Friday Watch

Late-Night Headlines
Bloomberg:
- NYSE Group(NYX) plans to remove a monthly limit on fees it charges brokers to complete trades at the NYSE as it seeks to benefit from increased trading.
- Lazard Ltd. and a group of its current and former managing directors raised $590 million by selling 13 million shares, more than originally planned, to help pay off debt and fund expansion.
- Japanese inflation unexpectedly slowed in October as oil prices dropped, giving the central bank room to delay an increase in interest rates to support a recovery in the world’s second-largest economy.
- Crude oil fell from a two-month high in NY on speculation recent gains have reduced the risk that OPEC will cut output a second time later this month.
- Billionaire Kirk Kerkorian sold his remaining stake in GM(GM) almost two months after the automaker rejected his plan to ally with Renault SA and Nissan Motor, a person briefed on the matter said.
- China started operating its first biomass-fired power plant in the eastern province of Shandong as the world’s second-largest energy consumer looks to increase the use of cleaner fuels and cut reliance on coal and oil.

Wall Street Journal:
- China’s companies are importing more scrap copper as a cheaper source of the metal for cathode production as prices rise. China’s copper-cathode output in the first nine months this year reached 2.2 million metric tons, of which 27% was made from scrap. In the same period in 2005, 16% came from scrap. Refineries and makers of semi-fabricated cable and wire are also using more scrap. China’s imports of copper concentrate have plunged 46% over the last 12 months.
- AirTran Holdings CEO Leonard said he’s interested in buying airport gates sold by US Airways Group or Delta Air Lines if those two merge.

Reuters:
- Netflix(NFLX) has had discussions with Amazon.com(AMZN) about selling its online DVD rental subscriptions to Amazon customers.
- A US Homeland Security Dept. unit issued an advisory about a potential attack on US financial institutions’ computers.
- Sirius Satellite Radi(SIRI) plans to offer a live television service next year.

Financial Times:
- Providence Equity Partners, a US buy-out group, is raising a fund worth at least $8 billion for acquisitions.

Australian:
- BHP Billiton(BHP) and Royal Dutch Shell Plc may next week force Tigris Petroleum Corp. from their venture at Iraq’s Halfayah oil field following the findings of an inquiry into kickbacks paid to ousted dictator Saddam Hussein’s regime.

Late Buy/Sell Recommendations
Business Week:
- Liberty Global’s(LBTYA) stock will rise as investors are drawn to the “triple play services” offered by the company, citing John Maloney, president of M&R Capital Management.
- Duke Energy(DUK) may rise to $35 a share because of earnings growth and investment opportunities for both Duke and the spin-off of its natural gas unit.
- Allos Therapeutics(ALTH), an anti-cancer drug developer, may rise on trial results for two drugs to be announced at an American Society of Hematology meeting next month. The stock may advance to $9 within the next year because the company will publicize “encouraging” data on its brain-cancer and lymphoma treatments, citing Needham’s Mark Monane.

Night Trading
Asian Indices are -.25% to +.50% on average.
S&P 500 indicated +.20%.
NASDAQ 100 indicated +.06%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
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Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
- (ATW)/.80
- (KWD)/.64
- (WMG)/.00

Upcoming Splits
- (AMED) 4-for-3
- (FMD) 3-for-2

Economic Releases
10:00 am EST
- Construction spending for October is estimated to fall .4% versus a .3% decline in September.
- ISM Manufacturing for November is estimated to rise to 51.8 versus 51.2 in October.
- ISM Prices Paid for November is estimated to rise to 49.8 versus 47.0 in October.

Afternoon:
- Total Vehicle Sales for November are estimated to rise to 16.4M versus 16.2M in October.
- Domestic Vehicle Sales for November are estimated to rise to 12.5M versus 12.4M in October.

BOTTOM LINE: Asian indices are higher, boosted by technology shares in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.

Stocks Finish Mixed as Short-covering and Lower Long-term Rates Offset Economic Worries

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Stocks at Session Highs on Falling Long-Term Rates and Short-Covering

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Telecom longs and Semi longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is positive as the advance/decline line is higher, most sectors are rising and volume is above average. Bloomberg is reporting that Apple Computer (AAPL) just filed for patent protection for a cell phone that also works as a media player. Theflyonthewall.com is saying that Attorney Michael Starkweather said, "I believe that, with this patent in hand, Apple will eventually be after every phone company, film maker, computer maker and video producer to pay royalties of every download of not just music but also movies and videos." He also said, "This is one of the most important patents in years." Apple rallied to session highs on the report. I continue to believe analysts are vastly underestimating the earnings potential of this company. It remains my second-largest long position behind Google (GOOG). I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, lower long-term rates and bargain-hunting.

Today's Headlines

Bloomberg:
- Cardinal Health(CAH) plans to sell its manufacturing and packaging unit, the source of $1.8 billion in annual revenue, to focus on hospital and pharmacy customers.
- Attacks on eastern Chad last week were conducted by mercenaries with ties to al-Qaeda and support from Sudan’s government and people close to Saudi Arabia’s royal family, Chad’s ambassador to the UN said.
- The bankers, traders and residents of Lower Manhattan are about to find out what it’s like to be in the vortex of the most concentrated construction zone in NYC’s history as construction at Ground Zero takes hold.
- Intuit(INTU) agreed to buy Digital Insight(DGIN) for $1.35 billion, adding a provider of Internet services to banks and expanding beyond its TurboTax and QuickBooks accounting products.
- Shares of US homebuilders jumped after Banc of America Securities upgraded the stocks, citing signs that the outlook for the housing market is improving.
- US Treasuries are rising, pushing the 10-year yield to the lowest since January on growth worries and diminishing inflation concerns.
- Oil is rising .54 as a cold weather system moved into the US and large funds raised bets to try and help performance before year-end.
- The US dollar is falling and is poised for its biggest monthly loss against the euro since April.
- US retailers’ sales rose in November as consumers shopped at department stores and bought luxury goods at the start of the holiday gift-giving season. Federated Dept. Stores(FD), the second-biggest US dept. store company, said sales surged 8.5%.
- OPEC considers $50/bbl. a fair price for oil, Venezuelan President Chavez said.
- Global crude oil prices are “stable” and OPEC does not need to cut supplies in the first quarter of next year, Algerian Oil Minister Khelil said. Global oil demand will fall by 2 million barrels per day in the second quarter of next year, posing a risk of rising inventories and falling oil prices, he said.

Wall Street Journal:
- Vodafone Group Plc is working with Yahoo! Inc.(YHOO) to start a mobile-phone advertising service that it hopes will boost sales in Europe.
- Electronic Arts(ERTS) will gain between $4 million and $5 million from in-game ads in the company’s “Need for Speed: Carbon” game over the holiday quarter.
- US and Latin American law enforcement agencies are concerned about a possible spread in the use of submarines to smuggle drugs into the US.
- BMW AG plans to offer two new vehicles with interior room similar to that of a sport utility vehicle but with better fuel efficiency.
- Automakers presenting new models and concept cars at the Greater LA Auto Show are focusing on fuel efficiency and smaller yet roomier vehicles.

