IBM isn't the only company announcing new deals. Late Thursday, Lockheed Martin reported that it landed a contract with the U.S. Air Force to build its next-generation Global Positioning Systems, or GPS III, for $1.4 billion. LMT announced that it would work with General Dynamics (GD) and ITT Corp. (ITT) to produce 8 GPS IIIA satellites, with first launch projected for 2014. What's more, 8 GPS IIIB and 16 GPS IIIC satellites are planned for later increments.

In addition, LMT said the work would create 500 new jobs for the company.

The shares of LMT are slightly higher this afternoon as the stock hovers close to breakeven. The security bounced off support in the 98 region in late March and is now approaching resistance in the 112-114 region. However, the stock has the support of its long-term 10-month and 20-month trendlines. These moving averages have ushered the shares higher since May 2004.

The equity could still benefit from upgrades. Zacks reports that LMT has earned 9 "buy" ratings and 7 "holds." Any upgrades from the remaining holdouts could help to boost the shares.

Earlier today, IBM Corp. announced that it signed 2 new large services deals in Brazil as part of its effort to expand in South America. The first deal is to provide file-management services to Rede Brasil Sul de Comunicacao, a Brazilian entertainment company. Terms of that deal weren't disclosed. Meanwhile, the second deal is to provide data and disaster recovery services to BNDES, a financial firm. The deal is valued at about $5.1 million.

Traders have largely shrugged off the news as the stock is down roughly 0.5% this afternoon. However, the equity remains in a solid uptrend along the support of its ascending 10-day and 20-day moving averages. In fact, IBM has gained approximately 17% since the start of 2008.

Overall, option trading has been relatively quiet today. The June 130 call is the site of heaviest call activity in the June series, with 1,800 contracts changing hands on open interest of 5,166 contracts. The June 125 put is the site of heaviest put activity in the June series, with fewer than 1,200 contracts trading.

The Schaeffer's put/call open interest ratio for IBM stands at 1.16, as put open interest is higher than call open interest among options that expire in less than 3 months. This reading is also higher than two-thirds of those taken during the past year. This pessimism on an outperforming stock has bullish implications from a contrarian perspective.

Shares of Encore Wire Corporation are slipping this afternoon after Sterne Agee cut the stock from "hold" to "sell." I did some digging through the Intrawebs, but was unable to find a rationale for the downgrade (I have a personal interest in the matter, since WIRE is the latest addition to my Undiscovered Gems portfolio). In light of the equity's 53% year-to-date rally, the old chestnut of "valuation concerns" may apply here. Sterne Agee has an $18 price target on WIRE, which closed yesterday at $24.41.

Given WIRE's recently meteoric price action, today's decline hasn't pushed the equity through too many support levels. An earlier breach of the 10-day moving average was quickly corrected, and WIRE is now poised atop this trendline once again. Even if the equity fills in its bull gap from late April, this drop would leave it perched conveniently atop its rising 10-week moving average.

Despite the bearish brokerage note, WIRE still looks like a force to be reckoned with. You can't argue with the equity's recent trend higher, and yet overwhelming amounts of negativity remain. I'm not just looking at Sterne Agee here; option traders are also betting against the stock's rally. WIRE's Schaeffer's put/call open interest ratio has ballooned up to 2.04, marking a new pessimistic peak for the indicator. If the shares continue to gain, we could see an unwinding of this bearish sentiment.

RadioShack shares are up more than 1% at midday after Goldman Sachs gave the shares an upgrade and added RSH to its "conviction list." Goldman raised its rating on the electronics retailer from "neutral" to "buy," and maintained its $20 price target. The brokerage cited the company's "financially savvy management team" for the positive note.

Additionally, Goldman said it's bullish due to "an expectation of smaller declines in Sprint wireless sales in the second-half of 2008; the impact of a new chief merchant and a new senior stores executive...and a prospective resumption of share buybacks, baked into our forecast."

