Tuesday Watch

Late-Night Headlines
Bloomberg:

- People who excel at making snap decisions and learn quickly from their mistakes, skills tied to successful stock traders, may share a genetic secret, according to a study by German neuroscientists.Berlin. Their report was published today in the Proceedings of the National Academy of Sciences. These talents have been linked in research to people who carry two copies of a gene variant, called VAL, that influences the actions of the brain chemical dopamine, according to scientists at the Max Planck Institute for Human Development.

Wall Street Journal:

- The U.K. government, in a bid to reduce its debt, is exploring a novel way to raise funds, people familiar with the matter say: bundling government activities such as human resources and information-technology management into commercial companies and selling or listing them. Advisers want the UK government to consider privatizing any government function that is also performed by private industry, these people say. The companies, in theory, would eventually compete for contracts outside government.

- The Obama administration has shelved a plan to raise more than $200 billion in new taxes on multinational companies following a blitz of complaints from businesses. A contingent of Silicon Valley chief executives, for example, traveled to Washington in late September to speak out against the proposal to change how the federal government taxes overseas profits. They came away from meetings with key congressmen relieved. Obama aides say the administration has set the idea aside for now, but may return to it as part of a broader tax overhaul sometime next year. The White House had billed the proposed change as an overdue fix to the tax code and potentially a key revenue-raiser. "This has gone all of a sudden from red-hot to white-cold," says Michael Klayko, chief executive of Brocade Communications Systems Inc., a large data-storage company. But he says he is concerned that if the proposed tax changes get entangled in the health-care overhaul, "it could go back to red-hot again." The story of the business community's campaign against the tax changes and the Obama administration's eventual retreat offers a window into the often uneasy relations between the White House and the corporate world.

- The Senate Finance Committee holds its big health-care vote today, but the bigger story is that the health-care industry may finally be coming to its senses. After months of serving as Rose Garden props, insurers, doctors and hospitals are discovering they've been taken for a ride on ObamaCare. Too bad it may be too late to stop the train.

- Federal securities regulators are examining whether an arrangement that lets high-speed traders rapidly buy and sell large chunks of stock anonymously could go awry and threaten markets. Called sponsored or "naked" access, the setup allows high-speed firms and other outfits to trade directly on exchanges using powerful computers without the exchanges or regulators knowing who is making the trades. "We understand that some firms are offering so-called naked access without effective controls over financial regulatory risk," said David Shillman, associate director of the Securities and Exchange Commission's division of trading and markets, which is stepping up its scrutiny of the issue. The practice is one of several involving high-frequency trading that is troubling regulators amid a broader look at making securities markets more transparent and stable.

MarketWatch.com:
- Bank of America Corp.(BAC) has agreed to hand over documents detailing legal advice it received during its purchase of Merrill Lynch & Co., after months spent resisting efforts by regulators and others to pry such information loose, according to a report published Monday.

CNBC.com:
- Goldman(GS) Tries to Distract Critics From Its Huge Bonuses.

NY Times:

- Many small and midsize American businesses are still struggling to secure bank loans, impeding their expansion plans and constraining overall economic growth, even as the country tentatively rises from its recessionary depths. Most banks expect their lending standards to remain tighter than the levels of the last decade until at least the middle of 2010, according to a survey of senior loan officers conducted by the Federal Reserve Board.

CNNMoney.com:

- Top 10 Highest Paying Jobs in America.

Politico:

- Hillary Clinton rules out White House bid.

zerohedge:

- Why Did US SDR Holdings Increase Five Fold In The Last Week Of August? By purchasing $40 billion in SDRs virtually overnight, what the Fed has done is to increase the value of the entire basket pro-rata, while in the process reducing the actual value of the dollar (which is a weighted constituent of the SDR basket). This was an operation to reduce the dollar's value: pure and simple.

Reuters:

- CIT Group Inc is seeing little interest from bondholders in a debt exchange offer aimed at repairing its fragile balance sheet, making bankruptcy increasingly likely, sources familiar with the matter said. The lender to small and medium-sized businesses said earlier this month it was looking for investors to approve a large debt exchange that would reduce its borrowings, or to approve a prepackaged bankruptcy. CIT is now more likely to try a prepackaged bankruptcy, two people familiar with the matter said.

- General Electric (GE) could start to exit a new NBC Universal joint venture with Comcast Corp (CMCSA) as soon as three-and-a-half years after the ink is dried, two people familiar with the talks said on Monday.

Financial Times:

- JPMorgan Chase(JPM) may post annual earnings of as much as $24 billion by 2012 because of less competition and the integration of Bear Stearns Cos. and Washington Mutual Inc., citing “internal back-of-the-envelope calculations.” JPMorgan had profits of $15.4 billion in 2007.

Yonhap News:

- North Korea is showing signs of preparing more missile launches, citing an unidentified South Korean official.

Late Buy/Sell Recommendations

Deutsche Bank:

- Rated (ONNN) Buy, target $10.

UBS:

- Rated (RL) Buy, target $86.

Night Trading
Asian Indices are -.25% to +.50% on average.

Asia Ex-Japan Inv Grade CDS Index 104.0 -2.0 basis points.
S&P 500 futures -.18%.
NASDAQ 100 futures -.16%.

Morning Preview

BNO Breaking Global News of Note

Google Top Stories

Bloomberg Breaking News

Yahoo Most Popular Biz Stories

MarketWatch News Viewer

Asian Financial News

European Financial News

Latin American Financial News

MarketWatch Pre-market Commentary

U.S. Equity Preview

TradeTheNews Morning Report

Briefing.com In Play

SeekingAlpha Market Currents

Briefing.com Bond Ticker

US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Stock Quote/Chart
WSJ Intl Markets Performance
Commodity Futures
IBD New America
Economic Preview/Calendar
Earnings Calendar

Conference Calendar

Who’s Speaking?
Upgrades/Downgrades

Politico Headlines
Rasmussen Reports Polling

Earnings of Note
Company/EPS Estimate
- (JNJ)/1.13

- (ALTR)/.19

- (INTC)/.28

- (LLTC)/.24

- (CSX)/.71

- (DPZ)/.15

Economic Releases

- None of note

Upcoming Splits
- None of note

Other Potential Market Movers
- The weekly retail sales reports, IBD/TIPP Economic Optimism Index, BoJ rate decision, White House’s Romer speaking, Fed’s Dudley speaking, Fed’s Kohn speaking, (JCI) Outlook, (CBRL) business update, ABC Consumer Confidence and OPEC’s monthly report could also impact trading today.

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