US HOT STOCKS:Coinstar, Novellus Systems, J.P. Morgan, Hasbro

U.S. stocks started lower and are now little changed Friday as the Dow Jones Industrial Average, the Standard & Poor's 500 and the Nasdaq Composite all were up about 1 point. Among the companies whose shares are actively trading in the session are Coinstar Inc. (CSTR), Novellus Systems Inc. (NVLS) and J.P. Morgan Chase & Co.'s (JPM)

Coinstar ($43.88, -$13.07, -22.95%) shares plunged after it slashed its financial outlook for the fourth quarter and current year as results were hurt by weak holiday rentals and the delay it has had to put on some new DVD releases. The company, which operates coin-counting stations and redbox DVD-rental kiosks, said it has been relying more on the latter business for growth recently.

Novellus Systems (NVLS, $34.76, +$1.95, +5.94%), KLA-Tencor Corp. (KLAC, $42.23, +$2.48, +6.24%), Varian Semiconductor Equipment Associates Inc. (VSEA, $44.30, +$2.71, +6.52%), Cymer Inc. (CYMI, $49.16, +$3.99, +8.83%), ASML Holding NV (ASML, $39.83, +$2.54, +6.81%) and Applied Materials Inc. (AMAT, $14.87, +$0.63, +4.42%) are positioned to benefit the most from a surprising capital expenditure increase by Intel, wrote Stifel Nicolaus. The entire equipment industry stands to gain, but Stifel says the biggest beneficiaries will be the above companies as they are most leveraged to Intel's 22 nanometer processor ramp.

J.P. Morgan Chase & Co.'s (JPM, $45.17, +$0.72, +1.62%) fourth-quarter profit jumped 47%, as the banking giant's asset quality improved and it said consumers and businesses were looking for more loans. J.P. Morgan, the first big bank reporting results and the second largest U.S. bank by assets, said business loans were increasing slightly and that it believed it was adding market share. But executives added gains were only "modest" and the rate at which borrowers are actually tapping their lines of credit remains low.

Toy maker Hasbro Inc. (HAS, $43.29, -$1.36, -3.05%) projected fourth-quarter revenue slightly below analysts' expectations and predicted "modest" earnings growth for the year. Fellow toy maker Mattel Inc. (MAT, $23.72, -$0.33, -1.37%) also fell.

Sterling Bancshares Inc. (SBIB, $7.74, +$0.26, +3.48%), which is facing a proxy fight from its largest shareholder, has put itself on the auction block, The Wall Street Journal reported, citing people familiar with the situation. Bids were due late Thursday, and a sale of the company is expected to be announced as early as next week, these people said.


Other Stocks In Focus:


Alpha Natural Resources Inc. (ANR, $61.56, -$2.44, -3.81%) raised its 2011 shipment target for the high-margin coal used by steel makers, expecting to benefit from Australian flooding that has disrupted the market.

American International Group Inc. (AIG, $55.15, -$2.04, -3.57%) said it expects to close an agreement with the U.S. government on Friday, paving the way for share sales that could eventually enable the insurer to end its status as a ward of the state, the Wall Street Journal reported late Thursday. Preparations for what could be the biggest stock offering in U.S. history officially began Thursday, as AIG and government officials auditioned Wall Street banks for a lead role in what insiders are calling the "re-IPO" of AIG.

AOL Inc. (AOL, $24.39, +$0.26, +1.08%) detailed new content partnership agreements with real-estate search site Move Inc. (MOVE, $2.68, +$0.11, +4.28%) and two other online companies, as the Internet company continues to add to the original content it offers to attract users.

Executives of Borders Group Inc. (BGP, $0.93, +$0.11, +14.01%) have told publishers that the bookseller is close to securing refinancing from General Electric Co.'s (GE) GE Capital and other lenders, and that it intends to cut costs, improve liquidity, expand marketing and sell some assets, the New York Times reported Friday, citing people briefed on the matter.

RBC went one-eighty on Corinthian Colleges (COCO, $5.17, +$0.45, +9.53%), upgrading its stock investment rating on the company to outperform from underperform after meeting with new CEO Jack Massimino. The firm called the for-profit education company "speculative, but worth it." Massimino is a former Corinthian College chairman and CEO, and firm thinks his return "will be viewed a year from now as an important step in terms of getting the company back on track."