There's ample opportunity for more analysts to follow suit if they so choose. Zacks reports that skepticism reigns on RSH - the stock has 7 "holds" and 1 "strong sell," compared to just 1 "strong buy."

You may or may not have heard that Yahoo! which balked at a recent takeover attempt by Microsoft (MSFT), is now steeling itself for a proxy battle led by renegade investor Carl Icahn. And you may or may not be surprised to hear that, once again, YHOO's top brass are balking at the suggestion that their shareholder value is not sufficiently maximized. (Have they seen a monthly chart of their stock price?) Anyway, a blog posting today by Peter Kafka at the Silicon Alley Insider highlighted one facet of this M&A melee that appeals to my English-major sensibilities: the absolute refusal of Yahoo chief Jerry Yang to respect the rules of capitalization.

In an all-hands memo to Yahoo employees bearing the subject line "today's new," Yang refers to his chief-executive self as "i" rather than "I," and notes that "mr. icahn's letter reflects a significant misunderstanding of the facts about the microsoft proposal...", all without deigning to tap his shift key. Elsewhere, Yang (or should I say "yang") displays a distinct disdain for the use of commas. Finally, the memo devolves into an "faq" section. Kafka sums it up best when he says, "We'd like to give Jerry credit for straight talk here, but it'd be easier to do so if he didn't repeat the same phrase -- "transforming the online experiences of our users, advertisers, publishers and developers" -- three times in the same missive." (Four times, if you include the preceding text of his email.)

And, indeed, there is a bit of a 1984 feel to the memo. Yang asserts that Yahoo is "a great company," and employees should keep working hard, ignore any talk about the buyout, and realize that "mr. icahn" simply doesn't understand Yang's strategy. Gee, thanks for the reassurance, big brother.

Right on the heels of stronger-than-expected housing data, the Street gets whammied with this: According to a report from the University of Michigan/Reuters, the U.S. consumer sentiment index in May fell to 59.5 from 62.6 in April. Economists were looking for a drop to 61.0.

Meanwhile, the expectations index in May fell to 51.7 from 53.3 in April, marking its lowest level since 1990, while the current conditions index dropped to 71.7 from 77.0 in April, marking its lowest level in 28 years.

Most economists attribute the recent drop in consumer sentiment to higher fuel and food prices - which many predict won't peak until late summer - as well as declining home values.

SanDisk was bombarded with a double-shot of notes from the brokerage bunch this morning. More specifically, the firm was cut to "market underperform" from "market perform" by JMP Securities, with a UBS analyst raising his price target on the shares to $35 from $24. Thomson Financial reports that the average 12-month price target on the equity is $34.46.

Taking a look at the rest of the Street, Zacks data indicates that the majority of brokers ranking SNDK remain in the bears' lair. The stock currently maintains 13 "hold" or worse ratings, compared to 8 "buy" or better ratings.

So, are these bears justified? I'll let you be the judge. Technically speaking, the shares of SNDK receded more than 50% after falling off support near the 50 level in October 2007. However, since bottoming out at the 20 region in mid-March, the security has managed to pare some of those losses, currently hovering near the 32 marker. What's more, the stock's 10-week and 20-week moving averages are now poised to make a bullish cross, indicative of potential intermediate-term strength.

However, it seems the bears aren't confined strictly to the brokerage bunch; near-term options players have become increasingly bearish this week, heading into May options expiration today. The stock's SOIR has jumped from its perch at 0.86 (in the 89th percentile) on Tuesday, to its current spot at 0.96 (in the 99th percentile) today.

Government-sponsored mortgage lender Fannie Mae this morning announced that it's doing away with higher minimum down-payment requirements for borrowers in distressed real estate markets, The Associated Press reported. FNM will now require minimum down payments of 3% to 5% for all guaranteed loans for the purchase of single-family, primary residences nationally, with the new policy set to take affect June 1. Previously, the mortgage firm required a higher minimum if the loan was for a property within a market consumed by declining real estate prices.

