Tuesday Watch

Late-Night Headlines
Bloomberg:
- Police officers can end a high-speed chase that threatens innocent bystanders by forcing a fleeing suspect’s car to crash, the US Supreme Court ruled.
- Microsoft Corp.(MSFT), citing today’s victory in the US Supreme Court, will ask judges to cut more than $1 billion from jury verdicts the company lost in two other patent cases.
- George Soros’s money management firm hired Mark Malloch Brown, the former deputy secretary general of the United Nations, as vice chairman to help with investments in emerging markets.
- Anadarko Petroleum Corp.(APC), a US oil and natural-gas producer, said first-quarter profit fell 84% on lower oil and natural-gas prices.
- Japanese wages fell for a fourth month in March, signaling that growth in consumer spending in the world’s second-biggest economy will be limited.
- Pakistan and Afghanistan will boost anti-terrorism cooperation, denying sanctuary to gunmen and cutting off funds to extremists, the country’s presidents Pervez Musharraf and Hamid Karzai said after meeting in Turkey.
- Crude oil is falling a second day in NY on speculation US stockpiles rose to a five-month high last week as US refinery “fires” and “breakdowns” cut demand.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on Corning(GLW), target $29. Circuit City(CC) lowered their F1H08 guidance, citing weak TV sales in April. According to the company, the weakness was due to the overall market condition and company specific issues. Our retailing team called Best Buy(BBY) and was informed by BBY that it had not seen material changes from their expectation, and they will not revise their guidance. We believe that CC’s weakness is mostly company-specific. On the recent earnings conference call, BBY indicated that the sales of flat-panel TVs were strong and they were gaining market share. We still think the market condition for GLW’s LCD business is healthy.

Night Trading
Asian Indices are -.75% to -.25% on average.
S&P 500 indicated +.07%.
NASDAQ 100 indicated +.05%.

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
- (ASF)/.33
- (ACS)/.80
- (NLY)/.23
- (ADM)/.61
- (ADP)/.66
- (AVP)/.32
- (BWLD)/.52
- (CBG)/.15
- (CEC)/.99
- (CEPH)/.89
- (CEN)/.30
- (CMG)/.32
- (COCO)/.14
- (DIVX)/.14
- (DWA)/.08
- (EMR)/.60
- (EOG)/1.02
- (FLS)/.56
- (GET)/.12
- (GBE)/-.07
- (HC)/.15
- (IVGN)/.77
- (KCP)/.16
- (KMI)/1.69
- (LIZ)/.60
- (MRO)/1.96
- (MAS)/.26
- (MHS)/.74
- (MET)/1.28
- (MYGN)/-.25
- (NMX)/.57
- (OII)/.51
- (PPC)/-.15
- (PG)/.74
- (Q)/.09
- (RCL)/.06
- (RUTH)/.28
- (SAF)/1.63
- (SIRI)/-.11
- (SOHU)/.17
- (JOE)/.09
- (TUES)/.05
- (UA)/.20
- (WBMD)/.01
- (YUM)/.63

Upcoming Splits
- None of note

Economic Releases
10:00 am EST
- Pending Home Sales for March is estimated to rise .1% versus a .7% gain in February.
- ISM Manufacturing for April is estimated to rise to 51.0 versus a reading of 50.9 in March.
- ISM Prices Paid for April is estimated to rise to 67.5 from 65.5 in March.

Afternoon:
- Total Vehicles Sales for April are estimated to fall to 16.2M versus 16.3M in March.

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

Stocks Finish at Session Lows on Profit-taking and Mixed Economic Data

Indices
S&P 500 1,482.37 -.78%
DJIA 13,062.91 -.44%
NASDAQ 2,525.09 -1.26%
Russell 2000 814.57 -1.82%
Wilshire 5000 14,914.85 -.91%
Russell 1000 Growth 584.62 -1.02%
Russell 1000 Value 852.19 -.64%
Morgan Stanley Consumer 732.55 -.66%
Morgan Stanley Cyclical 1,000.55 -1.28%
Morgan Stanley Technology 593.42 -1.19%
Transports 5,037.35 -1.66%
Utilities 519.25 -.98%
MSCI Emerging Markets 121.44 -1.07%

Sentiment/Internals
Total Put/Call .94 -6.0%
NYSE Arms 1.45 +18.20%
Volatility(VIX) 14.22 +14.2%
ISE Sentiment 121.0 -11.03%

Futures Spot Prices
Crude Oil 65.61 -1.26%
Reformulated Gasoline 244.05 +3.35%
Natural Gas 7.85 +.19%
Heating Oil 191.35 unch.
Gold 680.30 -.21%
Base Metals 270.44 +.75%
Copper 354.20 +.18%

Economy
10-year US Treasury Yield 4.62% -7 basis points
US Dollar 81.45 -.10%
CRB Index 312.71 -.47%

Leading Sectors
Telecom -.03%
Foods -.32%
Drugs -.42%

Lagging Sectors
Biotech -1.90%
Oil Service -1.91%
Homebuilders -2.44%

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:
- Crude oil fell on worries over global demand and profit-taking by investment funds.
- Circuit City Stores(CC) said it expects to post a first-quarter loss of as much as $90 million before taxes as rivals cut prices on flat-panel television sets. The stock fell 8.8% in after-hours trading.
- Barton Biggs, managing partner of Traxis Partners LLC, said the Dow Jones Industrial Average may rise as much as 19% this year and argued that shares of the largest US companies are “very cheap” relative to other asset classes. “Markets in general are going higher, but I think large caps in particular – particularly in the US – are going to do even better than the S&P 500 or a broader index of the market,” said Biggs, 74, a former Morgan Stanley strategist who left to run the $1.84 billion hedge fund four years ago. The DJIA is up 5.7% so far this year.

Nikkei English News:
- Japan’s Financial Services Agency will ask hedge funds operating in the country to submit annual reports as part of an effort to monitor their increasing activity.

BOTTOM LINE: The Portfolio finished lower today on losses in my Retail longs, Semi longs, Biotech longs and Medical longs. I added to my (EEM) short and added (IWM)/(QQQQ) hedges in the final hour, thus leaving the Portfolio 75% net long. The tone of the market was negative today as the advance/decline line finished substantially lower, almost every sector fell and volume was about average. Measures of investor anxiety were above average into the close. Today's overall market action was bearish. After such a good month, it isn't surprising to see short-term trading oriented investors taking profits and putting out new shorts. The NYSE Arms Index was at above-average levels throughout most of the day. The VIX rose 14.2% and the ISE Sentiment Index fell 11% to a below average 121.0. With the 10-year yield falling another 7 basis points, small caps and cyclicals underperforming and oil declining, it appears another bout of economic jitters is also underway that may last a few days.

