Tuesday Watch

Late-Night Headlines
Bloomberg:
- John McCain, calling for “a swift conversion of American vehicles away from oil,” said he would spur a market for vehicles that emit little or no carbon dioxide by offering consumers a $5,000 tax credit to buy them. The presumptive Republican presidential nominee today also proposed a $300 million prize for the development of a battery with sufficient capacity and power to “leapfrog” those that now fuel plug-in hybrids or electric cars.
- General Motors Corp.(GM) reduced its North American truck production plan and added no-interest loans on many 2008 models after a consumer shift to cars contributed to a 16 percent drop in its U.S. sales through May.
- United Parcel Service(UPS) lowered its second-quarter profit forecast because of rising fuel costs and a slowing US economy.
- Ireland’s economy will fall into a recession this year for the first time in more than two decades, the Economic and Social Research Institute said, as it slashed its forecasts for construction, exports and consumer spending. Gross domestic product will drop by 0.4 percent this year, after rising 5.3 percent last year, the Dublin-based institute said in a report published today. The group, which reduced its forecasts for the second time this year, had predicted growth of 1.8 percent in March.

Wall Street Journal:
- China’s stock-market swoon has sent the benchmark Shanghai Composite Index down by more than half in eight months to below the 3000 level, where many investors had assumed the government would intervene to provide support. But the hoped for support hasn’t come, and some analysts argue that the government’s ability to rejuvenate stocks is dwindling.
- Google Inc.(GOOG) will introduce a service as early as tomorrow that will measure Web sites’ audience size, helping advertisers fine-tune their advertisements.
- The Securities and Exchange Commission plans to propose rules that may diminish the longstanding importance of credit ratings across various markets, including the $3.4 trillion money-market industry, in the latest blow to the rating business stemming from the credit crunch.

MarketWatch.com:
- Bond insurers trying to unwind contracts: report. Companies in talks with banks about ‘commuting’ $125 billion in guarantees.

CNBC.com:
- More Wall Street Firms to Be Bought Up: Analyst.

NY Times:
- The New York Times and International Herald Tribune are working on plans to combine their Web sites.
- China’s Visa Policy Threatens Olympics Tourism.

BusinessWeek.com:
- Inside the Latest iPhone. For the upcoming iPhone 3G, Apple(AAPL) has reduced manufacturing and component costs by more than $50 per unit, says iSuppli.

IBD:
- Surgical Tools Boost Alcon’s(ACL) Earnings, Sales.

VentureBeat:
- Research firm iSuppli says in a new study that solar panels will be on par with the grid in four years.

Forbes.com:
- Sky-High Oil Will Make US Go Broke. A hefty $1.3 billion per month flowed into commodity trading advisers (CTAs) in the first four months of this year, and $700 million per month flowed into commodity exchange-traded funds (ETFs) in the first five months of this year. Those amounts do not even include investments through other vehicles by hedge funds and pension funds. The latest issue of Barron's reports that $55 billion flowed into commodity investments in the first quarter of 2008, and probably at least one-third of that amount was directed into long-only investments in oil. What is happening now is not demand destruction, it is a financial disaster. The U.S. consumes 21 million barrels of per day. At $135 per barrel, the U.S. spends $1.0 trillion per year on oil, which is equal to 15% of the $6.8 trillion in take-home pay of everyone who pays taxes. It is insane for the world to go broke while oil traders and a handful of gangsters who control their national oil production make huge fortunes.

CNNMoney.com:
- Over the horizon, a housing recovery. Harvard report finds immigration, other demographic trends will fuel housing demand over the next decade.

Financial Times:
- Some of the world’s biggest hedge funds were revealed to have taken big positions betting on declines in a number of the most sensitive stocks in the UK market. The disclosures are the first to be made as a result of a ground-breaking move by the UK's Financial Services Authority to force short-sellers to reveal size-able net short positions in companies undergoing rights issues, in a bid to stamp out suspected market abuse.
- One of the most powerful jobs in American journalism went up for grabs on Monday with the announcement that Leonard Downie, the long-serving executive editor of the Washington Post, is stepping down in September.

Saudi Press Agency:
- Kuwait will raise oil production by 300,000 barrels a day by the middle of next year, citing Mohammed al-Olaim, Kuwait’s oil minister. Kuwait will budget $55 billion for oil projects in the next five years.

Late Buy/Sell Recommendations
Morgan Stanley:
- Raised (MS) to Overweight, target $51.
- Rated (SYMC) Overweight, target $26.

CSFB:
- Rated (TOL) Outperform, target $24.
- Rated (KBH) Outperform, target $23.
- Rated (PHM) Outperform, target $14.
- Rated (RYL) Outperform, target $28.
- Rated (CTX) Outperform, target $19.
- Rated (HOV) Underperform, target $6.40.
- Rated (MTH) Underperform, target $16.

Night Trading
Asian Indices are -.50% to +.25% on average.
S&P 500 futures -.01%.
NASDAQ 100 futures +.01%.

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

Earnings of Note
Company/EPS Estimate
- (JBL)/.19
- (DRI)/.75
- (FUL)/.45
- (SONC)/.31
- (KR)/.55

Upcoming Splits
- None of note

Economic Releases
10:00 am EST
- Consumer Confidence for June is estimated to fall to 56.0 versus 57.2 in May.
- The House Price Index for April is estimated to fall .4% versus a .4% decline in March.

Other Potential Market Movers
- The S&P/CaseShiller Home Price Index, Richmond Fed Manufacturing Index, weekly retail sales report, (ALD) investor day, (POR) analyst day, (RDC) conference call, Jeffries Healthcare Conference, Bank of America Utilities Conference, Wachovia Nantucket Equity Conference, Deutsche Bank Alternative Energy Conference and UBS Global Financial Markets & Technology Conference could also impact trading today.

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