STOCKS NEWS US-Goldman downgrades the U.S. tobacco sector

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U.S. stock market report [.N] 1017 ET 11Dec2008-Goldman downgrades the U.S. tobacco sector ------------------------------------------------------------------------------

Goldman Sachs Thursday downgraded the U.S. tobacco sector to neutral from attractive, saying fundamentals for the group were likely to weaken in 2009. The firm also cited a potential federal excise tax (FET) hike of 61 cents, “which could negatively impact industry volume by 400-500 basis points.”

Goldman said that rising unemployment could cause “moderate downtrading and limit the companies’ ability to take significant pricing on top of an FET-related price increase.”

Despite that, the firm said that moist smokeless tobacco lines would remain healthy and that share declines for premium brands would be moderate because of higher promotional spending.

The AMEX Tobacco Index .TOB fell 0.4 percent to 662.32 on Thursday.

Reuters Messaging: 1012 ET 11Dec2008-P&G says rev could be weaker than expected ------------------------------------------------------------------------------

Dow component Procter & Gamble PG.N Thursday said that while it was on track to meet its earnings outlook for the fiscal year, its sales would be weaker than expected because of the recession. The consumer products maker said retailers, distributors and consumers had all lowered their inventories in both developed and developing markets. [ID:nN11373858]

Shares of Procter were down 0.9 percent to $58.59 on Thursday.

Reuters Messaging: 1007 ET cuts rev outlook on online ad slowdown ------------------------------------------------------------------------------

Internet search company Inc BIDU.O Thursday cut its fourth-quarter revenue outlook to $131 million to $133 million from a previous view of $151 million to $153 million, saying the economic slowdown in China had hurt online advertising more than it expected. [ID:nN11374803]

Shares of Baidu surged 10 percent to $115.30 on Thursday, while peers Google Inc GOOG.O fell 0.4 percent to $307.50 and Yahoo! Inc YHOO.O slid 2.5 percent to $13.06.

Reuters Messaging: 1000 ET 11Dec2008-DA Davidson sees limited Santa Claus rally ------------------------------------------------------------------------------

DA Davidson Thursday said that 2008’s Santa Claus rally would be limited by “the continuing drama over the auto industry” as well as companies giving profit warnings for their fourth quarters.

The firm added that the market would trade in a wide range through the first half of January, when there would be another round of economic data. “Hopefully by then we might see some enduring stability in the credit markets and lower levels of intraday stock market price volatility,” the firm wrote.

Reuters Messaging: 0954 ET 11Dec2008-Onxy Pharma shares rally after upgrade ------------------------------------------------------------------------------

Shares of Onxy Pharmaceuticals ONXX.O rallied on Thursday after the company was upgraded to overweight from neutral at JPMorgan, which cited positive results from a survey on the company's liver cancer treatment.

“This survey highlights the growth potential of Nexavar in Europe,” the firm wrote. [ID:nBNG118133]

Shares gained 4.9 percent to $31.54.

Reuters Messaging: 0948 ET 11Dec2008-Citi lowers view on supply chain companies again ------------------------------------------------------------------------------

Citi on Thursday cut its December quarter and 2009 estimates for supply chain companies for the third time in three months, citing a weakening macro environment, falling utilization rates and compressing margins.

“We are increasingly concerned that original equipment manufacturers customers are set to pull manufacturing back in-house in order to offset falling utilization rates at their own facilities,” the firm wrote.

Citi downgraded Jabil JBL.N to sell, saying that the company was "particularly at risk given the depth of the manufacturing capabilities at several of the company's largest customers."

Shares of Jabil slid 4.1 percent to $6.53 on Thursday.

Reuters Messaging: