Bear Radar

Style Underperformer:

Small-cap Growth -1.71%

Sector Underperformers:

Oil Tankers (-3.68%), Airlines (-3.25%) and HMOs (-2.33%)

Stocks Falling on Unusual Volume:

SOV, CBEY, CACB, INTU, OFIX, UNFI, QDEL, LNET, GFIG, CECO, HLTH, SWIM, CCOI, MGRC, LTM and AYR

Today's Headlines

Today’s Headlines
Bloomberg:
- Affiliated Managers Group(AMG) dropped as much as 6.9% after Bloomberg News reported the largest hedge fund run by the company’s AQR Capital Management fell almost 15% in the first six weeks of this year.
- The global sugar glut in the 2008-2009 season will be more than twice as big as previously estimated because higher prices will encourage more production in Brazil, Societe Kingsman SA said.
- Copper stockpiles monitored by the London Metal Exchange rose for the first time this month. Supplies jumped 4.6% from yesterday. Moreover, inventories tallied by the Shanghai Futures Exchange surged 45% this week.
- Federal Reserve Bank of Dallas President Richard W. Fisher said that the US will probably see slower economic growth rather than a deeper downturn.
- New York Times(NYT) fell for a second day on the NYSE after a Goldman Sachs Group(GS) analyst said that asset sales advocated by hedge funds may not be financially practical.
- Europe Services Growth Accelerated More Than Forecast.

Wall Street Journal:
- In a move aimed at preventing future freezes in credit markets, US and foreign bank regulators are jointly developing a set of best practices to improve the way banks deal with cash-flow problems.
- Debate on ‘Net Neutrality’ Misses Technology Shift.
- China’s Pearl River Delta – the southern coastal area that in the past two decades has become the world’s factory floor for low-end goods – is losing thousands of factories.

NY Times:
- Hillary Clinton’s campaign spending report, which detailed expenses such as $100,000 for party platters in Iowa and $5 million on political consultants in January, appeared to her supporters and donors as a road map of her political and management failings.

FINalternatives:
- Over the past three election cycles, hedge fund managers and their colleagues have become some of the most important donors to Democrats and Democratic candidates. Of the more than $3 million in hedge fund cash given to presidential candidates last year, 75% went to Democrats. Party leadership is hoping to leverage this newfound strength with a NY fundraiser aimed specifically at hedge fund professionals.

Boston Globe:
- For the first time in almost a decade, office rents in downtown Boston have moved about the eye-popping $100-a-square-foot mark as demand tightens.

TampaBayOnline:
- Despite What Critics Say, Fed Is Doing Right Thing To Help Economy.

USA Today:
- No time to relax: States want new retirees’ experience. The wave of baby boomers hitting retirement age threatens to create such a void in the workforce that states are crafting policies and programs to keep older Americans working and volunteering.

NY Post:
- A deal between Chicago giant CME Group(CME) and The New York Mercantile Exchange(NMX) to create a $40 billion futures trading powerhouse could be formally announced by early March.

AP:
- The US government approved the first “virtual” fence along the US and Mexican border in Arizona, a 28-mile stretch lined with radar and surveillance cameras build to stop people crossing into the country illegally.

Milliyet:
- Turkey’s politicians and army decided to renew diplomatic contacts with the northern Iraqi administration.

Daily Telegraph:
- The UK’s Financial Services Authority may allow small investors to put money into hedge funds.

Interfax:
- Russia may use force if the European Union recognizes Kosovo or NATO exceeds its mandate in the territory, Russia’s ambassador to the military alliance said

Sidney Morning Herald:
- Loophole allows hedge funds to manipulate stock in secret.