Stocks Lower into Final Hour on Profit-taking, Mixed Economic Data

BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Retail longs, Semi longs and Medical longs. I added to my Under Armour(UA) long and to an existing short today, thus leaving the Portfolio 100% net long. The tone of the market is negative as the advance/decline line is lower, sector performance is mostly negative and volume is below average. I added a bit to my Under Armour (UA) long ahead of tomorrow morning's earnings report. Bearishness is high on the stock ahead of the report. Under Armour's open interest put/call is currently 2.09, just off record highs of 2.50 set last week. As well, short interest is a record 8.65 million shares, or 35% of the float. Under Armour is the type of stock that should flourish in the current macro environment. I expect the stock to rise tomorrow, notwithstanding any initial morning weakness related to profit-taking. The AAII percentage of Bulls fell 16.4%, to 39.2%, and the AAII percentage of Bears soared 28.3%, to 37.9% last week. These readings came as the DJIA was blowing through another record high, which is remarkable. Over the weekend, I expected to see quite a few headlines regarding the piercing of the 13,000 barrier on the Dow, instead the headlines were overwhelmingly negative and focused on how "poorly" the U.S. economy was performing. As well, many suggested that only large U.S. companies with substantial emerging market exposure are doing well, yet many U.S .small-caps and most mid caps continue to outperform large caps, and the cumulative advance-decline line is at a record high. I continue to believe that overall investment sentiment regarding U.S. stocks has never been worse in history with stocks up this much and the DJIA at a record high. There is still a high wall of worry for stocks to climb substantially from current levels.

Today's Headlines

Bloomberg:
- Deutsche Boerse AG, operator of the Frankfurt stock exchange, agreed to buy International Securities Exchange Holdings(ISE), the second-largest US options market, for about $2.8 billion in cash.
- China, the world’s largest steel producer, will introduce export licenses for some steel products from May 20 to rein in shipments which more than doubled in the first quarter.
- US Treasury 10-year notes rose the most in almost seven weeks after the measure of inflation favored by the Fed policy makers showed core consumer prices were stable in March.
- Prince Harry will serve in Iraq despite the risk of him being killed or kidnapped by insurgents, UK General Sir Richard Dannatt, Chief of the General Staff said.
- Apple Inc.(AAPL) may repeat iPod magic with Apple TV, according to Bear Stearns(BSC) analysts. “Apple TV along with iTunes has the potential to emerge as a new means for purchasing, storing and accessing video in the same way iPod/iTunes and MP3 players have become a new way to purchase, store and listen to music,” writes Kunal Madhukar, analyst at Bear Stearns in NY, in a research note.
- Yahoo!(YHOO) plans to acquire the remain stake in Right Media it doesn’t already own for $680 million in cash and stock, aiming to increase online advertising sales.
- Alltel Corp.(AT) shares rallied to a six-year high on speculation that the largest regional wireless carrier in the US may be an acquisition target.
- US newspaper circulation fell 2.1% in the six months through March as the LA Times and Washington Post lost readers, the Newspaper Assoc. of America said.
- Merrill Lynch(MER) said it may buy back as much as $6 billion of its stock.

Wall Street Journal:
- Immigrant activists plan to demonstrate on May Day to put pressure on Congress to adopt more favorable immigration laws.
- Hedge fund leveraging through which investors place large bets without actually putting down any money has regulators worried because no one knows how much there is.
- Marathon Oil(MRO) is betting on increased demand for diesel from cars and light trucks because of the fuel’s higher efficiency over gasoline.
- Jones Apparel Group(JNY) is acting like a private equity firm over the possible sale of the Barneys NY chain of luxury department stores.
- UnitedHealth Group(UNH), Humana(HUM) and other companies that expanded into Medicare are fighting to defend their business as Democrats try to slash the payments insurers get.

NY Times:
- Melamine, a chemical linked to tainted pet foot that has killed dogs and cats in the US, is commonly added to animal feed in China as a counterfeit protein, citing interviews with Chinese workers familiar with the process.

Baltimore Sun:
- Duke University’s Fuqua School of Business will punish 34 first-year MBA students after it learned they collaborated on a take-home exam.

NY Post:
- Wal-Mart Stores(WMT) plans to open smaller stores in urban areas to spur revenue, citing analysts.
- Pure Digital Technologies plans to put on sale tomorrow a tiny camera device known as Flip Video that allows users to instantly edit and download footage to YouTube and other Internet sites.
- Fresh Pet, a Secaucus, NJ-based company, plans to sell a new line of refrigerated, pre-cooked dog food following the recall of more than 60 million containers of pet food.

AP:
- Google Inc.(GOOG) is partnering with four US states to develop a search engine to make public records more accessible over the Internet.

USA Today:
- PepsiCo Inc.(PEP) will top the US Environmental Protection Agency’s list of “green power” companies because it will buy credits to subsidize production of renewable energy.
- A majority of the 100 top-grossing US law firms reported 2006 profits of more than $1 million per equity partner.

Dagens Nyheter:
- Ericsson AG(ERIC) is in better shape today than it ever was after emerging from the industry slump a few years ago, former CEO Hellstroem said.

Kargozaraan:
- Iran has expelled about 20,000 Afghan immigrants from Sistan-Baluchistan province in the past eight days.

Personal Incomes Higher, Spending Lower, Inflation Gauge Decelerates Further, Chicago Area Activity Decelerates, Construction Spending Decelerates

- Personal Income for March rose .7% versus estimates of a .6% increase and an upwardly revised .7% gain in February.
- Personal Spending for March rose .3% versus estimates of a .5% gain and an upwardly revised .7% increase in February.
- The PCE Core for March was unch. versus estimates of a .1% gain and a .3% increase in February.
- Chicago Purchasing Manager for April fell to 52.9 versus estimates of 54.0 and a reading of 61.7 in March.
- Construction Spending for March rose .2% versus estimates of a .1% gain and an upwardly revised 1.5% increase in February.

BOTTOM LINE: Personal spending in the US rose less than forecast, while incomes gained more than estimates and the Fed’s favorite inflation gauge eased in March, Bloomberg reported. The Fed’s recent Beige Book survey said generally positive retail sales were offsetting slower growth in manufacturing in most regions and that most regions reported tight labor market conditions. The unemployment rate is matching a five-year low and wages/salaries gained the most in six years during the first quarter. The Core PCE, the Fed’s favorite inflation gauge decelerated further. The gauge is now rising at a 2.1% year-over-year rate versus the 20-year average of 2.5%. I continue to believe wages will continue growing well above most measures of inflation, thus powering spending and helping sustain economic growth.

