Friday Watch

Late-Night Headlines
Bloomberg:
- The euro headed for the biggest weekly decline in 1 ½ years against the dollar after European Central Bank President Trichet signaled he’s open to cutting interest rates as economic growth slows.
- The rebound in the dollar foreseen by UBS AG, BNP Paribas SA and Deutsche Bank AG is gaining momentum.
- Freddie Mac’s(FRE) losses from mortgage defaults may hit bottom by the end of the year as the housing recovery, CEO Richard Syron said today.
- The US Senate approved a $151 billion economic stimulus measure that will send tax rebates to more than 100 million US households.
- US economic growth is poised to return to its long-term trend in the second half of the year following aggressive interest –rate cuts, said Federal Reserve Bank of Dallas President Richard Fisher.
- OPEC may cut crude production when it meets next month to keep the price above $80 a barrel, oil ministry officials from four of the group’s nations said.
- Cognizant Technology(CTSH) said quarterly revenue rose 41% from year ago levels. The shares surged 13% in extended trading.
- Intermec(IN) reported revenues rose 16% over year ago levels. The shares rose 7.4% in after-hours trading.
- BMC Software(BMC) reported revenues exceeded the high end of guidance, rising 11% from year ago levels. The stock gained 4% in extended trading.
- CF Industries(CF) said net sales rose 62% from year ago levels. The shares jumped 7% in after-hours trading.
- MBIA Inc.(MBI) raised $1 billion by selling shares at $12.15 each in an effort to protect its AAA insurance rating. The stock fell 8.4% in extended trading.

MarketWatch.com:
- Hedge funds had their worst month since the dot-com bust. Fed rate cuts may have made things worse as heavily shorted stocks rallied.

NY Times:
- Benazir Bhutto died from a head wound caused after a bomb blast and not from an assassin’s bullet, according to Scotland Yard investigators probing the Pakistan opposition leader’s killing.

IBD:
- Handhelds Become Instant Hit For Maker Of Ultrasound Devices.
- HR Software Online Rising.

Gizmodo:
- Google(GOOG) Phone Prototype to Be Shown Next Week at Mobile World Congress.

USA Today.com:
- Corporate cafeterias go the green, healthy route.
- It’s not just Clinton, Obama and McCain stressing over the presidential election. Wall Street is, too.

Reuters:
- Three former El Paso(EP) natural gas traders were convicted on Thursday of reporting false deals to manipulate gas prices from 2000-2002.

Financial Times:
- China Investment Corporation, the Chinese sovereign wealth fund, is close to an agreement with JC Flowers, the US pirate equity group, to put about $4 billion into a new fund to invest in ailing financial institutions.
- US and Italian police arrested more than 70 Mafia suspects in NY and Sicily on Thursday, decapitating the second largest crime family in the US and thwarting plans by a new generation of organized crime bosses to re-establish a transatlantic axis.

Late Buy/Sell Recommendations
Citigroup:
- Maintained Buy on (WW), target $62.
- Reiterated Buy on (ARW), raised target to $50..
- Reiterated Buy on (EXPE), target $38.
- Maintained Buy on (MDTH), target $40.
- Maintained Buy on (COV), target $52.
- Maintained Buy on (IP), target $40.
- Reiterated Buy on (CF), target $139.

Night Trading
Asian Indices are -.50% to +.75% on average.
S&P 500 futures -.03%.
NASDAQ 100 futures -.07%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
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Before the Bell CNBC Video(bottom right)
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Today in IBD
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Earnings of Note
Company/EPS Estimate
- (ALU)/.14
- (BEC)/1.03
- (CVH)/1.18
- (FNM)/-1.29
- (SKYW)/.64
- (WY)/.34

Upcoming Splits
- None of note

Economic Releases
10:00 am EST
- Wholesale Inventories for December are estimated to rise .3% versus a .6% gain in November.

Other Potential Market Movers
- The Fed’s Lockhart speaking, Fed’s Pianalto speaking, Fed’s Yellen speaking, (GLW) investor meeting, (STJ) analyst meeting and CSFB Energy Conference could also impact trading today.

BOTTOM LINE: Asian indices are mixed as gains in automaker stocks are offsetting losses in industrial stocks in the region. I expect US equities to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the day.