Bear Radar

Style Underperformer:

Small-cap Growth (-1.07%)

Sector Underperformers:

Oil Tankers irlind (-3.84%), Utilities (-2.15%) and Steel (-1.89%)

Stocks Falling on Unusual Volume:

TSRA, OIS, NGS, EXC, FCX, PCU, REP, ASTE, PEC, ABM, NOK, CAE and GNI

Stocks With Unusual Put Option Activity:

1) CELG 2) WLP 3) SWY 4) SUN 5) MT

Bull Radar

Style Outperformer:

Large-cap Value (-.88%)

Sector Outperformers:

Tobacco (+3.22%), Disk Drives (+2.06%) and Airlines (+.72%)

Stocks Rising on Unusual Volume:

SNDK, UST, ALK, ZNH, MO, ADTN, DLB, IOC, MATK, ULTA and FUJI

Stocks With Unusual Call Option Activity:

1) SNDK 2) UST 3) MF 4) LO 5) HUN

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

Friday Watch

Late-Night Headlines
Bloomberg:
- The euro slumped to an 11-month low against the US dollar on speculation a credit-market slump will push European economies into recession. The currency headed for its biggest weekly decline versus the yen in more than a year after European Central Bank President Jean-Claude Trichet said the economy is ``weak'' and Luxembourg Finance Minister Jean-Claude Juncker said the euro is ``overvalued.''
- Ospraie Management LLC, the New York- based investment firm that this week shut down its biggest hedge fund, told clients its investment in XTO Energy Inc.(XTO) contributed to its losses in the past two months, according to investors.
- Mitsui & Co., Japan's second-largest trading company, will close its New York hedge fund business as it shifts to investments including property and utilities.
- Crude oil fell to a five-month low in New York as the U.S. dollar rallied, reducing the appeal of commodities as an inflation hedge. Oil is headed for its biggest weekly decline in a month, falling more than 6 percent this week as the euro dropped to the lowest this year against the dollar amid signs that Europe's economy is slowing. ``The outlook looks bearish and funds are selling off on fundamental weakness.''
- Soybeans fell for a third straight day on speculation Midwest rains will boost the yield potential of the second-biggest U.S. crop.
- Russia Inherits ‘Enormous Problems’ by Adopting Georgia Regions.
- Chile's central bank raised its target interest rate to 8.25 percent, the highest in almost a decade, as policy makers step up the fight against inflation. Inflation reached a 13-year high of 9.5 percent in July.
- Philippine inflation accelerated to the fastest pace in more than 16 years, adding pressure on the central bank to increase borrowing costs further in October. Consumer prices climbed 12.5 percent in August from a year earlier after rising a revised 12.3 percent in July.
- South Korea's won rose from near a four-year low on speculation the central bank intervened to slow a decline in the currency, Asia's worst performer this year.

Wall Street Journal:
- Sen. John McCain seized the Republican party nomination he has sought for almost a decade by pledging to rise above Washington's acrimony as president and strike a new tone by reaching across partisan divides.

Fox News:
- The troop surge in Iraq has been more successful than anyone could have imagined, Barack Obama conceded Thursday in his first-ever interview on FOX News’ “The O’Reilly Factor.” As recently as July, the Democratic presidential candidate declined to rate the surge a success, but said it had helped reduce violence in the country. On Thursday, Obama acknowledged the 2007 increase in U.S. troops has benefited the Iraqi people.

