Stocks Sharply Lower into Final Hour on More Short-Selling, Rising Financial Sector Pessimism, Increasing Global Economic Concerns

BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Retail longs, Technology longs and Medical longs. I was stopped out of a trading long, added (QQQQ)/(IWM) hedges and added to my (EEM) short today, thus leaving the Portfolio 75% net long. The tone of the market is very bearish as the advance/decline line is substantially lower, every sector is declining and volume is below average. Investor anxiety is above average. Today’s overall market action is very bearish. The VIX is rising 22.1% and is very elevated at 56.18. The ISE Sentiment Index is below average at 125.0 and the total put/call is above average at .95. Finally, the NYSE Arms has been running at a high level most of the day, hitting 2.78 at its intraday peak, and is currently 2.37. The Euro Financial Sector Credit Default Swap Index is rising 8.97% today to 117.33 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 rising 4.39% to 220.69 basis points. The TED spread is rising .01% to 102 basis points. The TED spread is now down 364 basis points in just over three months. The 2-year swap spread is rising 6.83% to 61.75 basis points. The Libor-OIS spread is falling .90% to 93 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is up 8 basis points to .56%, which is down 214 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 .10%, which is down 1 basis point today. The US dollar is soaring 1.76% today. The US Economic Surprise Index has risen to -80.70, while the European Economic Surprise Index has declined to -152.0. I suspect the US currency will take out its recent highs versus the euro over the coming weeks. Recent eurozone economic data, European bank developments and ECB comments/actions are greatly impacting global stock markets in a negative way, in my opinion. Nikkei futures indicate a -210 open in Japan and DAX futures indicate a -51 open in Germany tomorrow. I expect US stocks to trade mixed-to-lower into the close from current levels on more shorting, increasing economic pessimism and rising financial sector worries.

Today's Headlines

Bloomberg:

- The Dow Jones Industrial Average fell 14 percent between Barack Obama’s election and Inauguration Day, the biggest decline ever. The second-biggest drop gave way to a 75 percent rally in 1933.

- U.S. bank stocks plunged, led by Bank of America Corp.(BAC), on concern that mounting losses will force companies to slash dividends, raise more money and face further government oversight.

- Kingdom Holding Co., the investment company controlled by Prince Alwaleed bin Talal, reported a fourth-quarter loss of almost 31 billion riyals ($8.26 billion) after Citigroup Inc. shares plunged in the credit crisis. Kingdom Holding fell 6.8 percent in Riyadh. The company reported its latest results on the Saudi bourse Web site today after the market closed. “The loss is phenomenal,” John Sfakianakis, chief economist at Saudi British Bank, said in an interview today by telephone from Riyadh. “This is the biggest corporate story for Saudi Arabia in many years.”

- Chrysler LLC, rescued last month with $4 billion in federal loans, is trading a 35 percent stake to Italy’s Fiat SpA as the two companies work to create viable carmaking operations. Cerberus Capital Management LP’s Chrysler, the third- largest U.S. automaker, would get access to Fiat’s small-car lineup and global sales network to wean itself from dependence on trucks and the North American market, while Fiat would expand a U.S. foothold now limited to its luxury brands.

- At least one-quarter of House Democrats’ proposed $825 billion economic stimulus plan wouldn’t be spent until at least 2011, according to a report that suggests the package may take longer than expected to boost the economy. A Congressional Budget Office analysis said most of the plan’s $355 billion in appropriations for programs such as highway construction wouldn’t be spent until after 2010. The government would spend about $26 billion of that money this year and $110 billion more next year, the report estimated.

- The Bank of New York Mellon(BK) has rescheduled its fourth-quarter 2008 financial results conference call to 5 p.m. EST today (Tuesday, January 20, 2009).

- The Bank of Canada slashed its key interest rate to the lowest since the institution was founded in 1934 and signaled that more cuts may be needed to jolt the economy out of recession and stabilize credit markets. Governor Mark Carney cut the target rate on overnight loans between commercial banks by half a point to 1 percent, lower than the previous record of 1.12 percent in 1958 when the rate was based on treasury-bill yields.

- Greenwich, Connecticut, home prices dropped the most in three decades last year and the number of houses sold plunged by more than a third as cutbacks in the financial industry spurred declines in residential real estate. The median home price in America’s hedge-fund capital dropped 7 percent to $1.95 million in 2007, and the number of single-family houses sold fell to 460 from 726 a year earlier, broker Prudential Connecticut Realty said.