NY Times:
- More doctors are switching to cosmetic medicine or adding the specialty to their practices as a way to earn extra income and cut hours.
- A $150 laptop designed for children in Third World countries has sparked a debate among educators and philanthropists about the role of computers in education and economic development. The laptop, developed by the nonprofit One Laptop Per Child project, will enter production in Taiwan in 2007. Five countries—Argentina, Brazil, Libya, Nigeria and Thailand—have said they will put the laptop in the hands of millions of students. Microsoft chairman Bill Gates opposes the project.

AP:
- Toyota Motor’s(TM) North American president, Jim Press, asked the US Congress to enlarge tax credits for hybrid gas-electric automobiles to speed buying of the energy-saving vehicles.

NY Post:
- Citigroup(C) Chairman and CEO Prince should consider breaking up the company to help boost its stock price, CreditSights analyst David Hendler said.

Washington Post:
- Democratic leaders decided not to introduce plans to improve oversight and funding for intelligence agencies, a proposal they campaigned to implement, citing House and Senate aides.

LA Times:
- Billionaire philanthropist Eli Broad donated $10.5 million to a Los Angeles charter school organization to fund expansion and help efforts to lure students from traditional public schools.

Gulf News:
- Dubai Aluminum, known as Dubal, will add 60,000 tons of production capacity to its plant in Jebel Ali in Dubai, United Arab Emirates, to make the factory the largest in the world.

Personal Incomes Rise, Spending Bounces Back, Jobless Claims Rise, Chicago Manufacturing Falls, Prices Paid Declines

- Personal Income for October rose .4% versus estimates of a .5% gain and a .5% increase in September.
- Personal Spending for October rose .2% versus estimates of a .1% increase and a downwardly revised -.2% in September.
- The PCE Core for October rose .2% versus estimates of a .1% increase and a .2% gain in September.
- Initial Jobless Claims for last week rose to 357K versus estimates of 315K and 323K the prior week.
- Continuing Claims rose to 2480K versus estimates of 2440K and 2435K prior.
- The Chicago Purchasing Manager Index for November fell to 49.9 versus estimates of 54.4 and a reading of 53.5 in October.

BOTTOM LINE: Incomes rose and personal spending rebounded in the US last month, suggesting consumers may prevent the economy from slowing too much, Bloomberg said. Adjusted for inflation, spending increased the most in three months. The PCE core, the Fed’s favorite inflation gauge, rose 2.4% year-over-year, the same increase as the prior month. Adjusted for inflation, disposable income rose .3% versus a .5% gain the prior month. I continue to expect a healthy labor market will continue to propel consumer spending, while inflation continues to decelerate over the intermediate-term.

The number of US workers filing first-time applications for state unemployment benefits unexpectedly rose last week to the highest in more than a year, Bloomberg reported. The four-week moving-average rose to 325,000 from 317,750 the prior week. Jobless claims were artificially magnified this week due to the Thanksgiving holiday last week. The unemployment rate for those eligible to collect benefits, which tracks the US jobless rate, held steady at 1.9%. I expect jobless claims to trend a bit higher over the coming weeks before rebounding as auto production and housing-related cutbacks subside over the intermediate-term.

A gauge of manufacturing activity in the Chicago region unexpectedly showed a contraction in November as production and orders slowed, Bloomberg reported. This conflicts with the Chicago Fed’s Beige book comments yesterday that “manufacturing expanded at a modest pace” last month. Manufacturing now accounts for only 12% of the US economy. The new orders component of the index fell to 52 versus 54.1 the prior month. The employment component dropped to 49.4 versus 57 the prior month. The prices paid component of the index fell to 60.2 from 62.5 the prior month. I expect manufacturing to improve over the intermediate-term as auto production cutbacks subside and housing stabilizes at relatively high levels.

Links of Interest

Market Snapshot
Detailed Market Summary
Quick Summary
Economic Commentary
Movers & Shakers
Today in IBD
NYSE OrderTrac
I-Watch Sector Overview
NYSE Unusual Volume
NASDAQ Unusual Volume
Hot Spots
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Option Dragon
Real-time Intraday Chart/Quote

Thursday Watch

Late-Night Headlines
Bloomberg:
- US lawmakers and regulators should reduce penalties on companies and their auditors to help American financial markets compete globally, a group of prominent executives and academics backed by Treasury Secretary Henry Paulson said.
- Tom Purves, CEO of BMW’s North America unit, expects to introduce a hydrogen-gasoline car in 2007.

Wall Street Journal:
- More US mothers take time off to raise their children during their first years even as their financial contribution to family income rises, citing a US Labor Statistics Bureau study to be released within a few weeks. In 2004, 51% of married mothers of infants worked, down from about 59% in 1997. Mothers with bachelor’s degrees or higher had the largest drop in work-force participation. Wives contributed 34.8% of families’ income, on average, in 2004, up from 32.7% in 1997.

Financial Times:
- The market for investing in the global infrastructure industry is overheated due to overvaluation and excessive leverage, citing Standard & Poor’s infrastructure director Michael Wilkins. Increased demand has resulted in the infrastructure industry becoming “an asset bubble similar to the dotcom era,” Wilkins said.
- Signet Group Plc, the world’s largest specialty jewelry retailer, will seek acquisitions in the US, citing CEO Burman.

China Daily:
- NYSE Group(NYX) plans to open an office in Beijing to convince more Chinese companies to list shares publicly on the NYSE, citing CEO Thain.
- China’s production of aluminum, used in car and plane parts, rose 17% in October from a year earlier, the National Bureau of Statistics said.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (DKS), raised target to $62.

Night Trading
Asian Indices are +.75% to +1.25% on average.
S&P 500 indicated -.01%.
NASDAQ 100 indicated +.01%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
- (CAKE)/.28
- (PLCE)/1.20
- (DLM)/.13
- (FNSR)/.03
- (HRB)/-.32
- (HNZ)/.60
- (OVTI)/.30
- (SFD)/.46

Upcoming Splits
- (EAT) 3-for-2
- (NT) 1-for-10

Economic Releases
8:30 am EST
- Personal Income for October is estimated to rise .5% versus a .5% gain in September.
- Personal Spending for October is estimated to rise .1% versus a .1% rise in September.
- PCE Core for October is estimated to rise .1% versus a .2% increase in September.
- Initial Jobless Claims for last week are estimated to fall to 315K versus 321K the prior week.
- Continuing Claims are estimated to fall to 2440K versus 2454K prior.

10:00 am EST
- Chicago Purchasing Manager for November is estimated to rise to 54.4 versus a reading of 53.5 in October.

BOTTOM LINE: Asian indices are higher, boosted by automaker and technology shares in the region. I expect US equities to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.

