Monday Watch

Weekend Headlines
Bloomberg:
- Yahoo!(YHOO), the Internet company that has failed to crack Google’s(GOOG) dominance of Web search, plans to reject a $44.6 billion takeover bid from Microsoft Corp.(MSFT). Yahoo wants at least $40, the Wall Street Journal reported.
- The average price of regular gasoline at the pump in the US fell 3.5 cents in the past two weeks to $2.94 a gallon, according to oil industry analyst Trilby Lundberg’s survey of 7,000 filling stations nationwide.
- The euro posted its biggest weekly decline against the US dollar since June 2006 on speculation a slowing economy will force the European Central Bank to join the Federal Reserve in reducing interest rates.
- Illumina Inc.(ILMN), the maker of high-speed gene analysis equipment, said it sequenced the first complete genome of an African man, completing the task at record time and cost. The sequence was completed in less than four weeks at a cost of about $100,000. The Illumina announcement is the most recent step toward the goal of a $1,000 genome, the cost point at which analysts and doctors have said full-genome sequencing for individuals will become commonplace. “For right now, I think they have the advantage,” said Ross Muken, a Deutsche Bank AG analyst. “I look at them as the leader.”
- President Bush said Republican presidential front-runner John McCain is a “true conservative” and vowed to help him gain the support of skeptics if he wins the nomination.
- Venezuelan President Hugo Chavez Calls for Farm Seizures, Raises Prices Amid Shortages.
- Venezuelan President Hugo Chavez called Exxon Mobil Corp.'s attempt to freeze $12 billion in Venezuelan assets a case of U.S. ``economic sabotage'' and said such behavior could drive him to cut off oil supplies. A cutoff would drive oil to $200 a barrel, Chavez said today on his ``Alo, Presidente'' weekly talk show on state radio and television.
- Group of Seven officials indicated they’ll be forced into more interest-rate cuts and tax reductions to shore up the global economy. US Treasury Secretary Henry Paulson said in a statement after a meeting in Tokyo of finance ministers and central bankers from Group of Seven nations the global economy faces “downside risks” from the rout of capital markets that is “serious and persisting.” The group discussed rising oil prices, and called on OPEC to boost production, as well as the need to remain open to foreign investment, Paulson said.
- A newly discovered protein on the surface of cells in the intestine allows them to be infected by HIV, the virus that causes AIDS, and may be a target for experimental drugs in attacking the disease at its start.
- US natural gas is the cheapest it’s been relative to oil since the 1991 Gulf War, raising the prospect of a windfall for investors who sell crude and buy the other heating fuel.
- Microsoft Corp.(MSFT) shares haven’t been as cheap since 1986, the year Bill Gates took what would become the world’s largest software maker public. Nokia(NOK) is trading at its least expensive level since surpassing Motorola(MOT) as the biggest producer of mobile phones in 1998. Computer and software-related companies in the MSCI World Index were valued at 20.8 times profit on Feb. 6, the lowest ever and down from 91.1 at the start of the decade. Institutional investors turned sellers of technology shares in December and dumped more on a net basis last month than in any 20-day period since August 2002, two months before the Morgan Stanley Tech Index bottomed in October of 2002. The Morgan Stanley Tech Index is currently up 114.2% from that low.

Wall Street Journal:
- Hillary Rodham Clinton named a new campaign manager and suffered losses to Obama in Louisiana, Nebraska, Washington state and Maine over the weekend.
- Motorola(MOT) and Nortel Networks are in talks to combine their wireless-infrastructure units in a joint ventures.

NY Times:
- Walt Disney(DIS) and other theme-park operators are developing rides rooted in technology to attract younger audiences.
- In an attempt to increase book sales, HarperCollins Publishers will begin offering free electronic editions of some of its books on its Web site, including a novel by Paulo Coelho and a cookbook by the Food Network start Robert Irvine.
- After rising steadily in the 1980s and ‘90s, worldwide paper consumption per capita has plateaued in recent years.
- Eons, a tiny two-year-old company based in Boston, is one of several contestants aiming to become the pre-eminent Web destination for boomers.

CNBC.com:
- Bush Says to Sign Stimulus Plan on Wednesday.
- Homeowners May Be Big Winners In Stimulus Plan.
- Tobias’ Wife Unlikely to Face Murder Charges.

MarketWatch.com:
- New tax perks, legal changes to consider as you do your 2007 taxes.

IBD:
- Domain Name Game Still Going Strong; Tad Less Secretive.

