. The letter is addressed to Semel's successors, new Chairman Roy Bostock and the current CEO, co-founder Jerry Yang, who is one of Yahoo's largest shareholders.

In a prepared statement, Yahoo said its board "will evaluate this proposal carefully and promptly in the context of Yahoo's strategic plans and pursue the best course of action to maximize long-term value for shareholders."

Microsoft views Yahoo as its best chance to thwart Google, which has leveraged its leadership in Internet search and advertising to emerge as an increasingly serious threat to the world's largest software maker's persuasive influence on how people interact with computers.

Google already controls nearly 60 percent of the U.S. search market, and has been widening its lead, despite concerted efforts by both second-place Yahoo and third-place Microsoft. By combining, Microsoft and Yahoo would have a 33 percent share of the U.S. search market, according to the latest data from comScore Media Metrix.

By joining forces, Microsoft and Yahoo also would widen their narrowing advantage over Google in providing free e-mail accounts -- a service that helps foster more loyalty with users and create more advertising opportunities.

Advertisers around the world are expected to double their spending on the Internet during the next three years as more people get their news and entertainment on the Web instead of television, radio, newspapers and magazine. The trend is expected to create an $80 billion online ad market in 2010, up from an estimated $40 billion last year.

Despite an aggressive push in recent years, Microsoft's online advertising expansion hasn't paid off. Last week, the Redmond, Wash.-based company reported a 79 percent jump in its overall profit, but its online division's loss widened to $245 million.

And Yahoo has been struggling to attract more advertising even though its Web site attracts one of the biggest audiences. The Sunnyvale-based company's profit has declined for five consecutive quarters, prompting plans to cut 1,000 jobs later this month, a 7 percent reduction of its 14,300-employee work force.

Besides helping to boost its online ad revenue, Microsoft believes it could mine more profit from Yahoo by jettisoning workers and eliminating overlapping operations.

Microsoft said it sees at least $1 billion in cost savings if it buys Yahoo. Microsoft executives deflected questions about how many jobs might be lost, but the company emphasized retention packages will be offered to Yahoo engineers and other key employees, including some executives.

The fate of Yahoo's brand also is unclear if Microsoft takes over. Both Ballmer and Kevin Johnson, president of Microsoft's platforms and services division, hailed Yahoo's strong brand value but didn't commit to keeping the name alive.

STOCKS TO WATCH

Among the companies whose shares are expected to see active trade in Thursday's session are Google, MBIA, AstraZeneca, Proctor & Gamble, and Electronic Arts.

Google Inc. (GOOG:548.27, -2.25, -0.4%) is forecast to report fourth-quarter earnings of $4.44 a share, according to analysts polled by Thomson Financial.

MBIA Inc. (MBI) is projected to post a loss of $2.97 a share in the fourth quarter.

AstraZeneca Plc (AZN) is expected to report fourth-quarter earnings of 95 cents an ADR.

Procter & Gamble Co. (PG) is estimated to report fiscal second-quarter earnings of 97 cents a share.

Electronic Arts Inc. (ERTS) is likely to post earnings of 90 cents a share in the fiscal third quarter.

Mattel Inc. (MAT) is forecast to post fourth-quarter earnings of 73 cents a share.

Goodrich Corp. (GR) is estimated to post earnings of 91 cents a share in the fourth quarter.

Bristol-Myers Squibb Co. (BMY) is projected to report earnings of 34 cents a share in the fourth quarter.

MasterCard Inc. (MA) is expected to report fourth-quarter earnings of 72 cents a share.

Burger King (BKC) is likely to post fiscal second-quarter earnings of 32 cents a share.

Colgate-Palmolive (CL) is expected to report earnings of 89 cents a share in the fourth quarter.

Monster Worldwide Inc. (MNST) is estimated to post earnings of 38 cents a share in the fourth quarter.

CVS Caremark Corp. (CVS) is forecast to post earnings of 55 cents in the fourth quarter.

Raytheon Co. (RTN) is estimated to post earnings of 92 cents a share in the fourth quarter.

NewYork Times Co. (NYT:16.65, +0.59, +3.7%) is projected to report fourth-quarter earnings of 48 cents a share.

Wyeth (WYE: 39.70, -1.34, -3.3%) is likely to report fourth-quarter earnings of 79 cents a share.


Aflac Inc. (AFL: 60.82, -1.41, -2.3%) is forecast to post earnings of 80 cents a share in the fourth quarter.

Anheuser-Busch Co. (BUD:47.26, -0.03, -0.1%) is expected to post fourth-quarter earnings of 32 cents a share.

Nasdaq Stock Market Inc. (NDAQ:44.65, -0.84, -1.8%) is projected to post earnings of 47 cents a share in the fourth quarter.

McKesson Corp. (MCK:63.26, +1.01, +1.6%) is forecast to post fiscal third-quarter earnings of 80 cents a share.

Lear Corp. (LEA:27.05, -0.28, -1.0%) is likely to report earnings of 66 cents a share in the fourth quarter.

L-3 Communications Holdings (LLL:107.85, -0.39, -0.4%) is expected to report fourth-quarter earnings of $1.61 a share.

Elizabeth Arden Inc. (RDEN) is projected to report fiscal second-quarter earnings of $1.15 a share.

Harsco Corp. (HSC) is expected to post fourth-quarter profits of 70 cents a share.

Newell Rubbermaid Inc. (NWL) is likely to post earnings of 45 cents a share in the fourth quarter.

Hologic Inc. (HOLX) is projected to post fiscal first-quarter earnings of 48 cents a share.

Celgene Corp. (CELG) is estimated to post earnings of 31 cents a share in the fourth quarter.

Nova Chemicals Corp. (NCX) is expected to report fourth-quarter earnings of $1.01 a share.

E.W. Scripps Co. (SSP) is projected to post earnings of 70 cents a share in the fourth quarter.

RF Micro Devices Inc. (RFMD) is likely to report earnings of 7 cents a share in the fiscal third quarter.

Safeco Corp. (SAF) is estimated to post earnings of $1.44 a share in the fourth quarter.

VeriSign Inc. (VRSN) is expected to post fourth-quarter earnings of 29 cents a share.

Callaway Golf Co. (ELY) is forecast to report a loss of 19 cents a share in the fourth quarter.

Western Union Co. (WU) is likely to post earnings of 31 cents a share in the fourth quarter.

C.R. Bard Inc. (BCR:95.60, +2.75, +3.0%) is expected to report earnings of $1 a share in the fourth quarter.

Hanesbrands Inc. (HBI:24.76, -0.05, -0.2%) is forecast to report fourth-quarter earnings of 39 cents a share.

Marathon Oil Corp. (MRO:50.91, -1.22, -2.3%) is estimated to post earnings of 86 cents a share in the fourth quarter.

Sealy Corp. (ZZ:9.53, -0.13, -1.3%) is likely to report fourth-quarter earnings of 14 cents a share.

IMS Health Inc. (RX:21.13, -0.20, -0.9%) is forecast to post earnings of 42 cents a share in the fourth quarter.

ImClone Systems Inc. (IMCL:41.97, -1.79, -4.1%) is expected to post earnings of 27 cents a share in the fourth quarter.

Affymetrix Inc. (AFFX:20.77, -0.42, -2.0%) is estimated to report fourth-quarter earnings of 16 cents a share.

PPL Corp. (PPL:47.97, +0.27, +0.6%) is likely to report earnings of 54 cents a share in the fourth quarter.

Affiliated Computer Services (ACS:45.90, +0.15, +0.3%) is forecast to post fiscal second-quarter earnings of 83 cents a share.

Starwood Hotels & Resorts (HOT:42.90, -0.94, -2.1%) is expected to report fourth-quarter earnings of 67 cents a share.

Brinks Co. (BCO:54.50, +0.17, +0.3%) is likely to report earnings of 74 cents a share in the fourth quarter.

After Wednesday's closing bell, Starbucks (SBUX:19.22, -0.75, -3.8%) reported fiscal first-quarter net income of $208.1 million, or 28 cents a share, compared with net income of $205 million, or 26 cents a share, a year ago. Sales rose 17% to $2.8 billion. Starbucks also said it will close 100 underperforming U.S stores and expects "low double-digit" earnings-per-share growth in 2008. This month, founder Howard Schultz returned as CEO, pledging to slow the pace of U.S. store openings, close underperforming stores, and accelerate global expansion.