A measure of business activity in the Chicago region fell this month from the highest level in almost two years, Bloomberg reported. The report indicates that companies are still increasing production and spending after holding back to work down inventories. The inventories component of the index fell to 43.2 from 48.8 the prior month. The prices paid component rose to 64.9 versus 59.1 in March. However, the employment component rose to 50.5 from 45.0 the prior month. Considering last month saw one of the largest jumps in US history in this index, a large drop was expected. I continue to believe US economic growth will grind slowly higher over the remainder of the year.

Construction spending in the US rose for a second month in March as work on office buildings, hotel and schools increased, Bloomberg said. Private residential construction spending fell 1.0% in March versus a 1.8% gain the prior month. While overall construction spending is holding up, residential construction will continue to mute activity as homebuilders work down inventories.

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
Intraday Chart/Quote

Monday Watch

Weekend Headlines
Bloomberg:
- US stocks rose for the fourth straight week, sending the DJIA above 13,000 for the first time, after profit reports that topped analysts’ estimates and a surge in takeovers reinforced speculation that shares are cheap.
- Shares of Aluminum Corp. of China Ltd., the nation's biggest maker of the lightweight metal, rose as much as 300% as the company started trading on the Shanghai stock exchange today.
- President Bush said he is gaining new support for immigration overhaul as his administration works with lawmakers in both political parties to try to tackle the issue this year.
- China orders banks to set aside more money as reserves for the seventh time in 11 months to try to prevent an accelerating economy from overheating. Premier Wen Jiabao is trying to stop a flood of cash from an export boom from fueling wasteful investment, inflation and a stock market bubble.
- The Fed’s Yellen said the odds are good for exceptionally strong world growth and that US growth should rebound later this year. Current below trend growth may mitigate inflation risk and low rates haven’t cut demand for US assets, she said.
- It’s a question few in Tokyo want to ask: What happens if deflation returns to Japan?
- Speculators are increasing their purchases of Russian stocks just as six years of gains grind to a halt in the world’s second-largest emerging market.
- The cost of shipping coal and iron-ore is about to decline as the supply of cargo vessels overwhelms demand.

NY Times:
- Citigroup Inc.(C) plans to spend $30 million in two months on a global advertising campaign, the first since it was created almost a decade ago.
- Michael S. Dell, the chairman and chief executive of Dell, who built his business by selling direct to his customers, is now thinking about changing the way the company markets its computers.
- The US military has found a cooperative ally in Sunni Muslim tribal leaders in Iraq’s Anbar province in fighting against the al-Qaeda terrorist network.

Boston Globe:
- Boston will plant 100,000 trees during the next 13 years and the US Forest Service will study the results on the city’s residents and environment.

Washington Post:
- The Interior Dept. will announce plans on April 30 to permit oil and gas drilling off the Virginia coast, an area currently off-limits. New exploration in Alaska’s Bristol Bay and the Gulf of Mexico would also be allowed. A news release the department distributed yesterday said officials had finished a five-year plan, including a major proposal for expanded oil and natural gas development on the US Outer Continental Shelf.

Financial Times:
- News Corp.’s MySpace Web site says 70% of its advertising income now comes from branded advertising, compared with around 30% a year ago.
- Senior Citigroup(C) executives fear the world’s biggest financial services company could become the target of activist hedge funds that would press for it to be broken up.
- DE Shaw, a NY-based hedge-fund firm, may start a private equity fund into which it may place some of its existing holdings.
- Iberdrola SA considers the US as the next market for growth as Spain’s second-largest power company is dissatisfied with the slow pace of energy integration in Europe. The US is “demonstrating a strong commitment to renewable energy,” Galan said. “In fact, in some states, the legislation sets out goals that go beyond the emission cuts laid out by” the 1997 Kyoto Protocol’s clean development mechanism.
- Short-sellers are facing growing structural barriers in their quest to profit from share-price declines, a reversal of fortune that helps explain the heavy losses suffered recently by hedge funds that bet against Amazon.com(AMZN), the internet retailer.

Nikkei:
- Osaka Gas Co. and Yamaha Motor Corp. are jointing developing methane gas vehicles that may be on sale within 3 years.

Commercial Times:
- Liquid-crystal display makers will accelerate price increases of some panels next month because of demand from personal computer makers. Prices of liquid-crystal displays used in computers began rising this month and may climb until the third quarter as Microsoft’s new Windows operating system spurs demand for wider screens, research firm iSuppli Corp. said.

Al-Hayat:
- Total SA plans to invest $2 billion in Yemen through 2009 to develop exploration projects and increase oil production.

Weekend Recommendations
Barron's:
- Made positive comments on (CELL) and US Dollar.
- Made negative comments on (ACP) and (AMZN).

Night Trading
Asian indices are -.50% to +.25% on average.
S&P 500 indicated -.19%.
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/Estimate
- (APC)/.76
- (ATHR)/.21
- (BEAV)/.32
- (CTX)/.63
- (CNA)/1.02
- (CVD)/.60
- (GNW)/.77
- (HLT)/.18
- (HUM)/.40
- (K)/.69
- (LTR)/.97
- (PBI)/.67
- (PPS)/.02
- (RSH)/.13
- (TSN)/.10
- (VZ)/.53
- (VMC)/.80

Upcoming Splits
- None of note

Economic Releases
8:30 am EST
- Personal Income for March is estimated to rise .6% versus a .6% gain in February.
- Personal Spending for March is estimated to rise .5% versus a .6% gain in February.
- PCE Core for March is estimated to rise .1% versus a .3% gain in February.

9:45 am EST
- Chicago Purchasing Manager for April is estimated to fall to 54.0 versus 61.7 in March.

10:00 am EST
- Construction Spending for March is estimated to rise .2% versus a .3% gain in February.

