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					                                          Americas Morning Summary
                                          August 30, 2010



The Goldman Sachs Group, Inc.
                                           Focus Items
This document contains comments
related to the following stocks:           Americas: Technology: Semiconductors: GS US SEMI & SPE Weekly: NVLS, TER,
                                                                                                                                                                            1
                                           and AMAT updates
Abbott Laboratories (ABT)                  VMware, Inc. (VMW): VMworld preview: Focus on public cloud and mgmt
                                                                                                                                                                            2
Abercrombie & Fitch (ANF)                  opportunities
Acme Packet, Inc. (APKT)
ADTRAN, Inc. (ADTN)                        The Boeing Company (BA): BA tends to outperform after flagged 787 delays;
                                                                                                                                                                            3
Aeropostale (ARO)                          reiterate CL-Buy
Agrium Inc. (AGU)
Air Products & Chemicals Inc.
(APD)
                                           Key Data Changes
Airgas Inc. (ARG)                          Rating and price target changes
Albemarle Corp. (ALB)                                                                Rating/
American Eagle Outfitters Inc.                                                                              Price Target                           Estimates
                                                                                  Coverage view
(AEO)                                      Company                         Ticker New     Old         New        Old       % chg    Current Year Next Year Fiscal y/e
Ann Taylor Stores Corp. (ANN)              Bank of New York Mellon Corp.    BK       N/N    unch   ↓ $27.00     $29.00   (6.9%)        $2.21            $2.45        Dec
Applied Materials, Inc. (AMAT)
Aruba Networks, Inc. (ARUN)                Northern Trust Corp.            NTRS      B/N    unch   ↓ $57.00     $59.00   (3.4%)        $2.98            $3.65        Dec
Bank of New York Mellon Corp.              State Street Corp.              STT       N/N    unch   ↓ $45.00     $50.00   (10.0%)       $3.18            $3.29        Dec
(BK)
BJ's Wholesale Club, Inc. (BJ)             Estimate changes
The Boeing Company (BA)                                                                                       Current Year                    Next Year
                                                                                         Rating/                                                                   Fiscal y/e
Bristol-Myers Squibb Company               Company                          Ticker    Coverage view    New        Old      % chg     New         Old      % chg
(BMY)
Broadsoft, Inc. (BSFT)                     Abercrombie & Fitch               ANF           B/N        ↑ $1.71    $1.70     0.9%      $2.41      unch        --       Jan
Brocade Communications Systems             Agrium Inc.                      AGU            N/N         $4.68      unch       --     ↓ $5.85     $5.86     (0.1%)     Dec
(BRCD)
                                           Bank of New York Mellon Corp.     BK            N/N        ↑ $2.21    $2.20     0.4%     ↓ $2.45     $2.65     (7.6%)     Dec
Calix, Inc. (CALX)
Celanese Corp. (CE)                        Eli Lilly & Company               LLY           S/N        ↓ $4.58    $4.59     (0.4%)   ↑ $4.58     $4.56     0.5%       Dec
CF Industries Holdings, Inc. (CF)          Nalco Holding Company             NLC           N/N        ↑ $1.51    $1.49     1.2%     ↑ $1.72     $1.70     0.8%       Dec
Chico's FAS, Inc. (CHS)
Cisco Systems, Inc. (CSCO)                 Northern Trust Corp.             NTRS           B/N        ↓ $2.98    $3.30     (9.7%)   ↓ $3.65     $3.95     (7.7%)     Dec
Compass Minerals International             Pfizer Inc.                       PFE           B/N        ↑ $2.19    $2.18     0.5%     ↑ $2.25     $2.23     0.9%       Dec
(CMP)
                                           State Street Corp.                STT           N/N        ↑ $3.18    $3.00     6.0%     ↓ $3.29     $3.55     (7.3%)     Dec
Corning Inc. (GLW)
Costco Wholesale (COST)
Cytec Industries (CYT)
Dow Chemical Company (DOW)
                                           Other Headlines
E.I. duPont de Nemours (DD)
                                           Portfolio Strategy
Eastman Chemical Company (EMN)
Ecolab Inc. (ECL)                          US Weekly Kickstart: Disappointing Intel guidance highlights reasons to own stocks with low
Eli Lilly & Company (LLY)                                                                                                                                                   4
                                           operating leverage
F5 Networks, Inc. (FFIV)
Family Dollar Stores, Inc. (FDO)           Basic Materials
Gap Inc. (GPS)
Garmin Ltd. (GRMN)                         Americas: Chemicals: Data update: Introducing 2011 quarterly estimates                                                           5

For further product information,
contact:

