Today's Headlines

Bloomberg:

- Medtronic Inc.(MDT), the biggest maker of heart-rhythm devices, said profit grew 59 percent, helped by sales of a new heart stent. The shares rose the most in a year after the company raised its earnings forecast.

- JPMorgan Chase & Co.(JPM) and Pacific Investment Management Co. are inundated with money from individuals attempting to mimic the performance of hedge funds speculating that the stock-market rally is over. So-called bear-market and long-short mutual funds, designed to protect against falling stock prices, attracted a record $10 billion this year through October, more than double the previous high in 2006, according to Morningstar Inc. Asset managers have opened 19 long-short funds, the most in one year. The funds’ rising popularity shows how skeptical small investors remain even after the Standard & Poor’s 500 Index recouped almost half the 57 percent loss incurred from October 2007 to the March 2009 low. Conventional mutual funds that only buy U.S. stocks posted $4.6 billion of redemptions in the first 10 months of the year, while bond funds added $280 billion.

- Investors should buy bullish options on U.S. retailers including Wal-Mart Stores Inc.(WMT) and Gap Inc.(GPS) because increases in home sales and bank lending suggest consumers will spend more, Jefferies Group Inc. said. “Retail firms are well positioned for a rebound in consumer spending,” derivatives strategist Scott Becker wrote in a report today. “With the consumer hunting for deals now more than ever, Black Friday may provide the upside catalyst for the retail space going into year end.” “Increases in existing home sales are also an indication of improving retail sales as stabilizing housing fundamentals allow for higher discretionary spending,” the New York-based strategist wrote. Becker also recommended buying call options giving the right to purchase shares of Abercrombie & Fitch Co., Urban Outfitters Inc., Coach Inc., Target Corp., Kohl’s Corp., Costco Wholesale Corp., Best Buy Co. and Lowe’s Cos., all of which have a “buy” rating at Jefferies. The day after the U.S. Thanksgiving holiday, Nov. 27 this year, is known as “Black Friday” and marks the beginning of the holiday shopping season. Retailers may lure 4.7 percent more consumers this year over the Black Friday weekend, the Washington-based National Retail Federation said today.

- Trading of bullish General Electric Co.(GE) options surged as an investor wagered on a 40 percent jump in the stock before January 2011. More than 225,000 calls changed hands as of 12:41 p.m. in New York, 2.5 times the four-week average. Contracts to buy GE shares for $22.50 by Jan. 21, 2011, were the most-active following a single trade of 131,500 contracts. Shares of GE added 0.7 percent to $16.13.

- Home prices in 20 U.S. cities rose for a fourth straight month in September, pointing to improvement in real estate that’s helping the economy emerge from recession. The S&P/Case-Shiller home-price index increased 0.27 percent from the prior month on a seasonally adjusted basis, after a 1.13 percent rise in August, the group said today in New York. The gauge fell 9.36 percent from September 2008, more than forecast, yet the smallest year-over-year decline since the end of 2007.

- China’s five largest banks submitted plans to regulators for raising money after unprecedented lending eroded their capital, according to four people with knowledge of the matter. Industrial & Commercial Bank of China Ltd., China Construction Bank Corp., Bank of China Ltd., Agricultural Bank of China and Bank of Communications Ltd. told the China Banking Regulatory Commission how they can bolster capital ratios after the watchdog evaluated their finances last week, the people said. Lenders were told to estimate potential deficits in 2010 based on their own loan forecasts and capital ratio targets, they said. Bank shares fell in Hong Kong trading today after Bank of China said it’s studying “various options” to replenish capital. “With China’s pace of credit growth, banks’ capital will be drained very quickly and that leaves little room for cushioning if asset quality worsens,” said Sheng Nan, a Shanghai-based analyst at UOB-Kayhian Investment Co.

- Commodity investors risk a “Sub- Prime II”-style crisis should assumptions underlying record levels of speculation prove unfounded, Citigroup Inc. said. “Thousands of very smart speculators have accumulated the biggest ever speculative physical raw-material positions ever witnessed in the belief that either the dollar will collapse or an ongoing global ‘Supercycle’ will shake off the effects of the credit crunch,” London-based Citigroup analyst Johan Bergtheil wrote in a report dated yesterday.