Right out of the gate this morning, the shares of FNM fell more than 4%, or roughly $1.21, to hover near the 29 level. The stock has lost around 55% since trading near the 68.50 marker in early October, and has been trading within the confines of its 10-week and 20-week moving averages for 6 of the last 7 weeks.

The Commerce Department this morning reported that housing starts rose to a seasonally adjusted annual rate of 1.032 million in April, an 8.2% increase from March. Economists, on average, predicted housing starts to drop to 939,000.

However, the gain isn't attributable to starts of single-family homes, which actually declined for a 12th consecutive month. More specifically, single-family housing starts slumped 1.7% to a seasonally adjusted annual rate of 692,000 - the lowest rate since January 1991. In fact, the gain in housing starts in April looks to come from a 36% increase in multi-family units.

On a year-over-year basis, housing starts are down 31%, while single-family starts are down a whopping 42%. Building permits - which increased 4.9% in April to a seasonally adjusted annual rate of 978,000 - are down 34% in the past year. Single-family building permits are down 40% from a year ago, even after the latest data revealed a 4% rise in April - the first increase in 13 months.

In related news, the National Association of Home Builders yesterday reported that builders' assessment of current sales conditions ranked as the worst in the 23-year history of the survey.

Yahoo! CEO Jerry Yang has to be squirming in his executive chair this afternoon. This morning, we learned that Carl Icahn may launch a proxy fight to replace the company's board of directors. Icahn currently owns 59 million YHOO shares, with the prospect of buying $2.5 billion more. Meanwhile, John Paulson, the equally vocal pro-Microsoft-takeover head of Paulson & Co., owns about 50 million shares. According to reports at Silicon Alley Insider, that totals about 12% of outstanding YHOO shares. SAI quips that there is "No question how those shares will vote in a proxy fight."

But wait, there's more. Capital Research's Gordon Crawford owns 16% of YHOO, and is reportedly "extremely angry" with Jerry Yang for botching the original Microsoft deal. Furthermore, we have another 7% owned by Legg Mason's Bill Miller, who "as much as said he'd be happy with $34 a share," says SAI.

Assuming Icahn can convince everyone that MSFT is still at least somewhat interested in the deal, that's a total of about 30%-35% of YHOO stock available to take charge of a proxy fight for the company. As SAI notes, "Icahn, Paulson, & Co. only need to make it clear that they can scrape together another 15%-20% of the votes...and Jerry Yang and Roy Bostock will be on the next Seattle plane."

Amid all this speculation, YHOO shares added 2.25% to close at $27.75 today. And so the drama continues...

If you were like me, you weren't as impressed as the rest of the market with Research In Motion's new Blackberry Bold. Sure, the phone looks sharp, but then all Blackberries look "sharp" in my opinion. The Bold just wasn't, well, bold enough. I kept thinking "if only that screen were a touch screen, then we might have something truly capable of competing with the iPhone." Well, it seems that RIMM holds that same view. According to The Wall Street Journal, the company plans on launching a touch-screen version of its Blackberry in the third-quarter of this year in an attempt to compete with the runaway success of Apple's iPhone.

Granted, the Blackberry and the iPhone appeal to 2 totally different market segments: the iPhone to the more hip, young, professional crowd and the above average tech-geek; the Blackberry to the business and ultra-connected professional. However, RIMM's latest offering, known as the Blackberry "Thunder" according to The Journal, could well bridge the gap between the professional and the non-professional business segments. The Blackberry is already gaining favor outside the business world, and the incorporation of more user-friendly interfaces like a touch-screen could well put RIMM over the top in the heated battle with upstart iPhone producer Apple.

Steak N Shake's shares plunged today after news of its disappointing second-quarter results. Analysts were expecting a loss of 1 cent per share, but the company reported a loss of 10 cents per share on revenue of $189.3 million, after the close on Wednesday.

