Tuesday Watch

Late-Night Headlines
Bloomberg:

- Yields on bonds backed by credit- card payments and auto loans, relative to benchmark interest rates, are falling from record highs as investors anticipate the start of the U.S. government’s program to bolster investment in consumer-finance assets. Demand for debt backed by consumer payments is picking up as details crystallize on the Federal Reserve’s plan to finance the purchase of as much as $200 billion in consumer asset-backed securities. The Treasury will commit as much as $20 billion in credit protection for soured loans under its Term Asset-Backed Securities Loan Facility, or TALF. “TALF is gaining interest among investors,” JPMorgan Chase & Co. analysts led by Christopher Flanagan in New York said in a Jan. 9 report. “Investors are homing in on the potential opportunities under the program.” The gap, or spread, on top-rated credit card-backed debt maturing in three years fell 75 basis points to 475 basis points more than the one-month London interbank offered rate, or Libor, during the week ended Jan. 8, according to JPMorgan Chase data. The spread on similar bonds backed by auto loans fell 25 basis points to 575 basis points more than Libor, the data show. One- month dollar Libor is 0.34 percent.

- JPMorgan Chase(JPM) announced it will be ready to issue fourth-quarter 2008 earnings on Thursday, January 15, 2009 at 6:30 a.m. (Eastern), rather than on Wednesday, January 21, the previously scheduled date.

- Barack Obama will direct his Treasury Department to restrict executive compensation and dividends for financial institutions that get “exceptional assistance” from the financial bailout fund, Larry Summers, a top economic adviser to the president-elect, told Congress. Summers sent a letter to congressional leaders today outlining the conditions that Obama supports in tapping the second half of the $700 billion Troubled Asset Relief Program.

- The Dalai Lama, Tibet’s exiled spiritual leader, blamed a lack of spirituality among people today for the global financial crisis. The Buddhist monk, speaking during a weeklong religious seminar in the Indian holy city of Varanasi, told followers that “rampant corruption in the world” is due to a decline in culture and spirituality. “People have become selfish and materialistic, which has led to the economic slowdown,” the 73-year-old Nobel Peace Prize winner said in an address at the Central Institute of Higher Tibetan Studies yesterday, Indian state-run broadcaster Doordarshan reported.

- Toyota Motor Corp., the largest seller of gasoline-electric autos, wants to sell batteries for plug-in cars to competitors to generate the biggest return from its investment. Along with making packs for a plug-in version of the Prius hybrid, Toyota wants additional revenue from supplying packs to rivals, Executive Vice President Masatami Takimoto said in an interview yesterday at the North American International Auto Show in Detroit.

- The euro traded near a one-month low versus the US dollar as traders raised bets the European Central Bank will reduce interest rates, decreasing the appeal of the region’s assets to overseas investors. “There is more than enough room for the euro to fall further,” said Hideki Amikura, deputy general manager of foreign exchange at Nomura Trust and Banking Co. Ltd. in Tokyo, a unit of Japan’s largest brokerage. “The focus of the currency market is how far rates will fall in Europe, because the ECB is behind the curve compared to other central banks.” A Credit Suisse Group AG gauge of probability based on an overnight index-swap index indicated the ECB will cut its 2.5 percent main refinancing rate by as much as 0.75 percentage point this week. “The latest German stimulus package probably won’t be enough to turn back the tide of euro selling,” said Kengo Suzuki currency strategist at Shinko Securities Co. in Tokyo. “It will take time for these measures to kick in, and other European countries will need to join Germany and announce similar policies. During this time, the ECB is sure to lower rates.”

- FedEx Corp.(FDX), the second-largest U.S. package-shipping company, agreed to buy 15 more Boeing Co.(BA) 777 Freighter aircraft and took an option for another 15 as it expands overseas deliveries.

- Futures trading will fall as much as 20% this year in financial and energy contracts, while exchange stocks are now valued at attractive levels, according to Morgan Stanley(MS). The analyst raised his exchange-industry rating to “in- line” from “cautious.” The companies covered are CME Group, Intercontinental Exchange, NYSE Euronext and Nasdaq OMX Group Inc. He favors Intercontinental Exchange, also known as ICE, out of that group, giving it the only “overweight” designation. He rates Nasdaq and CME Group as “equal weight” and NYSE as “underweight.”

- Greg Salvaggio, vice president of capital markets at Tempus Consulting Inc. sees the euro falling on lagging ECB rate cuts. (video)

- Gilead Sciences Inc.(GILD) expects to begin the first trial to test the effectiveness of its experimental four-in-one AIDS-drug pill early in the second half of this year, President John Milligan said in an interview.

