Tuesday Watch

Late-Night Headlines
Bloomberg:
- President Bush said Palestinians have arrived at a “moment of choice” between accepting the violent path Hamas has charted against Israel or a more peaceful route to a Palestinian state.
- Demand for services in Japan unexpectedly fell in May, suggesting waning consumer spending is slowing growth in the world’s second-largest economy.

Wall Street Journal:
- Google Inc.(GOOG) is working on a new service to let mobile-phone users find and buy items such as ringtones. Under the new system, users will get a list of companies that provide the content they’re seeking and links to allow them to purchase the material.
- News Corp(NWS/A) reached a tentative agreement for the purchase of Dow Jones & Co.(DJ) at its original $5 billion offer price. The deal will be put to the full Dow Jones board tomorrow evening for its approval, said people familiar with the situation.
- The leading Republican presidential candidates have received more campaign donations from private-equity firms than Democrats, a shift from past fund-raising patterns as Democrats view the industry as a source of new taxes.

Crain’s Chicago Business:
- The Chicago Tribune will begin selling ads on its front page and the first page of two other sections.

Daily Telegraph:
- Democratic Representative Keith Ellison, the first Muslim congressman in the US, compared President Bush to Adolf Hitler. The Democratic congressman, who addressed a gathering of atheists in his hometown of Minnesota, also suggested Bush may have been responsible for the Sept. 11 attacks.

21^st Century Business Herald:
- China’s state investment company that is being set up to manage the nation’s foreign-exchange reserves, will book profits in US dollars, citing a financial researcher.

Late Buy/Sell Recommendations
Keybanc:
- Rated (PWR), (EME) and (JEC) Buy.

Night Trading
Asian Indices are -.25% to +.25% on average.
S&P 500 futures unch.
NASDAQ 100 futures -.02%.

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Earnings of Note
Company/EPS Estimate
- (ADTN)/.29
- (CHB)/.08
- (SCHW)/.23
- (KO)/.82
- (CCK)/.45
- (CSX)/.64
- (FRX)/.77
- (INTC)/.19
- (JEF)/.39
- (JNJ)/1.00
- (KEY)/.70
- (MER)/2.02
- (PPDI)/.36
- (RF)/.69
- (SLM)/.73
- (STT)/1.01
- (USB)/.67
- (WFC)/.67
- (YHOO)/.11

Upcoming Splits
- (IOSP) 2-for-1

Economic Releases
8:30 am EST
- The Producer Price Index for June is estimated to rise .2% versus a .9% gain in May.
- The PPI Ex Food & Energy for June is estimated to rise .2% versus a .2% gain in May.

9:00 am EST
- Net Long-term TIC Flows for May are estimated to fall to $70.0B versus $84.1B in April.

9:15 am EST
- Industrial Production for June is estimated to rise by .5% versus unch. in May.
- Capacity Utilization for June is estimated to rise to 81.6% versus 81.3% in May.

1:00 pm EST
- The NAHB Housing Market Index for July is estimated to rise to 27 versus a reading of 26 in June.

Other Potential Market Movers
- The Fed’s Hoenig speaking, weekly retail sales reports, (AMAT) Analyst Meeting, AG Edwards E&P Conference and SEMICON West could also impact trading today.

BOTTOM LINE: Asian indices are slightly lower, weighed down by insurance 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.