Stocks Mostly Higher into Final Hour on Bargain-Hunting

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Biotech longs, Healthcare longs, Education longs and Computer longs. I covered some of my (IWM)/(QQQQ) hedges and some of my (EEM) short today, thus leaving the Portfolio 75% net long. The tone of the market is mildly positive as the advance/decline line is modestly higher, sector performance is mixed and volume is below average. Investor anxiety is above average. Today’s overall market action is mildly bullish. The VIX is falling rising 1.0% and is very high at 45.31. The ISE Sentiment Index is below average at 115.0 and the total put/call is below average at .80. Finally, the NYSE Arms has been running high most of the day, hitting 1.68 at its intraday peak, and is currently 1.0. The Euro Financial Sector Credit Default Swap Index is rising 1.56% today to 119.17 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 4.16% to 205.32 basis points. The TED spread is rising 2.44% to 98 basis points. The TED spread is now down 368 basis points in under four months. The 2-year swap spread is rising 17.0% to 72.25 basis points. The Libor-OIS spread is rising 4.46% to 96 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is falling 4 basis points to 1.07%, which is down 163 basis points in over six months. 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 .24%, which is up one basis point today. Small-caps are displaying meaningful relative strength today. Education and healthcare stocks are particularly strong. As well, there are an unusual number of stocks rising on volume given the major averages’ performances. It is noteworthy that the 10-year yield is at session lows, despite the rebound in stock and better-than-expected ISM report. Nikkei futures indicate an +67 open in Japan and DAX futures indicate an +24 open in Germany tomorrow. I expect US stocks to trade mixed into the close from current levels as more shorting and rising credit angst offset bargain-hunting.

Today's Headlines

Bloomberg:

- Estonian new car registrations fell 62% in January from a year earlier as the Baltic country’s deepening recession deterred customers. New car registrations fell to 1,017 units from 2,706 units a year earlier, the vehicle registration center said in an e-mailed statement today. New and used car registrations fell an annual 65% to 1,604 units, it added.

- JPMorgan Chase(JPM) and its competitors have maintained their lending, contrary to media reports that the nation’s biggest banks are holding on to their cash, Ladenburg Thalmann analyst Dick Bove said. “Banks have not pulled back,” Bove said. “The press, for whatever reason, continues to perpetuate false comments on this subject.” Bove said the media’s motive in misrepresenting the state of consumer lending was “simply mystifying.” “Bad information often leads to bad policy making,” Bove said.

- The International Energy Agency will probably revise its forecast for world oil demand this month because of slowing economic growth, the agency’s executive director said. The Paris- based agency, which advises 28 developed nations on energy policy, is scheduled to publish its monthly report on Feb. 11. Hedge-fund managers and other large speculators increased their net-long position in New York crude-oil futures in the week ended Jan. 27, according to U.S. Commodity Futures Trading Commission data. Speculative long positions, or bets prices will rise, outnumbered short positions by 51,652 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitment of Traders Report. Net-long positions rose by 5,518 acts, or 12 percent, from a week earlier.

- Mario Gabelli is buying Wyeth to book a 13 percent profit from its takeover by Pfizer Inc. Managers at Cohen & Steers Inc. are scooping up closed-end funds trading at a 16 percent discount to the value of their holdings. Huntington Asset Advisors Inc. is betting the widest gap between silver and gold prices in 14 years will narrow. A year ago, these so-called arbitrage strategies would have been favorites of hedge funds whose debt-fueled trading squeezed out other investors. Since then, the credit-market seizure wiped out about 920 of the 10,096 funds in business at the start of 2008, according to Hedge Fund Research Inc.