Watch list

Aflac Inc.'s (AFL:60.82, -1.41, -2.3%) fourth-quarter earnings rose to $382 million, or 78 cents a share, from $332 million, or 67 cents a share, as revenue benefited from the strengthening of the yen, the company said. Revenue increased to $4.02 billion from $3.69 billion a year earlier. Analysts had expected earnings of 80 cents a share on revenue of $3.96 billion. The insurance provider said it expects 2008 operating earnings, excluding the impact of the yen, of $3.70 to $3.76 a share on a sales increase of 8% to 12%. Wall Street, on average, expects 2008 earnings of $3.83 a share. Analyst estimates typically exclude items.

Alliance Data Systems Corp.'s (ADS:42.70, -0.30, -0.7%) fourth-quarter net income fell to $33.9 million, or 42 cents a share, from $39.6 million, or 48 cents a share, a year earlier. The transaction processor said revenue grew to $602.7 million from $524.5 million. Analysts had expected cash earnings of 93 cents a share on revenue of $601 million. The company expects double-digit organic growth in 2008.

Earlier Wednesday, Alliance Data sued Blackstone Group LP (BX:18.65, -0.34, -1.8%) to force the private-equity firm to go through with its $6.4 billion acquisition of the company.

Amazon.com (AMZN:74.21, +0.26, +0.4%) report fourth-quarter earnings of $207 million, or 48 cents a share, compared to earnings of $98 million, or 23 cents a share, for the same period the previous year. Revenue grew 42% to $5.67 billion. Analysts were expecting earnings of 48 cents a share on revenue of $5.37 billion. For the first quarter, the company said it expects revenue to come in between $3.95 billion and $4.15 billion - ahead of the $3.92 billion predicted by analysts.

Ann Taylor Stores Corp. (ANN:22.83, +0.23, +1.0%) will close 117 underperforming stores between 2008 and 2010 and reduce staff as part of a restructuring program to "enhance profitability and improve overall effectiveness." Ann Taylor expects the program to result in ongoing annual pretax savings of about $50 million by fiscal 2010, with savings of about $20 million to $25 million in 2008. The company expects to incur a charge of 29 cents a share in fiscal 2007. Excluding expenses, the company backed its previous fiscal 2007 earnings outlook of $1.80 to $1.85 a share.

CACI International Inc.'s (CAI:42.05, -0.92, -2.1%) fiscal second-quarter earnings fell to $19.2 million, or 63 cents a share, from $20.5 million, or 65 cents a share, a year earlier. The information technology company said revenue increased to $577.8 million from $476.9 million a year ago. Analysts had predicted earnings of 63 cents a share on revenue of $559.1 million for the quarter. The company raised the lower end of its 2008 outlook to $2.60 to $2.80 a share from its previous view of $2.50 a share to $2.80 a share.

Covance Inc.'s (CVD:88.10, -0.95, -1.1%) fourth-quarter earnings rose to $50.9 million, or 78 cents a share, from $38.3 million, or 59 cents a share, as the company booked more than $500 million in net orders. The biopharmaceutical company said revenue increased to $411 million from $343 million. Analysts had expected earnings of 72 cents a share on revenue of $402 million. Covance said it expects 2008 earnings of $3.18 per share on "low- to mid-teens revenue growth." Wall Street, on average, anticipates 2008 earnings of $3.19 a share.

Crown Holdings Inc.'s (CCK:24.00, +0.06, +0.3%) fourth-quarter net income increased to $343 million, or $2.11 a share, from $162 million, or 97 cents a share, a year earlier. Revenue rose to $1.87 billion from $1.68 billion a year ago. Analysts had predicted fourth-quarter revenue of $1.78 billion.

Cytec Industries Inc.'s (CYT:52.69, +0.21, +0.4%) fourth-quarter net income fell to $47.6 million, or 97 cents a share, from $83.4 million, or $1.70 a share, a year earlier. The chemical company said net sales rose to $901.2 million from $793.6 million a year ago. Analysts had predicted fourth-quarter earnings of 83 cents a share and revenue of $852.5 million. Cytec said it expects year earnings in the range of $4.15 to $4.35 a share, up from 2007 adjusted earnings $3.90 a share.

Duke Realty Corp.'s (DRE:24.34, -1.09, -4.3%) fourth-quarter net income rose to $62 million, or 40 cents a share, from $55 million, or 37 cents a share, a year earlier. Funds from operations for the period rose to $123.5 million, or 80 cents a share, from $112.7 million, or 76 cents a share, a year earlier. The real estate investment trust said revenue from continuing operations increased slightly to $261.4 million from $256.4 million a year ago. Duke lowered its 2008 funds from operation guidance to a range of $2.60 to $2.90 a share from a range of $2.80 to $3 a share.

Dun & Bradstreet Corp. (DNB:87.75, -1.55, -1.7%) reported its fourth-quarter net income rose to $101.7 million, or $1.74 a share, from $91.2 million, or $1.46 a share, a year earlier. Revenue rose to $464.7 million from $424.2 million, the business information, data and services company said. Analysts had forecast earnings of $1.67 a share. Dun & Bradstreet also said it expects earnings in 2008 to range from $5.19 to $5.29 a share before non-core gains and charges.

DynCorp International Inc.'s (DCP:21.02, -0.31, -1.4%) fiscal third-quarter earnings increased to $12 million, or 21 cents a share, from $11.6 million, or 20 cents a share, a year earlier. The mission-critical technical services provider's revenue rose to $523.1 million from $517.5 million a year ago. Analysts had expected third-quarter earnings of 28 cents a share, on revenue of $602 million. DynCorp now expects fiscal 2008 earnings of $1 to $1.05 a share, on revenue of $2.13 billion to $2.18 billion. Previously, the company had expected full-year earnings of $1 to $1.10 a share, on revenue of $2.3 billion to $2.4 billion. Wall Street is looking for fiscal 2008 earnings of $1.08 a share, on revenue of $2.29 billion.

Eagle Materials Inc.'s (EXP:34.53, -0.47, -1.3%) fiscal third-quarter net earnings declined to $22.4 million, or 50 cents a share, from $40.9 million, or 83 cents a share, a year ago. The cement manufacturer reported weakness in wallboard sales volumes and prices, as revenue fell to $173 million, from $191.8 million a year ago. Analysts had expected per-share earnings of 47 cents a share on revenue of $174 million.

Drug maker Eli Lilly & Co. (LLY:51.35, -0.96, -1.8%) is in talks to settle civil and criminal probes into how the company marketed its antipsychotic drug Zyprexa, The New York Times reported on its Web site, citing several sources close to the matter. The settlement could reach up to more than $1 billion paid to federal and state governments, the paper reported.

Everest Re Group (RE:97.21, -0.05, 0.0%) said fourth-quarter net income came in at $12.2 million, or 19 cents a share, down from $206.4 million, or $3.15 a share, a year ago. Everest Re was expected to make $1.19 a share, according to analysts.

Fannie Mae (FNM:31.13, -1.78, -5.4%) cut President and Chief Executive Daniel H. Mudd's 2007 bonus to about $2.22 million. Mudd received a 2006 bonus of $3.5 million. The financial services company also said Mudd will receive a 2007 long-term incentive award of $9 million. Fannie Mae disclosed in January 2007 that Mudd would receive a 2007 and 2008 base salary of $990,000.

Fidelity National Financial (FNF:17.86, -0.75, -4.0%) reported a fourth-quarter loss of $44.9 million, or 21 cents a share, compared with net income of $71.2 million, or 34 cents a share, a year earlier. Analysts expected the company to earn 18 cents a share.

Harris Corp.'s (HRS:49.25, -0.12, -0.2%) fiscal second-quarter net income increased to $114.3 million, or 83 cents a share, from $94 million, or 67 cents a share, a year earlier. The communication products company's revenue rose to $1.32 billion from $1.02 billion in the year-ago period. Analysts had expected per-share earnings of 81 cents on revenue of $1.25 billion. Harris increased its forecast for fiscal 2008, saying it expects per-share earnings of $3.35 to $3.45.

Hologic Inc.'s (HOLX:61.80, -1.80, -2.8%) board approved a 2-for-1 stock split that, pending shareholder authorization, will be effected in the form of a dividend. The premium diagnostic, medical imaging system and surgical product supplier is currently awaiting approval to increase the number of common shares it can issue to 750 million from 300 million.

