Wednesday Watch

Late-Night Headlines
Bloomberg:
- Merrill Lynch(MER) raised $9.55 billion by selling bonds and preferred shares after writing down the value of $6.5 billion of assets.
- Fannie Mae(FNM) plans to change its guidelines to discourage homeowners from walking away from their loans.
- NYSE Short Interest by Industries as of April 15.
- Matthew Jones, foreign-exchange strategist at Travelex Australasia Group, says the US dollar may be ‘close to the end’ of declines. (video)
- The Bank of Japan may next week discard language calling for higher interest rates as the world’s second-biggest economy cools.
- VMware Inc.(VMW), the maker of software that lets multiple operating systems run on the same computer, reported first-quarter sales that beat analysts’ estimates as more companies used its products to cut costs and save energy. The stock jumped 15.4% in after-hours trading.
- Broadcom Corp.(BRCM), the maker of chips for Nintendo’s Wii video-game console, said profit rose 22%, beating analysts’ estimates, on higher demand from telephone equipment companies. The share rose 9.0% in extended trading.

Wall Street Journal:
- A European Central Bank policy maker whose remarks helped send the euro soaring Tuesday told The Wall Street Journal that his comments had been overinterpreted. “Movements can go both ways,” he said. “I would never engage in a discussion about the future path of interest rates, simply because nobody knows. It would be dangerous to make predictions in either direction,” said Christian Noyer, France’s central banker.
- Senator Hillary Clinton kept her presidential campaign alive as she won Pennsylvania’s primary, ending six weeks of charges, countercharges and controversy with her Democratic opponent Senator Barack Oabama and sending their contest into the remaining nine contests.
- Ford Motor(F) Turnaround Takes Hold. Ford Motor, long considered the sickest of the Big Three US auto makers, is showing signs of a surprise turnaround.

MarketWatch.com:
- Tech-stock veteran Tim Guinness wins Stockpicker of the Quarter award.
- Corporate insiders remain optimistic.
- Unlimited talk and data plans seen igniting cell-phone growth.

CNBC.com:
- S&P Investment Chief: Worst for Stocks Is Over. Stocks have seen the worst of the declines and are poised to head higher boosted by a spate of interest rate cuts by the Federal Reserve and spending linked to the government’s economic stimulus package, a leading equity strategist said.

NY Times:
- Faced with widespread complaints from the agricultural industry, federal regulators are backing away from two proposals that would have allowed institutional investors to expand their stake in the turbulent commodity futures markets. With the explosive increases in crop prices, those markets are attracting a flood of capital from hedge funds, pension funds and commodity index funds. The proposed rule changes would have raised the size of the market stake that financial speculators could hold, and exempted commodity index funds from those higher limits.

BusinessWeek.com:
- As the pump price climbs ever higher and the population ages, US road traffic is falling – and so is fuel consumption.

CNNMoney.com:
- Ford(F) is betting its future on a new strategy, starting with a small car built for the whole world.

SmartMoney:
- Can the Wind Power Big Returns for Investors?
- Why Google(GOOG) Is a Buy.

Barron’s:
- Hedge Fund Jana Partners Buys Big Chunk of MF Global(MF).

Reuters:
- Short interest on the NYSE rose .3% in mid-April. Washington Mutual(WM), Gap Inc.(GPS), Phillip Morris(PM), AMR Corp.(AMR) and Federated Investors(FII) all saw large increases in short interest.

Financial Times:
- Sloppy practices dog credit derivatives market.
- Big US financial groups have raised more than $28bn in the capital markets in recent days, suggesting that many investors believe the sector is poised for a strong comeback.

Telegraph:
- Investcorp’s $8bn-strong hedge fund arm is to work with fund manager John Paulson to launch a new fund to take advantage of the eventual upturn in the credit markets.

Economic Times:
- India’s Forward Markets Commission(FMC) may ban hedge, PE funds from trading in commodity markets. “Although hedge and PE funds play a major role in foreign markets, we would not like hedge and PE funds to come into our markets,” FMC’s Chairman, B C Khatuya, said.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (LMT), target $125.
- Reiterated Buy on (GME), target $66.
- Reiterated Buy on (OMC), target $60.
- Reiterated Buy on (VMW), target $80.

Night Trading
Asian Indices are -.25% to +1.0% on average.
S&P 500 futures +.25%.
NASDAQ 100 futures +.29%.

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
- (R)/.87
- (FCX)/2.16
- (FCL)/.32
- (ABC)/.76
- (BIIB)/.78
- (MCO)/.35
- (PX)/.95
- (WLP)/1.18
- (PFCB)/.32
- (BA)/1.35
- (UPS)/.86
- (QCOM)/.52
- (CMG)/.48
- (ALL)/1.62
- (AFL)/.96
- (TEX)/1.41
- (RYL)/-1.29
- (NE)/1.31
- (ACL)/1.43
- (AAPL)/1.07
- (PHM)/-.91
- (BDX)/1.03
- (GD)/1.30
- (SGP)/.38
- (DAL)/-.51
- (EMC)/.16
- (ATI)/1.48
- (GENZ)/.93
- (XLNX).36
- (FFIV)/.21
- (AMZN)/.33
- (LRCX)/.94

Upcoming Splits
- (RBA) 3-for-1

Economic Releases
10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil inventory build of 1,500,000 barrels versus a -2,356,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -2,000,000 barrels versus a -5,517,000 barrel decline the prior week. Distillate inventories are estimated to fall by -50,000 barrels versus a 52,000 barrel build the prior week. Finally, refinery utilization is expected to rise .63% versus a -1.63% decline the prior week.

Other Potential Market Movers
- The (GM) conference, weekly MBA Mortgage Applications report, Dow Jones Newswires Wireless Innovations Conference and JPMorgan China Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and commodity shares in the region. I expect US equities to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.