- Crude oil fell after a report showed that the U.S. economy grew at a slower level than previously estimated, and on forecasts that supplies gained. Oil retreated after the Commerce Department said that the economy expanded at a 2.8 percent annual rate in the third quarter, down from a 3.5 percent increase initially stated. “The fundamentals of this market are terrible and it’s been held higher by what’s happening elsewhere. The move is bigger than what we would normally see because the volume is so light.” “At least until the end of the year we see $80 as the top of the range,” said Tobias Merath, a commodity analyst at Credit Suisse Group in Zurich. “What’s limiting the potential in the short term is the supply glut in the distillate market.” “Oil should be at $50,” Schork said. “Look at Valero and Sunoco. They can’t make any money selling fuel, so they are shutting plants. If refineries are being shut, there’s no need for additional crude.” Valero Energy Corp., the largest U.S. refiner, said on Nov. 20 that it will close its Delaware City, Delaware, plant because of mounting losses after the recession eroded demand for gasoline and diesel. Philadelphia-based Sunoco Inc. idled its Eagle Point refinery in Westville, New Jersey, this month. “The floor has been set by the weaker dollar, higher inflation theme, while the ceiling has been set by weak refining margins, and a global recovery that is expected to be sluggish,” said Mike Wittner, head of oil market research at Societe Generale SA in London.

Wall Street Journal:

- Spurred by the release of a hot videogame and earlier-than-usual promotions on televisions, U.S. shoppers spent 6.1% more on electronics in the first half of November the month, through Nov. 14, than a year ago, according to a recent analysis from MasterCard SpendingPulse, a unit of MasterCard Advisors. Retailers such as Best Buy Co., Wal-Mart Stores Inc. and Amazon.com Inc. have begun earlier-than-usual promotions on TVs and videogames. And many people are buying laptops and netbooks loaded with Microsoft Corp.'s new Windows 7 operating system. Preseason Internet sales of a range of merchandise were up 19.4% over the first two weeks of November 2008. According to a preliminary Black Friday shopping survey conducted for the National Retail Federation by BIGresearch, up to 134 million people plan to shop this Friday, Saturday or Sunday, up from 128 million who planned to last year. Discount and department stores will be the biggest attractions for consumers this weekend, with 66% and 62%, respectively, planning to head to their favorite big-box store; 41% said they would shop at electronics stores; 36% planned to visit a clothing or clothing accessories store.

- Sen. Joseph Lieberman, speaking in that trademark sonorous baritone, utters a simple statement that translates into real trouble for Democratic leaders: "I'm going to be stubborn on this." Stubborn, he means, in opposing any health-care overhaul that includes a "public option," or government-run health-insurance plan, as the current bill does. His opposition is strong enough that Mr. Lieberman says he won't vote to let a bill come to a final vote if a public option is included. Probe for a catch or caveat in that opposition, and none is visible. Can he support a public option if states could opt out of the plan, as the current bill provides? "The answer is no," he says in an interview from his Senate office. "I feel very strongly about this." How about a trigger, a mechanism for including a public option along with a provision saying it won't be used unless private insurance plans aren't spreading coverage far and fast enough? No again. So any version of a public option will compel Mr. Lieberman to vote against bringing a bill to a final vote? "Correct," he says. This is, of course, more than just one senator objecting to one part of health legislation. This is the former Democratic vice presidential nominee, now an independent, Joe Lieberman, still counted on to be the 60th vote Democrats will need to force a final vote on health legislation. In opposing a public option, he is opposing the element some Democratic liberals have come to consider the cornerstone of a health-care bill.

CNBC:

- Federal Reserve officials are increasingly confident the U.S. economic recovery is sustainable, but they do not see employment picking up soon, according to minutes from their November meeting released on Tuesday.

- Boeing(BA) and Duke Energy(DUK) are among the companies awarded stimulus funds today as part of $4.5 billion set aside for enhancing smart grid technology.

MarketWatch.com

- Treasury bill yields are now as low as they were one year ago, during the darkest days of the panic and financial meltdown.

The Business Insider:

- Wall Street is starting to weigh in on AOL's(AOL) stock, which will start trading today. Here's Doug Anmuth of Barclays. His conclusion is slightly more optimistic than ours, but the underlying message is the same: You've got upside!

- As for what they're buying and holding, here's a list of the 50 "stocks that matter most" to hedge funds.

SmartMoney:

- BlackRock(BLK), Wall Street’s Newest Giant.

FinancialNews:

- Hedge funds remain the single most important investor group for investment banks, contributing nearly a third of overall equities revenues, with assets predicted to grow a further 10% this year.

SecuritiesIndustryNews:

- Don’t be surprised if more creative techniques involving the capturing of electronic messages or other evidence are used as the S.E.C. tries to step up its game, in the wake of the multibillion-dollar Ponzi scheme run by Bernard L. Madoff and other fallout of the two-year-old financial crisis. Prosecutors built their case against former Bear Stearns Cos. hedge-fund mangers Ralph Cioffi and Matthew Tannin around e-mail messages. “We will do everything we can to adopt whatever creative investigation techniques that appear appropriate to the case” being pursued, he said.

sandbox:

- It's been a week since Xbox Live launched access to Facebook on its online service - and the numbers are in. Two million players logged on to Facebook through their game consoles. This is a big deal. Xbox Live was already a thriving social hub, combining gameplay, community, and chat. Now with Facebook/Twitter access, it's unstoppable. What's Microsoft's big plan? To build "the largest social network connected to the TV," as a spokesperson puts it.