Merrill Lynch & Co. (MER:56.09, -1.38, -2.4%) said it won't pay 2007 bonuses to executives at the investment bank, according to a regulatory filing. The brokerage firm will make stock option grants to some executives to encourage them to stay as it tackles tough market conditions this year. Gregory Fleming, chief operating officer, will get 1.19 million options and Vice Chairman Robert McCann is getting 971,346 options, Merrill said.

Novellus Systems Inc. (NVLS23.41, -0.82, -3.4%) reported fourth-quarter net income of $52.9 million, or 47 cents per share, compared with income of $42.6 million, or 34 cents per share for the year-earlier period. Revenue was $363.5 million, compared with $438.5 million in the year-earlier period. Analysts had expected the company to report earnings of 36 cents per share on revenue of $361.4 million.

Pulte Homes Inc.'s (PHM13.57, -1.28, -8.6%) fourth-quarter loss widened to $874.7 million, or $3.46 a share, from $8.41 million, or 3 cents a share, due to the continued weakening of existing home sales. The home builder said revenue fell to $2.9 billion from $4.39 billion last year. New home orders for the fourth quarter fell 29% to 4,562 from 6,446 last year, and Pulte Homes' backlog as of Dec. 31 of 7,890 homes was valued at $2.5 billion, down from $3.58 billion the previous year. Pulte Homes expects a first-quarter per-share loss from continuing operations of 15 cent to 30 cents.

Snap-on Inc.'s (SNA 43.84, +0.62, +1.4%) fourth-quarter net income rose to $57.3 million, or 98 cents a share, from $38 million, or 64 cents a share, a year earlier. Analysts had predicted fourth-quarter earnings of 82 cents a share. Net sales increased to $742.9 million from $651.4 million a year ago, the company said. Snap-on expects to record $15 million to $20 million in 2008 restructuring expenses, down from $26 million in 2007. The company predicts sales and operating earnings for the year will exceed its 2007 results due to the cost reduction.

Two Stocks with Hefty Expected Returns Tuesday January 29, 6:00 pm ET

Following is a sampling of stocks that recently jumped to 5 stars. By way of background, we award a stock 5 stars when it trades at a suitably large discount--i.e., a margin of safety--to our fair value estimate. Thus, when a stock hits 5-star territory, we consider it an especially compelling value.

To get a complete tally of stocks that have recently jumped to 5 stars--as well as our full list of 5-star stocks--including our consider buying and selling prices, risk ratings, and moat ratings--simply take Morningstar Premium Membership for a test spin. Click here to sign up for a free trial.

Anheuser-Busch CompaniesMoat: Wide
Risk: Below Average
Price/Fair Value Ratio*: 0.83
Three-Year Expected Annual Return*: 15.5%

What It Does: Anheuser-Busch (NYSE:BUD - News) is the largest American brewer. Its domestic beer brands, which include Budweiser, Michelob, Busch, and Natural Light, are produced at 12 breweries in the United States. The company owns 50% of Grupo Modelo and has made substantial investments in Chinese breweries. It also owns a brewery in the United Kingdom and licenses its brands to various brewers worldwide. The company owns packaging companies and nine theme parks, including Sea World and Busch Gardens.

What Gives It an Edge: Morningstar analyst Ann Gilpin thinks Anheuser-Busch has a wide economic moat. The firm dominates the domestic beer market with nearly 50% share, and this scale advantage has allowed it to demand exclusivity from about 60% of its distributors, compared with 10% of its peers' volume that is distributed under exclusive arrangements. Anheuser-Busch's infrastructure for the distribution of alcoholic beverages in the U.S. is unparalleled, and the firm should be able to further leverage this system to generate improved growth by branching into faster-growth categories.

What the Risks Are: Because brewers have high fixed costs, weak volume trends significantly deteriorate profits. Wine and spirits have grown in popularity domestically at the expense of beer during the last few years, making each of the oligopolistic U.S. brewers more willing to discount to maintain volume. As a consequence, the domestic beer pricing environment, which was strong for a number of years, has become increasingly competitive.

What the Market Is Missing: Gilpin believes the market is preoccupied with near-term commodity (hops and barley) cost issues affecting all brewers, and it is discounting Anheuser-Busch's brands, unmatched scale, and its history of generating strong cash flows. Gilpin anticipates a more rational domestic pricing environment as the industry consolidates, on the heels of the recent joint venture agreement between SABMiller and Molson Coors (NYSE:TAP - News). Although Gilpin concedes that commodity costs may take a bite out of margins in 2008, she believes Anheuser-Busch will weather the storm and provide its investors with ample returns.

General MillsMoat: Narrow
Risk: Below Average
Price/Fair Value Ratio*: 0.81
Three-Year Expected Annual Return*: 17.3%

What It Does: General Mills (NYSE:GIS - News) is one of the largest packaged food companies in the United States. It produces ready-to-eat breakfast cereals, refrigerated dough and other baking items, snack and convenience foods, frozen vegetables, yogurt, and beverages. Well-known brands include Cheerios, Lucky Charms, Wheaties, Chex, Betty Crocker, Pillsbury, Gold Medal, Green Giant, Hamburger Helper, Old El Paso, Pop Secret, Colombo, and Yoplait. U.S. sales account for 85% of the firm's annual revenues.

What Gives It an Edge: With its well-known brands, General Mills has significant presence in the grocery aisles. More importantly, the company holds either the number-one or number-two market position in 12 product categories. Such strong brands allow General Mills to acquire favorable shelf space at retail and charge premium prices for its products, producing industry-leading margins and superior returns on invested capital. As a result, Morningstar analyst Greggory Warren has assigned General Mills a narrow moat.

What the Risks Are: General Mills is heavily influenced by the commodity-driven nature of its business. Input cost volatility, as well as the commodification of several of its categories, such as ready-to-eat cereals, has had an impact on profitability. General Mills faces stiff competition from branded and private-label food manufacturers in many of its product lines. Increased volatility in its foodservice segment has also been detrimental to the firm's sales and earnings growth during the last few years.

What the Market Is Missing: Warren thinks most of the packaged food firms have traded down over the past month on growing concerns over commodity cost inflation. However, he counters that the food and beverage manufacturers have in the past been able to pass much of the increase along to customers, either through straight price increases or ingenious alternatives. Although Warren believes the price hikes could negatively impact volume, the effect will differ depending on the product category involved. With below-average private-label penetration in categories such as ready-to-eat cereals (15%) and yogurt, which combined make up more than one third of the company's annual sales, Warren does not see much potential for disruption in General Mills' business. Soup sales are also not likely to be troubled, as the firm's chief competitor, Campbell Soup (NYSE:CPB - News), needs to be rational with its pricing for a category that makes up about half of its sales and profitability.

Boeing Boosts 4Q Profit on Plane Sales

Boeing Co. rode continued momentum from its commercial airplane business to a 4 percent increase in fourth-quarter profits Wednesday, topping Wall Street's expectations despite ongoing concerns over delays in its 787 Dreamliner program.

The world's second-largest commercial jet maker said it continues to address problems in assembling the first 787s and slightly reduced its estimate for both 2008 revenue and deliveries because of the previously announced glitches. It said it remains on the revised schedule announced earlier this month for the new plane, which has been pushed back three times and now isn't due to enter service until next year, but won't assess the impact of the delays on 2009 results until April.

The company characterized the outlook for its military contracting business and commercial airplane programs next year as "very strong," with strong earnings growth anticipated.

That helped lift Boeing shares, which had fallen 30 percent since last fall, by $2.82, or 3.5 percent, $83.78 in midday trading.

While avoiding talk of specific timeframes for the 787 program, CEO Jim McNerney said the fundamental technology of the airplane remains sound.

We believe in both the business case and the technology of the 787 and we look forward to getting the airplane in the hands of our customers as soon as possible," he said on a conference call.

Despite the 787 problems and the threat of a U.S. recession that could hurt its airline customers, McNerney was bullish about Boeing's near-term future and noted that U.S. carriers account for only 11 percent of its airplane backlog.

