Wednesday Watch

Late-Night Headlines
Bloomberg:
- Australia’s economy grew at the slowest pace in moiré than a year in the fourth quarter as construction decline and bottlenecks at ports cut exports.
- Japanese businesses cut investment last quarter at twice the pace economists predicted, suggesting the government will trim its economic growth estimate next week.
- China’s key economic tasks for this year are to curb accelerating inflation and prevent overheating, Premier Wen Jiabao said.
- US bank regulators assured Congress the banking industry, bolstered by a long period of strong economic growth and low credit losses, remains strong amid losses stemming from the subprime-mortgage crisis.
- More than 30,000 Californians could benefit from new Federal Housing Administration rules raising loan limits to almost $730,000, Housing Secretary Alphonso Jackson said.
- China, the world’s biggest grain producer, will use imports of essential commodities and the sales of reserve stockpiles to stabilize supplies and prices, the Minister of Finance said.
- Sugar fell the most in nine months as investors such as hedge funds sold commodities.
- Goldman Sachs(GS) investment management co-head Peter Kraus is leaving after his division’s Global Alpha hedge fund suffered a 40% drop last year.
- Three years after Theo van Gogh was murdered in Amsterdam for making a film critical of Islam, the Netherlands is embroiled in another row over religion.

Wall Street Journal:
- McCain Clinches GOP Nomination; Clinton Notches Win in Ohio.
- Citigroup Inc.(C) executives are confident with the company’s capital levels and aren’t looking to raise additional funds from outside investors.
- Top crude oil consumer the US said Tuesday it is “imperative” to expand the use of renewable energy such as wind power and biofuels to reduce its dependence on foreign oil.
- Iran vowed to push ahead with uranium enrichment Tuesday, a day after the UN Security Council passed a third round of sanctions that Tehran called “worthless” and politically biased.

CNBC.com:
- Banks Hope to Reach Deal Soon on Ambac(ABK) Rescue.
- Some Bank Stocks Worth Buying Despite Bad News.

NY Times:
- The Bush administration and the Fed are inching closer toward a government rescue of distressed homeowners and mortgage lenders.

IBD:
- Big Solar Deal Shows Applied(AMAT) Is Heating Up.
- Microsoft’s(MSFT) Gamble With Xbox Business Has Turned Corner.

CNNMoney.com:
- The man who must keep Goldman(GS) growing. Lloyd Blankfein has a lot on his mind. The chief of Wall Street’s most successful investment bank has to outsmart treacherous markets while balancing the firm’s interests with those of its clients.
- Housing: Best time to buy in four years.

Morningstar:
- JPMorgan Chase(JPM) remains the biggest US hedge-fund manager as total assets of the biggest hedge-fund firms topped $1.6 trillion as of Jan. 1.

USA Today.com:
- Nike(NKE), Apple(AAPL) plug iPods into gym equipment.
- Businesses give veterans a big lift in starting new franchises.

SEC:
- The SEC sued a Salt Lake City hedge-fund manager for allegedly misleading clients about risks it took while making wrong-way bets on New Century Financial.

Reuters:
- SEC proposes tougher “naked” short selling rules.
- US growth stocks outperformed value stocks last month in all size categories except microcaps.

Financial Times:
- Al-Qaeda is losing the war of minds. The US “surge” in Iraq has been so manifestly successful that no serious person can deny that gains have been made. In large measure because of what is going on in Iraq, the tide within the Islamic world is beginning to run strongly against al-Qaeda – and this may be the single most important ideological development in recent years.
- Amazon.com(AMZN) to enter US wine market.

AFP:
- China’s south to build nation’s largest offshore wind farm.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (PX), target $90.
- Maintained Buy on (HOLX), target $81.
- Reiterated Buy on (TECD), target $50.
- Reiterated Buy on (ADBE), target lowered to $46.

Night Trading
Asian Indices are -1.0% to unch. on average.
S&P 500 futures -.04%.
NASDAQ 100 futures +.14%.

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/EPS Estimate
- (BWS)/.42
- (BJ)/.74
- (SKS)/.19
- (ADCT)/.17
- (MATK)/.22
- (CMTL)/.79
- (MR)/.20
- (HRB)/.09
- (PETM)/.59
- (COST)/.74
- (CSK)/-.11
- (LDG)/.97
- (BIG)/.84

Upcoming Splits
- None of note

Economic Releases
8:30 am EST
- Final 4Q Non-farm Productivity is estimated to rise 1.8% versus prior estimates of a 1.8% gain.
- Final 4Q Unit Labor Costs are estimated to rise 2.1% versus prior estimates of a 2.1% gain.

10:00 am EST
- Factory Orders for January are estimated to fall 2.5% versus a 2.3% gain in December.
- ISM Non-Manufacturing for February is estimated to rise to 47.3 versus 44.6 in January.

10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil build of 2,400,000 barrels versus a 3,231,000 barrel increase the prior week. Gasoline supplies are estimated to rise 125,000 barrels versus a 2,355,000 barrel build the prior week. Distillate Supplies are expected to fall by -1,825,000 barrels versus a -2,575,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise .23% versus a 1.16% increase the prior week.

2:00 pm EST
- Fed’s Beige Book

Other Potential Market Movers
- The Fed’s Pianalto speaking, ADP Employment report, Challenger Job Cuts report, weekly MBA Mortgage Applications report, weekly EIA energy inventory report, (PFE) analyst meeting, (XOM) analyst meeting, (KWK) analyst meeting, (ARRS) analyst meeting, (TAP) analyst meeting, (JNJ) analyst meeting, Susquehanna Healthcare Conference, CSFB Under Followed Opportunities Conference, Morgan Stanley Tech Conference, CSFB Global Biotech Conference, Citi Global Real Estate Conference, Bear Stearns Retail/Restaurants/Consumer Conference, Citi Industrial Manufacturing Conference, CIBC Retail Conference and Raymond James Institutional Investor Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and industrial 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.