- Federal Reserve Bank of Atlanta President Dennis Lockhart says the Fed has more tools, sees recovery this year. (video)

- Wheat, corn and soybeans plunged the most allowed by the Chicago Board of Trade after the U.S. Department of Agriculture projected bigger supplies than forecast in December. World wheat inventories may rise to 148.4 million metric tons by the end of the marketing year on May 31, up 0.7 percent from a December estimate, the USDA said today in a report. Global corn supplies will jump to 136 million tons, up 9.9 percent from a December forecast, the USDA said. U.S. soybean stockpiles before the next harvest may increase 9.7 percent to 6.12 million tons. “We’ve got more inventory to work our way through, and we didn’t need that,” said Larry Glenn, an analyst at Prime Ag in Quinter, Kansas.

- Crude oil fell for a sixth day in New York, extending yesterday’s 7.9 percent slump on speculation oil inventories last week increased as demand declined. An Energy Department report tomorrow will probably show U.S. crude stockpiles increased 2.25 million barrels in the week ended Jan. 9, according to a Bloomberg survey. Goldman Sachs Group Inc. said in a Jan. 9 report that “weak underlying economic fundamentals” will dominate the oil market. The bank maintained a forecast that oil will fall to $30 a barrel this quarter. Oil inventories in Organization for Economic Cooperation and Development nations will probably rise to a 10-year high in the next two months, Goldman analysts Giovanni Serio and Jeffrey Currie said in the report.

- Erich Hunziker, chief financial officer of Roche Holding AG, said talks with Genentech Inc. are “on track,” and a takeover by the Swiss drugmaker wouldn’t cause the company to cut its dividend. Hunziker made the remarks in a speech at the J.P. Morgan Healthcare Conference in San Francisco. He declined to comment on a Financial Times report last week that said Basel, Switzerland-based Roche planned to raise the bid to $95.

- ZymoGenetics Inc.(ZGEN) jumped 35 percent in extended trading after Bristol-Myers Squibb Co. said it would pay as much as $1.1 billion for PEG-interferon lambda, an experimental treatment for the hepatitis C liver virus.

- Taiwan’s dollar may fall against the U.S. currency in the first six months of the year as the island’s economy slumps, Barclays Capital said. Falling interest rates around the world will also support the U.S. dollar, said David Woo, global head of foreign-exchange strategy at Barclays Capital, the third-biggest currency trader.

- China’s exports fell the most in almost a decade in December as the deepening global recession cut demand for the nation’s toys, clothes and electronics. Shipments dropped 2.8 percent, the customs bureau said on its Web site today. That compares with a 21.7 percent gain a year earlier. Waning export demand has led to protests by fired factory employees, an exodus of 600,000 migrant workers from the manufacturing hub of Guangdong, and an estimated urban unemployment rate of more than 9 percent. Shipments may fall 10 percent in 2009, Nomura’s Sun estimated, dragging down economic growth by 2.5 percent points.

- International Business Machines Corp.(IBM) and Accenture Ltd.(ACN) are in a stronger position to win new contracts after the fraud at Satyam Computer Services Ltd. tarnished the credibility of India’s outsourcing industry. Companies seeking to outsource some of their operations -- such as handling customer calls or testing software -- may turn to U.S. firms in the short term as they grow wary of the risks of working with smaller companies abroad, said Moshe Katri, an analyst at Cowen and Co. IBM and Accenture are the two largest U.S. computer-services providers.

Wall Street Journal:

- DTV, Broadband Access Top Agenda for New House Chairman.

- The head of the United Auto Workers union said Monday that he would like the government to appoint a "car czar" who "knows something about the auto industry" to oversee the restructuring of the Big Three.

- He boasts his own self-declared army and the support of 13 governors, 53 congressmen and 180 mayors, along with the Sierra Club and the American Lung Association. He has plugged his cause on countless news shows and spent $60 million of his own money on a massive ad spree. Now T. Boone Pickens is about to find out which has more oomph: all of the above, or a $100 drop in the price of oil. The flinty Dallas billionaire is going all out to sell lawmakers and the next administration on his plan to wean the U.S. off Middle East oil by ramping up the use of wind power and natural gas.

