Wednesday Watch

Late-Night Headlines
Bloomberg:
- BHP Billiton Ltd.(BHP) the world’s largest mining company, raised its hostile offer for Rio Tinto Group(RTP) to $147.4 billion, aiming to thwart a blocking move led by a Chinese competitor. Rio Tinto shares rose 4.9% in extended trading.
- JDS Uniphase(JDSU), the maker of equipment for testing telecom networks, reported second-quarter profit and sales that beat analysts’ estimates, sending the share soaring 20.6% in after-hours trading.
- Walt Disney(DIS), the second-largest US media company, reported first-quarter profit that beat analysts’ estimates as revenue from cable networks and theme parks climbed. The stock jumped 5.7% in extended trading.
- Smoking marijuana on a regular basis as a young adult can lead to gum disease by age 30 or younger, according to a study by New Zealand researchers.
- Heart attacks and deaths nearly doubled after patients stopped taking the anti-clotting drug Plavix, according to the first national study documenting the risk to heart patients who end their drug therapy.
- The euro declined the most against the US dollar in almost two months after Europe’s service industries weakened and raised concern that Jean-Claude Trichet’s reluctance to cut interest rates will hamper growth.
- Euro May Weaken to $1.431 on Technical Charts, Citigroup Says.

Wall Street Journal:
- McCain Scores in Northeast, Illinois. Romney Takes Massachusetts, Utah; Huckabee Rallies in Southern States.
- Obama Shows Strength in Deep South; Clinton Wins New York, Massachusetts.

MarketWatch.com:
- Buying January’s worst. Newsletters attracted to many worst performers from last month.
- Insiders are betting heavily on bull-market rebound.

NY Times:
- Whatever the outcome of Microsoft’s(MSFT) bid for Yahoo(YHOO), the move and Google’s(GOOG) countermoves mark an escalation in the confrontation between the two companies.
- For Marketing, the Most Valuable Player Might Be Google’s YouTube.
- In CBS Test, Mobile Ads Find Users.

SmartMoney.com:
- Microsoft(MSFT) Shareholders to Pay High Price for Yahoo(YHOO).

Forbes.com:
- Worries that payment shock on adjustable-rate mortgages could trigger even more defaults could subside as LIBOR continues to fall. The majority of hybrid adjustable-rate mortgages currently resetting – the ones analysts and experts widely predicted would default at high levels because of rising interest rates – are tied to LIBOR. Six months ago LIBOR was at 5.31%. By Monday, the rate had fallen to 3.1%. Subprime borrowers that were looking at a 30% jump in monthly payments just six months ago, are now looking at a monthly payment increase of less than 10%. If LIBOR continues to decline, adjustable rates could actually begin resetting below their initial interest rate, saving customers on monthly payments.

IBD:
- Google(GOOG) Cuts E-Mail Security Price To Advance ‘Cloud’ Services Push.

Financial Times:
- The Iraqi government is inviting major oil multinationals to participate for the first time in the development of the oil industry. Iraq is determined to push ahead with plans to raise production from a current 2.5 million barrels per day to 6 million barrels per day in five years.

Business Times:
- Singapore Telecom Ltd. says its 172 million mobile-phone subscribers will help the company in its bid to bring Apple’s(AAPL) iPhone to Asia, citing CEO Chua Sock Koong.

Late Buy/Sell Recommendations
Citigroup:
- Maintained Buy on (SMTC), target $18.
- Reiterated Buy on (EMR), target $58.
- Maintained Buy on (MU), target $17.

Night Trading
Asian Indices are -3.75% to -1.75% on average.
S&P 500 futures -.29%.
NASDAQ 100 futures -.36%.

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
- (WMG)/.12
- (IACI)/.55
- (PDX)/.80
- (DVN)/1.93
- (MGAM)/-.02
- (BIIB)/.80
- (TWC)/.31
- (TIN)/.16
- (TWX)/.29
- (SLE)/.24
- (CI)/.98
- (ITT)/.93
- (RL)/.76
- (HB)/.66
- (EDS)/.57
- (CCI)/.09
- (FMC)/.70
- (PRU)/1.89
- (CSCO)/.38
- (ACL)/1.27
- (MET)/1.44
- (WMS)/.25
- (AVB)/.58
- (AKAM)/.37

Upcoming Splits
- (CJR) 2-for-1
- (JASO) 3-for-1

Economic Releases
8:30 am EST
- Preliminary 4Q Non-farm Productivity is estimated to rise .5% versus a 6.3% gain in 3Q.
- Preliminary 4Q Unit Labor Costs are estimated to rise 3.5% versus a -2.0% decline in 3Q.

Other Potential Market Movers
- The weekly EIA energy inventory report, weekly MBA mortgage applications report, (CTXS) analyst day, (AXP) financial community meeting, (JAVA) analyst meeting, CSFB Financial Services Forum, CSFB Energy Conference, Cowen & Co. Aerospace/Defense Conference, Thomas Weisel Tech/Telecom/Internet Conference and Merrill Lynch Global Pharma/Biotech/Medical Conference could also impact trading today.

BOTTOM LINE: Asian indices are sharply lower, weighed down by commodity and financial 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.