Bull Radar

Style Outperformer:
Small-cap Value (+.47%)

Sector Outperformers:
Homebuilders (+7.81%), I-Banks (+3.22%) and Retail (+3.04%)

Stocks Rising on Unusual Volume:
AMRI, QSII, USMO, BK, EBS, CCI, AZN, JPM, WYE, LNC, MET, BAS, NOV, PTR, BBL, SU, PKX, WOR, MNRO, STRL, BBBY, CBST, OFIX, NNDS, CTAS, TECH, RCRC, ISRG, CHCO, ATHN, AMZN, QGEN, AMSC, CEG, IBA, FMS, ETP, KCE, TOD, RHB, TLP and ISH

Stocks With Unusual Call Option Activity:
1) TXT 2) JNPR 3) SNDK 4) GENZ 5) TIF

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:

- Republican Senator Saxby Chambliss won a second term and blocked Democrats from gaining a 60-seat Senate majority by defeating challenger Jim Martin in a runoff election in Georgia. Chambliss received 57.4 percent of the vote to 42.6 percent for Martin with 99 percent of the precincts reporting. Chambliss’ victory makes it more difficult for Democrats to stave off Republican filibusters, an attempt to block legislation through endless debate. It takes 60 votes to stop the procedure, meaning Democrats, set to control at least 58 seats when the Senate convenes in January, will need to enlist Republicans to stymie filibusters. Preventing a 60-seat majority gives Republicans “a shot at shutting Democrats down, or at least getting a seat at the table,” on important legislation, said Jennifer Duffy, a congressional analyst at the nonpartisan Cook Political Report in Washington.

- U.S. House Speaker Nancy Pelosi said she believes either Congress or the Bush administration will step in to aid domestic automakers because bankruptcy is “not an option.”

- Hedge Funds Lower Fees, Lengthen Lockups on New Bond Funds. Artradis Fund Management Pte, RAB Capital Plc’s Northwest unit and Cannizaro (Hong Kong) Ltd. are cutting fees and locking up investors’ money for longer in new hedge funds that will buy bonds after prices fell in Asia.

- The Markit iTraxx Australia index quoted 25 basis points lower at 355 as of 11:27 am in Sydney, Citigroup Inc. data show. The Markit iTraxx Japan index fell 5 basis points to 355 in Tokyo, according to Morgan Stanley.

- Research In Motion Ltd.(RIMM), maker of the BlackBerry phone, reported third-quarter sales and profit that missed its forecasts, blaming the economic slump and a strengthening U.S. dollar.

- Incitec Pivot Ltd., Australia’s largest fertilizer maker, and Wesfarmers Ltd. may face falling sales and rising inventories as farmers delay purchases on expectation domestic prices will drop in line with a global slide. “Demand is very slow; stock that was purchased before the crash is still sitting in sheds,” Peter McEwen, chief executive officer of Summit Fertilizers, a unit of Japan’s Sumitomo Corp. said from Kwinana, Western Australia.

- China, India Looking More ‘Third World’ Again. Economists such as Jim Walker of Asianomics Ltd. in Hong Kong are right that ``China is now at the heart of the global slowdown.'' If Walker's prediction that China will grow 4 percent or less next year -- with a 30 percent chance of a contraction -- is even close to being right, the nation is in huge trouble. The world's most-populous country needs to grow closer to 10 percent to generate the jobs needed to contain social unrest.

- Mongolia, sitting on what Rio Tinto Group has said is the world’s largest undeveloped copper-gold resource, is considering faster approval for investments after commodity prices plunged, President Nambaryn Enkhbayar said.

- NATO foreign ministers agreed to resume limited ties with Russia and ruled out further expansion of the alliance in the near term, handing an early diplomatic challenge to President-elect Barack Obama. Western European countries led by Germany maintained a veto on fast-track membership for Georgia and Ukraine and successfully pushed for an end to the U.S.-inspired policy of “no business as usual” with the Kremlin that was proclaimed after Russia’s war with Georgia in August.

Wall Street Journal:

- Big Three Seek $34 Billion Aid. GM, Chrysler Warn of Collapse This Month as Lawmakers Explore Bankruptcy.

