THURSDAY, JULY 31, 2008..... Wall Street soared for the second straight day Wednesday, rallying in the last hour of trading after a rebound in financial stocks and optimism about private sector jobs. Investors brushed off a sharp jump in oil prices. The Dow Jones industrials rose more than 180 points, bringing its two-day gain to more than 450. Bank and brokerage stocks, many trading at multiyear lows, turned higher and led the late advance. There was some relief in the market after the Federal Reserve said it would extend and expand its program to lend money to investment banks. The central bank's move reassured the market that the banks would have cash if they needed it. Investors have been worried that some of Wall Street's biggest names will be slashing prices on more of their assets -- and needing more money -- after Merrill Lynch & Co. unexpectedly announced a $5.7 billion write-down late Monday. "There's a growing sense that what we saw out of Merrill Lynch is the beginning of the end for the financial cleanup," said Craig Peckham, market strategist at Jefferies & Co. He added that the ADP number was also a good sign for the economy. Earlier, Automatic Data Processing said private sector employment rose by 9,000 this month. After seeing jobs disappear by the thousands in recent months, the stock market is eager for any insights into the Labor Department's take on the job market on Friday. The ADP news helped offset a big spike in the price of oil after a weekly Energy Department report on domestic supplies showed a surprise increase. Israeli Prime Minister Ehud Olmert's announcement that he plans to resign in September stirred concerns about the viability of Middle East peace efforts and rising tensions with Iran. Light, sweet crude rose $4.58 to settle at $126.77 on the New York Mercantile Exchange. Oil has fallen sharply, however, since hitting a high above $147 on July 11. A drop in oil prices Tuesday contributed to a huge gain on Wall Street.

The late rally may also have been due to technical trading; in times of great volatility, many institutional investors start adjusting their holdings before the closing bell. According to preliminary calculations, the Dow rose 186.13, or 1.63 percent, to 11,583.69. On Tuesday, the blue chips jumped 266 points, more than wiping out a nearly 240-point loss from the previous session. Broader stock indicators also surged. The Standard & Poor's 500 index advanced 21.06, or 1.67 percent, to 1,284.26, and the Nasdaq composite index rose 10.10, or 0.44 percent, to 2,329.72. Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where volume came to 1.48 billion shares. Bond prices fell as stocks advanced, diminishing demand for the safety of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 4.05 percent from 4.04 percent late Tuesday. The dollar was higher against other major currencies, while gold prices fell.

Shares of Morgan Stanley and Lehman Brothers Holdings Inc. climbed more than 5 percent, while Citigroup Inc. and Merrill Lynch rose about 2 percent. Fannie Mae and Freddie Mac, the government-chartered mortgage companies which together hold or back nearly half of all U.S. mortgage debt, also rose on news of the Fed's latest moves. Fannie Mae advanced 45 cents, or 3.9 percent, to $12.05, while Freddie Mac rose 6 cents to $8.48. Wall Street has been juggling a number of intertwined worries in recent months as it tries to determine where the economy is headed. There is continued concern about bad mortgage debt that many banks are holding because homeowners swept up in the pullback in the housing market are missing mortgage payments.

And the rapid rise in oil and other commodity prices this year has only made it harder for many consumers to keep up with their bills. Any sign of an easing in the credit and housing markets, or a drop in energy prices, offers some investors hope that the economy could begin to recover. Investors are anxious for the government's advance reading on second quarter gross domestic product, which is due Thursday. Economists expect that, while it might not feel like it to many consumers, the economy is still eking out growth. A good chunk of it may be due to government tax rebates. In earnings news, Starbucks Corp. said costs related to its closure of 600 underperforming stores led it to post a loss in its fiscal third quarter. However, it matched Wall Street projections. The Walt Disney Co. said third-quarter profits surged nearly 9 percent thanks to revenue growth at ESPN and strong results from its theme park near Paris, where the weak U.S. dollar was helpful.