Shares of Cumberland Pharmaceuticals Inc. (CPIX, $7.13, +$1.46, +25.75%) jumped after the pharmaceutical company disclosed it won Food and Drug Administration approval for a new formula of Acetadote, an injectable treatment for non-acetaminophen acute liver failure.

J.P. Morgan cut its stock investment rating on Heartland Payment Systems (HPY, $15.87, -$0.36, -2.22%) to underweight from neutral given full valuation and what it believes is a low likelihood of benefiting from regulation or consolidation in the near term relative to Global Payments (GPN, $47.21, +$0.09, +0.19%)

Intel Corp. (INTC, $21.12, -$0.18, -0.82%) reported yet another record quarter--and projected better-than-expected first-quarter revenue and margins--as the semiconductor maker continues to benefit from strong demand from businesses.

J.P. Morgan raised its stock investment rating on Kilroy Realty Corp. (KRC, $37.98, +$0.66, +1.77%) to overweight from neutral, noting that the real estate investment trust's ability to complete accretive acquisitions, maintain a strong balance sheet and increase occupancy is compelling.

Local.com Corp. (LOCM, $4.50, -$0.42, -8.45%) said it plans to offer 4 million shares of its stock in an offering to the public. The company, which operates a network of local search websites, will offer the shares at $4.25 each. Local.com, the latest company to tap equity markets for cash, has about 17.2 million shares outstanding.

RBC downgraded its stock investment rating on Life Technologies Corp. (LIFE, $55.16, -$0.77, -1.38%) to sector perform from outperform, noting that with substantially better-than-expected third-quarter results and upward revisions to its 2011 estimates, growth prospects are now more fully appreciated.

Material Sciences Corp.'s (MASC, $5.70, -$1.13, -16.54%) shares fell after the provider of material-based solutions for acoustical and coated applications reported third-quarter results that were below analyst expectations.

Mitel Networks Corp. (MITL, $5.24, +$0.10, +1.94%) on Thursday named Danaher Corp. (DHR, $46.88, -$0.01, -0.02%) executive Richard McBee as its chief executive, succeeding the retiring Don Smith. Mitel, which sells Internet-based communications items as well as applications that integrate voice, video and data communication with business programs, said McBee's new role is effective Monday.

FBR Capital cut its stock investment rating on Patriot Coal Corp. (PCX, $25.61, -$0.87, -3.29%) and Walter Energy Inc. (WLT $130.52 -$6.96, $5.06), to market perform from outperform, "as we believe that expectations for a very high ($275 to $300/ton) met coal settlement are now becoming reflected in these names and we believe that new investors may not be able to capture any significant upside in the near term." The firm suggested investors focus on steam coal stocks, "given their laggard performance" despite improving fundamentals.

Duncan-Williams initiated coverage on Salix Pharmaceuticals (SLXP, $43.90, -$1.00, -2.23%) with a stock investment rating of reduce. Though it views the company as a successful gastroenterology franchise with a promising future growth trajectory, it is cautious regarding Xifaxan Irritable Bowel Syndrome approval.

Sealy Corp. (ZZ, $2.96, -$0.03, -1.00%) swung to a fiscal fourth-quarter loss on an income-tax provision and a loss from discontinued operations related to the mattress maker's European and Brazilian businesses, although sales and margins grew.

Webster Financial Corp. (WBS, $20.75, +$1.05, +5.33%) swung from a prior-year loss in the fourth-quarter as loan-loss provisions continued to decline and credit quality continued to improve. The Connecticut-based bank has been reporting stronger results, with Webster and other lenders needing to set less aside to cover bad loans.

The U.S. Treasury said Friday it plans to auction warrants in Citigroup Inc. (C, $5.10, +$0.06, +1.19%), Boston Private Financial Holdings (BPFH, $6.33, +$0.08, +1.20%), and Wintrust Financial Corp. (WTFC, $32.19, +$0.46, +1.45%), disposing of its remaining holdings in the financial institutions.