The stock is currently trading 38% lower since its highest point in 2008 on January 2. SNS is trading more than 58% lower than August 2007, the highest it has been in the last year. The stock is down more than 11% today, hitting a new annual low of $6.57. The shares have been falling under resistance at their 10-week and 20-week moving averages since November 2006.

SNS's same-store-sales dropped 6.3% during the most recent quarter. Speculations such as higher energy prices, the declining housing market and the frugal consumer are possible causes for the shortfall. David Tarantino, Robert W. Baird & Co. analyst said, "We expect the tough sales environment to continue based on a variety of factors, including a soft housing market, weaker consumer confidence and higher gasoline prices."

Interim Chairman and Chief Executive Wayne L. Kelley announced that the company is focusing on ways to change its current operations. This revamping will include cost-saving efforts, customer service, price and value, and a reevaluation of underperforming stores and markets. He said, "While we expect the operating environment to remain difficult, we remain committed to reversing the negative same-store sales trends while positioning the brand for long-term growth."

Toyota Motor shares are 2% higher today, with the company reporting a milestone for its hybrid Prius vehicles. The environmentally friendly cars have now sold over 1 million units, according to a company release. Douglas McIntyre of BloggingStocks.com notes that the Prius was a gamble when it debuted, but says, "Toyota has once again put its competition in a situation where they have to catch up." (Not even the competition will argue this point; witness Ford's new ad campaign, where it asserts its quality is now "as good as" Toyota's.)

Regardless of the fact that TM's Prius is now a green icon, the stock has slipped consistently lower since January 2007. In fact, competitor Ford Motor (F) has surged versus TM on a relative-strength basis since mid-March, and TM's year-to-date loss of more than 5% exceeds that of the S&P 500 Index (SPX).

More recently, TM seems to have found relief from its slump in the form of double-barreled support from its 50-month moving average and the 100 level. Will these levels provide TM with enough of a bounce to challenge its resistant 20-week moving average? Option traders don't seem to think so. The equity's Schaeffer's put/call open interest ratio is 1.03, which ranks higher than 73% of comparable readings taken during the past year.

Tiffany & Co. is nearly 5% higher at midday after the luxury retailer bumped up its quarterly dividend and its fiscal first-quarter earnings guidance. TIF increased its dividend by 13% to 17 cents per share, and said it now expects first-quarter earnings to exceed last year's profit of 39 cents per share. Analysts were looking for first-quarter profits to fall in line with the year-ago period.

Today's gains have helped TIF establish a foothold well atop its 80-week moving average. As noted in Option Activity Alert last month, this trendline is a level that has recently provided TIF with resistance, a reversal of its previously supportive role. If TIF can hang onto its gains through tomorrow's session, it could stage its first weekly close atop this moving average since late December 2007. Such a development could indicate that the stock is set to break out of its recent sideways pattern and move higher.

Salary.com this morning reported fourth-quarter earnings that could fairly be dubbed as "ill-received." The company swallowed a loss of $1.2 million, or 9 cents per share, while revenue totaled $9.3 million. SLRY missed the Street's mark on both counts; analysts were looking for a per-share loss of 8 cents on $9.9 million in revenue. Looking ahead to fiscal 2009, SLRY said it expects to take a loss of $22 million to $25 million on revenue of $45 million to $49 million. It was this forecast that seems to have prompted today's slew of negative analyst commentary; Pacific Crest noted that "the outlook for fiscal 2009 is significantly worse than expected."

Pacific Crest downgraded SLRY from "outperform" to "sector perform" as a result of the disappointing guidance, and accordingly slashed its own 2009 earnings estimates. Wachovia jumped on the bearish bandwagon, too, downgrading SLRY to "market perform," while Needham & Co. cut the stock from "buy" to "hold."

At last check, SLRY was down about 30% to trade at $4.38. Earlier, the shares tapped a new all-time low of $3.88. Today's slew of downgrades seems to have almost entirely reversed the Street's bullish stance on the shares. Ahead of the earnings report, Zacks noted that each one of the 4 analysts covering SLRY ranked it a "buy" or better.