Links of Interest

Market Snapshot Commentary
Market Performance Summary
Style Performance
Sector Performance
WSJ Data Center
Top 20 Biz Stories
IBD Breaking News
Movers & Shakers
Upgrades/Downgrades
In Play
NYSE Unusual Volume
NASDAQ Unusual Volume
Hot Spots
Option Dragon
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Intraday Chart/Quote
Dow Jones Hedge Fund Indexes

Thursday Watch

Late-Night Headlines
Bloomberg:
- US Treasury Secretary Henry Paulson will tell Congress tomorrow that Fannie Mae(FNM) and Freddie Mac(FRE) should be allowed to temporarily buy home loans above $417,000 if Congress creates a tougher regulator for the two largest US mortgage finance companies.
- Overnight yields on US asset-backed commercial paper fell to the lowest in more than a year after the Fed cut benchmark interest rates by 50 basis points to stem a credit crunch.
- Japan’s manufacturers became optimistic this quarter, a government report showed, indicating they’re confident the economy will rebound from a contraction.
- Israel was awarded “developed” status by FTSE Group, helping its stock market attract more of the estimated $2.5 trillion in funds that track the index provider’s global benchmarks.
- Macquarie Bank Ltd. is planning the first sale of mortgage-backed bonds in Australia in two months, tapping a market shut down by the US subprime mortgage rout.

Wall Street Journal:
- ABC’s AOL Pact Marks Web’s Growing TV Allure.

MarketWatch.com:
- Korea’s status as emerging market seen changing. Move by FTSE expected; rival MSCI sticking with developing country tag.
- Bear(BSC) may have slipped in prime brokerage: analyst. Morgan Stanley’s(MS) record prime brokerage result raises questions, Mayo says.
- With its impressive Tuesday rally, the stock market has risen to within shouting distance of the all-time high set in mid-July. And yet the editor of the average market timing investment newsletter is not nearly as optimistic today as then. That, in a nutshell, is why contrarians expect the stock market to continue to have an upside bias.

NY Times:
- NBC to Offer Downloads of Its Shows.

Financial Times:
- China’s government will freeze prices it controls in a bid to stem inflation, now at its highest rate in more than a decade.
- CIT Group(CIT), a leading US commercial finance company, said on Wednesday it would sell its subprime loan portfolio to Freddie Mac(FRE) in a move to quit the home-lending business, triggering a sharp rally in its shares.

Reuters:
- Chinese banks to invest in US, UK stocks via QDII.

Late Buy/Sell Recommendations
Citigroup:
- August appears to have been a strong month for Google(GOOG). Google “core” queries were up 1.68% M/M(as defined by comScore, this metric excludes properties like YouTube, etc.), and Google was the only major player to post M/M growth. Google’s share increased 130 bps M/M to 56.5%, tying its record high in May. Yahoo!’s(YHOO) queries declined 1.5% M/M, while its share dropped 20 bps M/M to 23.3%. Microsoft(MSFT) share dropped to 11.3%, down 100 bps M/M following an 8.9% M/M decline in queries. We believe much of the decline is due to lower Club Live usage but currently lack empirical support for this hypothesis.

Night Trading
Asian Indices are unch. to +.75% on average.
S&P 500 futures -.27%.
NASDAQ 100 futures -.28%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Pre-market Stock Quote/Chart
Before the Bell CNBC Video(bottom right)
Global Commentary
WSJ Intl Markets Performance
Commodity Movers
Top 25 Stories
Top 20 Business Stories
Today in IBD
In Play
Bond Ticker
Economic Preview/Calendar
Daily Stock Events
Macro Calls
Upgrades/Downgrades
Rasmussen Business/Economy Polling
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
- (COMS)/.02
- (AM)/-.05
- (BSC)/1.79
- (CCL)/1.62
- (CC)/-.12
- (CAG)/.29
- (FDX)/1.55
- (GS)/4.34
- (NKE)/.87
- (ORCL)/.21
- (SCHL)/-.47
- (SCS)/.24
- (TEK)/.39

Upcoming Splits
- None of note.

Economic Releases
8:30 am EST
- Initial Jobless Claims for last week are estimated to rise to 321K versus 319K the prior week.
- Continuing Claims are estimated to fall to 2575K versus 2585K prior.

10:00 am EST
-.Leading Indicators for August are estimated to fall .4% versus a .4% gain in July.

12:00 pm EST
- The Philly Fed for September is estimated to rise to 2.6 versus 0.0 in August.