- Electricité de France SA will offer to buy as much as $6.5 billion of assets from Constellation Energy Group Inc.(CEG), the U.S. utility that spurned an earlier offer from the French energy giant and instead agreed to be bought by Warren Buffett's MidAmerican Energy Holdings Co., people familiar with the matter say.

- AIG May ‘Dismantle’ Firm to Repay Government Loan.

- Goldman Sachs Group Inc.'s(GS) Whitehall family of real-estate funds is struggling with weak performance and potentially big losses on some investments made at the top of the real-estate market. Whitehall is best known for deals such as buying Rockefeller Center in 1996, but has slashed the value of the equity in one of its funds in half and likely will struggle to make a profit on deals such as its purchase of the Stratosphere, a Las Vegas casino, in 2008 and a string of hotel deals in the past two years.

- Another week, another hedge-fund restructuring. This time it's Ramius Capital Group, the New York firm overseen by Peter Cohen, the former chairman of the old Shearson Lehman Brothers. Ramius manages $10 billion in assets, but like many hedge-fund firms it's getting smaller.

- Paulson Debates Second Infusion. U.S. Treasury Secretary Henry Paulson is debating whether to ask Congress for the second installment of the $700 billion bailout package, concerned about competing demands for the funds and a potentially hostile reaction from lawmakers.

MarketWatch.com:
- Will December break Dow’s losing streak? Odds of stocks losing in the month are low.

NY Times:
- Lehman Bankers Resurface in Barclays Deal Team.

CNNMoney.com:
- iPhone grabs 30% of US smartphone market. Apple’s(AAPL) iPhone is the star in a series of charts published Tuesday by Needham & Co. analyst Charles Wolf.

ABC News:

- The Mumbai Police Bomb Squad confirmed today that terrorists planted a total of five bombs in the city during Wednesday's attacks, and that at least two of the bombs used sophisticated timers unlike anything India had seen until this year.

IBD:

- Integral Systems(ISYS): Defense Suppliers Banks On Being Low-Cost Maker Of Satellite Gear.

Reuters:

- Europe's greenhouse gas market has shown that investments by rich countries into clean-energy projects in poor nations are not always the best way to cut emissions blamed for global warming, the investigative arm of the U.S. Congress reported on Tuesday.

- Financial assets have become so cheap because of the credit crisis that now is a good time to scoop up bargains, the head of one of the world's biggest hedge funds, Avenue Capital, said on Wednesday. "Now is a phenomenal time to buy, assuming you think we're not in a depression," Marc Lasry, chairman and CEO of the company, said at the 2008 Clinton Global Initiative meeting in Hong Kong. "We're looking at valuations we think are extremely low. Unless the unthinkable happens, you'll be fine," he said, referring to the investment environment. Lasry said the fund is holding around $7 billion in cash. Of that capital, Avenue is investing 10 percent a month, he said.

Financial Times:
- Robert Gates, the US defence secretary who will remain as Pentagon chief in the Obama administration, on Tuesday said he was "less concerned" about President-elect Barack Obama's 16-month timetable to remove combat troops from Iraq. During the presidential campaign, Mr Obama pledged to remove combat troops from Iraq within 16 months of taking office, a position that Mr Gates and Admiral Mike Mullen, chairman of the joint chiefs, had publicly opposed. Mr Gates on Tuesday appeared to soften his opposition, saying he was comfortable with the 16-month timetable because Mr Obama wanted a "responsible drawdown". In doing so, however, he hinted that the incoming president might be more flexible on the timing of the withdrawals.

South China Morning Post:

- Macau casino revenues snapped a two-month losing streak last month, rising a modest 2.6 per cent from a year ago to 7.55 billion patacas, according to unofficial data.

China Daily:

- The sharp fall in initial public offerings and other businesses has forced many accounting firms in China, including the big four international giants, to start cutting jobs for the first time in many years.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (ESRX), target $77.

- Reiterated Buy on (SKS), target $7.

Deutsche Bank:

- Investors should buy technology stocks because they will probably rebound the most when the economy recovers, according to Owen Fitzpatrick, head of equities at Deutsche Bank Private Wealth Management. The industry “doesn’t have to deal with the credit issue,” Fitzpatrick said. “Tech name in general are pretty safe.” Microsoft(MSFT), Apple Inc.(AAPL) and Google Inc.(GOOG) are among seven of 15 companies representing the largest proportion of the S&P 500 Info Tech Index that had had no long-term debt as of Sept. 30, shielding them from turmoil in credit markets.

