Tuesday Watch

Late-Night Headlines
Bloomberg:
- Boeing Co.(BA) signed a $5.5 billion contract to provide state-owned Iraqi Airways with 40 new aircraft, including 787 Dreamliners and 737s, Thomson Financial reported. Iraq also has an option to buy 15 more planes.
- Schering-Plough Corp. CEO Fred Hassan said he stands behind Vytorin, its cholesterol drug that a study presented at the American College of Cardiology said is no more effective than some generic counterparts. “We stand behind the science,” Hassan said. “We stand behind our product.” Hassan criticized the study, saying it wasn’t an “open scientific discourse.”
- IBM(IBM) announced today that it has learned that it has been temporarily suspended from participating in new business with US Federal government agencies.
- Defaults on bonds and loans in Asia may rise as much as $20 billion over the next two to three years, creating opportunities for investors in distressed assets, said the chief investment officer of Tribridge Investment Partners Ltd.
- Thornburg Mortgage(TMA) Raises $1.35 Billion Through Private Placement.
- The cost to exchange fixed for floating interest-rate payments will decline as the turmoil in credit markets begins to subside and the Treasury boosts note sales, Barclays Capital Inc. and UBS Securities LLC said. “The worst essentially is over” for the financial markets, said Michael Pond, an interest-rate strategist at Barclays in NY.
- MF Global’s Meir Says Oil May Fall to ‘Mid-80’s’ By June. (video)
- Wheat plunged the maximum allowed on the Chicago Board of Trade after the government said US farmers, the world’s largest exporters, will plant more to capitalize on record prices and diminished global inventories.
- Confidence among Japan’s largest manufacturers fell to a four-year low as Toyota Motor and Canon Inc. struggle with the yen’s rise and a US slump.
- Lehman(LEH) to sell $3 billion of shares to raise capital and squash speculation about a cash shortage. Lehman will offer 3 million convertible shares. Demand for the shares was already three times greater than the amount offered as of 6:30 pm in NY. “We still maintain that we don’t need capital, but we’ve realized that perception is the dominant issue in today’s markets,” CFO Erin Callan said. “This is an endorsement of our balance sheet by investors.”
- The Bill & Melinda Gates Foundation, the world’s biggest charitable fund, is offering $100 million to support development of “bold and unconventional” ways to combat infections and other diseases.
- General Motors(GM) shut its plant in Toledo, Ohio, for a second time in four weeks, bringing to 30 the number of factories idled or partially closed by a strike at supplier American Axle.
- Australian stocks fell the most in 20 years during the first quarter after rising interest rates cut demand for bank shares and slowed the economy’s 17^th year of expansion.

Wall Street Journal:
- With their stock prices reeling, Schering-Plough(SGP) and Merck(MRK) mounted an aggressive campaign to defend their $5 billion-a-year franchise for cholesterol drugs Vytorin and Zetia against calls from leading cardiologists to curtail the drugs’ use.
- Western Union Co., hoping to boost its share of the money-transfer market, is teaming up with RadioShack Corp. and a small wireless company to offer a service that lets people send money through their cellphones.
- No Mouth-to-Mouth Is Needed With CPR, Heart Association Says.

MarketWatch.com:
- The US and Australia on Monday inked an open skies aviation agreement eliminating restrictions on air travel between the two allies that would lead to lower fares, officials said.

BusinessWeek.com:
- Google’s(GOOG) Gamble. As investors fear falling ad revenue, the search giant pushes ahead with its bid to boost quality clicks.

IBD:
- Polysilicon Powers MEMC’s(WFR) Growth.

Forbes.com:
- Chinese shares are expected to extend their first-quarter slump into the second quarter, as Beijing’s policy tightening and higher consumer prices weigh on corporate earnings, analyst and economists said.
- Hungering for the kind of revenue needed to field top teams, a wave of stadium construction is sweeping through sports. But not just any stadiums. Super-stadiums.

FOXBusiness:
- Paulson’s Plan Puts Hedge Funds Under Watch. Hedge funds – often described as ‘secretive’, with their pools of cash invested in everything from soybeans to mortgages – may soon find themselves under the watchful eye of the SEC.

CNNMoney.com:
- Congress is set to grill oil executives over tax breaks Tuesday. But with record gas prices and company profits, the public has more on its mind than just IRS policy.
- Analyst: How Apple(AAPL) sells 45 million iPhones in 2009.

USA Today.com:
- Utilities jump on board to plan for plug-in cars. In a sign of accelerating progress on plug-in hybrids – the 100 mpg vehicles you can’t yet buy in showrooms – electric utilities quickly are linking with automakers and tech companies to develop “smart-charging” technology that controls when and how fast a vehicle is recharged.

Morningstar.com:
- NY-based activist hedge fund Pardus Capital Management said it’s halting investor redemptions, at a time where many of its holdings are plummeting in value.

Reuters:
- The SEC is probing whether short-sellers are spreading bogus rumors to push down shares of Lehman Brothers Holdings(LEH).

