***Alert***

I am unable to post Thursday's close due to a scheduling conflict. I will post tbe Friday Watch later this evening.

Stocks Sharply Lower into Final Hour on Rising Geopolitical Tensions

BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Semi longs, Internet longs and Retail longs. I added to my (EEM), (IWM) and (QQQQ) shorts today, thus leaving the Portfolio 50% net long. The tone of the market is very negative as the advance/decline line is substantially lower, every sector is falling and volume is heavy. I suspect we are setting up for a very sharp snapback rally in stocks next week as sentiment is deteriorating rapidly. Dovish comments from Bernanke, better earnings reports from key companies and a calming in Middle Eastern tensions should provide the catalysts. I expect US stocks to trade modestly higher into the close from current levels on short-covering and bargain-hunting.

Today's Headlines

Bloomberg:
- Israel bombed Beirut’s international airport and two Lebanese army airfields, while rockets from Lebanon landed in Israel’s third-biggest city as a military confrontation sparked by Hezbollah intensified.
- Crude oil rose above $76 a barrel for the first time, as violence in the Middle East and Nigeria posed a threat to supplies.
- California and 33 other states plan to file a price-fixing lawsuit seeking “hundreds of millions of dollars” from Infineon Technologies, Hynix Semi and five other computer memory-chip makers.

Wall Street Journal:
- Staples Inc.(SPLS) is using contests to find amateur inventors with exclusive items it can sell under its own brand.
- San Francisco officials are examining telecom contracts with AT&T(T) to determine whether action should be taken against the company for alleged cooperation with the National Security Agency, citing Mayor Gavin Newsom.
- Harvard University faces the loss or postponement of four donations, totaling $390 million, as a result of Lawrence Summer’s resignation as president of the university.
- Biotech companies are increasingly choosing to be acquired by bigger pharmaceutical companies instead of going for an IPO, citing a study by Bain & Co.
- Capital One Financial’s(COF) auto-lending unit is testing an online car buying service that lets users get a guaranteed ceiling price before walking into a dealership.

NY Times:
- Weinstein Co. and BET Holdings are close to forming a joint venture to make so-called urban movies and television shows.

Emirates Today:
- General Motors(GM) sold 20% more cars in the Middle East in the first half of the year than it did in the same period last year, led by the United Arab Emirates, where business doubled.

Neue Zuercher Zeitung:
- Swiss and US governments have signed an agreement to broaden their cooperation in anti-terror investigations.

Initial Jobless Claims Above Expectations on Automaker Retooling and New Jersey Shutdown

- Initial Jobless Claims for last week rose to 332K versus estimates of 320K and 313K the prior week.
- Continuing Claims fell to 2429K versus estimates of 2430K and 2447K prior.

BOTTOM LINE: The number of US workers filing first-time applications for state jobless benefits rose last week because of temporary shutdowns at some auto factories and a partial closure of government services in New Jersey, Bloomberg said. The four-week moving average of jobless claims rose to 317,250 versus 308,500 the prior week. So are this year, the economy is on track to create 1.7 million new jobs. I continue to believe the labor market will remain relatively healthy over the intermediate-term even as economic growth slows to around average rates.

Links of Interest

Market Snapshot
Detailed Market Summary
Market Internals
Economic Commentary
Movers & Shakers
Today in IBD
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

Thursday Watch

Late-Night Headlines
Bloomberg:
- Cowen Group Inc.(COWN), the US investment-banking unit of France’s Societe Generale SA, raised a less-than-expected $179,5 million today in the first IPO for a Wall Street firm since February.
- The yen may gain after the Nihon Keizai Shimbun newspaper said the Bank of Japan will lift interest rates tomorrow for the first time in six years.
- China’s stocks declined, set for the biggest drop in a month, amid concern new share sales will drain capital from the market.
- South Korea’s government won’t introduce measures to “prop up” Asia’s third-largest economy as rising oil prices and interest rates curb growth, Vice Finance Minister Chin Dong Soo said.

Xinhua:
- Israeli warplanes bombed runways at Beirut International Airport on Thursday, security sources said.

Late Buy/Sell Recommendations
- None of note

Night Trading
Asian Indices are -1.0% to unch. on average.
S&P 500 indicated +.09%.
NASDAQ 100 indicated +.08%.

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
- (CTAS)/.54
- (ESIO)/.17
- (FLE)/.05
- (IFIN)/.56
- (STAR)/.20
- (MAR)/.40
- (MEG)/.82
- (PII)/.53

Upcoming Splits
- None of note

Economic Releases
8:30 am EST
- Initial Jobless Claims are estimated to rise to 320K versus 313K the prior week.
- Continuing Claims are estimated to fall to 2430K versus 2456K prior.

2:00 pm EST
- The Monthly Budget surplus for June is estimated to fall to $20.0 billion versus $22.9 billion in May.

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology stocks in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.