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

Weekly Scoreboard*

Indices
S&P 500 1,494.07 +.66%
DJIA 13,120.94 +1.23%
NASDAQ 2,557.21 +1.22%
Russell 2000 829.70 +.10%
Wilshire 5000 15,051.89 +.61%
Russell 1000 Growth 590.63 +1.02%
Russell 1000 Value 857.66 +.17%
Morgan Stanley Consumer 737.42 +.46%
Morgan Stanley Cyclical 1,013.53 +1.51%
Morgan Stanley Technology 600.54 +3.0%
Transports 5,122.39 -1.60%
Utilities 524.38 +.73%
MSCI Emerging Markets 122.75 +.09%

Sentiment/Internals
NYSE Cumulative A/D Line 75,694 unch.
Bloomberg New Highs-Lows Index +355 -48.10%
Bloomberg Crude Oil % Bulls 42.0 +61.5%
CFTC Oil Large Speculative Longs 199,503 -3.4%
Total Put/Call 1.0 +33.3%
NYSE Arms 1.23 +41.4%
Volatility(VIX) 12.45 +3.1%
ISE Sentiment 136.0 +8.8%
AAII % Bulls 39.2 -16.4%
AAII % Bears 38.0 +28.3%

Futures Spot Prices
Crude Oil 66.46 +3.6%
Reformulated Gasoline 236.13 +10.5%
Natural Gas 7.83 +4.5%
Heating Oil 191.35 +4.5%
Gold 681.80 -2.03%
Base Metals 268.43 -2.0%
Copper 353.25 -2.5%

Economy
10-year US Treasury Yield 4.69% +2 basis points
4-Wk MA of Jobless Claims 332,000 +.8%
Average 30-year Mortgage Rate 6.16% -1 basis points
Weekly Mortgage Applications 653.30 +3.6%
Weekly Retail Sales unch.
Nationwide Gas $2.90/gallon +.04/gallon
US Heating Demand Next 7 Days 34.0% below normal
ECRI Weekly Leading Economic Index 141.60 +.9%
US Dollar Index 81.53 -.1%
CRB Index 314.20 +.7%

Leading Sectors
Oil Service +5.4%
Networking +4.8%
Internet +1.7%
Biotech +1.6%
I-Banks +1.4%

Lagging Sectors
Telecom -1.8%
Steel -1.9%
HMOs -2.2%
Gold -2.5%
Airlines -6.7%

One-Week High-Volume Gainers
One-Week High-Volume Losers

*5-Day Change

DJIA Finishes at Another All-Time High, Led by Cyclicals

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

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
Intraday Chart/Quote

Friday Watch

Late-Night Headlines
Bloomberg:
- Robert “Bo” Collins, founder of the $400 million MotherRock LP hedge fund that collapsed last year, plans to start a new energy trading company next month. The firm will be called 1.618 Group LLC.
- Ritchie Capital Management Ltd. agreed to sell a “significant portion” of the assets in its flagship hedge fund to NY-based Reservoir Capital Group, a step toward returning cash to investors.
- Late payments on subprime mortgages that underlie derivative indexes rose at a slower pace in March, according to Barclays Capital Inc. and Bear Stearns(BSC). A second month of slower increases in late payments of more than 60 days, foreclosures and seized property suggests stabilizing performance for mortgage bonds issued in the past 18 months, according to Barclays.
- Japan’s consumer prices fell more than economists predicted and industrial production unexpectedly dropped, reducing the likelihood the central bank will raise interest rates.
- The yen dropped to a record low versus the euro after Japanese consumer prices fell more than expected and industrial production declined.

Financial Times:
- French presidential candidate Nicolas Sarkozy has the support of the leaderships of Germany, the UK and Belgium.
- Gao Xiqing, vice chairman of the National Council for Social Security Fund, said China’s stock prices are “defying gravity.” The fund is selling stocks to cut its risk to the climbing market, Gao said.

Late Buy/Sell Recommendations
Business Week:
- Cooper Cos.(COO), an optical, surgical and medical-diagnostic products maker trying to turn itself around and seeking a CEO, is a potential takeover target.
- Shares of Metabolix(MBLX), a maker of biodegradable plastic and chemicals, may rise 61% in the next 12 months. Cantor Fitzgerald LP analyst Pamela Bassett said Metabolix’s bioplastics is the only one that can biodegrade in the earth, sea or sewer without incineration or industrial composting. She said the stock will rise to $40 in the next year.
- Shares of Progressive Corp.(PGR), the low-cost auto insurer, are undervalued and will gain on strong earnings, citing Michael Camp, a principal at Northwest Criterion.

Morgan Stanley:
- Reiterated Overweight on (OSIP), target raised to $46.

Night Trading
Asian Indices are -.75% to -.25% on average.
S&P 500 indicated -.14%.
NASDAQ 100 indicated -.20%.

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
- (BEBE)/.13
- (BKC)/.22
- (CVX)/1.68
- (CVH)/.80
- (CMI)/.94
- (GT)/-.12
- (IR)/.71
- (IRF)/.59
- (ITT)/.68
- (MSTR)/1.28
- (NOV)/1.33
- (GAS)/.98
- (PD)/3.61
- (PCU)/1.88

Upcoming Splits
- None of note

Economic Releases
8:30 am EST
- Advance 1Q GDP is estimated to rise 1.8% versus a 2.5% gain in 4Q.
- Advance 1Q Personal Consumption is estimated to rise 3.5% versus a 4.2% gain in 4Q.
- Advance 1Q GDP Price Index is estimated to rise 3.0% versus a 1.7% gain in 4Q.
- 1Q Employment Cost Index is estimated to rise .9% versus a .9% gain in 4Q.

10:00 am EST
- Final Univ. of Mich. Consumer Confidence for April is estimated at 85.3 versus prior estimates of 85.3.

BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity stocks in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the day.

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
Intraday Chart/Quote

***Alert***

Blogging will be light over the next few days due to a scheduling conflict. Sorry for the inconvenience and thanks for reading.

Thursday Watch

Late-Night Headlines
Bloomberg:
- New Zealand’s central bank raised the benchmark interest rate to a record 7.75%, the second increase in seven weeks.
- Nigeria’s president-elect Umaru Yar-Adua said he’s ready to run in fresh elections if the courts annul his victory in the April 21 polls because of fraud.
- Apple Inc.(AAPL) said second-quarter profit rose 88% after demand soared for its iPod media players and Macintosh computers. The company’s shares surged 6.3% in extended trading.
- Congress can limit violent television programming without violating the free-speech rights of broadcasters, according to an FCC report.
- The House of Representatives approved a war spending bill tonight that requires US troops to withdraw from Iraq, beginning Oct. 1.

Dow Jones:
- The International Monetary Fund is more closely monitoring the impact of yen carry trades on markets in developing countries and may raise the issue in annual talks with some countries.

Late Buy/Sell Recommendations
HSBC:
- Rated (URBN), (ANN), (ANF) Overweight.

Night Trading
Asian Indices are +.50% to +.75% on average.
S&P 500 indicated +.03%.
NASDAQ 100 indicated +.38%.