Financial Times:
- Hedge funds are having their worst year on record after March turned into one of the ugliest months for popular strategies and several funds imploded. March was the worst month since 1998 for hedge funds, citing Hedge Fund Research. The average fund was down 2.4% for the month. Large relative-value traders, who bet on price discrepancies, sustained large losses.
- Radical strategies to fight the credit crisis including temporary suspension of capital requirements, taxpayer-funded recapitalization of banks and outright public purchase of mortgage-backed securities are being actively discusses by governments and central banks.
- UBS set for further writedowns.

el universal.com:
- Former Mexican President Vicente Fox said that “there are important and clear signals” that Hugo Chavez “is putting money from Venezuelan oil” in the Colombian guerrilla FARC.

The Economic Times:
- The Indian government is under pressure to shut down futures trading in key farm commodities. Several senior leaders even within the UPA government share the widely held view that speculation in futures may be partly fueling food inflation by raising consumer prices without benefiting farmers.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (DELL), target $27.
- Reiterated Buy on (WW), raised target to $64.
- Reiterated Buy on (IBM), target $146.

Night Trading
Asian Indices are -.75% to +1.50% on average.
S&P 500 futures +.16%.
NASDAQ 100 futures +.04%.

Morning Preview
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Earnings of Note
Company/EPS Estimate
- (BLUD)/.22

Upcoming Splits
- (HOLX) 2-for-1

Economic Releases
10:00 am EST
- ISM Manufacturing for March is estimated to fall to 47.5 versus 48.3 in February.
- ISM Prices Paid for March is estimated to fall to 75.0 versus 75.5 in February.
- Construction Spending for February is estimated to fall 1.0% versus a 1.7% decline in January.

Afternoon:
- Total Vehicle Sales for March are estimated to fall to 15.2M versus 15.3M in February.

Other Potential Market Movers
- The weekly retail sales reports, (ALU) analyst meeting, (FST) analyst meeting, CTIA Wireless Forum and Morgan Stanley Banking Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and automaker 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.

Stocks Finish Higher, Boosted by Retail, I-Banking, Disk Drive and Airline Shares

Evening Review
Market Summary
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In Play

Stocks Higher into Final Hour on Lower Energy Prices, Short-Covering

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Medical longs, Biotech longs, Gaming longs and Commodity shorts. I have not traded today, thus leaving the Portfolio 75% net long. The overall tone of the market is mildly bullish as the advance/decline line is higher, most sectors are rising and volume is below average. Investor anxiety is slightly above-average. Today’s overall market action is mildly bullish. The VIX is falling .2% and remains high at 25.7. The ISE Sentiment Index is a below average 135.0 and the total put/call is slightly above average at .98. Finally, the NYSE Arms has been below average most of the day and is currently .78. Considering the losses in Asia overnight, today’s action is more impressive. The Shanghai Composite fell another 3.0% last night and is now down -43.3% from October’s high. As well, India’s Sensex Index fell another 4.4% and is down -26.2% from October highs. The DJIA is down -12.3% from its all-time high set in October of last year. Given how long oil hedge funds are, today’s decline isn’t that surprising as there is probably some quarter-end profit-taking going on. However, a continuation of today’s oil decline over the next few days and a convincing break back below $100/bbl. may indicate the beginning of a more meaningful decline. Psychology for commodities does appear to be changing. Two of my longs, (GILD) and (ILMN), are making new record highs today. I would still be a buyer of both on pullbacks and still see substantial upside in the shares of both companies from current levels. Nikkei futures indicate an +200 open in Japan and DAX futures indicate an +77 open in Germany tomorrow. I expect US stocks to trade modestly higher into the close from current levels on short-covering, lower energy prices and bargain-hunting.

Today's Headlines

Bloomberg:
- Federal Reserve Chairman Ben S. Bernanke has so far shouldered most of the burden of saving the global economy and financial markets. He may be about to get more help. With the credit crisis entering its ninth month, Bank of England Governor Mervyn King and European Central Bank President Jean-Claude Trichet are on the verge of new steps to spur lending and increase liquidity, say economists at Lloyds TSB Group Plc and Royal Bank of Scotland Group Plc.
- Russia’s economy is “overheating,” said Finance Minister Alexei Kudrin.
- Emerging-market bonds fell, led by declines in Turkish debt, on speculation a deepening global credit crisis will prompt investors to cut holdings of higher-yielding assets. The yield premium investors demand to own emerging-market bonds over Treasuries widened 6 basis points to 3.08 percentage points, the biggest since March 20, according to JPMorgan’s EMBI Plus Index.
- Soybeans fell the maximum allowed by the Chicago Board of Trade after the US government said farmers will boost planting by 18%, more than analysts forecast, to take advantage of record prices.
- Crude oil is falling more than $5 a barrel in NY, the biggest decline since December 2004, on signs that slowing economic growth will bolster stockpiles and curb demand.
- Treasury Secretary Henry Paulson proposed the broadest overhaul of US financial regulation since the Great Depression, saying American capitalism needs to be better prepared for “inevitable market disruptions.”
- Merck(MRK), Schering(SGP) Plunge as Doctors Discourage Vytorin.