- Options traders increased bets that General Electric Co.(GE), which reports quarterly results this week, will tumble by half before next month’s contracts expire. About 56,000 GE puts traded when an investor used a “butterfly” spread strategy to wager that the stock will fall to $7.50 by Feb. 20, according to Andrew Wilkinson, the senior market analyst at Greenwich, Connecticut-based Interactive Brokers Group Inc. GE, the finance and industrial company that’s fallen 61 percent in the past year on the New York Stock Exchange, lost 5.3 percent to $13.23 at 1:07 p.m. in New York.

Wall Street Journal:

- Barack Obama was sworn in Tuesday as the 44th president under sunny skies and before an ocean of humanity, calling on the nation to put aside greed, irresponsibility and "our collective failure to make hard choices" -- and turn back the "raging storms" of war and recession. In an ambitious, 20-minute address, Mr. Obama sought to obliterate the divisions of conservatism and liberalism and remake American politics. "Let it be said by our children's children that when we were tested we refused to let this journey end, that we did not turn back nor did we falter; and with eyes fixed on the horizon and God's grace upon us, we carried forth that great gift of freedom and delivered it safely to future generations," Mr. Obama said.

NY Times:

- A new national report on childbirth suggests that some long-term trends may be reversing themselves. The report, published Jan. 7 by the National Center for Health Statistics, found that more babies were born in 2006 than in any year since 1961.

- They also put him in rare concert with his campaign opponent, Gov. Sarah Palin of Alaska, who just announced her own wind, geothermal, tidal and wave energy push. Momentarily parting ways with “drill, baby, drill,” the pro-oil refrain made popular during the Republican presidential campaign, the oil- and gas-producing state will endeavor to get half its electricity from renewables by 2025, Governor Palin said last week, as she unveiled a state energy plan.

FINalternatives:

- Today’s inauguration of Barack Obama as the 44th president of the United States will be the most expensive in history. And despite their troubles, hedge fund managers and employees are helping to foot the bill. The bill for Obama’s swearing-in may hit $150 million—more than $100 million of which is for security costs. And among those giving the maximum $50,000 per individual are Soros Fund Management’s George Soros and D.E. Shaw Group’s David Shaw, leading a large number of hedge fund industry professionals to pay for the inauguration. The Presidential Inauguration Committee has raised more than $27 million, of which $7.1 million came from those involved in finance, according to the Centre for Responsive Politics. The Soros family alone gave $200,000. Other hedgies (or former hedgies) giving the max include Grosvenor Capital Management’s Stephen Malkin and Michael Sacks (and Sacks’ wife, Cari), Paloma Partners CEO Donald Sussman and Oaktree Capital Management Chairman Howard Marks. Also giving $50,000 was CNBC personality Ron Insana, who recently shuttered his hedge fund, Insana Capital Partners, and Howard Kagan, late of activist shop Harbinger Capital Partners. Howard Gottlieb, a retired partner at Glenwood Financial Group, now owned by Man Group, gave $50,000, as did his wife, Anne. Marsha Laufer, the wife of Renaissance Technologies chief scientist Henry Laufer, also gave as much as she could, along with Naomi Aberly, the wife of HBK Capital Management’s Lawrence Lebowitz. Chess Capital Partners founder Shonda Warner, Fletcher Asset Management deputy CEO Denis Kiely, GEM Investors senior managing partner Barry Malkin, McGarr Capital’s Cappy McGarr, Seminole Capital Partners founder Michael Messner, Taconic Capital Advisors founder Frank Brosens, and Willow Creek Capital Management founder Aaron Braun each gave the maximum. The CRP said that 118 people with Wall Street ties gave a total of $3.6 million to fund the festivities, followed by lawyers ($2.5 million) and people with ties to the entertainment business ($1.7 million).

Politico:

- Allies of House Speaker Nancy Pelosi call her a grand master at “three-level chess” — a skilled politician who games out her complex relationships with the White House, the Senate and her own fractious, heterodox House Democratic Caucus. Two days before Barack Obama’s Inauguration, the speaker showed off a new move — using the media to keep even a Democratic president from wandering onto her turf. Pelosi used a Fox News appearance Sunday to break with the president-elect on two key issues: the fate of President George W. Bush’s tax cuts for families earning $250,000 or more and the possibility of congressional investigations into the actions of Bush administration officials. While Pelosi’s words showed that she and Obama don’t always agree on matters of policy, the signal they sent was more important: Yes, you can use the media to speak straight to the public. But so can I — and I will when you’re invading my turf.