Stocks Finish at Session Highs After Positive Beige Book Comments

Indices
S&P 500 1,399.48 +.92%
DJIA 12,226.73 +.74%
NASDAQ 2,432.23 +.81%
Russell 2000 784.16 +1.21%
Wilshire 5000 14,048.63 +.97%
S&P Barra Growth 650.41 +.86%
S&P Barra Value 746.78 +.98%
Morgan Stanley Consumer 674.37 +.59%
Morgan Stanley Cyclical 880.99 +1.0%
Morgan Stanley Technology 574.11 +.61%
Transports 4,737.82 -.33%
Utilities 454.58 +1.17%
Put/Call .67 -27.96%
NYSE Arms .82 -19.81%
Volatility(VIX) 10.83 -6.80%
ISE Sentiment 134.0 -.74%
US Dollar 83.51 +.46%
CRB 318.17 +1.02%

Futures Spot Prices
Crude Oil 62.39 +2.30%
Unleaded Gasoline 167.06 +2.71%
Natural Gas 8.87 +3.63%
Heating Oil 179.25 +3.71%
Gold 642.0 +.03%
Base Metals 237.32 -1.62%
Copper 315.50 -1.62%
10-year US Treasury Yield 4.52% +.39%

Leading Sectors
Oil Service +3.96%
Energy +2.97%
Steel +2.75%

Lagging Sectors
Semis -.43%
Oil Tankers -.43%
HMOs -.81%

Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
- None of note

Afternoon/Evening Headlines
Bloomberg:
- NYC subway and bus riders will be spared previously contemplated fare increases and service cuts for the next two years because the Metropolitan Transportation Authority will have a surplus this year of $938 million.
- Pfizer Inc.(PFE) should get US approval to market its Celebrex arthritis-pain pill for use in children because the benefits outweigh the risks, a FDA advisory panel said.
- Corporate profits from current production soared 31% in the year through September, the largest 12-month gain in 22 years, according to the Commerce Dept.’s 3Q GDP update.
- Most Federal Reserve districts reported “moderate growth” in October and November as gains in consumer spending and “solid” expansion in service industries offset weakness in housing and auto production, the Fed’s Beige Book said.
- Microsoft(MSFT) reiterated plans to sell 10 million Xbox 360 video game consoles by the end of the year, maintaining forecasts after Sony Corp. and Nintendo introduced competing machines.
- US farmers will plant 11% more acres of corn next year after rising demand for ethanol sent prices higher, agricultural broker Risk Management Commodities said.
- Alcan(AL) said it has no plans to bid for a titanium company.

CNBC:
- Home Depot(HD) may be a potential takeover target for private-equity firms.

San Francisco Business Journal:
- Microsoft Corp.(MSFT) is in talks to lease a large block of space at the new $460 million Westfield San Francisco Centre, which opened in September.

BOTTOM LINE: The Portfolio finished slightly higher today on gains in my Biotech longs and Telecom longs. I did not trade in the final hour, thus leaving the Portfolio 100% net long. The tone of the market was positive today as the advance/decline line finished substantially higher, almost every sector rose and volume was above average. Measures of investor anxiety were mostly lower into the close. Today's overall market action was very bullish as the major averages and breadth finished near session highs. Today's midday weakness likely further trapped the near-record shorts. I still expect new all-time highs in the Dow over the next few weeks. The main negative today was the hot money jumping from market-leading growth stocks back to commodities. It is no wonder that the overwhelming majority of funds are badly lagging the S&P 500. I expect this momentum fund rotation to last a couple more days. Last night, Citigroup said steel imports into the U.S. were 3.5M tons in October, the fifth largest increase on record. For the year, steel imports have soared 44%, sending service-center inventories to records. Supplies are now 2.5-3.0M tons above normal. Citi expects this to continue to pressure pricing despite mill curtailments. They also said the U.S. market is already consolidated and that major players are unlikely acquisition targets. The Steel Index (STQ) rose 2.75% today as the mania for most commodities continues.

Stocks at Session Highs into Final Hour on Positive Beige Book Comments and Short-Covering

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Biotech longs and Telecom longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is positive as the advance/decline line is higher, most sectors are rising and volume is about average. The Fed just released its Beige Book. It said consumer spending is increasing and that there is continued moderate growth in the economy. Most areas were cautiously optimistic on holiday sales. Housing and autos were weak areas of the report, however, manufacturing was positive and services were solid. It said that labor markets are tight, but wage growth is only moderate. Finally, most areas reported easing energy and construction costs. Overall, this report should be perceived as bullish for equities as it paints a picture of modest growth and inflation. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering and bargain-hunting.

Today's Headlines

Bloomberg:
- General Motors(GM) will introduce new hybrid gasoline-electric autos next year in an attempt to win sales from Toyota Motor(TM), the world leader in the fuel-saving technology.
- Tiffany & Co.(TIF) reported a 23% rise in earnings on increased sales of $20,000 rings and necklaces and boosted its profit forecast for the year because of holiday demand.
- Crude oil is rising to the highest in two months as speculators increased bets after a government reported showed distillate supplies unexpectedly fell.
- The US dollar is rising the most in three weeks against the euro after a government report showed US economic growth last quarter was quicker than previously estimated.
- NATO leaders agreed that future missions require a “fair sharing of the burden” in terms of military contributions as alliance members said allies need to do more to fight the Taliban in Afghanistan.
- Copper is falling to a one-week low on signs that demand continues to wane from US homebuilders as inventories rise.
- Oil prices “are very comfortable” and it’s too soon to tell whether OPEC will cut output at its next meeting, Kuwaiti Oil Minister Sheikh Ali-Jarrah al-Sabah said.

Wall Street Journal:
- Intel(INTC), Wal-Mart(WMT), BP Plc(BP) and other companies plan to disclose next week a plan to provide digital health records for their employees.
- Home Depot(HD) is betting that a new line of products called Orange Works can help revive sales.
- Citigroup(C) is linking its Smith Barney and Citibank units more closely, so that it can act as both banker and broker for more customers.
- Hewlett-Packard(HPQ) is starting a business to cool computers using technology that the company says can cut energy expenses by 25% to 45%.
- Two US hedge funds that pushed out the CEO of Pep Boys – Manny, Moe & Jack(PBY), a car parts retailer, after building up stakes have continued to buy shares.
- Volkswagen AG and DaimlerChrysler AG are unveiling diesel engines at the LA Auto Show that are clean enough to meet California emission standards.
- Honda Motor’s cars topped the list of vehicle brands with the best resale value.

NY Times:
- Riverdeep Group Plc is close to buying textbook publisher Houghton Mifflin Holdings for about $3.5 billion including debt.

Detroit News:
- Ford Motor(F) persuaded more than 35,000 hourly workers in the US to take buyout or early retirement offers that will have them leave the company by September 2008.

AP:
- Data indicate that oil companies “slacked off” supplying oil and gasoline during the seven-year rally that saw prices reach a record in July. In 2003, for example, Royal Dutch Shell Plc proposed closing a profitable oil refinery at Bakersfield, California.

Financial Times:
- Microsoft Corp.(MSFT) shares could keep rising because its Windows Vista software may do better than some analysts expect.

Engineering News:
- De Beers Fuels Ltd. won South Africa’s first commercial license to produce bio-diesel.