- Bond investors are telling Hugo Chavez he should be voted out of office instead of winning his campaign to serve as Venezuela’s president another 10 years. Venezuelan bonds fell the most in Latin America since December, when Chavez began pushing for a referendum to abolish term limits so he can serve through at least 2019. The average yield on the government’s dollar bonds rose to 17.40 percentage points more than Treasuries, from 14.74 points when he took office a decade ago, according to JPMorgan Chase & Co. The combination of Chavez’s political strategy and the 72 percent plunge in oil from a July record is increasing investor concern about the country’s ability to pay its $46 billion of debt. Venezuela, the biggest oil exporter in the Americas, raised government spending to the equivalent of 36 percent of gross domestic product in 2007 from 23 percent in 1998, according to Standard & Poor’s. “The Chavez model is based on the idea of spending lots of money,” said Michael Atkin, who helps oversee $12 billion in fixed-income assets as head of sovereign research at Putnam Investments in Boston. “The credit quality is deteriorating. It’s hard to want to own Venezuelan debt even at these spreads.”

- The ruble slumped to its weakest level against the dollar in 11 years as investors speculated Russia will be forced to give up its currency defense after draining reserves.

- Barack Obama said he “absolutely” stands behind Thomas A. Daschle, the president’s nominee for Health and Human Services Secretary who amended his U.S. tax returns Jan. 2 to pay $140,000 in back taxes and interest. Daschle also won the support of Senate Finance Committee Chairman Max Baucus, a Montana Democrat, whose panel will meet today with the nominee. Daschle, a former Senate Democratic leader, also had been named by Obama to head a new White Office of Health Reform and was viewed as the new administration’s leading spokesman on its efforts to expand health coverage to more Americans and reduce medical costs. Daschle, in a letter to the Finance Committee, said he was “deeply embarrassed” about his tax errors. He amended his 2005, 2006 and 2007 returns to add unreported consulting fees, unspecified charitable contributions and a car and driver provided by Leo Hindery Jr., founder of the private-equity firm InterMedia Advisors, a committee draft report said.

Wall Street Journal:

- The chairman of the House Committee on Foreign Affairs tried to meet a top aide to Iran's supreme leader in mid-December but was rebuffed at the last minute, a snub that illustrates the challenges to dialogue with Tehran pushed by President Barack Obama. Rep. Howard Berman, a California Democrat, notified Mr. Obama's transition team and the Bush White House of the planned meeting in Bahrain, according to senior Obama administration officials. The engagement with Ali Larijani, speaker of the Iranian parliament, would have marked one of the highest-level meetings between American and Iranian officials since the 1979 Islamic revolution in Iran. It's unclear why Mr. Larijani pulled out.

- The House Democrats’ political arm is launching a radio, email, and telephone campaign against 28 House Republicans in 20 states who voted against the $819 billion economic stimulus package last week. The “Putting Families First” campaign will being airing Tuesday morning on drive time radio and run throughout the week. The Democratic Congressional Campaign Committee also said they will target three million voters with an email campaign and make 100,000 phone calls.

- Treasury Secretary Timothy Geithner will give a speech next week in which he will outline the Obama administration's financial-rescue plans, according to a Treasury official. The plan will include an effort to help homeowners in danger of foreclosure, as well as additional steps to shore up the financial sector.

- President Barack Obama's choice for Health and Human Services secretary, Tom Daschle, apologized and tried to explain lapses in his personal taxes in a letter to leaders of the Senate Finance Committee. "As you can well imagine, I am deeply embarrassed and disappointed by the errors that required me to amend my tax returns," the former South Dakota senator wrote in the letter, released Monday. "I apologize for the errors and profoundly regret that you have had to devote time to them."

- With a slew of high-profile hires, President Barack Obama's chief economic adviser is raising the clout of the White House National Economic Council -- as well as the prospects of internal conflict in the Obama administration. Lawrence Summers's effort may lift the NEC to a level of prominence unmatched since President Bill Clinton created the body in 1993 to give economic issues equal weight with national-security matters. White House aides say that is an appropriate response to the economic challenges facing the nation. But Mr. Summers has raised concern outside the White House that clashes with the Obama cabinet on policy and personality may be inevitable as Mr. Summers transforms a policy-coordinating council into a center for policy making.

