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Second Edition

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Change In Ratings | Stock Comments / EPS Changes | Strategy Calls / Market Calls | Economics | Meetings | View Archived StreetNotes

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AMBAC Financial Group (ABK / NYSE)
Goldman Sachs
Upgrading from Market Outperform to Recommended List with a target in high 60s. Outlook remains strong under a wide range of scenarios. Unusually high confidence in our 2003 outlook.

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Automatic Data Processing (ADP / NYSE)
Prudential Securities
Initiating with Hold and $50 price target. Effects of tough economy are restraining the model.

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AstroPower (APWR / Nasdaq)
Merrill Lynch
Initiating coverage with a near-term Neutral and long-term Buy rating. We believe the company offers the best pure-play solar power investment in the market.

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Boeing Company (BA / NYSE)
SG Cowen
Downgrading from Buy to Neutral. We believe the current decline in dmenad will lead to a long downcycle.

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Banta Corporation (BN / NYSE)
Warburg Dillon Read
Initiating coverage with a Buy rating and $33 price target.

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Capital One Financial (COF / NYSE)
Morgan Stanley Co.
Downgrading from Outperform to Neutral. Industry fundamentals remain weak and competition is increasing.

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D.R. Horton (DHI / NYSE)
Smith Barney Shearson
Upgrading from Outperform to Buy. Resilience during this recession. Vulnerable to upturn in rates, but group rallies when Fed raises rates.

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R.R. Donnelley & Sons Co. (DNY / NYSE)
Warburg Dillon Read
Initiating coverage with a Hold rating and $30 price target.

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Dupont Photomask (DPMI / Nasdaq)
Merrill Lynch
Initiaiting coverage with a near-term Neutral and long-term Buy rating. The company is the leading photomask producer in the world.

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Emulex Corporation (EMLX / Nasdaq)
Bank of America Montgomery
Initiating coverage with a Buy rating and $35 price target.

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FuelCell Energy (FCEL / Nasdaq)
Goldman Sachs
Downgrade to Market Perform from Market Outperform. CESI and FCEL, direct exposure to ENE. Limited potential impact. No change in their prospects and no adjustments in any estimates due to Enron.

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First Data Corporation (FDC / NYSE)
Prudential Securities
initiating coverage with a Buy rating and a $90 price target. We believe FDC shares are cheap compared to our key valuation metrics.

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Hovnanian Enterprises (HOV / NYSE)
Smith Barney Shearson
Upgrading Neutral to Outperform. Resilience during this recession. Vulnerable to upturn in rates, but group rallies when the Fed raises rates.

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Investment Technology Grp (ITG / NYSE)
JP Morgan Chase & Co.
UPGRADING from market perform to long term buy. $70 PT. Down 15% with no change in fundamentals. We think recent weakness due to profit taking, concerns over insider selling.

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i2 Technologies (ITWO / Nasdaq)
Bank of America Montgomery
Initiating coverage with a Market Performer rating.

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Manugistics Group (MANU / Nasdaq)
Bank of America Montgomery
Initiating coverage with a Market Perform rating.

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McData Corporation (MCDTA / Nasdaq)
Bank of America Montgomery
Initiating coverage with a Buy rating and $30 price target.

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Knight Trading Group (NITE / Nasdaq)
JP Morgan Chase & Co.
UPGRADING from market perform to long term buy. raising Q4E EPS from $0.08 to $0.11, because we think market environment has bottomed, seeing positive trends, things improving for 1st time in a while, ests could come up. 12-month $13 PT

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Novellus Systems (NVLS / Nasdaq)
NEWS
announced in its mid-quarter update that orders will come in between $105 million and $125 million for the fourth quarter, below its previous guidance for orders in the range of $125 million to $150.

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Novellus Systems (NVLS / Nasdaq)
Deutsche Banc Alex Brown
Slashing calendar 2002 estimate to 5 cents per share, following another earnings warning from the company. Maintain Buy rating.

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Novellus Systems (NVLS / Nasdaq)
Robertson Stephens
Downgrade to Market Perform from Buy. Lowering FY02 est. from 74c to 16c. Bookings down 72% from peak. Fared worse than AMAT down 60-65% from peak. Some upside as it trades higher with group in upturn, raising target to $46 from $37.