- Senate leaders and Roland Burris reached a deal for him to become the 58th senator to caucus with Democrats in the 111th Congress, following a two-week standoff between the Senate and impeached Illinois Gov. Rod Blagojevich. The deal to seat Mr. Burris was struck Monday afternoon, when the secretary of the Senate accepted Mr. Burris's paperwork, which had been in question since Illinois Secretary of State Jesse White refused to certify the appointment by the embattled governor.

- President-elect Barack Obama intends to nominate his technology adviser, Julius Genachowski, to head the Federal Communications Commission, a Democratic source close to the Obama transition team said. Mr. Genachowski, 46 years old, is a former Harvard Law School classmate of Mr. Obama. He previously worked at the FCC during the Clinton administration. More recently, he co-founded LaunchBox Digital, a Washington, D.C.-based venture capital firm. He worked at Barry Diller's IAC/InterActive Corp. in various executive positions for eight years after leaving the FCC.

Barron’s:

- Google’s (GOOG) share of the U.S. search market increased to 72.07% in December, from 71.97% in November and 65.98% a year ago, according to research firm Hitwise.com. For all of 2008, Google accounted for 69.48% of all U.S. searches, up 8 percentage points from 2007.

MarketWatch.com:
- Alcoa kicked off the earnings season Monday after the close, reporting a loss of $1.2 billion last quarter, versus a gain of $632 million in the year-earlier period.

Wall Street appears to be betting that this upcoming earnings season -- covering the last quarter of 2008 -- will contain more of the same. Fear of worse-than-expected earnings was widely credited for the Dow Jones Industrial Average declining by 125 points on Monday. But a review of the historical patterns suggests that Wall Street may be overreacting. Because corporate earnings were already falling sharply a year ago, the benchmark is low for analyzing the current earnings season. So even an otherwise-mediocre earnings season might nevertheless look pretty good, relatively speaking.

Lloyd’s List:

- Shipowners face the prospect of placing vehicle carrier newbuildings directly into lay-up as new car sales slump, with those that ordered tonnage on a speculative basis during the recent boom staring at a miserable future unless they can wriggle out of contractual obligations.

- Car imports through the Baltic and into Russia have plummeted over the last three months. Not only has the global economic downturn affected sales, but also the collapse of the Russian rouble and a hike in import duty on new cars has knocked volumes into western Russian cities.

Reuters:

- General Motors Corp(GM) is planning to re-enter the vehicle lease business early this year and could see that form of financing amount to about 5 percent of its U.S. vehicle sales, a senior executive said on Monday.

Financial Times:
- Costs in the oil and gas industry have begun to fall for the first time this decade, bolstering the profits of companies hit by the steep drop in the price of crude. The shift could add to pressure on oil prices, which had been supported by soaring production costs. Analysts have argued that those costs put a floor under the oil price, because if the price fell below production cost, projects would be cancelled and oil supply would be cut. The leading survey of the industry’s capital spending costs, produced by Cambridge Energy Research Associates, a consultancy, is set to show a decline for the fourth quarter of last year, the Financial Times has learnt. Candida Scott of CERA said: “They are going to go down in 2009. Oil and gas, which are used as inputs, concrete, steel... they have all been falling in price.” Lower steel prices – they have fallen by more than 50 per cent since last summer – are particularly significant: steel typically accounts for 20-25 per cent of an oil project’s costs. Ms Scott said labor costs were generally hard to cut, but there were already signs that staff shortages were starting to ease.

South China Morning Post:

- Shanghai, Shenzhen ports see record throughput falls. Conditions expected to worsen as manufacturing contracts.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (AAPL), lowered estimates, target $132..

Night Trading
Asian Indices are -1.50% to +1.0% on average.
S&P 500 futures +.58%.
NASDAQ 100 futures +.60%.

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Economic Releases

8:30 am EST

- The Trade Deficit for November is estimated to shrink to -$51.0B from -$57.2B in October.

2:00 pm EST

- The Monthly Budget Statement for December is estimated at -$83.0B versus $48.3B in November.

Upcoming Splits
- None of note

Other Potential Market Movers
- The weekly retail sales, IBD/TIPP Economic Optimism Index, Fed’s Bernanke speaking, Fed’s Lacker speaking, (HRB) Investment Conference, (MOS) Analyst Meeting, (MGAM) Analyst Meeting, JPMorgan Healthcare Conference, CSFB Homebuilding Conference, Deutsche Bank Auto Analysts Conference, Cowen Consumer Conference and BMO Capital Unconventional Gas Conference could also impact trading today.