NY Times:

- Kirsten E. Gillibrand, New York’s new senator, suggested to Latino elected officials on Sunday that she would take the lead on some immigration issues — and perhaps quickly drop some positions that they considered objectionable. In particular, she promised to take a lead in promoting a Congressional bill to roll back a federal provision that discourages states from charging in-state tuition to the children of illegal immigrants who attend state-supported universities. The bill also would permit illegal immigrants who have grown up in the United States and are attending college to apply for legal status. And despite her vote in Congress when she was a representative from upstate New York, Ms. Gillibrand said she no longer supported cracking down on so-called sanctuary cities like New York that fail to enforce all immigration laws.

- As Wal-Mart(WMT) undergoes a changing of the guard, with a new chief executive in office since Sunday, the company says that it has improved fleet efficiency by more than 25 percent since 2005. The retailer, which has one of the largest trucking fleets in the country, is also testing out alternative fuels with a small number of its trucks, according to a statement scheduled for release today.

Politico:

- The Albuquerque Journal reports that federal investigators have asked the Democratic Governors Association, which Bill Richardson headed, for documents in their expanding pay-to-play investigation:

Washington Post:

- Connecticut Sen. Chris Dodd says he'll refinance two mortgages that he received through a VIP program from Countrywide Financial Corp. Dodd told reporters Monday that the mortgages for his homes in Washington and East Haddam, Conn., will be refinanced with a different company. Dodd has acknowledged receiving mortgages in 2003 through a VIP program at Countrywide, which was sold to Bank of America Corp. earlier this year and has been the focus of allegations that it gave favorable loan terms to lawmakers.

AppleInsider:

- Even as the economy has continued to falter, Apple’s(AAPL) share of web users has climbed up to a landmark 9.93% in the first month of 2009 while Windows’ own share continues to slide downwards. Web tracking data compiled from tens of thousands of websites by Net Applications shows Apple reaching the all-time high with an 0.3 percent bump to the number of Macs making page requests.

The Detroit News:

- Ford’s(F) electric car project charges ahead. Canadian supplier’s prototype fuels drive to bring battery-powered vehicle to market in ’11.

InformationWeek:

- Recent stories on Apple's(AAPL) iPhone patent have focused on Cupertino's threatened legal action against Palm, which is launching the iPhone-like Pre smartphone. But a closer examination of the Apple patent yields much more interesting news. Namely, Apple is considering adding a video record feature to the iPhone -- an omission users have long complained about -- and it may soon become a handheld videophone platform, with support for mobile video-conferencing calls.

Reuters:
- Dallas Federal Reserve President Richard Fisher warned on Monday against "Buy America" provisions in a proposed fiscal stimulus law and said it could lead to devastating trade protectionism. "Let me just be blunt. Protectionism is the crack cocaine of economics. It may provide a high. It's addictive and it leads to economic death," Fisher told C-Span television in an interview for its "Washington Journal" program. President Barack Obama seeks a $825 billion stimulus plan to end the country's yearlong recession. U.S. lawmakers are debating rules that will insist that public money is spent on U.S-made products, although the White House has already said it will review any Buy America provisions.

MailOnline:
- Google(GOOG) Ocean will let users explore shipwrecks and reefs in the deep blue sea. The latest version of Google Earth lets people plunge beneath the sea, swim around underwater volcanoes, hover above shipwrecks and navigate mountains on the sea bed. The Ocean in Google Earth software also includes video and photographs of thousands of marine species, and lets virtual divers follow whales and sharks tagged with satellite tracking devices. The undersea 3D world was created with help from more than 25 leading marine scientists.

Lusa:

- Macau’s casino revenue fell about 17% in January, citing provisional data collected from operators. Billionaire Stanley Ho’s casinos had a market share of “a little more” than 28% and his casino operator was the only one with revenue of more than 2 bilion patacas, Lusa said. Las Vegas Sands(LVS) was ranked second with “a little more” than a 22% market share, followed by Wynn Resorts with “slightly” more

recast to "

Xinhua:
- Iran's President Mahmoud Ahmadinejad on Monday called on the United Nations to bring Israeli leaders to justice, the official IRNA news agency reported. The president made the remarks in a meeting with the visiting chief of Hamas Political Bureau Khalid Mashaal who arrived here Sunday for talks with senior Iranian officials on major regional and international issues. Ahmadinejad urged the United Nations to bring Israeli leaders to justice for "crimes against humanity and war crimes in Gaza," the report said.

