Today's Headlines

Bloomberg:

- Bank of America Corp.(BAC), the largest U.S. bank, climbed as much as 25 percent in New York trading after analyst Richard Bove called the bank a “strong buy” because of its positive cash flow and government support. Chief Executive Officer Kenneth Lewis bought 200,000 shares on Feb. 4, and four directors bought a combined 150,000 shares this week. “I have always believed Ken Lewis may be the best operating manager of any bank in the United States,” Bove said in his report. “I continue to think that this company has $5 per share in earnings power.”

- Investors should buy US technology stocks after prices fell near the lows reached after the dot-com crash in 2000, investor Marc Faber said. Cisco Systems(CSCO), Intel Corp.(INTC), Microsoft Corp.(MSFT) and Oracle Corp.(ORCL) shares will outperform US Treasuries over the next five to 10 years, Faber said. “You could make a case that in the US some equities have come down a lot and are inexpensive,” Faber said.

- New York real estate developer Larry Silverstein, who’s leading a $6 billion project to rebuild Manhattan’s World Trade Center site, said he’s ready to buy property now that prices have plummeted. “We certainly are interested in buying,” Silverstein said in a Bloomberg Television interview. “There will be significant opportunities in the marketplace if you have the wherewithal and the capacity and the knowledge to be able to deal.” And like many wealthy New Yorkers, the 77-year-old Silverstein says South Florida looks appealing. “Residential condos clearly are in oversupply in some areas of the country,” Silverstein said. “Where you’ve had extensive over-production, there are opportunities to buy them at much depressed prices.”

- Costs to ship dry-bulk commodities, after doubling this year, are climbing on “meaningful” demand, the Baltic Exchange’s top executive said, cautioning that new vessels may cap gains in the year ahead. “There’s meaningful demand in the short term, and that’s by comparison with the collapse of last year,” Jeremy Penn, chief executive officer of the London-based Baltic Exchange, said in a phone interview yesterday. The market may weaken as new ships are delivered “over the next 12 to 24 months.” “It’s a short-term push for a very depressed” freight market, Michael Gaylard, a London-based strategic director at Freight Investor Services Ltd., said by phone today. “I don’t see that this rally will maintain its momentum and push through the year.” Rates may “steady from here,” he said. New ship deliveries may damp charter rates. If all vessels on order for this year and 2010 take to the water, the fleet would grow 42 percent by deadweight tons, according to Drewry Shipping Consultants Ltd. in London. It cited the order book at end-December.

- Industrial production in Germany, Europe’s largest economy, dropped the most in at least 18 years in December as demand for plant and machinery faltered. Output fell a seasonally adjusted 4.6 percent from November, the biggest decline since records for a reunified Germany began in January 1991, the Economy Ministry in Berlin said today. It was the fourth straight monthly drop and almost twice the 2.5 percent retreat forecast by economists in a Bloomberg survey.

- Britain’s financial regulator said it plans to require investors to disclose short positions on the more than 3,000 shares traded on U.K. exchanges. Expanded disclosure requirements are necessary to ensure that no direct restrictions are placed on short-selling, the Financial Services Authority in London said. The FSA also moved away from suggestions that it ban so-called naked short-selling.

- Oil fell to the lowest in more than two weeks on signs that OPEC’s implementation of its latest supply cuts has stalled as a deepening economic slump in the U.S. threatens demand. The Organization of Petroleum Exporting Countries will keep oil shipments steady at a five-year low in the next four weeks, data from tanker-tracker Oil Movements showed. “The rise in crude oil stocks is already raising doubts about OPEC’s quota discipline,” said Eugen Weinberg, a Commerzbank AG analyst in Frankfurt. “We read every week OPEC commitment is there, but we don’t see it in the data,” said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna.

- The Agriculture Department is in discussions with the Environmental Protection Agency about raising the amount of ethanol blended into the U.S. gasoline supply, Agriculture Secretary Tom Vilsack said. “I do think it’s important for us to look for strategies to make sure the infrastructure of the ethanol industry is preserved, because it is a key component to this new energy future the president’s laid out,” Vilsack, a former Democratic governor of Iowa, said today in an interview with Bloomberg News in Washington.

- President Barack Obama and former Federal Reserve Chairman Paul Volcker today named an advisory board drawn from business, labor groups and former government officials to provide an outside perspective on plans to revive the economy. Obama this morning signed an executive order establishing the Economic Recovery Advisory Board, which will be headed by Volcker. The members include former Securities and Exchange Commission Chairman William Donaldson, former Fed Vice Chairman Roger Ferguson, UBS Americas Chairman and Chief Executive Officer Robert Wolf, General Electric Co. CEO Jeffrey Immelt and Service Employees International Union Secretary-Treasurer Anna Burger, the administration announced.

