Today's Headlines

Bloomberg:

- Ford Motor Co.(F) and Nissan Motor Co. posted U.S. sales gains in December that beat analysts’ estimates as the industry showed signs of stabilizing after the worst year in almost three decades. Ford’s deliveries jumped 33 percent to 184,655, the Dearborn, Michigan-based company said today in a statement. Nissan’s sales rose 18 percent to 73,404. Chrysler Group LLC said sales fell 3.7 percent to 86,523. “People are waking up and realizing the world didn’t end and are starting to return to showrooms,” said Aaron Bragman, a forecaster at IHS Global Insight in Troy, Michigan. “It’s way too early to say the trend is pointing north, but if it continues this quarter, it’s a positive sign.” An industrywide increase for December would cap automakers’ first quarterly improvement since the last three months of 2006, after October and November totals were little changed. Ford, spurred by an 83 percent gain for the Fusion and a doubling of Taurus sales, said the December results gave the second-largest U.S. automaker an estimated 15 percent of 2009 domestic sales for the first full-year increase in its home market since 1995. Ford said 2008’s total was about 14 percent. The shares rose 74 cents, or 7.2 percent, to $11.02 at 12:48 p.m. in New York Stock Exchange composite trading, after touching $11.21 for the highest intraday price since June 2005.

- The cost to protect against defaults on U.S. corporate bonds fell to the lowest in two years as factory orders in November rose more than twice as much as economists anticipated. A benchmark credit-default swaps index that allows investors to speculate on investment-grade corporate debt and typically falls as demand for corporate bonds rises, declined to the lowest since January 2008. A swaps index tied to North American high-yield, high-risk corporate loans reached its highest level since it was created in April. The Markit LCDX Index Series 12, which is linked to the senior secured loans of 90 companies with below-investment-grade ratings and rises as the cost of debt protection falls, climbed 0.35 percentage point to 105.25 percent of face value today, according to Goldman Sachs Group Inc. That’s up from 79.5 percent when Series 12 started trading April 15. The price of the Markit CDX North America High Yield Index, a credit swaps index linked to non-investment grade bonds, also climbed, gaining 0.2 percentage point to about 100.6 percent of face value as of 11:30 a.m. in New York, CMA DataVision prices show.

- Treasuries rose for a second day as investors bet the biggest monthly increase in 10-year note yields in almost six years was overdone and pending sales of existing U.S. homes fell more than forecast in November. Ten-year note yields touched the lowest levels in almost two weeks after rising 64 basis points in December, the most since April 2004.

- Copper, which more than doubled last year, is “breaking higher” after passing through a so-called Fibonacci retracement level, according to technical analysis by Dan Smith, an analyst at Standard Chartered Plc.

- Cold weather from China across Europe and the U.K. reaching to the U.S. is disrupting travel and pushing up fuel prices.

- The lowest-rated corporate bonds rallied above so-called distressed trading levels for the first time since January 2008 on optimism the economy is recovering. The average yield on U.S. bonds rated CCC or lower tightened to 9.82 percentage points more than similar-maturity Treasuries, from as much as 36.7 percentage points in March, according to Merrill Lynch & Co. index data. The debt has been distressed, or trading at a spread of at least 10 percentage points, since Jan. 8, 2008, the data show.

- Bruce Berkowitz, head of the $9.99 billion Fairholme Fund, was named the top U.S. stock fund manager for 2009 by research firm Morningstar Inc., which cited his winning bets on drug and defense companies. The group that oversees American Funds’ $98.2 billion EuroPacific Growth Fund won in the international stock fund category, Chicago-based Morningstar said today in a statement. The team that runs the $18.8 billion Loomis Sayles Bond Fund was selected best fixed-income manager.

- Continental Airlines Inc.(CAL) rose to its highest in almost a year in New York trading and led a rise in shares of major U.S. carriers after reporting that December unit revenue fell the least in 11 months. In its main jetliner operations, revenue for each seat flown a mile dropped as much as 5.5 percent from a year earlier, the smallest decline since January 2009, the Houston-based airline said in a statement yesterday. Its passenger traffic last month increased 6.3 percent, the largest gain since September.