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Novellus Systems (NVLS / Nasdaq)
Goldman Sachs
Company lowered net order guidance to flat to down 15% from flat to up 20%. Revs were guided to bottom of $200-215 million range. Will not be profitable in 1Q02. Reiterate Market Perform.

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Novellus Systems (NVLS / Nasdaq)
Credit Suisse First Boston
Cutting our 2002 estimate to $0.15 per share. The company's orders continue to deteriorate, and our expectation for recovery is being pushed out to 2003.

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Novellus Systems (NVLS / Nasdaq)
Bank of America Montgomery
Slashing 2002 estimate to $0.16 per share, based on negative pre-announcement. Maintain Buy rating, although we'd be more aggressive in the $30 range.

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Novellus Systems (NVLS / Nasdaq)
Weisel Partners
Slashing 2002 estimate to $0.12 per share. Maintain Attractive rating and $40 price target.

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Paychex (PAYX / Nasdaq)
Prudential Securities
initiating coverage with a Hold rating and a $31 price target. Although still a very solid company in our view, we believe the current valuation already takes into consideration a full economic recovery.

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American Italian Pasta (PLB / NYSE)
Warburg Dillon Read
Upgrading from Hold to Buy with a $46 price target, based on valuation.

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ProQuest Company (PQE / NYSE)
Bear Stearns
Upgrade from Attractive to Buy.

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SAP AG (SAP / NYSE)
Weisel Partners
Initiate with Buy; Largest enterprise apps software firm with broad customer base & product portfolio; Our top '02 enterprise software pick

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Sirius Satellite Radio (SIRI / Nasdaq)
Deutsche Banc Alex Brown
Initiating coverage with a Market Perform rating and $9 price target. We expect the company to become EBITDA positive in 2006, when it has 4 million subscribers.

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Telephone & Data Systems (TDS / AMEX)
Credit Suisse First Boston
Initiating coverage with a Buy rating and $110 price target.

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webMethods (WEBM / Nasdaq)
Morgan Stanley Co.
Downgrading from Outperform to Neutral, based on valuation.

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XM Satellite Radio Hold. (XMSR / Nasdaq)
Deutsche Bank
Initiating coverage with a Buy rating and $20 price target. The company should reach 4 million subscribers in 2005, when it will also become cash flow positive.

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Accenture (ACN / NYSE)
Goldman Sachs
Raising EPS estimates, 2002 from 80c to 85c and 2003 from 94c to 98c. Reiterate Recommended List rating. Target raised to $24. Higher rev. and margin. Good momentum in profit and efficiency improvements.

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Amazon.com (AMZN / Nasdaq)
Bear Stearns
Reit Attractive Rating based upon the company's leading online position, solid signs of increased operational efficiency and a share price beneath our estimate of a $13 per share fair value.

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Bank of America Corp. (BAC / NYSE)
Sanford Bernstein
Key businesses are improving their performance. BAC stock is 25% below our price target and rated outperform. We are cutting our EPS estimates modestly to be more in line with the company's guidance. For Q4 01, we are reducing our estimate from $1.27 to $1.25; this means a cut in the annual estimate to $4.91 from $4.93. For 2002, we are reducing our estimate to $5.30 from $5.40.

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Barnes & Noble (BKS / NYSE)
Goldman Sachs
Reported 3Q in-line with pre-announcements. Bookings exceeding our estimates. Raising 2001 by 3c to $1.18 and 2002 by 15c to $1.70.

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Cendant Corporation (CD / NYSE)
Merrill Lynch
We believe the company's guidance is conservative, and that CD will be able to beat consensus estimates over the coming quarters. Reiterate Buy rating and $25 price target.

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Cendant Corporation (CD / NYSE)
Weisel Partners
Believe refinance activity & home sales suggest potential upside to recently revised Dec Q est; Reiterate Buy.

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Claire's Stores (CLE / NYSE)
Dain Rauscher
maintaining Neutral rating. Looking forward we remain cautious on Q4 and 2002.

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3Com Corporation (COMS / Nasdaq)
Bear Stearns
Raising estimates .10 to .12 for '02 off company guidance.

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Calpine Corporation (CPN / NYSE)
Deutsche Banc Alex Brown
The company says it has zero exposure to Enron. Reiterate Strong Buy rating.