New York Investment Research
(212) 902-1000

Analysts employed by non-US                The Goldman Sachs Group, Inc. does and seeks to do business with companies covered in its research
affiliates are not registered/qualified    reports. As a result, investors should be aware that the firm may have a conflict of interest that could
as research analysts with FINRA in         affect the objectivity of this report. Investors should consider this report as only a single factor in making
the U.S.                                   their investment decision. For Reg AC certification, see the end of the text. Other important disclosures
                                           follow the Reg AC certification, or go to www.gs.com/research/hedge.html.
Global Investment Research
Infinera Corp. (INFN)
Intrepid Potash, Inc. (IPI)        Consumer Cyclicals
Intuit, Inc. (INTU)
J. Crew Group, Inc. (JCG)
                                   Nike, Inc. (NKE): Adjusting NKE model                                                            6
Johnson & Johnson (JNJ)            Americas: Retail: Broadlines: In Shapira Style- September 2010                                   7
Juniper Networks, Inc. (JNPR)
Kohl's Corp. (KSS)                 Americas: Retail: Specialty Apparel & Accessories: Stay selective: Better B2S does not put
                                                                                                                                    8
Limited Brands, Inc. (LTD)         sector in the clear
lululemon athletica inc. (LULU)    Abercrombie & Fitch (ANF): Tweaking ANF model                                                    9
Macy's Inc. (M)
Merck & Co., Inc. (MRK)            Financial Services
Mills (MILS3.SA)
Motorola, Inc. (MOT)               Americas: Banks: Trust Banks: Market weakness, rates, and seasonality drive negative earnings
                                                                                                                                   10
Nalco Holding Company (NLC)        revisions
Netgear, Inc. (NTGR)
Nike, Inc. (NKE)                   Healthcare
Nordstrom, Inc. (JWN)
                                   Americas: Healthcare: Pharmaceuticals: Introducing 2011 quarterly estimates for Major Pharma    11
Northern Trust Corp. (NTRS)
Novellus Systems Inc. (NVLS)
                                   Industrials
J.C. Penney Company (JCP)
Pfizer Inc. (PFE)                  Mills (MILS3.SA): Positive feedback from infrastructure visits in São Paulo                     12
Potash Corp. (POT)
PPG Industries, Inc. (PPG)         Technology
Praxair Inc. (PX)
QUALCOMM, Inc. (QCOM)              Americas: Communications Technology: GS CommTech Weekly: Short interest, China
                                                                                                                                   13
Research In Motion Ltd. (RIMM)     CDMA/WCDMA, and durable goods updates
Riverbed Technology, Inc. (RVBD)   Americas: Technology: Software: The Weekly Catalyst: VMworld 2010                               14
Rockwood Holdings, Inc. (ROC)
Ross Stores, Inc. (ROST)           Other
rue21, inc. (RUE)
Saks Inc. (SKS)                    Latin America Weekly Kickstart: Views from US roadshow                                          15
Sherwin-Williams Company (SHW)
State Street Corp. (STT)           Reports Published
Target Corporation (TGT)
Tellabs, Inc. (TLAB)
Teradyne, Inc. (TER)
The Buckle, Inc. (BKE)
The Mosaic Co. (MOS)
The TJX Companies, Inc. (TJX)
Urban Outfitters Inc. (URBN)
The Valspar Corp. (VAL)
VMware, Inc. (VMW)
Wal-Mart Stores, Inc. (WMT)
Westlake Chemical Corp. (WLK)
Americas Morning Summary                                                                                                         August 30, 2010




Focus Items

Americas: Technology: Semiconductors: GS US SEMI & SPE Weekly: NVLS, TER, and AMAT updates                                                    1

                                 James Covello (New York): james.covello@gs.com, (212) 902-1918
                                 Goldman Sachs & Co.
                                 James Schneider, Ph.D. (New York): james.schneider@gs.com, (917) 343-3149
                                 Goldman Sachs & Co.
                                 Kate Kotlarsky (New York): kate.kotlarsky@gs.com, (212) 357-7956
                                 Goldman Sachs & Co.
                                 Ian Eigenbrod (New York): ian.eigenbrod@gs.com, (212) 902-0695
                                 Goldman Sachs & Co.
                                 Mark Delaney (New York): mark.delaney@gs.com, (212) 357-0535
                                 Goldman Sachs & Co.

                                 NVLS (Neutral): Expect orders to be narrowed to +5% to +10% qoq
                                 We expect Novellus to narrow its guidance between the mid- and high end of the range during its 3Q2010
                                 mid-quarter update call on 9/2/2010. Recall that management guided orders to be flat to +10% qoq ($385 to
                                 $423 mn), shipments to be +4% to +13% qoq ($345 to $375 mn), revenue growth of +4% to +14% qoq ($335
                                 to $365 mn), and EPS between $0.72 and $0.90.
                                 We believe that order guidance will be revised to +5 to +10% qoq, driven in particular by Samsung foundry
                                 and Intel. In addition, we believe that NAND orders are beginning to increase, with Micron ordering for its
                                 Singapore fab and SanDisk/Toshiba completing Fab 4.
                                 Importantly, we continue to believe orders will increase in 2011 driven by NAND memory and logic. We
                                 expect that strong iPad and smartphone growth will lead to significantly higher NAND orders (15% of SPE
                                 orders YTD). In addition, we expect Intel will continue to order in 2011 for 22nm in order to reduce the power
                                 of its chips for tablet and smartphone devices. Intel’s announcement that it is increasing capex has received
                                 very limited attention in our view even though it is the second largest SPE customer.
                                 TER (CL-Buy): Cash flow attractive even if sales were to deteriorate
                                 We continue to believe Teradyne will have more than $7 in net cash per share exiting 2011 (78% of the
                                 current stock price), and it trades at just 2.1X our 2011 EPS estimate ex. cash and 6X normalized EPS.
                                 However, even if we assume that: (1) 2011 sales are about 40% less than our forecast; (2) net income is
                                 67% below our current outlook; and (3) zero working capital benefit, we estimate that Teradyne would still
                                 have $5.50 in net cash per share exiting 2011.
                                 AMAT (Buy): Applied announces Eterna flowable CVD gap-fill tool
                                 Applied introduced the Eterna flowable CVD tool aimed at gap-fill applications to isolate transistors.
                                 According to Applied, its solution can reduce the process steps compared to current spin-on techniques by up
                                 to 50% given that it deposits carbon-free films and therefore does not need to undergo purification steps. The
                                 company estimates the market will be $400 mn in 2010 and grow to more than $700 mn in the next few
                                 years. We continue to believe Applied has a solid SPE franchise with strong margins, and would Buy the
                                 stock given multiple EPS levers, improved leverage post its exit from the thin-film solar business, and
                                 attractive valuation.




