7 Stocks You Need to Know for Monday

.S. stocks recovered most of Wednesday's losses, with financial stocks leading the advance. Commodity prices continued their rapid descent and the dollar rose.

The Dow gained +261.66 , the Nasdaq Compsite +48.15, and the S&P 500 +31.09. The markets are closed on Friday in observance of the Easter holiday.

Nike (NYSE:NKE - News) jumped 8.4% after beating earnings estimates. NKE's Short Term PowerRating is 5.

Carnival Corp. (NYSE:CCL - News) also gained 8.4% after reporting earnings above expectations. CCL's Short Term PowerRating is 4.

Shares of CIT Group (NYSE:CIT - News) plunged as much as 42%, before closing down 17%, after Fitch Ratings said the company may need to use a $7.3 billion backup credit line. CIT's Short Term PowerRating is 6.

Bain Capital and its Chinese partner dropped their $2.2 billion bid for 3Com (NasdaqGS:COMS - News) after failing to reach an agreement that would satisfy the U.S. government's national security concerns. COMS' Short Term PowerRating is 6.

After the close, Palm (NasdaqGS:PALM - News) missed estimates by -$0.02, reporting a loss of -$0.16 per share. PALM's Short Term PowerRating is 5.

Before the market open on Monday, Walgreen (NYSE:WAG - News) is expected to report earnings of $0.67. WAG's Short Term PowerRating is 4.

Do you think Goldman Sachs (NYSE:GS - News) will close up or down on Tuesday? GS' Short Term PowerRating is 3. Play TradingMarkets Up or Down Daily Stock Contest for the chance to win $1000 every month by predicting the direction of a stock.

7 Stocks You Need to Know for Wednesday

Stocks surged on Tuesday, after strong gains in Europe and Asia, with financial stocks leading the advance. Before the market open, Goldman Sachs and Lehman Brothers reported stronger than expected earnings. Later in the day, the Federal Reserve slashed its benchmark rate by 75bp to 2.25% in an attempt to ease the credit crisis and help the slowing U.S. economy.

The Dow gained +420.41, while the Nasdaq Composite lost +91.25, and the S&P 500 +54.14.

Here are 7 stocks to watch...

Goldman Sachs (NYSE:GS - News) reported a 53% decline in net profit, after writedowns and lower fixed income revenues. However, first quarter earnings of $3.23 per share beat estimates by $0.65. GS' Short Term PowerRating is 3.

Lehman Brothers (NYSE:LEH - News) reported first quarter earnings of $0.81, a 57% drop, but still beat estimates by $0.09. After the sudden collapse of Bear Stearns, speculation that LEH could be next to fall has been rampant, but today's numbers eased concern and led to a huge rally. LEH's Short Term PowerRating is 4.

Bloomberg reported a Wachovia analysts' note to investors that stated Merrill Lynch (NYSE:MER - News) "is the riskiest" of the remaining U.S. investment banks. MER's 4.

Yahoo! (NasdaqGS:YHOO - News) laid out its vision for the future, stating that it expects revenue to double over the next three years. The company also reaffirmed its Q1 and FY08 outlook. YHOO's Short Term PowerRating is 6.

After the close, Adobe Systems (NasdaqGS:ADBE - News) reported earnings of $0.48, beating estimates by $0.03. ADBE's Short Term PowerRating is 5.

Visa (NYSE:V - News) is set to make its debut as a publicly traded company tomorrow. The $17 billion IPO will be the biggest stock sale in U.S. history, second only to the $22 billion offering of Industrial & Commercial Bank of China.

Morgan Stanley (NYSE:MS - News) is scheduled to report before the market open on Wednesday, with analysts looking for $1.03 per share. MS' Short Term PowerRating is 4.

Do you think Morgan Stanley will close up or down on Thursday? Go to TradingMarkets.com to play our Up or Down Daily Stock Contest for the chance to win $1000 every month by predicting the direction of a stock.

Wall St sinks as Bear shakes faith in banking

Stocks fell on Monday after JPMorgan Chase (NYSE:JPM - News) bought Bear Stearns (NYSE:BSC - News) at a fire sale price and the Federal Reserve provided emergency cash to Wall Street as the global credit crisis worsened.

But stocks trimmed losses as shares of JPMorgan led advancers, while the Fed's move to cut its discount rate to 3.25 percent and expand lending to a wider range of big financial firms -- the first such move since the Great Depression -- helped Wall Street ease a bit off early lows.