- William Ackman’s hedge fund that invests solely in Target Corp.(TGT) fell 40.1 percent in January, bringing the loss since inception to 89.5 percent, according to a letter sent to investors. The decline in Pershing Square IV fund was about four times that of Target shares in January because Ackman made his bet using options rather than owning the underlying stock, which tumbled 9.6 percent. Ackman said he will personally add another $25 million to the fund, and employees and board members will put up more cash. “While PSIV and Target stock have declined materially, we still believe our fundamental investment case for Target stock will ultimately be realized, although not within the original timeframe we had initially estimated,” he wrote in the letter dated Feb. 5.

Wall Street Journal:

- Majority Leader Harry Reid said Friday he hoped the Senate would have a final stimulus package to vote on by late Friday afternoon. A group of nearly 20 moderates from both parties have been negotiating in hopes of cutting as much as $100 billion from President Barack Obama's plan, which has ballooned to $935 billion on the Senate floor, with further add-ons possible during a long day of votes Friday.

- The U.N. secretary-general said Friday that provincial elections were an important step toward full democracy but told Iraqis they still have work to do before they can "enjoy genuine freedom and security and prosperity." Ban Ki-moon made his second visit to Iraq as U.N. chief a day after official preliminary results showed Prime Minister Nouri al-Maliki's allies swept to victory in the vote for powerful local councils, an endorsement of his crackdown on extremism and violence. "You have come such a long way, but still you have to go a far way to say that you will fully be able to enjoy genuine freedom and security and prosperity," he said during a meeting in Baghdad with President Jalal Talabani. He also met with Mr. Maliki. U.N. representatives worked closely with the Iraqis in preparing for the balloting, in which voters chose provincial officials in 14 of Iraq's 18 provinces. Mr. Ban said the U.N. would continue to provide technical or political assistance as needed. "I'm very much encouraged by what you have achieved," he said.

- Energy Secretary Steven Chu said Friday that he wants at least half of the roughly $35 billion to $40 billion proposed for Energy Department programs in the economic-stimulus package to be spent within a year. Mr. Chu said he is prepared to overhaul the way the agency operates to quickly direct the money to projects on weatherization, energy efficiency and support for renewable energy. "We've got to do this, and we've got to do it in a way that has not been done at the Department of Energy," Mr. Chu said. "I think this is solvable. And not only solvable -- we've got to do it. Otherwise it's just going to be a bust."

- The U.S. will continue to hand foreign detainees over to other countries for questioning, but only with assurances they will not be tortured, Leon Panetta told a Senate committee considering his confirmation as CIA director. That has long been U.S. policy, but some former prisoners subjected to the process -- known as extraordinary rendition -- during the Bush administration's antiterror war say they were tortured. "I will seek the same kind of assurances that they will not be treated inhumanely," Mr. Panetta said Friday in his second day before the Senate Intelligence Committee. "I intend to use the State Department to be sure those assurances are implemented and stood by, by those countries." Mr. Panetta formally retracted a statement he made Thursday that the Bush administration transferred prisoners for the purpose of torture. "I am not aware of the validity of those claims," he said.

CNBC.com:
- The federal government should concentrate on fixing the banking industry rather than worrying about a stimulus bill in Congress, Jack Welch, a former GE CEO, told CNBC. “If you don’t get the blood flowing in the patient, why are you buying him new shoes and a suit?” Welch said. He criticized the economic stimulus bill being considered now in the US Senate as larded with spending that doesn’t “create jobs.” (video)

- Bank of America(BAC) won't need any more bailout money from the government and hopes to pay back the $45 billion it's already received within three years, CEO Ken Lewis told CNBC. In a live interview, Lewis also dismissed speculation of a possible government nationalization of BofA as "absurd" and said the controversial acquisition of Merrill Lynch last year will "turn out to be a good investment over time." Lewis said BofA is focused on making money and getting TARP money paid back "as soon as humanly possible." "We're going to get on with doing business," he said. "And frankly, we had a pretty good January." When asked about the possibility of a government takeover, Lewis said he's talked to members of Congress, regulators and government officials and that "it's not even a remote possibility and no one has mentioned nationalization."

- Apple’s(AAPL) Not So Quiet Rally And Why It Will Continue.

