Thursday, October 5, 2006

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Thursday, October 5, 2006
Presented by Ya-hui Chang
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Federal Reserve Bank

• Treasury prices closed lower on speculation that
  the markets current expectation of an interest
  rate cut by the Fed is overdone.
• Federal Reserve Chairman Ben Bernanke said
  Wednesday the burden from retiring baby boomers
  will strain the nation's budget and economy,
  unless Social Security and Medicare are revamped.
  
• U.S. Fed Funds Rate 5.25
• U.S. 10-Year Treasury 4.58

3
International Markets

• Japans Firms Raise Outlook, Easing Fears of
  Sagging Economy
• Global oil and energy stocks were expected to
  come under pressure as crude prices retreated
• European shares were set to open slightly weaker
  on Tuesday, tracking technology-led declines in
  Asia and the United States.

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Exchange Rates

• Wall Street barreled higher Wednesday, propelling
  the Dow Jones industrials to their second
  straight record high close -- but the dollar
  isn't budging much

U.S. to Euro
U.S. to Yen
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Stock Index - Asia
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Stock Index - Europe
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Consumer Goods Staples Discretionary

• Market Cap 2590.6B (2590.5B)
• P/E 30.23 (28.75)
• ROE 16.29 (16.35)
• Dividend Yield 2.05 (2.19)
• Long Term Debt to Equity 1.16 (1.17)
• Price to Book Value 2.97 (3.40)
• Net Profit Margin 6.72 (6.75)
• Price to Free Cash Flow -21.81 (-18.22)

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Consumer Staples

• Restaurant stocks closed higher Wednesday after
  several chain operators reported strong September
  and third-quarter same-store sales.
• Wal-Mart (WMT) slipped 2 after the world's
  largest retailer lowered its September same-store
  sales growth estimate to 1.3.
• Procter Gamble Co. begins new facebook group
  smile state for crest whitestrips
• Supreme Court to review Phillip Morris V.
  Williams, Mayola to possibly place limits on
  punitive damages
• U.S. doughnut maker Krispy Kreme plans to begin
  dipping into the massive Chinese-speaking market
  Tuesday by opening a shop in Hong Kong.

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Consumer Staples
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Consumer Discretionary

• Shares of General Motors slipped nine cents to
  33.32 Wednesday after GM chief Rick Wagoner and
  Carlos Ghosn, chief executive of Nissan Motor Co.
  and Renault SA, agreed the two sides were too far
  apart on the value of the potential tie-up and
  decided to stop the high-stakes talks which had
  been underway for two months.
• Volkswagen AG, Europe's biggest automaker, said
  Wednesday it has taken a 15 percent stake in
  truckmaker MAN AG and will use it to support
  cooperation between MAN and Swedish truckmaker
  Scania AB.
• The Tata Group plans to buy the Ritz-Carlton
  Hotel in Boston for US170 million (euro135
  million) in a move that will help the Indian
  business conglomerate expand its presence in the
  United States.

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Consumer Discretionary
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Industrial - Services

• VERSAR, Inc. announced today that it was awarded
  an additional 7.9 million for its Construction
  Oversight/Quality Assurance Program for the Air
  Force Center for environmental excellence in
  Iraq.
• Target Logistics acquires assets of Capitaland
  Express, Inc.
• Protiviti Inc., a leading international provider
  of internal audit and business and technology
  risk consulting services, has launched operations
  in India with the opening of offices in Mumbai
  and New Delhi.
• Trucking stocks traded higher Wednesday
  afternoon, following weeks of downward pressure
  due to bleak earnings outlooks and analyst
  downgrades.
• YRC Worldwide Inc. (YRCW) will host a conference
  call for shareholders and the investment
  community on Friday, October 27, 2006, beginning
  at 830 a.m. CT. Third quarter earnings will be
  released Thursday, October 26, 2006, after the
  market close.

