Today's Headlines

Bloomberg:
- The cost of protecting corporate bonds from default fell to the lowest in seven days as money- market rates declined a 14th day and investors speculated U.S. regulators may enact a $500 billion plan to guarantee troubled mortgages. Benchmark credit-default swap indexes in the U.S. and Europe fell for a fourth day after the U.S. Federal Reserve yesterday cut its benchmark interest rate, fueling speculation the European Central Bank and the Bank of England will do the same next week. Contracts on banks including Morgan Stanley and Citigroup Inc. fell to the lowest in almost seven weeks. Credit-default swaps on the Markit CDX North America Investment Grade Index of 125 companies in the U.S. and Canada decreased 10.5 basis points to 197 as of 9:14 a.m. in New York, according to Phoenix Partners Group. Credit-default swaps on Morgan Stanley fell 18.5 basis points to a mid-price of 397.5 basis points, and Goldman Sachs declined 18 basis points to 299, according to CMA Datavision in London. Both are at the lowest since the week before Lehman Brothers Holdings Inc. filed for bankruptcy protection. Swaps on Citigroup fell 7 to 195 and JPMorgan Chase & Co. fell 6 to 106, CMA data show. Contracts on the financial arm of General Electric Co. declined 27 basis points to 522.5.

- Copper and zinc fell on the London Metal Exchange as an expansion of stockpiles monitored by the bourse increased speculation that supplies are outpacing demand. Copper inventories jumped 6,575 metric tons, or 3 percent, to 223,875 tons, the biggest jump in three weeks. Zinc stockpiles are the biggest since 2006.

- Crude oil fell on concern that the biggest decline in the U.S. economy since 2001 will further curb fuel demand in the world's biggest energy consuming country. U.S. fuel demand during the past four weeks averaged 18.9 million barrels a day, down 7.8 percent from a year ago, an Energy Department report showed yesterday.

- Money-market rates fell after the Federal Reserve lowered borrowing costs and agreed to pump $120 billion into Brazil, Mexico, South Korea and Singapore to help alleviate demand for dollar-based funding. The swap agreements with central banks, which also followed rate cuts from China to Norway, led to a drop in three-month rates in Asia. The London interbank offered rate, or Libor, for three-month loans in dollars slid 23 basis points to 3.19 percent today, its 14th consecutive drop, according to the British Bankers' Association. The overnight dollar rate tumbled 41 basis points to 0.73 percent, an all-time low, the BBA said.

- Corporate borrowing in the commercial paper market soared the most on record after the Federal Reserve began buying the debt directly from issuers. U.S. commercial paper outstanding rose by $100.5 billion, or 6.9 percent, to a seasonally adjusted $1.55 trillion for the week ended Oct. 29, the Fed said today in Washington. It was the first gain in seven weeks, reversing a 20 percent decline during the previous six weeks. Financial paper led this week's gain, rising $69.4 billion, or 12.4 percent, to $628.8 billion. ``The introduction of the commercial paper program is an enormous jolt of not just liquidity but stimulus to the economy,'' Tom Sowanick, chief investment officer at Clearbrook Financial LLC in Princeton, New Jersey, said in a Bloomberg Television interview. Clearbrook manages about $20 billion.

- MetLife Inc.(MET), the biggest US life insurer, is scaling back investments in hedge funds after a loss on the holding in the third quarter. MetLife reported a 38% drop in quarterly profit yesterday as hedge funds, private equity investments and other partnerships returned $120 million less than forecast.

NY Times:
- Starbucks Corp.(SBUX) will add outlets in urban areas and focus on serving drinks to satisfy local preferences, citing an interview with Arthur Rubinfeld, president of global development. The company also plans to redecorate store interiors to emphasize its roots in premium coffee and eliminate generic art, citing Rubinfeld.

Pension & Investments:

- Citadel Alternative Asset Management is closing Fusion, its $1 billion hedge fund of funds, said a source with knowledge of the firm. About 95% of the assets are internal, and that money will be moved to two CAAM seeding and incubation funds, Discovery and Pioneer. The 5% from external investors will be returned.

Reuters:
- Angola has cut the estimated benchmark oil price in its draft 2009 budget to $55 per barrel from $65, state-owned news agency Angop reported on Wednesday, citing a draft document.

