Tuesday Watch

Late-Night Headlines
Bloomberg:
- News Corp. Chairman Rupert Murdoch said his company is in "very friendly" talks to acquire voting shares held by John Malone's Liberty Media Corp.
- The Federal Reserve may raise its interest-rate target just two or three more times because of a "soft patch" that is emerging in the global economy, according to Paul McCulley, a managing director at PIMCO.

NY Times:
- Iran is arranging oil and gas deals with fast-growing countries amid threats of sanctions from the US and Europe.

London-based Times:
- The UK ruling Labour party has increased its lead over the opposition Conservative party as 71% of voters forecast Prime Minister Tony Blair's government to win a third term in office in the May 5 election.

Economic Daily News:
- A Taiwan cabinet fund, a private bank and the Alaskan state government of the US will set up a $200 million venture to jointly invest in energy companies in the Asia-Pacific region.

Australian Financial Review:
- General Re Corp. and National Indemnity Co., units of Warren Buffett's Berkshire Hathaway, are among defendants in a $307 million Australian suit by the liquidator of failed HIH Insurance Ltd.

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on GE, RE, ACN, DIS, NSM and PKG.

Night Trading
Asian Indices are +.75% to +1.25% on average.
S&P 500 indicated +.18%.
NASDAQ 100 indicated +.53%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
ASO/.48
AV/.17
BOL/.51
BSX/.51
CDWC/.71
CD/.24
CKFR/.36
CAKE/.24
KO/.43
DHI/.80
EMC/.11
FRX/.40
FCX/.55
GM/-1.49
ITW/1.06
INTC/.31
JCI/.85
JNJ/.92
JNPR/.15
LLTC/.32
LU/.04
MER/1.18
MGG/.75
PFE/.53
RSH/.32
STX/.37
SYK/.40
WFC/1.09
YHOO/.11

Splits
GGB 3-for-2
PIXR 2-for-1

Economic Releases
8:30 EST
- The Producer Price Index for March is estimated to rise .6% versus a .4% increase in February.
- The PPI Ex Food & Energy for March is estimated to increase .2% versus a .1% gain in February.
- Housing Starts for March are estimated to fall to 2090K versus 2195K in February.
- Building Permits for March are estimated to fall to 2090K versus 2107K in February.

BOTTOM LINE: Asian indices are higher, spurred by gains in technology stocks in the region. I expect US equities to open mixed. However, stocks may rally later in the day on short-covering and bargain-hunting after the PPI report. The Portfolio is 75% net long heading into tomorrow.

Monday Close

Indices
S&P 500 1,145.98 +.29%
DJIA 10,071.25 -.16%
NASDAQ 1,912.92 +.25%
Russell 2000 585.33 +.78%
DJ Wilshire 5000 11,281.60 +.33%
S&P Barra Growth 554.25 +.12%
S&P Barra Value 587.43 +.47%
Morgan Stanley Consumer 575.56 -.59%
Morgan Stanley Cyclical 698.34 +.79%
Morgan Stanley Technology 426.15 +.29%
Transports 3,405.31 +.66%
Utilities 358.81 +.61%
Put/Call .96 -36.42%
NYSE Arms .94 -42.87%
Volatility(VIX) 16.56 -6.56%
ISE Sentiment 133.00 -6.34%
US Dollar 84.00 -.66%
CRB 297.69 -.38%

Futures Spot Prices
Crude Oil 50.49 +.26%
Unleaded Gasoline 150.20 +.51%
Natural Gas 6.94 -.14%
Heating Oil 144.76 +.37%
Gold 429.00 unch.
Base Metals 124.64 +.07%
Copper 144.50 unch.
10-year US Treasury Yield 4.27% +.70%

Leading Sectors
Steel +3.0%
Gold & Silver +1.92%
Energy +1.71%

Lagging Sectors
Drugs -.74%
Hospitals -1.19%
HMOs -1.76%

After-hours Movers
TXN +5.67% after beating 1Q estimates and raising 2Q outlook.

Evening Review
Detailed Market Summary
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Timely Economic Charts
PM Market Call
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
Goldman Sachs:
- Reiterated Outperform on MMM, MDT and BAC.

Merrill Lynch:
- Raised RRD to Buy, target $38.

Afternoon/Evening Headlines
Bloomberg:
- Iran ordered Al-Jazeera to suspend operations at its Tehran bureau for an unspecified period, following its reporting on civil unrest along the Iraq border.
- AstraZeneca’s Iressa doesn’t improve survival for lung-caner patients, according to US government researchers who decided to halt a study of the company’s medicine.

Wall Street Journal:
- Walt Disney plans to move “Monday Night Football” from its ABC television network to ESPN in 2006.

Financial Times:
- The US Treasury Department may name China as a currency manipulator for the first time since 1994.