Barron’s:

- With health-care costs running wild, pharmacy-benefit manager Express Scripts (ESRX) is giving clients some much needed relief. And in doing so, its share price could flirt with new highs in 2009.

Washington Post:

- So much for the president who in his inaugural address two weeks earlier declared "we have chosen hope over fear." Until, that is, you need fear to pass a bill.

PRNewswire:

- iTMP Technology, Inc., a pioneering iPhone hardware and software developer, announces the commercial launch of SMHEART LINK, a highly-anticipated new technology that is poised to bring unparalleled health and fitness capabilities to Apple(AAPL) iPhone and iPod(R) touch users. For the first time ever, a technology is now available that allows the iPhone to double as a heart monitor and fitness tracking system that actually listens to a person's heart. In addition to the iPhone and iPod touch, SMHEART LINK can be compatible with other smartphones, PCs or other Wi-Fi enabled devices.

PollingReport.com:

- Latest polling results on the economic stimulus package.

PCWorld:

- Waiting for the new Amazon(AMZN) Kindle e-book reader is no fun. But if you already have an Apple(AAPL) iPhone or a T-Mobile G1 in your pocket, more than 1.5 million books are now at your fingertips. The Google(GOOG) Book Search project, ever controversial since its introduction, yesterday launched mobile editions of its entire book collection.

Telegraph:
- The Daily Telegraph has learned that the 85-year-old former US secretary of state met President Dmitry Medvedev for secret negotiations in December. According to Western diplomats, during two days of talks the octogenarian courted Russian officials to win their support for Mr Obama's initiative, which could see Russia and the United States each slashing their nuclear warheads to 1,000 warheads.

Bear Radar

Style Underperformer:
Large-cap Growth (+2.30%)

Sector Underperformers:
Education (-.29%), Defense (+.49%) and Insurance (+.54%)

Stocks Falling on Unusual Volume:
SRCL, RATE, HWAY, LMNX, THOR, VLCCF, VRSN, CTRP, SRA, MTD, HIG, OKS and VVI

Stocks With Unusual Put Option Activity:
1) VMC 2) FST 3) AGU 4) EXEL 5) SINA

Bull Radar

Style Outperformer:
Small-cap Value (+2.58%)

Sector Outperformers:
Banks (+10.76%), Homebuilders (+7.95%) and Airlines (+5.81%)

Stocks Rising on Unusual Volume:
STI, STT, WFC, TNE, CLF, JPM, RTP, MBT, SNP, PTR, CNC, HON, ULTI, OMTR, MCRS, DGIT, FEIC, VRTX, NCMI, HIBB, ZION, DLTR, UTHR, CMED, KELYA, DDUP, LOGI, TNDM, VOCS, SQNM, HAIN, AIPC, LUX, IAT, IT, EVR, PHH, XHB, ROP and RMD

Stocks With Unusual Call Option Activity:
1) MBI 2) HIG 3) OI 4) AOC 5) CMA

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Friday Watch

Late-Night Headlines
Bloomberg:

- U.S. municipal bonds advanced for an eighth day and sent a benchmark 10-year yield to the lowest since 2003 as debt from the week’s largest new issue gained. State and local government bonds have returned about 5 percent in 2009, outpacing a 3.3 percent decline in U.S. Treasuries and a 0.2 percent gain in corporate debt, Bank of America Merrill Lynch index data show. “That’s an indication that the flight to quality is abating and investors are willing to start assuming some more credit risk,” said Paul Brennan, who oversees about $12 billion in municipal-bond funds at Nuveen Asset Management in Chicago. “Munis have done extremely well year to date.” Municipal funds reported net cash inflows of $758 million during the week through yesterday, AMG said today.

- The cost to protect against defaults by homebuilders including DR Horton(DHI), Lennar Corp.(LEN) and KB Home(KBH) fell after the US Senate voted to include a tax credit for homebuyers in the government’s stimulus plan. Credit-default swaps on Fort Worth, Texas-based DR Horton fell 24 basis points to 358 basis points, the lowest in more than seven months, according to CMA DataVision. Contracts on Miami-based Lennar dropped 15 basis points to 585 basis points, and KB Home of Los Angeles declined 35 basis points to 445, CMA data show. The Senate unanimously approved a Republican amendment yesterday that would temporarily offer homebuyers a tax credit up to $15,000, costing the government $18 billion.

