Wednesday Watch

Late-Night Headlines
Bloomberg:
- Most ABX indexes jumped, suggesting the perceived risk of subprime-mortgage securities fell, after the Fed lowered its benchmark interest rate a half-percentage point to blunt the effect of a slowdown in housing.
- JPMorgan Chase(JPM) promoted Tom Lee to chief US equity strategist, filling the position vacated when Abhijit Chakrabortti joined rival Morgan Stanley(MS) last month.
- Russian and Chinese spying on the US is approaching Cold War levels, the top US intelligence official told a House committee.
- Typhoon Wipha slammed into the eastern coast of China with winds of 116 mph and headed toward Shanghai, the country’s financial capital, where 200,000 people were evacuated.

Wall Street Journal:
- Stocks Soar as Bernanke Tackles Credit Crunch With Half-Point Move.
- Sun Microsystems(JAVA) expects revenue in China to double within three years, citing executives.
- Countrywide Financial Corp.(CFC) plans to double the number of branches that offer certificates of deposit and money-market accounts, aiming to obtain more deposits to fund mortgage lending.

MarketWatch.com:
- The move by E-Trade Financial(ETFC) to unload its troubled wholesale mortgage business makes the online broker much more attractive as a prospective buyout candidate, according to several analysts.
- Kiss-ups and slackers are equally annoying at work: poll.

NY Times:
- Intel(INTC) gave the first public demonstration on Tuesday of a new generation of computer processors that significantly increase performance without consuming more power.

CNNMoney.com:
- Fed cut could buoy housing markets.

CNBC.com:
- Darden Restaurants(DRI) reported a 20% rise in quarterly net earnings, helped by higher prices and increased customer traffic at its Red Lobster and Olive Garden restaurants. Shares of Darden traded up 1.5% in post market trading after finishing the regular session up 3.5% at $43.84.

Forbes.com:
- Countrywide Financial Corp.(CFC) Chairman and CEO Angelo Mozilo delivered a bullish outlook Tuesday for his company as it grapples with the ongoing housing downturn.

USA Today.com:
- Mattel toys’ lead was 180 times the limit.
- Wal-Mart, whose health coverage for employees has been a target of critics, says it will offer improved options for workers next year that include $4 generic drugs and monthly premium costs of as low as $4.36 on some of its plans.
- Murdoch: Fox business channel aiming at Main Street. “CNBC is a financial channel for Wall Street,” Murdoch told an investor conference in NY sponsored by Goldman Sachs(GS). “We’re for Main Street.” “They dwell too much on failures or scandals,” Murdoch said. “We want to put a lot on innovations and successes, people who are making money.”

Financial Times:
- China Construction Bank, the nation’s second-largest lender, reduced its investment in the country’s “overheated” property market, citing Chairman Guo Shuqing.
- Dick Parsons, chairman and chief executive of Time Warner(TWX), said the company was taking a “hard look” at spinning off its cable division.
- Lehman Brothers(LEH) helped ease concern about the effect of the credit squeeze on bank earnings on Tuesday when it reported better-than-expected third-quarter results and signaled its belief that the worst of the market turmoil was over.

Reuters:
- Fed brightens bank picture, may help deal makers.
- Nasdaq Stock Market(NDAQ) is poised to launch an index made up of companies whose primary focus is the development of drugs, devices and diagnostics to treat neurological disorders, including Alzheimer’s disease, Parkinson’s disease and schizophrenia.
- News Corp.(NWS/A) chief Rupert Murdoch on Tuesday sketched out early plans for Dow Jones, saying he leaned toward making the online Wall Street Journal free but had not yet made a decision.

Economic News:
- Infosys Technologies Ltd. may compete with Microsoft Corp.(MSFT) in a $6.4 billion bid for Sage Group Plc. Intuit Inc.(INTU) and Goldman Sachs(GS) are also likely bidders for Sage. Sage is Britain’s biggest maker of accounting software.

Late Buy/Sell Recommendations
Citigroup:
- eBay’s(EBAY) core growth rate trends in the US improved materially this week, with core down 6.9% y/y QTD, an improvement versus down 8.1% y/y last week. Listings were up 3% w/w, as September promotion and seasonality continue to drive w/w growth acceleration. Maintain Buy rating.
- Reiterated Buy on (NLY), target raised to $19.
- Reiterated Buy on (INTC), target $31.

Night Trading
Asian Indices are +1.0% to +3.25% on average.
S&P 500 futures -.08%.
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
- (AIR)/.39
- (KMX)/.29
- (CKR)/.21
- (CLC)/.49
- (CMTL)/.47
- (DBRN)/.42
- (GIS)/.80
- (MLHR)/.50
- (MS)/1.55

Upcoming Splits
- None of note.

Economic Releases
8:30 am EST
- The Consumer Price Index for August is estimated to rise 0.0% versus a .1% gain in July.
- The CPI Ex Food & Energy for August is estimated to rise .2% versus a .2% gain in July.
- Housing Starts for August are estimated to rise to 1350K versus 1381K in July.
- Building Permits for August are estimated to fall to 1348K versus 1373K in July.

10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil drawdown of 2,025,000 barrels versus a 7,011,000 barrel decline the prior week. Gasoline supplies are estimated to fall by 1,000,000 barrels versus a 666,000 barrel decline the prior week. Distillate supplies are expected to rise by 1,225,000 barrels versus a 1,793,000 barrel build the prior week. Finally, Refinery Utilization is expected to fall by .5% versus a 1.56% decline the prior week.

Other Potential Market Movers
- The weekly EIA energy inventory report, weekly MBA Mortgage Applications report, (NCX) analyst meeting, RBC Consumer Conference, Keybanc Capital Basic Materials & Packaging Conference, ThinkEquity Growth Conference, AG Edwards Emerging Growth Conference, Bank of America Investor Conference, Goldman Sachs Communacopia Conference and UBS Global Paper and Forest Products Conference could also impact trading today.

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