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
- (MMM)/1.11
- (AET)/.77
- (DOX)/.50
- (AMT)/.06
- (APA)/1.60
- (APPB)/.33
- (AN)/.40
- (AVID)/.20
- (BIDU)/.37
- (BZH)/.12
- (BYD)/.53
- (BMY)/.23
- (BRCM)/.27
- (CAH)/.91
- (CCU)/.15
- (CMCSA)/.17
- (CFC)/.79
- (DECK)/.51
- (DO)/1.47
- (DRIV)/.53
- (DOW)/1.00
- (XOM)/1.52
- (FII)/.50
- (FLEX)/.19
- (F)/-.60
- (FO)/.86
- (HAL)/.52
- (IMCL)/.32
- (IM)/.39
- (KLAC)/.78
- (LVLT)/-.22
- (MBI)/1.47
- (MFE)/.33
- (MDC)/-.24
- (WFR)/.69
- (MCHP)/.34
- (MSFT)/.46
- (MNST)/.34
- (NEM)/.24
- (NYX)/.50
- (ODP)/.59
- (SNDK)/.17
- (SOHU)/.17
- (HOT)/.38
- (TDW)/1.46
- (VLO)/1.82
- (WDC)/.47
- (XMSR)/-.39
- (ZOLL)/.14

Upcoming Splits
- None of note

Economic Releases
8:30 am EST
- Initial Jobless Claims for last week are estimated to fall to 330K versus 339K the prior week.
- Continuing Claims are estimated to fall to 2523K versus 2531K prior.

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

DJIA Soars to Another Record, Surpassing 13,000 on Positive Earnings and Economic Data

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

DJIA Surging Past 13,000, Hitting Another Record High, on Strong Earnings and Economic Reports

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Telecom longs, Computer longs and Medical longs. I added to my Google(GOOG) long and to an existing short today, thus leaving the Portfolio 100% net long. The tone of the market is positive as the advance/decline line is higher, sector performance is mostly positive and volume is heavy. I continue to believe that Google is egregiously undervalued at current levels relative to the broad market and its Internet peers. I am shocked that I am able to buy the shares again at current levels after GOOG's recent report. I still expect GOOG to exceed $600 this year on multiple expansion and better-than-expected earnings. The stock remains my largest long position. Yesterday after the close, Bloomberg reported that Nasdaq short interest surged 1.7% to 8,010,000,000 shares, from mid-March through mid-April, hitting another all-time high. Moreover, like the NYSE, the last two months has seen Nasdaq short interest soar 13.8%, the largest two-month percentage increase since at least 1991. Here are the 20 Nasdaq stocks with the largest percentage increase in their short interest relative to their float from mid-March through mid-April:

1) USNA +32.9%
2) HCBK +25.5%
3) HINT +23.4%
4) HLYS +19.1%
5) HERO +18.7%
6) ASTI +18.0%
7) DVSA +15.9%
8) DHOM +14.2%
9) CLWT +13.7%
10) CONN +9.4%
11) BLDR +9.0%
12) NRMX +8.4%
14) PONR +8.0%
15) CBRL +7.5%
16) DAKT +6.8%
17) PRAA +6.5%
18) LHCG +6.5%
19) NUVO +6.4%
20) TECUA +6.2%

Here are the 20 S&P 500 stocks with the largest percentage increase in their short interest relative to their float from mid-March through mid-April:

1) WEN +13.0%
2) KBH +6.9%
3) HAL +5.4%
4) MOT +4.3%
5) BEN +4.0%
6) CTX +3.5%
7) JNY +3.1%
8) DHI +2.8%
9) CIEN +2.8%
10) X +2.7%
11) ED +2.5%
12) RSH +2.5%
13) MCO +2.4%
14) CHK +2.4%
15) STZ +2.4%
16) CC +2.2%
17) HRB +2.1%
18) AVB +2.0%
19) MTG +1.7%
20) MAS +1.7%

I expect US stocks to trade mixed-to-higher into the close from current levels on positive earnings reports, short-covering, positive economic data and stable long-term rates.

Today's Headlines

Bloomberg:
- US stocks are surging, sending the DJIA to another all-time high and above 13,000 for the first time, after earnings from Amazon.com(AMZN) bolstered speculation that profit forecasts are too low.
- Israel held back today from retaliating for a barrage of rockets fired by Hamas members in the Gaza Strip, while warning that any further attacks will draw a powerful response.
- Shares of Amazon.com(AMZN), the world’s biggest Web retailer, sky-rocketed 27% after the company boosted its 2007 profit and sales forecasts. As of today, the short-interest ratio on the shares was at an all-time high, surpassing the peak in March 2003.
- Crude oil rose .60/bbl. after a government report showed that US gasoline supplies fell again as refinery utilization dropped substantially on ongoing nationwide “outages.” US oil supplies jumped and are near eight year highs.

Wall Street Journal:
- Fuel-efficient car drivers are having a negative impact on the US federal highway trust fund as less gasoline tax is paid.
- Martha Stewart Living(MSO) will start selling craft products, citing an interview with CEO Lyne.

NY Times:
- Jarden Corp.(JAH), a maker of consumer goods including Coleman camping equipment and Bicycle playing cards, will buy K2 Inc.(KTO) for $1.2 billion in cash and stock.

- Energy News Today:
- Exxon Mobil Corp.(XOM) halted production on a catalytic cracker at its Beaumont, Texas, refinery in the past 24 hours to repair a “minor problem.”

China Information:
- China needs to control the expansion of short-term assets as people put less money in bank deposits and the stock market booms, a state Statistics Bureau affiliated newspaper said. Financial risks have also risen as short-term currency arbitrage increases, and the economic and financial bubble grows, the paper said. International “hot money” has directly or indirectly flowed into the stock market, while assets from domestic banks, private equity, and assets managed by financial companies are participating in the equity market boom. To stop the stock market overheating, the government should remind people of the risks associated with buying shares now. Regulators should tighten supervision of mutual funds and control equity growth, and should accelerate changes to the currency.

Durable Goods Orders Jump, New Home Sales Rise, New Home Inventories Fall, New Home Prices Rise

- Durable Goods Orders for March rose 3.4% versus estimates of a 2.5% gain and an upwardly revised 2.4% gain in February.
- Durables Ex Transports for March rose 1.5% versus estimates of a 1.1% gain and an upwardly revised -.4% decline in February.

- New Home Sales for March rose to 858K versus estimates of 890K and 836K in February.