Wall Street Journal:
- The best solution to the current crisis is to stop the flight from the US dollar.
- The Treasury Dept.’s blueprint for overhauling the regulation of financial markets would significantly alter the landscape for exchanges where stocks, investment funds and derivative products trade.
- CDC Data Show Rise in HIV Cases, Reflecting More Accurate Tracking.

NY Times:
- Chinese Nationalism Fuels Tibet Crackdown.

CNBC:
- The Fed will stop cutting its target rate for overnight lending between banks once it reaches 1.5%, Paul McCulley, a portfolio manager at PIMCO, said.

Washington Post:
- Former Vice President Al Gore will launch a three-year, $300 million campaign April 2 to encourage Americans to mobilize a fight against greenhouse gas emissions.

CNNMoney.com:
- The last days of Bear Stearns. Bear’s fall hastened by lack of Goldman support. It took only a few days, a rising sense of panic – and a critical e-mail – to spell the end of the 85-year-old investment back.

BloggingStocks:
- Did hedge funds push and profit from Bear Stearns’s collapse? And while this Wall Street insider’s story does not constitute an open and shut case that hedge funds pushed and profited from Bear’s collapse, it certainly suggests that it would be a useful area for regulators to investigate. After all, $29 billion worth of taxpayer’s money was lent to make the JPMorgan deal go through.

Financial Times:
- Lawrence Summers, a former US Treasury Secretary, said measures to overcome paralysis in the credit markets give grounds for hope that in the US, at least, the financial crisis is abating. While the prices of many assets are discounting a severe recession or worse, a combination of monetary and fiscal stimulus, together with rising exports may limit the slowdown, he said.

Frankfurter Allgemeine Zeitung:
- Unemployment in Germany that has fallen steadily since mid-2005 may soon show a net gain as companies fire more staff than they hire.

Euromoney Institutional Investor Online Network:
- 38.6% of all hedge funds are no more than 2 years old. Only 2.45% have been around 15 years or longer. There were three times as many hedge funds in 2007 as there were in 2000.

Bear Radar

Style Underperformer:

Mid-cap Growth +.59%

Sector Underperformers:

Gold (-3.36%), Coal (-2.2%) and Steel (-1.2%)

Stocks Falling on Unusual Volume:

SGP, MRK, ACOR, CALM, ANSS, JOSB, LOJN and PLL

Stocks With Unusual Put Option Activity:

1) WLT 2) SGP 3) UPL 4) MRK 5) CECO

Chicago PMI Jumps

- The Chicago Purchasing Manager for March rose to 48.2 versus estimates of 46.0 and a reading of 44.5 in February.

BOTTOM LINE: Exports spurred new orders and production as US business activity rose in March, Bloomberg reported. The Production component rose to 50.4 from 46.5. The Employment component jumped to 44.6 from 33.5. The Prices Paid component rose to 83.9 from 79.4 the prior month. The New Orders component surged to 53.9 from 48.8 in February. The Inventories component fell to 42.0 from 46.0 the prior month. Overall, this gauge showed meaningful improvement, especially considering the ongoing American Axle strike, and bodes well for other manufacturing readings showing improvement going forward.

Bull Radar

Style Outperformer:

Large-cap Value (+.66%)

Sector Outperformers:

Oil Service (+2.18%), I-Banks (+1.91%) and REITs (+1.2%)

Stocks Rising on Unusual Volume:

VRTX, BNT, RDC, NE, UBS, KWR, ABT, AMN, BTI, AZN, ANST, ASTI, MXWL, VRTX, RNOW, APOL, IIVI, AMAG, EXPO, BFAM, WOOF, RSTI, MIM, BNT, KWR and ASA

Stocks With Unusual Call Option Activity:

1) SGP 2) MRK 3) QLGC 4) RDC 5) ISIL

Links of Interest

Market Snapshot Commentary
Market Performance Summary
Style Performance
Sector Performance
WSJ Data Center
Top 20 Biz Stories
IBD Breaking News
Movers & Shakers
Upgrades/Downgrades
In Play
Exchange Volume vs. Average
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Dow Jones Hedge Fund Indexes

