Today's Headlines

Bloomberg:
- The number of mortgage applications filed in the US jumped last week as a drop in borrowing costs caused refinancing to almost double.
- Commodities rallied for the third straight day on a decline in the US dollar, a decline in US energy stockpiles and continuing historic speculation by investment funds.
- Emerging-market bonds are falling, led by Argentine securities, after a worse-than-expected report on US durable goods. The so-called spread on Argentine debt swelled 17 basis points, the most in emerging markets, to 5.52 percentage points.
- Apple Inc. has placed a manufacturing order for 109 million updated iPhones that can download from the Internet at a faster rate than current models, Gartner Inc. said. The new phones operated on third-generation, or 3G, wireless networks, analyst Ken Dulaney said today.
- Google Inc.(GOOG) led US search engines in market share for February with 58.7%. Yahoo! came in second at 17.6%.

Wall Street Journal:
- Barack Obama is drawing fire for pledging to hold direct talks with foreign adversaries, an approach both Hillary Clinton and John McCain say they will hit hard. Critics in the foreign-policy establishment and from rival presidential camps said his idea could undercut pro-Western forces and legitimize leaders whose power the US wants to undermine, including Iranian President Mahmoud Ahmadinejad. Increasingly, they are presenting his ideas as a radical departure from standard US doctrine.
- Iraqi Religious Leader Talks Helpful, McFarlane Says.

NY Times:
- Many US Muslims Turn to Home Schooling.

NY Post:
- TV journalist Charlie Gasparino has inked a $400,000 advance for a book on the collapse of Bear Stearns(BSC).

Bear Radar

Style Underperformer:

Mid-cap Value -1.69%

Sector Underperformers:

Airlines (-7.2%), Banks (-4.0%) and Homebuilders (-4.0%)

Stocks Falling on Unusual Volume:

CHIC, AMN and CCU

Stocks With Unusual Put Option Activity:

1) SIRI

2) SHPGY

3) CMI

4) IR

5) JBL

Durable Goods Orders Fall, New Home Sales Exceed Estimates

- Durable Goods Orders for February fell 1.7% versus estimates of a .7% rise and an upwardly revised 4.7% decline in January.

- Durables Ex Transports for February fell 2.6% versus estimates of a .3% decline and an upwardly revised 1.0% decline in January.

- New Home Sales for February were 590K versus estimates of 578K and an upwardly revised 601K in January.

BOTTOM LINE: Orders for US durable goods unexpectedly fell in February, Bloomberg said. Bookings for non-defense capital goods excluding aircraft, a gauge of future business spending, fell 2.6%, the most since October. Shipments of these items, used in computing GDP, fell 2.1%, the most since January 2007. Bookings for military equipment fell 10%. Orders for computers, communications equipment and electrical equipment all rose in February. I had expected GDP growth to average about 1% during the first half of the year. However, recent data suggest GDP will likely be flat during the first half, before accelerating meaningfully during the second half of the year. I expect Durable Goods Orders to bounce back sharply next month.

Sales of new homes in the US fell less than economists had forecast, Bloomberg reported. The median price declined 2.7% from a year earlier to $244,100. Sales in the Northeast fell, while sales in the South and West rose. The number of new homes for sale at the end of February fell to 471,000, the lowest since July 2005. At the current sales pace, the supply of new homes remained at 9.8 months worth. Mortgage Applications surged 48.1% as refis soared 82% and purchase applications jumped 10.6%. According to Bankrate.com, the average 30-year fixed rate mortgage has declined 36 basis points over the last two weeks to 5.72%. I continue to expect home sales to surprise on the upside this spring on pent-up demand, lower prices and lower mortgage rates.

Bull Radar

Style Outperformer:

Small-cap Growth (-.67%)

Sector Outperformers:

Oil Service (+2.8%), Energy (+2.5%) and Utilities (+.27%)

Stocks Rising on Unusual Volume:

ANR, CRK, TESO, BJS, RIO, FCX, CLWR, WSCI, CYBX, VTIV, ICLR, RMBS, ACGY, UTHR, TRAK and WAT

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