Night Trading
Asian Indices are -.25% to +1.75% on average.
S&P 500 futures -.73%.
NASDAQ 100 futures -.82%.

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
Commodity Movers
Top 25 Stories
Top 20 Business Stories
Today in IBD
In Play
Bond Ticker
Economic Preview/Calendar
Daily Stock Events
Upgrades/Downgrades
Rasmussen Business/Economy Polling

Earnings of Note
Company/EPS Estimate
- (DLM)/.12

- (AVAV)/.28

- (ARO)/.62

- (JAS)/.33

- (CPRT)/.43

- (SNPS)/.38

Economic Releases
8:15 am EST

- The ADP Employment Change for November is estimated at -205K versus -157K in October.

8:30 am EST

- Final 3Q Non-farm Productivity is estimated to rise .9% versus a prior estimate of a 1.1% gain.

- Final 3Q Unit Labor Costs are estimated to rise 3.6% versus a prior estimate of a 3.6% increase.

10:00 am EST

- ISM Non-Manufacturing for November is estimated to fall to 42.0 versus 44.4 in October.

10:35 am EST

- Weekly EIA energy inventory data.

2:00 pm EST

- Fed’s Beige Book

Upcoming Splits
- None of note

Other Potential Market Movers
- The Feds’ Lacker speaking, Fed’s Kroszner speaking, weekly MBA mortgage applications report, Challenger Job Cuts report, (EGN) Investor Meeting, (XEL) Investor Meeting, (HI) Analyst Day, Deutsche Bank Tech Conference, Merrill Lynch Energy Conference, Citi Chemicals Conference, FBR Investor Conference, CSFB Tech Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by financial and airline stocks 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.

Stocks Rising into Final Hour on Less Financial Sector Pessimism, Short-Covering, Lower Energy Prices

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Internet longs, Biotech longs, Computer longs and Medical longs. I covered my (IWM)/(QQQQ) hedges and some of my (EEM) short this morning, thus leaving the Portfolio 100% net long. The tone of the market is bullish as the advance/decline line is higher, almost every sector is rising and volume is about average. Investor anxiety is high. Today’s overall market action is bullish. The VIX is falling 6.19% and is very elevated at 64.27. The ISE Sentiment Index is below average at 110.0 and the total put/call is above average at .96. Finally, the NYSE Arms has been running below average most of the day, hitting .39 at its intraday trough, and is currently .56. The Euro Financial Sector Credit Default Swap Index is rising 3.97% today to 122.33 basis points. This index is up from a low of 52.66 on May 5^th, but down from 157.81 on Sept. 16^th. The North American Investment Grade Credit Default Swap Index is down .07% to 260.50 basis points. The TED spread is falling .92% to 216 basis points. The TED spread is now down 248 basis points in about seven weeks. The 2-year swap spread is down 1.86% to 105.75 basis points. The Libor-OIS spread is rising 1.69% to 183 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is rising 7 basis points to .40%, which is down 222 basis points in under five months and at the lowest level since Bloomberg record-keeping began in August 1998. The 10-year TIPS spread bottomed at .65% in October 1998 during the Asian financial crisis and at 1.24% in October 2001 during the technology bubble-bursting meltdown. The 3-month T-Bill is now yielding .05%, up 1 basis point today. The REIT index, the source of much angst of late, is surging 12%. As well, the (XLF) is at session highs, up 6.5%, despite weakness in (GS). Many market leading stocks are substantially outperforming the major indices. I am seeing a number of stocks with bad news out today reverse substantially higher off morning lows, which is always a good sign. It is also a large positive that another steep decline in energy prices isn’t resulting in growth worries. I would expect to see further strength in Asia tonight. Nikkei futures indicate an +230 open in Japan and DAX futures indicate a -9 open in Germany tomorrow. I expect US stocks to trade modestly higher into the close from current levels on less financial sector pessimism, short-covering, bargain-hunting, lower energy prices and seasonal strength.