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

Stocks Finish Lower, Weighed Down by Commodity, REIT, Homebuilding, Financial and Construction Shares

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In Play

Stocks Falling into Final Hour on Financial Sector, Economic Pessimism

BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Financial longs and Computer longs. I have not traded today, thus leaving the Portfolio 75% net long. The tone of the market is bearish as the advance/decline line is substantially lower, most sectors are declining and volume is light. Investor anxiety is high. Today’s overall market action is bearish. The VIX is rising 7.85% and is elevated at 46.17. The ISE Sentiment Index is low at 100.0 and the total put/call is high at 1.11. Finally, the NYSE Arms has been running very high most of the day, hitting 2.89 at its intraday peak, and is currently 1.62. The Euro Financial Sector Credit Default Swap Index is rising 6.06% today to 102.0 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 rising 3.2% to 206.67 basis points. The TED spread is down 9.15% to 109 basis points. The TED spread is now down 357 basis points in just over three months. The 2-year swap spread is falling 3.23% to 52.50 basis points. The Libor-OIS spread is falling 8.91% to 98 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is unch. at .58%, which is down 217 basis points in just over six 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 yielding .06%, which is unch. today. Volume is light again on today’s sell-off with a high NYSE Arms reading. However, the stock and bond market’s reactions to today’s news are negatives again. The most economically sensitive, emerging market and financial shares are under the most selling pressure. The conditions are right for a sharp snapback rally to materialize at any time, but a positive catalyst must materialize. Nikkei futures indicate a -290 open in Japan and DAX futures indicate a -26 open in Germany tomorrow. I expect US stocks to trade mixed-to-lower into the close from current levels on more shorting, financial sector pessimism and economic pessimism.

Today's Headlines

Bloomberg:

- The cost of borrowing in dollars for three months in London fell the most in almost four weeks as central banks drenched money markets with cash to spur lending. The London interbank offered rate, or Libor, for such loans slid 10 basis points to 1.16 percent today, the steepest decline since Dec. 17, British Bankers’ Association data showed. The drop sent the Libor-OIS spread, a measure of money-market stress favored by former Federal Reserve Chairman Alan Greenspan, to the least since the September failure of Lehman Brothers Holdings Inc. The Libor-OIS spread, the difference between the three-month Libor for dollars and the overnight indexed swap rate, dropped to 98 basis points today, from a peak of 364 basis points on Oct. 10. The last time it ended the day at less than 100 basis points was Sept. 12, the last working day before Lehman filed for bankruptcy.

- Abbott Laboratories(ABT) will pay $1.36 billion for Advanced Medical Optics, a maker of eye-surgery equipment, expanding the drugmaker’s stake in medical devices.

- Russia’s ruble slid to the weakest level in almost six years against the dollar after the central bank devalued the currency for a second day as declining oil prices threaten to deepen the country’s economic crisis. The ruble fell 1.9 percent to 31.1252 per dollar by 12 p.m. in Moscow, from 30.5312 yesterday, extending its decline to 25 percent since August.

- China’s passenger-car sales fell 8 percent in December, capping the slowest annual increase in at least nine years, as a cooling economy damped demand for new vehicles. Chinese car sales have fallen in four of the past five months as the country’s slowing exports lead to job losses and reduced consumer confidence. Car sales in India also tumbled 7 percent last month, as the global recession spreads into Asia.

- China, the world’s largest metal consumer, discarded a plan to buy copper to support domestic smelters because producers are still profitable and inventories aren’t high, government and company officials said. The government also deemed it risky to buy the metal now from overseas as prices could fall, said the three officials.

- Gold trading climbed 20 percent last year as the global economic slowdown increased the metal’s appeal as an investment haven, said International Financial Services London. “The traditional ‘safe-haven’ appeal of precious metals has attracted many investors to this asset class,” Maslakovic said in a separate report that he wrote. Increased investment in exchange-traded funds also helped boost trading volumes, according to Maslakovic.

- Crude oil fell below $40 a barrel in New York on concern output cuts by the Organization of Petroleum Exporting Countries will fail to counter a slump in demand. Goldman Sachs Group Inc. said that “weak underlying economic fundamentals” will dominate the oil market. The bank maintained its forecast that oil will fall to $30 a barrel this quarter, in a report dated Jan. 9. OPEC may trim production further should crude prices continue to decline, Iran’s OPEC governor, Mohammad Ali Khatabi, said yesterday. Inventories at Cushing, Oklahoma, the delivery point for crude oil traded at Nymex, climbed to 32.2 million barrels, the highest since the Energy Department started tracking the supplies in 2004. Oil prices also fell on speculation that OAO Gazprom, Russia’s natural-gas exporter, will resume fuel shipments to Europe. The European Union said Russia and Ukraine signed a natural-gas monitoring deal that may pave the way for the resumption of flows “by tomorrow morning.”

