Today's Headlines

Bloomberg:
- UBS AG and Credit Suisse Group AG led a decline in the cost of protecting company bonds from default after Federal Reserve Chairman Ben S. Bernanke said the central bank may extend its emergency-loan program into 2009.
- Optimism about U.S. stocks among newsletter writers slid to the lowest level since July 1994 after the Dow Jones Industrial Average fell into a bear market and oil prices reached records, according to Investors Intelligence
- The U.S. Commodity Futures Trading Commission named Stephen Obie acting director of enforcement as the agency faces political pressure to ensure energy and agricultural markets are not being manipulated as prices soar.
- Iran's test-firing of a long-range missile capable of reaching Israel violates United Nations Security Council resolutions and further isolates it from the rest of the world, U.S. officials said.
- Boeing Co.(BA) raised its 20-year forecast for world jetliner deliveries by 2.8 percent, saying air travel is expanding and carriers will need new, more fuel-efficient planes to replace aging jets amid surging oil prices.
- Corn fell for the seventh time in eight sessions, after setting a record last month, as better weather helped plants in the U.S. Midwest recover from the worst flooding in 15 years.
- Fadel Gheit, managing director of oil and gas research at Oppenheimer says oil may fall further as China demand slows. (video)

Wall Street Journal:
- Yahoo Inc.(YHOO) CEO Jerry Yang accused Microsoft(MSFT) of trying to destabilize the Internet company without a real desire to complete a deal, and he responded sharply to recent comments by investor Carl Icahn.
- Newer, Faster, Cheaper iPhone 3G.

NY Times:
- Chrysler, Toyota, Adapt Designs for Fuel Efficiency.
- US Republican and Democratic lawmakers, confronted with growing concern among constituents about oil prices, returned to Capital Hill this week inclined to compromise on energy policy. Lawmakers are envisioning an agreement that would ease restrictions on domestic offshore oil drilling while allowing for renewable fuel incentives and stricter rules for oil speculators, citing Senator Susan Collins, Republican of Maine.
- Obama Donors Aren’t Rushing to Aid Clinton. A prominent donor to Senator Barack Obama recently sent an e-mail plea to other supporters, asking them — for the sake of Democratic unity — to write checks to Senator Hillary Rodham Clinton to help retire her $23 million in campaign debt. Some of the replies are unprintable, given the coarse language, the donor said. A sampling of others included: “Why would I help pay off debts that Hillary amassed simply to keep damaging Senator Obama?”

CNBC.com:
- Lehman Brothers(LEH) has enough capital to rebuild its business, former CEO Peter Cohen said. Lehman has raised capital that’s many multiples of the losses it incurred on mortgage-related assets.

NY Post:
- A blind trust run by Mayor Bloomberg is willing to pay between $4.5 billion and $5 billion to buy Merrill Lynch's 20 percent stake in Bloomberg LP, sources tell The Post.
- NYC Welfare Cases Drop to 45-Year Low.
- NYC Bus Ridership Surge Leaves Many Standing.

Bear Radar

Style Underperformer:

Small-cap Value -1.07%

Sector Underperformers:

Airlines irlind (-2.94%), REITs (-2.68%) and Gaming (-2.60%)

Stocks Falling on Unusual Volume:

FUL, FSS, ITG, CAVM, DRIV and WWW

Stocks With Unusual Put Option Activity:

1) SPLS 2) EXC 3) AEO 4) ABK 5) RMBS

Economic Releases

- None of note

Bull Radar

Style Outperformer:

Mid-cap Growth (+.84%)

Sector Outperformers:

Steel (+4.02%), Biotech (+2.05%) and Drugs (+1.47%)

Stocks Rising on Unusual Volume:

CLF, X, STLD, AGU, SXT, SGP, GSK, KBW, EEFT, SWIR, LOOP, LAZ, ERIC, SKS, QLGC, FSYS, AFAM, MDVN, MELI, RMBS, BUCY, GIII, JRCC, POOL, NUVA, VRSN, ULBI, CTSH, XNPT, NCTY, AAUK, SGMO, SCHN, TITN, CIR, KBW, AHD and SNN

