US HOT STOCKS: Scotts Miracle-Gro, Sovereign Bancorp -2-

Among the companies whose shares are actively trading in Tuesday’s session are
Rackable Systems Inc. (RACK), Domino’s Pizza Inc. (DPZ) and Wynn Resorts Ltd.
(WYNN).

Rackable Systems ($7.73, -$1.01, -11.56%) slashed its fiscal-year outlook, citing
reduced demand from corporate customers. The provider of servers and data-storage
products said it no longer expects to be profitable for the year.

Domino’s Pizza Inc.’s ($8.45, -$1.55, -15.50%) third-quarter net income fell 8.2%
on declining U.S. store traffic amid higher commodity costs that continue to
challenge the pizza-delivery chain’s operations.

Wynn Resorts ($58.43, -$4.94, -7.80%) said third-quarter earnings should fall
significantly due to higher bad-debt reserves. The casino operator also said it
had lower gambling revenue from its table games.

Morgan Keegan raised its investment rating on shares of Marshall & Ilsley Corp.
(MI, $19.25, $3.30, 20.69%), saying the U.S. government’s plan to inject capital
into U.S. banks via preferred stock will help the industry as a whole. It added
M&I had been pro-active in dealing with credit issues in the past year, and its
already-healthy capital position should lead to improved valuation as private
capital flows into the sector.

Financial stocks rose sharply as President Bush confirmed the government would
start buying stakes in the nation’s largest banks and financial institutions and
guarantee new bank debt and expand insurance for noninterest-bearing accounts.
Beleaguered regional banks stocks such as KeyCorp (KEY, $10.81, $3.05, 39.30%)
and National City Corp. (NCC, $3.06, $0.76, 33.04%) were some of the biggest
gainers in the morning, while Morgan Stanley (MS, $22.87, $4.77, 26.35%), Merrill
Lynch & Co. (MER, $21.22, $3.60, 20.43%) and Bank of America Corp. (BAC, $26.18,
$3.39, 14.87%) were all rising as well.

Other Stocks In Focus

RBC Capital Markets reduced the price target on online-store Amazon.com Inc.
(AMZN, $58.81, -$3.21, -5.18%) to $80 from $100 and reiterated its outperform
rating, citing a drop-off in consumer spending.

BJ Services Co. (BJS, $13.39, $0.82, 6.52%) said fiscal fourth-quarter earnings
should meet prior expectations, with revenue topping analysts’ estimates, despite
the impact from hurricanes in the Gulf of Mexico.

Boston Scientific Corp. (BSX, $9.78, $0.56, 6.07%) said its U.S. market share in
the drug-eluting-stent market remained steady in the third quarter as the
medical-device maker again reiterated its financial strength amid last week’s
margin calls that prompted the company’s co-founders to sell 31 million shares.

General Motors Corp. (GM, $6.97, $0.46, 7.07%) extended Monday’s 30% jump, as an
executive said Tuesday that a bankruptcy filing isn’t an option for the company.

J.B. Hunt Transport Services Inc.’s (JBHT, $31.87, $3.12, 10.85%) third-quarter
net income rose 19% as the trucking company’s fuel costs fell and interest costs
dropped nearly 25%.

Pharmaceutical giant Johnson & Johnson (JNJ, $65.05, $2.37, 3.78%) posted a 30%
rise in third-quarter net income, as strong sales of consumer products and
medical devices offset the effect of stepped-up competition from generic-drug
makers.

Deutsche Bank cut its investment rating on shares of Infineon Technologies AG
(IFX, $3.93, -$0.51, -11.49%) to hold from buy on low revenue visibility.
Deutsche Bank said it believes a sale of Infineon’s Qimonda AG (QI, $0.75,
-$0.05, -6.41%) stake is unlikely now, unless the credit markets and the market
for dynamic random-access memory recover.

Neurogen Corp. (NRGN, $0.27, $0.04, 18.30%) reported positive results from Phase
II trials testing its Aplindore drug for the treatment of restless-leg syndrome
and Parkinson’s disease, and the drug-development company believes the drug may
be “better tolerated” than existing treatments for the diseases.

PepsiCo Inc. (PEP, $58.40, -$3.37, -5.46%) posted a 9.6% decrease in
third-quarter net income amid weak U.S. beverage sales as the beverage giant and
snack-food maker cut its full-year revenue view because of the rebounding dollar
and said it will cut costs by $1.2 billion over the next three years.

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Scotts Miracle-Gro Co. (SMG, $24.24, $1.13, 4.89%) was upgraded to buy from
neutral by SunTrust. The firm said the maker of lawn- and garden-care products
will benefit from people staying closer to home and the dramatic drops in
raw-material costs in recent weeks.

Sovereign Bancorp Inc. (SOV, $3.92, $0.24, 6.52%) agreed to sell itself to Banco
Santander SA (STD, $14.33, -$0.17, -1.20%) for $1.9 billion in stock, making it
the latest distressed bank to run into the arms of a suitor.

Supervalu Inc.’s (SVU, $19.93, $1.53, 8.32%) fiscal second-quarter net income
fell 13.5%, and the supermarket-chain owner cut its earnings outlook again amid
lower-than-expected sales.

W.W. Grainger Inc.’s (GWW, $85.87, $5.42, 6.74%) third-quarter net income rose
28% on strong sales growth as the seller of building-maintenance supplies again
raised its full-year earnings outlook.

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