Reuters:
- Barclays on Tuesday upgraded the U.S. real estate investment trust (REIT)sector to positive from neutral, saying the group will report better quarterly results than what is priced into current valuation, "as they should be relatively less impacted than private players" by the economic environment. The firm added that the group's sell-off from September 2008 through November "was overdone, resulting in attractive valuation levels, even after the subsequent recovery."

Financial Times:
- Any attempt by Barack Obama to get European Union members of Nato to send more troops to Afghanistan will be strongly rebuffed by EU voters, according to a new opinion poll for the Financial Times. As Mr Obama prepares to be sworn in as US president on Tuesday, a Harris poll for the FT shows that clear majorities of people in the UK, France, Italy and Germany believe that their governments must not send more forces to Afghanistan, irrespective of demands that the new American head of state might make.

El Nacional:
- Venezuela received $175 million in foreign investment last year, 56% less than the previous year.

Sarmayeh:
- Iran’s oil revenue will decline by more than 50% to about $30 billion in the fiscal year starting March 21, citing former Economy Minister Davoud Danesh-Ja’fari.

Etemade Meli:

- Iran’s economy has been caught by the global financial turmoil and faces a “vast crisis,” citing head of Tehran’s chamber of commerce Yahya Ale Eshagh.

Bear Radar

Style Underperformer:
Small-cap Value (-5.10%)

Sector Underperformers:
Banks (-13.5%), Oil Tankers (-6.57%) and I-Banks (-6.56%)

Stocks Falling on Unusual Volume:
STT, PNC, BK, WFC, CS, SU, MBT, PCZ, WAG, FWRD, NTRS, IWOV, LOGI, ZION, MELI, SINA, BMRN, PETS, SIVB, CATY, HBC, SLF, WF and BLK

Stocks With Unusual Put Option Activity:
1) BUCY 2) LUK 3) JASO 4) LDK 5) ADP

Bull Radar

Style Outperformer:
Large-cap Value (-1.94%)

Sector Outperformers:
Telecom (+.18%), Drugs (-.48%) and Education (-.53%)

Stocks Rising on Unusual Volume:
KGC, NEM, HMC, MO, BCO, RAI, HES, PTNR, DT and NBL

Stocks With Unusual Call Option Activity:
1) STT 2) RYL 3) PNC 4) SLM 5) HBC

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Tuesday Watch

Weekend Headlines
Bloomberg:

- Fiat SpA, the Italian automaker that sells only Ferraris and Maseratis in the US, may be close to a deal to acquire a stake in Chrysler LLC to expand in the world’s largest auto market. Fiat has an agreement in principle to acquire as much as 35% of Auburn Hills, Michigan-based Chrysler.

- The ruble fell below the weakest level seen in the 1998 Russian crisis after the central bank devalued for the sixth time in seven days to protect reserves. The currency slid to as little as 33.1080 per dollar today, the lowest since early 1998, before the government defaulted on $40 billion of debt. The ruble has lost 7.3 percent since official trading resumed this year, extending the decline to 29 percent since August.

- Southern California home sales rose 51 percent in December as a surge in foreclosures pushed prices of single-family houses and condominiums down from a year earlier, MDA DataQuick said.

- Crude oil fell below $35 a barrel in New York on speculation faltering global economic growth will drive down fuel consumption for a second year. Slowing world demand, reduced tension in the Middle East and settlement of Russia’s gas dispute with Ukraine could push prices toward last month’s four-year low of $32.40 a barrel, Goldman Sachs Group Inc. said yesterday. OPEC may have to cut output again should prices fall further, Algerian Oil Minister Chakib Khelil said Jan. 17. The settlement of Russia’s natural gas dispute with Ukraine, and a cease-fire in the Gaza Strip had also increased selling pressure, Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois, said yesterday. “There was a reduction of the geopolitical risk premium,” he said in a telephone interview.

- Israel proceeded with pulling its troops out of the Gaza Strip as Hamas ceased rocket attacks and residents of the Palestinian enclave grappled with the aftermath of the three-week conflict. In southern Israel, residents began returning to normal routines as there were no reported rockets yesterday, an army spokesman said on customary condition of anonymity.

