Wednesday Watch

Late-Night Headlines
Bloomberg:

- The U.S. Commerce Department imposed preliminary duties of as much as 12 percent on $269 million of imports of steel grating and wire strand from China. In two separate decisions announced today, the U.S. said the producers are receiving illegal subsidies from the Chinese government, backing petitions by companies including Insteel Industries Inc., American Spring Wire Corp. and Sumiden Wire Products Corp. Makers of steel grating will face tariffs of 7.4 percent, the Commerce Department said in an e-mailed statement today. Importers of concrete steel wire strand, which is used to reinforce concrete construction applications, will face anti- subsidy duties ranging from 7.5 percent to 12 percent.

- Apollo Group Inc.(APOL) plunged as much as 21 percent in extended trading after the company reported the Securities and Exchange Commission commenced an informal inquiry into the company’s revenue recognition practices. The probe was started by the SEC’s Enforcement Division, Phoenix-based Apollo Group said today in a statement. Shares of Apollo Group fell as much as $15.32 to $57.65 at 4:32 p.m. after U.S. markets closed today. Apollo Group, based in Phoenix, is the parent company of the University of Phoenix, the nation’s largest private university with 443,000 students, most of whom take classes via the Internet. Federal student aid accounted for about 86 percent of company revenue in fiscal 2009, Apollo said today in a filing.

- ‘Jobs Created or Saved’ Is White House Fantasy. “Most analysts predict that the fiscal stimulus will have its greatest impact on growth in the second and third quarters of 2009,” Romer said. “By mid-2010, fiscal stimulus will likely be contributing little to growth.” At first it was just fringe elements, such as conservative blogs and the not-really-a-news-organization Fox News, that pounced on Romer’s statement. Then other news outlets started to question her statement, which seemed to fly in the face of White House assertions that only a small portion of the stimulus -- $120 billion, or 15 percent -- has actually been spent. Most of the criticism of the stimulus coming from the president’s own party has been, “too little, too late,” and here’s Romer saying it’s kaput. No wonder capital spending plans were at an all-time low in the third quarter, according to the NFIB monthly survey. Only 30,383 jobs were created or saved by the American Recovery and Reinvestment Act, according to Recovery.gov, the government’s once-transparent Web site that has become a complex blur of numbers, graphs and pie charts. An extrapolation of what would have happened without the fiscal stimulus isn’t much consolation to the 9.8 percent of the workforce that is unemployed. Nor is Romer’s prescription for the economy and labor market very comforting in light of the trillions of future tax dollars that have been spent, lent or promised by the federal government.

- Visa Inc.(V), the world’s biggest payments network, climbed in extended New York trading after posting results that exceeded most analysts’ forecasts and saying a year-long skid in consumer spending has ended.

Wall Street Journal:

- In a stark reminder of how some battered financial firms remain dependent on government lifelines, GMAC Financial Services Inc. and the Treasury Department are in advanced talks to prop up the lender with its third helping of taxpayer money, people familiar with the matter said. The U.S. government is likely to inject $2.8 billion to $5.6 billion of capital into the Detroit company, on top of the $12.5 billion that GMAC has received since December 2008, these people said. The latest infusion would come in the form of preferred stock. The government's 35.4% stake in the company could increase if existing shares eventually are converted into common equity. The willingness by Treasury officials to deepen taxpayer exposure to GMAC reflects the troubled company's importance to the revival of the auto industry.

- Washington is captivated by the Senate melodrama over the so-called public option, salivating at the ring of Harry Reid's political bell (see below). But the most important health-care questions continue to be about the policy substance—particularly those that Democrats don't want asked. Foremost among them is: How will ObamaCare affect insurance premiums in the private health-care markets? Despite indignant Democratic denials, the near-certainty is that their plan will cause costs to rise across the board. The latest data on this score come from a series of state-level studies from the insurance company WellPoint Inc. At the request of Congressional delegations worried about their constituents—call it a public service—WellPoint mined its own actuarial data to model ObamaCare in the 14 states where it runs Blue Cross plans. The study therefore takes into account market and demographic differences that other industry studies have not, such as the one from the trade group America's Health Insurance Plans, which looked at aggregate national trends. In all of the 14 states WellPoint scrutinized, ObamaCare would drive up premiums for the small businesses and individuals who are most of WellPoint's customers. (Other big insurers, like Aetna, focus on the market among large businesses.) Young and healthy consumers will see the largest increases—their premiums would more than triple in some states—though average middle-class buyers will pay more too. Not even two hours after Wellpoint had presented its materials on the Hill, Democrats were already trashing it—which, considering that it runs to some 238 pages and took weeks to prepare, must have required remarkable powers of digestion and analysis.