3Q GDP Revised Higher, Inflation Reading Revised Lower, New Home Sales Decline, New Home Prices Rise

- Preliminary 3Q GDP rose 2.2% versus estimates of a 1.8% gain and prior estimates of a 1.6% increase.
- Preliminary 3Q GDP Price Index rose 1.8% versus estimates of a 1.8% gain and prior estimates of a 1.8% increase.
- Preliminary 3Q Personal Consumption rose 2.9% versus estimates of a 2.8% increase and prior estimates of a 3.1% gain.
- Preliminary 3Q Core PCE rose 2.2% versus estimates of a 2.3% gain and prior estimates of a 2.3% increase.
- New Home Sales for October fell to 1004K versus estimates of 1049K and a downwardly revised 1037K in September.

BOTTOM LINE: The economy expanded at a revised 2.2% annual rate from July through September, faster than forecast, Bloomberg said. The core PCE Index, the Fed’s favorite inflation gauge, rose 2.2% versus a 2.7% increase in the second quarter. Consumer spending, which provides about 70% of US economic growth, rose 2.9% versus a 2.6% increase in the second quarter. Residential construction fell 18% during 3Q. Business fixed investment, which includes commercial building and spending on equipment and software, rose at a 10% pace during 3Q. 3Q Nominal GDP rose 4.0%. I continue to believe 4Q GDP growth will exceed estimates of 2.5% as the deflator subtracts less than most expect.

Sales of new homes in the US fell more than forecast in October, Bloomberg reported. The supply of unsold homes at the current sales pace rose to 7 months’ worth. The median price of a new home rose 1.9% to $248,500 from 243,900 a year earlier. Sales fell 39% in the Northeast, 5.6% in the Mid-west and 1.7% in the South. They rose 3.2% in the West. I continue to expect housing to stabilize at relatively high levels over the coming months, which combined with subsiding auto production cutbacks, should help US economic growth accelerate back to around average levels over the intermediate-term.

Links of Interest

Market Snapshot
Detailed Market Summary
Quick Summary
Economic Commentary
Movers & Shakers
Today in IBD
NYSE OrderTrac
I-Watch Sector Overview
NYSE Unusual Volume
NASDAQ Unusual Volume
Hot Spots
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Option Dragon
Real-time Intraday Chart/Quote

Wednesday Watch

Late-Night Headlines
Bloomberg:
- Mack-Cali Realty(CLI) is joining billionaire investor Carl Icahn and real estate developer Harry Macklowe in their $4.6 billion bid for rival Reckson Associates Realty(RA).
- China, the biggest maker of copper and aluminum, may produce 2.95 million metric tons of copper this year, the National Development and Reform Commission said.
- Fuel oil prices in Asia fell to a 10-day low in relation to benchmark Dubai crude on concern supplies may exceed demand in December as imports increase and purchases from China slow.
- Iran’s 10-day war games this month were aimed at intimidating US allies in the region and dissuading them from cooperating.
- The US Treasury Department discriminates against blind people by issuing same-size paper currency whose value is indistinguishable to those unable to see, a federal judge ruled.
- Walt Disney(DIS) will boost its annual dividend by 15% to .31 cents/share, the biggest jump in eight years.
- Sony Corp.(SNE) said it is “possible” that it will exceed its target to ship 6 million liquid crystal display televisions this fiscal year ending March 2007.
- China’s yuan rose to the highest since the government ended a decade-old link to the dollar after US Treasury Henry Paulson said a stronger currency will help resolve the “tension” in trade ties between the two nations.

Wall Street Journal:
- Nokia Oyj(NOK) plans to sell Internet-related services in an effort to maintain growth, citing CEO Kallasvuo.
- Venture capitalists, betting on new battery technologies, are funding companies developing energy-storage products.
- Citigroup(C) and Charles Schwab(SCHW) are among financial services companies that help administer charitable foundations for wealthy families looking to teach philanthropy to their children.

Fortune:
- Apple Computer(AAPL) is close to a deal to sell the Beatles’ catalog on its iTunes online music store.

AP:
- A federal judge ruled President Bush’s authority to block assets of suspected terrorist groups is unconstitutional. US District Judge Audrey Collins, who said in July she would uphold Bush’s executive order, ruled the US government can’t block the assets of the Liberation Tigers and Partiya Karkeran Kurdistan.

Late Buy/Sell Recommendations
- None of note

Night Trading
Asian Indices are +.50% to +1.0% on average.
S&P 500 indicated +.15%.
NASDAQ 100 indicated +.21%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
- (ARO)/.61
- (BEAS)/.13
- (DSW)/.27
- (JLG)/.33
- (PRGS)/.36
- (SNPS)/.19
- (TIF)/.16
- (TIVO)/-.14
- (VRNT)/.29

Upcoming Splits
- (EAT) 3-for-2
- (NT) 1-for-10

Economic Releases
8:30 am EST
- Preliminary 3Q GDP is estimated to rise 1.8% versus prior estimates of a 1.6% increase.
- Preliminary 3Q GDP Price Index is estimated to rise 1.8% versus prior estimates of a 1.8% increase.
- Preliminary 3Q Personal Consumption is estimated to rise 2.8% versus a 3.1% prior estimate.
- Preliminary 3Q Core PCE is estimated to rise 2.3% versus prior estimates of a 2.3% increase.

10:00 am EST
- New Home Sales for October are estimated to fall to 1049K versus 1075K in September.

10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil drawdown of 350,000 barrels versus a 5,161,000 build the prior week. Gasoline supplies are expected to rise by 450,000 barrels versus a 1,406,000 barrel build the prior week. Distillate supplies are expected to rise by 500,000 barrels versus a 1,198,000 barrel decline the prior week. Finally, Refinery Utilization is expected to rise .63% versus a .22% decline the prior week.

2:00 pm EST
- Fed’s Beige Book

BOTTOM LINE: Asian indices are higher, boosted by automaker and technology shares in the region. I expect US equities to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.

Stocks Finish Near Session Highs on Surge After Positive Bernanke Comments

Indices
S&P 500 1,386.72 +.35%
DJIA 12,136.45 +.12%
NASDAQ 2,412.61 +.28%
Russell 2000 774.82 +.35%
Wilshire 5000 13,913.86 +.32%
S&P Barra Growth 644.89 +.46%
S&P Barra Value 739.51 +.24%
Morgan Stanley Consumer 670.41 +.48%
Morgan Stanley Cyclical 872.26 -.29%
Morgan Stanley Technology 570.61 +.55%
Transports 4,753.62 -.74%
Utilities 449.33 +.56%
Put/Call .93 -27.34%
NYSE Arms 1.06 -39.66%
Volatility(VIX) 11.62 -5.53%
ISE Sentiment 135.0 +13.45%
US Dollar 83.12 -.46%
CRB 314.97 +.63%

Futures Spot Prices
Crude Oil 60.90 +.96%
Unleaded Gasoline 161.40 +1.27%
Natural Gas 8.31 +4.0%
Heating Oil 172.75 +1.31%
Gold 645.80 +.33%
Base Metals 241.22 -.84%
Copper 317.0 unch.
10-year US Treasury Yield 4.50% -.61%

Leading Sectors
Energy +1.84%
Internet +1.23%
HMOs +1.12%

Lagging Sectors
Steel -.48%
Wireless -.50%
Oil Tankers -3.65%

Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
- None of note

Afternoon/Evening Headlines
Bloomberg:
- Shares of Apple Computer(AAPL) rose to a record after analysts said faster Macintosh computers and low-priced iPod players will spur holiday sales, and that a new music phone may buoy revenue next year.
- Shares of Louisiana-Pacific Corp.(LPX), a US producer of wood panels and boards, soared the most in seven months on speculation the company may be a takeover target.
- Bank of America(BAC), whose shares have climbed 18% this year, surpassed Citigroup(C) for the first time to become the biggest US bank by market value.
- Wheeling-Pittsburgh(WPSC), a US steel producer, said its financial results for the fourth quarter will miss forecasts because of prices and shipments were less than expected.
- Copper prices declined in NY as US inventories climbed. Supplies have risen 400% from this year’s low of 6,756 tons on July 28.