Monday Watch

Weekend Headlines
Bloomberg:
- The rates on three-month Treasury bills posted the biggest weekly jump in 26 years as the Fed’s steps to add liquidity to financial markets diminished demand for the safest assets.
- Lehman Brothers(LEH) said it plans to sue Marubeni Corp., Japan’s fifth-biggest trading company, to recover “fraudulently misappropriated” funds that newspaper reports say may amount to more than $250 million.
- Burger King Holdings(BKC) said it plans to set up a new, smaller restaurant called the Whopper Bar that will be focuses on its top-selling sandwich.
- Petroleo Brasileiro SA(PBR) found oil and natural gas off the coast of Brazil. The MB-S-8 offshore basin is south of the Tupi field, which may hold 8 billion barrels of oil.
- BlackRock Inc.(BLK), the largest publicly traded money manager in the US, plans to raise as much as $500 million in an IPO of shares in BlackRock Absolute Return Strategies Ltd. they closed-end fund of hedge funds known as BARS will be listed on the London Stock Exchange.
- Thornburg Mortgage(TMA) has received an extension through March 31 to raise $948 million in new capital.
- Soybeans tumbled more than 4%, and wheat fell on forecasts that US farmers will plant more this year to take advantage of surging prices. When seeding starts in May, growers will plant 12% more soybeans than a year ago, according to a Bloomberg survey before a government report on March 31.
- Argentine farmers began talks with cabinet ministers after suspending a strike that led to food shortages and confronted President Cristina Fernandez de Kirchner with the biggest anti-government protests since 2001.
- Japan’s five-year notes rose this week on speculation signs of an economic slowdown will back the case for the central bank to cut interest rates this year.
- “Japan’s economy is being pulled down by a combination of the US subprime lending problem, stock market instability and energy prices,” Japanese Prime Minister Yasuo Fukuda said.
- Venezuelan President Hugo Chavez said he’ll take more land from private owners that he says is being left idle in a bid to increase production of food stables.
- Fed Actions Defuse Subprime ARM Rate Reset Bomb. Many analysts and public officials have said that foreclosures of subprime adjustable-rate mortgages would soar this year as owners’ monthly payments jumped when interest rates reset to a higher level. Not only is that unlikely to happen, this year’s resets of earlier vintages of subprime mortgages may even reduce some payments that increased in 2007.
- China voiced “strong dissatisfaction” with the European Union after the bloc’s foreign ministers called on the government in Beijing to hold talks with the Dalai Lama after three weeks of unrest in Tibet.
- Elpida Memory, Japan’s largest computer-memory maker, plans to raise prices 20% in April, CEO Yukio Sakamoto said. Elpida will inform computer makers that it plans to increase prices 10% in the first half of next month and another 10% in the second half of April after demand rose and inventory levels fell, Sakamoto said in a Bloomberg TV interview. Shares of Elpida climbed as much as 8.9%.
- UBS AG, the European bank with the highest losses from the US subprime crisis, may ask shareholders to approve a capital increase of as much as $16.1 billion.

Wall Street Journal:
- US Treasury Secretary Henry Paulson plans Monday to call for sweeping structural changes in the way the government monitors financial markets, capping a broad review aimed at revamping a system of regulatory oversight built piecemeal since the Civil War.

Barron’s:
- Overall commodity prices may decline by half as the value of products such as corn, wheat and copper tend to “overshoot” on speculative buying, citing independent analyst Steven Briese, editor of the Website CommitmentsOfTraders.Org. Thanks to the proliferation of mutual funds and exchange-traded funds tied to commodities indexes, speculative buying has gone way beyond anything the domestic commodities markets have ever seen. Index funds now account for 40% of all bullish bets on commodities. The speculative juices are even more plentiful – nearly 60% of bullish positions – if you count the bets placed by traditional commodity “pools.” If the speculators were to follow the commercial players or “smart money” – the farmers, the food processors, the energy producers and others who trade the physical commodities – they’d be heading for the exits. The commercial players are betting on price declines more heavily than ever before. In soybeans, the index funds and commodity pools have effectively purchased 59.1% of the 2007 domestic crop. In wheat, 83.6% of the domestic 2007 crop has effectively been purchased by these speculators. Societe Generale analyst Albert Edwards says that the “commodity bubble is nonsense on stilts” and holds the very strong conviction that before the end of the year, “commodity prices… will be unraveling.” Potential catalysts for a 50% plunge in commodity prices include a slowdown in China, a US dollar rally, an asset allocation switch back to stocks from commodities, less inflation hedging, falling US demand or the CFTC rescinding its exemption on position limits given to index funds.

CNBC.com:
- Commodities Bubble Burst? Big Clue Comes Monday.
- US Treasury Secretary Henry Paulson said on Friday that an economic stimulus program that will put $168 billion into consumers’ hands this year and next could help create 600,000 jobs.
- Top 10 College Degrees in Highest Demand.

MarketWatch.com:
- Dow 16,000? Index could be at 16,000 by year end, Richard Band says.

NY Times:
- A federal judge ruled that Superman co-creator Jerome Siegel’s family has the right to reclaim his share of the comic-book character’s US copyright.
- Governments in some of the world’s largest rice-producing countries including Vietnam and India moved to limit exports of the grain in an effort to avoid civil unrest.
- Online Chat, as Inspire by Real Chat.

IBD:
- Honeywell(HON) Takes Off As Airlines Make Fleets More Efficient, Safer.
- Investors In Chinese Stocks Eye Tibet. Blackouts of YouTube and video-sharing Web sites in China. And the Chinese government blocking all coverage of clashes between its police and Tibetan protestors. All this just five months before China’s big showcase, the Beijing Olympics.
- Microsoft(MSFT) Hoping Fixes Will Spark Vista’s Sales.