Stocks With Unusual Call Option Activity:

1) BAX 2) ABK 3) ERIC 4) IDTI 5) BBT

Links of Interest

Market Snapshot Commentary
Market Performance Summary
Style Performance
Sector Performance
WSJ Data Center
Top 20 Biz Stories
IBD Breaking News
Movers & Shakers
Upgrades/Downgrades
In Play
Exchange Volume vs. Average
NYSE Unusual Volume
NASDAQ Unusual Volume
Hot Spots
Option Dragon
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Real-Time Intraday Quote/Chart
Dow Jones Hedge Fund Indexes

Wednesday Watch

Late-Night Headlines
Bloomberg:
- The US dollar traded near a two-week high against the euro as crude oil prices fell and the Federal Reserve pledged to support credit markets, improving the outlook for the world's biggest economy.
- Gold fell for the third straight session after energy costs tumbled, reducing the appeal of the precious metal as a hedge against inflation. ``When you prick a balloon, you get an explosion,'' said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois. ``You're looking at a weakening economy, weakening demand for all commodities, and a fear of greater government intervention in these markets.'' Speculative long positions, or bets prices will rise, outnumbered short positions by 187,679 contracts, the agency said in its Commitments of Traders report. Net-long positions rose by 34,141 contracts, or 22 percent, from a week earlier.
- Hedge funds that primarily invest in Asia outside Japan widened their losses this year to 14%, according to preliminary data from Hedge Fund Research.
- Orders for Japanese machinery rose at 10 times the pace economists expected in May, as demand increased for equipment used to make semiconductors and steel. Equipment orders, which signal capital spending in the next three to six months, rose 10.4 percent from April when they climbed 5.5 percent, the Cabinet Office said today in Tokyo.
- The G-8 yesterday conditioned a promise to reduce greenhouse gas pollution at least 50 percent by 2050 on China, India and other emerging economies taking part in a ``global response.'' The two sides will square off today in Toyako, on Japan's northern island of Hokkaido, to air their differences.
- Australian consumer confidence fell to the lowest level in more than 16 years, adding to evidence soaring living costs, declining share prices and interest-rate increases are slowing the economy.
- Alcoa Inc.(AA), the world's third-largest aluminum producer, reported second-quarter profit that topped analysts' estimates as the company raised prices. The shares gained 3.5% in after-hours trading.
- U.K. consumer confidence declined to the lowest level since at least 2004 in June as inflation accelerated and the economic slowdown deepened, Nationwide Building Society said.

MarketWatch.com:
- Have commodities peaked? Some say oil could go back to $100, with other commodities following suit.
- Hurt by electricity shortages, high interest rates and soaring inflation, South Africa's economy may slip into a recession this year, Moody's Investors Service warned.

NY Times:
- Google(GOOG) Introduces a Cartoonlike Method for Talking in Chat Rooms.

BusinessWeek.com:
- Unlocking Cell Phones May Get Easier.

CNNMoney.com:
- The Issues: McCain vs. Obama See where the presidential candidates stand on the issues that affect you and your money.

USA Today.com:
- Handheld marvel: iPhone 3G is a lot friendlier for business, too.
- Despite the slow economy, venture-capital funding of clean-tech start-ups in the USA and abroad is on pace for a record year, according to a report released Tuesday.

Pension & Investments:
- Hedge funds gain big from volatile global markets. Assets of top 25 climbed 73% in 2007 from year earlier.
- The hedge fund industry wants parity with mutual funds in its ability to buy exchange-traded funds under a Securities and Exchange Commission proposal to streamline ETF regulation. Mutual funds and hedge funds are limited under the Investment Company Act of 1940 to ownership stakes of no more than 3% of the outstanding voting shares of other investment companies, including ETFs.