"Notwithstanding some recent events and market volatility, we continue to forecast an extended commercial aerospace cycle driven by strong economic growth and solid traffic demand in much of the world," he said. "Even if we encounter a more significant economic downturn in the future, I believe the industry is better positioned than in past cycles and Boeing is even better positioned within the industry to weather any storms."

Boeing's net income for the last three months of 2007 was $1.03 billion, or $1.36 per share, up from $989 million, or $1.29 per share, in the fourth quarter of 2006. That was 4 cents per share better than the consensus estimate of analysts polled by Thomson Financial.
Revenue was $17.5 billion, flat with a year earlier but slightly above analysts' forecast of $17.3 billion.

The company increased its guidance for 2008 earnings per share to between $5.70 and $5.85 from an earlier range of $5.55 to $5.75, still short of the Wall Street consensus estimate of $5.95. It also lowered its estimate of 2008 revenue by $500 million, to a range of $67 billion to $68 billion, due to the 787 delay.

Boeing's continued resurgence in the quarter was led by its Seattle-based commercial airplane manufacturing business, where operating earnings increased 46 percent to $973 million and revenue jumped 17 percent to $8.9 billion. Deliveries rose 9 percent to 112 and the record backlog grew 46 percent to $255 billion, reflecting strong demand for the 787 and other planes.

The Chicago-based company closed the gap on Airbus in aircraft deliveries but still ended the
year trailing its European rival for a fifth straight year, 453 to 441, while outpacing it in orders. It scaled back its estimate of 2008 deliveries by about five airplanes to between 475 and 480 to reflect the rescheduling of initial 787 deliveries into 2009.

The unit's continued success depends on how quickly Boeing can untangle snags involving the 787, Boeing's first newly designed jet since airlines started flying the 777 in 1995. It will be the world's first large commercial airplane made mostly of carbon-fiber composites, which are lighter and more durable than aluminum and don't corrode like metals.

Boeing said Jan. 16 it would push back the 787's inaugural flight until the end of the second quarter due to supply chain problems and slow progress on the assembly line, with the first delivery not expected until early 2009.

Analyst Paul Nisbet of JSA Research said the 787's status won't be fully known until the company succeeds in "powering up" or turning on the aircraft and its 92 electronic systems. That event was pushed back two weeks ago until early in the second quarter.

Despite the 787 concerns, Nisbet said: "It was a strong quarter. They've been just knocking the cover off the ball as far as orders, with 520 for the quarter, and with a (companywide) backlog of $327 billion. Those are just unheard-of numbers."

The company's St. Louis-based military contracting business saw earnings from operations decline 5 percent to $978 million and revenue fall 14 percent to $8.6 billion. The revenue drop was largely because results from a year earlier included two months of revenue from its Delta IV family of rockets, which are now part of United Launch Alliance, a joint venture with Lockheed Martin Corp.

Boeing had full-year earnings of $4.1 billion, or $5.28 per share, up 84 percent from $2.2 billion, or $2.85 per share, in 2006. Revenue climbed 8 percent to $66.4 billion from $61.5 billion.

Fed May Cut Rates Again Today

Federal Reserve Is Expected to Cut a Key Interest Rate for a 5th Time

The Federal Reserve is likely to follow its bold action last week to battle an economic downturn with further interest rate reductions, although analysts are split on just what size the future cuts will be.

Some believe the Fed will settle into a series of quarter-point moves, especially if upcoming economic reports show the economy is slowing but not toppling into an actual recession.

That would mean the Fed will cut its federal funds rate, the interest that banks charge each other, by a quarter point at the conclusion of Wednesday's meeting. It would be the fifth rate cut since last September.

Last week, the Fed announced a surprise three-quarter-point cut which drove the funds rate down to 3.5 percent. It was the largest reduction in this rate in more than two decades and the first change in the funds rate between meetings since the immediate aftermath of the September 2001 terrorist attacks.

Federal Reserve Chairman Ben Bernanke and his colleagues held an emergency videoconference call on Jan. 21 after a turbulent day on world markets when investors grew increasingly worried about what a recession in the United States would do to the prospects for global growth.

Many analysts believed the Fed would quickly follow last week's aggressive move with a cut of at least a half-point at its first regular meeting of the new year. That view gained support on Wednesday hours before the Fed announcement, when the government reported that the total economy slowed to a barely discernible 0.6 percent growth rate in the final three months of last year.

The increase in the gross domestic product was just half what had been expected and some economists believe that the GDP could tumble into negative territory in the current quarter. One definition of a recession is two consecutive quarters of negative GDP.

However, other economists said they were still looking for just a quarter-point move by the Fed because other reports show the economy appears to be skirting a full-blown recession.

In the category of positive reports was news Tuesday that orders to U.S. factories for big-ticket durable goods jumped 5.2 percent in December, the biggest increase in five months, and demand in a key series that tracks business investment shot up at the fastest pace since last March.

The House, worried about the possibility of a downturn, overwhelmingly approved a $146 billion economic stimulus bill on Tuesday. Passage in the Senate could be slowed by an effort to expand the measure.

Whatever the Fed does Thursday, analysts said that further rate cuts are likely until the central bank is sure that the economy is back on sound footing. Bernanke pledged in a speech on Jan. 10 to take decisive action to combat a slowdown. Many economists believe the funds rate could fall to 2.5 percent before the Fed stops easing.

"It is clear that the Fed has moved into a crisis-fighting posture," said David Jones, chief economist at DMJ Advisors.

Stocks Higher As Investors Await Fed

Wall Street was mostly higher Tuesday as the Federal Reserve opened a two-day meeting expected to bring another interest rate cut to revitalize the U.S. economy.

The Fed's rate decision is clearly the market's focus this week, and trading is marked by investors' conjectures about policymakers' thoughts on the weak economy and crunched financial industry. With an announcement not expected until Wednesday afternoon, the market in the meantime digested data on earnings, consumer spending and durable goods.

Investors did get some encouragement about the economy after the Commerce Department said orders for big-ticket items rose 5.2 percent in December, the widest jump in five months. In addition, the Conference Board reported consumer confidence fell in January -- pretty much as expected.

Economic data will continue to be scrutinized as investors try to determine what the Fed's take is on the economy. Investors are angling for a half-point cut following its emergency three-quarter-point cut last week.

"The market is just in a holding pattern," said Todd Leone, managing director of equity trading at Cowen & Co. "It seems we've hit a short-term bottom, and the market has been stabilizing as we wait to hear what the Fed says."

In early afternoon trading, the Dow Jones industrial average rose 37.64, or 0.30 percent, to 12,421.53.

Broader indexes were mixed. The Standard & Poor's 500 index rose 2.20, or 0.16 percent, to 1,356.16, and the Nasdaq composite fell 4.82, or 0.21 percent, to 2,345.09.

Government bond prices fell as stocks rose, indicating that investors feel less need for the safety of Treasurys. The 10-year Treasury note's yield, which moves opposite its price, was at 3.67 percent, up from 3.58 percent late Monday.

The dollar was mixed against most major currencies, and gold prices fell.

Oil prices moved higher as traders waited to see what the Fed's next move will be. A barrel of light sweet crude fell 23 cents to $90.76 a barrel on the New York Mercantile Exchange.
Wall Street has been extremely volatile in recent weeks amid fears of a U.S. recession and further write-downs in the financial sector. However, that has given way to a more quiet tone this week as investors looked for their second-straight day of gains before the Fed's decision.

Central bankers are widely expected to lower its key rate, now at 3.5 percent, by as much as one-half percentage point to 3 percent when policy-makers wrap up on Wednesday. This will be the last meeting for two months, but that doesn't rule out another emergency cut in the meantime.

Rate cuts are just one part of the central bank's plan to boost the economy. The Fed auctioned $30 billion in funds to commercial banks on Tuesday -- the fourth time since last month it has provided cash-strapped banks with extra reserves.

The auction is designed to keep banks lending and prevent a severe credit squeeze from pushing the country into a recession. Global banks have lost about $141 billion since the credit crisis began last year.

Investors were also hopeful after President Bush's State of the Union address Monday night. Bush urged Congress, as expected, to expedite its approval of a $150 billion tax relief and business incentive package.

As American Express Co.'s fourth-quarter results indicated Monday, companies are being forced to prepare for a climate throughout 2008 of deteriorating credit and slower spending. American Express said its fourth-quarter profit fell 10 percent after socking away more cash in reserve to use in case cardholders can't pay back their debt. AmEx rose 10 cents to $47.50.