TheStreet.com:
- Google’s(GOOG) Next Conquest: The Airwaves. (video)
- Cramer: Reinstate the Uptick Rule. (video)

Chicago Sun-Times:
- Trinity United Church of Christ is building a $1 million home for Reverend Jeremiah Wright, the former pastor of presidential candidate Barack Obama. The home, which building plans show will have a whirlpool, elevator and a four-car garage, will be next to the Odyssey Country Club gold course in the Tinley Park suburb.

IDDmagazine.com:
- Signs of Liquidity Starting to Emerge. Moves by Fed, regulators improve liquidity in mortgage-backed securities.

Washington Post:
- James Carville, former President Bill Clinton’s 1992 campaign manager, defended his comparison of Bill Richardson to the Bible’s Judas Iscariot after the New Mexico Governor switched allegiances and endorsed Hillary Clinton’s rival for the Democratic presidential nomination.
- The Bush administration is finalizing details of a plan to rescue thousands of homeowners at risk of foreclosure by helping them refinance into more affordable mortgages backed by public funds, government officials said.
- Democratic presidential candidate Hillary Clinton said she may keep challenging rival Barack Obama right up to their party’s national convention in August.

Business Week:
- The 50 Best Corporate Performers.
- Contrarians to Watch. Who are the maverick fund managers of the future?
- Stocks: The Next Hot Sectors. Amid the volatility, Gene Marcial talks with stockpicking pros about the market sectors they see leading the next major advance.

Advertising Age:
- Spending on alternative media hit $73.43 billion in 2007, a 22% increase over the previous year, and will continue to grow, according to PQ Media’s Alternative Media Forecast: 2008-2012. The forecast predicts a 20.2% increase over the next year, to a total of $88.24 billion, and a compounded annual growth rate of 17% for 2007-2012, reaching $160.82 billion. By then, alternative media will represent 26.6% of all advertising and marketing dollars.

USA Today:
- 6 home renovations with major payoffs.

CNNMoney.com:
- iPhone vs. BlackBerry 9000: The keyboard wars, round 2. The folks who designed Apple’s(AAPL) iPhone bet that touchscreen keys would be good enough for most users, and based on a February survey of iPhone owners that found 72% “very satisfied”(versus 55% for RIM), Apple’s gamble seems to have paid off.
- Why tech stocks have a glorious future.
- Citing ambitious production plans, observers eye a big June debut of Apple’s(AAPL) next generation iPhone.

SmartMoney.com:
- What if Wall Street Starts Attacking Wall Street? So, from your perch at Big Investment Bank, you decide that it’s time to start circulating a few rumors about your competitor. If you have any cash on deposit with Competitor to Big Investment Bank, you withdraw it. Your brokers start talking to your customers(who are also your competitor’s customers). Your traders start talking to traders at other firms, so soon their brokers are calling their customers(who are also your competitor’s customers.) Pretty soon there’s a run on Competitor to Big Investment Bank, just like there was at Bear Stearns(BSC).

Financial Times:
- The Indian government said it would sacrifice blistering economic growth in order to tame inflation as latest figures reached a 13-month high of 6.7% on the back of spiraling global fuel and commodity prices.
- Sovereign wealth funds grew 18% last year as commodity prices surged and the foreign exchange reserves of some Asian countries continued to rise.
- Investors worldwide pulled close to $100 billion out of equity funds in the first three months of this year – a record shift that accelerates a longer-term trend away from US and western European stock markets.
- George W. Bush, US president, and Gordon Brown, UK prime minister, have agreed to step up co-operation over the crisis in financial markets. They are setting up a joint working group which will develop plans to monitor and regulate the banking systems.

Daily Telegraph:
- Hedge fund legends hit by financial crisis. The credit crunch is exposing the masters of the universe as mere mortals after all, reports Louise Armitstead.

De Tijd:
- The International Monetary Fund will pare its forecast for 2008 economic growth in the euro area to below 1.4% next month, citing Luc Everaert, who heads the IMF’s regional studies unit in Europe.

Bild:
- European Union External Affairs Commissioner Benita Ferrero-Waldner wants the EU to wait to see how China acts in the coming weeks in Tibet before deciding whether to boycott the Olympics, citing an interview with the commissioner. Ferrero-Waldner said that the EU should only participate in an Olympics in which the internal situation in China mirrors the spirit of the games, which includes respect for human rights.

thisismoney:
- As the last rites were administered, the question many were asking in the golden triangle of St. James’s, Mayfair and Knightsbridge – spiritual home of London-based hedgies – was who will be next?

theglobeandmail.com:
- Corporate credit markets have staged their biggest rally this year in the two weeks since the bailout of Bear Stearns(BSC), easing the pressure on the global financial system and economy. Over the past two weeks, many global indicators show that fears are receding in the bond market. The cost of buying insurance against corporate bond defaults has fallen, the panicked flight to US Treasury bills has abated and the giant clot of unsold debt in areas such as the market for buyout loans is starting ever so slowing to dissolve. At the beginning of the year, there was about $156 billion of unsold buyout loans. That number is now down to $123 billion, according to S&P.

