Tuesday Watch

Late-Night Headlines
Bloomberg:
- Biovail Corp. plants to pursue a lawsuit against a group of hedge funds it accuses of driving down its share price after settling a separate case.
- Third Avenue Management LLC, the money manager founded by Martin Whitman, more than quadrupled its stake in mortgage insurer Radian Group(RDN), buying into a housing slump that sent the stock down 67% in two months.
- China’s inflation quickened to the fastest pace in more than a decade, raising the likelihood of the fifth interest-rate increase since March to cool the economy.
- Japan’s machinery orders surged at three times the pace forecast by economists in July, easing concern the economy will contract for a second quarter.
- Mediatek Inc., Taiwan’s biggest semiconductor designer, climbed to a record on Taipei’s stock exchange after the company said it will buy Analog Devices’ mobile-phone chip business.
- Recalls of Chinese goods by US companies almost tripled in the past three months, threatening to cut overseas revenue for the world’s biggest consumer-products exporter.

Wall Street Journal:
- The two top US officials in Iraq sketched out a plan to end the troop surge by next summer, but they left unanswered questions about how quickly the pullout would proceed beyond July and how US strategy might shift if Iraq’s civil war continues.
- Senator Hillary Rodham Clinton will return $850,000 in campaign contributions raised by a major fund-raiser who has come under federal investigation on multiple fronts.

MarketWatch.com:
- Argus Research economist is MarketWatch’s forecaster of the month.
- Virtualization market wave still worth riding. Opportunities remain after VMWare’s(VMW) blowout IPO.

CNNMoney.com:
- Apple(AAPL) could go after major chunk of airwaves. The consumer tech giant, rapidly diversifying, could make a bid for a portion of a national wireless network with faster Internet access than cellular or Wi-Fi.
- Wachovia is grabbing more mortgage business as a result of the recent shakeout in the industry, CEO Thompson said.

MySteel.com:
- China’s stainless steelmakers may need to curb further investment on production capacity, citing an official at the China Iron & Steel Association.

Automotive News:
-.The United Auto Workers union held two meeting with workers from Honda Motor’s Alabama auto-assembly plant last month in an initial attempt to convince them to join, citing a plant employee.

Financial Times:
- Highbridge Capital Management LLC, the JPMorgan Chase(JPM) hedge-fund business, raised $20 billion in the first half of the year, increasing its assets under management to $37 billion, citing data from Absolute Return magazine.

Nikkei:
- Japan’s ruling Liberal Democratic Party will submit a bill as early as next week to allow military support for the US war in Afghanistan.

China Daily:
- Terrorism poses the most serious threat to a successful Beijing Olympics in 2008, citing Minister of Public Security Zhou Yongkang.

Late Buy/Sell Recommendations
- None of note

Night Trading
Asian Indices are unch. to +.50% on average.
S&P 500 futures +.06%.
NASDAQ 100 futures +.04%.

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
- None of note

Upcoming Splits
- (FMC) 2-for-1

Economic Releases
8:30 am EST
- The Trade Deficit for July is estimated to widen to -$59.0 billion versus -$58.1 billion in June.

Other Potential Market Movers
- The Fed’s Bernanke speaking, weekly retail sales reports, (TXN) mid-quarter update, (DUK) analyst meeting, (ECL) analyst meeting, (SLE) analyst meeting, (EAT) analyst day, IBD/TIPP Economic Optimism Index, Wachovia Services Conference, Morgan Stanley Industrials Conference, Jeffries Media/Communications Conference, Lehman Brothers Financial Services Conference, BMO Back to School Conference and Bear Stearns Healthcare Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by real estate and commodity stocks in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.