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Cisco Systems (CSCO / Nasdaq)
Weisel Partners
Analyst conference could be positive catalyst; Expect focus onenterprise data, metro optical & carrier IP routing; Survivor with attractive risk/reward.

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Dell Computer Corporation (DELL / Nasdaq)
Smith Barney Shearson
Positive meeting with CEO Michael Dell and senior staff. Highlighted continued share gains across all product categories. Does not anticipate significant rebound until Spring/Summer 2002.

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Amdocs Limited (DOX / NYSE)
ABN Amro
reiterate ADD rating given comments out of the Convergys Analyst Day yesterday. CVG management indicated that the lengthening of the sales cycle experienced through much of 2001 seems to have stopped and the billing market seems to have stabilized.

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eBay (EBAY / Nasdaq)
ABN Amro
Continuing our proprietary study of eBay's US auction activity, we believe our 4Q01 and fiscal 2001 estimates remain intact. maintain HOLD rating as valuation remains principal concern.

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Ensco International (ESV / NYSE)
Deutsche Banc Alex Brown
Lowering fiscal 2002 estimate to $1.05 per share, because of soft demand. Maintain Strong Buy rating.

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Freddie Mac (FRE / NYSE)
JP Morgan Chase & Co.
Raising 02E EPS from $4.85 to $4.90 due to company doing large accretive debt buyback earlier in the week and cont strong port growth. Stock has been weak, 10 yr back down to 4.75%, should widen spreads, reit Buy.

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Goldman Sachs Group (GS / NYSE)
Warburg Dillon Read
Reducing estimates, to reflect lower profits from trading activity. We now expect the company to earn $4.20 per share in 2001 and $4.43 for next year.

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Gillette Company (G / NYSE)
Credit Suisse First Boston
Raising estimates, following our meeting with management. We now expect the company to earn $1 per share in 2001 and $1.10 for next year. Maintain Hold rating.

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Lehman Brothers Holdings (LEH / NYSE)
Warburg Dillon Read
Cutting EPS estimates because of weaker fundamentals, but Lehman's business was also very affected by the WTC attack. The company should earn $4.65 this year and $5 in 2002.

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Lockheed Martin Corp. (LMT / NYSE)
NEWS
The U.S. Navy has awarded LMT a contract worth $283,453,552 to provide fiscal year 2002 Trident missile deployed system support and related technical and engineering services.

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Lincoln National Corp. (LNC / NYSE)
Lehman Bros
After meeting with management, we continue to believe the company can top estimates in the current quarter. LNC is also likely to make an acqusition with the $1.5 billion in cash it just received for selling its Lincoln Re subsidiary.

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Lincoln National Corp. (LNC / NYSE)
ABN Amro
reiterate HOLD rating and $50 target after LNC held its annualanalyst and bankers meeting yesterday. Management provided an update on operations and products but would not comment on earnings expectations.

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Mellon Financial Corp. (MEL / NYSE)
Dain Rauscher
Mellon looking to leverage its capital--acquires Unifi Network for $275 million; no impact to earnings expected in 2002.

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Merrill Lynch & Co. (MER / NYSE)
Warburg Dillon Read
Lowering expectations because of restructuring activity and lower trading activity. We now believe the company will earn $2.42 this year and $2.75 in fiscal 2002.

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Microsoft Corporation (MSFT / Nasdaq)
Deutsche Banc Alex Brown
Our survey of 85 retail outlets show that Xbox is selling extremely well. We also believe the company is on track to meet December quarter expectations. Maintain Buy rating.

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Morgan Stanley (MWD / NYSE)
Warburg Dillon Read
The company's bottom-line will be hurt by lower commission revenue and a likely increase to loan-loss reserves. We now expect the company to post EPS of $3.26 for next year. Maintain Hold rating.

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The Neiman Marcus Group (NMG.B / NYSE)
Goldman Sachs
Lowering 2Q est. of 50c to 35c reflecting guidance. Reported 1Q EPS of 48c, above our 45c estimate. Reiterate Market Perform rating.

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The Neiman Marcus Group (NMG.B / NYSE)
ABN Amro
lowering fiscal 2002 EPS estimate from $1.95 to $1.65 andfiscal 2003 from $2.45 to $2.05 after NMG.B reported fiscal 1Q02.Inventory levels were high and we believe the company will have to take more aggressive markdowns in the current quarter in order to meet the goal of flat y/y inventory by 2Q01 end.

