Today's Headlines

Bloomberg:
- The euro dropped to a two-year low against the dollar after a 12th night of rioting in France. Concern that the social disorder will damp growth and deter investment in euro-denominated assets pushed the currency lower.
- President Chiraq declared a state of emergency to quell spiraling urban violence, applying for the first time in France a 50-year law that authorizes curfews and warrant-less searches.
- The UN Security Council voted 15 to 0 to authorize US-led forces to remain in Iraq until Dec. 31, 2006, to give Iraqi troops time to prepare for assuming responsibility for the nation’s security.
- US Treasuries are rising for a second day, the first back-to-back gain in more than two weeks, as yield near the highest since March attracted investors.
- Linens ‘n Things agreed to a $1.3 billion buyout by a group led by Apollo Management LP after struggling to compete with Bed Bath & Beyond.
- Comcast plans to sell $2 billion of five-, 10-, and 30-year bonds today, according to Market News.
- Yum! Brands is developing contingency plans to educate consumers that it’s safe to eat at its Kentucky Fried Chicken restaurants amid rising concerns about a possible avian flu outbreak.
- Guidant said the SEC started a formal investigation into the company’s disclosures about unspecified products and trading in Guidant stock.

Wall Street Journal:
- Worldwide demand for business jets is expected to reach a record of about 850 aircraft deliveries in 2006, citing estimates by Honeywell.
- Advanced Micro Devices in October beat Intel in supplying chips for personal computers to US retail stores.
- US House of Representatives and Senate negotiators reached agreement on a $30.5 billion water and energy bill.
- Genetically modified plants are increasingly distorting the makeup of traditional crops as they account for a growing share of the world’s farmland.
- GM’s Chevrolet brand may pass Ford’s Ford nameplate as the No. 1 vehicle marque this year in the US for the first time in 18 years.

NY Times:
- Some US retailers such as Gap Inc., Walgreen Co. and Wal-Mart Stores are developing national crime databases to combat shoplifting gangs.
- The FASB will decide this week whether to alter its 20-year-old rule on how US companies account for pensions.

DigiTimes:
- Global demand for indium-tin oxide, which is used to make liquid-crystal displays, may rise as much as 40% net year because of increasing demand from panel makers.

NY Post:
- Sales of Apple Computer’s Macintosh personal computers have benefited from the success of the iPod personal music player.

Le Parisien:
- French courts are imposing increasingly heavy punishment on youths involved in riots which have rocked the country in the past 12 days.

Ath-Thawra:
- Syria wants foreign companies to carry out more seismic surveys in its waters to search for oil and gas fields.

Economic Releases

- None of note

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
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Chart Toppers
Option Dragon
Real-time Intraday Chart/Quote

Tuesday Watch

Late-Night Headlines
Bloomberg:
- Billionaire investor Carl Icahn said he owns 9.3% of Fairmont Hotels & Resorts and wants the luxury-hotel operator to boost returns to shareholders by selling properties.
- Australian police arrested 17 people in Sydney and Melbourne for allegedly stockpiling explosive chemicals and planning a “catastrophic” terrorist attack.
- The euro is falling to a two-year low against the dollar in Asia on concern rioting that has escalated in France over the past week will spread to other parts of Europe.
- Google and Yahoo! are expanding the content they offer on mobile phones, a further sign of the growing connection between the Web and wireless services.
- Crude oil is trading near a three-month closing low in NY as warmer-than-normal weather in the northern US is further reducing demand for heating fuel.

Financial Times:
- Anheuser-Busch has set up it first spirit-making subsidiary, Long Tail Libations, to meet a fall in demand for beer.

Shanghai Securities News:
- China and the US today will sign an agreement in Geneva to cap growth in imports of Chinese textiles for the next three years, resolving a dispute between the two nations.

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on EBAY.
- Reiterated Underperform on HRB.

Night Trading
Asian Indices are -.25% to +.50% on average.
S&P 500 indicated -.08%.
NASDAQ 100 indicated -.06%.

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
AL/.48
AQNT/.10
CVC/-.08
CMX/.51
DISH/.47
ENER/-.13
FSH/.88
FOSL/.28
HW/.81
IDTI/.06
IVX/.22
MBI/1.38
MCK/.48
PIXR/.11
SOHU/.20
TOL/1.58
RIG/.47

Upcoming Splits
- None of note

Economic Releases
- None of note

BOTTOM LINE: Asian indices are mostly higher, spurred by gains in exporters in the region after oil fell to a three-month low. I expect US equities to open mixed-to-higher as stocks continue to consolidate recent gains before what I believe will be another push higher. The Portfolio is 100% net long heading into the day.

***Alert***

I am unable to post the Monday Close due to a scheduling conflict. I finished the day 100% net long. I will post the Tuesday Watch later this evening.

Stocks Higher Mid-day on Another Fall in Energy Prices and Increasing Optimism

Indices
S&P 500 1,222.97 +.24%
DJIA 10,581.65 +.49%
NASDAQ 2,179.52 +.47%
Russell 2000 661.43 +.50%
DJ Wilshire 5000 12,227.58 +.27%
S&P Barra Growth 585.86 +.25%
S&P Barra Value 632.97 +.22%
Morgan Stanley Consumer 586.60 +.20%
Morgan Stanley Cyclical 738.48 +.85%
Morgan Stanley Technology 512.57 +.45%
Transports 3,978.78 +1.11%
Utilities 393.59 +.17%
Put/Call .88 +2.33%
NYSE Arms 1.10 +27.80%
Volatility(VIX) 12.92 -1.90%
ISE Sentiment 144.00 -23.8%
US Dollar 91.44 +.20%
CRB 316.89 -.59%

Futures Spot Prices
Crude Oil 59.30 -2.11%
Unleaded Gasoline 155.50 -3.30%
Natural Gas 11.62 +1.80%
Heating Oil 178.00 -.90%
Gold 460.40 +.55%
Base Metals 136.26 -.15%
Copper 184.75 +.08%
10-year US Treasury Yield 4.64% -.35%

Leading Sectors %
Homebuilders +1.64%
Tobacco +1.47%
Oil Tankers +1.22%

Lagging Sectors
Disk Drives -1.05%
Broadcasting -1.10%
Energy -1.31%

BOTTOM LINE: The Portfolio is higher mid-day on gains in my Internet longs, Software longs, Steel shorts and Energy-related shorts. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly positive as the advance/decline line is modestly higher, sector performance is mixed and volume is below average. Measures of investor anxiety are mostly higher. After doing some checks, I found the demand for the Xbox 360 seems greater than even optimistic projections. Notwithstanding its $300 price, I am hearing that it is virtually impossible to pre-order the device. Gamestop and Electronics Boutique have quit taking orders and say they won't even take your name for the next shipment because they "don't want to make the customer mad" and they "don't know when it will be available." The lack of supply may be disappointing in the short run, but it bodes well for a number of companies in the longer term. Microsoft (MSFT), GameStop (GME), Best Buy (BBY), Circuit City (CC), Activision (ATVI), THQ (THQI) and Electronic Arts (ERTS) should all benefit over the coming months from this very strong replacement cycle. Can the consumer really be anything but strong considering a $300 toy is in such strong demand six weeks before the holiday season? I expect US stocks to trade modestly higher from current levels into the close on more optimism and short-covering.