In other earnings news, 3M Co., the maker of Post-it notes and Scotch tape, reported on Tuesday a decline in net income but the results beat analyst expectations. 3M rose 75 cents to $78.19.

The embattled mortgage lender Countrywide Financial Corp., which was recently bought by Bank of America Corp., posted a sharp loss, as expected, due to its missteps in subprime lending.

Countrywide rose 25 cents, or 4.2 percent, to $6.20; BofA added 46 cents to $41.66.

The Russell 2000 index of smaller companies dipped 1.13, or 0.16 percent, to 701.26.

Advancing issues led decliners by a 4-to-3 basis on the New York Stock Exchange, where volume came to 758.9 million.

In Asian trading, Tokyo's Nikkei stock average closed up 2.99 percent; Shanghai's key index added 0.87 percent; and Hong Kong's main index rose 0.99 percent. In European trading, London's FTSE rose 1.66 percent; Frankfurt's DAX rose 1.09 percent; and Paris' CAC rose 1.92 percent.

Latest Updates

11:30 am : In the past half-hour, the Dow climbs to fresh session highs and the S&P trades near its intraday high. The Nasdaq is well off its lows, but has been unable to reach its opening highs as it trades slightly above the unchanged mark.

The International Monetary Fund (IMF) cut its forecast for world growth this year, citing continued stress in global credit markets, according to Reuters. The IMF also warned that economic activity could slow further. It now expects the global economy to grow 4.1%, compared to its earlier forecast of 4.4%.DJ30 +77.72 NASDAQ +3.56 SP500 +7.37 NASDAQ Dec/Adv/Vol 1337/1422/725 mln NYSE Dec/Adv/Vol 1115/1870/477 mln

11:00 am : The major indices are trading in mixed fashion. The Dow and S&P
are holding slight gains, while the Nasdaq is trading with a slight loss. Seven of the ten sectors are higher, led by a 2.6% surge in telecom. Consumer discretionary is the main laggard (-0.7%) as retailers shed 1%.

The market rumor that JPMorgan Chase (JPM 45.95, +0.83) was facing a big derivative loss is not true, according to Reuters, citing sources. JPMorgan has been relatively unscathed by the subprime turmoil that has mired other Wall Street banks.DJ30 +47.13 NASDAQ -3.88 SP500 +4.71 NASDAQ Dec/Adv/Vol 1363/1332/579 mln NYSE Dec/Adv/Vol 1167/1759/366 mln

10:30 am : The stock market is back in the green as it rises in conjunction with financials (+0.7%). JPMorgan (JPM 45.88, +0.31) declined sharply during the recent retreat on a headline that stated there is a rumor the company may be facing a large trading loss. A CNBC commentator has said the rumor is most likely not true, as the stock recovers.

After a rough start, 3M (MMM 77.84, +0.40) is modestly outperforming the broader market. The company reported fourth quarter earnings of $1.19 per share, topping estimates by two cents. The company also reiterated its 2008 guidance. The stock was lower at the start of trading, but has rebounded in the green after traders liked what the company said during its conference call. DJ30 +54.22 NASDAQ -1.21 SP500 +5.23 NASDAQ Dec/Adv/Vol 1397/1195/419 mln NYSE Dec/Adv/Vol 1329/1550/258 mln

10:05 am : Stocks give up their early gains, led by a dip in tech (-0.8%) and financials (-0.2%).
Just hitting the wires, the Conference Board said January consumer confidence was 87.9, down from December's revised reading of 90.6. Economists expected a reading of 87.0. The response immediately after the release was negative, sending the major indices to their session lows.

The weakness in tech is weighing on the Nasdaq, which is now trading with a modest loss. The S&P and Dow are trading with a slight loss.DJ30 -15.52 NASDAQ -16.08 SP500 -2.25 NASDAQ Dec/Adv/Vol 857/1509/134 mln

09:45 am : The stock market opens modestly higher, buoyed by a better than expected durable orders report.

December durable orders rose 5.2%, larger than the expected 1.6% rise. Excluding transportation, orders still rose a healthy 2.6%. This strong level of orders in December does not support the assertion that the economy is in a recession.
Earnings reports have been mostly better than expected, although some companies disappointed with their outlooks.

The consumer confidence reading will be released at the top of the hour.DJ30 +47.31 NASDAQ +7.90 SP500 +6.73

09:13 am : S&P futures vs fair value: +9.2. Nasdaq futures vs fair value: +11.8.

08:59 am : S&P futures vs fair value: +8.7. Nasdaq futures vs fair value: +12.0. Futures continue to point to a higher start. The FOMC begins its two day meeting today, and is set to issue its statement on Wednesday at 14:15 ET. Fed funds futures indicate a 76% chance of a 50 basis point cut, with the rest of the bets on a 25 basis point cut.

08:30 am : S&P futures vs fair value: +9.9. Nasdaq futures vs fair value: +9.5. Stock futures extended their gains, and then climb higher on a better than expected economic release. December Durable orders rose 5.2%, compared November’s revised reading of 0.5%. Economists expected a rise of 1.6%. Countrywide (CFC) reported a fourth quarter loss of $0.79 per share, $0.49 worse than the consensus estimate. The company issued a dividend of $0.15 on its common shares. It will not be holding a conference call to discuss its results due to its pending merger with Bank of America.

08:01 am : S&P futures vs fair value: +3.3. Nasdaq futures vs fair value: flat. Futures point to a flat to slightly higher open. Earnings reports have been mostly better than expected. 3M (MMM) topped estimates by two cents and reaffirmed its FY08 earnings guidance. Eli Lilly (LLY) and EMC (EMC) beat their estimates and provided reassuring FY08 guidance. American Express (AXP) met, but continues to be cautious in its 2008 outlook. VMware (VMW) beat expectations but is getting clipped in pre-market trading after guiding revenues slightly below the consensus estimate.

06:19 am : S&P futures vs fair value: +5.9. Nasdaq futures vs fair value: +3.3.

06:16 am : FTSE...5883.60...+94.70...+1.6%. DAX...6911.98...+93.13...+1.4%.

06:16 am : Nikkei...13478.86...+390.95...+3.0%. Hang Seng...24291.80...+238.19...+1.0%.

4:10 pm : On Monday, the major indices closed with significant gains, at their best levels of the session. The advance was broad-based with nine of the ten sectors posting a gain in excess of 1%. Financials showed significant strength, leading a late-day surge.

It was shaping up to be another negative day on Wall Street. Asian markets closed sharply lower on fear of a U.S. economic slowdown, and an economic reading on new home sales disappointed. The stock market managed to rebound into positive territory, though, as traders upped their bets for a rate cut and embraced several better than expected earnings reports.

On the economic front, December new home sales came in at a seasonally adjusted annual rate of 604,000 which is 4.7% less than last month's reading and is 40.7% less than last year's number. Economists expected sales to come in at 647,000.

The median sales price of a new house in December was $219,200. This equates to a 10.9% price drop year-over-year, the largest decline in nearly four decades. At the current sales rate, there is a 9.6 month supply of new homes. In 2007, there were an estimated 774,000 new homes sold, down 26.4% from 2006.

The number of new home sales is very low, and the large supply of inventory should keep pressure on prices for some time. Homebuilders (+6.4%) shrugged off the negative report. The group is up 36.5% in the last five sessions.

Stocks fell to their session lows shortly after the release, but then recovered into positive territory as traders increased their bets on the size of a fed funds rate cut on Jan. 30.
Fed funds futures currently indicate an 88% chance of a 50 basis point rate cut, with a 25 basis point cut fully priced in. Prior to today's action, futures suggested a smaller 70% chance of a 50 basis point cut.

Of the 22 companies that reported earnings this morning, 12 beat expectations, three met, and seven missed. Some of the notable companies that topped estimates include Corning (GLW 23.10, +0.73), Halliburton (HAL 33.55, +0.46), McDonald's (MCD 51.07, -3.03) and Sysco (SYY 28.33, +0.72). McDonald's traded lower though, as traders were disappointed with its flat December U.S. same-store sales. Verizon (VZ 38.11, +0.35) met expectations.

