Wednesday Watch

Late-Night Headlines
Bloomberg:
- Laszlo Birinyi, president of investment research and management firm Birinyi Assoc., said he purchased equities in the past few weeks, including shares of Google Inc.(GOOG) and Apple Inc.(AAPL).
- China’s stocks may drop another 21% after a five-month rout slashed Shanghai’s benchmark index from its October record, Citigroup Inc. said. China’s government will probably resist calls for measures to bolster the equity market because valuations have yet to reach “distress levels,” Citigroup’s head of China research Lan Xue said. The Shanghai A-Share Stock Price Index may drop as low as 3,000 and rise to a maximum 4,4000, Lan said, without specifying a time period. Yesterday’s close of 3,790.69 was 41% below the record on Oct. 16. China’s stock market is the second-worst performer in the Asia-Pacific region this year amid concern the government’s measures to tame 11-year-high inflation will slow earnings growth. Growth in operating profit of listed companies may be insufficient this year to make up losses on equity investments, which accounted for about a third of corporate earnings in 2007.
- United Parcel Service(UPS), the world’s largest package-delivery company, reduced its first-quarter earnings estimates. The shares fell 4.2% in after-hours trading.
- Australian consumer confidence fell in April to the lowest since 1993, reinforcing the central bank’s view that the highest interest rates in 12 years will slow the $1 trillion economy.

Wall Street Journal:
- President Bush to Expand Homeowner Help. The Bush administration appears set to support a significant expansion of its assistance for struggling homeowners in a bid to forestall even more aggressive action being contemplated by Democrats in Congress.
- The Fed is considering contingency plans for expanding its lending power in the event its recent steps to unfreeze credit markets fail.
- JPMorgan(JPM), which has emerged as the go-to bank for the financial industry, got spurned by Washington Mutual(WM) just weeks after receiving an urgent call for help from the struggling competitor.

MarketWatch.com:
- Honeywell lands $23 billion jet engine contract. Company to build 1,200 engines for Brazilian business-jet maker Embraer.

IBD:
- A New Year For Ex-Highflier VMware(VMW).

CNNMoney.com:
- Survey: 6% of US teens own iPhones.
- Online sales to rise 17%, survey says. Annual study by Internet analysis firm says consumers are still spending on clothes, computers and cars online, despite slowing economy.

USA Today.com:
- Small US firms make big global sales. In a powerful trend that is reshaping the economic landscape, a rising wave of US small businesses and start-ups are going cross-border and selling hundreds of billions of dollars in goods and services to Asia, Canada, Latin America, Europe and Africa.

Reuters:
- China is planning to buy a more than 9% stake in miner BHP Billiton Ltd.(BHP) in a bid to interfere in BHP’s proposed acquisition of rival Rio Tinto Ltd.(RTP).
- Wall Street bankers and traders, fearing possible layoffs, may strike out on their own and try to launch new hedge funds in the coming weeks, a top industry official said.

Financial Times:
- Citigroup(C) is nearing a deal to sell $12 billion in leveraged loans at a discount to a group of leading private equity firms, marking another step in new chief executive Vikram Pandit’s efforts to shrink the beleaguered bank’s balance sheet. Although details of the deal were still being worked out, people familiar with the matter said Apollo Management, the Blackstone Group and TPG would buy the loan portfolio at a discount that could come in at about 90 cents on the dollar.
- The period of aggressive monetary easing by the Fed that began on January 22 – and saw interest rates cut by 200 basis points in the space of two months –might be over, bank minutes released on Tuesday suggest. The records, from the March 18 policy meeting, raise the possibility that the US central bank will switch gears, moving to smaller cuts as it ponders how low it wants to take rates.
- Wouldn’t you like to run your apps in Google’s(GOOG) data centers?

TimesOnline:
- Boeing(BA) is expected to announce today that its 787 Dreamliner has been delayed by 18 months, a setback that will cost the company billions of dollars in compensation to airlines.

Daily Telegraph:
- The IMF’s World Economic Outlook will slash its growth forecasts today for the UK and will predict the weakest two years of growth for Britain since the last recession in the early 1990s. The IMF expects UK economic growth of 1.6% for this year and 2009. The IMF has cut its forecast by .7% since the last report six months ago.

Straits Times:
- Prices of luxury condominiums in Singapore have fallen by as much as 30% this year, citing housing records.

Late Buy/Sell Recommendations
Citigroup:.
- Reiterated Buy on (IGT), target $52.
- Reiterated Buy on (SMTC), target $19.

Night Trading
Asian Indices are -1.25% to +.25% on average.
S&P 500 futures -.18%.
NASDAQ 100 futures -.04%.

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
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Today in IBD
In Play
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Economic Preview/Calendar
Daily Stock Events
Upgrades/Downgrades
Rasmussen Business/Economy Polling
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Earnings of Note
Company/EPS Estimate
- (ISCA)/.72
- (SGR)/.54
- (CBK)/-.08
- (BBBY)/.65
- (PGR)/.29
- (CC)/-.07

Upcoming Splits
- None of note

Economic Releases
10:00 am EST
- Wholesale Inventories for February are estimated to rise .5% versus a 1.0% increase in January.

Other Potential Market Movers
- The Fed’s Bernanke speaking, Fed’s Fisher speaking, weekly MBA Mortgage Applications report, weekly EIA energy inventory data report, (WBSN) analyst meeting, (AWI) analyst meeting, Howard Weil Energy Conference and CSFB Global Real Estate Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by automaker 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.