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                                     August 30, 2010




VMware, Inc. (VMW): VMworld preview: Focus on public cloud and mgmt opportunities                                                                         2

VMW, $79.27                                Derek R. Bingham (San Francisco): derek.bingham@gs.com, (415) 249-7435
Market cap                  $33,478 mn
                                           Goldman Sachs & Co.
                                           Sarah Friar (San Francisco): sarah.friar@gs.com, (415) 249-7436
Target price                      $88.00
                                           Goldman Sachs & Co.
Fiscal y/e Dec            2010E   2011E    Gonzalo Cavenaghi (San Francisco): gonzalo.cavenaghi@gs.com, (415) 249-7438
EPS ($)                    0.85     1.35   Goldman Sachs & Co.
P/E                       93.4X   58.9X

EPS Quarter/Interim
                      *
                           0.24     0.12
                                           What's changed
                                           The general session of VMworld 2010 will kick off Tuesday, August 31, in San Francisco. We expect key
Investment Lists                           announcements and updates in the following areas: (1) Hybrid clouds: We expect the release of vCloud
                      Americas Buy List    Director (codenamed “Project Redwood”), which opens up the service provider opportunity and should help
Coverage view                 Attractive   cement dominance in the enterprise; (2) Management tools: We expect updates on the company’s
                                           management tool evolution post recent acquisitions; (3) Virtual desktop: The company may announce the
*Current and a year ago
                                           next release of its VDI product (View 4.5); (4) Security: We expect to see VMware move to address Cloud
                                           security challenges as the company leverages its platform to add greater value to enterprises and service
                                           providers; (5) Storage: We expect continued emphasis on deep integration with storage vendors, helping to
                                           extend VMware’s market leadership.
                                           Implications
                                           We continue to believe that server virtualization penetration remains in its early stages, while VMware is
                                           extending its technology lead relative to challengers with a multitude of emerging products. The company is
                                           also ramping its first wave of long-term ELA (enterprise license agreement) renewals, which should serve to
                                           further boost bookings, cash flow, and cross-sell opportunities. We continue to favor secular winners such as
                                           VMware that can continue to deliver strong growth amid the current sluggish and uncertain macro backdrop.
                                           Valuation
                                           VMware trades at 41X our CY2011E non-GAAP EPS and 21X CY2011 EV/FCF. Our 12-month price target of
                                           $88.00 represents 23X EV/FCF on our 2011 estimate.
                                           Key risks
                                           Key risks to our view and price target include the macro economy and large competitors.



The Boeing Company (BA): BA tends to outperform after flagged 787 delays; reiterate CL-Buy                                                                3

BA, $63.16                                 Noah Poponak, CFA (New York): noah.poponak@gs.com, (212) 357-0954
Market cap                  $46,922 mn
                                           Goldman Sachs & Co.
                                           Chun-Yai Wang (New York): chun-yai.wang@gs.com, (212) 902-9610
Target price                      $84.00
                                           Goldman Sachs & Co.
Fiscal y/e Dec            2010E   2011E

EPS ($)                    4.00     5.05   News
P/E                       15.8X   12.5X    Boeing announced that it now expects first delivery of the 787 in mid-1Q11 vs. its official previous expectation
                                           of 4Q10. The delay was attributed to supplier workmanship issues and the lack of availability of a Rolls
EPS Quarter/Interim*       1.09   (2.22)
                                           Royce engine needed for the final phase of flight test.
Investment Lists
                                           Analysis
                    Americas Buy List      BA shares outperformed the S&P on Friday following the announcement, which may seem surprising, given it
          Americas Conviction Buy List
                                           is negative news. We attribute the stock performance to (1) this being a relatively short delay, (2) the program
Coverage view                 Attractive   being far enough into development that investors still have some visibility into first delivery timing, but, most
*Current and a year ago                    importantly, (3) it was expected, and well flagged by both the company and various aerospace media outlets.
                                           A historical analysis of BA stock performance around 787 delays shows that, when 787 delays are a
                                           complete surprise, the stock underperforms on the day of the announcement and then also underperforms in
                                           the weeks after. However, when 787 delays are well flagged and largely expected, the stock outperforms on
                                           the day of the announcement and then also outperforms in the weeks after. We believe this occurs because,
                                           if long investors wanted to buy BA but believed a 787 delay was coming, they would likely wait until after the
                                           announcement to buy, and if investors were short, they would likely cover following the negative news.
                                           Implications
                                           We expect BA to continue outperforming with this piece of bad news out of the way and as the focus shifts




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                           August 30, 2010



                                 back to the positive cyclical components of the story – traffic and orders recovering, the large backlog, and
                                 production rate increases. We do have concern with the ongoing workmanship challenges related to the
                                 acquired Vought facility but also believe the 787 program is far enough into development that challenges
                                 discovered at this point are very likely to be quite manageable (as evidenced by the short duration of the
                                 latest delay). We reiterate our CL-Buy rating on BA. Our estimates and price target are unchanged.