- Australia’s central bank slashed its forecasts for economic growth and inflation and said interest rates at the lowest level in more than four decades will “provide significant stimulus” to offset weaker export demand. Gross domestic product will rise 0.25 percent in the 12 months through June, according to the Reserve Bank of Australia, which in November predicted growth of 1.5 percent for the same period.

- As construction cranes littering Dubai’s skyline go idle, it’s time to revisit that ever intriguing economic indicator: the Skyscraper Curse. As this columnist has pointed out periodically, there’s an uncanny, if unscientific, correlation between financial crises and efforts to build the world’s tallest building. Look no further than Kuala Lumpur in 1997, Chicago in 1974, New York in 1930 and in biblical times with the Tower of Babel. The human propensity for architectural overreach has been a surprisingly reliable omen. It’s not a stretch to think of such projects as visual punctuation marks. A giant billboard made of steel, glass, concrete and money. A common thread between skyscrapers and economic disasters has to be easy credit, which fuels irrational growth, valuations, and hubris.

- Bank of America Corp.(BAC) Chief Executive Officer Kenneth Lewis bought 200,000 shares yesterday, his second purchase in the past three weeks. Four other Bank of America directors bought shares, along with Brian Moynihan, who heads the company’s investment banking and wealth management businesses. The shares rose 6.4% in after-hours trading.

- Hartford Financial Services Group Inc.(HIG), the Connecticut-based seller of life insurance and property coverage, slashed its dividend by 84 percent after reporting a loss and missing a capital target. The insurer slipped $2.89 to $12.20 at 7:09 p.m. in New York.

- The US Oil Fund(USO), an exchange-traded fund betting the price of crude will rise, holds more than 20% of outstanding March futures contracts. The fund, which tracks the price of West Texas Intermediate crude, owned about 79,000 March futures as of Feb. 4, according to the fund’s Web site. That’s more than four times the size of its holdings at the beginning of December.

- Baidu’s(BIDU) China Lead Over Google(GOOG) Shrinks After Web Search Outcry. Baidu, the leading Internet search engine in China, has seen its traffic decline and stock price slump since November, when a state-run television broadcast criticized its practice of displaying paid search results higher than some free ones, according to Beijing-based research firm Analysys International. “Until Baidu can clearly demonstrate it has overcome the issues brought up by the negative media reports recently, advertisers will likely pull back spending,” said Steven Chang, chief executive officer at Optimedia China, which buys advertising from Baidu and Mountain View, California-based Google. “Google’s biggest strengths are its ‘Don’t Be Evil’ motto and the integrity of its technology, and the company should attempt to capitalize on them in China.”

Wall Street Journal:

- Senior Senate Democrats pressed Thursday evening to force a final vote on President Barack Obama's economic-recovery package, as a bipartisan group of senators worked to craft a sharply lower-cost alternative to a two-year plan that has been pumped up to more than $920 billion. Twenty moderate senators -- from both parties -- worked Thursday to hammer out a proposal to bring the total package's cost down to about $800 billion, and tilt it more toward tax cuts. Led by Sens. Susan Collins (R., Maine) and Ben Nelson (D., Neb.), the group gathered in an office building across from the U.S. Capitol, combing over the bill for spending programs deemed unlikely to provide immediate benefit to the economy. The group's $800 billion target was set by Sens. Collins and Nelson after meeting Wednesday with Mr. Obama, who insisted the two-year package needed to be at least that large to provide a lift to the sagging economy. Late Thursday, Mr. Obama, on his way to Williamsburg, Va., to visit a House Democratic retreat, suggested he's willing to accept $800 billion.

- The Obama administration's financial-rescue plan is shaping up to include capital injections with tougher terms than the first round and an expansion of an existing Federal Reserve lending facility that could potentially buy up toxic assets clogging the system, according to people familiar with the plans. The discussions are still fluid and much could change. But efforts to create a so-called bad bank to purchase distressed assets and to insure other assets against future losses appear less central to the administration's thinking. Still, some within the administration continue to push those efforts and they could wind up as part of the plan that will be detailed Monday by Treasury Secretary Timothy Geithner.