BOTTOM LINE: Orders for US durable goods rose more than forecast in March, signaling business spending started to recover as the first quarter ended, Bloomberg said. Demand at Boeing(BA) surged, while orders for communications equipment metals and machinery bounced back. Orders for non-defense capital goods excluding aircraft, a gauge of future business investment, jumped 4.7%, the largest gain since September 2004. 100 CEOs turned optimistic over the pace of future US economic growth for the first time in a year, according to a recent Conference Board survey. I continue to believe manufacturing bottomed last quarter and will begin adding to US economic growth this quarter as companies gain confidence in the sustainability of the current expansion.

Purchases of new homes in the US rose in March as better weather and sales incentives brought out more buyers, Bloomberg reported. The median price of a new home rose 6.4% in March to $254,000 from $238,800 a year earlier. The supply of new homes at the current sales pace fell to 7.8 months’ worth from 8.1 months in February. Sales soared 50% in the Northeast and jumped 9.8% in the Midwest. Sales fell 2.7% in the South and .9% in the West. Moreover, mortgage applications rose the most in seven weeks this week, led by a 3.7% surge in purchase applications. I continue to believe home sales have stabilized at relatively high levels and will trend around current 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
Intraday Chart/Quote

Wednesday Watch

Late-Night Headlines
Bloomberg:
- South Korea’s economy, Asia’s third largest, expanded .9% in the first quarter, the same pace as the fourth quarter, as increased exports and consumer spending made up for slowing construction.
- Google Inc.(GOOG), owner of the world’s most-used Internet search engine, signed an agreement with China Telecom Corp. to sell online advertising on 400 Web sites operated by the nation’s biggest Internet service provider.
- Posco, the world’s fourth-largest steelmaker, said it will increase output of nickel-free stainless steel 500% by next year.
- New Zealand’s dollar is “massively overvalued” and will fall 7% against the yen in six months, said Stephen Koukoulas, chief Asia-Pacific strategist at TD Securities Ltd.

21^st Business Century Herald:
- China’s commerce ministry has sent officials to probe local government export incentives and may eliminate some “unreasonable” policies, citing ministry officials.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (T), target raised to $44.

Think Equity:
- Rated (UA) and (CROX) Accumulate.

Night Trading
Asian Indices are -.50% to unch. on average.
S&P 500 indicated -.02%.
NASDAQ 100 indicated -.04%.

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
- (AGR)/.18
- (AAI)/.02
- (AKAM)/.28
- (ACL)/1.16
- (ATI)/1.83
- (ABC)/.67
- (BUD)/.69
- (AAPL)/.64
- (AVB)/.63
- (AV)/.13
- (BHI)/1.10
- (BDX)/.91
- (BDK)/1.49
- (BA)/1.02
- (BWLD)/.52
- (BOB)/.38
- (CDN)/.24
- (CEN)/.29
- (CTXS)/.34
- (CL)/.77
- (COP)/1.90
- (CEG)/.94
- (GLW)/.26
- (DBD)/.19
- (EXC)/1.02
- (FFIV)/.62
- (FCX)/2.20
- (GD)/1.06
- (GENZ)/.74
- (HCA)/.87
- (HES)/1.17
- (KOMG)/.98
- (LEA)/.22
- (LVLT)/-.22
- (MANH)/.22
- (MSO)/-.17
- (MXIM)/.31
- (MCO)/.58
- (NSC)/.70
- (NTRI)/.91
- (OI)/.17
- (PEP)/.61
- (PFCB)/.40
- (PHM)/-.14
- (QCOM)/.47
- (RTN)/.64
- (ROL)/.18
- (R)/.82
- (RYL)/.48
- (SEE)/.37
- (SII)/.73
- (SWK)/.80
- (TIN)/.47
- (TSCO)/.11
- (UPS)/.96
- (VAR)/.47
- (WEN)/.13
- (XLNX)/.25
- (XTO)/1.07
- (ZMH)/.93

Upcoming Splits
- None of note

Economic Releases
8:30 am EST
- Durable Goods Orders for March are estimated to rise 2.5% versus a 1.7% gain in February.
- Durables Ex Transports for March are estimated to rise 1.1% versus a -1.0% decline in February.

10:00 am EST
- New Home Sales for March are estimated to rise to 890K versus 848K in February.

10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil drawdown of -1,500,000 barrels versus a -994,000 barrel decline the prior week. Gasoline supplies are expected to fall by -500,000 barrels versus a -2,718,000 barrel decline the prior week. Distillate supplies are expected to rise by 500,000 barrels versus a -795,000 barrel decline the prior week. Finally, Refinery Utilization is expected to rise by .5% versus a 2.0% gain the prior week.

2:00 pm EST
- Fed’s Beige Book

BOTTOM LINE: Asian indices are mildly lower, weighed down by technology and automaker stocks 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 Finished Mixed as DJIA Hits Another Record, Led by Technology Shares

Indices
S&P 500 1,480.42 -.03%
DJIA 12,953.94 +.27%
NASDAQ 2,524.54 +.03%
Russell 2000 826.36 -.14%
Wilshire 5000 14,927.78 -.05%
Russell 1000 Growth 584.84 +.12%
Russell 1000 Value 851.68 -.24%
Morgan Stanley Consumer 734.76 +.17%
Morgan Stanley Cyclical 997.76 unch.
Morgan Stanley Technology 587.29 +.89%
Transports 5,133.60 -.55%
Utilities 526.56 +.51%
MSCI Emerging Markets 122.65 -.04%

Sentiment/Internals
Total Put/Call 1.19 +30.77%
NYSE Arms .84 -25.91 -23.92%
Volatility(VIX) 13.12 +.61%
ISE Sentiment 145.0 +9.02%

Futures Spot Prices
Crude Oil 64.61 -1.94%
Reformulated Gasoline 221.14 +.94%
Natural Gas 7.58 +.29%
Heating Oil 184.69 -2.50%
Gold 688.0 -.89%
Base Metals 277.40 +2.04%
Copper 357.0 -2.07%

Economy
10-year US Treasury Yield 4.62% -2 basis points
US Dollar 81.50 -.29%
CRB Index 310.84 -1.15%

Leading Sectors
Semis +2.57%
Disk Drives +1.24%
Networking +1.19%

Lagging Sectors
Gold -1.40%
I-Banks -1.41%
Steel -1.54%

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:
- The DJIA hit another all-time high today, boosted by the tech sector, after Texas Instruments(TXN) boosted guidance and IBM(IBM) announced a stock buyback.
- New Century Financial(NEWC) won court permission to auction most of its loan-making division to help lure a buyer.
- Harold McGraw, CEO of McGraw Cos.(MHP), says US subprime mortgage market problems are overblown.
- Exxon Mobil(XOM) drilled more than seven miles to a subsea oil field at its $17 billion Sakhalin-1 project off Russia’s Pacific coast, the longest well ever bored.
- Oil fell $1.31/bbl. today as investment funds cut speculation on production disruptions related to the Nigerian election.
- Amazon.com, the world’s biggest online retailer, said profit doubled, exceeding analysts’ estimates, after the company increased sales of electronic and slowed spending on technology. The shares are surging 9% after-hours.
- CH Robinson Worldwide(CHRW), a logistics provider, reported first-quarter net income of $72.9 million, or .42/share. The stock is jumping 5.6% after-hours.
- Sun Microsystems(SUNW) posted a second straight quarterly profit after updating products and cutting jobs. Sales fell short of analysts’ estimates, sending the shares 5.5% lower after-hours.

