Tuesday Watch

Late-Night Headlines
Bloomberg:
- The US economy will grow in the second half of 2008, the S&P 500 may climb to a record this summer and commodity prices will retreat as much as 30%, hedge fund manager Barton Biggs said. Companies aren’t expressing “gloom and doom,” and the economy is “not as bad as you would believe from listening to the press and some of the Wall Street commentators,” Biggs said. The Federal Reserve has cut its benchmark lending rate seven times since September, lowering the target for overnight loans between banks to 2% from 5.25%. Once the economy starts benefiting from those reductions later this year, GDP may expand 1 percent to 3 percentage points more than the rate of inflation, Biggs said. Biggs, a former Morgan Stanley strategist who now runs the $1.5 billion hedge fund Traxis Partners LLC, predicted on March 14 that the DJIA would rally 1,000 points, or 8.4%. The 30-company measure has since risen 1,018.45 points. Biggs recommended buying companies that make products consumers purchase with their discretionary income. He said that while financial stocks look attractive at current prices, they will underperform during the next five years. (video)
- Copper pared gains after soaring to a record on speculation that a trader error may have triggered an early surge.
- Contract workers at Chile’s state-run Codelco, the world’s largest copper-mining company, voted to end a strike that curtailed production for almost three weeks and sent prices of the metal soaring to a record.
- Australia Wheat Output May Increase 92%, Bank Says. Australia, the world’s second-biggest wheat exporter before two years of drought ravaged crops, may almost double its harvest this year as higher prices and better weather encourage planting, National Australia Bank Ltd. said.
- Target Corp.(TGT), the second-largest US discounter, will sell 47% of its $8.2 billion in credit-card loans to JPMorgan Chase(JPM) for $3.6 billion to raise cash for stock buybacks and reduce its exposure to consumer defaults.
- Federal Reserve Chairman Ben S. Bernanke, seeking to end the worst housing slump in 25 years, urged the government and mortgage lenders to intensify their efforts to avoid home foreclosures.
- Bank of America(BAC), seeking to quell speculation that it will abandon its $4 billion purchase of Countryside Financial Corp.(CFC), said the takeover is proceeding as planned.

Wall Street Journal:
- US regulators are poised to expand their oversight of oil companies and energy markets in ways that Congress once thought unnecessary. The Federal Trade Commission last week said it would delve into the workings of the oil industry, examining scenarios such as the withholding of supplies from the market, as it prepares to write rules banning market manipulation. Acting under authority granted in a 2007 energy law, the FTC’s powers may be great enough to reach into the oil-trading markets. “They have the power to do something that would create major transparency in these markets,” said Michael Greenberger, who was once the director of the division of trading and markets at the CFTC.
- Wireless provider Sprint Nextel(S) is considering spinning off or selling its ailing Nextel unit.

MarketWatch.com:
- Chinese stocks still aren’t attractive.

CNBC.com:
- 5 Things You Need to Know to Play Videogame Stocks.

IBD:
- US Stock Funds Rallied 4.98% in April, With Growth In The Lead.

USA Today.com:
- IMAX makes a dramatic comeback.

Reuters:
- Merrill CEO: No need to raise more capital.
- Google(GOOG) and Yahoo(YHOO) are still hammering out the intricacies of a potential advertising and search deal, and no final agreement has been reached yet.

ZDNet:
- Fuel cell breakthrough? Gentlemen, start your engines…

Ipsos News Center:
- Senator Hillary Clinton has a seven percentage point lead over Senator Barack Obama among Democrats nationwide the night before the Indiana and North Carolina primaries, according to the latest Ipsos poll. A previous poll by Ipsos, conducted April 23 through April 27, showed Obama winning 46 percent to Clinton’s 43%.

Financial Times:
- BlackRock(BLK), the US asset manager, will pay UBS AG(UBS) $15 billion for a portfolio of subprime mortgage debt in deal that the Swiss bank plans to announce on Tuesday with its first-quarter results.
- India’s finance minister said on Monday he was considering a blanket ban on trading in food futures, underlying growing concerns in Asia over the role of hedge funds and financial market traders in the recent surge in commodities prices. Speaking on the sidelines of the Asian Development Bank annual meeting in Madrid, P. Chidambaram said his worries over market speculation were shared by governments across the region and that India was “facing a very grave crisis on the food front.” The surge in the cost of basic staples has sparked some social unrest in Asian countries such as China and Indonesia. It has also fuelled inflation to the point that it is now threatening to dent the spectacular economic progress of countries such as Vietnam and China. “It is the bid speculators that have taken the oil price to a level that is unacceptable and they just want to ruin the developing countries,” said Ishaq Dar, Pakistan’s new finance minster.

Handelsblatt:
- German insurers, including Allianz Lebensversicherung AG and DEVK Allgemeine Versicherungs AG, plans to invest billions of dollars in securities backed by consumer debt. Allianz Leben plans to invest about $3.1 billion in asset-backed securities. “We plan to seize the day and buy ABS paper,” Bernd Zens, board member in charge of capital investment at DEVK, said. DEVK is especially interested in bonds from 2003 and 2004.

AFP:
- A Chinese government watchdog has warned major state-owned enterprises to brace for tough times given the likelihood of a worsening global economic slowdown, state media reported. Chinese state-owned enterprises(SOEs) must pay more attention to their financial position to avoid a potential capital crunch, the Economic Observer reported, citing Li Rongrong, director of the State-owned Assets Supervision and Administration Commission. Li said the SOEs, some of which have already flagged cash flow shortages, should better prepare themselves for tightening monetary policy lasting at least two years. The meeting was held after figures showed that combined profits of the major SOEs in the first quarter dropped 2.9% from a year earlier. Earnings at oil companies and power generators were worst hit, because of rising raw material costs and the government’s central pricing system for oil products and electricity tariffs.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (HEW), target $48.

Night Trading
Asian Indices are -.50% to unch. on average.
S&P 500 futures +.23%.
NASDAQ 100 futures +.19%.

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
- (NYX)/.83
- (TAP)/.28
- (COV)/.58
- (EL)/.47
- (JOE)/.14
- (EMR)/.71
- (LAZ)/.52
- (PCP)/1.89
- (LPX)/-.52
- (MGM)/.43
- (SLE)/.24
- (DHI)/-.64
- (MLM)/.69
- (Q)/.09
- (LM)/-.84
- (WBMD)/.07
- (CELL)/.11
- (DIS)/.51
- (GGC)/-.30
- (PZZA)/.44
- (CSCO)/.36
- (WMS)/.30
- (PBI)/.64
- (SNCR)/.17
- (THQI)/-.06
- (CAR)/.00
- (VNO)/1.36
- (NILE)/.14
- (THC)/.00
- (TK)/1.00
- (HAR)/.70
- (TSO)/-.53
- (KCP)/.03
- (ONXX)/-.06

Upcoming Splits
- None of note

Economic Releases
- None of note

Other Potential Market Movers
- The Fed’s Bernanke speaking, Fed’s Hoenig speaking, (YUM) analyst conference, weekly retail sales reports, Deutsche Bank Health Care Conference, Goldman Sachs Alternative Energy Conference, CSFB Basic Materials Conference and Merrill Lynch Technology Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial shares in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the day.