CNBC:
- Dollar General Corp.(DG) may be a target of leveraged-buyout firms Bain Capital LLC and Cerberus Capital Management.

Reuters:
- Time Warner Inc.(TWX) plans to offer a service next year to allow consumers to download films online and copy them onto DVDs, citing CEO Parsons.

BOTTOM LINE: The Portfolio finished higher today on gains in my Medical longs, Retail longs, Telecom longs and Computer longs. I covered my (EEM), (IWM) and (QQQQ) hedges in the final hour, thus leaving the Portfolio 100% net long. The tone of the market was modestly positive today as the advance/decline line finished slightly higher, sector performance was mixed and volume was above average. Measures of investor anxiety were lower into the close. Today's overall market action was bullish. Many market-leading stocks finished the day with nice gains. With short interest just off all-time highs, I suspect today's late surge was mainly the result of short-covering after the bears were unable to gain downside traction this morning, despite potential catalysts. Most bears continue to view every dip as the beginning of a major sell-off and remain stunningly complacent giving what has transpired since mid-year, in my opinion. The Association of American Railroads reported recently that intermodel volume of 250,512 trailers (RAILTOTL Index on Bloomberg) or containers rose 2% in the week ended November 18 vs. last year. Moreover, this is only down 3% from all-time highs set in late September of this year. As well, the Baltic Dry Index (BDIY Index on Bloomberg) has been trending higher for months. Finally, while truck tonnage (TRUKINDX Index on Bloomberg) has been falling modestly of late, it is mostly the result of record high rail use.

Stocks Slightly Higher into Final Hour on Positive Bernanke Comments

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Telecom longs, Medical longs, Retail longs and Computer longs. I have not traded today, thus leaving the Portfolio 75% net long. The tone of the market is slightly positive as the advance/decline line is about even, sector performance is mixed and volume is above average. The latest data from the NYSE shows short interest fell only .7% from mid-October through mid-November, after reaching an all-time high the prior month, despite recent gains and bears' suggestions that they are a dying breed. To put that into perspective, NYSE short interest has risen 6.2% from June and 21% from January of this year. Moreover, since the stock market bubble burst in early 2000 and the negativity bubble began to fill with air, NYSE short interest has rocketed 148.2%. I suspect many shorts will be quick to cover on any signs of market stabilization. More record highs for the DJIA are likely before year-end. I expect US stocks to trade modestly higher into the close from current levels on short-covering, lower long-term rates and bargain-hunting.

Today's Headlines

Bloomberg:
- Fed Reserve Chairman Bernanke said the US economy will expand toward its full capacity in the coming year and that inflation should continue to slow.
- Currency options traders are the most bullish on the euro in three years, which could signal the currencies strength is near a peak.
- NYSE Group(NYX) and the NASD agreed to form a single regulator for the securities industry, ending a turf war in order to cut compliance costs for Wall Street firms and better police ever-more complex financial markets.
- Citadel Investment Group LLC plans to sell as much as $2 billion in notes in what may be the first-ever bond sale by a hedge fund, Fitch Ratings said.
- Vornado Realty Trust(VNO), the second-largest US real estate investment trust, agreed to buy the Manhattan Mall on Sixth Ave. for about $689 million, expanding in a neighborhood where it owns eight properties.
- Crude oil is rising to a two-week high on forecasts that most of the US will be colder than normal next week.

Wall Street Journal:
- Nokia Oyj(NOK) is under pressure to introduce slimmer handsets to match those of rivals Motorola(MOT) and Samsung Electronics.
- Morgan Stanley(MS), Merrill Lynch(MER), Bear Stearns(BSC) and other investment banks are buying US subprime-mortgage lenders as that industry is troubled with defaulted payments.
- Intel Corp.(INTC) will invest more than $1 billion in venture capital projects for the first time since 2000.
- Microsoft’s(MSFT) 30-gigabyte Zune digital player failed to make Amazon.com’s Top 10 selling list for electronics yesterday.
- Telephone-equipment makers that have for years dominated the Chinese market may be in for a disappointment. China is likely to begin supporting its own equipment makers, Huawei technologies and ZTE Corp., by starting its 3G networks with its own technology standard, called TD-SCDMA.

Market News Intl.:
- Fed Reserve Bank of St. Louis President William Poole said US inflation is still too high yet may decline further if expectations keep falling.

NY Times:
- The US Agriculture Dept. is trying to decide how to label fish as organic.
- Boeing Co.(BA) is trying to avoid mistakes it made almost a decade ago by not over-producing planes and keeping demand high.
- Members of the Mahdi Army, an Iraqi Shiite militia, are being trained by the Iranian-backed group Hezbollah.
- Latinos are moving in and blacks are leaving the once predominately black neighborhoods of Los Angeles.

AP:
- Alaska plans to take away ExxonMobil Corp.’s(XOM) leases at the Point Thomson oil and gas field in the North Slope after the company failed to develop the site, citing Governor Frank Murkowski.

Handelsblatt:
- Federal Reserve Bank of Dallas President Richard Fisher said he’s “content” with the level of interest rates in the US, adding that the key lending rate of 5.25% is “just about right.”

Sueddeutsche Zeitung:
- German families’ net average income has declined 2% since 1991 dented by accords between unions and employers, as well as rising costs for pensions, health and unemployment insurance.

Durable Goods Orders Fall, Consumer Confidence Declines, Existing Home Sales Rise

- Durable Goods Orders for October fell 8.3% versus estimates of a 5.0% decline and an upwardly revised 8.7% increase in September.
- Durables Ex Transports for October fell 1.7% versus estimates of a .2% increase and an upwardly revised .5% gain in September.
- Consumer Confidence for November fell to 102.9 versus estimates of 106.0 and 105.1 in October.
- Existing Home Sales for October rose to 6.24M versus estimates of 6.14M and 6.21M in September.

BOTTOM LINE: Orders for durable goods fell last month after a surge the prior month, Bloomberg reported. Bookings for non-defense capital goods excluding aircraft, a gauge of future corporate spending, fell 5.1%. However, a survey released earlier in the month from Blue Chip Economic Indicators said business spending will rise 7.8% this year, up from 6.8% last year. Orders for commercial aircraft declined 45% after soaring 198% the prior month. I expect durable goods to bounce back sharply next month.