BOTTOM LINE: The Portfolio finished slightly higher today on gains in my Computer longs, Semi longs and Commodity shorts. I didn’t trade in the final hour, thus leaving the Portfolio 100% net long. The tone of the market was mildly negative today as the advance/decline line finished mildly lower, sector performance was mixed and volume was heavy. Measures of investor anxiety were above average into the close. Today's overall market action was slightly bullish. Considering today's news and recent gains, I would have expected to see mild losses in the averages. It is hard to generate much in the way of downside traction though with the Semis (+2.6%) breaking out of an eight-month trading range on volume. Moreover, the MS Tech Index(+.9%) is very close to breaking out of its recent trading range. The CRB Index, after a brief surge above its 200-day moving-average is now back below it and poised to take out the 50-day, notwithstanding recent U.S. Dollar weakness. Last week, I pointed out that the gap between crude oil large traders and commercials was the largest since the euphoric top in oil set last year at $78/bbl. even as pundits, analysts and traders continued to talk of $100/bbl. oil and $4/gallon gas. I even heard one analyst this week talking about $250/bbl. oil. However, the gap between the two grew even wider this week. Commercials, the smart money historically, have only been more short oil one other time in the last three years. As well, the Saudi Tadawul is down 17% in the last month and looks poised to test the low it set in January. The Tadawul has crashed 62.1% from its high set in February of last year. These are big red flags for oil bulls that are currently being ignored as almost everyone, including market bulls and bears, believes oil has to rise into the summer. Finally, bearish sentiment towards the U.S. Dollar is near levels normally associated with tradable bottoms, which could also provide a headwind for oil. I suspect we could see some early morning weakness tomorrow in stocks on a likely weaker-than-expected New Home Sales report. However, I continue to believe any pullbacks will remain relatively mild and short as too many investors are still leaning the wrong way or are underinvested.

DJIA Surging to Another All-Time High, Led by the Tech Sector

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Semi longs, Computer longs and Commodity shorts. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly negative as the advance/decline line is mildly lower, sector performance is mixed and volume is above-average. Sentiment in the Northern part of the country continues to dramatically skew overall consumer confidence readings. Once again, the overall decline this month was led by a -10.0% drop in the Northeast Central and -13.4% decline in the New England region. Confidence in the Mid-Atlantic region actually rose 5.1% this month. What is truly amazing is that confidence in the Northeast Central region is now at 59.0, a very depressed level that has only been eclipsed during February and March 2003 when it came in at 58.20 and 58.50, respectively. This also happened to be right around the time of the final test of the major bear market lows during the second week of March 2003. It is also interesting to note that housing is arguably the least problematic in the northern part of the country. I continue to believe the fact that most media outlets and investment funds are based in the northern part of the country is helping to pump air into the current U.S. "negativity bubble."

Here is a breakdown of consumer confidence by region:

• Northeast Central 59.0
• New England 80.10
• Mid-Atlantic 97.0
• Northwest Central 99.40
• Southeast Central 116.40
• South Atlantic 115.50
• Pacific 116.80
• Mountain 135.70
• Southwest Central 124.0

I expect US stocks to trade mixed-to-higher into the close on positive earnings reports, short-covering, lower energy prices and lower long-term rates.

Bloomberg:
- The DJIA is climbing to another all-time high after IBM(IBM) raised its share buyback.
- Gold and silver fell the most this month in NY as a drop in prices for oil and other commodities reduced the appeal of precious metals as a hedge against inflation.
- Crude oil is falling $1.31/bbl. because shipments from Nigeria have been unaffected by an upsurge in violence in the country.
- Apple Inc.(AAPL) won’t be sanctioned by the SEC for backdating stock options, including some to CEO Steve Jobs, because it cooperated with regulatory probes.
- NY Times(NYT) shareholders, led by Morgan Stanley(MS), withheld 42% of their votes from directors to protest the Sulzberger family’s control over the company.
- Home prices in the Hamptons, New York’s beachside playground for the rich and famous, rose in the first quarter at the slowest pace in four years.
- International Business Machines(IBM) added $15 billion to its stock buyback program, the most ever, and raised the quarterly dividend by 33% to boost shareholder returns. The stock is rising the most since 2003 today.

Wall Street Journal:
- Virgin Atlantic Airways Ltd. agreed to acquire as many as 24 of Boeing’s(BA) 787 Dreamliners.

NY Times:
- Several black elected officials in New York are undecided about supporting home sate Senator Hill Rodham Clinton or Illinois Senator Barack Obama, citing interviews.
- China will allow US regulators to enter the country to investigate if contaminated pet food that killed at least 16 cats and dogs originated with Chinese suppliers.
- LanzaTech, a New Zealand-based company, has secured financing to develop a process to create ethanol from carbon monoxide gas, citing the company’s founder.
- Las Vegas is adding to its 151,000 hotel rooms as the weekend occupancy rate reaches 95%.

Seattle Post-Intelligencer:
- Washington state will begin its first comprehensive probe of gas prices in 16 years. The state’s attorney general, governor’s office and Dept. of Community, Trade and Economic Development, will probe the reasons behind the high prices and present their findings in July.

Energy News Today:
- Exxon Mobil Corp.’s(XOM) “maintenance” on a crude refinery unit at its Baytown, Texas, will last until the second week of June. Unusually low refinery utilization at this time of the year has been the main reason for the recent surge in gas prices.

Etemaad:
- Iranian women dressed as “models” in the streets of Tehran risk severe penalties including imprisonment, citing a top judiciary official.

Tehran Times:
- Iran’s budget deficit rose to almost $16 billion in the Iranian year that ended March 20, citing official statistics. The government of President Mahmoud Ahmadinejad has come under criticism from Iran’s parliament over its failure to curb public spending. Inflation officially stands at about 14%.

Confidence Slightly Below Estimates, Existing Home Sales Fall

- Consumer Confidence for April fell to 104.0 versus estimates of 105.0 and an upwardly revised 108.2 in March.