Other Headlines
Portfolio Strategy

US Weekly Kickstart: Disappointing Intel guidance highlights reasons to own stocks with low operating                                            4
leverage

                                 David J. Kostin (New York): david.kostin@gs.com, (212) 902-6781
                                 Goldman Sachs & Co.
                                 Stuart Kaiser, CFA (New York): stuart.kaiser@gs.com, (212) 357-6308
                                 Goldman Sachs & Co.
                                 Amanda Sneider (New York): amanda.sneider@gs.com, (212) 357-9860
                                 Goldman Sachs & Co.
                                 Yi Zhang (New York): yi.g.zhang@gs.com, (212) 357-6003
                                 Goldman Sachs & Co.

                                 Performance
                                 The S&P 500 was down 2.6% this week. Utilities was the best performing sector this week (+0.5%) while
                                 Industrials was the worst performing sector (-4.1%). We maintain our 3-month price target of 1160 (+11%)
                                 and expect the S&P 500 will rise to 1200 (+15%) at year-end 2010.
                                 S&P 500 Earnings
                                 Our top-down EPS forecasts of $81 and $89 for 2010 and 2011 reflect +43% and +10% growth, respectively.
                                 Our pre-provision and write-down EPS forecasts are $85 for 2010 and $89 for 2011. Bottom-up consensus
                                 forecasts a 46% increase in 2010 to $83, and a 16% increase in 2011 to $96.
                                 Valuation
                                 Top-down, the S&P 500 trades at an NTM P/E of 12.1X (11.9X on pre-provision EPS). Bottom-up, it trades at
                                 an NTM P/E of 11.8X and LTM P/B of 2.0X.
                                 Sector views and performance
                                 Our recommended sector weightings lost 8 bp of alpha this week as Industrials and Info Tech lagged the
                                 market. Our recommended sector weightings have generated -44 bp of alpha YTD.
                                 US Portfolio Strategy baskets
                                 Our new recommendations both performed well this week. Our low operating leverage trade (long
                                 <GSTHOPLO> / short <GSTHOPHI>) was up 1.5% and our dividend growth trade (long <GSTHDIVG> /
                                 short SPX) was up 1.2%.
                                 Our BRICs sales trade (long <GSTHBRIC> / short SPX) was down 0.2% this week while our high Sharpe
                                 ratio trade (long <GSTHSHRP> / short SPX) was down 0.6%.
                                 S&P 500 stock performance this week
                                 Leaders: CRM, RHT, INTU, WPO, and PLD.
                                 Laggards: SNDK, MEE, ODP, ISRG, and AKS.



Basic Materials

Americas: Chemicals: Data update: Introducing 2011 quarterly estimates                                                                           5

                                 Robert Koort, CFA (Houston): robert.koort@gs.com, (713) 654-8480
                                 Goldman Sachs & Co.
                                 Lindsay Drucker Mann, CFA (New York): lindsay.mann@gs.com, (212) 357-4993
                                 Goldman Sachs & Co.




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                                  August 30, 2010



                                           Brian Maguire, CFA (New York): brian.maguire@gs.com,
                                           Goldman Sachs & Co.
                                           Luisa Hermann (Houston): luisa.hermann@gs.com, (713) 654-8482
                                           Goldman Sachs & Co.

                                           Introducing our 2011 quarterly estimates
                                           We are rolling out our 2011 quarterly EPS estimates for our Americas Specialty Chemicals and Agriculture
                                           coverage universe. We are also introducing our FY2013 EPS estimate of $4.75 for MOS. We do not view
                                           these changes as material and there are no changes to our investment theses, ratings or price targets. For
                                           methodology and risks associated with our price targets, please see our previously published research.



Consumer Cyclicals

Nike, Inc. (NKE): Adjusting NKE model                                                                                                                    6

NKE, $70.94                                Michelle Tan, CFA (New York): michelle.tan@gs.com, (212) 902-3099
Market cap                 $34,718 mn
                                           Goldman Sachs & Co.
                                           Nicole Shevins (New York): nicole.shevins@gs.com, (212) 902-9884
Target price                     $85.00
                                           Goldman Sachs & Co.
Fiscal y/e May         2011E     2012E     Kamal Suri (Bangalore): kamal.suri@gs.com, (212) 934-6797
EPS ($)                   4.40     5.00    Goldman Sachs India SPL
P/E                    16.1X      14.2X

