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MARKET CURRENTS

  • 7:53 PM Vanguard's Jack Bogle takes advantage of Facebook's (FB) plunge and the negative impact it's had on the psyche of the retail investor to hammer home the merits of index investing. Bogle says: "It all comes down to value and it all goes away from price, and avoiding IPO's and avoiding individual stocks is the best strategy for investors." (video) 5 Comments [U.S. Economy, Tech]
  • 7:37 PM More on Compuware (CPWR): FQ4 EPS beats on a per share basis. Net earnings sank 22% Y/Y on softer professional service fees and higher expenses. Going forward, the company forecast earnings of $0.45 - $0.49 cents per share on revenue of $1.07B - $1.08B. Street estimates are for an EPS of $0.51 on revenue of $1.07B, respectively. Shares +7.8% AH. Comment! [Earnings, Tech, On the Move]
  • 7:24 PM As conerns grows on the economic front, former Council of Economic Advisers Chairman Martin Feldstein says the dangers are all too real. We're stumbling along right now, Feldstein says, and the folks forecasting 3% growth are far too optimistic. "We'll be lucky if we have 2%." As for the "economic cliff" we're facing in 2013, if everything that's due to expire expires, it will in fact be an economic disaster. (video) 1 Comment [U.S. Economy]
  • 7:10 PM As FINRA and the SEC investigate allegations that analysts cut their Facebook (FB -8.9%) estimates ahead of its IPO and only shared the info with select clients, a source tells BI the estimates were cut because a Facebook exec told them to. Backing up this claim is a May 11 Bloomberg column in which sources claim Facebook is telling analysts its sales "may not meet their most optimistic projections." 5 Comments [Tech]
  • 7:02 PM More on Avago Technologies (AVGO): FQ2 beats on a per share basis on continued Y/Y revenue growth. Net earnings eased 0.7% amid higher operating costs and weaker margins. Comp store sales decreased 5.5% in U.S. dollars and 5.1% in local currency. Shares +3.5% AH. Comment! [Earnings, On the Move]
  • 6:58 PM The application delivery controller (ADC) market grew 5% Q/Q in seasonally weak Q1, according to Dell'Oro. Especially positive for market leader F5 (FFIV) is Dell O'ro's estimate that sales of physical high-end ADCs - a market F5 dominates - rose 14%. Less positive is the fact the budding market for virtual (i.e. software-based) ADCs grew 167% - while F5 sells virtual ADCs, they risk cannibalizing hardware sales. Citrix Systems (CTXS) and Cisco (CSCO) also participate in the ADC market. (previous) Comment! [Tech]
  • 6:38 PM Renowned NYU finance prof. Aswath Damodaran assigns Facebook (FB -8.9%) a value of $29/share, a little below today's $31 closing price, based on a detailed valuation analysis. His assumptions: Facebook's annual revenue growth will average 40% over the next 5 years before slowing; its operating margin will fall from a sky-high 45.68% to 35%; and its cost of capital will be a relatively high 11.42% (to account for higher-than-normal risk). (Blodget's valuation) Comment! [Tech, Quick Ideas]
  • 6:31 PM More on Qihoo 360 Technology (QIHU): Q1 beats on all counts as total revenue soared over 202% Y/Y. Non-GAAP Net Income was $25.7M, up 290% over the prior year. Monthly active users grew to 411M and browser user penetration rate was a record 62%. Shares +4.7% AH. Comment! [Global & FX, Tech, On the Move]
  • 6:24 PM OmniVision (OVTI -2%) announces two 16MP image sensors for smartphones and digital cameras. The chips are capable of taking 60 fps video at full resolution (3840x2160), and also support burst photography at 16MP. Overkill? Probably for many consumers. But smartphone vendors are pulling out all the stops to differentiate themselves, and OmniVision needs the margin boost provided by high-end sensors, given tough competition from Sony (SNE) and others. Comment! [Tech]
  • 6:20 PM A Booz survey of ~200 auto industry executives finds bullish views abound, as 94% of automaker execs and 92% of auto supplier execs say the sector is somewhat or much better off Y/Y. Profitable growth is seen, with 52% projecting revenue will rise 11% or more, and strong majorities expect Detroit's big three to hold or gain market share next year. 1 Comment [Consumer]
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ANALYSIS FOR TUESDAY, MAY 22, 9:05PM ET

DIA -0.10%
SPY -0.01%
QQQ -0.37%
GLD -1.69%

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