Tuesday Watch

Late-Night Headlines
Bloomberg:
- Thomson Corp. confirmed that it’s in talks to take over Reuters Group Plc, the world’s largest publicly traded provider of financial data.
- Toyota Motor(TM) sold more care than GM(GM) for the first time in the three months through March, generating what may be record profits. Toyota outspent GM by 50% during the past three years and will open its eighth North American factory in Mississippi in 2010.
- Billionaire investor Carl Icahn failed to win a seat on Motorola’s(MOT) board after a three-month campaign, in a victory for CEO Zander.
- Inotera Memories, Taiwan’s most-profitable memory-chipmaker, said prices will rebound from a 64% slump this year as Microsoft’s(MSFT) Vista operating system drives demand. Inotera joins Korean rivals Samsung Electronics and Hynix Semiconductor in predicting a second-half price recovery because of Microsoft’s new Windows operating system.
- Tyco Intl.(TYC) bondholders said today they rejected the company’s offer to buy back $6.6 billion of debt securities, likely making it more expensive for the maker of ADT security systems to spit into three entities.
- Nucor Corp.(NUE), the second-largest US based steel company, may hold off on making acquisitions because steel assets are overvalued, CEO Dan DiMicco said. Asset prices aren’t reflecting the threat of continued high imports into the US, which helped depress prices in recent months, DiMicco said. “To participate in the acquisition activity just to be one of the boys is a bad business decision,” DiMicco said.
- Alcoa(AA) may face competition for its $26.9 billion bid for rival Alcan(AL) from mining companies including BHP Billiton(BHP) and Rio Tinto Group(RTP), said Credit Suisse Group.
- French President-elect Nicolas Sarkozy was warned by European finance ministers and central bankers that his plan to press the European Central Bank to focus more on bolstering growth would prove futile.
- Fortress Investment Group(FIG), the first US manager of private equity and hedge funds to go public, is starting a new $5 billion buyout fund.

NY Times:
- News Corp.’s(NWS/A) Fox Interactive Media is close to acquiring Photobucket, an Internet service that allows users to store photos and videos, for as much as $300 million. Photobucket has 41 million users, up from 14 million a year ago. Sixty percent of Photobucket’s Web traffic came from users of News Corp.’s MySpace during the week ending last Saturday.

Financial Times:
- Citigroup Inc.(C), the US financial firm once lauded for its adoption of environmental policies, will today say it will give $50 billion to environmental projects over the next decade The US bank will pledge to increase 10-fold, to $10 billion, its spending on reduction of its own greenhouse gas emissions. CEO Prince will call for world-wide regulation on the environment “to bring certainty to the markets and achieve a level playing field.”
- CB Richard Ellis Group(CBG), a real-estate broker, has started a $199 million property hedge fund. The Iceberg Alternative Real Estate fund, a newly formed London-based joint venture between CB Richard Ellis and Reech, a derivatives specialist, will aim for returns of 15 percentage points above cash rates.

London-based Times:
- Dutch shareholder group VEB said it will block the sale of ABN Amro Holding NV’s La Salle Bank to Bank of America(BAC), citing VEB Chairman Peter Paul de Vries.

Xinhua News Agency:
- Beijing handed out $6.50 spitting fines to 56 people during the week-long May holiday as the city tries to stamp out embarrassing behavior ahead of the 2008 Olympic Games.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (CCRN), target $28.

Morgan Stanley:
- Rated (UNP) and (NSC) Overweight.
- Unfavorable weather conditions, the Easter calendar shift, and higher gas prices have combined to create the “perfect storm” for retail softlines in April. However, our retail sales lead indicator predicts potential acceleration into 2H2007. Our updated MSRSLI predicts sales growth ex autos and gas of +6.0% into July, up from +4.2% growth in February.

Night Trading
Asian Indices are -.50% to +.25% on average.
S&P 500 indicated -.08%.
NASDAQ 100 indicated -.13%.

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Global Commentary
Asian Indices
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Top 20 Business Stories
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Earnings of Note
Company/EPS Estimate
- (MDRX)/.12
- (ATW)/1.09
- (BBG)/.21
- (CELL)/.13
- (CRL)/.60
- (CHD)/.63
- (CSCO)/.33
- (CNO)/.34
- (CVS)/.46
- (DIGE)/.22
- (DUK)/.31
- (DYN)/.03
- (EP)/.25
- (ERTS)/.02
- (ENER)/-.07
- (EXPE)/.19
- (GI)/1.22
- (HET)/1.01
- (HSIC)/.48
- (HEW)/.27
- (LAZ)/.59
- (MVSN)/.23
- (MMC)/.50
- (MLM)/.72
- (MVL)/.34
- (PZZA)/.40
- (PFGC)/.18
- (PCLN)/.35
- (REV)/-.07
- (STE)/.40
- (THC)/-.02
- (TYC)/.47
- (VSE)/.11
- (DIS)/.36
- (WMG)/-.11

Upcoming Splits
- (ATR) 2-for-1
- (VOLV) 5-for-1

Economic Releases
10:00 am EST
- Wholesale Inventories for March are estimated to rise .4% versus a .5% gain in February.

Other Potential Market Movers
- The (TXN) analyst meeting, weekly retail sales reports, Robert Baird Growth Stock Conference, Bear Stearns Global Transportation Conference, UBS Global Generic/Specialty Pharma Conference, Goldman Consumer Products Symposium, BIO Intl. Convention and Bank of America Basic/Industrials Conference could also impact trading today.

BOTTOM LINE: Asian indices are slightly 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.