Today's Headlines

Bloomberg:
- Oil Falls More Than $100 From July Record. U.S. fuel consumption during the four weeks ended Nov. 21 was down 6.6 percent from a year earlier, the department said in a report last week. Oil prices will extend declines during the next 12 to 18 months if OPEC fails to implement “sufficient cuts” and supply stays at current levels, according to Christof Ruehl, the chief economist of BP Plc, Europe’s second-largest oil producer.

- Russia’s ruble may fall as much as 25 percent in the next 12 months as the central bank seeks to conserve foreign-currency reserves amid declining oil prices, Goldman Sachs Group Inc. said.

- CME Group Inc.(CME), the world’s largest futures market, said November volume fell 29 percent while the second-largest U.S. derivatives exchange, Intercontinental Exchange Inc.(ICE), said trading rose 9 percent.

- Ford Motor Co.(F) asked Congress for a credit line of as much as $9 billion, saying it expects to break even or be profitable before taxes in 2011.

- India ruled out military retaliation against Pakistan after last week’s attacks in Mumbai and asked its neighbor to extradite 20 people suspected of involvement in terrorism, including the alleged mastermind of the rampage.

- The U.S. Securities and Exchange Commission may act to curb conflicts of interest at credit-rating companies while delaying a mortgage-bond ranking proposal faulted by underwriters, two people familiar with the matter said.

- Fidelity Investments, the world’s largest manager of mutual funds, will open its Contrafund and Low-Priced Stock Fund to new investors starting Dec. 16.

Wall Street Journal:

- Goldman Sachs Group Inc.(GS), known for avoiding many of the blowups that have battered its Wall Street rivals, now is likely to report a net loss of as much as $2 billion for its quarter ended Nov. 28, according to industry insiders.

- Highbridge Capital Management helped its owner, J.P. Morgan Chase & Co., become one of the biggest hedge-fund managers in the world. But like many prized assets roiled by this year's markets, Highbridge has shrunk considerably, and now many investors want out. Investors have asked to withdraw 36% of the assets from the firm's flagship multistrategy fund, the firm's biggest. The exodus, combined with investment losses, could reduce the once-$15 billion fund to $6 billion, according to people familiar with the fund.

- Former AOL Chief Executive Jonathan Miller is trying to raise money to purchase a portion or all of Yahoo Inc., according to people familiar with the matter.

Silicon Alley Insider:
- Analysts Pan Nokia’s(NOK) iPhone Killer.

NY Post:

The days of hedge funds operating behind a curtain may soon be over. Bruised and bloodied by unprecedented losses, hedge-fund investors are rebelling, demanding lower fees, greater transparency and, in a growing number of cases, unfettered access to their dough. They're doing this through separately managed accounts (SMAs), which basically act as a portfolio for individual investors.

USA Today:

- Despite tough economic times, families are still out there shopping, and video games are at the top of a lot of lists. Experts expect overall retail sales to grow a modest 2.2% over last year, but sales of video games could improve as much as 15% over 2007, says analyst Michael Pachter of Wedbush Morgan Securities. Despite tough economic times, families are still out there shopping, and video games are at the top of a lot of lists. Experts expect overall retail sales to grow a modest 2.2% over last year, but sales of video games could improve as much as 15% over 2007, says analyst Michael Pachter of Wedbush Morgan Securities.

Boston Globe:

- The Bush administration is expected to issue as early as Friday a favorable final environmental review of the nation's first offshore wind farm project, clearing the way for Cape Wind to obtain a federal lease to erect 130 wind turbines in Nantucket Sound.

CNNMoney.com:

- Big Blue’s big plan.

Charlotte Observer:

- Family Dollar’s(FDO) Levines Give $1 Million to Help Needy.

Folha de S. Paulo:
- Brazilian vehicle registrations fell 25% in November from a year earlier because of the global credit crunch.

Sarmayeh:
- Iran’s power grid will ‘soon’ be linked to Russia’s via Azerbaijan, based to an agreement ‘recently’ signed by Iranian and Russian officials, citing the Energy Ministry.

Bear Radar

Style Underperformer:
Large-cap Value (+1.96%)

Sector Underperformers:
HMOs (-.56%), Oil Service (-.14%) and Utilities (+.27%)

Stocks Falling on Unusual Volume:
RTP, XNPT, QSFT, RIMM, CEDC, VCO and SUN

Stocks With Unusual Put Option Activity:
1) SINA 2) PSA 3) AMED 4) SNDA 5) TSRA