- HSBC Holdings Plc led banking shares lower in Asia after Royal Bank of Scotland Group Plc flagged the biggest loss in British history.

- The Federal Reserve’s inability to narrow the gap between consumer borrowing costs and government interest rates is driving investors to the longest-maturity Treasuries. Central bank officials say they may buy Treasury debt, which helps determine rates on everything from mortgages to auto loans, to prevent borrowing costs from rising and delaying the economic recovery. Speculation that the purchases will start within days helped spark a rally last week in debt due in 10 years or more.

- Royal Bank of Scotland Group Plc, facing the biggest loss in British history, promised to make 6 billion pounds ($8.7 billion) available to U.K. borrowers as the government took another step toward full control. In exchange for government guarantees on losses from toxic debt, the bank will have to sign a binding agreement with the Treasury on how much it will lend and on what terms. Auditors will move in to check the bank is following the government directive. “We’ll be one of the first guinea pigs,” RBS Chief Executive Officer Stephen Hester told reporters on a conference call yesterday.

- Russia and Ukraine signed 10-year natural-gas contracts, ending a dispute that’s squeezed supplies to the European Union for almost two weeks and setting the stage for a resumption of deliveries. Russian Prime Minister Vladimir Putin said yesterday gas flows to the 27-nation bloc will restart in “full volumes” through all export routes. His Ukrainian counterpart, Yulia Timoshenko, said there would be “no delays.” Gas prices in the U.K., Europe’s biggest market, slumped the most in almost a year on expectations that supply shortages in many parts of central Europe and the Balkans will shortly be eased.

- Top advisers to President-elect Barack Obama signaled they will emphasize getting credit to consumers and businesses rather than helping banks as the new administration deploys the second half of the $700 billion rescue fund. “The focus isn’t going to be on the needs of banks; it’s going to be on the needs of the economy for credit,” Lawrence Summers, the president-elect’s top economic adviser, said on CBS’s “Face the Nation” program yesterday.

- Spain had its AAA sovereign credit rating removed by Standard & Poor’s in the second downgrade of a euro-region government in five days, as the country’s first recession in 15 years swelled the budget deficit. The risk of losses on Spanish government debt rose to a record today, credit-default swaps showed, after S&P lowered the rating one step to AA+ and assigned it a “stable” outlook. It was S&P’s first reduction in Spain’s rating and puts it on the same level as Belgium and Hong Kong.

- Morgan Stanley(MS) scrapped a deal to hire a supertanker for storing crude oil in the Gulf of Mexico, two people familiar with the situation said. Traders for the bank canceled the booking today, the people said, declining to say why or be identified because the information is private.

- New York Times Co.(NYT) received $250 million in financing from companies controlled by Mexican billionaire Carlos Slim as credit markets dry up and the newspaper industry confronts plummeting ad revenue.

- China’s official urban unemployment rate jumped for the first time since 2003 and may climb to an almost 30-year high as exports slump and a slowdown deepens in the world’s third-biggest economy.

Wall Street Journal:

- Americans poured into the nation's capital to celebrate the inauguration of their first black president. But with the U.S. in its worst economic crisis since the Depression and at war on two fronts, Barack Obama was expected to call on the country to embrace a new culture of responsibility when he takes office at noon. The inaugural crowd Tuesday could reach two million people, one of the largest gatherings in Washington's history. Millions more will be watching across the U.S. and around the world, with outdoor video screens planned for public squares. Mr. Obama will take the oath of office with his hand on the Bible that once belonged to the last president to hail from Illinois, Abraham Lincoln. The 44th president will stand opposite the Lincoln Memorial, two miles away, where 45 years ago, Martin Luther King Jr. called upon the nation to judge people by the content of their character, not the color of their skin. Mr. Obama spent Monday celebrating Dr. King's birthday as a day of service, while street vendors sold memorabilia juxtaposing the images of the two black leaders.

- Hedge Fund Fees Too High? Traditional 2%-20% structure questioned as results disappoint.

MarketWatch.com:

- We'll say it again: A bear-market bottom may be in sight. We base this opinion on the work of Prof. Jeremy Siegel of the University of Pennsylvania's Wharton School, author of the classic book, "Stocks For the Long-Run." Bottom line: In two centuries, Siegel's year-end data has never shown the stock market further below trend than it is today.