Confidence among US consumers unexpectedly fell this month, Bloomberg reported. The present situation component of the index declined to 123.6 versus 125.1 in October. The expectations component fell to 89.2 versus a reading of 91.9 in October. The percentage that said jobs are plentiful rose to 25.8% from 25.6% the prior month. I continue to expect consumer sentiment to make new cycle highs over the intermediate-term as housing stabilizes at relatively high levels, energy prices fall further, inflation decelerates, the job market remains healthy and the stock market rises further.

US previously owned home sales unexpectedly rose in October as lower prices and borrowing costs brought more buyers into the market. The median selling price fell 3.5% from a year earlier to $221,000. The number of homes for sale at the existing pace rose to 7.4 months’ worth from 7.3 months in September. Purchases rose 6.4% in the West and were unch. in the Mid-west. They fell 2.9% in the Northeast and 1.2% in the South. I continue to expect the housing market to stabilize at a relatively high level. I expect US economic growth to bounce back to more average levels over the intermediate-term as auto production cutbacks subside and housing subtracts less.

Links of Interest

Market Snapshot
Detailed Market Summary
Quick Summary
Economic Commentary
Movers & Shakers
Today in IBD
NYSE OrderTrac
I-Watch Sector Overview
NYSE Unusual Volume
NASDAQ Unusual Volume
Hot Spots
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Option Dragon
Real-time Intraday Chart/Quote

Tuesday Watch

Late-Night Headlines
Bloomberg:
- Berkshire Hathaway Inc.(BRK/A), the insurance and investment firm run by billionaire Warren Buffett, will disclose more in financial reports in response to a government request, according to regulatory filings.
- A unit of hedge-fund manager Man Group Plc shut down because of losses from US hedge fund Amaranth Advisors LLC’s collapse. Man Alternative Investments Ltd., which owns about 13% of Amaranth’s shares, lost about 20% of this year’s gains because of Amaranth’s collapse in September.
- The SEC will propose raising asset requirements for investing in hedge funds at a Dec. 4 public meeting. The agency will also consider new anti-fraud rules that would prohibit hedge fund managers from making false or misleading statements to individuals who invest in funds.
- Billionaire investor Carl Icahn and Harry Macklowe disclosed that they own an 8% stake in Reckson Associates Realty Corp.(RA), the real estate investment trust they are seeking to buy for $4.26 billion.
- Iran will stand by its neighbor Iraq to help the country boost security and achieve peace, President Mahmoud Ahmadinejad said during a visit to Tehran by his Iraqi counterpart Jalal Talabani.
- Nintendo sold more than 600,000 Wii video-game consoles in the Americas during the product’s first eight days on the market as the company battled to take sales from Sony Corp.’s(SNE) PlayStation 3.
- Japan’s retail sales unexpectedly fell for a second month, undermining the central bank’s case that the economy is strong enough to withstand another interest rate increase.

Financial Times:
- French President Jacques Chirac wants Iran to contribute to the group of countries and multinational institutions co-coordinating NATO’s peace-keeping mission in Afghanistan.

Reuters:
- IAC/InterActiveCorp(IACI) will merge its Ask.com, CitySearch and functions from other sites to provide local search services.

Yonhap News:
- North Korea’s nuclear negotiator Kim Kye Gwan said his country is ready to rejoin six-nation talks on its nuclear weapons “at any time.”

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (HLT), target $39.
- Downgraded (NYT) to Sell, target $17.
- Boosted estimates for (GS) and (MS).

Night Trading
Asian Indices are -1.25% to -.50% on average.
S&P 500 indicated +.01%.
NASDAQ 100 indicated -.01%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
- (AMWD)/.58
- (CHS)/.23
- (DG)/.15
- (DBRN)/.36
- (JTX)/-.38

Upcoming Splits
- None of note

Economic Releases
8:30 am EST
- Durable Goods Orders for October are estimated to fall 5.0% versus a 8.3% rise in September.
- Durables Ex Transportation for October are estimated to rise .2% versus a .5% gain in September.

10:00 am EST
- Consumer Confidence for November is estimated to rise to 106.0 versus a reading of 105.4 in October.
- Existing Home Sales for October are estimated to fall to 6.14M versus 6.18M in September.

BOTTOM LINE: Asian indices are lower, weighed down by automaker and technology shares in the region. I expect US equities to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 75% net long heading into the day.

Stocks Finish Near Session Lows on Profit-taking and Higher Energy Prices

Indices
S&P 500 1,381.91 -1.36%
DJIA 12,121.71 -1.29%
NASDAQ 2,405.92 -2.21%
Russell 2000 772.10 -2.55%
Wilshire 5000 13,868.82 -1.51%
S&P Barra Growth 641.92 -1.38%
S&P Barra Value 737.77 -1.34%
Morgan Stanley Consumer 667.23 -1.26%
Morgan Stanley Cyclical 874.79 -1.82%
Morgan Stanley Technology 567.50 -2.74%
Transports 4,789.15 -1.16%
Utilities 446.84 -.83%
Put/Call 1.28 +26.73%
NYSE Arms 1.73 +13.83%
Volatility(VIX) 12.30 +14.63%
ISE Sentiment 119.0 +12.26%
US Dollar 83.51 -.18%
CRB 313.01 +1.31%

Futures Spot Prices
Crude Oil 60.36 +1.89%
Unleaded Gasoline 159.0 +.08%
Natural Gas 7.99 +3.63%
Heating Oil 170.55 +2.34%
Gold 647.40 +.05%
Base Metals 243.27 +.10%
Copper 321.0 -.17%
10-year US Treasury Yield 4.53% -.43%

Leading Sectors
Gold & Silver +.57%
Energy -.40%
Drugs -.51%

Lagging Sectors
I-Banks -3.57%
Disk Drives -4.04%
Airlines -4.62%

Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
CSFB:
- Rated (DE) Outperform.

Afternoon/Evening Headlines
Bloomberg:
- Cholesterol-lowering drugs such as Pfizer’s(PFE) Lipitor, taken by millions of Americans in danger of heart attacks and strokes, also slash the risk of those afflictions among the healthy.
- Palm Inc.(PALM) cut its second-quarter forecast, saying it is taking longer than anticipated to make its latest Treo device compatible with US wireless networks. The shares fell 7.3% after-hours.
- The US Supreme Court refused to block federal prosecutors from reviewing the phone records of two NY Times(NYT) reporters who allegedly tipped off the targets of a terrorist fundraising probe.
- NYSE short interest fell .7% to 9.65 billion shares as of mid-November, just off all-time highs set in October.
- US crude-oil inventories probably rose as higher imports helped meet demand from refineries returning to service after being shut for maintenance, a Bloomberg survey showed.
- ConocoPhillips(COP) and Anadarko Petroleum announced the start up of a second Alpine satellite oil field on Alaska’s North Slope.

Gainesville Sun:
- The presidents of the University of Florida and Florida State are working together on a college football playoff system to replace the Bowl Championship Series.