- Russia’s efforts to extract more money from Ukraine by cutting off natural gas supplies sent the fuel to a three-year high in Europe, and set up prices for a steeper decline. OAO Gazprom, Russia’s state-run gas export monopoly, today said Ukraine had agreed to an accord on monitoring gas flows, which will pave the way for resuming shipments through Ukraine to Europe. The global recession is reducing demand just as new liquefied natural gas terminals open, increasing the capacity for imports. The post-winter thaw usually drives spot prices lower, and the cost of most European gas is tied to months-old oil prices, which have plunged 74 percent since July. Natural gas “will drop like a stone,” said Thierry Bros, an analyst at Societe Generale, France’s second-largest bank, in an interview from Paris.

- E-mails between New Jersey Governor Jon Corzine and a labor leader he once dated need not be made public, a state appellate court ruled. Corzine’s exchanges with former Communications Workers of America Local 1034 President Carla Katz during union negotiations in 2007 are covered under executive privilege, according to the decision released today. At the time, Katz led the largest union local representing state workers. “The governor properly asserted executive privilege and plaintiff did not articulate or identify a sufficient reason to overcome the privilege,” Judge Mary Catherine Cuff wrote in the three-judge panel’s 37-page decision.

- Bernard Madoff will remain free on a $10 million bond, a federal judge ruled, denying a request by U.S. prosecutors that he be jailed while awaiting trial on a federal securities fraud charge. U.S. Magistrate Judge Ronald Ellis in Manhattan today said Madoff, arrested last month for running an alleged $50 billion Ponzi scheme, may continue to live under house arrest in his Manhattan apartment on the Upper East Side.

- Spain’s top AAA long-term sovereign ratings may be cut by Standard & Poor’s, putting the country at risk of its first downgrade from the agency as it suffers its first recession in 15 years. Standard & Poor’s cited “significant challenges” facing the Spanish economy and said it would probably decide on the rating this month. Credit-default swaps linked to Spanish government debt rose 11 basis points to 106, according to CMA Datavision, in the biggest one-day move since Oct 23.

Wall Street Journal:

- Why Russia Stokes Mideast Mayhem by Garry Kasparov. Petrodictators have a permanent interest in instability. There are those who will incite a new crisis to escape or distract from the current one. This is the scenario looming in Russia as the Kremlin faces increasing pressure on multiple fronts. Russia and its fellow petrodictatorships are in dire need of a way to ratchet up global tensions to inflate the sagging price of oil. Petrodictators, after all, need petrodollars to stay in power. The war in Gaza and the otherwise inexplicable skirmish with Ukraine over natural gas have helped the Kremlin in this regard, but $50 a barrel isn't going to be nearly enough. It will have to reach at least $100 and it will have to happen soon. There persists a very damaging myth in the West, spouted by politicians and the press, that says Russia's assistance is needed with Iran and other rogue states. In fact, the Kremlin has been stirring this pot for years and has a vested interest in further increasing turmoil in the region. The futile pursuit of balance and neutrality by Western leaders and the media has become nothing more than a cover-up for the gravest of crimes. No doubt they would have judiciously considered the "legitimate grievances" of Stalin, Hitler and bin Laden. The time to stand up to such monsters is before they have achieved their horrific goals, not after. (very good article)

- Mutual-fund firms aren't known for their elan, preferring to launch funds in good times when small investors' confidence is high. That isn't the tactic T. Rowe Price Group Inc. has chosen. The Baltimore-based money manager's latest fund offering, Strategic Income, will focus on some of the market's riskiest areas, including junk bonds, loans, mortgage-backed securities and emerging markets debt.

- Seeking a bigger slice of the online video space, CBS Corp.'s television site TV.com is bolstering its programming with more than a thousand full episodes of shows ranging from "Starsky & Hutch" to "Dexter."

- The transition team for President-elect Barack Obama, hoping to make a swift break in Bush administration policies at the Centers for Disease Control and Prevention and the Food and Drug Administration, is moving toward naming new heads to two of the most important federal health agencies.

- While Apple Inc.'s(AAPL) iPhone kicked off the craze for touch-sensing screens on mobile phones, Microsoft Corp.(MSFT) is pushing a similar technology for personal-computer screens that could eventually replace the computer mouse.