- U.S.-China ties will likely deteriorate this year as trade tensions rise between the two countries, posing the biggest geopolitical risk this year, according to a report by a political risk consulting group.

- General Electric’s(GE) share of the Dow Jones Industrial Average shrunk to the smallest of any company for the first time since at least 1992 after a rally in financial stocks lifted banks at a faster rate.

- U.S. retail sales in December probably rose more than projected as shoppers visited stores after Christmas to redeem gift cards, according to a trade group. December retail sales at stores open at least a year probably increased about 2.5 percent from a year earlier, the International Council of Shopping Centers and Goldman Sachs Group Inc. said today in a statement. The ICSC had previously projected a gain of 2 percent. Sales in the week ended Jan. 2 climbed 2.5 percent, the New York-based group said. “Holiday sales were late in coming, but showed healthy gains as the season wrapped up,” Michael Niemira, the ICSC’s chief economist, said in the statement.

- Discovery Communications Inc.(DISCA), Sony Corp. and Imax Corp.(IMAX) plan to start a 3-D cable-television channel in 2011, following recent 3-D success with films such as “Avatar.” The joint venture, which doesn’t have a name yet, will air 3-D shows 24 hours a day, seven days a week in the U.S., the companies said today in a statement. Discovery, based in Silver Spring, Maryland, Sony and Imax will own equal stakes in the channel, according to the statement.

- Students in New York City charter schools outperformed their public school counterparts in reading and math, according to a Stanford University study. Fifty-one percent of charter school students showed gains in math that are “statistically larger” than they would have achieved in conventional public schools, according to the report released today by the Center for Research on Education Outcomes, which is based at Stanford, near Palo Alto, California. The study, which analyzed six years of data at 49 charter schools from 2003 through 2009, also found that 29 percent of charter schools students showed greater gains than their public-school counterparts in reading.

- Trading in bullish Ciena Corp.(CIEN) options reached a four-month high and the shares climbed on speculation that businesses including Nokia Siemens Networks may bid for the maker of fiber-optic gear for phone companies.

Wall Street Journal:

- Copenhagen’s Dodged Bullet. Modern men have lived through 20 sudden global warmings. Al Gore said the other week that climate change is "a principle in physics. It's like gravity. It exists." Sarah Palin agreed that "climate change is like gravity," but added a better conclusion: Each is "a naturally occurring phenomenon that existed long before, and will exist long after, any governmental attempts to affect it." Over time climates do change. As author Howard Bloom wrote in The Wall Street Journal last month, in the past two million years there have been 60 ice ages, and in the 120,000 years since the development of modern man, "we've lived through 20 sudden global warmings," and of course this was before--long before--"smokestacks and tail pipes." In truth, the world dodged a bullet in Copenhagen. There could have been significant damage to many nations' economies if the warming alarmists' full agenda had been adopted. But of course the game has not ended. Here in America, Mr. Obama, Congress and the Environmental Protection Agency all seem committed to regulating our behavior and consumption under the guise of addressing a crisis that is not a crisis. They will do so in a way that will not meaningfully reduce global temperatures, but will substantially hurt the economies and opportunities of the world's people.

- The U.K. government faces an 80% chance of a credit-rating downgrade if its deficit reduction plans remain as they are, according to Scott Mather, Pacific Investment Management Co.'s head of global portfolio management.

- Google(GOOG) this week is taking two dramatic steps to try to catapult devices using its Android mobile operating system into stronger competition with Apple's iPhone and Research in Motion's BlackBerry in the battle for supremacy in the super-smartphone category.

MarketWatch.com:

- CME Group Inc.(CME) closed 2009 year strongly, improving upon November's turnaround to growth with a 13% daily volume increase in December from a year ago, although its performance again fell short of smaller rival IntercontinentalExchange Inc.(ICE). ICE has been picking up market share in recent months, gaining as trading slowed at CME and then outpacing CME's growth since CME's turnaround.