Weekend Recommendations
Barron's:
- Made positive comments on (MO) and (FISV).
- Made negative comments on (JOSB).

Citigroup:
- Reiterated Buy on (MDCO), target $29
- Reiterated Buy on (TXT), target $62.
- Reiterated Buy on (GOOG), lowered estimates and lowered target to $600. Long Thesis: 1) Robust outlook for ‘Net advertising; 2) GOOG=share gainer in search; 3) Display/Video & Mobile are 2 large growth opportunities; 4) Risk-reward now bordering on extremely favorable.

Night Trading
Asian indices are -1.25% to +.25% on avg.
S&P 500 futures +.23%.
NASDAQ 100 futures +.22%.

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
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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
- (FUL)/.34

Upcoming Splits
- (HOLX) 2-for-1

Economic Data
9:45 am EST
- The Chicago Purchasing Manager report for March is estimated to rise to 46.0 versus 44.5 in February.

Other Potential Market Movers
- The Fed’s Yellen speaking, NAPM-Milwaukee and CTIA Wireless Conference could also impact trading today.

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

Evening Review

Market Summary
Top 20 Biz Stories
Today’s Movers
Market Performance Summary
WSJ Data Center
Sector Performance
ETF Performance
Style Performance
Commodity Movers
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Commentary
After-hours Movers
After-hours Real-Time Stock Bid/Ask
After-hours Stock Quote
After-hours Stock Chart
In Play

***Alert***

Blogging will be light over the next few days due to a scheduling conflict. I plan to stay 100% net long into the close, barring a substantial change in market action. Sorry for the inconvenience and thanks for reading!

Continuing Jobless Claims Unemployment Rate Graph

(click on image to enlarge)

BOTTOM LINE: The Continuing Jobless Claims Unemployment Rate, which closely tracks the US Unemployment Rate, remained steady this week at a historically low 2.1%. This is well below the long-term average of 2.9% and substantially lower than the 7.0% rate seen in May 1975. We are almost three years into the housing downturn and unemployment remains at healthy levels by historic standards.

Bear Radar

Style Underperformer:

Large-cap Growth -.74%

Sector Underperformers:

Software (-2.06%), Computer Hardware (-1.98%) and Gaming (-1.66%)

Stocks Falling on Unusual Volume:

RMBS, WFR, ORCL, HURN, SCHL, XMSR, DSW, RBN, CKR, SAP and OFG

Stocks With Unusual Put Option Activity:

1) RMBS 2) ORCL 3) WFR 4) CAG 5) AMAT

Bull Radar

Style Outperformer:

Large-cap Value (-.49%)

Sector Outperformers:

Hospitals (+1.21%), Utilities (+.69%) and Biotech (+.62%)

Stocks Rising on Unusual Volume:

CN, CEG, SGP, RTP, BTI, SPWR, CSIQ, SY, UBS, CTRN, RBCN, ASTI, SOLF, MXWL, TZOO, SWSI, INSU, LPHI, COMV, WPPGY, UTIW, PENN, ULBI, VRTX, CONN, MYGN, UDRL, CCU, CAG, NPO, AMN and MKC

Stocks With Unusual Call Option Activity:

1) TPX 2) IDTI 3) ORCL 4) SOLF 5) NVDA

Links of Interest

Market Snapshot Commentary
Market Performance Summary
Style Performance
Sector Performance
WSJ Data Center
Top 20 Biz Stories
IBD Breaking News
Movers & Shakers
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Thursday Watch

Late-Night Headlines
Bloomberg:
- Home sales in Greenwich, Connecticut fell 29% in the first two months of the year as North America’s hedge-fund capital feels the effects of the US housing slump, property broker Prudential Connecticut Realty said.
- Saddam Hussein’s Iraqi intelligence agency secretly funded a trip to Iraq by three US congressmen in 2002, after the Sept. 11 attacks and before the liberation of Iraq, the US said in charges filed in Michigan. The indictment accuses a Michigan man, a naturalized US citizen born in Iraq, of organizing the trip. Muthanna al-Hanooti is charged with conspiring to act as an Iraqi agent without notifying the US. He was to receive 2 million barrels of oil in payment, the indictment said. The indictment didn’t identify the three members of Congress it said traveled to Iraq with al-Hanooti. The AP reported that the timing coincide with a trip taken by Democrats Jim McDermott of Washington, David Bonior of Michigan and Mike Thompson of California.
- Goldman Sachs’ top communications technology analyst, Brantley Thompson, is moving to Capital Group Cos., the second-largest mutual-fund company in the US. Goldman’s chip analyst, Simona Jankowski, is taking over for Thompson.
- Oracle Corp.(ORCL), the world’s third-largest software maker, reported third-quarter sales that missed analysts’ estimates after an acquisition spree failed to spur orders of business applications. The shares fell 8.6% in after-hours trading.
- Google Inc.(GOOG), the most popular Internet search engine, saw slowing growth in the number of clicks on text advertisements, raising concern that a sputtering economy is hurting sales.
- A NY woman whose lawyer said worked at hedge funds was charged with operating a $2-million-a-year prostitution ring, Manhattan prosecutors alleged.
- Google(GOOG) Creeps Onto Cell Phones in Threat to Symbian, Microsoft(MSFT).
- Japan’s government bonds rose on speculation the Bank of Japan will consider cutting interest rates this year to boost economic growth.