Futures have been pricing in a 100-basis-point cut from the Fed when it meets tomorrow.

JPMorgan is buying Bear Stearns for $236 million, or $2 per share -- one-fifteenth of the price at Friday's close. Shares of Bear, which until recently had ranked as the fifth-largest U.S. investment bank, reached a high of $172.61 last year. Bear's stock plummeted 87.3 percent to $3.91 at midday on Monday.

The financial sector tumbled, as Lehman Brothers (NYSE:LEH - News) sank 23.9 to $29.86 and Citigroup dropped 7.3 percent to $18.35. The Standard & Poor's financial index (^GSPF - News) was down 3.6 percent.

JPMorgan, the top gainer in both the blue-chip Dow average and the S&P 500, climbed 8.3 percent to $39.58, preventing an uglier morning on Wall Street.

"The Fed took very aggressive action over the course of the weekend, and so that's having an impact," said Michael Darda, chief economist at MKM Partners LLC, in Greenwich, Connecticut.

"The problem is that action will have an inflationary price tag. And you can see that in all of the commodity and currency indicators."

The Dow Jones industrial average (DJI:^DJI - News) dropped 114.39 points, or 0.96 percent, to 11,836.70. The Standard & Poor's 500 Index (^SPX - News) shed 23.44 points, or 1.82 percent, to 1,264.70. The Nasdaq Composite Index (Nasdaq:^IXIC - News) tumbled 44.78 points, or 2.02 percent, to 2,167.71.

In a fresh sign of faltering confidence in the U.S. economy and financial system, the dollar sank to its weakest against the yen since 1995 and slumped against the euro.

The "fire sale" of Bear has put U.S. banks at risk as it will result in valuation adjustments that could result in a drop of stock prices by as much as 50 percent, Oppenheimer & Co analyst Meredith Whitney wrote.

Elsewhere in the financial sector, mortgage insurer PMI Group Inc (NYSE:PMI - News) reported its biggest-ever quarterly loss, mainly due to losses on its investment in bond insurer FGIC Corp. It also slashed its dividend by more than 70 percent.

Shares of PMI dropped 11.3 percent to $5.05, after hitting a lifetime low of $4.82 earlier in the session.

The New York Federal Reserve Bank reported an unexpectedly steep drop in its manufacturing survey and a rise in prices paid. It was the worst reading of business conditions in the state of New York since the index was launched in July 2001.

Alitalia Accepts AirFrance KLM Bid

Alitalia's board on Sunday unanimously accepted Air France-KLM's bid valued at $1.1 billion in a move to save the struggling national carrier.

The Air France-KLM offer values the airline at 139 million euros ($216 million), far less than expected, based on a share swap of 1 Air France share for every 160 Alitalia shares. The Franco-Dutch carrier also said it will pay euro608 million ($946 million) for convertible shares.

Air France said it will inject euro1 billion ($1.56 billion) in capital once the deal is complete.

Alitalia's board issued a statement accepting the offer after a meeting that went some 16 hours into early Sunday. Air France said it was "happy" with Alitalia's decision.

Air France has said it wants to have union approval before the deal is completed. It also must be approved by the Italian government, which is selling its 50 percent share, as well as the stock market regulator and EU competition authorities.

Air France said it expected to have government and regulatory approvals within the first half of 2008.

Air France said it plans to relaunch Alitalia with an industrial and restructuring plan that will allow the Italian carrier "to rediscover the means of its development and to consolidate its status as a national leader." Alitalia will maintain its national identity within the Air France-KLM group, the carrier said in a statement.

Air France said it expected to be profitable by 2009.

Alitalia has been losing euro1 million ($1.56 million) a day, and its cash reserves were down to just euro282 million ($439 million)at the end of January, nearly a 25 percent drop from a month earlier.

The outgoing center-left government of Romano Prodi has been trying for more than a year to sell Alitalia. It's decision to enter exclusive talks with Air France-KLM has been met with opposition by unions concerned about jobs and backers of Milan's Malpensa airport, which would lose its status as a hub. Air France intends to maintain just one hub for Alitalia, at Rome's Leonardo da Vinci airport.

Opposition leader Silvio Berlusconi, who is favored to win national elections next month, recently said he could accept an Air France-KLM purchase of Alitalia if the Italian carrier maintains its national identity, backing down from his opposition to the deal.