Tuesday Watch

Late-Night Headlines
Bloomberg:
- French Finance Minister Christine Lagarde said investors haven’t grasped the magnitude of the Group of Seven’s shift in stance on exchange rates, likening its significance to the 1985 Plaza Accord.
- Petroleo Brasileiro SA’s(PBR) offshore Carioca prospect may hold 33 billion barrels of oil, enough to supply every refinery in the US for six years, making it the third-largest oil field ever discovered. “That whole area off the coast of Brazil is becoming a new oil province,” said Dick Gibson, a geologist who’s been advising oil and natural gas producers since 1975. “We think this is part of a major transformation of Petrobras, which could lead to it becoming a much larger company in terms of production and reserves over the next 5-10 years,” Merrill Lynch analysts wrote.
- Bear Stearns(BSC) eked out a profit in the three months leading up to its demise in March. First-quarter net income fell 79% to $115 million, or 86 cents a share.
- Compuware(CPWR) jumped 17% in after-hours trading. The US supplier of business software reported preliminary fourth-quarter net income of 22 cents a share. That topped the 20 cent average estimate from analysts.
- Crocs(CROX) said it will fire its 600 Canadian plant workers after lowering annual earnings and sales forecasts as consumer spending slowed. The shares plunged 25% in after-hours trading.
- China, Iran, Saudi Arabia and Pakistan carried out most of the known executions worldwide in 2007, Amnesty International said in a report that called upon governments to openly publish numbers of those killed. “Amnesty International can confirm at least 470 executions by China – the highest overall figure,” the charity said. The true figure “is undoubtedly much higher.”
- Australia’s benchmark interest rate at the highest in 12 years is exerting a “significant restraining influence” on households and businesses, central bank board members judged at their last meeting two weeks ago.
- The United Kingdom property market slump deteriorated in March to the worst since records began in 1978 as mortgage lending dried up, a survey of real-estate professionals showed.
- Two panels appointed by Treasury Secretary Henry Paulson advised hedge funds to adopt guidelines including increased disclosure and strengthened management of risk in the aftermath of the rout in credit markets.
- Delta Air(DAL) agreed to acquire Northwest Air(NWA) in a $3.1 billion stock deal that would create the world’s largest carrier and may unleash more industry consolidation.
- The Philippines is more at risk than Indonesia as record food and energy prices threaten budget targets and cause currencies to decline, according to Thomas Byrne, senior vp at Moody’s Investors Service.

Wall Street Journal:
- Google(GOOG) Seeks a Leading Role in China. Google Inc. aims to become a market leader in China’s Internet-search market in about five years, said Kai-Fu Lee, president of the company’s Greater China operation. Google also is exploring investments in Chinese companies that focus on social networking and mobile Internet as part of its strategy to expand in China.
- The dust-up over Senator Barack Obama’s remarks about rural America is forcing both Democratic candidates to talk about guns, abortion and family values – issues that don’t win them many votes among the social conservatives they are trying hard to court in the Rust Belt, South and West.

MarketWatch.com:
- Chinese investors wait in vain for government help. Focused on inflation, financial authorities resist calls to cut trading taxes. Frustrated mainland Chinese investors, who have watched the country’s main stock market in Shanghai plummet more than 40% since October, have been wondering when their typically hands-on government will move to reverse the fall. The word from Beijing: It just might not.
- Seemingly endless food-safety scandals have left Chinese consumers wary and opened the door for such foreign supermarket operators as France’s Carrefour, Britain’s Tesco and US giant Wal-Mart(WMT), writes Bruce McLaughlin, a Hong Kong alalyst.

NY Times:
- New Ways to Store Solar Energy for Nighttime and Cloudy Days.

Forbes.com:
- Everywhere you turn this year, Apple’s(AAPL) machines are on the march. Apple’s iPhone is continuing to gobble up the smart phone market. Apple’s PCs and notebook computers – long relegated to a niche status – are tearing off big gobs of the PC market. Even Apple’s least successful effort – Apple TV – has rivals such as Blockbuster(BBI) scrambling to blunt Apple’s attack.
- Google’s(GOOG) Cloud Attack On Microsoft(MSFT).

USA Today.com:
- Wal-Mart(WMT) agrees to toughen policies for gun sales.
- Big retailers seek teens(and parents).

Reuters:
- Continental Airlines(CAL) and United Airlines(UAUA) have laid most of the groundwork for a merger and could have a deal ready “pretty quickly” if Delta and Northwest announce a tie-up.

Late Buy/Sell Recommendations
Citigroup:
- Maintained Buy on (NTRI), raised estimates, target $29.
- Google’s(GOOG) US market share, according to comScore, increased 53 basis points in March M/M to a record high 59.8%(up 520 basis points Y/Y). GOOG’s query growth of 30% Y/Y market an acceleration vs. February’s 26% Y/Y growth. We were somewhat surprised at the March uptick, especially since the company had previously alluded that the unusual Easter timing could impact search activity.
- Reiterated Buy on (GET), target $50.

Night Trading
Asian Indices are -.25% to +1.0% on average.
S&P 500 futures +.11%.
NASDAQ 100 futures +.21%.

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
- (USB)/.63
- (FRX)/.78
- (PII)/.47
- (JNJ)/1.20
- (MTB)/1.55
- (RF)/.48
- (MI)/.52
- (CSX)/.73
- (LLTC)/.48
- (ADTN)/.26
- (WM)/-1.13
- (STX)/.69
- (INTC)/.28
- (STT)/1.30

Upcoming Splits
- (CHDX) 3-for-2

Economic Releases
8:30 am EST
- The Producer Price Index for March is estimated to rise .6% versus a .3% gain in February.
- The PPI Ex Food & Energy for March is estimated to rise .2% versus a .5% increase in February.
- Empire Manufacturing for April is estimated to rise to -17.0 versus -22.2 in March.

9:00 am EST
- Net Long-term TIC Flows for February are estimated to fall to $60.0 billion versus $62.0 billion in January.

1:00 pm EST
- The NAHB Housing Market Index for April is estimated at 20.0 versus 20.0 in March.

Other Potential Market Movers
- The weekly retail sales reports, (JCP) analyst meeting and SunTrust Robinson Humphrey Institutional Conference could also impact trading today.

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