Wednesday Watch

Late-Night Headlines
Bloomberg:
- ESL Investments Inc., the hedge fund started by Edward Lampert, disclosed it has built an $800 million stake in Citigroup Inc.(C), the largest US bank.
- BHP Billiton(BHP) and rival Australian mining and energy companies are planning a record $36.2 billion of new projects, 24% higher than the amount reported in October by the Canberra-based Australian Bureau of Agricultural and Resource Economics.
- The Fed’s Hoenig, speaking tonight in Denver, said the US economy will strengthen going forward and that inflation will recede further. Hoenig also said the current 5.25% target rate is “modestly firm.”
- Steel-product output in China, supplier of one-third of global steel, rose 21% in April compared with a year earlier.
- Copper futures fell for a fifth day in Shanghai after Chinese imports grew faster than expected, raising concern that the world’s biggest consumer of the metal may be oversupplied.
- Twenty-nine percent of Americans approve of the way the Democrat-controlled Congress is doing its job, down 4 percentage points from last month. Approval of President Bush’s job performance is holding steady at 33%, according to a Gallup poll released today.
- The yen may fall to a record low versus the euro for a second day as signs of weaker economic growth suggest the Bank of Japan is unlikely to raise interest rates anytime soon.
- Dell Inc.(DELL) said NY State Attorney General Andrew Cuomo plans to file a lawsuit over its customer practices.
- Australian wage growth unexpectedly slowed in the first quarter, suggesting the central bank won’t need to raise interest rates this year.
- South Korea’s department store sales fell for the first time in three months in April, suggesting rising gas prices and a slowing housing market may be chipping away at consumer spending.
- New Century Financial Corp.(NEWC), the largest subprime lender in bankruptcy, received another offer for its loan-servicing unit that tops the initial $133.3 million bid by Carrington Capital Management LLC, a lawyer said.

Wall Street Journal:
- Alan Greenspan, former chairman of the US Federal Reserve, will advise Allianz SE’s Pacific Investment Management. Pimco, based in Newport Beach, California, will be Greenspan’s first client since he left his government job in January 2006. The move means Greenspan, 81, will end his self-imposed ban on discussing Fed policy on interest rate changes.

Financial Times:
- Amvescap Plc may move its main listing from London to New York after US investors increased their combined holdings in the firm to nearly 50%.
- DNO ASA, a Norwegian oil company that explores in the North Sea and Middle East, plans to start selling crude oil pumped in Iraq, citing CEO Eide. Gross production capacity may reach 20,000 to 30,000 barrels a day in the second half of the year.
- Fidelity Investments, the world’s biggest mutual-fund company, slashed its stake in PetroChina Co.(PTR) after being pressured to sell shares of companies doing business in Sudan, according to a regulatory filing today.
- BP Plc’s(BP) refinery in Toledo, Ohio, is expected to be back in full operation by Friday, about four weeks after the company closed a catalytic cracking unit at the plant. The Toledo refinery has been in operation since 1919 and has the capacity to process about 160,000 barrels of crude oil a day.

China Securities Journal:
- Foreigners investing in China’s stock markets through the so-called QFII program cut their holdings of domestic shares by .48 percent in the first five months of 2007, citing the head of CLSA Ltd.’s China research unit. As valuations for domestic stocks keep climbing, foreign investors may switch to the Hong Kong stock market, according to Liu Wei.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (DISH), target raised to $59.00.

Night Trading
Asian Indices are unch. to +.25% on average.
S&P 500 indicated -.04%.
NASDAQ 100 indicated -.19%.

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
- (CTRP)/.23
- (DE)/2.42
- (DKS)/.37
- (FD)/.19
- (HPQ)/.68
- (JBXX)/.70
- (MNT)/.34
- (PETM)/.33
- (CRM)/.08

Upcoming Splits
- None of note

Economic Releases
8:30 am EST
- Housing Starts for April are estimated to fall to 1480K versus 1518K in March.
- Building Permits for April are estimated to fall to 1520K versus 1564K prior.

9:15 am EST
- Industrial Production for April is estimated to rise .3% versus a -.2% decline in March.
- Capacity Utilization for April is estimated to rise to 81.5% versus 81.4% in March.

10:30 am EST
- Bloomberg consensus estimates call for a weekly gasoline build of 1,000,000 barrels versus a 372,000 barrel increase the prior week. Crude oil supplies are estimated to remain the same versus a 5,511,000 barrel increase the prior week. Distillate inventories are expected to rise by 1,250,000 barrels versus a 1,630,000 barrel increase the prior week. Finally, Refinery Utilization is estimated to rise .75% versus a .78% gain the prior week.

Other Potential Market Movers
- The Fed’s Plosser speaking, Fed’s Kohn speaking, Fed’s Fisher speaking, weekly MBA Mortgage Applications report, (GENZ) analyst/investor day, Goldman Sachs Basic Materials Conference, Bank of America Smid Cap Conference, CSFB Semi & Supply-Chain Summit, UBS Global Financial Services Conference, Deutsche Bank Tech Conference, Oppenheimer Semiconductor Conference and Morgan Stanley Communications Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by energy stocks in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.