STOCKS NEWS US-Morgan Stanley: Rally may now be over

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1205 ET 16June2009-Morgan Stanley say rally may now be over
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Morgan Stanley on Tuesday wrote that now that the S&P 500 .SPX had
breached the 950 level, "the rally may now be over."

"We are reluctant to put too much weight on short-term price action, and
recognize that there could be another leg up which would take it back into our
tactical 950-1000 target range," it wrote. "However, as the market has rallied,
the risk-reward has shifted. Equity markets now implicitly need a V-shaped
recovery to sustain further gains. We do not expect such a recovery and
therefore believe the next move is more likely to be down than up."

Morgan Stanley remains cautious on the market, and said the recent rally
didn't represent the beginning of a new bull market.

"However, provided we do not see a significant U-turn in data momentum, any
sell-off should still leave the market well off the prior lows," it wrote.

Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1145 ET 16June2009-Roubini sees significant U.S stock market fall
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Disappointing macroeconomic news and earnings reports combined with
financial shocks from emerging markets will force a significant correction in
the U.S. stock market later this year, said economist Nouriel Roubini on
Tuesday.

Roubini, who predicted the financial crisis that has engulfed the globe in
the past two years, said a bubble in commodity prices encouraged by massive
government stimulus spending around the globe has spilled over into the stock
market.

"Right now people are not just pricing in getting out of a recession but
they are pricing in a V-shaped recovery," said Roubini at the Reuters
Investment Outlook Summit in New York. "Even part of the stock market recovery
is a bubble."

But he said that 12-year lows reached in early March when the market was
pricing in a depression would likely hold. The S&P 500 index .SPX has rallied
40 percent since then but has been treading water since early May as the market
looks for signs of a robust economic recovery.

Roubini said although some of the rally was justified as the economy
stabilizes, the 20 percent to 30 percent growth in corporate earnings that
markets are pricing in next year is probably excessive.

Reuters Messaging:rm://Edward.Krudy.reuters.com@reuters.net
1122 ET 16June2009-Talisman to buy Rift Oil for $186.8 mln
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Rift Oil Plc (RIFT.L) has agreed to be bought by Talisman Energy Inc
(TLM.N) (TLM.TO) in a cash deal valued at about $186.8 million.

The deal is expected to close by the second week of August.

For details, see [ID:nBNG361848]

U.S.-listed shares of Talisman were flat at $14.95.

Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1105 ET 16June2009 Players favor puts in Western Digital
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Put volume in hard disk drive maker Western Digital Corp (WDC.N) was 10
times the normal average daily turnover this morning with about 25,000
contracts traded vs. 1,572 calls, according to Trade Alert. Nearly all of the
volume was in the July $22.50 put strike with volume of 24,494 lots against
previous open interest of 5,233, Reuters data show.

The early flow in that strike price indicated that customers were opening
buyers at premiums of 65 to 85 cents per contract as shares traded slightly
lower near $24.50, said Trade Alert president Henry Schwartz. Western Digital's
earnings are expected after July expiration, so buyers may be positioning for a
preannoucement or some other downside catalyst, Schwartz said.

Western Digital shares fell 1.25 percent to $24.56 in late morning trade.

Reuters Messaging: doris.frankel.reuters.com@reuters.net