- Treasury Department pay czar Kenneth Feinberg last week announced sharp cuts in total compensation at the finance and auto companies under his control. But while he cut total compensation by half, he substantially increased one important element—regular salaries, according to a Wall Street Journal analysis. The move reflects the complexity of regulating something that mixes politics and economics. When the banks complained, Mr. Feinberg listened. He adjusted base salaries for the bulk of those employees, in some cases boosting them by hundreds of thousands of dollars, according to an analysis of government data by the Journal. On average, base salaries climbed to $437,896 a year as a result of Mr. Feinberg's review, compared with $383,409 previously, a 14% increase, according to a Journal analysis of Treasury data. Of the 136 employees under Mr. Feinberg's review, 89 saw their base salaries increase. At Citigroup, which is 34%-owned by the U.S., government, Mr. Feinberg agreed to more than double salaries for 13 of the 21 employees, according to the Journal's analysis. Treasury Department officials confirmed the accuracy of the Journal's methodology for calculating the number of employees whose base salaries rose.

- More than three decades after Maynard H. Jackson Jr. became the first African-American mayor of a major Southern city here, the era of uncontested black leadership in the cradle of the civil-rights movement is facing its first true test: A white city councilwoman leads the mayoral race by a wide margin just days before the Nov. 3 election. Recent polls show Mary Norwood, a fiscal conservative who lives in a heavily white, wealthy section of Atlanta, with support ranging from 39% to 46% of likely voters. That puts her potentially within striking distance of winning outright next week or heading into a runoff with one of the two most prominent African-American candidates, City Council President Lisa Borders and former state Sen. Kasim Reed, both of whom have struggled to gather support from even 25% of voters. Most striking in Ms. Norwood's numbers is her level of support among widely fractured African-American voters. An InsiderAdvantage poll on Oct. 16 showed Ms. Norwood leading all candidates among black voters, with nearly a third of African-Americans supporting her. Ms. Norwood's position reflects demographic changes that are scrambling the established political order in parts of the South as well as moderating racial attitudes that increasingly have left African-Americans, whites and other ethnicities open to votes that defy conventional racial blocs.

- One of the technology industry's highest-profile executives has become ensnared in an alleged insider-trading case that is shaking the corporate and financial worlds. A criminal case filed by the Manhattan U.S. Attorney's office earlier this month alleged an unnamed Advanced Micro Devices Inc. executive shared confidential information about the chip maker with a defendant in the case. The AMD executive is Hector Ruiz, then AMD's chairman and previously the company's chief executive, according to a person familiar with the matter.

- Al Qaeda's umbrella group in Iraq claimed responsibility for the twin suicide bombings in the heart of Baghdad that killed at least 155 people, including 24 children trapped in a bus leaving a daycare center.

MarketWatch:

- As U.S. regulators consider reining in excessive energy speculation, the two major U.S. futures exchanges have squared off over whether authorities should impose a blanket cap on positions traders hold on one exchange. The smaller but faster-growing IntercontinentalExchange(ICE) wants the regulator to set a market-wide cap. The older and bigger CME Group Inc.(CME) , which owns the New York Mercantile Exchange, wants individual exchanges to set caps based on the size of the exchange. The outcome of the regulatory decision, expected by year-end, could tilt the intensely competitive playing field for energy futures trading, extending a long-running rivalry between CME's Nymex and ICE.

CNBC.com:

- U.S. Treasury Secretary Timothy Geithner on Tuesday said there were strong arguments for extending many government programs geared at lifting the U.S. economy out of recession.

NY Times:

- Many workers at the Ford Motor Company(F) are signaling that they are unwilling to help the automaker cut its labor costs further, by voting against what would be the third round of concessions in the last two years.

IBD:

- Keeping that high-value, must-have-now data on expensive high-speed memory drives is an easy call. Getting that might-need-someday out to a cheaper, slower drive somewhere else has always been the challenge. That's what Compellent Technologies (CML) does.

CNNMoney.com:

- Research in Motion's (RIMM) BlackBerry, with a 40% share, is still the most popular smartphone among the 4,255 owners who responded to a ChangeWave survey in September. But Apple's (AAPL) iPhone is gaining fast, according to research director Paul Carton.

- Roughly $211 billion separates what the country owes and its self-imposed credit limit. And by Friday, after another week of massive debt sales by the Treasury Department, that gap will likely have narrowed considerably. It is now expected that the $12.104 trillion debt ceiling could be breached by the end of November.

- JPMorgan Chase(JPM) chief executive officer defended the dollar -- and the size of his company -- at a securities industry conference Tuesday. "The ultimate strength of the dollar will depend on the strength of the United States," Dimon said.

