Monday Watch

Weekend Headlines
Bloomberg:
- Ambac Financial Group(ABK) may get $3 billion in new capital as part of a rescue agreement with banks.
- Asian stocks advanced on speculation NY-based Ambac Financial(ABK) will get new capital to salvage its AAA credit rating, averting further writedowns for global financial companies.
- Electronic Arts(ERTS) offered to buy Take-Two Interactive(TTWO) for $2 billion in cash to help maintain its lead as the world’s largest video-game maker and acquire the top-selling “Grand Theft Auto” series.
- Cuban lawmakers name Raul Castro as president, formally ending the almost half-century rule of his ailing brother Fidel.
- Ralph Nader, the consumer advocate who ran for president in 2000 and 2004, said he’s going to make another bid for the White House this year.
- Virgin Atlantic Airways Ltd., the UK carrier controlled by billionaire Richard Branson, tested a jumbo jet partly powered by a biofuel made from babassu nuts and coconut oil, the first for a commercial aircraft.
- Brazil, the world’s second-largest soybean producer, will harvest more than expected this year as farmers limited crop diseases and used gene-modified seeks to grow stronger plants, a forecaster said after a field tour.
- Citigroup(C), which froze redemptions from a hedge fund in January, said it was providing a $500 million line of credit to other hedge funds run by its alternative investments unit.
- Genentech Inc.(DNA) won US approval to market its top-selling treatment Avastin for women with breast cancer, giving the company a chance to add more than $700 million in sales this year.
- Qualcomm Inc.(QCOM) rose as much as 5.7% on news that the microchip-producer agreed to put on hold some of its patent-infringement disputes with Nokia Oyj(NOK), the world’s biggest maker of mobile phones.
- Obama, Clinton Wrangle Over Trade Before Ohio Contest. Obama is seeking to tie his rival to NAFTA, signed by former President Bill Clinton, which many workers blame for the loss of millions of US jobs. “Shame on you Barack Obam,” Clinton said at a news conference. “He insists on putting out misleading and false and discredited information.,” said Clinton.
- OPEC President Khelil said that the group may agree to cut production at its next meeting.
- A senior adviser to John McCain today defended the Arizona senator against a New York Times report suggesting the likely Republican presidential nominee did favors for a Washington lobbyist eight years ago. In his weekly Sunday column, New York Times Public Editor Clark Hoyt took the paper to task, saying it owed readers “more proof than the Times was able to provide.”
- Two rare diseases that cause hair loss may be spurred by mutations in the same gene, according to research that may one day lead to new treatments for baldness, German and American scientists say.
- President Lee Myung Bak, South Korea’s first president with a business background, pledged to cut taxes and speed up deregulation to encourage investment and boost economic growth.
- The yen fell against 15 of the 16 most-active currencies on speculation rising stock prices will give investors confidence to increase purchases of higher-yielding assets funded with loans in the Japanese currency.
- Thailand’s economy, Southeast Asia’s second-largest, grew at the fastest pace in seven quarters in the last three months of 2007 as exports of rice, automobiles and computer chips climbed.

Wall Street Journal:
- Hedge Funds Feel Heat as Investors Shun Complexity.
- Hillary Clinton has resisted calls from Barack Obama to follow him in releasing personal tax returns, arguing that Senate and presidential disclosure rules already have required her to make public large amounts of personal financial information. But the NY senator’s tax returns likely would provide information not available in those filings.

NY Times:
- A Sign of Hope for Stocks.
- Texas wind farms now supply more than 3% of the state’s electricity, making it the leading US state in terms of wind power, ahead of California, Minnesota and Iowa. The US is now the second-biggest wind power market after Germany. Billionaire hedge fund manager T.Boone Pickens wants to build a 150,000-acre wind farm in the Texas Panhandle that would cost $10 billion.
- The competing universal health-insurance proposals from Senators Hillary Clinton and Barack Obama raise questions about how much will be saved through such efforts.
- A handful of mortgage REITs is managing to rise above the rubble and even thrive.
- A new drug aimed at treating schizophrenia turns its focus away from dopamine and instead on the effects of glutamate, another powerful neurotransmitter.

CNBC.com:
- Warren Buffett’s new bond insurance company has backed more than 100 municipal bonds in the past two days.

MarketWatch.com:
- Top five products to turn your house ‘green.’
- Toyota Motor is planning to establish research units for vehicle safety, alternative energy and new materials technologies in the US, breaking from its long-held tradition of basing such endeavors in Japan.

TheStreet.com:
- Apple TV Nails It the Second Time Around.

IBD:
- Corporate America is sitting on $611 billion in cash, says S&P.
- Networking Groups Aim To Turn LA Into Technology Star.

Washingtonpost.com:
- Conservatives Are Defending McCain After Newspaper Story.