BOTTOM LINE: US stocks finished mixed today as continuing worries over slowing growth offset bargain-hunting. The Portfolio finished slightly lower on losses in my Oil Tanker shorts and Retail longs. I did not trade in the afternoon, thus leaving the Portfolio 75% net long. The tone of the market was mixed into the afternoon as the advance/decline finished almost unchanged, most sectors were higher and volume was about average. Measures of investor anxiety were mostly lower into the afternoon. Overall, today’s market action was mixed, considering another decline in the CRB Index, the market’s oversold state and Asia’s losses. Investor anxiety over the upcoming PPI/CPI reports is high. I believe a larger-than-expected increase in these measures of inflation is already factored in at this point. Given the market’s positive reaction to the TXN report after the close, I would expect US stocks to rise tomorrow after the PPI report.

Mid-day Scoreboard

Indices
S&P 500 1,146.47 +.34%
DJIA 10,084.55 -.03%
NASDAQ 1,916.12 +.42%
Russell 2000 585.23 +.77%
DJ Wilshire 5000 11,286.05 +.37%
S&P Barra Growth 555.31 +.31%
S&P Barra Value 588.58 +.66%
Morgan Stanley Consumer 576.39 -.44%
Morgan Stanley Cyclical 699.22 +.92%
Morgan Stanley Technology 427.49 +.61%
Transports 3,428.14 +1.31%
Utilities 359.51 +.80%
Put/Call .94 -37.75%
NYSE Arms .91 -44.60%
Volatility(VIX) 16.68 -5.98%
ISE Sentiment 122.00 -14.08%
US Dollar 83.97 -.70%
CRB 297.80 -.34%

Futures Spot Prices
Crude Oil 50.15 -.67%
Unleaded Gasoline 148.40 +.01%
Natural Gas 6.91 -1.24%
Heating Oil 143.70 -1.57%
Gold 429.00 +.59%
Base Metals 124.64 +.07%
Copper 144.50 unch.
10-year US Treasury Yield 4.25% +.33%

Leading Sectors
Steel +3.26%
Gold & Silver +1.76%
Banks +1.27%

Lagging Sectors
Drugs -.81%
Hospitals -1.25%
HMOs -1.87%

BOTTOM LINE: US stocks are mixed mid-day as continuing worries over slowing growth are offsetting bargain-hunting. The Portfolio is slightly lower on losses in my Gaming and Retail longs. I took profits in a few shorts this morning and added a few new longs from various sectors, thus leaving the Portfolio 75% net long. One of my new longs is PIXR and I am using a stop-loss of $92 on this position. The tone of the market is modestly positive as the advance/decline line is slightly higher, most sectors are higher and volume is above average. Measures of investor anxiety are mostly lower. Today’s overall market action is neutral, considering the continuing decline in commodity prices, the market’s oversold state and Asia’s steep losses. The fact that commodities are unable to rally after recent losses and today’s fall in the US dollar is a positive. Energy-related stocks are in a precarious position as gains in oil prices will spur further talk of an impending recession, which would likely result in substantially lower oil prices. As well, a clear break below $50/bbl. in crude futures would increase speculation that the stocks are too expensive given deteriorating fundamentals. I expect US stocks to trade mixed-to-higher into the close on short-covering, lower commodity prices and bargain-hunting.

Today's Headlines

Bloomberg:
- The European Commission said the economy of the euro region risks slowing more abruptly than forecast as the currency’s gains erode exports and record oil prices undermine investment and consumer spending.
- Adobe Systems agreed to buy Macromedia for about $3.4 billion to add Flash Web-design programs to its offerings.
- GE agreed to buy Bombardier’s inventory finance division for about $1.4 billion.
- Banc of America Securities’ Thomas McManus, who urged money managers to buy shares as the market bottomed in 2002, recommended for the first time in more than two years that investors increase their US stock holdings.
- The US dollar fell against the euro and yen on speculation slowing economic growth and low Treasury yields will curb returns on US assets.

Wall Street Journal:
- China auto stylists are developing distinctive designs to meet demands from local consumers for something that’s uniquely Chinese.
- The US and the UK are getting closer to an agreement to provide billions of dollars in debt relief for impoverished countries.

Automotive News:
- Ford Motor plans temporary shutdowns later this quarter at plants that produce mid-size and large sport-utility vehicles.

NY Times:
- Goldman Sachs, Merrill Lynch and Lehman Brothers are among investment banks that have contacted some of Morgan Stanley’s managing directors in an effort to hire them.

LA Times:
- Sony’s Sony Pictures Entertainment unit is building a digital library of its movies and television shows so filmmakers can use them more easily in DVDs, digital cable and Internet downloads.

Gulf News:
- United Arab Emirates Oil Minister Mohamed al-Hamli said there is no “urgency” for OPEC to boost oil-output quotas in May.

AFP:
- OPEC will increase output by 500,000 barrels a day in May to help meet growth in demand, citing the group’s president Sheikh Ahmad Fahd al-Sabah.

Links of Interest

Market Internals
Movers & Shakers
NYSE OrderTrac
I-Watch Sector Overview
NYSE Unusual Volume
NASDAQ Unusual Volume
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Hot Spots
Option Dragon
Real-time Intraday Chart/Quote