Hurriyet:
- Petrol Ofisi AS, Turkey’s biggest fuel distributor, expects gasoline sales to decline by 11% this year, citing CEO Melih Turker. Gasoline sales fell 11% last year.

Bear Radar

Style Underperformer:
Mid-cap Value (-.79%)

Sector Underperformers:
Papers (-5.27%), Gold (-4.01%) and Oil Tankers (-3.49%)

Stocks Falling on Unusual Volume:
TSRA, UBS, COL, AXYS, INSU, SQNM, SCHW, TOD, ROK, MAT, HAS and PJC

Stocks With Unusual Put Option Activity:
1) HST 2) M 3) BEN 4) EXPD 5) ATI

Bull Radar

Style Outperformer:
Large-cap Growth (-.08%)

Sector Outperformers:
HMOs (+2.29%), Education (+2.02%) and Software (+1.70%)

Stocks Rising on Unusual Volume:
HUM, MSTR, ITMN, ESI, APOL, HNT, FORM, INTC, ME, TDS, PHG, PCZ, JJSF, SXCI, BEAV, SBNY, RYAAY, AMZN, AKAM, STBA, ATHR, SGMS, NFLX, TTEK, CTXS, ESRX, LANC, MDCO, HAE and CMP

Stocks With Unusual Call Option Activity:
1) CHRW 2) CIEN 3) BDK 4) JNPR 5) MU

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Monday Watch

Weekend Headlines
Bloomberg:

- President Barack Obama said his administration is readying a plan to unlock credit markets and lower mortgage rates, and vowed that company executives will be stopped from siphoning money intended for economic recovery. “Soon my Treasury secretary, Timothy Geithner, will announce a new strategy for reviving our financial system that gets credit flowing to businesses and families,” Obama said today in his weekly radio address. He didn’t provide specifics.

- Richmond Federal Reserve Bank President Jeffrey Lacker said the U.S. central bank should avoid favoring specific credit markets such as mortgages and consumer loans and instead boost the money supply with more “neutral” purchases of Treasuries.

- Republican Senator Judd Gregg, the leading candidate to head the Commerce Department in President Barack Obama’s administration, has indicated a Republican would be appointed in his place if he were to leave the chamber, Senate Minority Leader Mitch McConnell said today. “Senator Gregg has told me that if he were to take this appointment, it would not alter the make-up of the Senate in terms of the majority and the minority,” McConnell, a Kentucky Republican, said on CBS’s “Face the Nation” program today.

- Oleg Deripaska, the biggest shareholder of the world’s largest aluminum producer, said he expects “no more happy times” in the industry as a sluggish global economy saps demand. Deripaska, whose stake in United Co. Rusal makes him Russia’s richest man, predicted aluminum will average $1,600 per ton in the next seven years, compared with a current level of $1,349.

- US steel-sheet prices fell 10% this month as orders slowed and buyers sought cheaper supplies, Purchasing Magazine said. The average price of hot-rolled steel sheet, the benchmark product used in cars and appliances, dropped to $509 a ton in January from $566 last month, the magazine said today. Cold-rolled sheet slid 9% to $607. Hot-rolled steel prices have fallen by more than half from $1,068 a ton in July as the slowing global economy reduced demand for automobiles, appliances and homes.

- Former Maryland Lieutenant Governor Michael Steele became the Republican National Committee’s first black chairman, a signal the party wants to recast its image after suffering crippling defeats in Congress and losing the White House. Steele also had a message for party conservatives who have been wary of his bid. “We will cede no ground on matters of principle,” he said. By a vote of 91-77, Steele beat South Carolina Party Chairman Katon Dawson on the sixth round of balloting. The party’s current chairman, Mike Duncan, and a second black candidate, former Ohio Secretary of State Ken Blackwell, withdrew from consideration.

- House Financial Services Committee Chairman Barney Frank said President Barack Obama will require banks receiving government aid to lend more to businesses and consumers, saying the Bush administration “made a mistake” by not setting stricter rules for institutions getting funds from the $700 billion financial-rescue package. “I think you’re going to see the Obama administration, having learned from that, push for much more lending,” Frank said today on ABC’s This Week. “There are going to be some real rules in there.”