BOTTOM LINE: The Portfolio finished lower today on losses in my Semi longs, Internet longs and Computer longs. I added (EEM), (IWM) and (QQQQ) hedges in the final hour, thus leaving the Portfolio 75% net long. The tone of the market was very negative today as the advance/decline line finished substantially lower, almost every sector fell and volume was about average. Measures of investor anxiety were higher into the close. Today's overall market action was bearish. The market's inability to bounce in any meaningful way, as I had expected, is not a good sign. However, volume was only average. Investor anxiety was elevated throughout the day. The last time the NYSE Arms closed this high was in July. Sellers seemed to lack conviction today even as buyers stepped away. I suspect losses in overseas markets tonight could lead to some more weakness tomorrow morning here. Overall, I view today’s sell-off as a healthy pullback after extraordinary gains.

Stocks Sharply Lower into Final Hour on Profit-taking and Higher Energy Prices

BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Semi longs, Internet longs and Computer longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is very negative as the advance/decline line is substantially lower, almost every sector is falling and volume is below average. Copper is giving back some of this morning's gains after the Beijing-based Customs General Administration said that copper-concentrate imports plunged 46% in October from a year earlier and copper purchases fell 0.9%. Moreover, the OECD said it lowered U.S. growth estimates for next year to 2.4% from 3.1%, and for Japan from 2.2% to 2.1%. They boosted European growth estimates to 2.3% from 2.1%. The Case-Schiller US Housing futures are now projecting a 4.6% decline in the average home price over the next six months. This is up from a 5.2% decline projected a couple of months ago. I suspect the OECD should have left its forecast at 3.1% for US growth. An end to auto production cutbacks, lower inflation and a stabilizing housing market will result in average U.S. growth of around 3% next year, in my opinion. Considering today's headline losses, volume is only around average, and very few stocks are down meaningfully on above-average volume. I expect US stocks to trade higher into the close from current levels on short-covering, lower long-term rates and bargain-hunting.

Today's Headlines

Bloomberg:
- Christopher Hill, the chief US negotiator to six-nation talks on dismantling North Korea’s nuclear weapons program, arrives in Beijing today to meet with his Chinese counterpart, the US Embassy said.
- The Russian government’s growing intervention in key industries is a “step back” and may lead to slower economic growth, the Organization for Economic Cooperation and Development said.
- Wal-Mart(WMT) plans to set up a venture with Indian billionaire Sunil Mittal, gaining access to the second-most populous nation as the government considers tempering restrictions on overseas ownership.
- The US Supreme Court refused to revive a $10.1 billion award against Altria Group’s(MO) Philip Morris USA, rejecting an appeal from smokers who said they were misled about the health risks of “light” cigarettes.
- Oil is rising above $60 on forecasts that most of the US will be colder than normal next week and a report that Saudi Arabia’s oil minister said OPEC may cut output at a meeting next month.
- Brazil will likely double its output of ethanol to power cars in coming years as producers plant more sugarcane to meeting rising demand for the biofuel.
- Copper declined from morning highs as an import slowdown in China, the world’s largest user of the metal, renewed speculation that supplies may top consumption this year. Copper-concentrate imports plunged 46% in October from a year earlier, and copper purchases dropped .9%, the Chinese Customs General Administration said.

Wall Street Journal:
- US federal courts will require litigants to provide their opponents with electronically stored information under rules that took effect Friday.
- University of Southern California and other US schools of higher education are following the lead set by Massachusetts Institute of Technology and Stanford University in turning research projects into profitable business ventures.

NY Times:
- The New York State Legislature plans to provide a complete, public list of lawmarkers’ government-funded pet projects.
- Xerox Corp.(XRX) is trying to develop erasable paper for its copiers that would allow documents to be recycled an unlimited number of times.

AP:
- Bank of America(BAC) signed a five-year agreement with the Nascar auto-racing series to attract new business for the No. 2 US bank’s ATMs and branches.

NY Post:
- NYC will host a record 7.3 million tourists this year, many of them coming on shopping sprees.

Berlingske Tidende:
- Dong Energy A/S plans to increase the amount of oil it extracts from the Danish part of the North Sea by injecting carbon dioxide into oil extraction pipes, citing Dong CEO Eldrup.

Mlada Fronta Dnes:
- Czech appetite for learning English has led to classes being introduced for toddlers.

Panorama:
- Petroleos de Venezuela SA, South America’s largest oil company, said initial exploration shows that oil reserves in the Gulf of Venezuela might total at least 7 billion barrels.

Economic Releases

- None of note

Links of Interest

Market Snapshot
Detailed Market Summary
Quick Summary
Economic Commentary
Movers & Shakers
Today in IBD
NYSE OrderTrac
I-Watch Sector Overview
NYSE Unusual Volume
NASDAQ Unusual Volume
Hot Spots
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Option Dragon
Real-time Intraday Chart/Quote

Monday Watch

Weekend Headlines
Bloomberg:
- US retail sales rose a strong 6% to $8.96 billion on Black Friday, the first day of the holiday shopping season, as discounts and lower gasoline costs encouraged consumers to buy more gifts, according to ShopperTrak RCT.
- US shoppers spent 19% more over the Thansgiving weekend than last year, kicking off holiday gift buying with purchases of wide-screen televisions and clothes, the National Retail Federation said. Consumers spent an average $360.15 each over the weekend, up from m$302.81 a year earlier.
- China’s economy is unlikely to slow “sharply” in 2007 because rising consumer spending and industrial production will underpin growth, said Yao Jingyuan, chief economist of the National Bureau of Statistics.
- Palestinians fired rockets at Israel after a cease-fire agreement between Prime Minister Ehud Olmert and Palestinian Authority President Mahmoud Abbas went into effect, raising doubts about how long the truce can hold.
- Wal-Mart Stores(WMT) said November sales at US stores open at least a year fell .1%, the worst performance in more than a decade in the first month of the holiday season.

Barron’s:
- US philanthropists like billionaire investor Warren Buffet are developing longstanding relationships with causes they have a personal interest in, rather than donating to a general cause. Buffett has donated to organizations involved in family planning and abortion rights for years.
- Leveraged buyouts have accounted for 34% of merger activity this year, almost double from this time last year, as investment firms target companies stockpiling cash.

NY Times:
- Atlanta, GA has succeeded in luring young, college-educated workers from other US cities such as New York, NY and Washington, DC as the metropolises vie to retain their workforces. The number of 25- to 35-year-olds with college degrees increased 46% in Atlanta from 1990 to 2000, followed by San Francisco, Denver, Portland and Austin, citing a recent study.
- YRC Worldwide(YRCW) is focusing on its business in China as the trucking company follows customers to Asia, citing CEO Zollars.

Forbes:
- Your broker may be making a pretty penny lending your stock to a hedge fund without your knowledge. Here’s how to get a cut of the action.

Washington Post:
- Forty experts on warfare, the Middle East and topics such as Islamic militancy have been asked to devise options for the Iraq Study Group headed by former Secretary of State James Baker III.

San Jose Mercury News:
- US consumers may soon be able to use their mobile phones at retail stores instead of swiping debit or credit cards. Mobile phones may replace most cards found in consumers’ wallets, including gifts cards, reward cards and payment cards.