IMF:
- Economic growth in Africa is the strongest in decades.

Boston Globe:
- Gasoline prices have risen so high and stayed high for so long, that Americans are driving less. In the past six months, average daily consumption slipped two-tenths of a percent from a year earlier, after growing 2.5% in the previous year. In the Northeast, gasoline demand has dropped as much as 3%, after growing 1 to 2% annually in recent years.

Business Week:
- The Secrets of Microsoft’s(MSFT) Sync. This voice-control system for car stereos and cell phones, available only in Ford(F) cars, is sure to be imitated.

USA Today:
- Fast-growing jobs: Here’s how to open the door to your future.

Forbes:
- In the Darien, Conn. Office of brokerage Euro Pacific Capital, Peter Schiff, the president of the firm, does something most brokers would never do: He calls up details of client accounts in front of a journalist. Schiff, dubbed the Doctor of Doom by CNBC, is a favorite of magazine, newspaper and TV journalists looking for a particular point of view – namely, that US stocks, US real estate and the dollar are bad for investors. Schiff’s Chicken Little take on the US economy – that it is on the brink of collapse - isn’t new. He’s been serving up the same spiel for a decade. But these days he’s getting more applause than eye-rolling from jittery investors.

Reuters:
- Lehman Brothers(LEH) will not have to take writedowns anywhere near the $15 billion that was the subject of speculation in European markets on Friday.

Financial Times:
- The world’s sovereign wealth funds will be asked to accept a voluntary code of conduct governing their investment activities under proposals poised for approval next week by the European Commission.
- CME Group(CME) is considering improving its bid for the Nymex(NMX) as it seeks to create the world’s biggest exchange.
- More than half the collateral backing cash advances made by the Federal Reserve to banks operating in the US is in the form of loans rather than securities, the NY Fed said. This is the first time the fed has offered any insight into its collateral portfolio, and the news is likely to diminish market concerns about the nature of the assets backing the Fed loans.

Globe and Mail:
- Canada needs to double its military presence in Afghanistan to 5,000 soldiers if it wants to keep key districts in Kandahar province under control, citing a top Army official. “If countries like Germany and France were not so afraid of committing forces, this problem would be solved readily,” Major Richard Moffet, deputy commander of Canada’s battle group said.
- China’s money and credit growth will slow this year as the central bank implements a battery of tightening measures to achieve its primary goal of taming inflation, a senior central bank official said on Sunday.

Xinhua:
- China’s production of crude oil off its coast will exceed 50 million metric tons by 2010 as companies speed up exploration, citing a State Oceanic Administration report. The search for oil and natural gas offshore is still in its infancy, with 80% of resources untapped, the report said.

Haaretz.com:
- Hezbollah chief: We’re preparing for war with Israel in coming months.

Gulf Times:
- A top official of the Arab States Broadcasting Union has denied that the controversial Arab media code is intended to be a tool of censorship for the satellite channels in the region.

Arab News:
- The family members of the detained Saudi blogger Fouad Al-Farhan said yesterday that although Saudi authorities allowed Al-Farhan for the first time to make a telephone call from Jeddah’s Dahban Prison on Feb. 12 they would still like to continue to visit him. Al-Farhan’s blog leads with the slogan: “Searching for freedom, dignity, justice, equality, public participation(shoura), and all the rest of lost Islamic values, and for Raghad and Khetab”(Farhan’s two children). Al-Harhan is considered in the Saudi blogosphere as being the “Dean of Saudi Bloggers” for blogging under his real name. www.alfrahan.org has tackled social issues in the Kingdom, condemned terrorism and called for “open” and “real” dialogue within the Kingdom.

Weekend Recommendations
Barron's:
- Made positive comments on (ANF), (DIS), (MRVL) and (CELG).

Citigroup:
- Reiterated Buy on (AVP), target $55.

Night Trading
Asian indices are unch. to +1.75% on avg.
S&P 500 futures +.40%.
NASDAQ 100 futures +.29%.

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
Upgrades/Downgrades
Rasmussen Business/Economy Polling
CNBC Guest Schedule

Earnings of Note
Company/Estimate
- (AMT)/.07
- (JWN)/.89
- (SNDA)/.45
- (DCI)/.42
- (LDK)/.41
- (TDS)/.46
- (PAY)/.36
- (RSH)/.72
- (LOW)/.25
- (FLML)/-.32

Upcoming Splits
- (RBN) 2-for-1

Economic Data
10:00 am EST
- Existing Home Sales for January are estimated to fall to 4.8M versus 4.89M in December.

Other Potential Market Movers
- The (SNDK) analyst meeting, (HON) investor conference, (Q) analyst day, CSFB Global Services Conference and BMO Global Metals & Mining Conference could also impact trading today.

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