Job Market Still Healthy

- Initial Jobless Claims fell to 332K versus estimates of 325K and 359K the prior week.
- Continuing Claims fell to 2509K versus estimates of 2519K and 2554K prior.

BOTTOM LINE: Fewer Americans applied for first-time state unemployment benefits last week, suggesting the labor market remains resilient, Bloomberg said. The rise the previous week was mostly related to winter storms in many areas. The four-week moving-average rose to 328,000 versus 326,750 the prior week. The unemployment rate among those eligible for benefits, which tracks the US unemployment rate, remained at 1.9%. 43% of the executives polled by the Washington-based Business Council said they are having trouble finding workers, up from 25% 12 months ago. I continue to believe the job market will remain healthy over the intermediate-term without generating substantial unit labor cost increases.

Links of Interest

Market Snapshot
Detailed Market Summary
Quick Summary
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
Intraday Chart/Quote

Thursday Watch

Late-Night Headlines
Bloomberg:
- Crude oil imports by Japan, the world’s largest consumer of the fuel after the US and China, fell for a night consecutive month in January, dropping 4.8% from a year earlier. Imports of liquefied natural gas grew 14% to 5.94 million metric tons.
- The yen will weaken another 3% against the dollar by June as a Bank of Japan interest-rate increase won’t stop investors borrowing the currency to buy higher-yielding assets, said Nomura Securities.
- Tom Daschle, former US Senate majority leader, will endorse fellow Democrat Barack Obama for president.
- The IRS said the tax status of 8,500 residents of the US Virgin Islands who earn more than $75,000, including employees of hedge funds, would face renewed scrutiny as the agency steps up efforts to root out tax evaders.
- Cisco Systems(CSCO) and Apple Inc.(AAPL) agreed to share the iPhone brand, dismissing Cisco’s lawsuit for trademark infringement.

London-based Times:
- Warner Music Group(WMG) is planning a cash bid of over $3.9 billion for EMI Group.

CNBC TV-18:
- Indian tax sleuths today raided stockbrokers, property developers and top doctors, citing tax officials. Raids are being conducted in Mumbai. Mumbai is India’s financial capital, home to the country’s two biggest stock exchanges, the central bank and several companies.

Investor Daily Indonesia:
- Indonesia plans to spend $551 million to finance alternative energy projects in villages nationwide.

Xinhua News Agency:
- China’s steelmakers used 8.8% less energy in 2006 than the previous year, citing the nation’s top economic planning agency.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (BBY), target $63.

Night Trading
Asian Indices are +.75% to +1.0% on average.
S&P 500 indicated +.02%.
NASDAQ 100 indicated +.05%.

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
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
- (ARW)/.73
- (BEAS)/.14
- (BDN)/.65
- (CHK)/.77
- (CQB)/-.47
- (DNR)/.30
- (DCI)/.37
- (EME)/.72
- (ESV)/1.30
- (FSS)/.26
- (GSF)/1.22
- (HRB)/1.11
- (HMA)/.29
- (INTU)/.42
- (JCP)/1.96
- (JLG)/.31
- (LAMR)/.09
- (KSE)/.71
- (CLI)/.28
- (MORN)/.28
- (NEM)/.37
- (NBL)/1.05
- (OMX)/.40
- (PDCO)/.43
- (PTEN)/1.03
- (PCG)/.45
- (PWR)/.16
- (SWY)/.60
- (SRE)/1.27
- (TOL)/.28
- (WMB)/.26

Upcoming Splits
- (TRMB) 2-for-1

Economic Releases
8:30 am EST
- Initial Jobless Claims for last week are estimated at 325K versus 357K the prior week.
- Continuing Claims are estimated at 2510K versus 2560K prior.

10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil build of 1,050,000 barrels versus a -589,000 barrel decline the prior week. Gasoline supplies are expected to fall -50,000 barrels versus a -2,058,000 barrel decline the prior week. Distillate inventories are estimated to fall by -2,875,000 barrels versus a -3,018,000 barrel decline the prior week. Refinery utilization is expected to rise .25% versus a -.70% decline the prior week. Finally, natural gas supplies are expected to fall by -226 bcf versus a -259 bcf withdrawal the prior week.

BOTTOM LINE: Asian indices are higher, boosted by technology shares in the region. I expect US equities to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.

Stocks Finish Near Session Highs on Fed Commentary

Indices
S&P 500 1,457.63 -.14%
DJIA 12,738.41 -.38%
NASDAQ 2,518.42 +.21%
Russell 2000 827.33 +.15%
Wilshire 5000 14,723.0 -.08%
Russell 1000 Growth 576.67 -.05%
Russell 1000 Value 840.18 -.19%
Morgan Stanley Consumer 715.59 -.48%
Morgan Stanley Cyclical 971.68 +.03%
Morgan Stanley Technology 586.79 -.23%
Transports 5,178.37 +.63%
Utilities 474.89 -.50%
MSCI Emerging Markets 118.05 +.07%

Sentiment/Internals
Total Put/Call 1.13 +18.95%
NYSE Arms .92 -11.97%
Volatility(VIX) 10.20 -.39%
ISE Sentiment 124.0 -2.36%

Futures Spot Prices
Crude Oil 60.15 +2.21%
Reformulated Gasoline 170.30 +3.27%
Natural Gas 7.62 +.46%
Heating Oil 168.34 +2.33%
Gold 682.10 +3.19%
Base Metals 227.37 -1.23%
Copper 266.60 +2.54%

Economy
10-year US Treasury Yield 4.69% +1 basis point
US Dollar 84.22 +.05%
CRB Index 308.36 +1.61%

Leading Sectors
Steel +2.37%
Oil Service +1.88%
Alternative Energy +1.19%

Lagging Sectors
Retail -.39%
Utilities -.50%
Drugs -.54%

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
JPMorgan:
- Rated (ZION) Overweight. (ZION) top pick.
- Rated (MI) and (TCB) Underweight.