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Industrial - Services

• Market Cap 3044.8B (3023.0B)
• P/E 26.27 (26.26)
• ROE 14.10 (13.94)
• Dividend Yield 1.31 (1.3)
• Long Term Debt to Equity 1.30 (1.36)
• Price to Book value 4.62 (4.68)
• Net Profit Margin 5.57 (5.54)
• Price to Free Cash Flow -180.99 (-146.6)

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Industrial - Goods

• Airbus Parent EADS says A380 Superjumbo Jet will
  be delayed for another year
• Boeing-Lockheed launch venture gets antitrust OK
• Amcol Buys Several Facilities From Unimi
• General Cable creates new business segments
  announces restatements
• 12,000 Goodyear Tire Rubber Co. employees in 10
  states may be locked out of their jobs or could
  go on strike if the company and its unionized
  workers don't agree on a new contract.

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Industrial - Goods

• Market Cap 1272.7B (1257.5B)
• P/E 23.02 (23.2)
• ROE 15.39 (15.46)
• Dividend Yield 1.96 (2.02)
• Long Term Debt to Equity 1.71 (1.7)
• Price to Book value -111.99 (-31.35)
• Net Profit Margin 7.09 (7.08)
• Price to Free Cash Flow -63.01 (28.0)

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Financials

• Morgan Stanley purchased Nan Tung Bank in China
  to get a foothold in the domestic market
• Wells Fargo Co. will buy renewable energy
  certificates to support generating 550M
  kilowatt-hours of wind energy for 3 years, making
  the bank the largest purchaser of renewable
  energy in the nation.
• Wachovia Corp. closed its merger with Golden West
  Financial Corp. on Tuesday
• Bank of America Corp.'s stock is trading in
  record territory, building on its steady rise
  over the past five years.

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Financials

• Market Cap 5817.3B (5818B)
• P/E 14.63 (14.12)
• ROE 15.94 (16.12)
• Dividend Yield 2.77 (2.79)
• Long Term Debt to Equity 2.27 (2.26)
• Price to Book Value 2.93 (2.86)
• Net Profit Margin 14.69 (14.74)
• Price to Free Cash Flow 26.91 (-10.12)

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Utilities

• Progress Energy has completed the sale of its
  Winchester Energy natural gas business to Exco
  Resources Inc. for 1.2 billion.
• The California Public Utilities Commission
  approved rate increases for Southwest Water Co.
  a 6.4 percent hike, which became effective in
  August and two more rate increases --
  approximately 2.9 percent and 2.6 percent --
  which will take place July 2007 and July 2008,
  respectively.
• Falling natural gas prices should have a positive
  effect on gas utilities this winter according to
  analysts.  This is due to the fact that most
  utilities make their profits on volume, rather
  than price.

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Utilities

• Market Cap 944.4B (937.3B)
• P/E 38.44 (38.47)
• ROE 16.22 (16.14)
• Dividend Yield 4.11 (4.20)
• Long Term Debt to Equity 2.30 (2.31)
• Price to Book Value 2.76 (2.74)
• Net Profit Margin 8.98 (8.92)
• Price to Free Cash Flow -65.86 (-80.27)

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Health Care

• The U.S. Supreme Court on Wednesday heard drug
  maker MedImmune's patent dispute with
  biotechnology company Genentech, a case that
  could help determine the ability companies have
  to challenge patents in court.
• Lawsuits against Merck surge to beat two year
  filing deadline for Vioxx, putting current total
  up to 22,000.
• Data for GlaxoSmithKline drug Cervarix suggests
  it may prevent as many as 80 of cervical cancer
  cases.
• New England Journal of Medicine reports positive
  results from Dynavaxs (DVAX) ragweed allergy
  therapy trial
• GE Healthcare Launches New Platform for Automated
  Synthesis of PET Radiopharmaceutical

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Health Care

• Market Cap 2578.2B (2569.2B)
• P/E 33.02 (37.97)
• ROE 14.64 (14.69)
• Dividend Yield 1.62 (1.62)
• Long Term Debt to Equity 0.52 (0.50)
• Price to Book Value 5.10 (4.13)
• Net Profit Margin 11.50 (11.54)
• Price to Free Cash Flow 94.04 (85.89)

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Health Care
DJ US Health Care Index 1 Month
DJ US Biotech Index 1 Month
DJ US Pharma Index 1 Month
23
Information Technology