Align Technology Plunges to 52-Week Low on Lower
Guidance; Launches Invisalign Teen(TM)
Shares of Align Technology, Inc. (ALGN) fell to a 52-week low on heavy volume Wednesday after the Company reported financial results for the second quarter of fiscal 2008, ended June 30, 2008. Total net revenues for the Q2 of fiscal 2008 were a record $79.9 million. This reflects a year-over-year increase of 4.3 percent compared to $76.6 million in Q2 of 2007. Net profit for Q2 was $4.0 million, or $0.06 per diluted share. This is compared to net profit of $13.6 million, or $0.19 per diluted share in Q2 07, and net profit of $5.3 million, or $0.07 per diluted share in Q1 of 2008. For the third quarter, Align Technology expects net revenues to be in a range of $74 million to $76 million. Non-GAAP earnings per diluted share for Q3 08 is expected to be in a range of $0.04 to $0.06. For fiscal 2008, Align Technology expects net revenues to be in a range of $309 million to $314 million. Non-GAAP earnings per diluted share for fiscal 2008 is expected to be in a range of $0.29 to $0.33. Kenneth B. Arola, CFO of Align Technology, explained in a conference call, "We believe the continuing challenges in the U.S. economy and weak consumer spending will continue. Given this enviroment, we are more cautious about our ability to accelerate growth in our base business over the back half of the year. We are expecting gross margins in the second half of the year to be impacted by about 50 basis points from increases in fuel charges and raw material costs. "We are implementing cost saving measures that include a reduction of 38 full-time headcount and discretionary spending cuts. This will have the effect of reducing expenses by $5 million to $6 million over the second half of the year, while allowing us to continue critical investments in our new products and strategic initiatives. In addition, we plan a phase consolidation of our order acquisition operations from Santa Clara to Juarez, Mexico. We anticipate completing this by the end of 2008. We should realize cost savings from this of $1.0 million-$1.5 million in 2009." Mr. Arola added, "Our outlook for growth is not as robust as we had planned, but in this economic enviroment, we believe it is reasonable. We are committed to delivering shareholder value and are positioning the company for increased growth and profitability as the market improves. The cost saving actions that we announced today are only the first steps in actively reducing our cost structure and moving towards a financial model with greater operating leverage. Beyond this year, as we deliver on product innovation and gain efficiencies, we have a great opportunity to flatten our expense growth and take structural costs out of the business." Thomas M. Prescott, President and CEO of Align Technology, commented, "As a result of economic conditions, we have adopted a more conservative outlook for revenue growth. We are committed to our new investments, but we are reducing overall company spending and slowing headcount growth, while preserving the important investments in strategic priorities. We are confident that we have the right long term strategy." In a separate announcement yesterday, Align announced a new addition to its Invisalign product family: Invisalign Teen(TM) for non-adult, comprehensive orthodontic treatment. Darrell Zoromski, VP of Global Marketing and Chief Marketing Officer of Align Technology, explained in the conference call, "Teenagers are a significant portion of the orthodontics practice. Patients aged 12-17 represent half of all patients. Until now, only a small number of doctors have treated their nonadult patients with Invisalign(R). The most often cited barriers have been patient compliance and the need to accommodate permanent teeth that are still coming in. We have addressed these issues with Invisalign Teen(TM), so that orthodontists will have confidence that they can treat their teen patients successfully with Invisalign." He added, "Our goal over the next six to eighteen months is to gain initial trial among our core orthodontist customers (approximately 3,000 doctors). Orthodontists are conservative by nature and teen cases make up the majority of their cases. We expect the product to ramp gradually over time as orthodontists experience outstanding clinical results with a product that we know can deliver. We expect our share gains to play-out over a number of years. We believe the adoption will significantly accelerate in the long term." Leerink downgraded ALGN to Market Perform from Outperform to reflect the Company’s lowered guidance and cut their target to $9 from $16.

SEC TERMINATES FORMAL INVESTIGATION WITHOUT ANY ACTION: The Fort Worth office of the SEC has provided a letter to Exobox Technologies Corp. (EXBX)indicating that the Commission’s formal investigation of the Company and its management commenced in 2006 has been terminated. The Termination Letter states that the Commission’s investigation of the Company, "has been completed as to Exobox Technologies Corp., its Chief Executive Officer, Robert Dillon and its other officers and directors, against whom we do not intend to recommend any enforcement action by the Commission."

TERMINATES CEO; APPOINTS REPLACEMENT: United PanAm Financial Corp. (UPFC) announced the appointment of Jim Vagim as chief executive officer and announced the termination of Ray Thousand as chief executive officer and Stacy Friederichsen as chief operating officer, all effective as of July 25, 2008. Mr. Vagim was formerly President of Westlake Financial, a nonprime automobile finance company of similar size to UPFC, where Mr. Vagim spent more than 20 years in various executive positions until his resignation in 2007.

