Economic Releases

- The Trade Balance for February fell to -$61.0B versus estimates of -$59.0B and -$58.5B in January.

Morning Buy/Sell Recommendations

Goldman Sachs:
- Reiterated Outperform on DNA, COF and GCI.
- Reiterated Underperform on PBG.

Smith Barney:
- Reiterated Buy on DNA, target $87.50.
- Reiterated Sell on IMCL, target $36.
- Reiterated Buy on CELG, target $41.
- Reiterated Buy on LRCX, target $38.

Morgan Stanley:
- Raised TLWT to Overweight, target $23.

JP Morgan:
- Cut WDC to Underweight.
- Rated GBBK Underweight.
- Raised SHW to Overweight.
- Rated PCBC Overweight.

Banc of America:
- Rated ALB Buy, target $41.

CSFB:
- Downgraded SKS to Underperform, target $14.

CIBC:
- Raised NICE to Sector Outperform, target $46.

Legg Mason:
- Rated WYNN Buy, target $80.

Merrill Lynch:
- Raised CUNO to Buy, target $60.
- Raised CSCO to Buy and added to Focus 1 stock list.

UBS:
- Rated URS Buy, target $45.
- Rated MHS Buy, target $67.
- Raised UGI to Buy, target $56.
- Reiterated Buy on OTEX, target $22.
- Reiterated Reduce on BMC, target $14.

Bear Stearns:
- Reiterated Outperform on HET, target $83.

Prudential:
- Reiterated Overweight on PD, target $137.

Tuesday Watch

Late-Night Headlines
Bloomberg:
- Mentor Corp. and Inamed got doctors' support at a hearing today before US government advisors who will decide whether the companies' silicone breast implants are safe enough to end a 13-year ban on the devices.

Wall Street Journal:
- Northwest Airlines is close to an agreement to buy 18 Boeing 787 Dreamliner jets, whose list prices total about $2.1 billion.

Financial Times:
- China has drafted regulations to tighten control on government purchases of software developed by overseas companies.

Lloyd's List:
- Nasdaq Stock Market expects as many as 10 Greek shipowners to sell shares and list on its exchange this year.

Advertising Age:
- Sirius Satellite Radio expects to increase advertising sales to $100 million in 2007 from $1 million last year.

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on SLB and Underperform on GPI, BMC.

Night Trading
Asian Indices are -.50% to +.25% on average.
S&P 500 indicated -.01%.
NASDAQ 100 indicated +.07%.

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
Analyst Actions
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
ABT/.58
AMTD/.16
CEN/.21
GCI/1.05
TZOO/.14

Splits
TTWO 3-for-2

Economic Releases
8:30 EST
- The Trade Balance for February is estimated to fall to -$59.0B versus -$58.3B in January.

2:00 EST
- Minutes of March 22 FOMC Meeting
- The Monthly Budget Statement for March is estimated to rise to -$69.3B versus -$72.7B in February.

BOTTOM LINE: Asian indices are mixed as gains in India are being offset by losses in China. I expect US equities to open modestly lower on a bounce in long-term interest rates and energy prices. The Portfolio is Market Neutral heading into tomorrow.

Monday Close

Indices
S&P 500 1,181.21 unch.
DJIA 10,448.56 -.12%
NASDAQ 1,992.12 -.36%
Russell 2000 607.17 -.59%
DJ Wilshire 5000 11,629.63 -.06%
S&P Barra Growth 570.12 -.05%
S&P Barra Value 606.71 +.05%
Morgan Stanley Consumer 582.89 -.20%
Morgan Stanley Cyclical 739.87 -.39%
Morgan Stanley Technology 451.50 -.49%
Transports 3,610.44 +.38%
Utilities 366.25 +1.17%
Put/Call 1.02 +9.68%
NYSE Arms 1.01 -27.24%
Volatility(VIX) 11.98 -5.07%
ISE Sentiment 145.00 -11.04%
US Dollar 84.22 +.01%
CRB 304.18 -.05%

Futures Spot Prices
Crude Oil 53.68 -.06%
Unleaded Gasoline 155.34 +.23%
Natural Gas 7.30 -.05%
Heating Oil 148.95 +.16%
Gold 430.40 unch.
Base Metals 130.61 +.71%
Copper 152.50 unch.
10-year US Treasury Yield 4.43% -.77%

Leading Sectors
Tobacco +1.25%
Oil Service +.93%
Energy +.70%

Lagging Sectors
Semis -.80%
Restaurants -.85%
Disk Drives -.98%

After-hours Movers
TIVO +4.96% on Smith Barney upgrade to Buy.
NTGR +4.6% after saying it will replace Advanced Marketing Services(MKT) in the S&P Small-cap 600.
SBGI +10.99% after saying that it has entered into an extension of its retransmission consent agreement with DIRECTV.
SLNK -8.2% after cutting 1Q forecast.
OTEX -13.2% after cutting 3Q/4Q outlook substantially.

Evening Review
Detailed Market Summary
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
Futures Recap
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 DNA.

Smith Barney:
- Upgraded TIVO to Buy, target $7.75.

Banc of America:
- Downgraded ADM bonds to sell.

Afternoon/Evening Headlines
Bloomberg:
- Genentech said first-quarter profit rose 61% on higher sales of Avastin and other cancer medicines.
- The average US retail price for regular-grade gasoline jumped 6.3 cents in the past week to $2.28 a gallon.

Wall Street Journal:
- Maurice “Hank” Greenberg, the former CEO of AIG, plans to invoke the Fifth Amendment tomorrow to avoid answering questions from regulators.

Australian Financial Review:
- China plans to introduce a licensing system to reduce the number of iron ore importers by as much as 80%, which may damage trade relations with Australia.