- U.S. Securities and Exchange Commission Chairman Mary Schapiro made one of her first appointments, hiring Kayla Gillan, an executive at financial analysis firm RiskMetrics Group Inc.(RMG) and former member of the board that oversees U.S. auditors, as a senior adviser, three people familiar with the matter said. Enlisting Gillan, the chief administrative officer at New York-based RiskMetrics, is “a reasurring sign to the investor community, which feels like their concerns haven’t been listened to in the past few years,” said James Cox, a law professor at Duke University in Durham, North Carolina.

- China’s manufacturing contracted for a sixth month in January as the global recession sent growth sliding in Asia’s export-driven economies. The CLSA China Purchasing Managers’ Index rose to a seasonally adjusted 42.2 from 41.2 in December, CLSA Asia- Pacific Markets said today in an e-mailed statement. A reading below 50 reflects a contraction. “The fact that the PMI has bottomed is encouraging but should not be taken as evidence of recovery,” said Eric Fishwick, head of economic research at CLSA in Hong Kong. “The rate of contraction remained considerable, reflecting rapidly deteriorating market conditions and fears of a deepening economic downturn.”

- The euro fell to its lowest in almost two months against the US dollar on concern a report tomorrow will show European producer prices slid for a fifth month, giving the region’s central bank more reason to cut interest rates. Europe’s single currency declined for a third day and the British pound weakened the most in 10 days on concern policy makers in the euro area and the U.K. will lower borrowing costs as economic growth stalls.

Wall Street Journal:

- The European Central Bank is drawing up guidelines for European governments that are considering so-called “bad banks” to house banks’ toxic assets. The ECB is also working on guidelines for European governments that plan to guarantee toxic assets remaining on banks’ books, another form of bank bailout. Both sets of guidelines are being drawn up with the European Commission. The ECB hopes the guidelines can help avoid competitive one-upmanship across the 27-nation European Union as nations seek to shore up struggling banks.

- Republican and Democratic senators on Sunday questioned how former Sen. Tom Daschle could make a $128,203 mistake on his taxes but said they were not prepared to oppose his nomination as health secretary. "You have to be troubled by it," said Sen. Jon Kyl of Arizona, the No. 2 Republican in the Senate. Sen. Daschle recently filed amended tax returns to report $128,203 in back taxes and $11,964 in interest. The amended returns reflect additional income for consulting work, the use of a car service and reduced deductions for charitable contributions. The South Dakota Democrat, once the majority leader of the Senate, was scheduled to meet privately Monday with the Senate Finance Committee. Senate Republican leader Mitch McConnell of Kentucky said he was surprised that Daschle had not paid his taxes properly but would not say whether he thought the nomination was in trouble.

- Republican Sen. Judd Gregg of New Hampshire has emerged as President Barack Obama's top choice for commerce secretary, with an announcement coming as soon as Monday, an Obama administration official said Sunday. Democrats and Democrat-friendly independents control 58 seats in the Senate, two short of a filibuster-proof majority. One seat, Minnesota, remains unresolved, but the Democratic candidate appears to be ahead. Sen. Gregg's potential departure could give Democrats a shot at 60 seats, as New Hampshire's governor, who would appoint Sen. Gregg's replacement if he were to become commerce secretary, is a Democrat. But several Republican lawmakers voiced confidence Sunday that a Gregg appointment wouldn't alter the balance of power in the Senate. "Sen. Gregg has assured me that if it were to happen, it would not change the makeup of the Senate," said Senate Minority Leader Mitch McConnell of Kentucky on CBS's "Face the Nation." "It would have no effect on the balance of power in the Senate." Sen. Kyl said the balance-of-power issue has "been thought through," but he declined to say whether a deal had been struck to ensure that New Hampshire Gov. John Lynch would appoint a Republican to finish out the balance of Gregg's term, which is up next year, if Gregg were to become commerce secretary.

