Schaeffer's S&P 500 Index Hot Stocks Features Fannie Mae, Supervalu, Anadarko Petroleum, Patterson Companies, and Coach

Business Wire, August 24, 2006

CINCINNATI -- Among the stocks featured in the August 24 edition of Schaeffer's S&P 500 Index Hot Stocks are Fannie Mae (NYSE:FNM), Supervalu (NYSE:SVU), Anadarko Petroleum (NYSE:APC), Patterson Companies (NASDAQ:PDCO), and Coach (NYSE:COH). Schaeffer's S&P 500 Index Hot Stocks is just one of the many free market commentaries written every day at www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. For additional information about this report or to have it delivered to you free via email every day click on the following link. http://www.schaeffersresearch.com/redirect.aspx?CODE=PRSHS13M&PAGE=1 .

E[acute accent]Schaeffer's S&P 500 Index Hot Stocks for Thursday, August 24, 2006:

E[acute accent]A daily feature available on SchaeffersResearch.com is the "SPX Hot Stocks" column. Each afternoon, we will provide a list of the day's top-20 performing stocks in the S&P 500 Index (SPX - 1,295.50) as well as the bottom-20 names. Featured along with this table will be news that is moving some of the securities, including a look at Ford. E[acute accent]NOTE: Stocks trading under $5 per share have been eliminated from this listing of the top-20 and bottom-20 performing stocks.

E[acute accent]Currently, U.S. stocks are flirting with the break-even mark, and the SPX is the only major index in positive territory (albeit barely). This morning's data proved to be a double-edged sword. The Commerce Department announced that sales of new homes dropped by 4.3 percent in July, hitting a seasonally adjusted annual rate of 1.07 million. Inventories of unsold homes hit an 11-year high, and median prices flattened out. The Commerce Department continued to issue news, announcing that U.S.-made durable goods orders dropped 2.4 percent in July thanks to a sizeable decline in orders for transportation goods. This drop far outpaced that 0.7-percent decline that economists expected. Finally, the Labor Department announced that initial unemployment claims dropped by 1,000 to reach 313,000 for last week. How is this data a double-edged sword? The statistics further stoked expectations that the Fed may be finished hiking interest rates, but it also fanned the flames of concern that the economy's growth is slowing at a faster-than-expected rate. Against this backdrop, 51 percent of the SPX is in positive territory. E[acute accent]Perched atop the SPX this afternoon is Fannie Mae (NYSE:FNM). This morning, FNM announced that the Justice Department has ended its investigation into its accounting procedures. The company added that the government does not plan to file charges against the company. Regulators investigated whether FNM manipulated its earnings from 1998 to 2004 in order to increase the value of its stock and executive bonuses. In May, the firm agreed to pay a $400-million fine to settle matters with the Office of Federal Housing Enterprise Oversight and the Securities and Exchange Commission. Finally, FNM added that it will complete its ongoing earnings restatement by the end of 2006. This glut of news was music to investors' ears, as FNM is more than five percent higher this afternoon. E[acute accent]Moving to the second spot on the SPX is supermarket operator Supervalu (NYSE:SVU). Early this morning, SVU was upgraded to "neutral" from "underweight" by J.P. Morgan. The brokerage based its move on valuation. J.P. Morgan recognized that SVU's shares have dropped 24 percent in the past year, and noted that its bias on the stock remains negative. The brokerage stated, "we question whether the company can manage everything effectively. Also, Supervalu has already subtly revised deal expectations down 3 times." Nonetheless, SVU is more than three percent higher. E[acute accent]Late last night, Anadarko Petroleum (NYSE:APC) completed its $4.74 billion acquisition of Western Gas Resources (WGR). The purchase makes APC one of the nation's leading independent energy exploration and production companies. WGR shareholders will receive $61 per share in cash. Last night's move was the last step of a three-company, $21.1 billion deal for APC, which purchased Kerr McGee earlier this month. Yesterday afternoon, Standard & Poor's Ratings Services downgraded APC's credit rating to "BBB" from "BBB " after its acquisitions. APC's ratings will remain on CreditWatch with negative implications. The energy company was more than two percent higher when we pulled our numbers for this article. E[acute accent]Propping up the rest of the SPX is Patterson Companies (NASDAQ:PDCO), thanks to its first-quarter earnings report. The company posted ex-item earnings of 31 cents per share on revenue of $655.5 million. According to Thomson First Call, the Street expected earnings of 32 cents per share on revenue of $653.1 million. This news sent the stock tumbling more than six percent. E[acute accent]Accompanying PDCO at the bottom of the SPX is Coach (NYSE:COH). The fashionista has shed nearly five percent this afternoon after Piper Jaffray downgraded it to "market perform." The brokerage didn't stop there; it also cut its target price on COH to $30 per share from $40 per share.