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To: Gottfried who wrote (54079)	10/4/2011 8:09:23 PM
From: Sam	1 Recommendation Respond to of 95572

Bloomberg's take on the final hour. U.S. Stocks Jump; S&P 500 Gains in Final Hour By Michael P. Regan and Rita Nazareth - Oct 4, 2011 4:43 PM ET bloomberg.com U.S. stocks rallied, driving the Standard & Poor’s 500 Index up 4.1 percent in the final 50 minutes, amid speculation European Union officials are examining how to recapitalize the region’s banks. Treasuries fell and the euro rallied. The S&P 500 surged 2.3 percent to 1,123.95 at 4 p.m. New York time, sparing the benchmark measure of U.S. equities its first bear market, or 20 percent retreat from a peak, since 2009. Yields on Treasury 10-year notes climbed 6 basis points to 1.82 percent. The euro appreciated 1.1 percent to $1.3322. Futures on Germany’s DAX Index pared their loss to 1 percent from 4.9 percent. Equities rebounded after the S&P 500 fell below 1,090.89, the closing level required to give the index a 20 percent slump from the three-year high reached on April 29. Stocks rose after the Financial Times quoted Olli Rehn, European commissioner for economic affairs, as saying there is an “increasingly shared view” that the region needs a coordinated approach to halt the sovereign debt crisis. After U.S. markets closed, Belgian Prime Minister Yves Leterme said a “bad bank” to hold Dexia SA (DEXB)’s troubled assets will be set up. “The European crisis has been the market driver,” Richard Sichel, who oversees $1.6 billion as chief investment officer at Philadelphia Trust Co., said in a phone interview. “If Europe comes out with something to kick the can down the road, it buys them more time. We learned in 2008 how important the financial system is and how a ripple effect can occur.” Morgan Stanley (MS) Jumps Banks, brokerages and insurers led the rally as the S&P 500 Financials Index jumped 6.5 percent between 3:18 p.m. and 4 p.m. New York time. Morgan Stanley surged 17 percent and Bank of America Corp. (BAC) soared 10 percent during the same period. Stocks were due for a rally after the S&P 500 fell 5.3 percent in the previous two sessions, said Paul Zemsky, the New York-based head of asset allocation for ING Investment Management. His firm oversees $550 billion. The S&P 500 is trading for 12.3 times earnings in the last 12 months, close to the cheapest valuation since March 2009. “The market doesn’t go on a straight line either up or down,” he said in a telephone interview. “There’s no sign of recession in the U.S., and yet the market is pricing for one. So you’re going to have days when things pop up and you’re going to have bear market rallies.” 200-Day Average About 7 percent of S&P 500 stocks began the day trading above their average price in the last 200 days, according to data compiled by Bloomberg. That matched the proportion following the Aug. 8 rout for the lowest level in 30 months. The full index began today 14.1 percent below its 200-day moving average, the biggest gap since April 30, 2009. U.S. stocks followed European shares lower earlier as some officials signaled bondholders may have to take bigger losses on Greek debt than previously negotiated. The possible breakup of Belgian bank Dexia and Deutsche Bank AG (DBK)’s abandonment of its profit forecast added to signs that contagion from the debt crisis is spreading. Goldman Sachs Group Inc. cut its global growth forecasts and predicted recessions in Germany and France. Treasuries extended losses after the Financial Times report. Yields on 30-year bonds rose 9 basis points to 2.81 percent. “People are looking for optimism anywhere they can get it,” said Christopher Bury, co-head of fixed-income rates at Jefferies & Co., one of the 22 primary dealers that trade with the Federal Reserve. “You have these random stories and the market reacts, but how many times have we been down this road where these are just words?” To contact the reporters on this story: Michael P. Regan in New York at mregan12@bloomberg.net; Rita Nazareth in New York at rnazareth@bloomberg.net

To: Gottfried who wrote (54079)	10/4/2011 11:11:28 PM
From: Sam	2 Recommendations Respond to of 95572

Veeco Instruments Inc (VECO) The China Weed-Out Process Continues; Cutting Estimates Again October 2011 ¦ 8 pages citigroupgeo.com China cracking down — Checks this week in China indicate the government is now requiring a long list of criteria including verification of facility/personnel readiness before Chinese LED makers can exchange local currency (RMB) to USD/EUR for MOCVD tools. This is the next step in the gov’t’s desire to ensure funds are being appropriated to suppliers who can realistically ramp the tools, limiting risk of a potential grey-market of brand-new tools that were bought w/gov’t money. Together with some recent project cancellations in China (including large projects from Zhongke and GCL (~100 tools for AIXG)), this helps to further explain the shipment delays that MOCVD companies are currently facing as well as the rapid scale-back of new orders. This further argues that a significant piece of China order backlog could be at risk regardless of deposits. Pricing is (really) ugly — Customers indicate to us that AIXG has now cut reactor prices to the $1.3MM range (or down ~50% from just 6-9mos ago) to limit share loss. CQ4 looks even worse than we thought — While it continues to gain a lot of share, our customer checks make it hard to see VECO shipping more than 40-45 reactors in CQ4 vs. our prior ~60-65 model (and likely <40 in CQ1:12). While the impact to the P&L could be somewhat mitigated by recognition of some prior deferrals of MaxBright revenue, CQ4 revenue now looks more like ~$160MM versus our prior $180MM. Thus, we are cutting our CQ4 EPS from $0.47 to $0.37 (the Street is still way above us at $1.17) which implies VECO will earn <$4.00 in C2011 versus current guidance of >$5.00. We are also tweaking 2012 EPS down from $2.28 to $2.02 but VECO could lose money in CQ1:12. Owing to this, we cut our tgt again to $27 from $40. While VECO seems close to discounting this news and is gaining share, it’s hard for us to see VECO working yet with consensus so high; thus, we maintain our Hold rating. Competitive update — Checks indicate more VECO share gains at Samsung and we can find very few orders out there for AIXG as its cluster-tool answer to MaxBright is still several Qs away, giving potential customers that much more reason to wait. === Aixtron SE (AIXGn.DE) China Cracking Down; Aixtron Apt To Lose Money in 2012 3 October 2011 ¦ 9 pages citigroupgeo.com China cracking down [same as above] Pricing is (really) ugly [same as above] Cutting 2011 revenue below guidance — Checks indicate more VECO share gains at Samsung and very few new orders for AIXG as its cluster-tool answer to MaxBright is several Qs away, giving customers an incentive to wait. We're cutting 2011 rev/EBIT/EPS from €652M/28%/€1.29 to €580M/26%/€1.07. Our new rev est. is below guidance €600-650M while EBIT at the low end 25%-30%. AIXG is about to start losing money — With China likely to take <200 tools in 2012, Taiwan/Korea still moribund and AIXG losing a lot of share, it's hard to see the company shipping more than 150-160 reactors in 2012. This translates to what is now likely to be a loss as we believe breakeven is ~175 reactors/yr. Our new revs/EPS of €249MM/(€0.24) are light years below the Street €627MM/€1.17 and the only estimates in negative territory. Based on investor conversations, negative earnings could serve as a wake-up call for income/value investors who seem to be nibbling at the stock recently. Given our negative outlook and estimates, we lower our TBV multiple from ~2x to 1.5x and cut our target again from €10 to €8. Reiterate Sell (3S) rating.