- Election officials here turned to the daunting task of counting millions of ballots after Iraqis voted Saturday in provincial elections that saw little violence but less-than-expected turnout. While the election itself went fairly smoothly, observers say it's critical that the polling--and now, the counting of ballots--be perceived as free and fair. A successful election would provide a shot of confidence for the Iraqi government as U.S. forces begin to pull back combat troops from cities at the end of June.

- South Korea’s exports fell by a record 32.8% in January from a year earlier, citing the Korea Customs Service.

- Some Republican lawmakers criticized the economic-stimulus bill making its way through Congress, while Democrats praised the version passed by the House last week. Senate Minority Leader Mitch McConnell of Kentucky, speaking on CBS's "Face the Nation" Sunday, said: "I can't believe the president isn't embarrassed about the products that have been produced so far." The Senate is expected to vote on its own version of the bill, a package of tax cuts and spending aimed at strengthening the country's ailing economy. The Senate version carries a price tag of nearly $900 billion; the House version costs about $815 billion. Some Republicans suggested the bill include more tax cuts, or that it be broken into two parts, one focused on providing a short-term boost to the economy, and the other on longer-term measures.

- A bill proposed last week to regulate hedge funds in the U.S. could require them to start talking more -- including about their investors. The Hedge Fund Transparency Act was introduced by Sen. Carl Levin, a Michigan Democrat, and Sen. Charles Grassley, an Iowa Republican. One part of the bill that caused a buzz among hedge-fund managers and lawyers over the weekend is a new requirement that hedge-fund investors' names be routinely and publicly disclosed. The broader bill would require hedge funds with at least $50 million in assets to register with the Securities and Exchange Commission. The senators and others are calling for increased public disclosure of hedge funds' assets and trading strategies to help prevent market catastrophes and investor fraud. Currently, hedge-fund registration is voluntary for most of the industry. The proposed legislation calls for hedge funds to provide names and addresses of "each natural person who is a beneficial owner," which lawyers say includes outside investors. It also would require disclosure of a fund's size and the names of its prime brokers, which are the banks that lend funds money and clear their trades. Registration also would open funds to random audits by regulators.

- There is a widespread belief that banks are now refusing to lend as much as they should, and that Congress should pressure them to extend more credit to consumers and businesses. In reality, banks as a whole increased their lending during 2008 -- the notion they haven't is based on a misunderstanding of U.S. credit markets. Pressuring banks to lend more could backfire.

CNBC.com:
- Discussions between the Obama administration and financial industry representatives continued for a third day Sunday with the focus moving to new terms on lending, transparency and executive compensation for companies receiving financial aid, according to a source familiar with the situation. CNBC.com reported Saturday that the talks were centered around the Obama administration’s consideration of a group of options in providing aid to the financial sector, which include a bad bank concept to buy toxic assets. The announcement of new terms is expected to come this week, the source said, while the announcement of the financial aid plan now appears to be pushed back to the following week. Specifics on the possible terms are still unclear at this point. "Things are fluid," said the source. Saturday's talks appeared to unfold on a dual track.

- A bonus by any other name would smell just as sweet. The fury over the fact that Wall Street paid out $18.4 billion in bonuses in 2008, the "sixth largest" amount in history, is about words and nothing else. This isn't a compensation issue, it's a diction issue. Outside of lower Manhattan, a "bonus" is a special, one-off reward for performance above and beyond what's expected of an employee. And if investment bankers had gotten $18.4 billion worth of bonuses in that traditional sense of the word, then of course it would be truly outrageous. But on Wall Street, and at many law firms as well, a bonus is simply part, often the greater part, of your regular compensation.

IBD:
- The package, pending approval by the Senate, is seen as a stimulus for health care tech companies such as Quality Systems (QSII), which sells software-based practice management and patient-records systems to doctor and dental practices. Irvine, Calif.-based Quality Systems also sells to federally sponsored health clinics and Indian health services . "We think the best days are ahead, fueled by the Obama plan and by the continued promotion of electronic medical records and paperless health care," said Quality Systems' chief executive Steven Plochocki.

NY Times:

- California Utility Rates Customers on Energy Usage.