- Gadgets and gizmos: what they mean to their makers. A look at 10 favorites from the Consumer Electronics Show.

NY Times:

- Piping Internet video into a television seems as if it should be simple — after all, a screen is a screen. But consumer electronics and media companies have been moving toward that combination with painstaking caution, both because of technical limitations and to protect their existing business models. Now, with an Internet start-up’s hubris and whimsical name, an 11-employee New York company called Boxee is barging into the fray. It is treading over the carefully negotiated business arrangements of much larger companies and garnering accolades from tech-heads for doing what the big guys have failed to do.

- Hedge Funds, Unhinged. Mr. Griffin, who built the Citadel Investment Group into one of the largest hedge funds in the world, has seen the value of his funds plunge by roughly $10 billion — one of the biggest amounts lost in the hedge fund carnage last year. He was down 55 percent while the average fund was down 18 percent.

- The National Park Service and an organization representing victims’ families have reached a deal to buy the most critical piece of land needed for the Flight 93 National Memorial in Shanksville, Pa.

- Within the next few months, Cisco Systems(CSCO), the largest maker of networking equipment, plans to release a product that threatens to shake up the technology industry and put the company on a collision course with traditional partners like Hewlett-Packard(HPQ) and I.B.M.(IBM).

Washington Post:
- Nearly 100 wealthy families and power couples contributed at least $100,000 each to help Barack Obama over the past two years, creating an elite set of donors to whom the president-elect repeatedly turned in financing his campaign, transition and inauguration, a Washington Post analysis shows. As inaugural donations become public, a list of Obama's most loyal backers has emerged, pointing to his success with a system that allows supporters to give maximum amounts on several occasions and to multiple committees. The families gave to as many as five committees, records show, and 27 of the 94 families also bundled money from others, collecting millions of dollars on top of their personal donations. Among the supporters were well-known families such as the Rockefellers, as well as lesser-known backers such as New Yorker Frank Brosens, a leader in the hedge fund industry, who raised $500,000 for Obama's campaign and inauguration in addition to the $182,000 he gave with his wife, parents and three sons. Many big donors will also watch Obama be sworn in next week, but from premium seats, and will attend an inaugural ball and other private celebrations using tickets they received in exchange for their donations. "Obama had a well-organized core of larger donors who he went back to repeatedly for donations," said Stephen Weissman, associate director for policy at the nonpartisan Campaign Finance Institute, citing the election's "many vehicles" for giving. "These cumulative donations add up and lead to greater and greater influence." Brosens, founder of the $1.3 billion Taconic Capital Advisors and an alumnus of Goldman Sachs(GS), bundled about half a million for Obama's campaign and $200,000 for the inauguration.

Boston Globe:

- Several major department stores will be giving away $175 million worth of perfume, makeup, and moisturizers beginning tomorrow - part of an agreement to settle a lawsuit that accused them of conspiring with cosmetics companies to fix prices.

LA Times:

- An estimated 60 million people, virtually all of them on the Indian subcontinent, carry a mutated gene that makes them all but certain to develop heart disease in their 40s and 50s and to suffer an early death, researchers are reporting today. Though heart disease is the leading cause of death around the world, it is an even more serious problem in India. By next year, according to Indian scientists, the country will carry 60% of the world's burden of heart disease, and this defective gene may be the major reason why.

USA Today:

- In an interview that aired Sunday on Dateline NBC, the chairman and CEO of Berkshire Hathaway (BRK/A), said the nation's economic situation is not as bad at World War II or the Great Depression, but it's still pretty severe. Buffett said Americans are in a cycle of fear, "which leads to people not wanting to spend and not wanting to make investments, and that leads to more fear. We'll break out of it. It takes time." "It's never paid to bet against America," he said. "We come through things, but its not always a smooth ride."

CNNMoney.com:

- Stimulus: Spend or cut taxes?

- The total cost of the inauguration of the 44th President of the United States will likely top $150 million by the time the galas and streamers and porta-pots are all cleaned up.

Reuters:

- Venezuelan President Hugo Chavez said on Saturday Barack Obama had the "stench" of his predecessor as U.S. president and was at risk of being killed if he tries to change the American "empire." Chavez's foreign policy is based on countering U.S. global influence and promoting countries like Russia and China as world leaders. He has close ties to U.S. foes Cuba and Iran. Until recently, Chavez had said he hoped relations with Washington could improve. But in the last few days, he has picked up on comments he attributes to Obama accusing him of obstructing progress in Latin America and exporting terrorism.