Bear Radar

Style Underperformer:
Mid-cap Value (+.37%)

Sector Underperformers:
Insurance (-2.94%), HMOs (-1.40%) and Papers (-1.35%)

Stocks Falling on Unusual Volume:
RE, IRIS, LKQX, BBBB, SONO, LMDIA, BABY, SYMC, AVP, CI, AIZ and CTL

Stocks With Unusual Put Option Activity:
1) BIIB 2) WFR 3) HUM 4) RSH 5) PG

Bull Radar

Style Outperformer:
Small-cap Growth (+2.31%)

Sector Outperformers:
Gaming (+6.87%), Homebuilders (+5.72%) and Hospitals (+5.69%)

Stocks Rising on Unusual Volume:
DB, BW, CPTS, STRA, LHCG, FDRY, FSLR, AVAV, CVLT, WYNN, VARI, NATI, LPHI, ITRI, NIHD, GRMN, CETV, AUXL, IPCC, SIAL, ENER, HUGH, SNN, LVS, WF, STE, JAH, SHI, GVA and IR

Stocks With Unusual Call Option Activity:
1) UTHR 2) SPLS 3) DOX 4) HBC 5) CA

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
Exchange Volume vs. Average
NYSE Unusual Volume
NASDAQ Unusual Volume
Hot Spots
Option Dragon
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Real-Time Intraday Quote/Chart
Dow Jones Hedge Fund Indexes

Thursday Watch

Late-Night Headlines
Bloomberg:
- The cost of protecting Asia-Pacific bonds from default tumbled, according to traders of credit- default swaps. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan, including Thailand and Hong Kong's Hutchison Whampoa Ltd., fell 70 basis points to 490 and earlier traded at 480, according to ICAP Plc data as of 8:19 a.m. in Hong Kong. The iTraxx Australia index was quoted 30 basis points lower at 280 in Sydney, Citigroup Inc. data show. The Markit iTraxx Japan index fell 20 basis points to 270 at 9:38 a.m. in Tokyo, according to prices from Morgan Stanley.

- The Federal Reserve agreed to provide $30 billion each to the central banks of Brazil, Mexico, South Korea and Singapore, expanding its effort to unfreeze money markets to emerging nations for the first time. The Fed set up ``liquidity swap facilities with the central banks of these four large systemically important economies'' effective until April 30, the central bank said yesterday in a statement. The arrangements aim ``to mitigate the spread of difficulties in obtaining U.S. dollar funding.''

- The US dollar and the yen fell as a wave of global interest rate cuts sparked a rally in Asian stocks, bolstering demand for higher-yielding assets. The greenback slid to a one-week low against the euro after the Federal Reserve cut its target lending rate to the lowest in a half-century. The yen slumped for a third day versus the euro on speculation the Bank of Japan will lower borrowing costs when it meets tomorrow. South Korea's won jumped the most in a decade after the Fed extended swap lines to the nation's central bank to help ease a shortage of the U.S. currency.

- Nike Inc.(NKE) Chairman Philip Knight has pledged $100 million for cancer research to the Oregon Health & Science University. The donation from Knight and his wife, Penny, is the largest gift in the Portland, Oregon, school's history, the university said in a statement today.

- Delta Air Lines Inc.(DAL) and Northwest Airlines Corp. won U.S. approval to combine, clearing the last regulatory hurdle to becoming the world's largest carrier.

Wall Street Journal:
- India's employment boom in its flagship industries -- one of the most visible signs of the vast nation's rapid development -- could be set to burst in dramatic fashion. Many Indian companies in sectors including technology, financial services and construction are likely to cut one quarter or more of their employees in coming weeks, warned the Associated Chambers of Commerce and Industry of India, a trade group, on Wednesday.

CNBC.com:

- Kenneth Heebner, manager of last year’s top US equity fund, said stocks will rise with a “buying panic” by investors who put cash to work. The market will rise “appreciably” from current levels, Heebner said. Asset managers who are holding “massive” amounts of cash will need to resume investing in stocks to produce positive returns, he said. “As the market starts up, there is going to be the same buying panic as the selling panic we have had in the last month,” Heebner said. (video)

- US regulators are working on a new federal program that could provide government guarantees for up to $600 billion of home mortgages to help prevent foreclosures, a source familiar with the discussions told Reuters on Wednesday. The plan, being hammered out by the Federal Deposit Insurance Corp and the U.S. Treasury, could provide guarantees for up to 3 million at-risk mortgages, said the source, who spoke on condition of anonymity because the program is still being discussed.

MarketWatch.com:
- How will Apple(AAPL) put cash hoard to work?

Schaeffers Research.com:
- Hedge Fund Trauma. Examining the heavy selling suffered by the hedge-fund community.