Honolulu Advertiser:
- Hawaii auto-loan delinquencies plunge 42%, to .6% in 1^st quarter. The sharp decline in Hawaii and nationally comes after rates spiked late last year along with worries about home foreclosures in the wake of the subprime mortgage crisis.

Chicago Tribune:
- Chicago Tribune to cut 80 newsroom positions.

Reuters:
- Cisco Systems Inc (CSCO) Chief Executive John Chambers said on Tuesday that the office of the CEO will be less hierarchical in five years, although he has not yet decided on when he would hand over to a successor. Asked about the U.S. economy, Chambers said many customers of Cisco see a recovery early next year. "Most customers still see the turn probably late this year or early next year. More of them looking toward early next yea," he said.
- Two environmental groups on Tuesday filed a lawsuit seeking to overturn new federal regulations that grants permission to oil companies working in the Chukchi Sea to disturb the polar bears and walrus that live there.
- New Zealanders pitch tent in early queue for iPhone.
- Shares of Hovnanian Enterprises Inc (HOV) rose more than 26 percent on Tuesday amid share gains across the home building industry and on news that Hovnanian's chairman had bought stock.

Financial Times:
- Beijing needs to bare its teeth to Tehran.

Herald Sun:
- Australia Minimum Wage Hike May Lift Inflation.

Australian Financial Review:
- Australian bankruptcies are the highest in 10 years amid higher petrol and food prices and increasing interest rates.

Oriental Morning Post:
- China’s securities regulator has banned the nation’s senior fund managers from leaving the county before Beijing’s Aug. 8 Olympics to ensure the stock market’s stability. Senior executives of China’s fund management firms will not be allowed to go abroad for any activities including vacation, investor meetings or investment conferences, the report said.

China Securities Journal:
- China Investment Corp., which manages the nation’s $200 billion sovereign wealth fund, will “soon” begin investing in global equities through external managers.

Xinhua:
- China’s economy is seeing more negative impact from the world slowdown and “imported” inflation, citing vice premier Li Keqiang. China’s economic development is at a “crucial” stage, Li said.
- China faces “unprecedented” job pressure this year partly because of a record number of university graduates seeking work, Caijing Magazine reported, citing Minister of Human Resources and Social Security Yin Weimin. The number of students expected to complete their degrees this year will reach 5.59 million, an increase of 13% from 2007. As many as 800,000 of lat year’s graduates are still unemployed.

Late Buy/Sell Recommendations
Citigroup:
- Rated (QCOM) Buy, target $61.
- Reiterated Buy on (DOX), added to Top Picks Live list, target $46.
- Reiterated Buy on (SPLS), target $28.

Morgan Stanley:
- Reiterated Overweight on (GILD), target $59.

RBC:
- Upgraded (VMW) to Outperform, target $60.

Night Trading
Asian Indices are +1.0% to +2.25% on average.
S&P 500 futures +.07%.
NASDAQ 100 futures -.05%.

Morning Preview
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Earnings of Note
Company/EPS Estimate
- (ISCA)/.55
- (WWW)/.31
- (SGR)/.62
- (RT)/.20
- (AIR)/.51

Upcoming Splits
- (PCU) 3-for-1
- (ATW) 2-for-1

Economic Releases
10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil inventory drawdown of -2,100,000 barrels versus a -1,982,000 barrel decline the prior week. Gasoline supplies are expected to rise by 100,000 barrels versus a 2,100,000 barrel increase the prior week. Distillate inventories are estimated to rise by 2,000,000 barrels versus a 1,264,000 barrel increase the prior week. Finally, Refinery Utilization is expected to rise by .13% versus a .63% gain the prior week.

Other Potential Market Movers
- The weekly MBA Mortgage Applications report, (IART) shareholder meeting, (MW) mid-quarter update, (ETH) investor conference, (HTH) shareholder meeting, CE Unterberg Towbin Growth Conference, Collins Stewart Growth Conference and Oppenheimer Consumer Growth Conference could also impact trading today.

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