Today's Headlines

Bloomberg:
- US Representative Tom Delay was indicted by a Texas grand jury on a single count of conspiracy.
- Gasoline and crude oil rose on speculation that supplies will fall because Hurricane Rita shut refineries and platforms.
- US Treasury Bonds are rallying as high energy prices increase speculation of an economic slowdown.

Wall Street Journal:
- Celgene Corp. may face concerns over the safety of its experimental blood cancer drug Revlimid after a clinical trail was suspended, citing the principal investigator of the study.
- Valero Energy, Tesoro Corp. and other US gasoline refiners are finding it increasingly difficult to decide whether to keep pumping gas or halt operations for scheduled maintenance.
- Dell is expected to announce a new line of desktop and notebook personal computers with prices between $1,100 to more than $6,000 aimed at more affluent customers.
- Morningstar, Reuters Group Plc, and a small New Jersey company, Sky Fund, are trying to fill a gap in the market by developing dependable ratings of hedge funds.
- New Orleans public schools will need massive repairs and reorganization after Hurricane Katrina set back efforts to turn around the corruption-plagued system.
- UPS may be hurt by a Dell decision to ship many computers to US post offices for customer pick-up rather than to buyers’ homes.

NY Times:
- NRG Energy Inc., the owner of power plants in 14 US states, is in advanced talks to acquire Texas Genco Holdings for at least $5 billion.

Financial Times Deutschland:
- Royal Philips Electronics NV, Europe’s biggest maker of televisions, expects the price decline for flat-panel televisions to end because of higher demand.

Durable Goods Orders Rebound Sharply

- Durable Goods Orders for August rose 3.3% versus estimates of a .7% gain and a 5.3% decline in July.
- Durables Ex Transportation for August rose 4.2% versus estimates of a 1.0% gain and a 3.7% decline in July.

BOTTOM LINE: US orders for durable goods rose a greater-than-expected 3.3% in August, rebounding as businesses sought to rebuild stocks depleted by surging sales, Bloomberg reported. Total shipments, a gauge of future sales, rose 1.7%, the most since December. As well, bookings for non-defense capital goods excluding aircraft, an indication of future business spending, rose 3.6% last month. Moreover, unfilled orders, a measure of future production, rose 1.7%. Durables will likely take a tumble for September on Katrina, however another push higher is likely thereafter through year-end.

Links of Interest

Market Snapshot
Detailed Market Summary
Market Internals
Economic Commentary
Movers & Shakers
IBD New America
NYSE OrderTrac
I-Watch Sector Overview
NYSE Unusual Volume
NASDAQ Unusual Volume
Hot Spots
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Option Dragon
Real-time Intraday Chart/Quote

Wednesday Watch

Late-Night Headlines
Bloomberg:
- Mississippi Governor Haley Barbour proposed moving casinos moored on the Mississippi River or along the state’s coast inland, in response to Hurricane Katrina damage.

Financial Times:
- SanDisk Corp., the world’s biggest flash-memory card maker, and music company EMI Group Plc have developed a music storage card that may replace CDs and DVDs.
- Deutsche Post AG’s DHL package-delivery unit may plan to start a chain of retail outlets in the US.

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on BC and PAYX.
- Reiterated Underperform on HCC and MKL.

Night Trading
Asian Indices are +.25% to +.75% on average.
S&P 500 indicated +.02%.
NASDAQ 100 indicated unch.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
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
MKC/.34
RHAT/.07
RECN/.28

Upcoming Splits
- None of note

Economic Releases
8:30 am EST
- Durable Goods Orders for August are estimated to rise .7% versus a 4.9% decline in July.
- Durables Ex Transportation for August are estimated to rise 1.0% versus a 3.2% decline in July.

10:30 am EST
- Platt's estimates weekly crude inventories fell 2.7 million barrels, gasoline inventories fell 3.25 million barrels, distillate inventories declined 2.25 million barrels and refinery utilization dropped 9.5%.

BOTTOM LINE: Asian indices are higher, boosted by Financial companies in the region after S&P raised their debt ratings. I expect US equities to open mixed. However, stocks may rally later in the afternoon on short-covering ahead of quarter’s end. The Portfolio is 75% net long heading into the day.