CNBC:

- Apple(AAPL) announced that more than three billion applications—or apps—have been downloaded from its App Store by iPhone and iPod touch users worldwide.

- If the stock market holds to a pattern it has followed for most of the past 40 years, 2010 could be a big year for investors. Since 1973, a big advance on the first trading day of January has been a strong sign stocks will post robust gains for the rest of the year.

The Business Insider:

- David Tepper is one of the recovery's biggest success stories. His hedge fund, Apaloosa, has made $6.5 billion this year, a 120% gain after betting big on bank stocks and debt. In BusinessWeek today, he gets a glowing profile. "I don't think Warren Buffet holds a candle to him," says Alan Fournier, a former Appaloosa co-worker and founder of Pennant Capital Management LLC. From 1993 to this year, Tepper's average return is 38 percent, 30.7 percent net of fees. Warren Buffet's returns for that same time period average 12.3%.

- Securities-fraud class-action lawsuits fell 24 percent in 2009 as litigation related to the credit crunch, and especially subprime-mortgage losses, began to dry up, according to a study.

- Economists Don’t Know Jack: This Is Going to Be A Barburner Of a Recovery.

- David Rosenberg: Government Handouts Are Now 1/5^th Of The National Income. (graph)

LATimes:

- Democrats Reid, Pelosi ponder crafting Obama’s final healthcare bill behind closed doors. Since it's basically one-party rule in Washington nowadays, Democratic leaders including Harry Reid and Nancy Pelosi are seriously considering pushing President Obama's beloved healthcare legislation through Congress without the normal conference committee work involving both party's members from both houses. Such a select conference committee is normally charged with reconciling differing House and Senate bills on the same issue before final votes in each house on the compromise version. But since American voters collectively wanted so much change so badly in 2008, they handed over the White House, House of Representatives and Senate to Democrats with such lopsided majorities that, much as in Chicago, the ruling party doesn't really need any Republican help driving the differing bills through a blender to produce a final version, possibly by early February.

ABCNews:

- C-SPAN CEO Brian Lamb last week wrote to Congressional leaders asking that they "open all important negotiations, including any conference committee meetings, to electronic media coverage" as the House and Senate work to reconcile the differences between the House and Senate health care reform bills. "The C-SPAN networks will commit the necessary resources to covering all of these sessions LIVE and in their entirety," Lamb wrote. "We will also, as we willingly do each day, provide C-SPAN’s multi-camera coverage to any interested member of the Capitol Hill broadcast pool."

Gizmodo:

- Google(GOOG) Nexus One Liveblog.

SeekingAlpha:

- Smallcap Nanotech Company NVE(NVEC) Is Wade Slome’s Highest Conviction Holding – Here’s Why. Wade W. Slome, CFA, CFP is President and Founder of Newport Beach, California based Sidoxia Capital Management, LLC. He managed one of the ten largest growth funds in the country ($20 billion in assets under management) at American Century Investments, and currently manages a hedge fund in addition to separate customized accounts for a selective client base at his firm.

Politico:

- The top Republican on the Senate Judiciary Committee is pushing Attorney General Eric Holder to explore links between a jihadist rehabilitation program in Saudi Arabia and Yemeni extremists linked to the failed Christmas Day terror plot. Sen. Jeff Sessions (R-Ala.) on Tuesday rereleased a letter he sent last month to Holder demanding that the Department of Justice suspend a program that sends select Guantanamo detainees to Saudi Arabia to shed their extremist tendencies. The program has not been successful, Sessions contends, and his letter alleges that 11 of Saudi Arabia’s 85 most-wanted terrorists are “graduates of the Saudi program.”

InvestmentNews:

- In an effort to get its advisers to focus on snagging more of their existing clients’ assets, along with new clients, Wells Fargo Advisors LLC has introduced a new rewards program in its deferred-compensation plan.

