Monday Watch

Earnings of Note
Company/Estimate
A/.24
CSC/1.00
LOW/.54
LTD/.13
TOY/-.01

Splits
SYK 2-for-1 split

Economic Data
Empire Manufacturing for May estimated at 34.50 versus 36.05 in April.

Weekend Recommendations
Forbes on Fox had guests that were positive on TSG, mixed on ADM, CNX and negative on Dell. Bulls and Bears had guests that were mixed on TM, RTP, AGI, WWCA, YHOO, SBL, GE, MEE, NCC and negative on MHR. Cashin' In had guests that were positive on KROL, CVX, CCU, mixed on CME and negative on MSO. Louis Rukeyser's Wall Street had guests that were positive on INTC, JNJ, AMGN, RDN, KSS, COF, XRX, AIG, TGT, PEP, PFE and BAC. Wall St. Week w/Fortune had guests that were positive on ESV, NOI, MIK, BLI, ESRX, CMX, TEVA, BRL, MYL and ELAB. Barron's had a positive column on CMX, MHS, MDRX and a negative column on FNM.

Weekend News
Pfizer is not considering a merger, but is actively looking for partnerships with biotech companies, La Gaceta de los Negocios reported, citing Pfizer's Chairman. Japan's air cargo exports rose 10% to an all-time high in the year ending March 31, Nikkei English news reported. Blue Nile, the Internet jewelry retailer that plans to hold its IPO on Wednesday, has gained loyal clients by selling diamonds at below-market prices and by letting buyers customize, Barron's reported. IBM and Cisco plan a tie-up to offer Internet protocol phone services, the Nihon Keizai reported. Electronic Arts and Activision are considering buying smaller rival Eidos Plc for $569M, the Observer reported. BT Group, the UK's largest phone company is losing more than 150,000 customers each month, the Sunday Times reported. Mattel's new restaurant on Fifth Avenue in New York is capitalizing on the growing popularity of its American Girl brand, the NY Times reported. Saudi Arabia is seeking to rent a fleet of oil tankers to boost production and delivery as oil prices surge, The Business newspaper reported. Employers in the West expect to increase their number of college-graduate hires this year by 8.3%, the Seattle Times reported. Jordan's King Abdullah II said he is urging Arab leaders to fight religious extremism and terrorism against civilians and that Arab countries must develop a blueprint for reform, Newsweek reported. SAP AG Chief Executive Officer Kagermann said he expects sales from software licenses to grow by 10% this year, helped by rising demand in the U.S. as companies are showing an increasing readiness to spend more, the Welt newspaper reported. Chinatrust Financial may take over some medium or small U.S. banks, the Economic Daily News reported. Japanese Finance Minister Tanigaki said the Chinese have a good grasp of their current economic situation and will successfully engineer a soft-landing, Bloomberg reported. As well, China's government is confident it can cool its economy without causing an abrupt slowdown, Finance Minister Jin Renqing said. Merck, Bristol-Myers Squibb and Gilead Sciences plan to develop a combination of three HIV drugs, the companies said. The U.S. government is enacting a quick approval process for AIDS treatments intended for use in developing countries under the Emergency Plan for AIDS Relief, Bloomberg reported. Dell is boosting sales to government and corporate customers in China, helping it catch the country's biggest supplier Lenovo Group, according to researcher IDC. China told Taiwan President Shuibian three days before his inauguration that he must accept Chinese sovereignty or "face destruction by playing with fire," Bloomberg reported.

Late-Night Trading
Asian indices are sharply lower, -4.75% to -1.50% on average.
S&P 500 indicated -.72%.
NASDAQ indicated -1.00%.

BOTTOM LINE: The Portfolio is 100% net long heading into the week. U.S. stocks will likely open sharply lower on significant declines in Japan, Taiwan, Korea and India. India's biggest stock market is currently halted for the second time today, plunging 15.6% on concerns that the nation is headed for political instability and a slowdown in it economic program as Communist parties backing a new government will block sales of profitable state-run companies. I expect U.S. stocks to reach their daily lows before noon. Stocks should rally later in the day as bonds rally and investors speculate the Fed can be more patient with respect to raising interest rates due to slowing growth in Asia.