EPS Quarter/Interim*      1.10     1.04
                                           Changes and Implications
                                           We have updated our estimates in our NKE model. We do not view these changes as material, and there is
Investment Lists                           no change to our investment thesis, rating or price target.
                    Americas Buy List      For methodology and risks associated with our price target, please see our previously published research.
          Americas Conviction Buy List

Coverage view                    Neutral

*Current and a year ago




Americas: Retail: Broadlines: In Shapira Style- September 2010                                                                                           7

                                           Adrianne Shapira (New York): adrianne.shapira@gs.com, (212) 357-4174
                                           Goldman Sachs & Co.
                                           Morry Brown, CFA (New York): morry.brown@gs.com, (212) 357-0648
                                           Goldman Sachs & Co.
                                           Stephen Grambling, CFA (New York): stephen.grambling@gs.com, (212) 902 7832
                                           Goldman Sachs & Co.
                                           Scott Kaufman-Ross (New York): scott.kaufman-ross@gs.com, (212) 934-4206
                                           Goldman Sachs & Co.

                                           Industry Context
                                           Broadlines 2Q EPS ushered in expense driven beats and lowered guidance, compared to 1Q’s margin drive
                                           beats and upward guidance revisions.
                                           Rain or Shine Index indicates that August was 26% drier and 2% warmer than last year
                                           Pricing study: Wal-Mart’s pricing gap showing some stabilization, settling in at 299 bp, after last month’s
                                           regional phenomenon
                                           Promotional e-mail growth picked up at department stores, +21% as inventories began to build post 2Q
                                           In Retail Forward’s spending survey, respondents grew less bearish as only 32% plan to spend less, while
                                           60% plan to hold spend constant.
                                           Broadlines’ stock short interest is up 1% compared to five-year averages but up 14% month over month with
                                           FDO, JNY, and SKS sitting well above five-year averages




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                          August 30, 2010




                                 Catalysts
                                 Retail Sales: Thursday, September 2, 2010
                                 Same-store sales est. vs. year-ago actual
                                 Ticker Aug 2010E Aug 2009
                                 BJ 2% – 4% (6.0)%
                                 COST 3% – 5% (2.0)%
                                 KSS 1% –3% 0.2%
                                 JCP 0% - 2% (7.9)%
                                 JWN 4% – 6% (7.6)%
                                 M 3% – 5% (8.1)%
                                 TGT 1% –3% (2.9)%
                                 SKS 6% – 8% (19.6)%
                                 TJX (ex FX) 1% - 3% 5.0%
                                 ROST 2% - 4% 6.0%




Americas: Retail: Specialty Apparel & Accessories: Stay selective: Better B2S does not put sector in the                                       8
clear

                                 Michelle Tan, CFA (New York): michelle.tan@gs.com, (212) 902-3099
                                 Goldman Sachs & Co.
                                 Nicole Shevins (New York): nicole.shevins@gs.com, (212) 902-9884
                                 Goldman Sachs & Co.
                                 Kamal Suri (Bangalore): kamal.suri@gs.com, (212) 934-6797
                                 Goldman Sachs India SPL

                                 Where there's a reason to spend, conversion seems better in Aug
                                 While mall traffic and the ICSC index are weaker this month, commentary from several retailers and
                                 sequential improvement in weekly sales trends for athletic footwear (NPD) suggest that back-to-school (B2S)
                                 trends sales improved vs. July. We suspect the combination of a reason to spend and some added tax
                                 holidays in key states (FL, MA, IL) provided some lift for retailers focused on back-to-school selling.
                                 But recent weakness at a number of adult apparel retailers still points to sales risk ahead, particularly
                                 in lull periods
                                 While select adult brands (Ann Taylor, Victorias Secret) have indicated strength through August, several
                                 others (Chico's, J. Crew, Anthropologie & LOFT) reported results that suggested a sharp sales deceleration.
                                 We think the divergence relates to an increasingly less supportive macro backdrop that leaves little room for
                                 any errors, particularly in periods where there is no catalyst to spend. While some company-specific product
                                 issues were likely factors, we are concerned about implications for the broader group.
                                 Sales volatility and heavier inventories add margin risk
                                 75% of the apparel retailers we cover grew inventory faster than sales, creating added pressure to promote.
                                 We anticipate across the board declines in average price for teen retailers competing for B2S share, and
                                 several adult retailers have already lowered their gross margin outlooks. Our indices clearance discounts are
                                 back in check in August after aggressive July clearing, but our promotions tracker shows that duration and
                                 number of special offers are still up to last year. We suspect that if sales choppiness persists, we will see
                                 even more aggressive action on both clearance and promotions at the expense of margins.
                                 Stay selective: Buy ANF following earnings-driven sell-off
                                 Despite a beat, ANF sold off hard on concerns over high inventory. We view it as an opportunity as: (1) Better
                                 promos/product are starting to recapture lost domestic share (a trend we expect to see manifest in strong
                                 August sales) on top of double-digit sales growth from international openings; (2) This stock is inexpensive
                                 relative to a number of significant EPS growth levers; and (3) ANF is the one exception to the sector
                                 inventory rule, as a different end of season strategy has historically meant that ANF’s inventory builds do not
                                 carry the same markdown risk that others’ do.