CNBC.com:
- There is a big chance that the Chinese economy will contract, as exports are falling because of the financial crisis that has gripped Western economies, Hugh Hendry, chief investment officer and partner at hedge fund Eclectica, told CNBC. "The world super-sized itself. The world seemed to be enormous, seemed to be a giant. China built a productive capacity to serve a world that doesn't exist," Hendry said. Figures showing that China's economic growth was relying mainly on domestic development should be taken with a grain of salt, he added. "Asian economic figures are very bad, and Chinese economic figures are particularly bad," Hendry said.

NY Times:

- Toyota Plans to Leapfrog GM With a Plug-In. Toyota plans to introduce its plug-in hybrid electric vehicle late this year, a year earlier than originally planned, and a year ahead of the Chevrolet Volt.

- YouTube is aiming to raise its profile in American politics by helping deliver a glimpse of life on Capitol Hill to its large online audience. On Monday, YouTube, in collaboration with Congress, will unveil two new Web pages, one for the House and one for the Senate, where every lawmaker will be able to create a video channel on the site.

Fox News:

- Alleged Ponzi schemer Bernard Madoff scammed millions from his sister, who is now desperately selling her Florida home, sources told the New York Post. Sondra Wiener, 74, "has nothing," said one of her neighbors in the BallenIsles Country Club, a gated Palm Beach enclave where she and her husband, Marvin, live alongside such celebrities as Serena and Venus Williams. "She lost millions in this whole thing," said a source who estimated her loss at $3 million.

USA Today:

- For the first time since the dawn of the jet age, two consecutive years have passed without a single airline passenger death in a U.S. carrier crash. No passengers died in accidents in 2007 and 2008, a period in which commercial airliners carried 1.5 billion passengers on scheduled airline flights, according to a USA TODAY analysis of federal and industry data.

Politico:

- The Rt. Rev. V. Gene Robinson of New Hampshire, who was elected the Episcopal Church’s first openly gay bishop in 2003, will deliver the invocation for Sunday’s kickoff inaugural event on the steps of the Lincoln Memorial, the Presidential Inaugural Committee said. President-elect Obama is scheduled to attend the afternoon event, which is free and open to the public.

Boston Globe:

- Hedge fund firm GMB Capital Management is shutting down a fund that lost more than $50 million on bad bets that included putting money with accused swindler Bernard Madoff, according to sources familiar with the matter. The Boston-based GMB Low Volatility Fund LP, which had more than $100 million in assets, began liquidating late last year, the sources said.

Reuters:
- South Korea's POSCO (PKX), the world's No. 4 steelmaker, expects its January steel sales to fall by around 27 percent to 1.9 million tons, hit by faltering demand, its chief financial officer said on Tuesday.

- Mohammad Khatami, who won presidential elections in 1997 and 2001 with landslides, gave the strongest signal yet on Monday that he was considering running in this year's race for the Iranian presidency. Khatami worked for political and social change during his eight years in office but hardliners in charge of major levers of power in the Islamic Republic blocked many of his reforms, costing Khatami some key supporters, such as students. If he chooses to run, Khatami can expect to face Mahmoud Ahmadinejad, who came to power in 2005 pledging a return to revolutionary principles and promising to spread Iran's oil wealth more fairly.

O Estado de S. Paulo:

- Brazilian companies may have cut 600,000 jobs in December, double the normal amount for that month, because of the global economic slowdown, citing people close to Labor Minister Carlos Lupi.

Bear Radar

Style Underperformer:
Mid-cap Value (-2.88%)

Sector Underperformers:
Coal (-8.50%), Steel (-6.91%) and Construction (-6.03%)

Stocks Falling on Unusual Volume:
STP, NIHD, TKC, REP, APA, CSKI, CBST, DECK, DRYS and TBSI

Stocks With Unusual Put Option Activity:
1) LEG 2) SGP 3) HK 4) PALM 5) SAY

Bull Radar

Style Outperformer:
Large-cap Growth (-1.15%)

Sector Outperformers:
Computer Services (+1.20%), Restaurants (+.99%) and Medical Equipment (+.49%)

Stocks Rising on Unusual Volume:
MO, ED, KALU, JCOM, DB, HOLX, AFAM, EZPW, UHAL, APOL, MR, SNX and SUR

Stocks With Unusual Call Option Activity:
1) MCRI 2) MU 3) HOG 4) V 5) KLAC