Stocks Finish Mixed in Choppy Trading

Indices
S&P 500 1,215.66 unch.
DJIA 10,456.21 +.12%
NASDAQ 2,116.42 -.24%
Russell 2000 659.17 -.16%
DJ Wilshire 5000 12,139.58 -.02%
S&P Barra Growth 581.57 +.15%
S&P Barra Value 629.88 -.13%
Morgan Stanley Consumer 579.07 +.42%
Morgan Stanley Cyclical 721.72 -.01%
Morgan Stanley Technology 494.84 -.47%
Transports 3,617.49 +.05%
Utilities 424.65 +.41%
Put/Call .79 -35.77%
NYSE Arms .94 -5.09%
Volatility(VIX) 12.76 -2.15%
ISE Sentiment 200.00 +21.95%
US Dollar 89.60 +.55%
CRB 327.03 +.03%

Futures Spot Prices
Crude Oil 64.90 -.26%
Unleaded Gasoline 217.75 +.51%
Natural Gas 12.67 +.11%
Heating Oil 206.90 +.02%
Gold 466.40 +.04%
Base Metals 130.67 -.39%
Copper 172.60 -.12%
10-year US Treasury Yield 4.28% -.09%

Leading Sectors
HMOs +1.07%
Foods +.84%
Defense +.68%

Lagging Sectors
Computer Hardware -1.12%
Semis -1.23%
Gold & Silver -1.62%

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

Afternoon Recommendations
Goldman Sachs:
- Reiterated Underperform on SIRI.

Afternoon/Evening Headlines
Bloomberg:
- NBC’s television audience shrank in the first week of the season after new programs such as Martha Stewart’s reality show failed to stem viewer defections.
- Michael Brown, the former head of FEMA, defended the federal government’s response to Hurricane Katrina before a congressional committee and called the state and local governments in Louisiana “dysfunctional.”
- Pfizer said US regulators approved its cholesterol-lowering drug Lipitor to reduce risk of stroke and heart attack in patients with Type 2 diabetes.
- GM faces a “50-50” chance of a strike by the Canadian Auto Workers at midnight as the two sides negotiate.

BOTTOM LINE: The Portfolio finished slightly unchanged today as gains in my Medical longs offset losses in my Semiconductor longs. I covered my IWM and QQQQ shorts in the afternoon, thus leaving the Portfolio 75% net long. The tone of the market was slightly negative today as the advance/decline line finished modestly lower, most sectors were lower and volume was slightly below average. Measures of investor anxiety were lower into the close. Overall, today’s market action was slightly positive. Treasury-note yield reversed on Greenspan's comments and finished at session lows of 4.28%. I still have part of my iShares Lehman 20+ Year Treasury Bond (TLT) long and I am considering adding back to it.

Stocks Mixed Mid-day as Lower Oil Prices Offset Weaker Economic Data and Hawkish Fed Comments

Indices
S&P 500 1,215.09 -.04%
DJIA 10,452.94 +.09%
NASDAQ 2,116.70 -.22%
Russell 2000 658.09 -.32%
DJ Wilshire 5000 12,132.38 -.08%
S&P Barra Growth 581.10 +.07%
S&P Barra Value 629.81 -.15%
Morgan Stanley Consumer 578.66 +.35%
Morgan Stanley Cyclical 721.38 -.06%
Morgan Stanley Technology 495.08 -.42%
Transports 3,603.20 -.34%
Utilities 424.45 +.31%
Put/Call .81 -34.15%
NYSE Arms .98 -.45%
Volatility(VIX) 12.88 -1.30%
ISE Sentiment 230.00 +40.24%
US Dollar 89.62 +.57%
CRB 326.34 -.18%

Futures Spot Prices
Crude Oil 64.75 -1.55%
Unleaded Gasoline 216.00 +1.45%
Natural Gas 12.51 +.56%
Heating Oil 204.50 -.78%
Gold 465.90 -.77%
Base Metals 130.67 -.39%
Copper 172.30 -.78%
10-year US Treasury Yield 4.30% +.41%

Leading Sectors %
HMOs +1.18%
Foods +.76%
Defense +.55%

Lagging Sectors
Coal -1.0%
Semis -1.10%
Gold & Silver -2.19%

BOTTOM LINE: The Portfolio is unchanged mid-day as gains in my Medical longs are offsetting losses in my Semiconductor longs. I added back QQQQ and IWM shorts this morning, thus leaving the Portfolio 50% net long. The tone of the market is negative as the advance/decline line is lower, most sectors are lower and volume is below average. Measures of investor anxiety are lower. Today’s overall market action is neutral given the decline in energy prices and worse-than-expected economic data. The Johnson Redbook same-store sales index rose 3.1% year-over-year last week vs. a 3.2% rise the prior week. This week's gain is up from a 1.5% increase in late April and the 21th week in a row the index has risen 3% or more. The Morgan Stanley Retail Index has stabilized over the last few days, but is still below its 200-day moving-average. Investors continue to anticipate a substantial drop-off in consumer spending that has yet to develop. I expect US stocks to trade mixed-to-higher from current levels into the close on short-covering.