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                                      August 30, 2010




Abercrombie & Fitch (ANF): Tweaking ANF model                                                                                                              9

ANF, $35.99                                 Michelle Tan, CFA (New York): michelle.tan@gs.com, (212) 902-3099
Market cap                   $3,128 mn
                                            Goldman Sachs & Co.
                                            Nicole Shevins (New York): nicole.shevins@gs.com, (212) 902-9884
Target price                      $41.00
                                            Goldman Sachs & Co.
Fiscal y/e Jan            2011E   2012E     Kamal Suri (Bangalore): kamal.suri@gs.com, (212) 934-6797
EPS ($)                    1.71     2.41    Goldman Sachs India SPL
P/E                       21.0X    15.0X

EPS Quarter/Interim
                      *
                           0.50     0.55
                                            Changes and Implications
                                            We have updated our estimates slightly for ANF. We do not view these changes as material, and there is no
Investment Lists                            change to our investment thesis, rating or price target.
                      Americas Buy List     For methodology and risks associated with our price target, please see our previously published research.
Coverage view                     Neutral

*Current and a year ago




Financial Services

Americas: Banks: Trust Banks: Market weakness, rates, and seasonality drive negative earnings revisions                                                  10

                                            Richard Ramsden (New York): richard.ramsden@gs.com, (212) 357-9981
                                            Goldman Sachs & Co.
                                            Alexander Blostein, CFA (New York): alexander.blostein@gs.com, (212) 357-9976
                                            Goldman Sachs & Co.
                                            Soumil Zaveri (New York): soumil.zaveri@gs.com, (212) 902-8484
                                            Goldman Sachs & Co.

                                            Market, rates, seasonality drive lower EPS
                                            We lower our 2010/2011/2012 EPS estimates and price targets on the trust banks by 1%/8%/6% and 7%,
                                            respectively, reflective of soft equity markets, persistent rate pressure, weaker seasonal trends, and lower FX
                                            volatility and volumes. Specifically, we see three headwinds heading into 3Q-end.
                                            (1) Lower markets to drive fee pressure: Fee businesses (custody/administration and asset management) will
                                            be under pressure, given a 4% qoq decline in equity markets on a daily average basis. Moreover, continued
                                            investor risk aversion (evidenced though lackluster equity fund flows) will add incremental headwinds.
                                            (2) Low rates to weight on sec lending and NIM: Short-term rates remain at historic lows, while the spread
                                            earned on sec lending balances (1 month LIBOR – Fed Funds) is flat qoq at 12 bp, well below historical
                                            average. Coupled with seasonal 3Q headwinds, this dynamic will pressure sec lending businesses, with core
                                            sec lending revenues expected to be down 25% qoq. NIMs are expected to be down 7 bp to 149 bp on
                                            average vs. 174 bp average over the last five years.
                                            (3) Volume businesses, FX, down on seasonality, tough comps
                                            Other volume-driven businesses are also expected to slow down qoq due to seasonal weaknesses and tough
                                            comps vs. 2Q, particularly in FX. We expect FX revenues to be down 20% on average, as volatility during 3Q
                                            is down 16% from 2Q levels.
                                            Neutral on the group despite valuation; NTRS top pick
                                            Trust banks’ multiples continue to compress, now at 11X forward P/E vs. 17X over the last 10 years. Relative
                                            to the SPX, however, the disconnect is not as pronounced, with the group trading at a 6% discount vs. flat
                                            historically. While these valuation levels offer a good long-term value entry point, our “lower for longer” rate
                                            view, coupled with an uncertain market environment will likely keep fundamentals under pressure in the near
                                            term, and we remain Neutral on the group.
                                            NTRS (CL-Buy) remains our favorite name among the trust banks due to its significant global presence,
                                            strong capital and conservative balance sheet position.




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                                      August 30, 2010




Healthcare

Americas: Healthcare: Pharmaceuticals: Introducing 2011 quarterly estimates for Major Pharma                                                              11

                                           Jami Rubin (New York): jami.rubin@gs.com, (212) 357-7536
                                           Goldman Sachs & Co.
                                           Florence Tsang, CFA (New York): florence.tsang@gs.com, (212) 357-3567
                                           Goldman Sachs & Co.
                                           Sebastian Paquette, CFA (New York): sebastian.paquette@gs.com, (212) 902-5306
                                           Goldman Sachs & Co.

                                           Introducing 2011 quarters in our models
                                           We are introducing 2011 quarterly estimates for our Major Pharma models: ABT, BMY, LLY, MRK, and PFE.
                                           Our JNJ 2011 quarterly estimates were previously published. Our new 2011 EPS quarter estimates are as
                                           follows.
                                           2011 EPS Quarterly estimates

                                           Exhibit Source: Company data and Goldman Sachs Research estimates.
                                           Updated for 2Q 10Q filings
                                           We also update our models to reflect the 2Q 10Q SEC filings. Our new annual estimates are as follows.
                                           GS 2010-2015 EPS estimates

                                           Exhibit Source: Company data and Goldman Sachs Research estimates.
                                           Valuation
                                           We do not view these changes as material, and there is no change to our investment thesis. Our ratings and
                                           price targets remain unchanged. For methodology and risks associated with our price targets, please see our
                                           previously published research.