- Existing Home Sales for March fell to 6.12M versus estimates of 6.4M and 6.68M in February.

BOTTOM LINE: Consumer confidence in the US declined to the lowest level since April on rising gas prices and housing worries, Bloomberg reported. The Present Conditions component of the index fell to 131.3 versus 138.5 the prior month. The Expectations component fell to 85.8 from 87.9 the prior month. However, the percentage of people expecting more jobs over the next six months rose to 12.9% from 12.7% the prior month. As well, those planning to purchase an auto rose to 6.0% from 5.4% the prior month. The Fed’s Mishkin said recently that subprime spillovers “appear to have been minimal” and that “most borrowers are not likely to face a serious credit constraint.” As well, historically low unemployment and strong wage growth are helping sustain consumer sentiment and spending. Confidence in the Northeast Central region continues to depress the overall gauge. It fell another 10% to a very depressed 59.0 and is right at the major bear market lows seen in 2003. I continue to expect consumer confidence to head back to cycle highs later this year as gas prices fall, inflation decelerates, the job market remains healthy, housing sales stabilize at relatively high levels, interest rates remain low and stocks rise further.

Sales of previously owned homes in the US fell more than forecast in March, Bloomberg reported. Existing home sales had surged the prior month the most since December 2003. This month’s decline in sales was partly weather related. The supply of homes for sale at the current sales pace is now 7.3 months’ worth versus 6.8 months in February. The median price of an existing home remained steady, falling .4% to $217,000. Sales fell 10.9% in the Midwest, 9.1% in the West, 8.2% in the Northeast and 6.2% in the South. I expect existing home sales to bounce back next month, however construction will remain muted as homebuilders reduce inventory.

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
Intraday Chart/Quote

Tuesday Watch

Late-Night Headlines
Bloomberg:
- BHP Billiton(BHP), the world’s biggest mining company, said third-quarter copper, iron ore and nickel output rose. Copper output surged 22%, iron ore output gained 8% and nickel production rose 14%.
- Former Apple Inc.(AAPL) CFO Fred Anderson agreed to pay $2.5 million to resolve SEC claims over backdated stock option grants to Apple executives approved by CEO Jobs.
- North Korea is an “enormous” threat to Japan and must be closely watched to see that it fulfills its pledge to shut down its nuclear weapons program, Japanese national security adviser Yuriko Koike said.
- Valero Energy(VLO), the largest US oil refiner, said it’s cutting gasoline output 71% at its St. Charles refinery in Norco, Louisiana, after a “mechanical failure” idled the plant’s fluid catalytic cracking unit. The plant will lose 60,000 barrels a day of gasoline production. The “outage” is expected to last 14 days.
- Australia’s consumer prices rose less than expected in the first quarter, sending the currency tumbling as traders reduced bets the central bank will increase interest rates next week.

Wall Street Journal:
- China is set to become the world’s top greenhouse gasses emitter this year, surpassing the US, citing the International Energy Agency. The IEA, which advises developed countries on energy policy, had previously forecast China to surpass the US by 2010. China’s growing carbon-dioxide emissions are expected to exceed any reductions from Europe, the US and Japan. If left unchecked, its emissions are forecast to double that of all the member countries in the OECD, which includes Europe, the US, Canada, South Korea and Japan.

AP:
- US Representative Dennis Kucinich, an Ohio Democrat running for president, will tomorrow start impeachment proceedings against Vice President Dick Cheney.

Financial Times:
- A majority of companies in the UK, Australia, US, France and Germany reported experiencing leaks of sensitive data during the last 12 months, citing a survey by Datamonitor Plc and McAfee Inc.
- The leading 25 hedge fund managers together earned $15 billion, citing an annual industry survey by Institutional Investor’s Alpha magazine. Three managers – Renaissance Technologies’ James Simons, Citadel Investment Group’s Ken Griffin and ESL Investments’ Eddie Lampert – earned in excess of $1 billion.
- JetBlue Airways Corp.(JBLU) may introduce an in-flight text messaging service to boost revenue, citing CEO David Neeleman.
- Russia’s sustained financial growth over the past seven years, fuelled mostly by credit from foreign markets, is nearing its limits, citing Barclays Capital Chairman Hans-Joerg Rudloff. The Russian market’s current growth is not “sustainable” and the “boom” will come to a “painful end in the near future,” Rudloff said at the Russian Economic Forum in London.

Xinhua News Agency:
- China’s President Hu Jintao and other senior officials called for Web sites to produce “healthy” Internet material to promote social stability. China aims to foster a “healthy online culture” and prevent “decadent” material from being disseminated over the Internet.

Hong Kong Economic Journal:
- China Life Insurance Co. plans to sell a stake of as much s 19.9% to Citigroup(C).

Late Buy/Sell Recommendations
Citigroup:
- Upgraded (SNDK) to Buy, target $52.
- Reiterated Buy on (ESRX), target raised to $110.

CSFB:
- Reiterated Buy on (ESRX), target raised to $106.

Morgan Stanley:
- Reiterated Overweight on (TGT), target $64.

Night Trading
Asian Indices are -.50% to unch. on average.
S&P 500 indicated -.02%.
NASDAQ 100 indicated +.16%.

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
- (ACE)/1.76
- (AFL)/.79
- (AKS)/.45
- (ACV)/.20
- (AMZN)/.20
- (T)/.61
- (AVY)/.82
- (BJS)/.72
- (EAT)/.48
- (BNI)/1.10
- (CDWC)/.85
- (CAKE)/.25
- (CME)/3.60
- (COH)/.38
- (CYMI)/.66
- (DLX)/.53
- (ESV)/1.51
- (ETH)/.55
- (FRX)/.71
- (HTCH)/.09
- (ILMN)/.08
- (JEC)/.51
- (JBLU)/-.18
- (LXK)/1.02
- (LMT)/1.37
- (MHP)/.30
- (MWRK)/.40
- (NOC)/1.14
- (OXY)/.90
- (OMC)/1.05
- (PNRA)/.46
- (PNR)/.39
- (RDN)/1.40
- (COL)/.79
- (RUTH)/.28
- (SLM)/.75
- (SUNW)/.01
- (TLAB)/.05
- (X)/1.87
- (VFC)/1.12
- (WAT)/.53
- (WEBX)/.39
- (WHR)/1.13

Upcoming Splits
- None of note

Economic Releases
10:00 am EST
- Consumer Confidence for April is estimated to fall to 105.0 versus a reading of 107.2 in March.
- Existing Home Sales for March are estimated to fall to 6.4M versus 6.69M in February.

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