- Leon Panetta, nominee to be director of the Central Intelligence Agency, said Thursday that he would "turn the page to a new chapter" at an institution that, according to current and former officials, faces a host of internal challenges. President Barack Obama is pushing what he calls a "rebranding" of U.S. intelligence and moved quickly after his inauguration to close the CIA's secret prisons and revoke controversial interrogation techniques. Mr. Panetta, formerly a chief of staff under President Bill Clinton, said at Thursday's hearing that he believes waterboarding, or simulated drowning, constitutes torture and is wrong. But he said government employees who carried out waterboarding on the belief that it was legal based on opinions supplied by government lawyers shouldn't be prosecuted. Just before the hearing began, Mr. Panetta's responses to the committee on his ties to EduCap Inc., a nonprofit student lender, were released. Mr. Panetta said he flew "on one or two occasions" on the airplane of EduCap founder Catherine B. Reynolds, who is under investigation by the Senate Finance Committee and the Internal Revenue Service for possible improper use of EduCap's $28 million corporate jet. Mr. Panetta said the flight was for a business meeting and didn't represent taxable income.

- The senators behind a week-old bill that urges stricter oversight of hedge and private-equity funds said Thursday they never meant to propose that fund investors' names be publicly disclosed. Securities lawyers and investment-fund attorneys say that, as it's written, the bill's use of "beneficial owners" would include limited partners, which encompasses outside clients who put money in the funds. Fund-industry lobbyists are strongly opposed to such disclosure.

- Countries grappling with global recession have enacted a wave of barriers to world commerce since early last month, scrambling to safeguard their key industries -- often by damaging those of their neighbors. The World Trade Organization is gathering nations in a special meeting Monday to try to stem the rising tide, just two weeks after saying protectionism was largely under control. On Thursday, 10 European Union commissioners headed to Moscow for talks Friday with Prime Minister Vladimir Putin and other Russian officials, where they plan to air complaints over the pace of new Russian trade barriers.

- President Barack Obama's crackdown on Wall Street pay contains loopholes, and may have limited impact in restraining compensation, according to some executive-pay consultants and management attorneys. Some compensation professionals already are pointing out potential holes in the rules, including tactics such as changing executives' titles or rearranging pay packages. Just as past attempts by the government to restrict executive pay largely backfired, these people warn, the new curbs also may have unintended consequences.

NY Times:

- China’s Unemployment Swells as Exports Falter. Hundreds of thousands of migrant workers are returning here earlier than usual from their home villages after the Chinese New Year holiday. Lugging their belongings in plastic sacks and cardboard boxes, they are hoping to find increasingly scarce jobs. Many will fail. A spokeswoman for the Guangdong Provincial Labor and Social Security Bureau said Thursday that 3 million of an expected 9.7 million migrant workers had returned to the province by Wednesday evening. Many have jobs waiting for them, but two million have no employment lined up and must look for work, she said. Beijing authorities disclosed Monday that based on an agriculture ministry survey of villages just before the Chinese New Year holiday last week, about 20 million of the nation’s 130 million migrant workers are unemployed.

BusinessWeek:

- When Google (GOOG) and its partners first unveiled plans for the Android operating system, they billed it as software that would run mobile phones. That mission was accomplished the following year with the late 2008 release of T-Mobile's G1 phone. More Android-enabled handsets are on the way. But before long, you may be seeing Android in a lot of other electronic devices.

- Small Banks Say ‘No Thanks’ to US Bailout Money. Healthy small bankers would like the boost to lend more, but fear regulations and conditions attached to the Treasury Dept.’s rescue program.

USA Today.com:

- A plan by Republicans in the Senate aimed at pushing mortgage rates lower has gone down to defeat at the hands of Democrats. The plan by Nevada Republican John Ensign would have encouraged banks to issue mortgages with interest rates of 45 to 4.5%. The government-controlled mortgage giants Fannie Mae and Freddie Mac would have bought the mortgages on the secondary market. Jumbo loans would have been ineligible. Democrats killed the idea Thursday night by a 62-35 vote. The plan also contained an assortment of tax cuts such as cutting the bottom 10% income tax rate in half for two years.

- President Obama ordered the Department of Energy on Thursday to set tough new energy-efficiency standards for a broad range of home appliances, from dishwashers and ovens to lamps and air conditioners. That's a sharp break from Bush administration policy. It's also the latest sign Obama plans to move aggressively to reduce greenhouse gas emissions. He's already pushed to double renewable energy in five years and boost fuel efficiency in vehicles. Although final rules have yet to be issued, Obama indicated Thursday that appliance standards would be dramatically tightened.

AP:

- In a move aimed at limiting harm to Arctic waters opened by global warming, a federal advisory board voted Thursday to ban commercial fishing north of the Bering Strait off Alaska's coast. The North Pacific Fishery Management Council, meeting in Seattle, voted unanimously to prohibit industrial fishing in nearly 200,000 square miles of U.S. waters in the Chukchi and Beaufort seas. The U.S. Commerce Department is expected to approve the recommendation. The fishery council has primary responsibility for managing Bering Sea groundfish, including Alaska pollock, the largest U.S. fishery by volume. Annual catches average 2.5 billion pounds and provide raw material for fishsticks and fast-food fish sandwiches.