Bull Radar

Style Outperformer:

Large-cap Growth (-.74%)

Sector Outperformers:

Gaming (+.76%), Hospitals (+.63%) and REITs (+.05%)

Stocks Rising on Unusual Volume:

OCR, HVT, CAB, LYG, HTV, ESRX, VE, SBAC, BAP, MVSN, DRL, HTX, LLTC, SHPGY, MINI, TSON, PSYS, NDSN, NCTY, VLCM, LULU, RRGB, AUXL, ENDP, SDXC, IMCL, SYNT, ABAX, BIOD, ICON, AMZN, FLI, NCI and ME

Economic Releases

- None of note

Links of Interest

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Friday Watch

Late-Night Headlines
Bloomberg:
- Two members of the panel charged with dating US economic cycles said while increasing evidence of a downturn has drawn their attention, it’s too early to declare whether a recession has begun. “Notwithstanding the darkening clouds, we are still far from the point where the committee would act,” Roberta Hall, a Stanford University economist who leads the National Bureau of Economic Research’s business cycle dating committee, said in an interview.
- Crude oil fell for a second day in NY after an Energy Dept. report showed that US inventories rose almost twice as much as forecast and refiners slowed processing to perform seasonal maintenance. “There comes a point where fundamentals can no longer be ignored,” said Michael Fitzpatrick, vp for energy risk management at MF Global. “You can’t justify $100 oil when inventories are up six weeks, demand is weak and the economy is slowing.” Crude oil supplies have risen 7.9% in just the last six weeks. “Refineries are curtailing output for economic reasons. There’s weak product demand and they are responding by reducing output,” said Tim Evans, an energy analyst at Citigroup Global Markets. Total implied fuel demand is down 1.1% over the last four weeks from a year earlier. Gasoline inventories climbed 1 million barrels to 230.3 million, the highest since February 1994. “Gasoline supplies are near the highest level ever, and crude oil supplies are still gaining,” said Kyle Cooper, director of research at IAF Advisors in Houston.

Wall Street Journal:
- Obama, Clinton Trade Jabs on Health Care. One of the most anticipated debates of the primary season unfolded largely without drama early on, but a hint of the snarling tone that has marked the race between Sens. Hillary Clinton and Barack Obama rose up as the debate progressed.

MarketWatch.com:
- RIM shares jump on raised subscriber forecast. BlackBerry maker says seasonal slowdown didn’t occur in Feb. quarter.

CNBC.com:
- Amid ‘Stagflation’ Fear, Opportunities Abound.

NY Times:
- AOL Prods Users to Switch to Firefox, Drop Netscape.
- At Toyota, a Global Giant Reaches for Agility.
- A Short-Selling Savior? Does William Ackman want to save troubled bond insurers or to bury them? A break-up proposal raises questions.

BusinessWeek.com:
- Microsoft(MSFT) Pledges Fail to Move the EU.
- Google(GOOG) Goes to the Doc’s Office. The search giant’s pilot program with the Cleveland Clinic is aimed at giving patients and doctors better access to electronic medical records.

Portfolio.com:
- Google’s(GOOG) Video AdSense: Just the Beginning?

Silicon Alley Insider:
- New York Times Co.(NYT) investor Harbinger Capital Partners may raise its stake in the newspaper company to as much as 20% stake by the end of the week, Henry Blodget said on his Silicon Alley Insider Web site today. The group believes that, without aggressive restructuring, the company could go out of business, Blodget wrote, citing a person familiar with the plans. The investors want New York Times to sell its headquarters, stakes in professional sports teams and its regional newspapers. They want the company to consider selling the Boston Globe and About.com and use the proceeds to buy digital assets.

Reuters:
- MBIA(MBI) says municipal, corporate units should split.

Financial Times:
- NY hedge fund DB Zwirn & Co is winding down its principal funds after investors – rattled by lapses in internal controls, including the expense of a private jet used by the firm’s founder – said they would withdraw more than $2 billion.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (JCP), target $58.

Night Trading
Asian Indices are -3.0% to -.50% on average.
S&P 500 futures -.30%.
NASDAQ 100 futures -.14%.

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Earnings of Note
Company/EPS Estimate
- (AYR)/.39
- (ENDP)/.44
- (HTV)/.30
- (HUN)/.25
- (LTM)/.48
- (HUN)/.25
- (SYNT)/.35
- (PCG)/.55
- (GAS)/1.10

Upcoming Splits
- None of note

Economic Releases
- None of note

Other Potential Market Movers
- The Fed’s Fisher speaking, CIBC Institutional Investor Conference, DA Davidson Electronic Systems Design Conference and EnerCom Oil Service Conference could also impact trading today.

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