HedgeFund.Net:

- There’s a new sheriff in town at the New York office of the Securities and Exchange Commission and he wants the hedge fund industry to listen up. “We have planned a number of significant sweeps of investment advisors,” George Canellos, the N.Y. SEC Regional Director tells HedgeFund.net. “In the last few months -- really in the last year or two -- we have tried to orient our program, especially the investment management program, more toward cause- and risk-based exams.” The Bernard Madoff $65 billion Ponzi scam, and more recently, an alleged $20 million insider trading scheme at hedge fund firm Galleon Group, has trained the SEC’s sights on the private investment industry. “Investment management, and especially hedge funds, is a big area of emphasis,” Canellos acknowledges.w sheriff in town at the New York office of the Securities and Exchange Commission and he wants the hedge fund industry to listen up

USA Today:

- ESPN is going 3D. The venerable sports network will launch ESPN 3D on June 11 with a World Cup soccer match, creating what it says will be the first all three-dimensional television network to the home. ESPN 3D expects to showcase at least 85 live sporting events during the first year. There'll be no reruns initially, so the network will be dark when there's no 3D event. Among other events planned for 3D broadcast: the Summer X Games (extreme sports), NBA games, college basketball and college football. ESPN is committing to the 3D network through June 2011.

Reuters:

- The number of financial advisers defecting from the biggest brokerage firms picked up in December after a recent lull, suggesting Wall Street's revolving door has not yet stopped spinning.

- Standard & Poor's on Tuesday said the U.S. speculative-grade default rate decreased to 10.9 percent in December, the first monthly decline since October 2007.

- The Federal Reserve is discussing re-entering the mortgage-backed securities market later this year if its buying power is needed to hold down interest rates, Market News said on Tuesday in a story citing Fed officials.

theInquirer:

- Intel(INTC) has taken the wraps off its upcoming series of Westmere processors, the 32nm version of the Nehalem architecture, with chips dubbed Clarkdale for the desktop version and Arrandale for mobile. Hitting the 'Tock' on Intel's TickTock process schedule, these LGA1156 Core i3 and i5 dual core processors can have a graphics unit and DDR3 memory controller integrated in the package, lowering production costs and system footprint as well as opening up a host of enhanced power management features and minimizing latency between the CPU, GPU and memory controller.

TimesOnline:

- Freed Guantanamo Inmates are Heading for Yemen to Join al-Qaeda Fight. At least a dozen former Guantánamo Bay inmates have rejoined al-Qaeda to fight in Yemen, The Times has learnt, amid growing concern over the ability of the country’s Government to accept almost 100 more former inmates from the detention centre. The Obama Administration promised to close the Guantánamo facility by January 22, a deadline that it will be unable to meet. The 91 Yemeni prisoners in Guantánamo make up the largest national contingent among the 198 being held. Six prisoners were returned to Yemen last month. After the Christmas Day bomb plot in Detroit, US officials are increasingly concerned that the country is becoming a hot-bed of terrorism. Eleven of the former inmates known to have rejoined al-Qaeda in Yemen were born in Saudi Arabia. The organisation merged its Saudi and Yemeni offshoots last year.

Guardian:

- Powerful American banks spending lavishly on lobbying are more likely to engage in high-risk lending and their shares have performed less well than others, a groundbreaking study by the International Monetary Fund has found. The in-depth research will prompt calls for a wholesale clean-up of Capitol Hill by the Obama administration. Lobbying by the finance, insurance and real estate (Fire) sector outstrips any other in the US economy. The study, entitled A Fistful of Dollars: Lobbying and the Financial Crisis, published by the IMF, reveals a stark correlation between lobbying by lenders and high loan-to-income loans.

MailOnline:

- Goldman Sachs(GS) is being widely blamed within the financial industry for igniting a war with the government over its bonus supertax. Rivals are privately incensed at the scale of the rewards the Wall Street giant is preparing to dole out in the forthcoming annual bonus round. The firm's largesse has forced many competitors to follow suit.

JerusalemPost:

- The Shin Bet (Israel Security Agency) is considering beefing up its teams of security guards stationed at Ben-Gurion Airport and on Israeli commercial flights, The Jerusalem Post has learned.