BOTTOM LINE: US stocks finished slightly lower today as energy prices rebounded from morning lows and worries over slowing growth persisted. The Portfolio finished higher on gains in my Energy longs, Chinese ADR shorts and Gaming longs. I exited a Retail long and added ESV long in the afternoon, thus leaving the Portfolio Market Neutral. I am using a $35.5 stop-loss on this position. The tone of the market weakened into the afternoon as the advance/decline finished at its daily lows, sector performance was mixed and volume remained very light. Small-cap and Cyclical stocks underperformed into the afternoon, while measures of investor anxiety remained mixed. Overall, today’s market action was mildly negative, considering the fall in long-term interest rates, stable commodity prices and the market’s oversold state. Worries over comments from the Fed and a bounce in energy prices and long-term interest rates will likely pressure stocks near-term.

Mid-day Scoreboard

Indices
S&P 500 1,180.90 -.03%
DJIA 10,453.73 -.07%
NASDAQ 1,993.68 -.29%
Russell 2000 608.25 -.41%
DJ Wilshire 5000 11,629.12 -.06%
S&P Barra Growth 570.38 unch.
S&P Barra Value 606.27 -.02%
Morgan Stanley Consumer 583.96 -.02%
Morgan Stanley Cyclical 739.36 -.46%
Morgan Stanley Technology 451.38 -.52%
Transports 3,599.19 +.07%
Utilities 366.05 +1.11%
Put/Call 1.07 +15.05%
NYSE Arms 1.16 -16.12%
Volatility(VIX) 11.99 -4.99%
ISE Sentiment 128.00 -21.47%
US Dollar 84.10 -.37%
CRB 302.53 -.59%

Futures Spot Prices
Crude Oil 52.65 -1.26%
Unleaded Gasoline 152.60 -.69%
Natural Gas 7.21 -.44%
Heating Oil 146.40 -2.22%
Gold 430.40 +.37%
Base Metals 130.61 +.71%
Copper 152.60 +1.23%
10-year US Treasury Yield 4.44% -.54%

Leading Sectors
Tobacco +1.34%
Biotech +.71%
Oil Service +.43%

Lagging Sectors
I-Banks -.62%
Gold & Silver -.70%
Restaurants -.88%

BOTTOM LINE: US stocks are slightly lower mid-day on worries over slowing growth. The Portfolio is substantially higher on gains in my Chinese ADR shorts, Software longs and Base Metal shorts. I exited a few trading longs in the Tech sector this morning, thus leaving the Portfolio’s market exposure Market Neutral. The tone of the market is modestly negative as the advance/decline line is lower, sector performance is mixed and volume is very light. Small-caps, Cyclicals and Tech are underperforming, while measures of investor anxiety are mixed. Today’s overall market action is modestly negative, considering the decline in long-term interest rates, the market’s oversold state, light volume and stabilizing energy prices. The fact that most commodity prices are falling again, even with a decline in the US dollar, is a positive. Oil is likely to continue bouncing in the near-term as sentiment became too negative. However, new highs in crude are unlikely and I continue to expect a meaningful decline in energy prices over the intermediate-term. I expect US stocks to decline modestly into the close on continuing worries over slowing global growth and a bounce in energy prices.

Today's Headlines

Bloomberg:
- President Vladimir Putin’s control over industries such as oil and machinery and the government’s reluctance to allow foreigners to buy majority stakes in Russian companies is hurting economic growth.
- Merrill Lynch unseated Morgan Stanley at the top of the lucrative market for stock sales in the first quarter and may get an additional boost from its rival’s persistent feuding with former executives.
- Microsoft agreed to pay Gateway $150 million over four years to resolve legal claims.
- Crude oil is falling for a sixth consecutive day, the longest decline since October 2003, on signs that refiners will have sufficient supply to make gasoline during the peak demand months of summer.
- Lazard Ltd. plans to sell shares to the public for as much as $27 each, valuing the company’s parent at about $3.9 billion.
- Ford Motor’s shares and bonds fell after CEO William Clay Ford Jr. cut the company’s 2005 profit forecast amid plunging sales of US pickups and sport-utility vehicles.

The Wall Street Journal:
- American International Group Chairman Maurice Greenberg used the private investment partnerships CV Starr and Starr International to reward favored executives.
- Ameritrade Holding, E*Trade Financial and Charles Schwab shares have fallen this year as a price was has broken out in the discount brokerage business.
- US apartment vacancy rates fell and rents rose in the first quarter of 2005, in the strongest performance for dwelling owners since 2001.
- Cablevision Systems will decide this week whether to raise its $16.5 billion bid for Adelphia Communication’s cable-television assets.
- Apple Computer faces growing competition from cell-phone companies and wireless carriers moving into the market for mobile music.
- Most stock analysts who suggested selling a particular company’s shares erred in past years, as a large number of sell recommendations did better than stocks carrying a “buy” or “hold” advisory.

NY Times:
- Vivendi Universal SA, Take-Two Interactive Software and eight other major video game publishers plan to incorporate product marketing in more than 40 games this year.

USA Today:
- The Fed can keep to its strategy of raising interest rates in a “slow, methodical” way as long as inflation remains tame, said Anthony Santomero, president of the Federal Reserve Bank of Philadelphia.

Xinhua News Agency:
- China’s crude oil imports fell 1.7% in the first three months of the year.
- China’s steel-product imports fell 41% in the first three months of the year.

AFP:
- China will support India’s bid for permanent membership of an expanded UN Security Council.

Project Finance International:
- A group of 10 private Chinese oil companies will merge to form a $1.2 billion competitor to PetroChina and the country’s two other large oil producers.