MarketWatch.com:
- Mortgage refinancing applications surge. Here’s what you should know before jumping in.
- Chicago Fed chief makes case for Fed to do less.
- Lawmakers on Capitol Hill Wednesday took the first steps to shine a light on the finer points of JPMorgan’s(JPM) Federal Reserve-authorized buyout of Bear Stearns(BSC), seeking explicit details of the controversial deal.

NY Times:
- Clinton Donors Ask Pelosi to Back Off.
- Clear Channel(CCU), Buyers Sue Banks to Force Buyout’s Completion.

The Oklahoman:
- Banker, grain dealers blame hedge funds for risking wheat industry. “What is the true price of wheat?” asked Tippens, president and CEO of Canadian State Bank. Certainly, it’s not $10.68. Or it wouldn’t be at that level without billions of dollars from hedge funds that have artificially caused the price to soar since the first of the year, he said. “It is estimated that $8 billion has flowed into ag futures since the start of the year,” said Joe Neal Hampton, president of the Oklahoma Grain & Feed Assoc. and Oklahoma Agribusiness Retailers Assoc. This ongoing large investment has served to drive general commodity prices to ever higher prices, often in disrespect to prevailing fundamentals. The solution to wild price swings and prices far above what industry fundamentals would dictate would be to limit the number of bushels that hedge funds can control, both Tippens and Hampton said. “We need to get the index funds out,” Hampton said. “They need to be considered what they are, and they are speculators.” “If the CFTC would come back in and put those limits back on I think you would see the market probably adjust back to what the real price of wheat is,” Tippens said.
- China’s top 10 renewable energy developments in 2007. China is displaying surprising progress in renewables, more than many outsiders might expect.
- Tech M&A: It’ll Be a Good Year. As company valuations tumble, big players like eBay(EBAY) and Oracle(ORCL) see lots of potential bargains, while targets see fewer buyout alternatives.

Forbes.com:
- Getting Over International Investing. For years, US investors have been told to “go global” in search of stronger growth and higher returns. And Americans obliged by pouring billions of dollars into international stocks, mutual funds and exchange-traded funds. Nine out of $10 from US fund investors went into international equities in 2006. But now the case for overseas investing seems to be unraveling. Since global markets topped out late in 2007, the much-maligned US has dramatically outperformed some of last year’s hottest markets. “The international outperformance was a great story, but it’s over,” says Alec Young, S&P’s international equity strategist. Despite all the moaning and groaning on Wall Street and in the financial media, the DJIA and S&P 500 have still not crossed the 20% decline that technically signals a bear market. And yet some of last year’s biggest winners – Germany, India and especially China – are deep in bear market territory. The bloom is off the rose in China. The Shanghai Composite has fallen below 4,000 after topping 6,000 last October, when we recommended selling Chinese stocks. Inflation is rising, threatening to puncture China’s growth bubble amid food and fuel shortages and an energy squeeze. And as the Beijing Olympics approaches, a rebellion has broken out in Tibet and in neighboring provinces as Tibetans looks for some autonomy and religious freedom. China’s answer: Crush the dissenters and blame the Dalai Lama for everything. These events may help crack the finely wrought veneer the government has crafted in its effort to make China shine in the eyes of the world. Ultimately it may remind investors that this is very much a dictatorship whose economy is still firmly controlled by the Communist Party. Nothing last forever- not tech stocks in the 90s, housing in the early part of this decade or commodities now. International stocks, especially emerging markets, had a great run, but now may be their time to revert to the mean and lag ours for awhile. Over the last couple of years, I’ve observed a certain schadenfreude – a joy in other people’s trouble – in the downright glee with which some commentators have viewed the recent fall of the US dollar and underperformance of US stocks. But now investors may realize that the US economy is much more resilient than others in times of crisis like this.

CNNMoney.com:
- 100 best places to live and launch a business.
- Former finance workers are switching careers to answer the huge demand for new nurses.

USA Today.com:
- Automakers roll out technologically-advanced green cars.

Financial Times:
- Goldman Sachs(GS) has reclaimed 90% of the $2 billion it used to bail out one of its troubled hedge funds last summer as the investment bank moved to shrink the fund and avoid consolidating it on its balance sheet.
- The Bank of England is poised to take revolutionary action to fin a “resolution” to the problems faced by British banks unable to sell or refinance portfolios of mortgage-backed debt, Mervyn King, the governor, signaled on Wednesday.