• Apple Computer Inc. CEO Steve Jobs apologized
  Wednesday for the company's past stock-option
  practices after a three-month internal
  investigation raised concerns over how some
  grants were handled between 1997 and 2002.
• Hewlett-Packard (HPQ) continued to make news
  headlines as their general counsel unexpectedly
  resigned ahead of the Congressional hearing.
• Sierra Wireless (SWIR) was under pressure today
  on the announcement of Intel partnering with
  Nokia to offer HSDPA modem technology in
  next-generation laptops. They say is was
  highlighted in their Q2 results note (July 28)
  and represents 'headline risk' vs. risk to SWIR
  fundamentals.
• 3M Co., the diversified manufacturer whose
  products include Post-it Notes and Scotch tapes,
  said Wednesday it agreed to acquire Biotrace
  International PLC, a U.K.-based manufacturer of
  industrial microbiology products, for 98 million.

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Information Technology

• Market Cap 5488.3B (5478.6B)
• P/E 28.87 (29.26)
• ROE 14.81 (14.84)
• Dividend Yield 2.02 (2.05)
• Long Term Debt to Equity 0.61 (0.62)
• Price to Book Value 6.50 (6.43)
• Net Profit Margin 10.62 (10.64)
• Price to Free Cash Flow 25.96 (86.12)

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Basic Materials

• Xstrata, worlds 3rd largest copper producer, to
  raise 5.47B in special equity offering to
  finance takeover of Canadian mining company
  Falconbridge Ltd.
• Canadian aluminum producer Alcan Inc. to buy back
  5 of its 376 shares outstanding
• Contracts for December delivery of bullion closed
  off 14.80 at 566.70 an ounce on the Comex
  division of the New York Mercantile Exchange.
  Exchange-traded funds that hold the metal fell in
  concert. (GOLD)

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Basic Materials

• Market Cap 4331B (4224B)
• P/E 13.09 (12.99)
• ROE 25.45 (25.36)
• Dividend Yield 2.38 (2.46)
• Long Term Debt to Equity 0.44 (0.44)
• Price to Book Value 3.61 (3.54)
• Net Profit Margin 11.70 (11.67)
• Price to Free Cash Flow 50.84 (26.27)

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Energy

• Even though the Dow reached a record close on
  Tuesday, oil and oil stocks fell the price crude
  oil dipped below 60/barrel.
• Brazil's state-owned oil company and two partners
  have confirmed significant quantities of light
  oil and natural gas in deep water about 280
  kilometers off the coast of Rio de Janeiro,
• Exxon Mobil Corp. shut a processing unit at its
  Torrance, Calif., refinery Wednesday, following
  the release of some oil from equipment, according
  to a report to public safety officials.
• Veritas DGC Inc., a provider of geophysical
  information and services for the oil and gas
  industry, said Wednesday its fiscal
  fourth-quarter profit dropped sharply from a
  year-ago period boosted by a large tax-related
  gain.
• BP's shareholders have filed a lawsuit against
  the company for negligent management practices
  associated with the Prudhoe Bay oil field in
  Alaska.

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Energy (Major Oil Gas)

• Market Cap 1412.1B
• P/E 8.50
• ROE28.10
• Dividend Yield 3.08
• Long Term Debt to Equity 0.28
• Price to Book Value2.93
• Net Profit Margin 10.70
• Price to Free Cash Flow58.90

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Energy
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Telecommunications Services

• Shares of Cincinnati Bell Inc. and Embarq Corp.
  fell Wednesday after a brokerage firm downgraded
  both companies, and most telecommunications
  stocks also tacked lower
• Cingular finishes absorbing network of ATT
  Wireless
• Alltel completes 1.08B acquisition of Midwest
  Wireless
• ATT develops new DSL service tier for basic
  internet users
• New telecommunications rules paving the way for
  cable television and telephone companies to
  directly sell phone, internet, and TV services
  over their networks went into effect Wednesday in
  Mexico.

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Telecommunications Services - Domestic

• Market Cap 394.4B (401.8B)
• P/E 18.30 (18.30)
• ROE 12.70 (12.70)
• Dividend Yield 3.56 (3.47)
• Long Term Debt to Equity 0.82 (0.82)
• Price to Book Value 8.79 (8.79)
• Net Profit Margin 9.2 (9.2)
• Price to Free Cash Flow 79.90 (79.90)

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Telecommunications Services
Domestic
Foreign
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As of 9/29/2006