Politico:

- They acted as surrogates, stumped on the campaign trail and held lavish fundraisers at their homes. They donated heaps of cash, led voting drives and made insanely viral Web videos. And last month, they descended on Washington to celebrate with their publicists, their Prada and — finally — their president. So what do celebrities want from President Barack Obama now? More than they’re likely to get. Although Obama threw a star-studded inaugural festival, he’s no Bill Clinton — so don’t expect Lincoln Bedroom sleepovers for Ted Danson or parties with Barbra Streisand. Indeed, during his inaugural address, Obama spoke dismissively of those who “seek only the pleasures of riches and fame.”

Forbes.com:

- America’s 25 Fastest-Growing Tech Companies.

- Tech’s Top Dealmakers.

Reuters:

- President Barack Obama may yet win skeptical Republicans in the U.S. Congress over to his economic stimulus plan if he and fellow Democrats abandon some pet projects. Obama would like to signal he is working for all Americans with a show of bipartisan unity when the Senate votes later this month. No Republican backed the plan that passed the House of Representatives last Wednesday. Republicans accuse the Democrats, who control both houses, of loading up on projects known as "pork" that curry favor with constituents but which they say will not stop the slide in the U.S. economy after 13 months of recession. Republicans have blasted the $800 billion to $900 billion package for such programs as $335 million to prevent sexually transmitted diseases and $25 million to rehabilitate trails for all-terrain vehicles. They prefer the money go into more tax cuts.

- Creating "bad banks" may be the only solution to the worst financial crisis in generations, but the quid pro quo of government-led fixes may be more insular lending and a de-globalization of finance. After almost 100 hours of debate, discussion and dinners at this year's Davos World Economic Forum, many politicians, bankers and economists reckon the uncoordinated scramble by states to support national banking systems will now gravitate around "good bank/bad bank" solutions.

- Swiss drugmaker Roche is confident that it will succeed in its bid for U.S. biotechnology group Genentech Inc (DNA), the Swiss drugmaker's chairman was quoted as saying in comments released on Saturday.

- Nike(NKE) is experiencing a sharp increase in online sales, driven in part by cost-conscious shoppers conserving gasoline, the U.S. company's chief executive said on Saturday. "We've seen a fairly dramatic increase in online sales," Mark Parker told a panel at the annual meeting of the World Economic Forum. Industry analysts say the online sector continues to grow as more shoppers opt to shop on the Internet for convenience and the ability to compare bargains. Nike, the world's largest athletic shoe and clothing maker, last month reported a 9 percent rise in quarterly net profit, showing its relatively resilience to the sluggish consumer environment around the world.

- As U.S. President Barack Obama confronts the legacy of a war his predecessor launched almost six years ago, Iraq has once again begun to open its vast oil reserves to foreign companies. The country has launched a bidding round for some of its largest oil and gas fields, which it hopes will attract multibillion dollar investments. There is still some confusion over the deals, scheduled to be awarded by June.

Financial Times:

- The party of Nouri al-Maliki, the Iraqi prime minister, appeared set for a boost as initial tallies from Saturday’s provincial elections indicated voters had bought into its law-and-order campaign. The elections for provincial councils were Iraq’s first since 2005 and passed without serious incident in what was seen as a significant step forward for the nation as it attempts to build on recent security gains that have bolstered Mr Maliki’s credibility. The prime minister did not stand in the elections, but the list led by his Dawa party, the Coalition of the State of Law, used his image prominently during campaigning. Full provisional results were not expected for several days. But the Dawa list appeared to have done particularly well in Basra, Iraq’s second largest city, according to Iraqi media and news agencies.

Telegraph:

- Rio Tinto Group(RTP) may sell an additional stake to Aluminum Corp. of China, its largest shareholder known as Chinalco, and issue a convertible bond to raise $15 billion or more. Chinalco would increase its holding in Rio’s London-listed shares to 18% and buy 14% of the company’s Australian-listed shares under the plan.

- It is all very well for President Obama to vent his anger on all those US bankers who continued to claim billions of dollars in bonuses while expecting Washington to bail them out after the sub-prime mortgage scandal brought the banks to their knees. But conveniently overlooked has been the curious part Mr Obama himself played in the sub-prime debacle.