- The Vatican will soon have its own channel on the video sharing site YouTube where the Catholic faithful or the curious will be able to see Pope Benedict or Church events, a Vatican source said on Saturday.

Financial Times:

- US futures regulators are seeing a jump in the number of “Ponzi” schemes coming to light in their markets as the $50bn fraud allegedly perpetrated by Bernard Madoff prompts fraudsters to confess. The development is a sign that the fall-out is spreading beyond the markets in which Mr Madoff was active as the collapse of his fund prompts widespread client redemptions.

- Germany’s trade surplus with partners in the European Union has more than doubled over the past decade and amounts now to more than 5 per cent of GDP. At the same time intra-European trade balances have deteriorated for all of Germany’s immediate neighbors. This development must stop. Competitive tensions are increasing rapidly and could soon reach the tipping point where the euro and the single market fall apart. The gleeful policy consensus in Berlin (“We are world champions in exports”) resembles the last dance on The Titanic, moments before it hit the iceberg.

- Obama courts conservative foes. On his last night of freedom – so to speak – Barack Obama on Monday chose to host a dinner for John McCain, the man he defeated last November after a rancorous campaign. Monday night’s forgive-and-forget banquet followed an equally eyebrow-raising dinner last week at the home of George Will, the conservative columnist, whose guests included Bill Kristol, the viscerally anti-Obama neo- conservative.

Guardian:
- The disappearance of a Florida hedge fund manager has raised the possibility of another Madoff-style scandal in the United States, with fears mounting that an estimated $350m of investments may have evaporated.

Telegraph:

- A leading Irish economist has called on Dublin to threaten withdrawal from the euro unless Europe’s big powers do more to rescue Ireland’s economy. "If Ireland continues hurtling down this road, which is close to default, the whole of Europe will be badly affected. The credibility of the euro will be badly affected. Then Spain might default, Italy and Greece," he said.

Spiegel:

- Germany’s 20 biggest banks have accumulated about $398 billion of so-called toxic assets, of which one-quarter have been written off, citing a survey by the Bundesbank and the BaFin regulator for the Finance Ministry. The amount of “risky assets” held by all of Germany’s banks may be as high as 1 trillion euros, the ministry is assuming. Government officials expect further writedowns and losses among German banks.

Rheinische Post:

- The Germany economy, Europe’s biggest, will shrink 2.25% this year, citing Economy Ministry documents to be published Jan. 21. In its annual economic report, the ministry will also predict an increase in the average unemployment rate to 8.4% from 7.8% in 2008, a public deficit just below 3% of GDP and a drop in average inflation to .9% from 2.2%.

Deutsche Presse-Agentur:

- Al –Qaeda, in a purported videotape message, said in Germany should end its military mission in Afghanistan. Germany is “gullible and naïve” to expect to “emerge unscathed” from having the third-largest contingent in the international military mission in Afghanistan, DPA said, citing the videotape.

The National:

- Compared with figures last July when the market peaked, the total fall in property prices by the end of this year is predicted to be up to 60 per cent in Dubai and about 20 per cent in Abu Dhabi, according to Roy Cherry, a research analyst at Shuaa Capital.

Weekend Recommendations
Barron's:
- Made positive comments on (ENOC), (AMSC), (KEY), (ADBE), (SY) and (ENER).

- Made negative comments on (MLM) and (VMC).

Citigroup:

- Reiterated Buy on (BEAT), target $30, added to Tops Picks Live list.

Night Trading
Asian indices are -3.0% to -1.25% on avg.
S&P 500 futures -1.65%.
NASDAQ 100 futures -1.29%.

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Earnings of Note
Company/Estimate
- (FRX)/.73

- (RF)/-.09

- (FAST)/.41

- (JEF)/-1.54

- (PCP)/1.70

- (IBM)/3.02

- (CSX)/.90

- (STT)/1.13

- (JNJ)/.91

- (AMTD)/.31

Upcoming Splits

- None of note

Economic Releases

- None of note

Other Potential Market Movers
- The presidential inauguration and weekly retail sales reports could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by financial and commodity shares in the region. I expect US stocks to open lower and to rally into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the week.