NY Times:
- Altria Group is in advanced talks to buy UST, the maker of the popular Skoal and Copenhagen smokeless tobacco brands, for more than $10 billion, people with close knowledge of the negotiations said late Thursday. The terms could not be learned.
- The People’s Bank of China needs more capital and is in talks with the nation’s finance ministry on how to get it.
- “Palin Power” may represent conservative principles and women’s ascension, but it could just as well mean purchasing power. After Gov. Sarah Palin’s acceptance speech last night, merchandise with her name or likeness is super hot. Amazon.com is “temporarily out of stock” of the only Palin biography, “Sarah: How a Hockey Mom Turned Alaska’s Political Establishment Upside Down.” The Alaska governor has pulled off a remarkable coup, snagging a higher Amazon sales rank than the Democratic memoir writer she scorned last night. The Palin biography now sits at No. 13, while Senator Barack Obama’s “The Audacity of Hope” is No. 26.
- Scientists have for the first time recorded individual brain cells in the act of summoning a spontaneous memory, revealing not only where a remembered experience is registered but also, in part, how the brain is able to recreate it.

Forbes.com:
- An audience of 37.2 million people watched Alaska Governor Sarah Palin, the Republican vice presidential candidate, on ABC, CBS, NBC, CNN, Fox News Channel and MSNBC, Nielsen Media Research said Thursday. PBS estimated its audience at 3.9 million, based on a less reliable sample of several big cities. Nielsen does not count the audience for C-SPAN, which also showed the speech. Last week, Nielsen said 38.4 million people watched Obama speak at a Denver stadium on the six commercial networks, along with BET, TV One, Univision and Telemundo - four networks that didn't cover Palin's speech. PBS added an estimated 4 million to that total. Nearly 2 million more women were watching Palin than men, Nielsen said. Viewers were far more interested in Palin than Democratic vice presidential candidate Joe Biden. Biden's speech to Democrats last week was seen by an estimated 24 million people.

IBD:
- Quanta Services(PWR): Wind, Sun Are New Frontiers For Maker Of Electrical Infrastructure.

USA Today.com:
- Honda has a new budget-priced hybrid.
- Rates on 30-year mortgages averaged 6.35% this week, down from 6.40% the previous week, a third consecutive decline that dropped rates to the lowest level since mid-July, Freddie Mac reported Thursday.

Reuters:
- Lehman Brothers Holdings Inc (LEH) is considering a plan to put some $32 billion of its commercial real estate and mortgage assets in a new company and spin it off, Bloomberg reported on its website on Thursday.
- Hedge fund company Atticus Capital denied market rumors it was liquidating its positions and closing down and said it had a large net capital position and was looking for investment opportunities, the Wall Street Journal reported on Thursday.
- Goldman Sachs Hedge Fund Partners LLC, an investment fund comprised by five other hedge funds, fell in value by 2.6 percent in July, according to a Securities and Exchange Commission filing on Thursday.

Financial Times:
- Russia's central bank intervened heavily to support the rouble on Thursday as analysts said $21bn of foreign capital might have been pulled out of the country as Moscow paid the price for its conflict with Georgia.

TimesOnline:
- UK car sales fell to their lowest level for more than 40 years last month in the most dramatic sign yet that the country is heading into a recession.

Edaily:
- Samsung Electronics Co. is seeking to acquire SanDisk Corp.(SNDK). Samsung hired JPMorgan Chase(JPM) as the adviser for the deal about a month ago and the company’s semiconductor division is expected to lead the acquisition.

Commercial Times:
- Taiwan’s central bank bought the island’s currency during the opening and closing minutes of trading yesterday to help support it, citing traders.

Shanghai Securities News:
- Shanghai’s new home prices fell the most in three years in July as sales volumes declined. Prices fell 24% in July from the previous month, the largest decline since July 2005. The volume of new home sales slumped almost 70% in both July and August from a year earlier.

Late Buy/Sell Recommendations
Citigroup:
- Downgraded (ANF) to Sell, target $45.
- Reiterated Buy on (MOT), target $12.50.
- Reiterated Buy on (EL), raised target to $60.

Morgan Stanley:
- Rated (ABT) Overweight, target $67.
- Rated (COV) Overweight, target $64.
- Rated (AFFX) Underweight, target $8.
- Rated (WAT) Overweight, target $81.