Frankfurter Allgemeine Sonntagszeitung:

- Germany is the number one target of terrorist attacks in the next few months, citing Guido Steinberg at the Germany Institute for International and Security Affairs. Al-Qaeda is targeting the country more than the US or UK in a possible attempt to influence Germany’s engagement in Afghanistan, Steinberg said. Recent videos by Islamic terror organizations in German indicate the risk of a terror attack has increased, citing Deputy Interior Minister August Hanning.

MailOnline:

- Russia was rocked today by some of its strongest protests yet as thousands rallied across the vast country to attack the Kremlin's response to the global economic crisis. The marches, complete with Soviet-style red flags and banners, pose a challenge to a government which has faced little threat from the fragmented opposition and politically apathetic population during the boom years fuelled by oil.

Globe and Mail:

- The Canadian government expressed optimism Saturday that the U.S. might climb down from a so-called “Buy American” trade policy that several countries have warned could start a trade war. Conciliatory signals from the White House and from American officials at the World Economic Forum in Davos, Switzerland, have fuelled hopes for a resolution. Canada says a range of possible solutions is being discussed – including an exemption for Canadian goods.

Xinhua:

- Housing sales in major Chinese cities like Beijing, Shanghai and Guangzhou failed to rebound during the weeklong Spring Festival holiday, as homebuyers bet on further price cuts following last year's sluggish performance. In Guangzhou, capital of south China's Guangdong Province, home sales from Jan. 25 to 31 fell by 20 percent from last year's lunar New Year holiday, the Guangzhou-based Nangfang Daily reported. "The real estate market was particularly dismal during this year's Spring Festival," Huang Tao, head of Guangzhou's Centaline, a leading real estate agency in China, told Xinhua.

Jakarta Post:

- PT Jakarta International Container Terminal, 51% owned by Hutchinson Port Holdings Ltd., expects the number of containers it handles this year to drop 30% on slowing trade. JICT operates Indonesia’s largest shipping terminal.

Beijing Youth Daily:

- Beijing may start charging a municipal fee on auto emissions as it seeks to improve air quality and curb the rapid growth of traffic in the city.

Haaretz.com:

- Benjamin Netanyahu, Israel's leading candidate for prime minister, said Saturday that Iran will not be armed with a nuclear weapon. In an interview with Channel 2 TV, Netanyahu said if elected prime minister his first mission will be to thwart the Iranian nuclear threat. Netanyahu, the current opposition leader and head of the Likud party, called Iran the greatest danger to Israel and to all humanity. When asked if stopping Iran's nuclear ambitions included a military strike, he replied: "It includes everything that is necessary to make this statement come true."

Weekend Recommendations
Barron's:
- Made positive comments on (HIG), (SPG), (VZ) and (BXP).

Night Trading
Asian indices are -1.50% to +.25% on avg.
S&P 500 futures +.19%.
NASDAQ 100 futures +.15%.

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/Estimate
- (PJC)/-.81

- (CPO)/.63

- (SYY)/.38

- (HUM)/1.06

- (MAT)/.71

- (ATHR)/.15

- (APC)/.22

- (SNDK)/-.61

- (PCL)/.48

- (AFL)/1.00

- (BEAV)/.46

Upcoming Splits

- None of note

Economic Releases

8:30 am EST

- Personal Income for December is estimated to fall .4% versus a .2% decline in November.

- Personal Spending for December is estimated to fall .9% versus a .6% decline in November.

- The PCE Core for December is estimated unch. versus unch. in November.

10:00 am EST

- ISM Manufacturing for January is estimated to fall to 32.5 versus 32.9 in December.

- ISM Prices Paid for January is estimated at 18.0 versus 18.0 in December.

- Construction Spending for December is estimated to fall 1.2% versus a .6% decline in November.

Other Potential Market Movers
- The JPMorgan Global High Yield/Leveraged Finance Conference, CSFB Energy Summit, (SRDX) shareholders meeting and (LQDT) shareholders meeting
could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the week.