Thursday Watch

Late-Night Headlines
Bloomberg:
- New Zealand’s central bank raised the benchmark interest rate to a record 7.75%, the second increase in seven weeks.
- Nigeria’s president-elect Umaru Yar-Adua said he’s ready to run in fresh elections if the courts annul his victory in the April 21 polls because of fraud.
- Apple Inc.(AAPL) said second-quarter profit rose 88% after demand soared for its iPod media players and Macintosh computers. The company’s shares surged 6.3% in extended trading.
- Congress can limit violent television programming without violating the free-speech rights of broadcasters, according to an FCC report.
- The House of Representatives approved a war spending bill tonight that requires US troops to withdraw from Iraq, beginning Oct. 1.

Dow Jones:
- The International Monetary Fund is more closely monitoring the impact of yen carry trades on markets in developing countries and may raise the issue in annual talks with some countries.

Late Buy/Sell Recommendations
HSBC:
- Rated (URBN), (ANN), (ANF) Overweight.

Night Trading
Asian Indices are +.50% to +.75% on average.
S&P 500 indicated +.03%.
NASDAQ 100 indicated +.38%.

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
- (MMM)/1.11
- (AET)/.77
- (DOX)/.50
- (AMT)/.06
- (APA)/1.60
- (APPB)/.33
- (AN)/.40
- (AVID)/.20
- (BIDU)/.37
- (BZH)/.12
- (BYD)/.53
- (BMY)/.23
- (BRCM)/.27
- (CAH)/.91
- (CCU)/.15
- (CMCSA)/.17
- (CFC)/.79
- (DECK)/.51
- (DO)/1.47
- (DRIV)/.53
- (DOW)/1.00
- (XOM)/1.52
- (FII)/.50
- (FLEX)/.19
- (F)/-.60
- (FO)/.86
- (HAL)/.52
- (IMCL)/.32
- (IM)/.39
- (KLAC)/.78
- (LVLT)/-.22
- (MBI)/1.47
- (MFE)/.33
- (MDC)/-.24
- (WFR)/.69
- (MCHP)/.34
- (MSFT)/.46
- (MNST)/.34
- (NEM)/.24
- (NYX)/.50
- (ODP)/.59
- (SNDK)/.17
- (SOHU)/.17
- (HOT)/.38
- (TDW)/1.46
- (VLO)/1.82
- (WDC)/.47
- (XMSR)/-.39
- (ZOLL)/.14

Upcoming Splits
- None of note

Economic Releases
8:30 am EST
- Initial Jobless Claims for last week are estimated to fall to 330K versus 339K the prior week.
- Continuing Claims are estimated to fall to 2523K versus 2531K prior.

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

DJIA Soars to Another Record, Surpassing 13,000 on Positive Earnings and Economic Data

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

DJIA Surging Past 13,000, Hitting Another Record High, on Strong Earnings and Economic Reports

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Telecom longs, Computer longs and Medical longs. I added to my Google(GOOG) long and to an existing short today, thus leaving the Portfolio 100% net long. The tone of the market is positive as the advance/decline line is higher, sector performance is mostly positive and volume is heavy. I continue to believe that Google is egregiously undervalued at current levels relative to the broad market and its Internet peers. I am shocked that I am able to buy the shares again at current levels after GOOG's recent report. I still expect GOOG to exceed $600 this year on multiple expansion and better-than-expected earnings. The stock remains my largest long position. Yesterday after the close, Bloomberg reported that Nasdaq short interest surged 1.7% to 8,010,000,000 shares, from mid-March through mid-April, hitting another all-time high. Moreover, like the NYSE, the last two months has seen Nasdaq short interest soar 13.8%, the largest two-month percentage increase since at least 1991. Here are the 20 Nasdaq stocks with the largest percentage increase in their short interest relative to their float from mid-March through mid-April:

1) USNA +32.9%
2) HCBK +25.5%
3) HINT +23.4%
4) HLYS +19.1%
5) HERO +18.7%
6) ASTI +18.0%
7) DVSA +15.9%
8) DHOM +14.2%
9) CLWT +13.7%
10) CONN +9.4%
11) BLDR +9.0%
12) NRMX +8.4%
14) PONR +8.0%
15) CBRL +7.5%
16) DAKT +6.8%
17) PRAA +6.5%
18) LHCG +6.5%
19) NUVO +6.4%
20) TECUA +6.2%