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Novell (NOVL / Nasdaq)
NEWS
reported fourth quarter earnings of 2c/share, compared to Street forecasts, calling for break-even results. Net Sales were $307.6 million, versus $273.3 million in the same period last year

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Oracle Corporation (ORCL / Nasdaq)
Lehman Bros
We expect no surprise earnings pre-announcement from the company. Our November quarter estimates have been lowered to a reachable number. Maintain Buy rating.

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Oracle Corporation (ORCL / Nasdaq)
Sanford Bernstein
continues to under-invest in R&D relative to its softwarecompetitors in the infrastructure and applications segments. ORCL's under-investment in R&D, coupled with its focus on the enterprise applications business, will lead to lower-than-expected license and overall growth. maintain Market perform with $12 price target.

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Pinnacle Entertainment (PNK / NYSE)
Robertson Stephens
Lowering estimates for 4Q01 from -18c to -25c based on revisions from company. Target $7.

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Starbucks Corporation (SBUX / Nasdaq)
Deutsche Banc Alex Brown
November comp sales grew 1%, which was ahead of consensus expectations. Maintain Buy rating.

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Starbucks Corporation (SBUX / Nasdaq)
Lehman Bros
November sales figures were positive, but we expect the shares to remain range-bound because of valuation. Maintain Buy rating.

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Symantec Corporation (SYMC / Nasdaq)
Credit Suisse First Boston
Trimming EPS estimates because of a dilutive $600 million convertible offering. We now expect the company to earn $2.31 in fiscal 2002 and $2.96 for next year.

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Triad Hospitals (TRI / NYSE)
Bank of America Montgomery
We believe the company will narrow its guidance to the high-end of the previous range. Reiterate Buy rating.

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Microtune (TUNE / Nasdaq)
JP Morgan Chase & Co.
turning more positive on shares becauase proprietary info shows Transiliciashould contribute to rev and margin sooner and more substantially than previously ($35m rev expected in 2H02) expected, and we believe major designs wins in the works.

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Ixia (XXIA / Nasdaq)
Morgan Stanley Co.
Raising price target to $16 per share, as the December quarter appears to be on track. Maintain Outperform rating.

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Bear Stearns (Sentiment)
Bullish Sentiment back up: SPX 61%, NDX 63%, 5 day moving average 66 and 62%. Equity P/C .71, SPX P/C 1.59. Still expecting a short dovering rally.

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Merrill Lynch (Print Advertising)
Lowering our expectations for 2001, to a year/year decline of 5.1%. Newspapers will likely underperform the publishing industry as a whole.

Morgan Stanley Co. (Footwear)
Pricing trends are firming after heavy discounting, and the inventory channel looks clean for the peak holiday season.

Morgan Stanley Co. (Telecom)
The bells have underperformed by 23%, as the rest of the market has rebounded in the fourth quarter. While valuations look attractive, the group generally lags economic recovery.

Smith Barney Shearson (Homebuilding)
Upgrading several homebuilders. Resilience during this recession. Vulnerable to upturn in rates, but group rallied in similar late-87 to mid-89 while Fed raised rates. Neutral to Outperform: BZH, HOV, RYL. Outperform to Buy: DHI, MDC, TOL. Estimates increased for BZH, CTX, DHI, HOV, KBH, LEN, MDC, PHM, RYL, SPF, TOL.

Morgan Stanley Co. (Enterprise Software)
Valuations have exceeded fundamentals for many companies. We continue to be selective on the group, as the potential for downward EPS revisions remains.

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8:30 a.m. Gross Domestic Product. Real GDP -1.1% GDP deflator 2.1%

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Oscillator: 2.2

10:00 a.m. PMAC Survey

3:00 p.m. Farm Prices

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IBM Web Builder Conference

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SUNW JavaOne User Conference

Safeguard Scientifics Inc. Meeting

Credit Suisse First Boston Annual Technology Conference Scottsdale, AZ CSCO, EMBT, UTSI

Lehman Brothers Industrial Select Conference Coral Gables, FLVC, PTV, AN, DD, HUBB, PNR

CSFB Credit Forum 2001: Risk and Reward Conference BarcelonaFRE, ENE, TM, EN, BBV

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