1) UBS is pounding the table on oil: It upgraded oil to $115 for 2008, $120 for 2009, and initiates coverage of the offshore drilling sector, with buy ratings on Atwood , Diamond Offshore , Ensco , Noble , Rowan , and Transocean .
a) prices have been stronger and demand more resilient than expected at today's higher prices; and
b) higher than previously expected prices are required to limit demand growth, given anemic supply growth outlook.
2) A disappointing IPO: Verso Paper priced 14 million shares at $12. That is well below the price talk of 18.75 million shares at $16-$18 that was floated on the Street.
Verso was formerly a unit of International Paper; it is now majority owned by Apollo Global Management. All the money will go toward paying down debt of $153.3 million and related prepayment fees, which is the debt that was floated to buy the company.
3) J.C. Penney up 2 percent; they beat estimates by a few pennies. This is good news -- but here's a reality check: the reported earnings of $0.54 per shqre was almost half last year's $1.04. Total sales decreased 5.1 percent to $4.1 billion. Comparable store sales declined 7.4 percent.
4) General Electric (CNBC's parent company) up 1 percent on a Wall Street Journal report that are considering an auction of its appliance unit. Estimates are all over the place: the Journal mentioned it could fetch $5-$8 billion, but Citi's analyst estimated $3-$7 billion.
Tough time to sell an appliance business.
5) At the NYSE, they're having their annual meeting. CEO Duncan Niederauer is saying the American Express takeover is ahead of schedule and could close as early as August 1.
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