Here are the 20 S&P 500 stocks with the largest percentage increase in their short interest relative to their float from mid-March through mid-April:

1) WEN +13.0%
2) KBH +6.9%
3) HAL +5.4%
4) MOT +4.3%
5) BEN +4.0%
6) CTX +3.5%
7) JNY +3.1%
8) DHI +2.8%
9) CIEN +2.8%
10) X +2.7%
11) ED +2.5%
12) RSH +2.5%
13) MCO +2.4%
14) CHK +2.4%
15) STZ +2.4%
16) CC +2.2%
17) HRB +2.1%
18) AVB +2.0%
19) MTG +1.7%
20) MAS +1.7%

I expect US stocks to trade mixed-to-higher into the close from current levels on positive earnings reports, short-covering, positive economic data and stable long-term rates.

Today's Headlines

Bloomberg:
- US stocks are surging, sending the DJIA to another all-time high and above 13,000 for the first time, after earnings from Amazon.com(AMZN) bolstered speculation that profit forecasts are too low.
- Israel held back today from retaliating for a barrage of rockets fired by Hamas members in the Gaza Strip, while warning that any further attacks will draw a powerful response.
- Shares of Amazon.com(AMZN), the world’s biggest Web retailer, sky-rocketed 27% after the company boosted its 2007 profit and sales forecasts. As of today, the short-interest ratio on the shares was at an all-time high, surpassing the peak in March 2003.
- Crude oil rose .60/bbl. after a government report showed that US gasoline supplies fell again as refinery utilization dropped substantially on ongoing nationwide “outages.” US oil supplies jumped and are near eight year highs.

Wall Street Journal:
- Fuel-efficient car drivers are having a negative impact on the US federal highway trust fund as less gasoline tax is paid.
- Martha Stewart Living(MSO) will start selling craft products, citing an interview with CEO Lyne.

NY Times:
- Jarden Corp.(JAH), a maker of consumer goods including Coleman camping equipment and Bicycle playing cards, will buy K2 Inc.(KTO) for $1.2 billion in cash and stock.

- Energy News Today:
- Exxon Mobil Corp.(XOM) halted production on a catalytic cracker at its Beaumont, Texas, refinery in the past 24 hours to repair a “minor problem.”

China Information:
- China needs to control the expansion of short-term assets as people put less money in bank deposits and the stock market booms, a state Statistics Bureau affiliated newspaper said. Financial risks have also risen as short-term currency arbitrage increases, and the economic and financial bubble grows, the paper said. International “hot money” has directly or indirectly flowed into the stock market, while assets from domestic banks, private equity, and assets managed by financial companies are participating in the equity market boom. To stop the stock market overheating, the government should remind people of the risks associated with buying shares now. Regulators should tighten supervision of mutual funds and control equity growth, and should accelerate changes to the currency.

Durable Goods Orders Jump, New Home Sales Rise, New Home Inventories Fall, New Home Prices Rise

- Durable Goods Orders for March rose 3.4% versus estimates of a 2.5% gain and an upwardly revised 2.4% gain in February.
- Durables Ex Transports for March rose 1.5% versus estimates of a 1.1% gain and an upwardly revised -.4% decline in February.

- New Home Sales for March rose to 858K versus estimates of 890K and 836K in February.

BOTTOM LINE: Orders for US durable goods rose more than forecast in March, signaling business spending started to recover as the first quarter ended, Bloomberg said. Demand at Boeing(BA) surged, while orders for communications equipment metals and machinery bounced back. Orders for non-defense capital goods excluding aircraft, a gauge of future business investment, jumped 4.7%, the largest gain since September 2004. 100 CEOs turned optimistic over the pace of future US economic growth for the first time in a year, according to a recent Conference Board survey. I continue to believe manufacturing bottomed last quarter and will begin adding to US economic growth this quarter as companies gain confidence in the sustainability of the current expansion.

Purchases of new homes in the US rose in March as better weather and sales incentives brought out more buyers, Bloomberg reported. The median price of a new home rose 6.4% in March to $254,000 from $238,800 a year earlier. The supply of new homes at the current sales pace fell to 7.8 months’ worth from 8.1 months in February. Sales soared 50% in the Northeast and jumped 9.8% in the Midwest. Sales fell 2.7% in the South and .9% in the West. Moreover, mortgage applications rose the most in seven weeks this week, led by a 3.7% surge in purchase applications. I continue to believe home sales have stabilized at relatively high levels and will trend around current levels over the intermediate-term.

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