AP:
- NYSE Group(NYX) CEO John Thain is traveling to China next week to attract more listings from Asia.
- Israel and the Palestinians late yesterday agreed on a cease-fire to end Israel’s five-month military campaign in the Gaza Strip and the firing of rockets by Palestinian militants into the Jewish state.
- Sunni, Shiite and Kurdish leaders in Iraq appealed for an end to sectarian violence in a statement issued on national television.
- Somalia’s Islamist militia, which controls most of the country’s south, deployed forces within nine miles of the border with Ethiopia to the north. The militia seized control of the capital, Mogadishu, in June and has introduced Islamic law in areas it controls. Ethiopia’s Prime Minister Meles Zenawi said on Nov. 23 his country is preparing to defend itself against a holy war declared by the Islamic Courts.

Reuters:
- The US Transportation Security Administration has set a $28 annual fee it will charge airline passengers who join a privately run registry to enable them shorter waits for screening.

Financial Times:
- The National Association for Stock Car Auto Racing, or Nascar, wants to expand to China and western Europe by tying its licensing, sponsorship and media expertise with local partners, citing Chairman Brian France.
- Merck & Co.(MRK) plans to advertise its drugs more on the Internet and less on television, citing an interview with Peter Loescher, president of the Global Human Health unit.
- Kazakhstan’s Kashagan oil field, one of the world’s five biggest, will produce 25% more oil than forecast once it reaches full production.
- Cisco Systems(CSCO) plans a joint venture with Russia’s OAO Concern Sitronics, citing Paul Mountford, Cisco’s president of emerging markets.

De Telegraaf:
- Air France-KLM is in a “comfortable position” as consolidation in the US airline industry will enter a crucial phase in 2007, citing vice-chairman Leo van Wijk.

El Economista:
- Juan Miguel Villar Mir, Chairman of Obrascon Huarte Lain SA, may invest in Texas and will focus on construction and infrastructure companies.

Nihon Keizai:
- Nissan Motor(NSANY) will start selling all-electric cars by 2009. The automaker will develop its own lithium-ion battery to power the lightweight vehicles.
- Net purchases of Japanese stock and bond purchases by foreign investors may fall this year for the first time in four years.

Xinhua News Agency:
- China will have 459 million mobile phone users by year’s end, citing the Ministry of Information Industry.

AFP:
- Thousands of Islamists rallied in Pakistan’s economic center Karachi protesting changes to the country’s 27-year-old rape law. Pakistan’s parliament voted earlier this month to scrap provisions in the law that oblige women alleging rape to produce four male witnesses or face possible prosecution for adultery.

Al-Hayat:
- Saudi Arabia’s Oil Minister Ali al-Naimi said OPEC may agree to cut oil production for a second time in the third quarter at a meeting in Nigeria next month.
- Foreign direct investment, know as FDI, has reached $37 billion so far this year in Arab states compared with $7 billion for all of last year. The United Arab Emirates, Egypt, Kuwait, Morocco and Lebanon have received 73% of the total investment coming into the region.

Milliyet:
- Turkiye Petrolleri A.O., Turkey’s state oil company, has discovered 20 new oil wells near the border with Syria and will start pumping oil from half of them by mid-December.

Weekend Recommendations
Barron's:
- Made positive comments on (AVP) and (ASMI).
- Made negative comments on (VRTX).

Citigroup:
- Reiterated Buy on (MAR), raised target to $55.
- Reiterated Buy on (WMB), raised target to $35.
- Reiterated Buy on (HOLX), target $55.
- Rated (SPNS) Buy, target $21.
- We continue to believe Analog semi fundamentals are poised for a favorable 1H07 inflection, and with that another leg up in select stocks. Our top picks are (MRVL), (ISIL) and (FCS).
- Video game sales were strong over the holiday weekend, helped by promotions and despite limited PS3/Wii availability. Front line title pricing generally held, a good sign of publisher/retailer demand, and discounts tended to be bundled and of limited duration. Out estimates for game publishers/retailers are unchanged, but we see the greatest opportunity for upside at Activision, whose games were cited as next gen favorites, received good shelf space and were used in promotions.

Night Trading
Asian indices are -.25% to +.50% on average.
S&P 500 indicated -.05%
NASDAQ 100 indicated -.08%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/Estimate
- (DCI)/.42

Upcoming Splits
- (AME) 3-for-2

Economic Releases
- None of note

BOTTOM LINE: Asian Indices are mostly higher, boosted by technology and commodity shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the week.

Weekly Outlook

Click here for The Week Ahead by Reuters

There are a number of economic reports of note and some significant corporate earnings reports scheduled for release this week.

Economic reports for the week include:

Mon. - None of note

Tues. - Durable Goods Orders, Consumer Confidence, Existing Home Sales, Richmond Fed Manufacturing Index

Wed. - 3Q GDP, 3Q GDP Price Index, 3Q Personal Consumption, 3Q Core PCE, New Home Sales, Fed’s Beige Book

Thur. - Personal Income, Personal Spending, PCE Deflator, Initial Jobless Claims, Chicago Purchasing Manager, House Price Index

Fri. - Construction Spending, ISM Manufacturing, ISM Prices Paid, Total Vehicle Sales

Some of the more noteworthy companies that release quarterly earnings this week are:

Mon. - Donaldson Co.(DCI)

Tues. - Chico’s FAS(CHS), Dollar General(DG), Dress Barn(DBRN), Jackson Hewitt(JTX)

Wed. - Aeropostale Inc.(ARO), BEA Systems(BEAS), JLG Industries(JLG), Marvell Tech(MRVL), Synopsys(SNPS), Telephone & Data(TDS), Tiffany & Co.(TIF)

Thur. - Brown-Forman(BF/A), Del Monte Foods(DLM), H&R Block(HRB), HJ Heinz(HNZ), Omnivision Tech(OVTI)

Fri. - Atwood Oceanics(ATW), Finisar Corp.(FNSR), j2 Global(JCOM), Multimedia Games(MGAM), Quanex Corp.(NX), Vimpel-Communications(VIP)

Other events that have market-moving potential this week include:

Mon. - None of note

Tue. - CSFB Tech Conference, JP Morgan Consumer & Retail Conference, Lazard Life Sciences Conference, CIBC Mid/Small-cap Best Ideas Conference, Goldman Sachs Shipping Conference, Merrill Lynch Health Services Conference

Wed. - CIBC Mid/Small-cap Best Ideas Conference, Lazard Life Sciences Conference, Piper Jaffray Health Care Conference, Bear Stearns Commodities & Capital Goods Conference, CSFB Tech Conference, JPMorgan Consumer & Retail Conference, Merrill Lynch Health Services Conference

Thur. - Bear Stearns Commodities & Capital Goods Conference, CSFB Tech Conference, Piper Jaffray Health Care Conference, monthly retail same-store-sales releases

Fri. - Piper Jaffray Health Care Conference, CSFB Tech Conference

BOTTOM LINE: I expect US stocks to finish the week modestly higher on better-than-expected economic data, rising consumer spending optimism, lower energy prices, seasonal strength, strong corporate profits, investment manager performance anxiety and short-covering. My trading indicators are still giving bullish signals and the Portfolio is 100% net long heading into the week.