TheStreet.com:
- Apple(AAPL) Ready to Shine Again.

Forbes.com:
- 1998 Redux. The worrywarts seek a parallel to today’s market and think they see it in 1930. I seek a parallel and find it only ten years ago. And that makes me bullish.

Investment Dealer’s Digest:
- Still Room for Small Hedge Funds.

San Jose Mercury News:
- San Francisco Bay Area pollution regulators are proposing charging local businesses an annual fee based on the volume of greenhouse gases they emit.

Platts:
- China is preparing to shut coal-fired power stations as well as manufacturing plants including steel mills to reduce air pollution before the Olympics start in August. Government officials has told “heavy polluters” that a shut-down order will be issued 30 days before the Olympics start Aug. 8 and will stay in force until they end Aug. 24. The closures will affect facilities in and near Beijing and in the northern city of Shenyang, capital of Liaoning province.

Business Week:
- Marcial: Microsoft(MSFT), Google(GOOG) Good Bets. Whether Microsoft gets Yahoo or not, some investing pros see money to be made long-term on the kings of software and search.

USA Today:
- Business travelers can’t seem to pack light on gadgets.
- Social-networking sites going global.
- Consumers wonder how much, when on tax rebate.

CNNMoney.com:
- 5 Stocks We Love.

SmartMoney.com:
- The Selloff That Wasn’t. Cisco’s(CSCO) weak forecast should’ve clobbered tech stocks this week. It didn’t.

Reuters:
- Mullah Omar and other Taliban leaders are directing insurgency operations in Afghanistan from the Pakistani city of Quetta, while al Qaeda leader Osama bin Laden is operating from Pakistan’s tribal areas, a senior US administration official said.
- Auto economist sees limited drop in 2008 sales.
- US machine tool demand rose 8% in 2007, two trade groups said in a joint report on Sunday. “Exceptionally strong December results have driven 2007 manufacturing technology to a level 8% above 2006,” AMT President Byrd said.

Financial Times:
- Research by the Global Wind Energy Council showed that, although Europe remains the world’s biggest generator of wind energy, its position is being eroded as growth speeds up in the US and China.
- The US is unlikely to suffer a recession this year, according to the CEO of BASF, who has accused the financial industry of “panicking” about the economic effect of the credit crunch.
- China’s $200 billion sovereign wealth fund is preparing to grant mandates of as much as $30 billion to international fund managers and is expected to receive another injection of capital for its offshore investments from the country’s $1.530 billion in foreign exchange fees.
- Hedge funds put up shutters to weather storm.
- One of Moore Capital’s best traders is spinning out his hedge fund to create a new $2.5 billion London-based asset manager in what is likely to be one of the year’s biggest hedge fund launches.

TimesOnline:
- Yahoo!(YHOO) set to revive merger talks with AOL after rejecting hostile takeover.

International Herald Tribune:
- A rocky road ahead for commodities.

Spiegel:
- Germany may increase its forces in Afghanistan by almost a quarter to 4,500, spreading it mission westward from its northern base in a response to US requests.

Nikkei:
- Hino Motors Ltd., 50% owned by Toyota Motors, increased production capacity at a US plant that makes parts for its parent’s large vehicles. Hino raised its workforce 20% and added a new line to produce suspension parts for Toyota’s Sequoia sport utility vehicle at its plant in Arkansas.

Weekend Recommendations
Barron's:
- Made positive comments on (ISCA), (K), (GIS), (HJZ), (KFT) and (SPWR).

Citigroup:
- Maintained Buy on (CF), raised estimates and target to $146.
- Reiterated Buy on (MER), target $75.

Night Trading
Asian indices are -1.75% to -.50% on avg.
S&P 500 futures -.47%.
NASDAQ 100 futures -.61%.

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/Estimate
- (LTR)/1.13
- (CSL)/.53
- (HAS)/.81
- (CNA)/1.02
- (GGP)/.25
- (CUZ)/.02
- (NUAN)/.02
- (PAY)/.36
- (OSG)/.59
- (LNCR)/.67

Upcoming Splits
- (WGOV) 2-for-1

Economic Data
- None of note

Other Potential Market Movers
- The (COT) analyst meeting, (MSFT) financial analyst briefing, (LVS) investor conference, Goldman Sachs Small/Mid-cap Financial Services Symposium, BIO CEO & Investor Conference, Lehman Brothers Industrial Select Conference, UBS Global Healthcare Services Conference, Citigroup Retail Conference and GSMA Mobile World Congress could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by financial and mining shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the week.