Industrials

Mills (MILS3.SA): Positive feedback from infrastructure visits in São Paulo                                                                               12

MILS3.SA, R$15.95                          Eduardo Siffert Couto, CFA (Sao Paulo): eduardo.couto@gs.com, +55(11)3371-0764
Market cap                R$1,988 mn
                                           Goldman Sachs Brasil Bco Múlt S.A.
                                           Tais Correa (Sao Paulo): tais.correa@gs.com, +55(11)3371-0833
Target price                     R$17.60
                                           Goldman Sachs Brasil Bco Múlt S.A.
Fiscal y/e Dec         2010E      2011E

EPS (R$)                  0.95      1.34   News
P/E                    16.8X       11.9X   We attended two infrastructure meetings in São Paulo on Aug 26 and 27. We visited Mills’ distribution center
                                           in the industrial city of Osasco. This site concentrates Mills’ maintenance, engineering design and distribution
EPS Quarter/Interim*      0.27        --
                                           operations. We also went to the Concrete Show 2010, a construction fair where engineering service
Investment Lists                           companies such as Mills and its competitors (Rohr, Peri, SH) were presenting. Contractors and homebuilders
                   Americas Buy List       are the main fair visitors searching for new products and engineering solutions.
Coverage view                Attractive    Analysis
                                           We left both visits with a positive outlook for infrastructure in Brazil and the perception that Mills is prepared
*Current and a year ago
                                           to deal with strong infrastructure investments in the coming years.
                                           We believe that Mills has higher quality equipment (more aluminum than steel products), more suppliers (+20
                                           exclusive ones), and more investments on new products than its competitors. A large number of competitors
                                           seem a risk but their small size and expertise in large projects, where focus is not prices but scale and
                                           engineering solutions, limit this threat.
                                           The combination of a big pipeline of time-sensitive projects and some recent start-up delays can make
                                           reliability and scale even more crucial than prices in the mid-term. Our conversations also suggested that
                                           competition is higher in the Southeast (especially São Paulo and Rio de Janeiro) than in the Northeast and




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                           August 30, 2010



                                 Mills is clearly a market leader, acting sometimes as price setter. The lack of qualified labor force today is a
                                 major concern in the sector. Equipment rental is the main focus with sales concentrated on large projects like
                                 dams and aluminum forms for the low-income house sector.
                                 Implications
                                 We are bullish on Mills due to its direct infrastructure exposure and strong investments to maintain
                                 leadership. Project delays are a concern and can bring short-term earnings volatility, but mid-term outlook is
                                 very solid. We maintain our Buy rating, estimates, and target price.



Technology

Americas: Communications Technology: GS CommTech Weekly: Short interest, China CDMA/WCDMA,                                                    13
and durable goods updates

                                 Simona Jankowski, CFA (San Francisco): simona.jankowski@gs.com, (415) 249-7437
                                 Goldman Sachs & Co.
                                 Thomas D. Lee (New York): thomas.d.lee@gs.com, (212) 902-2066
                                 Goldman Sachs & Co.
                                 Erin Riley (San Francisco): erin.riley@gs.com, (415) 249-7453
                                 Goldman Sachs & Co.
                                 Mukul Garg (Bangalore): mukul.garg@gs.com, (212) 934-9960
                                 Goldman Sachs India SPL

                                 Weekly stock performance
                                 Our median stock was up 1% last week, outperforming the S&P500 and Nasdaq both down 1%. Our
                                 strongest performer was CALX, up 13%, while our weakest was CSCO, down 6%.
                                 Secular stories continue to outperform as more mature/cyclical names stall
                                 We maintain an investment stance tilted toward secular rather than cyclical growth. Last week’s solid beat-
                                 and-raise from Aruba Networks (Buy) followed a string of similar results from other secular winners, by
                                 contrast to Intel’s negative preannouncement and Cisco’s disappointing outlook. Our favorite stocks remain
                                 Juniper (CL-Buy) and Qualcomm (CL-Buy) based on their strong secular growth at reasonable valuations.
                                 Short interest update
                                 CommTech short interest was up 4% in the first half of August (from the second half of July), and was up 7%
                                 mom. Short interest rose the most for APKT, up 76% (to 7% of shares), and fell the most for BRCD, down
                                 17% (to 4% of shares).
                                 China CDMA & WCDMA net sub adds update
                                 Last week, China released its subscriber numbers for the month of July, providing an important read-across
                                 for Qualcomm (CL-Buy). Overall, we view the results as net positive, with weaker CDMA net adds at China
                                 Telecom offset by a higher mix of handsets vs. data cards, and strong qoq growth of WCDMA net adds at
                                 China Unicom likely to continue given increasing subsidies in 2H.
                                 Communications equipment orders up mom in July, but worse than seasonal
                                 Comm equipment orders were up 4% mom, and were down 17% yoy. The three-month-moving-average
                                 (3MMA) was down 3% mom, worse than the seasonal average, up 1%. The 3MMA was down 15% yoy.
                                 Valuation
                                 The median CommTech forward P/E was 15.8X last week, suggesting an 18% discount to its 1-year average
                                 of 19.4X. This compares to the S&P 500’s 13.0X. Relative valuation was at 1.2X the S&P, below the 1-year
                                 average of 1.3X.