All ten sectors advanced. The financial sector (+3.3%) posted the largest gains, as it stands to benefit from a lower fed funds rate. Beaten down telecoms (+2.6%) came in second. Tech (+0.4%) underperformed on a relative basis due to lack of leadership within the sector.DJ30 +176.72 NASDAQ +23.71 NQ100 +0.9% R2K +2.0% SP400 +2.3% SP500 +23.36 NASDAQ Dec/Adv/Vol 1052/1929/1.90 bln NYSE Dec/Adv/Vol 749/2421/1.35 bln

3:30 pm : The stock market continues to give up ground. Tech (-0.5%) is leading the retreat, which sent the Nasdaq briefly into negative territory. Apple (AAPL 128.27, -1.74) is playing a large role in the tech sector's reversal, as it went from a leader to a laggard.

After the close, 29 companies will be reporting earnings including Dow component American Express (AXP 46.70, +1.26). President Bush will address the nation is his annual State of the Union address at 9:00 P.M. ET. It is being reported that the state of the economy and the proposed fiscal stimulus package will be focal points.

Before the open tomorrow, 55 companies are reporting their earnings. Notable companies include 3M (MMM 76.90, +1.39), Dow Chemical (DOW 36.97, +0.66) and Countrywide Financial (CFC 5.94, -0.08).DJ30 +79.66 NASDAQ +3.15 SP500 +11.96 NASDAQ Dec/Adv/Vol 1159/1801/1.59 bln NYSE Dec/Adv/Vol 851/2306/1.12 bln

3:00 pm : Stocks retreat off their highs, but are still holding onto strong gains. The recent retreat was concentrated in the tech sector, which is now trading 0.1% lower.
Shares of Nymex Holdings (NMX 114.50, +7.34) are posting significant gains. CME Group (CME 619.81, -9.19) and Nymex confirmed rumors that they are in preliminary discussions regarding CME's potential acquisition of Nymex. The companies have agreed to a 30-day exclusive negotiating period.

In other acquisition news, shares of Alliance Data (ADS 42.10, -23.50) are sharply lower after the company indicated its acquisition by affiliates of The Blackstone Group may not happen. Blackstone had told Alliance that it does not anticipate the condition to close the merger related to obtaining approvals from the Office of the Comptroller of the Currency will be satisfied.DJ30 +82.75 NASDAQ +10.32 SP500 +12.57 NASDAQ Dec/Adv/Vol 1017/1927/1.44 bln NYSE Dec/Adv/Vol 766/2390/1.02 bln

2:25 pm : Stocks hit fresh intraday highs in recent trade. Support has been broad based, with eight of the ten sectors advancing more than 1%. Energy (+0.5%) and consumer staples (+0.9%) are the laggards. Financials (+2.1%) continue to pace this session's advance. In currency trading, the dollar is down 0.7% against the euro. Against a basket of leading world currencies, the dollar is down 0.57%. DJ30 +130.55 NASDAQ +19.93 SP500 +17.11 NASDAQ Dec/Adv/Vol 1077/1834/1.28 bln NYSE Dec/Adv/Vol 886/2237/914 mln

2:00 pm : Stocks continue to post sold gains, as the major indices trade near their session highs.
Market breadth leans bullish. Advancers outpace decliners by 5-to-2 on the NYSE, and by 5-to-3 on the Nasdaq. Volume is on the heavy side, as it has been of late.

Gold closed the session up $16.00 to $926.70 per ounce, slightly lower than its new all-time intraday high of $929.80 that was reached in earlier trade.DJ30 +95.11 NASDAQ +15.93 SP500 +12.97 NASDAQ Dec/Adv/Vol 1112/1773/1.18 bln NYSE Dec/Adv/Vol 888/2222/841 mln

1:30 pm : The S&P 500 and Dow climb to fresh session highs. The financial (+2.0%) and energy (+1.6%) sectors are lending support. Energy has extended its gains as crude oil (+0.2% to $90.91) recovers into positive territory. The Nasdaq is trailing, as tech (+0.5%) is a notable laggard.

72 of the 100 stocks in the Nasdaq 100 Index are posting a gain. Weakness in Microsoft (MSFT 32.57, -0.37), Google (GOOG 559.55, -6.85) and Yahoo! (YHOO 20.90, -1.04) are offsetting Apple's (AAPL 131.08, +1.10) advance.DJ30 +93.00 NASDAQ +14.13 SP500 +13.08 NASDAQ Dec/Adv/Vol 1168/1714/1.07 bln NYSE Dec/Adv/Vol 984/2089/747 mln

1:00 pm : The major indices regain some ground, with notable strength in financials (+1.6%).
351 stocks in the S&P 500 have advanced this session. Bank of America (BAC 40.64, +1.16), Merck (MRK 49.11, +1.32) and General Electric (GE 34.35, +0.35) are pacing the advance. The main laggards are McDonald's (MCD 50.58, -3.52), Microsoft (MSFT 32.48, -0.46) and Google (GOOG 559.36, -7.04). Two stocks in the index hit new 52-week highs, and two stocks hit 52-week lowsDJ30 +71.78 NASDAQ +7.03 SP500 +10.41 NASDAQ Dec/Adv/Vol 1277/1586/971 mln NYSE Dec/Adv/Vol 995/2054/679 mln

12:30 pm : The major indices are holding onto modest gains, but remain off their best levels. All ten sectors remain in positive territory.

Gold continues to climb higher, hitting a fresh all time high of $929.80 per ounce. Silver has hit multi-year highs, and is currently up 1.5% to $16.73 per ounce.DJ30 +46.34 NASDAQ +7.19 SP500 +7.46 NASDAQ Dec/Adv/Vol 1245/1587/886 mln NYSE Dec/Adv/Vol 1063/1976/624 mln

12:00 pm : After some choppy action in the early-going stocks are posting modest gains at midday. Several better than expected earnings reports and increased bets on a rate cut helped offset steep declines in Asian markets and worse than expected new home sales data.

Of the 22 companies that reported earnings this morning, 12 beat expectations, three met, and seven missed. Some of the notable companies that topped estimates include Corning (GLW 23.17, +0.80), Halliburton (HAL 33.51, +0.42), McDonald's (MCD 51.14, -2.96) and Sysco (SYY 27.97, +0.36). McDonald's is trading lower though, as traders were disappointed with its flat December U.S. same-store sales. Verizon (VZ 37.21, -0.55) met expectations.

On the economic front, December new home sales came in at a seasonally adjusted annual rate of 604,000 which is 4.7% less than last month's reading and is 40.7% less than last year's number. Economists expected sales to come in at 647,000.

The median sales price of a new house in December was $219,200. This equates to a 10.9% price drop year-over-year, the largest decline in nearly four decades. At the current sales rate, there is a 9.6 month supply of new homes. In 2007, there were an estimated 774,000 new homes sold, down 26.4% from 2006.

The number of sales is very low, and the large supply of inventory should keep pressure on prices for some time. Homebuilders (+1.3%) shrugged off the negative report.

Stocks fell to their session lows shortly after the release, but then recovered into positive territory as traders increase their bets on the size of a Fed Funds rate cut on Jan. 30. Fed funds futures currently indicate an 88% chance of a 50 basis point rate cut, with a 25 basis point cut full priced in. Prior to today's action, futures suggested a smaller 70% chance of a 50 basis point cut, with a 25 basis point cut fully priced in.

Sharp declines in Asian markets on concerns of a U.S. economic slowdown weighed on U.S. stocks in pre-market trading. European markets were also lower, but pared most of their losses as U.S. stocks advanced.

All sectors are higher this session. Financials lead the way with a 1.6% advance. Consumer discretionary is underperforming on a relative basis with a 0.3% gain.DJ30 +59.10 NASDAQ +10.79 SP500 +10.01 NASDAQ Dec/Adv/Vol 1142/1656/767 mln NYSE Dec/Adv/Vol 1001/1987/521 mln

11:30 am : The major indices continue to post modest gains. U.S. Senate Democrats have added a jobless benefits extension and senior citizen rebates to the stimulus bill, according to Dow Jones.

Gold hit an all-time high of $924.80 per ounce before easing a bit. Gold is currently up 1.2% to $921.30 per ounce.DJ30 +58.29 NASDAQ +9.91 SP500 +9.81 NASDAQ Dec/Adv/Vol 1178/1578/650 mln NYSE Dec/Adv/Vol 1004/1967/433 mln

11:00 am : Stocks climb to their best levels of the session in a broad-based move. All ten sectors are in positive territory.