Forbes:

- Federal officials plan to ban sales of raw oysters harvested from the Gulf of Mexico unless the shellfish are treated to destroy potentially deadly bacteria - a requirement that opponents say could deprive diners of a delicacy cherished for generations. The plan has also raised concern among oystermen that they could be pushed out of business. The Gulf region supplies about two-thirds of U.S. oysters, and some people in the $500 million industry argue that the anti-bacterial procedures are too costly. They insist adequate measures are already being taken to battle germs, including increased refrigeration on oyster boats and warnings posted in restaurants. Some oyster sellers say the FDA rule smacks of government meddling. The sales ban would take effect in 2011 for oysters harvested in the Gulf during warm months. "We have one man who's 97 years old, and he comes in here every week and gets his oyster fix, no matter what month it is," said Mark DeFelice, head chef at Pascal's Manale Restaurant in New Orleans. "There comes a time when we need to be responsible. Government doesn't need to be involved in this." The anti-bacterial process treats oysters with a method similar to pasteurization, using mild heat, freezing temperatures, high pressure and low-dose gamma radiation. But doing so "kills the taste, the texture," DeFelice said. "For our local connoisseurs, people who've grown up eating oysters all their lives, there's no comparison" between salty raw oysters and the treated kind.

Dow Jones:

- A U.S. House panel voted Tuesday to periodically adjust the thresholds investors must meet in order to qualify for hedge funds and other sophisticated investments. The House Financial Services Committee agreed to an amendment that would direct the Securities and Exchange Commission to adjust for inflation the standards for whether an investor can partake in some funds. Current rules dictate that individuals can invest in more sophisticated funds only if they have a net worth of at least $1 million or an annual income of at least $200,000 over the previous two years. The amendment was included as part of a broader measure aimed at increasing oversight of hedge funds and other private pools of capital. The committee, chaired by Rep. Barney Frank, D-Mass., is scheduled to vote on the broader bill either Tuesday afternoon or Wednesday.

CBS:

- A former cashier for The Home Depot(HD) who has been wearing a "One nation under God" button on his work apron for more than a year has been fired, he says because of the religious reference. The company claims that expressing such personal beliefs is simply not allowed. "I've worn it for well over a year and I support my country and God," Trevor Keezor said Tuesday. "I was just doing what I think every American should do, just love my country." The American flag button Keezer wore in the Florida store since March 2008 says "One nation under God, indivisible."

Rasmussen:

- Most voters trust themselves more than either Congress or President Obama when it comes to the economy, but they have way more confidence in themselves when it comes to the news media. A new Rasmussen Reports national telephone survey shows that 85% of U.S. voters trust their own judgment more than the average reporter when it comes to the important issues affecting the nation. Only four percent (4%) trust the average reporter more.

Miami Herald:

- President Hugo Chavez's popularity has slipped and a majority of Venezuelans view the situation in their country negatively, according to a poll published Tuesday. The survey by the Caracas-based polling firm Datanalisis found that 46 percent responded positively when asked how they view Chavez's presidency, down from 53 percent a month earlier. The survey, published by the Venezuelan newspaper El Universal, also found that 59 percent said they saw the situation in the country as negative.

The Business Insider:

- Nielsen reported a 50% plunge in CNBC vierwership in October year over year. Specially, CNBC has experienced a massive 52% decline in overall viewers during business day hours (5 am - 7 pm), and a not much better 49% drop in its demo (25-54) in the month of October as compared to last year.

- You thought today's consumer news was bad? Just wait. Senator Chris Dodd, who has suffered from the impression that he is too close to the banking industry, has proposed an incredibly stupid immediate rate freeze on credit cards. Tom Brown at Bankingstocks.com explains why this is so stupid.

USA Today.com:

- When it comes to predicted reliability -- coming after years of gab from Detroit about how its cars don't break down anymore -- six American brands rank dead last in Consumer Reports' latest predictions on automotive reliability being released right now. At the other extreme, the best brand is Toyota's Scion.

Reuters:

- Wolfgang Leese, chief executive officer of Salzgitter AG, warned against overoptimism, noting that a recovery in steel-sector demand in recent weeks is not likely to be sustained. The market remains unstable and at best will be flat, he said. The company, Germany’s second-largest steelmaker, will post a loss for 2009.