Le Figaro:
- European Aeronautic Defense & Space Co. CEO Louis Gallois said the euro’s rise against the dollar is hurting exporters across Europe. “The euro at its current level is suffocating a large part of European industry by crushing export margins,” Gallois said. “If it continues, exporters are going to flee Europe,” he said. The dollar’s weakness is “a major issue” for EADS’s plane-making unit Airbus SAS, Gallois said.

Canadian Business Online:
- Venezuela’s National Assembly opened an investigation Wednesday into accusations that two of President Hugo Chavez’s brothers acquired 17 ranches in recent years – if true, a potential stain on the image of Chavez’s socialist movement.

Australian:
- Stockbrokers will find themselves facing fines as high as $1 million for serious market manipulation under new Australian Securities Exchange regulation in force from Monday. The ASX has found itself in the firing line because of recent trading practices in the market downturn such as short selling and stock lending, which have led to calls for more disclosure of which sales are “short” and which stocks are borrowed.

Late Buy/Sell Recommendations
Citigroup:
- We Are Assuming Approximately 20% Y/Y Paid Clicks Growth for Google(GOOG) In Q1. So IF the comScore data is accurate AND holds for Q1, AND if it is representative of Google’s GLOBAL trends – not just US – then it could imply risk to Q1 estimates. The disconnect is that this type of step-function deceleration should show up as a material fall-off in leads to Search Engine Marketers and channel checks remain generally positive.
- Refinery Utilization dropped 1.6% this week and now stands at 82.2%, the lowest level seen since Hurricane Rita. Implied gasoline demand rose .5% this week but remains 1% below 2007 on a 4-week average basis.
- Reiterated Buy on (PAYX), target $41.

Night Trading
Asian Indices are -1.75% to -.75% on average.
S&P 500 futures -.07%.
NASDAQ 100 futures -.21%.

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Earnings of Note
Company/EPS Estimate
- (LEN)/1.18
- (WSM)/1.12
- (UTIW)/.19
- (FRED)/.14
- (SCHL)/-.21
- (DSW)/.05
- (CAG)/.41
- (APOL)/.52
- (GPN)/.42
- (TXI)/.38
- (MKC)/.38
- (ACN)/.56
- (RHN)/.19

Upcoming Splits
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Economic Releases
8:30 am EST
- Final 4Q GDP is estimated to rise .6% versus prior estimates of a .6% gain.
- Final 4Q Personal Consumption is estimated to rise 1.9% versus prior estimates of a 1.9% increase.
- Final 4Q GDP Price Index is estimated to rise 2.7% versus prior estimates of a 2.7% gain.
- Final 4Q Core PCE is estimated to rise 2.7% versus prior estimates of a 2.7% gain.
- Initial Jobless Claims for this week are estimated to fall to 370K versus 378K the prior week.
- Continuing Claims are estimated to rise to 2885K versus 2865K prior.

Other Potential Market Movers
- The (MRO) analyst meeting, (EXR) analyst event, (SRE) analyst conference, (OMRI) analyst meeting, (OSG) investor day, weekly EIA natural gas inventory report, JPMorgan Insurance Conference, Banc of America SMid-cap Conference, CSFB Global Leveraged Finance Conference and JPMorgan Gaming/Lodging/Restaurants Conference could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by financial and automaker stocks in the region. I expect US equities to open modestly lower and to maintain losses into the afternoon. The Portfolio is 100% net long heading into the day.

Stocks Finish Lower, Weighed Down by Airline, Financial and Homebuilding Shares

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Stocks Lower into Final Hour on Profit-taking, Jump in Oil, Financial Sector Weakness

BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Alternative Energy longs and Commodity shorts. I have not traded today, thus leaving the Portfolio 100% net long. The overall tone of the market is bearish as the advance/decline line is lower, most sectors are declining and volume is below average. Investor anxiety is above-average again. Today’s overall market action is mildly bearish. The VIX is rising .5% and remains high at 25.9. The ISE Sentiment Index hit a very low 78.0 and the total put/call hit a high 1.27. Finally, the NYSE Arms has been high most of the day and is currently 1.43. Considering the news today and recent gains, today’s low volume pullback isn’t too bad. Many market leading stocks are actually rising. As well, wireless, commodity, construction, biotech and utility shares are all higher. The announcement by Senator Dodd that he plans an April 3 hearing into the Bear Stearns(BSC) deal seems to have killed a budding rebound in financial stocks, which have been the main source of market weakness today. The Shanghai Composite(-41% from high) continues to display an inability to rally, notwithstanding recent strength in other emerging and developed markets. This is being mostly ignored in the financial press so far. Nikkei futures indicate a -86 open in Japan and DAX futures indicate an +80 open in Germany tomorrow. I expect US stocks to trade modestly higher into the close from current levels on short-covering and bargain-hunting.