Night Trading
Asian Indices are -2.75% to -1.0% on average.
S&P 500 futures -.32%.
NASDAQ 100 futures -.35%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Pre-market Stock Quote/Chart
Before the Bell CNBC Video(bottom right)
Global Commentary
WSJ Intl Markets Performance
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Today in IBD
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Bond Ticker
Economic Preview/Calendar
Daily Stock Events
Upgrades/Downgrades
Rasmussen Business/Economy Polling

Earnings of Note
Company/EPS Estimate
- (NSM)/.34

Economic Releases
8:30 am EST
- The Change in Non-farm Payrolls for August is estimated at -75K versus -51K in July.
- The Unemployment Rate for August is estimated at 5.7% versus 5.7% in July.
- Average Hourly Earnings for August are estimated to rise .3% versus a .3% gain in July.

Upcoming Splits
- None of note

Other Potential Market Movers
- The Fed’s Yellen speaking, 2Q mortgage delinquencies report, (AGP) investor day, Kaufman Brothers Investor Conference, Morgan Keegan Equity Conference and Thomas Weisel Healthcare Conference could also impact trading today.

BOTTOM LINE: Asian indices are sharply lower, weighed down by commodity and automaker shares 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.

Stocks Finish at Session Lows, Weighed Down by Homebuilding, Financial, Networking and Steel Shares

Evening Review
Market Summary
Top 20 Biz Stories
Today’s Movers
Market Performance Summary
WSJ Data Center
Sector Performance
ETF Performance
Style Performance
Commodity Movers
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Commentary
After-hours Movers
After-hours Real-Time Stock Bid/Ask
After-hours Stock Quote
After-hours Stock Chart
In Play

Stocks Sharply Lower into Final Hour on Forced Selling, More Shorting, Global Growth Worries

BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Semi longs, Alternative Energy longs, Medical longs and Software longs. I added (IWM)/(QQQQ) hedges and added to my (EEM) short this morning, thus leaving the Portfolio 75% net long. The tone of the market is very negative as the advance/decline line is substantially lower, every sector is declining and volume is about average. Investor anxiety is above average. Today’s overall market action is bearish. The VIX is jumping 11.3% and is still above-average at 23.90. The ISE Sentiment Index is below-average at 129.0 and the total put/call is above average at 1.04. Finally, the NYSE Arms has been running extraordinarily high most of the day, hitting a peak of 2.80, and is currently 2.09. The Euro Financial Sector Credit Default Swap Index is rising 4.74% today to 95.83 basis points. This index is up from a low of 52.66 on May 5^th, but down from 129.46 basis points on March 20^th. The North American Investment Grade Credit Default Swap Index is +1.33% to 145.0 basis points. The TED spread is rising .12% to 1.13 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is dropping 5 basis points to 1.95%, which is down 67 basis points in about seven weeks and at the lowest level since August 2003. The forced selling that has characterized trading over the last few days has intensified. However, it is a positive that the NYSE Arms is soaring with volume only around average levels. This indicates to me that it won’t take much to send stocks higher as the forced selling subsides. Besides the forced selling, the main problem today is Europe. The ECB seems content to break inflation at any cost to the global economy. I still expect the ECB to change to a more dovish stance during 4Q. Several pundits on CNBC have insinuated that falling energy prices are a negative for stocks, which I believe couldn’t be further from the truth. The commodity bubble is the main reason for the end to the global economic boom that has occurred over the last several years. Runaway inflation in emerging markets and hesitant central bankers in developed markets are a direct result of the commodity bubble. As well, the commodity bubble is the driving force behind the current “US negativity bubble.” As of now, the overwhelming majority of investors and pundits think oil will bottom around current levels. Oil hasn’t moved much over the last 10 days and is still doing major economic damage at current levels. A clear break below $100/bbl. would be a big boost to the global economy, especially developed markets. Nikkei futures indicate a -287 open in Japan and DAX futures indicate a -30 open in Germany tomorrow. I expect US stocks to trade mixed into the close from current levels as falling commodity prices and bargain-hunting offset more shorting, forced selling and global growth worries.