Financials (+1.6%) is leading the rebound with all 19 of its industry groups in the green. Industrial REITs is posting a 2.3% gain and regional banks is up 1.8%.
Even the energy sector (+1.0%) has rebounded into the green, despite a 1.4% slide in crude oil prices.DJ30 +53.36 NASDAQ +6.68 SP500 +7.61 NASDAQ Dec/Adv/Vol 1446/1271/508 mln NYSE Dec/Adv/Vol 1476/1445/322 mln

10:30 am : Stocks recover after falling to fresh session lows on the weak new home sales data. Utilities are leading the recovery effort with a gain of 1.3%. Meanwhile, telecom (-0.5%) pares most of its losses.

With regard to the new home sales data, the December seasonally adjusted annual rate of 604,000 is 4.7% less than last month's reading and is 40.7% less than last year's number. The median sales price of a new house in December was $219,200. This equates to a 10.9% price drop year-over-year, the largest decline in nearly four decades. At the current sales rate, there is a 9.6 month supply of new homes. In 2007, there were an estimated 774,000 new homes sold, down 26.4% from 2006.

The number of sales is very low, and the large supply of inventory should keep pressure on prices for some time. Homebuilders are down 2.7% this session.DJ30 +6.91 NASDAQ -2.28 SP500 +2.60 NASDAQ Dec/Adv/Vol 1632/1008/342 mln NYSE Dec/Adv/Vol 1763/1100/205 mln

10:05 am : Just hitting the wires, the U.S. Dept. of Commerce said December new home sales fell to a seasonally adjusted annual rate of 604K. Economists were expecting sales to hold at 647K. November's reading was revised downward to 634K. Stocks had climbed back to the unchanged mark, but fell back into the red after the disappointing data.

Three of the ten sectors are trending higher. Utilities is leading the way with a 0.6% advance. Telecom is the main laggard with a 1.7% drop, as it continues its poor showing this year.DJ30 -74.87 NASDAQ -13.77 SP500 -6.56 NASDAQ Dec/Adv/Vol 1624/790/120 mln

09:40 am : The stock market dips into the red after opening on a slightly higher note. Foreign markets saw another day of steep declined on fears of U.S. economic slowdown. Japan's Nikkei fell 4.0% and Hong Kong's Hang Seng fell 4.3%. Goldman Sachs said in a report dated Jan. 25 that Japan is either already in a recession or is very likely to do so in the first quarter, according to SCMP.com.

Earnings news leaned bullish. McDonald's (MCD), Corning (GLW), Sysco (SYY) and Halliburton (HAL) topped earnings expectations. Verizon (VZ) came in-line with expectations. McDonald's is trading lower though, as investors were disappointed with its flat December U.S. same-store sales.DJ30 -53.57 NASDAQ -16.76 SP500 -4.97

09:13 am : S&P futures vs fair value: -1.3. Nasdaq futures vs fair value: -2.0.

08:59 am : S&P futures vs fair value: -2.2. Nasdaq futures vs fair value: -3.0. Stock futures shed a few points and suggest a slightly lower open. The Dec. new home sales report is set for release at 10:00 ET. Economists are expected a reading of 645K.

08:30 am : S&P futures vs fair value: +0.3. Nasdaq futures vs fair value: -4.5. S&P 500 futures are now pointing to a flat open as investors respond positively to this morning's earnings reports. McDonald’s (MCD) announced its dividends declared will now be paid on a quarterly basis. Nasdaq futures are pointing to a slightly lower open.

08:00 am : S&P futures vs fair value: -5.0. Nasdaq futures vs fair value: -10.0. Futures indicate a lower start for stock market after foreign markets fell sharply on concerns of U.S. economic slowdown. Japan closed down 4.0% and Hong Kong ended its session 4.4% lower. Earnings reports have lifted futures off their worst levels. Verizon (VZ) reported earnings in-line with expectations. Corning (GLW) topped earnings expectations by one cent and issued first quarter earnings guidance above the consensus estimate. McDonald’s (MCD) beat expectations by $0.02.

06:18 am : S&P futures vs fair value: -8.1. Nasdaq futures vs fair value: -19.3.

06:18 am : FTSE...5761.40...-107.60...-1.8%. DAX...6709.27...-107.47...-1.6%.

06:18 am : Nikkei...13087.91...-541.25...-4.0%. Hang Seng...24053.61...-1068.76...-4.3%.

10 Top-Rated Stocks for the Long Term

1.L-3 Communications (LLL) - View IBD Stock Checkup
Earnings Stability Rating: 1. Analysts have raised EPS outlook for this high-tech Pentagon contractor. Five-year earnings growth rate: 23%.

2.Becton Dickinson & Co. (BDX) - View IBD Stock Checkup
Earnings Stability Rating: 1. Medical supplies developer is No. 2 in its group in pretax margin and return on equity. Five-year earnings growth rate: 16%.

3.Genzyme (GENZ) - View IBD Stock Checkup
Earnings Stability Rating: 3. Biotech large cap’s industry group is one of the best-performing over the past six months. Five-year earnings growth rate: 27%.

4.Covance (CVD) - View IBD Stock Checkup
Earnings Stability Rating: 3. Clinical trial provider’s earnings growth rate is expected to hold firm in 2008. Five-year earnings growth rate: 23%.

5.Amphenol (APH) - View IBD Stock Checkup
Earnings Stability Rating: 4. Communications cable maker expands its share repurchase program from 10 million shares to 20 million Five-year earnings growth rate: 32%.

6.Northern Trust (NTRS) - View IBD Stock Checkup
Earnings Stability Rating: 4. Chicago-based bank holding company is No. 1 in stock-price performance among stocks in its industry group. Five-year earnings growth rate: 15%.

7.Ametek (AME) - View IBD Stock Checkup
Earnings Stability Rating: 5. Test instrument maker’s sales growth slowed from 27% to 17% in 2007. %. Five-year earnings growth rate: 21%.

8.Stericycle (SRCL) - View IBD Stock Checkup
Earnings Stability Rating: 5. Medical-waste handler has beaten Street’s estimates on earnings for eight straight quarters. Five-year earnings growth rate: 21%.

9.Emerson Electric (EMR) - View IBD Stock Checkup
Earnings Stability Rating: 6. The diversified technology company has increased pretax margin for four consecutive years. Five-year earnings growth rate: 19%.

10.BlackRock (BLK) - View IBD Stock Checkup
Earnings Stability Rating: 9. Money management firm is No. 1 in IBD Earnings Per Share Rating among the 148 stocks in its industry group. Five-year earnings growth rate: 31%.

Latest Updates

11:00 am : Stocks climb to their best levels of the session in a broad-based move. All ten sectors are in positive territory.

Financials (+1.6%) is leading the rebound with all 19 of its industry groups in the green. Industrial REITs is posting a 2.3% gain and regional banks is up 1.8%.

Even the energy sector (+1.0%) has rebounded into the green, despite a 1.4% slide in crude oil prices.DJ30 +53.36 NASDAQ +6.68 SP500 +7.61 NASDAQ Dec/Adv/Vol 1446/1271/508 mln NYSE Dec/Adv/Vol 1476/1445/322 mln

10:30 am : Stocks recover after falling to fresh session lows on the weak new home sales data. Utilities are leading the recovery effort with a gain of 1.3%. Meanwhile, telecom (-0.5%) pares most of its losses.

With regard to the new home sales data, the December seasonally adjusted annual rate of 604,000 is 4.7% less than last month's reading and is 40.7% less than last year's number. The median sales price of a new house in December was $219,200. This equates to a 10.9% price drop year-over-year, the largest decline in nearly four decades. At the current sales rate, there is a 9.6 month supply of new homes. In 2007, there were an estimated 774,000 new homes sold, down 26.4% from 2006.

This number of sales is very low, and the large supply of inventory should keep pressure on prices for some time. Homebuilders are down 2.7% this session.DJ30 +6.91 NASDAQ -2.28 SP500 +2.60 NASDAQ Dec/Adv/Vol 1632/1008/342 mln NYSE Dec/Adv/Vol 1763/1100/205 mln

10:05 am : Just hitting the wires, the U.S. Dept. of Commerce said December new home sales fell to a seasonally adjusted annual rate of 604K. Economists were expecting sales to hold at 647K. November's reading was revised downward to 634K. Stocks had climbed back to the unchanged mark, but fell back into the red after the disappointing data.