Reuters:

- Dow Jones news service corrected a report that had quoted General Electric Co's(GE) top executive about 2009 earnings after the report battered GE shares and sparked a late stock-market sell-off. The report had helped push the Dow Jones industrial average and Standard & Poor's 500 Index down from near session highs at 3:30 p.m. into negative territory 2 minutes before the close. The correction made clear that GE Chief Executive Jeff Immelt had not forecast 2009 profit to be flat. The news service said Immelt had been speaking hypothetically when he told a business group in Spain that he would ask his managers to maintain profits even if revenues at their businesses fell as much as 10 percent to 15 percent.

- Coffee chain Starbucks Corp (SBUX) may have weathered the worst of a sales slowdown as growth improved somewhat this month, its top executive said on Wednesday, and its share rose 8 percent. "The downturn continued in the fourth quarter, and we did see a slight improvement in the first weeks of Q1 ... which might suggest that Starbucks may have hit bottom in terms of negative transactions in our fourth quarter," Starbucks Chief Executive Howard Schultz told reporters at a company leadership conference in New Orleans.

- The United States and China kicked off what is likely to be a global round of interest rate cuts, part of a barrage of measures deployed around the world to fight a deep economic slowdown.

- General Motors Corp(GM) and Cerberus Capital Management have resolved the major issues in a proposed GM-Chrysler merger, but the final form of any deal would depend on the financing and government support available, sources familiar with the talks said on Wednesday.

Financial Times:
- GM calls bottom of downturn. General Motors(GM) on Wednesday said it had continued to feel the impact of the financial crisis in its third quarter sales but that the US had reached the bottom of its economic downturn.

Telegraph:

- Porsche and VW share row: how Germany got revenge on the hedge fund ‘locusts’. Many fund managers believe they are victims of a stitch-up orchestrated by the German government and Porsche. The German establishment has never tried to hide its contempt for them, with a leading politician referring to hedge fund managers as "locusts". One trader went as far as describing this week's events as "payback".

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (NLC), target $17.

- Reiterated Buy on (BWA), target $32.

- Upgraded (SLAB) to Buy, target $33.

Night Trading
Asian Indices are +1.5% to +6.5% on average.
S&P 500 futures +2.3%.
NASDAQ 100 futures +2.41%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
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Before the Bell CNBC Video(bottom right)
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Top 25 Stories
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Today in IBD
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Earnings of Note
Company/EPS Estimate
- (MYL)/.11

- (CVS)/.60

- (CBS)/.41

- (ATK)/1.81

- (LEA)/-.10

- (EXPE)/.40

- (ABC)/.70

- (TBL)/.46

- (ENR)/1.18

- (IP)/.77

- (ICE)/1.04

- (CI)/1.06

- (EK)/.24

- (MOT)/.01

- (APA)/3.72

- (IGT)/.31

- (MCRS)/.33

- (SGMS)/.31

- (CHK)/.88

- (OSG)/3.56

- (BMC)/.51

- (MEE)/.74

- (ERTS)/-.06

- (ESRX)/.78

- (MNST)/.34

- (SQNM)/-.17

- (AKAM)/.39

- (CL)/.98

- (SGR)/.71

- (KLAC)/.34

- (WYNN)/.59

- (JAVA)/-.06

- (MRO)/2.33

- (MFE)/.49

- (BJS)/.55

- (AVP)/.50

- (MORN)/.51

- (XOM)/2.40

Economic Releases
8:30 am EST

- Advance 3Q GDP is estimated to fall .5% versus a 2.8% gain in 2Q.

- Advance 3Q Personal Consumption is estimated to fall 2.4% versus a 1.2% increase in 2Q.

- Advance 3Q GDP Price Index is estimated to rise 4.04% versus a 1.1% gain in 2Q.

- Advance 3Q Core PCE is estimated to rise 2.5% versus a 2.2% increase in 2Q.

- Initial Jobless Claims are estimated to fall to 475K versus 4478K the prior week.

- Continuing Claims are estimated to rise to 3735K versus 3720K prior.

Upcoming Splits
- None of note

Other Potential Market Movers
- The weekly EIA natural gas inventory report, BIO Investor Forum, (SPLS) analyst conference and (WAG) analyst meeting could also impact trading today.

BOTTOM LINE: Asian indices are sharply higher, boosted by technology and commodity stocks in the region. I expect US equities to open higher and to maintain gains into the afternoon. The Portfolio is 100% net long heading into the day.