Other Potential Market Movers
- The Fed’s Bernanke speaking on the mortgage market, weekly EIA natural gas inventory report, (WW) analyst meeting, (NDAQ) analyst day, (CMS) analyst meeting, (BRCD) analyst meeting, RBC Consumer Conference, DA Davidson Engineering & Construction Conference, ThinkEquity Growth Conference, Merrill Lynch Global REITs Conference and Maxim Growth Conference could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by commodity and real estate stocks 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.

Stocks Build on Yesterday's Sharp Gains on Improving Credit Markets and Lower Inflation

Indices
S&P 500 1,529.03 +.61%
DJIA 13,815.56 +.55%
NASDAQ 2,666.48 +.56%
Russell 2000 817.40 +1.34%
Wilshire 5000 15,335.25 +.65%
Russell 1000 Growth 613.30 +.55%
Russell 1000 Value 858.55 +.64%
Morgan Stanley Consumer 741.15 +.93%
Morgan Stanley Cyclical 1,056.79 +.69%
Morgan Stanley Technology 653.29 +.20%
Transports 4,905.56 -.55%
Utilities 511.50 +1.31%
MSCI Emerging Markets 142.99 +2.50%

Sentiment/Internals
Total Put/Call .96 -8.57%
NYSE Arms .87 +197.87%
Volatility(VIX) 20.03 -1.57%
ISE Sentiment 155.0 +31.36%

Futures Spot Prices
Crude Oil 81.84 +.40%
Reformulated Gasoline 209.51 +1.69%
Natural Gas 6.14 -6.52%
Heating Oil 224.10 -.06%
Gold 729.10 +.75%
Base Metals 244.04 +4.46%
Copper 357.0 +3.54%

Economy
10-year US Treasury Yield 4.53% +6 basis points
US Dollar 79.32 +.14%
CRB Index 329.57 +.85%

Leading Sectors
REITs +1.70%
Oil Service +1.63%
Telecom +1.36%

Lagging Sectors
Gaming -.50%
Road & Rail -1.45%
Coal -1.77%

Evening Review
Market Performance Summary
WSJ Data Center
Sector Performance
ETF Performance
Style Performance
Commodity Movers
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Commentary
After-hours Movers
After-hours Stock Quote
In Play

Afternoon Recommendations
RBC:
- Rated (DIS) Outperform, target $39.

Afternoon/Evening Headlines
Bloomberg:
- US stocks extended their biggest rally in four years, buoyed by speculation Federal Reserve interest-rate cuts will help contain the housing slump and spur profit growth.
- Monolithic Power(MPWR), a leading fables manufacturer of high-performance analog and mixed-signal semiconductors, today announced increased revenue expectations for the third quarter of 2007 on strong demand for notebook computers and flat-panel TVs. The stock is jumping 9.4% in after-hours trading.
- US SEC Chairman Christopher Cox said the agency may expand its scrutiny of hedge funds for insider trading by asking more firms about their relationships with public companies.

NY Times:
- Dan Rather, whose career at CBS News ground to an inglorious end 15 months ago over his role in an unsubstantiated report questioning President Bush’s Vietnam-era National Guard service, filed a $70 million lawsuit this afternoon against the network, its corporate parent and three of his former superiors.

BOTTOM LINE: The Portfolio finished higher today on gains in my Biotech longs, Internet longs and Medical longs. I did not trade in the final hour, thus leaving the Portfolio 100% net long. The tone of the market was very positive today as the advance/decline line finished substantially higher, almost every sector rose and volume was above average. Measures of investor anxiety were slightly above-average into the close, despite today’s gains. Today's overall market action was bullish. Small-caps outperformed substantially today. I have dozens of stocks on my monitor pages with 2%-4% gains. Google (GOOG) is really starting to gain steam. I still expect the stock to easily exceed $600 by year-end. It remains my largest equity long position. Apple (AAPL) sold off into the close on option backdating rumors. Piper Jaffray said that there wasn't anything to these rumors and reiterated its buy on the shares. I am sure the bears will pull out all the stops to try and prevent this stock from breaking out. I still expect the shares to hit $180 before year-end, and it remains my second-largest long position. I sense many investors are hoping for something to come out of the clear blue to take stocks lower. Tomorrow's Bear Stearns (BSC), Circuit City (CC) and FedEx (FDX) reports could result in some early weakness in the major averages. I still think any near-term weakness will remain muted and short-term in nature as I suspect far too many bulls are still underinvested and bears are too short given the news over the last two days.