Diamonds.net:

- U.S. weekly chain-store sales rose by 3.3 percent year on year for the week that ended November 21, 2009, according to the International Council of Shopping Centers (ICSC) and Goldman Sachs. The week's comparable-store sales increase reflected an easy year-on-year comparison, given the 0.8 percent drop recorded one year ago. Sales were flat compared with the previous week. November's overall sales performance relies heavily on the cash-register sales generated on November 27, or "Bargain Friday," as it is now referred to by ICSC, given the heavy discounts expected this year. Michael P. Niemira, ICSC's director of research and chief economist, noted, “ICSC Research expects that day and that subsequent Saturday to be very strong. For the month, ICSC Research now expects November sales up 4 to 6 percent as easy year-over-year comparisons will dominate the results.”

Rassmussen:

- The Rasmussen Reports daily Presidential Tracking Poll for Tuesday shows that 27% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as President. Forty-two percent (42%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -15. This is the lowest Approval Index rating yet measured for President Obama (see trends).

- Sixty-three percent (63%) of U.S. voters say political correctness prevented the military from responding to warning signs from Major Nidal Malik Hasan that could have prevented the Fort Hood shootings from taking place. A new Rasmussen Reports national telephone survey shows that just 16% disagree and do not believe political correctness kept military authorities from possibly stopping the killing of 13 people and the wounding of many others in the November 5 incident.

Politico:

- Seventy-five percent of U.S. women disagree with the recommendations of a government panel that urged fewer women to get mammograms, with 47 percent saying that they strongly disagree, according to a new Gallup Poll. New guidelines issued by the U.S. Preventive Services Task Force suggest women begin getting routine mammograms starting at age 50, rather than age 40, and that such tests should be every other year. Among women ages 35 to 49, 84 percent said that they will ignore the guidelines and get a mammogram before age 50, according to the poll. Women also said they believed the reasoning behind the government report was not based on health but rather on potential cost benefits: About 76 percent of women said cost was the main reason for the report’s findings, whereas 16 percent said it was based upon an assessment of risks and benefits. The report has received backlash from lawmakers and breast cancer survivors alike.

- President Barack Obama has settled on a new course for the eight-year war in Afghanistan that he said Tuesday will “finish the job” and that he will announce to Americans after Thanksgiving. “After eight years, some of those years in which we did not have, I think, either the resources or the strategy to get the job done, it is my intention to finish the job,” Obama said at a news conference following his meeting with the prime minister of India, Manmohan Singh. “And I feel very confident that when the American people hear a clear rationale for what we're doing there and how we intend to achieve our goals, that they will be supportive.” The president would not confirm reports that he will make his announcement in a prime-time address next Tuesday, Dec. 1, saying only that he’d announce his plan “shortly.”

SeekingAlpha:

- Greenlight’s Einhorn Exits Energy, Focuses on Healthcare.

Reuters:

- Ford Motor Co(F) will launch a new car model in India every 12-15 months over the next five years, with its new Figo small car is set to drive a tripling of sales in 2010, its India head said on Tuesday. The No 2 U.S. automaker by sales plans to use India as a global manufacturing hub for compact cars, eyeing the country's low-cost facilities to grow in a segment that it expects will make up 60 percent of all global car sales in 10 years.

- When Fairfax Financial Holdings Ltd sued a group of hedge funds in 2006 claiming they conspired to drive down the price of the company's shares, many viewed the litigation as a cynical attempt by the Canadian insurer to silence its critics. Some skeptics predicted the lawsuit filed with a New Jersey state court would be quickly dismissed and forgotten. But three years later, the lawsuit against Steven Cohen's SAC Capital Advisors, James Chanos' Kynikos Associates and others is going strong and creating headaches for two of the best-known U.S. hedge fund managers. Fairfax's lawyers are expected to start taking depositions of some of the hedge funds' executives and traders soon. The Securities and Exchange Commission, now prominently pursuing an insider-trading case against New York-based hedge fund firm Galleon Group, has taken notice of some of the allegations raised in the Fairfax lawsuit, launching its own investigation last year, said people familiar with the case.

- VeriSign Inc (VRSN) expects to return to double-digit revenue growth in 2011, driven by its core businesses and the launch of new services in 2010, its top executive said.

United Evening News:

- Quanta Computer Inc., the world’s largest maker of notebook computers, revised its forecast for January-March shipments to a decline of 5% on quarter, from an earlier estimate of a 10% drop, citing company vice chairman C.C. Leung. Shipments next year may rise at least 40%, he said.