- Package delivery rivals FedEx Corp (FDX) and United Parcel Service (UPS) faced off for the first time over a bill pending in Congress that would change FedEx workers' labor laws, setting out their positions in a debate on Tuesday in Albuquerque, New Mexico. In question is a reauthorization bill for the Federal Aviation Administration passed in May by the U.S. House of Representatives, under which FedEx employees would be covered by the National Labor Relations Act instead of the Railway Labor Act. The bill is awaiting Senate approval. "It is legislation written by UPS, for UPS and only benefits UPS," said FedEx spokesman Maury Lane. "Everyone else suffers."

- National Australia Bank Ltd, the country's largest lender, expects business lending growth to contract in 2010, Chief Executive Officer Cameron Clyne told a media briefing on Wednesday.

- ABC News said on Tuesday that its weekly measure of U.S. consumer confidence fell to a three-month low, as Americans' views on the buying climate hit their lowest levels this year. The Consumer Comfort Index edged lower to -51 in the week ended Oct. 25 from a -50 the prior week. It was the index's lowest reading since mid-July, and puts the level in close proximity to its record low.

- Illumina Inc (ILMN) posted a lower-than-expected third-quarter profit as expenses rose, and the company cut its 2009 revenue forecast, sending its shares tumbling 21 percent in post-market trading.

Financial Times:

- The Federal Reserve could order a financial institution to sell a risky division or stop dangerous trading activity if the central bank determined there was a threat to the US financial system, under a draft law released on Tuesday. The landmark bill drawn up by the Treasury and the House financial services committee sets up a council of regulators charged with snuffing out systemic risks and gives the government and the Fed sweeping powers over financial companies at home and overseas. The Fed would require systemically significant companies – including foreign groups that own a large or risky US subsidiary – to abide by “heightened prudential standards”. These include leverage limits, liquidity rules and the drafting of a resolution plan, or “living will”. Companies would be placed in the new category if the council deemed that “material financial distress at the company could pose a threat to financial stability or the economy”. But the draft law goes further than expected – allowing the Fed to require any systemically significant company to “sell or otherwise transfer assets or off-balance sheet items to unaffiliated firms, to terminate one or more activities, or to impose conditions on the manner in which the identified financial holding company conducts one or more activities”. If that does not save a company, the government could seize it and force rival banks that have more than $10bn in assets to repay any taxpayer money used to seize or wind up their competitor.

TimesOnline:

- Loans to eurozone households and businesses fell for the first time ever last month in the latest sign of the continued fragility of the economy and the uncertainity of a recovery. Lending dropped 0.3 per cent in September from a year earlier, according to the European Central Bank (ECB). It was the first year-on-year drop since data was first collected in 1991, the ECB said. The situation mirrors the UK, where a lack of available credit from banks desperate to hoard cash has been seen as a major obstacle to the nation's emergence from recession. Earlier this week, David Cameron, the Conservative leader, said it was "astonishing" that 12 months after the bank rescue lending to businesses was still falling.

Late Buy/Sell Recommendations
Citigroup:

- Upgraded (AKS) to Buy, raised target to $21.

- Reiterated Buy on (X), target $49.

- Reiterated Buy on (NLC), target $24.

- Reiterated Sell on (UA), target $24.

Night Trading
Asian Indices are -1.25% to -.25% on average.

Asia Ex-Japan Inv Grade CDS Index 112.50 +13.50 basis points.
S&P 500 futures -.01%.
NASDAQ 100 futures -.04%.

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
- (GT)/.40

- (CCE)/.46

- (OC)/.37

- (IP)/.24

- (WLP)/1.39

- (HES)/.54

- (COP)/.94

- (ITRI)/.50

- (AVB)/1.08

- (CBG)/.10

- (FSLR)/1.75

- (AFL)/1.20

- (CERN)/.61

- (ESRX)/.82

- (OI)/.93

- (LSI)/.03

- (FLS)/2.04

- (RYL)/-1.06

- (SYMC)/.33

- (SPW)/.86

- (GD)/1.40

- (JNY)/.27

Economic Releases

8:30 am EST

- Durable Goods Orders for September are estimated to rise +1.0% versus a -2.6% decline in August.

- Durables Ex Transportation for September are estimated to rise +.7% versus a -.3% decline in August.

10:00 am EST

- New Home Sales for September are estimated to rise to 440K versus 429K in August.

10:30 am EST

- Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,910,000 barrels versus a +1,312,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -1,000,000 barrels versus a -2,214,000 barrel decline the prior week. Distillate supplies are expected to fall by -1,000,000 barrels versus a -784,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.28% versus a +.19% gain the prior week.

Upcoming Splits
- None of Note

Other Potential Market Movers
- The Treasury’s 5-Year Note Auction, weekly MBA mortgage applications report, (YHOO) analyst meeting and the Wells Fargo Consumer Conference could also impact trading today.

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