AWARDED $1.029M CONTRACT FROM DEPT. OF DEFENSE: Intevac Photonics, a division of Intevac, Inc. (IVAC), announced that its DeltaNu business unit has been awarded a $1.029 million contract from the Department of Defense to develop advanced Raman spectroscopy systems for both military and civilian applications. Applications include detection of toxic material and pathogens for the military, and detection of hazardous materials for civilian applications. Under this year-long contract, new capabilities for ultra-sensitive detection and detection at long distances will be developed.

BEGINS PHASE I/II TRIAL: Hollis-Eden Pharmaceuticals, Inc. (HEPH) has commenced a Phase I/II clinical trial with its oral drug candidate APOPTONE(TM) (HE3235) in late-stage prostate cancer patients who have failed hormone therapy and at least one round of chemotherapy treatment. Potential activity of the compound will be measured by standard prostate-specific antigen (PSA) tests and effect on well-established markers of progression free survival (PFS). In addition, the clinical trial will evaluate circulating tumor cell (CTC) enumeration as a marker for effectiveness for tumor treatment. Previous studies have shown that metastatic prostate cancer patients with less than 5 CTCs per 7.5 ml of blood have statistically better survival than patients with greater than 5 CTCs. APOPTONE has been tested in a number of preclinical cancer models and has been shown to date to be active in controlling the incidence, growth and development of new tumors. Hollis-Eden believes that APOPTONE may be directly inducing apoptosis, or cell death, in tumor cells, as opposed to traditional hormone blockade therapies directed at simply interrupting either the synthesis or the signaling of the tumor cell growth through the androgen or estrogen receptor. While hormone blockade therapy can effectively control prostate cancer for a period of time, it will eventually fail and the cancer can continue to grow and spread.

ANNOUNCES PHASE II MEETING WITH FDA: IntelGenx Corp. (IGXT) and Cary Pharmaceuticals Inc. have met with the FDA in an End-of-Phase II meeting for its antidepressant, CPI-300 at which the FDA indicated that it will accept a recently completed pivotal food effect study as sufficient to support a 505(b)(2) NDA submission. After reviewing the study results, the FDA confirmed that it will accept a labeling that the product may be taken without regard to food. With respect to the remaining clinical program, the FDA confirmed that it will require a single-dose, fasting, two-way crossover study vs. the Reference Listed Drug (RLD) to support the 505(b)(2) NDA submission. The companies anticipate that the remaining clinical development will be completed in Q3, 2008 and plan to submit the 505(b)(2) NDA in Q4, 2008.

INITIATES PHASE 2 CLINICAL TRIAL: ARIAD Pharmaceuticals, Inc. (ARIA) has initiated a Phase 2 clinical trial to examine the efficacy and safety of oral deforolimus, its investigational mTOR inhibitor, in patients with advanced breast cancer. In collaboration with Merck & Co. Inc., deforolimus is currently being evaluated in multiple clinical trials, both alone and in combination with other therapies, for the treatment of patients with several different cancer types. Under terms of the agreement, ARIAD will receive a $15 million milestone payment from Merck for treating the first patient in the breast cancer clinical trial. The multi-center, single-arm, Phase 2 study will evaluate oral deforolimus in combination with intravenous trastuzumab (Herceptin(R)) in patients with metastatic, HER2-positive breast cancer who have developed resistance to trastuzumab therapy. The primary endpoint for the study is clinical response to the experimental combination therapy.

ANNOUNCES ACQUISITION: Cubic Corporation (CUB) announced the acquisition of privately held Omega Training Group, Inc., of Columbus, Georgia. Located in close proximity to the U.S. Army Infantry Center and School at Fort Benning, Georgia, Omega provides training, testing, analysis, logistics and staffing services. The company plays a key role in training U.S. Army Soldiers at Fort Benning, Georgia; Fort Bliss and Fort Hood, Texas; and Fort Jackson, South Carolina. It has been involved with the transformation of the U.S. Army Infantry Center and School at Fort Benning, and Omega instructors also teach the U.S. Army’s Reconnaissance and Surveillance Leaders Course there.