Friday Watch

Late-Night Headlines
Bloomberg:
- Shares of AU Optronics Corp.(AUO), Taiwan’s largest marker of liquid-crystal displays, rose after the company reported a 33-fold jump in profit, beating analysts’ estimates, after prices for computer and TV screens increased.
- One measure of the US money supply rose by $14.2 billion in the week that ended July 16, according to Federal Reserve statistics released in Washington. That left M2 growing at an annual rate of 6.2% for the past 52 weeks, above the target of 5% the Fed once set for maximum growth.
- Crocs(CROX), the maker of a colorful line of casual shoes, said second-quarter profit tripled as sales of its namesakes footwear and accessories climbed. The stock surged 15% in after-hours trading.
- Deckers Outdoor(DECK) reported second quarter sales increased 26.4%. The stock rose 9.4% in after-hours trading.
- The New York State Ethics Commission will investigate actions by Democratic Governor Eliot Spitzer’s staff to pressure state police to compile travel records on Senate Majority Leader Joseph Bruno.
- Bear Stearns(BSC) took control of debt securities held by one of its failed hedge funds to control their sale and guard against “further price declines.”
- US Treasury Secretary Henry Paulson said the decline in the subprime mortgage market reflects a reassessment of risk that doesn’t pose a threat to the economy. “I don’t think it poses any threat to the overall economy,” Paulson, a former CEO of Goldman Sachs(GS), said.
- Japan’s consumer prices declined for a fifth month, undermining the central bank’s case that inflation will take hold and interest rates need to be raised.
- Intel Corp.(INTC) broke antitrust laws by giving illegal rebates to computer makers to wrest sales away from rival Advanced Micro Devices(AMD), European regulators said.
- The yen fell from a three-month high against the US dollar on concern sliding Japanese stocks and declining consumer prices will cause the central bank to delay raising interest rates in coming months.

Wall Street Journal:
- The US government said China boosted transfers of sensitive military technology to Iran, harming efforts to pressure the Islamic Republic to abandon its nuclear program.
- The Federal Regulatory Commission accused collapsed hedge fund Amaranth Advisors LLC and two former traders of manipulating the US natural gas market early last year.
- Wireless provider Sprint Nextel Corp.(S) said it would include a range of Google Inc.’s(GOOG) Web and communications applications on its coming “WiMax” mobile devices, a boost for Sprint as it rolls out the new technology and a breakthrough for Google in the US wireless industry.

Business Week:
- Americans spend $41 billion a year on their pets, more than what they shell out for movies, video games and recorded music combined, citing research firm Packaged Facts.

Late Buy/Sell Recommendations
Citigroup:
- Upgraded (JWN) to Buy, target $58.
- Reiterated Buy on (RTN), target $68.
- Reiterated Buy on (GT), target $45.
- Reiterated Buy on (BWA), target $100.
- Upgraded (NLY) to Buy, target $16.

Business Week:
- Shares of Starbucks Corp.(SBUX) will probably emerge from a slump after hitting bottom last month. McAdams Wright Ragen’s Dan Gelman said the stock could climb 57% to $44 in the next 12 months.

Night Trading
Asian Indices are -2.25% to -1.5% on average.
S&P 500 futures +.32%.
NASDAQ 100 futures +.12%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Pre-market Stock Quote/Chart
Before the Bell CNBC Video(bottom right)
Global Commentary
WSJ Intl Markets Performance
Commodity Movers
Top 25 Stories
Top 20 Business Stories
Today in IBD
In Play
Bond Ticker
Economic Preview/Calendar
Daily Stock Events
Macro Calls
Upgrades/Downgrades
Rasmussen Business/Economy Polling
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
- (AXL)/.61
- (BHI)/1.10
- (CVX)/2.28
- (CCU)/.45
- (CEG)/.73
- (FO)/1.44
- (IDXX)/.84
- (IR)/.95
- (ITT)/.90
- (MHS)/.78
- (MSTR)/1.20

Upcoming Splits
- (DIOD) 3-for-2
- (GMCR) 3-for-1

Economic Releases
8:30 am EST
- Advance 2Q GDP is estimated to rise 3.2% versus a .7% gain in 1Q.
- Advance 2Q Personal Consumption is estimated to rise 1.5% versus a 4.2% gain in 1Q.
- Advance 2Q GDP Price Index is estimated to rise 3.4% versus a 4.2% gain in 1Q.
- Advance 2Q Core PCE is estimated to rise 1.4% versus a 2.4% gain in 1Q.

10:00 am EST
- Final Univ. of Mich. Consumer Confidence for July is estimated at 91.2 versus a prior estimate of 92.4.

Other Potential Market Movers
- The Morgan Keegan Insurance Conference could also impact trading today.

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