Reuters:

- Russia plans to start up a nuclear reactor at Iran's Bushehr plant by the end of the year, the head of Russia's state nuclear corporation said on Thursday. "If there are no unforeseen events...then the launch will go according to the timetable," Rosatom chief Sergei Kiriyenko told reporters in the Kremlin.

- Did middleman know about Madoff losses beforehand?

Financial Times:
- The head of Germany’s biggest bank on Thursday laid out the welcome mat to disgruntled American banking executives, suggesting that Barack Obama’s tough curbs on boardroom pay could encourage the best to defect to overseas rivals. Josef Ackermann, chief executive of Deutsche Bank(DB), predicted that the president’s proposed $500,000 (€390,000) cap on executive pay at US banks that accept large tranches of state aid could help it recruit their most talented people. “If you are only going to be able to pay a $500,000 bonus, I think talent will be happy to work for us. At the end of the day, this is a people business, about who has the best talent,” he said. Mr Ackermann, who is to step down next year, said Deutsche would emerge successfully from the crisis after cutting some of its riskiest businesses. “We are convinced trust will return to the markets ... banks profiting from this will be the few independent investment banks that have handled the crisis without external assistance and have positioned themselves sustainably.

- US officials are examining ways gradually to convert government stakes in banks into ordinary shares as banks accumulate losses, according to people close to the discussions. The point would be to provide a drip-feed of additional common equity as needed to cover losses – without the government owning a larger stake in the banks than is necessary. Treasury Secretary Tim Geithner will announce the financial sector rescue plan on Monday along with a set of policies designed to reduce foreclosures and boost the housing market. Bank stocks, meanwhile, rallied on Thursday as bankers expressed fresh confidence that the US authorities will find ways to circumvent mark-to-market rules as part of the new financial rescue package. Executives who have talked to government officials recently said one option for the government would be to buy toxic assets below the value at which banks value them on their balance sheets, but provide a government security equal to the difference between government’s purchase price and the marked value. That would enable banks not to crystallize their losses on the assets for a number of years and wait and see whether they recover in value. Executives and policymakers who have spoken to key officials believe the plan to be presented by Mr Geithner will have insurance-style guarantees on bank portfolios of assets at its core, but will include a so-called “bad bank” that will acquire securities that have already been heavily written down.

cbcnews:

- Alberta May Offer Incentives to Spur Oil Drilling.

South China Morning Post:

- Climate change will become a new focal point in bilateral dialogue between China and the United States, an official in the administration of US President Barack Obama said.

China Business News:

- Shanghai home prices may fall further because the supply of new apartments is increasing, citing real estate agents and analysts. There were 8.4 million square meters(90 million square feet) of completed new apartments ready for sale at the end of January, close to total new home sales in the city in 2008, citing local government statistics. This “huge” inventory, which will take about 10 months for the local market to absorb, puts pressure on prices in districts such as Jing’an.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (ENR), Added to Top Picks Live List, target $85.

- Reiterated Buy on (RATE), target $41.

- We are raising our 4Q08 EPS estimates for (ARO), (GPS), (LTD), (ROST) & (TJX) and lowering our 4Q08 EPS estimate for (CHS), (PLCE) and (URBN).

Night Trading
Asian Indices are +1.0% to +1.75% on average.
S&P 500 futures -.05%.
NASDAQ 100 futures +.06%.

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Earnings of Note
Company/EPS Estimate
- (AOC)/.78

- (BIIB)/.92

- (WY)/-.57

- (LPNT)/.64

- (HI)/.43

Economic Releases

8:30 am EST

- The Change in Non-farm Payrolls for January is estimated at -540K versus -524K in December.

- The Unemployment Rate for January is estimated at 7.5% versus 7.2% in December.

- Average Hourly Earnings for January are estimated to rise .2% versus a .3% gain in December.

3:00 pm EST

- Consumer Credit for December is estimated at -$3.5B versus -$7.9B in November.

Upcoming Splits
- None of note

Other Potential Market Movers
- The Fed’s Yellen speaking, (EMR) analyst meeting, CSFB Financial Services Conference and CSFB Energy Summit could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by technology and financial stocks in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.

Stocks Finish Higher, Boosted by Commodity, Financial, Retail, HMO and Technology Shares

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