Stocks Building on Yesterday's Sharp Gains into Final Hour on Rapidly Improving Credit Markets, Low Inflation Reading

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Internet longs, Medical longs and Computer longs. I have not traded today, thus leaving the Portfolio 100% net long. The overall tone of the market is positive today as the advance/decline line is higher, almost every sector is gaining and volume is above average. Morgan Stanley (MS) reported disappointing results, however the brokers are surging another .65% today after yesterday’s huge move higher. This, along with Lehman's (LEH) report, just shows how much bad news is already priced into this sector. Moreover, Morgan Stanley said the worst of the credit crisis is over. Financial sector credit default swaps have plunged the last two days. The CPI for August came in below estimates and is rising at a 2.0% rate year-over-year, well below the long-term average of 3.1%. The 10-year/TIPS spread, a gauge of inflation expectations, is falling 6 basis points, to 2.32%. However, the 10-year yield is rising 5 basis points on a flight from safety. The dollar-based three-month Libor rate is plunging 35 basis points today, to 5.24%, the lowest since May 2006. The 10-year swap rate is plunging 12% today, to 60.25 basis points, over Treasuries. The 30-year average jumbo fixed-rate mortgage is dropping another 8 basis points today, to 7.03%, down 31 basis points in six days. Weekly mortgage applications rose 2.4%, boosted by a 4.6% surge in refis. According to Rasmussen, consumer confidence is beginning to improve, with only 17% rating their finances as poor. Oil inventories fell more than estimates, but gas supplies unexpectedly rose. According to the API, U.S. oil demand was down 2.2% in August. The yen is lower against the U.S. dollar again, which is a positive. A number of sectors are rising more than 1% again today. The VIX fell below 20 for the first time since Aug. 8. Despite the last two days gains, my intraday gauge of investor angst is only around average levels. The LCDX leveraged loan index, which tracks prices on credit derivative swaps for U.S. junk bonds, is improving rapidly. It is now back to levels seen in mid-July, right before the credit market turmoil began to accelerate. This is another large positive. A significant leveraged buyout right now certainly would catch many by surprise. Given the news over the last two days, I am actually surprised stocks aren't up more. Most U.S. stocks are still cheap given the macro backdrop. Back during August, I said that I strongly disagreed with those who said that a Fed rate cut wouldn't help the economy or stocks. The evidence over the last two days overwhelmingly backs up that view. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, performance anxiety, bargain-hunting and less economic pessimism.

Today's Headlines

Bloomberg:
- The European Central Bank might have to cut interest rates, even if the immediate outlook for growth and inflation suggests otherwise, because a general credit crisis could cause a recession, according to Eric Chaney, Morgan Stanley’s chief economist for Europe.
- Clean Energy Fuels Corp. rose the most since May after co-founder Boone Pickens said the company is “ahead of the curve” by selling natural gas that the US will use as a transportation fuel because it’s “going green.”
- Morgan Stanley(MS) said it sees no hedge fund defaults in its prime brokerage unit.
- The risk of lending to US companies fell to the lowest in almost a month on optimism the Fed’s rate cut will coax investors back to the corporate debt market, according to credit-default swap traders.
- Honeywell Intl.(HON) won $16 billion contract to build and service mechanical systems for Airbus SAS’s A350 wide-body plane, work that will take place over at least two decades.
- Carlyle Group co-founder David Rubenstein, who was forced to delay the sale of cable-television operator Insight Communications, said the Fed’s interest-rate cut may help clear a bottleneck of transactions.
- The Bush Administration reversed policy, allowing Fannie Mae(FNM) and Freddie Mac(FRE), the nation’s two largest providers of mortgage finance, to expand their investments in an effort to make mortgages easier to get.

Wall Street Journal:
- Defense Secretary Robert Gates sketched out a long-term vision for securing Iraq that includes a continuing American military force that is a fraction the size of the one there today, no permanent US bases and a significant Navy and Air Force presence in the Persian Gulf region.

NY Times:
- To gain an edge in attracting top talent, some NY hedge funds offer their employees an amenity that once was available only in residential buildings: a gym right in the workplace.

CNNMoney.com:
- China may import as much as 10 million metric tons of liquefied natural gas a year by 2010, citing Zeng Jian, vice commissioner of the Economic and Trade Commission of Guangdong province.

Dow Jones:
- Citigroup(C), the largest US bank, is planning raises for the majority of the brokers in its Smith Barney brokerage unit. The increase, scheduled to be announced in October by the NY-based bank, will boost the pay of 80% of Smith Barney’s brokers, especially those who generate $300,000 or more annually in commissions and fees.

Reuters:
- The Federal Reserve’s deep cut in benchmark US interest rates may revive the loan market by early 2008, a Bear Stearns(BSC) director and other top executives said at Reuters Loan Pricing Corp.’s Gold Sheets conference on Wednesday.

Daily Telegraph:
- Lloyds TSB Group Plc may be working with UBS AG on a possible bid for at least some of Northern Rock Plc, the UK lender bailed out by the Bank of England last week.