Three of the ten sectors are trending higher. Utilities is leading the way with a 0.6% advance. Telecom is the main laggard with a 1.7% drop, as it continues its poor showing this year.DJ30 -74.87 NASDAQ -13.77 SP500 -6.56 NASDAQ Dec/Adv/Vol 1624/790/120 mln

09:40 am : The stock market dips into the red after opening on a slightly higher note. Foreign markets saw another day of steep declined on fears of U.S. economic slowdown. Japan's Nikkei fell 4.0% and Hong Kong's Hang Seng fell 4.3%. Goldman Sachs said in a report dated Jan. 25 that Japan is either already in a recession or is very likely to do so in the first quarter, according to SCMP.com.

Earnings news leaned bullish. McDonald's (MCD), Corning (GLW), Sysco (SYY) and Halliburton (HAL) topped earnings expectations. Verizon (VZ) came in-line with expectations. McDonald's is trading lower though, as investors were disappointed with its flat December U.S. same-store sales.DJ30 -53.57 NASDAQ -16.76 SP500 -4.97

09:13 am : S&P futures vs fair value: -1.3. Nasdaq futures vs fair value: -2.0.

08:59 am : S&P futures vs fair value: -2.2. Nasdaq futures vs fair value: -3.0. Stock futures shed a few points and suggest a slightly lower open. The Dec. new home sales report is set for release at 10:00 ET. Economists are expected a reading of 645K.

08:30 am : S&P futures vs fair value: +0.3. Nasdaq futures vs fair value: -4.5. S&P 500 futures are now pointing to a flat open as investors respond positively to this morning's earnings

reports. McDonald’s (MCD) announced its dividends declared will now be paid on a quarterly basis. Nasdaq futures are pointing to a slightly lower open.

08:00 am : S&P futures vs fair value: -5.0. Nasdaq futures vs fair value: -10.0. Futures indicate a lower start for stock market after foreign markets fell sharply on concerns of U.S. economic slowdown. Japan closed down 4.0% and Hong Kong ended its session 4.4% lower. Earnings reports have lifted futures off their worst levels. Verizon (VZ) reported earnings in-line with expectations. Corning (GLW) topped earnings expectations by one cent and issued first quarter earnings guidance above the consensus estimate. McDonald’s (MCD) beat expectations by $0.02.

06:18 am : S&P futures vs fair value: -8.1. Nasdaq futures vs fair value: -19.3.

06:18 am : FTSE...5761.40...-107.60...-1.8%. DAX...6709.27...-107.47...-1.6%.

06:18 am : Nikkei...13087.91...-541.25...-4.0%. Hang Seng...24053.61...-1068.76...-4.3

STOCKS TO WATCH

Among the companies whose shares are expected to see active trade in Monday's session are Verizon, McDonald's, Corning and Meritage Homes.

Verizon Communications (VZ: 37.76, -0.47, -1.2%) is projected to report earnings of 62 cents a share in the fourth quarter, according to analysts polled by Thomson Financial.

McDonald's Corp. (MCD:54.10, +0.10, +0.2%) is expected to post fourth-quarter earnings of 71 cents a share.

Corning Inc. (GLW: 22.37, +0.17, +0.8%) is forecast to post earnings of 39 cents a share in the fourth quarter.

Meritage Homes Corp. (MTH:10.84, -0.03, -0.3%) is expected to report a loss of $3.52 a share in the fourth quarter.

Tyson Foods Inc. (TSN: 13.26, -0.23, -1.7%) is estimated to post earnings of 4 cents a share in the fiscal first quarter.

Albemarle Corp. (ALB: 37.30, +3.15, +9.2%) is likely to post earnings of 59 cents a share in the fourth quarter.

Black & Decker Corp. (BDK: 69.98, -0.25, -0.4%) is forecast to post earnings of $1.03 a share in the fourth quarter.

Sysco Corp. (SYY:27.61, +0.07, +0.3%) is tipped to report earnings of 43 cents a share in the fiscal second quarter.

VMware Inc. (VMW:80.55, +0.35, +0.4%) is expected to post earnings of 24 cents a share in the fourth quarter.

Crane Co. (CR: 36.35, +0.33, +0.9%) is projected to report earnings of 69 cents a share in the fourth quarter.

Halliburton Co. (HAL: 33.09, +0.72, +2.2%) is estimated to post fourth-quarter earnings of 69 cents a share in the fourth quarter.

Graco Inc. (GGG:34.42, +0.50, +1.5%) is forecast to report fourth-quarter earnings of 57 cents a share.

Rohm and Haas Co. (ROH: 49.90, +0.78, +1.6%) is expected to post fourth-quarter earnings of 78 cents a share.

SanDisk Corp. (SNDK: 25.62, -1.13, -4.2%) is estimated to post earnings of 64 cents a share in the fourth quarter.

Amylin Pharmaceuticals Inc. (AMLN:32.46, -0.85, -2.5%) is projected to post a loss of 44 cents a share in the fourth quarter.

Unum Group (UNM: 20.58, -0.20, -1.0%) is forecast to post earnings of 54 cents a share in the fourth quarter.

Stanley Works (SWK: 46.58, +0.52, +1.1%) is expected to report fourth-quarter earnings of $1.10 a share.

YRC Worldwide Inc. (YRCW:18.86, +0.86, +4.8%) is estimated to post fourth-quarter earnings of 54 cents a share.

Smurfit-Stone Container Corp. (SSCC: 8.83, +0.15, +1.7%) is forecast to post earnings of 8 cents a share in the fourth quarter.

Zoran Corp. (ZRAN) is expected to post earnings of 32 cents a share in the fourth quarter.

The Hanover Insurance Group (THG) is projected to post earnings of $1.12 a share in the fourth quarter.

Steel Dynamics Inc. (STLD:) is tipped to report fourth-quarter earnings of 98 cents a share.

Airgas Inc. (ARG) is estimated to report fiscal third-quarter earnings of 65 cents a share.

Con-Way Inc. (CNW) is expected to post fourth-quarter earnings of 82 cents a share.

After Friday's closing bell, Tyson Foods Inc. (TSN) said it will cease beef slaughter operations at its Emporia, Kansas, beef plant in the next few weeks, resulting in the elimination of 1,500 of 2,400 jobs. Affected workers will continue to be paid and receive benefits for 60 days, and the company will work with affected employees to discuss other employment opportunities within the company.

Watch list

Baxter International (BAX) issued an "urgent" recall of batches of its blood-thinner heparin due to reports they have caused severe allergic reactions in some recipients. In particular, Baxter is recalling injectable formulations of heparin sodium in 1000 units/mL and 30mL multi-vial doses.

Delphi Corp. (DPHIQ) said a federal bankruptcy judge confirmed the company's amended reorganization plan after ruling the company met all of the statutory requirements. The auto parts supplier said it plans to emerge from bankruptcy during the calendar quarter following the syndication and closing of about $6.1 billion of exit financing facilities.

FedEx (FDX) reportedly is in talks to buy all or part of Deutsche Post's DHL delivery business in the U.S. in a deal that would help it challenge larger rival UPS (UPS) . Seeking to cut losses in the hyper-competitive domestic fast delivery business, Deutsche Post may move to trim its DHL business in the United States without abandoning it completely, according to published reports on Friday.

Merck & Co. (MRK) received a not-approvable letter from the Food and Drug Administration in response to its application seeking approval for over-the-counter Mevacor 20 mg, the drug company said. The FDA indicated in its letter that it would require a revised label and additional data from Merck in order for marketing approval.

Short interest in 3,214 Nasdaq (NDAQ) securities totaled 8.69 billion shares at the end of the Jan. 15 settlement date, compared with 8.11 billion shares at the end of the Dec. 31 settlement date, the exchange said. Short interest in 2,707 Nasdaq Global Market securities totaled 8.49 billion shares at the end of the Jan. 15 settlement date, up from 7.93 billion shares in 2,697 issues.

Wellcare Health Plans Inc. (WCG:) named Charles Berg executive chairman and Heath Schiesser as president and chief executive officer, effective immediately, after three executives resigned from their positions. The managed-care services provider said the shakeup is in the "best long-term interest of the company."