Americas: Technology: Software: The Weekly Catalyst: VMworld 2010                                                                             14

                                 Sarah Friar (San Francisco): sarah.friar@gs.com, (415) 249-7436
                                 Goldman Sachs & Co.
                                 Derek R. Bingham (San Francisco): derek.bingham@gs.com, (415) 249-7435
                                 Goldman Sachs & Co.
                                 Stephanie Withers, CFA (San Francisco): stephanie.withers@gs.com, (415) 249-7470




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                        August 30, 2010



                                 Goldman Sachs & Co.
                                 Gonzalo Cavenaghi (San Francisco): gonzalo.cavenaghi@gs.com, (415) 249-7438
                                 Goldman Sachs & Co.
                                 Ventsi Stoichev (San Francisco): ventsi.stoichev@gs.com, (415) 249-7440
                                 Goldman Sachs & Co.
                                 Geo John (Bangalore): geo.john@gs.com, (212) 934-6386
                                 Goldman Sachs India SPL

                                 VMworld: Focus on public cloud and management opportunities
                                 The general session of VMworld 2010 will kick off Tuesday, August 31st in San Francisco. We expect key
                                 announcements and updates in the following areas: (1) Hybrid clouds: We expect the release of vCloud
                                 Director (codenamed “Project Redwood”), which opens up the service provider opportunity and should help
                                 cement dominance in the enterprise; (3) Management tools: We expect updates on the company’s
                                 management tool evolution post recent acquisitions; (3) Virtual desktop: The company may announce the
                                 next release of its VDI product (View 4.5); (4) Security: We expect to see VMware move to address Cloud
                                 security challenges as the company leverages its platform to add greater value to enterprises and service
                                 providers; (5) Storage: We expect continued emphasis on deep integration with storage vendors, helping to
                                 extend VMware’s market leadership.
                                 We continue to believe that server virtualization penetration remains in its early stages, while VMware is
                                 extending its technology lead relative to challengers with a multitude of emerging products. The company is
                                 also ramping its first wave of long-term ELA (enterprise license agreement) renewals, which should serve to
                                 further boost bookings, cash flow, and cross-sell opportunities. We continue to favor secular winners such as
                                 VMware that can continue to deliver strong growth amid the current sluggish and uncertain macro backdrop.
                                 VMware trades at 41X our CY2011E non-GAAP EPS and 21X CY2011 EV/FCF. Our 12-month price target of
                                 $88 represents 23X EV/FCF on our 2011 estimate. Key risks to our view and price target include the macro
                                 economy and large competitors.
                                 Introducing FY2012 quarter estimates for Intuit
                                 As a housekeeping item in conjunction with this weekly, we are introducing FY2012 quarter estimates for
                                 Intuit of ($0.11), $0.48, $2.47, and ($0.08) for FY1Q-FY4Q. There are no changes to our estimates, view, or
                                 price target.



Other

Latin America Weekly Kickstart: Views from US roadshow                                                                                     15

                                 Stephen Graham (Sao Paulo): stephen.graham@gs.com, +55(11)3371-0831
                                 Goldman Sachs Brasil Bco Múlt S.A.
                                 Andre Rezende (Sao Paulo): andre.rezende@gs.com, +55(11)3371-0766
                                 Goldman Sachs Brasil Bco Múlt S.A.

                                 Our equity view
                                 Talks on Brazil with emerging markets and global investors across the US last week suggest a mix of
                                 enthusiasm and apprehension, with definitive moves not likely until the fourth quarter.
                                 The enthusiasm concerns the underlying momentum of the economy, including signs that investment/GDP is
                                 on an upward track. Investors are also impressed with the depth of the consumer rise that drove surprisingly
                                 strong 2Q earning and should drive a record Christmas sales season. We recommend consumer-exposed
                                 stocks such as homebuilders, banks, and insurance companies that trade at lower multiples than retailers
                                 and consumer-goods companies but that grow nearly as fast.
                                 The concern is over the state’s role in the economy and whether this will be reined in or expanded after
                                 October’s elections. The immediate apprehension is over the technical pressure of upcoming equity
                                 issuances, the impact of these on index weightings in forcing sales of other shares, and doubts over both
                                 timing and size.
                                 Equity performance
                                 Over the week, the MSCI Latin America lost 1.0% and the MSCI Emerging Markets 1.8%, both in dollars.
                                 Locally, Brazil was down 1.6% and Mexico 1.7%. Our Latin America research coverage is listed on page 9.
                                 Rates and currency
                                 The Brazilian Real gained 0.2% at 1.76/$ and the Mexican peso 2.0% to 13.03/$. On rates, our economists




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                                         August 30, 2010



                                    expect Selic to reach 12.75% by January 2011.
                                    Valuation
                                    MSCI Brazil is trading at 9.5X next-12-month consensus earnings, with Mexico at 14.3X.
                                    LatAm Focus List
                                    Over the week (to Thursday), our Focus List lost 0.3% vs. MSCI LatAm and 1.0% vs. our Latin American
                                    coverage universe.



Reports Published

                                  US Economics Analyst: Only a Modest Rise in Structural Unemployment So Far

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Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                                               August 30, 2010




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Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                                            August 30, 2010



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Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                                                  August 30, 2010



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