Thursday Watch

Late-Night Headlines
Bloomberg:
- The Doris Duke Charitable Foundation pledged $100 million in grants to help health-care providers in African countries. The NY-based foundation plans to award three to six multiyear grants of $8 million to $20 million starting in early 2009.
- China’s economic growth may slow in the fourth quarter, economists from the State Information Center said, citing a moderation in power generation, steel output and government revenue.
- South Korean consumers became the most optimistic in five years in the third quarter, indicating shoppers may step up spending and spur economic growth.
- China and Russia blocked US and European efforts in the UN Security Council to condemn Myanmar’s military-run government for its crackdown on protesters.

MarketWatch.com:
- Robert Powell: Meet one guru who is “wildly optimistic” about boomer retirement.
- Housing inventory peak?(video)
- Monsanto(MON) expects to triple its international acreage.
- Dell(DELL) sells idea of green technology. Computer guru touts conservation, innovation.
- Ahead of the (yield) curve. Post-Fed curve much steeper, a good sign for the economy.
- A smirking Ahmadinejad suckers the US media.

NY Times:
- Bear Stearns(BSC), its shares and reputation beaten down after the collapse of two hedge funds, has held talks with several investors, including Warren E. Buffett, concerning a possible sale of as much as 20% of the firm, people briefed on the discussions said yesterday.

USA Today.com:
- Medicare’s new policy strains small firms.
- More Chinese-made jewelry and toys recalled.

Financial Times:
- Microsoft(MSFT) said on Wednesday that its Halo 3 video game had lived up to its expectations of being “the biggest entertainment launch in history”, with $170 million in sales recorded in the US alone on the first day of sales.

Reuters:
- The SEC is conducting more than 30 investigations into potential hedge fund manager misconduct in the northeast US alone, with more in other parts of the country, officials said on Wednesday.
- US home goods retailer Bed Bath & Beyond(BBBY) posted a slightly higher quarterly profit on Wednesday on increased sales and a one-time tax benefit and said its board of directors approved a $1 billion share buyback program.
- Paychex Inc.(PAYX), a payroll services company, said on Wednesday that quarterly earnings rose 12%, as it added customers, its check volume grew and it raised prices.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (BBY), target $55.
- We lowered our September same-store-sales estimates for (FDO), (JCP), (KSS), (M) and (TGT) based on unfavorable weather conditions as well as higher gas prices, which likely dampened and weighed on retail spending at the Broadlines retailers in September. Week 1 of this month ranked at the warmest Labor Day week in at least 15 years and Week 3 ranked as the 3^rd warmest in 15 years, while September 2006 was the coolest in several years and the wettest in over a decade, making for difficult compares.

Night Trading
Asian Indices are +.75% to +2.0% on average.
S&P 500 futures +.13%.
NASDAQ 100 futures +.20%.

Morning Preview
US AM Market Call
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Today in IBD
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Earnings of Note
Company/EPS Estimate
- (CHTT)/.74
- (KBH)/-.74
- (MKC)/.43
- (MTN)/-.89
- (ACN)/.48
- (BE)/.05
- (PLL)/.55
- (TXI)/.89
- (CBK)/.11
- (JBL)/.28
- (CTAS)/.53
- (FINL)/.13
- (FMCN)/.35
- (GPN)/.51

Upcoming Splits
- (FCSX) 3-for-2
- (LPHI) 5-for-4
- (NOV) 2-for-1

Economic Releases
8:30 am EST
- Final 2Q GDP is estimated to rise 3.8% versus prior estimates of a 4.0% gain.
- Final 2Q Personal Consumption is estimated to rise 1.4% versus a prior estimate of a 1.4% increase.
- Final 2Q GDP Price Index is estimated to rise 2.7% versus a 2.7% prior estimate.
- Final 2Q PCE Core is estimated to rise 1.3% versus a prior estimate of a 1.3% gain.
- Initial Jobless Claims for last week are estimated to rise to 316K versus 311K the prior week.
- Continuing Claims are estimated to rise to 2550K versus 2544K prior.

10:00 am EST
- New Home Sales for August are estimated to fall to 825K versus 870K in July.

Other Potential Market Movers
- The Fed’s Rosengren speaking, Fed’s Evans speaking, Fed’s Mishkin speaking, weekly EIA natural gas inventory report, Help Wanted Index, (INTU) investor day, (FCS) analyst meeting, CSFB Chemical Conference and UBS Global Life Sciences Conference could also impact trading today.

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