Afternoon/Evening Headlines
Bloomberg:
- Whole Foods Market(WFMI) said first quarter profit fell for the first time in five quarters and announced it agreed to buy rival Wild Oats(OATS) for $565 million in cash. The stock surged 5% after-hours.
- Analog Devices(ADI), a semiconductor maker used in products from mobile phones to cars, said first quarter profit increased 27% boosted by a royalty payment for use of its technology. The stock jumped 5.4% after-hours.
- The Fed’s Poole said inflation is likely to tilt down this year.

AP:
- US Senator Hillary Clinton’s unfavorable rating among New York voters has climbed 33% since her re-election victory in November, citing a statewide poll.

Australian:
- Australia will almost double its troops in Afghanistan, including commandos and more air support.

Sueddeutsche Zeitung:
- Expedia Inc.(EXPE), the world’s biggest online travel agency, aims to become the most profitable travel agency in the world

BOTTOM LINE: The Portfolio finished higher today on gains in my Biotech longs, Telecom longs and Computer longs. I added (TSCO) long and added to some existing shorts today, thus leaving the Portfolio 100% net long. The tone of the market was mixed today as the advance/decline line finished about even, sector performance was mixed and volume was above average. Measures of investor anxiety were mostly higher into the close. Today's overall market action was neutral as the major averages and breadth finished near session highs despite potential downside catalysts. The Fed's Yellen just said that "sub-prime housing delinquencies are small and they will have little impact on overall consumption." She also said Fed policy may now be well positioned to bring inflation down. The 10-year yield finished only 1 basis point higher, which helped buoy equities. My intraday gauge of investor angst was above average levels for the second day in a row. I expect stocks will build on this week’s gains by Friday.

Stocks Mixed into Final Hour as Stable Long-term Rates Offset Jump in Commodities

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Telecom longs, Biotech longs and Computer longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly negative as the advance/decline line is modestly lower, sector performance is mixed and volume is about average. Corn is up 127% in about 13 months, recently going parabolic. As you can see from this corn chart, the gap between net commercial and net large speculator positions has never been wider. This is not a healthy development if you are long corn. Corn is in the grips of the same investment fund-driven speculative mania that has engulfed many other commodities over the last few years. I sense the frenzy is nearing a crescendo. While the mania looks to continue in the short run, I suspect a major top in corn will occur this year. The 10-year yield is just 2 basis points higher today, to 4.69%, despite the above-expectations CPI report, more hawkish Fed commentary and jump in commodities. The yield was 4.89% just three weeks ago. I continue to believe that the 10-year yield will average about 4.75% this year and the Fed will remain on hold. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering and stable long-term rates.

Today's Headlines

Bloomberg:
- J&S Energy SA, a Polish importer of Russian crude oil and distributor of fuel products, wants to expand by opening two biofuel plants in Poland and buying other companies.
- Crude oil rose about $60 a barrel in NY on speculation that an Energy Dept. report tomorrow will show that US fuel supplies fell and that unexpected refinery shutdowns will curb stockpiles in the weeks ahead.
- Ascom Holdings AG, the Swiss maker of emergency radio systems that fired its CEO last week, may buy US-based technology companies SpectraLink(SLNK) and Comarco Solutions(CMRO).
- The yen dropped to a record low versus the euro and approached the weakest in four years against the dollar after the Bank of Japan raised interest rates and said further increases would be gradual.
- British Airways Plc placed an order worth as much as $1.6 billion for Boeing Co.(BA) planes over a rival model from Airbus SAS in the first stage of a plan to expand its fleet and replace older aircraft.
- BP Plc, Europe’s second-largest oil company, said its Northstar oil field in Alaska may resume production next week after a pipe that leaked gas is fixed.
- XTO Energy Inc.(XTO), a US oil and natural gas producer, said its proven reserves rose 12% last year to a record.
- Gold is rising in NY after the CPI came in slightly above estimates and oil gained, resulting in more record speculation by investment funds on the metal.

Wall Street Journal:
- Mylan Labs(MYL), a US maker of generic drugs, seems to have found its way again after the failure of a 2005 bid to acquire King Pharmaceuticals knocked it off course.
- Nexstar Broadcasting(NXTR), Young Broadcasting(YBTVA), Sinclair Broadcasting(SBGI) and other local-TV companies have seen their shares soar as they get more money from cable companies to carry local stations.
- Roundy’s Supermarket Inc., one of the US Midwest’s largest flood retailers, is considering selling itself in a deal that could be valued at as much as $2 billion or more.

NY Times:
- After years of increasing costs to employees, some US employers are reversing course and offering free prescription drugs.
- US efforts along the Mexican border are beginning to stem the flow of illegal immigrants.

Washington Post:
- Some liberal activists are launching attack campaigns against Democratic incumbents they believe are too moderate.

NY Post:
- Getty Images(GYI), the world’s largest supplier of photographs to advertisers and publishers, is in talks about acquiring Jupitermedia Corp.(JUPM) for a price that may be about $450 million including debt.

Financial Times:
- Wal-Mart Stores(WMT) is asking its biggest suppliers to put more women and minorities on the teams that handle its accounts.

Tagesspiegel:
- United Nations Secretary General Ban Ki-moon would welcome more German involvement in conflict situations.