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1. Valero Makes a Permanent Shutdown
By Sham Gad
8:25 a.m. EST
has decided to permanently shut down a refinery in Delaware, eliminating 550 jobs. So far, refiners like Valero and
have been idling plants and capacity until the market improves. As a sign of how bad the times are for refiners, Valero was unable to find a buyer for the 210,000 bpd plant. Lack of a buyer, even at a rock-bottom price, is interesting considering one bull argument that supports refiners: no U.S. refinery has been built since the 1970s due to the capital involved and regulations needed. The fact that no one was interested at any price may indicate more of these shutdowns to come. This refinery represented 7% of Valero's capacity.
One can argue two points of view going forward: 1) Continued capacity curtailment and permanent refinery shutdowns will lead to a severe supply disruption somewhere down the road when the economy turns and demand for gas turns up, in which case a bullish stance on Valero and Tesoro (that trade below book value) is warranted; or 2) the demand for gasoline may be on a permanent decline curve as the growth of electric automobiles propels over the next decade.
2. JOBS Looking Up Premarket
By Timothy Collins
9:19 a.m. EST
Obviously, I'm not talking about the U.S. job market -- nor am I a doctor, so I am not commenting on Steve Jobs' health here -- but
looks strong premarket. The company's revenue and EPS were both a beat, along with guiding both higher. The biggest negative I see on the headlines was the CEO leaving for personal reasons. I will be looking to sell enough of my holdings around the open so that the only money at risk going forward is unrealized profit.
3. Icahn Moves Into Health Care
By Tim Melvin
1:49 p.m. EST
It would appear that Carl Icahn shares the enthusiasm of Bruce Berkowitz and others for health care stocks. The legendary activist investor recently opened pretty good-sized positions in both
( GENZ) and
Genzyme shares are trading near a 52-week low as problems continue to plague the company. The company recently stopped development of a new kidney drug that did not do well in trials. it has had problems at a Boston area manufacturing facility that the FDA is investigating and delaying the plants recertification. Icahn has not yet gone activist in this stock, but it would not surprise me to see him do so before long.
4. Slow Earnings Week
By Timothy Collins
2:07 p.m. EST
Given that this is a holiday shortened week, I will tend to keep my plays small, generally half my normal size. Today, I am only looking at three plays.
reports today after the bell, and I am taking a position in the Dec 27.50 calls around 1.15. My upside target is around 29.50 on a beat and guide higher. If they disappoint, I don't see them sinking any further than 26.00 per share.
American Eagle Outfitters
has been beaten down mercilessly. It seems as if downside is priced in here. I am nibbling on some Jan 15 calls at .90 or .95. For a little higher risk/reward, the Dec 15 calls are hanging around .70; however, I am going to opt for more time.
looks like it could move to $30 on the upside or $25 on the downside. Me, I think downside. I am looking to short shares around 27.60.
Long ADI, AEO; short CTRN.
5. Verizon Tops Dow
By Gary Morrow
2:58 p.m. EST
is the top percentage gainer in the
today. Verizon is just edging out
at the top of the list with an hour of trading left. The Dow is again enjoying a broad rally today, with only two members not participating.
While many of the top gainers this morning have come in a bit since the first-hour surge, Verizon has continued to build on its very strong gap higher open. Its 2.8% gain has lifted it well above its 200-day moving average while leaving behind a solid short-term base. Today's action could be the first stage of a significant breakout as Verizon continues to move away from a 12-week bearish channel.
Volume over the past two weeks has been very light, but I expect this to change as the stock edges higher. A volume surge this week will confirm that breakout and set the stock up for a run back up to its April highs of $33.00.
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This article was written by a staff member of RealMoney.com.