Stocks Mostly Lower into Final Hour on Low Volume Consolidation of Recent Gains

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Computer longs, Medical longs, Financial longs, Internet longs and Education longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly negative as the advance/decline line is modestly lower, sector performance is mixed and volume is below average. Investor anxiety is above average. Today’s overall market action is neutral. The VIX is rising .76% and is very high at 43.70. The ISE Sentiment Index is about average at 144.0 and the total put/call is below average at .66. Finally, the NYSE Arms has been running around average most of the day, hitting 1.04 at its intraday peak, and is currently .83. The Euro Financial Sector Credit Default Swap Index is falling 2.41% today to 107.66 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 falling 3.66% to 186.40 basis points. The TED spread is falling 1.88% to 95 basis points. The TED spread is now down 372 basis points in under four months. The 2-year swap spread is falling 5.22% to 59.0 basis points. The Libor-OIS spread is falling 2.48% to 95 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is rising 18 basis points to 1.38%, which is down 132 basis points in under seven 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 .28%, which is up 1 basis point today. Given last week’s big stock gains, today’s low volume consolidation is a positive. Market-leading stocks are very strong again today, substantially outperforming the broad market. There still appears to me to be a large consensus among hedge fund managers that stocks will see a “sell the news” reaction to any stimulus passage and Geithner’s new financial rescue plan. I still suspect any short-term weakness in US stocks will be relatively mild and short-lived. The North American Investment Grade Credit Default Swap Index is now at the lowest level since November 5^th of last year. It is also noteworthy that gold is falling 2% today despite a weaker US dollar and rising inflation expectations. A fraction of the “fear premium” in gold is likely dissipating. As well, oil continues to trade very poorly given recent potential positive catalysts. Nikkei futures indicate an +215 open in Japan and DAX futures indicate a -6 open in Germany tomorrow. I expect US stocks to trade modestly higher into the close from current levels on short-covering, bargain-hunting, diminishing financial sector pessimism, falling credit market angst and less extreme economic pessimism.

Today's Headlines

Bloomberg:

- The biggest bears in U.S. stocks are losing their conviction after the steepest decline in the Standard & Poor’s 500 Index since the Great Depression. The number of shares borrowed and sold short on the New York Stock Exchange fell 28 percent last month from the peak in July. Companies in the S&P 500 trade at the lowest multiples of earnings in 18 years.

- Amazon.com Inc.(AMZN), the world’s largest Internet retailer, introduced a faster and thinner version of the Kindle, the electronic book reader that has sold out two years in a row. The Kindle 2 has seven times more storage than the previous model, a battery that will last up to two weeks, and a feature to read books aloud. It will sell for $359, the same price as the original Kindle, and deliveries will start Feb. 24, the Seattle-based company said today in a statement.

- The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages. The $9.7 trillion in pledges would be enough to send a $1,430 check to every man, woman and child alive in the world. It’s 13 times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office data, and is almost enough to pay off every home mortgage loan in the U.S., calculated at $10.5 trillion by the Federal Reserve.

- Russia may have its credit rating reduced again in the next six months as the country’s defense of the ruble drains reserves and companies default on their debt, according to Commerzbank AG. Fitch and S&P may cut their ratings to BBB- over the next six months, said Luis Costa, an emerging markets debt strategist for Commerzbank in London.

- The cost to protect corporate bonds from default fell for a second day and reached a three-month low. Credit-default swaps on the CDX North America Investment- Grade Index, tied to the bonds of 125 companies in the U.S. and Canada, fell 7.5 basis points to 186 basis points as of 11:04 a.m. in New York, according to broker Phoenix Partners Group. In London, contracts on the Markit iTraxx Europe index of 125 companies with investment-grade ratings fell 5.5 basis points to 143.5 basis points, JPMorgan Chase & Co. prices show. Contracts on Citigroup, the New York-based bank that received $45 billion in government aid and last month announced plans to split itself into two companies, fell 10 basis points to 270 basis points, Phoenix prices show. Swaps on Bank of America declined 10 basis points to 170, according to Phoenix. Contracts on JPMorgan narrowed 1 basis point to 112 basis points, Phoenix prices show. Morgan Stanley swaps fell four basis points to 324 basis points, according to CMA DataVision.

- US home prices will reach bottom by the end of the year, concluding a slide that will have cut values 36%, Moody’s Economy.com said. “Notwithstanding the intensifying economic gloom, the bottom of the housing downturn is within sight,” chief economist Mark Zandi said today.

- Gold fell for the first time in four sessions on expectations the U.S. Congress will pass a smaller- than-expected stimulus package to revive the economy, easing the risk of accelerating inflation. Gold had climbed on speculation that government spending will spark inflation. Investment in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, rose to a record 867.2 metric tons on Feb. 5. Speculative long positions, or bets prices will rise, outnumbered short positions by 155,306 contracts on the Comex in the week ended Feb. 3, Commodity Futures Trading Commission data showed on Feb. 6. Net-long positions rose by 14,192 contracts, or 10 percent, from a week earlier.

- Crude oil traded little changed in New York amid doubts a $780 billion stimulus plan in the U.S. will lead to a rapid recovery in global energy demand. Senate and Congress lawmakers due to vote on the plan today and tomorrow are more than “90 percent” agreed on its contents, Lawrence Summers, director of the National Economic Council, said yesterday. U.S. crude inventories have climbed in 17 of the past 19 weeks, leaving them 15 percent higher than the five-year average for the period, the Energy Department said. The prospect of further production cuts by the Organization of Petroleum Exporting Countries and strike action in Nigeria, the fifth-largest supplier of oil to the U.S., failed to push crude beyond its recent trading band. Saudi Aramco, the world’s biggest state oil company, will reduce crude supplies to Japan in March for a fourth month, refinery officials said. New York oil futures have fallen 10 percent this year and are down 73 percent from the record $147.27 reached July 11. Speculative long positions, or bets prices will rise, outnumbered short positions by 29,276 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report.

- ITC Holdings Corp.(ITC) said it wants to build the world’s largest renewable-energy transmission system, a $12 billion project to bring electricity from wind farms in the Dakotas to Chicago. The Michigan power transmission company’s proposal, known as the Green Power Express, calls for about 3,000 miles of new lines that could move 12,000 megawatts of power from the upper Midwest to cities where there’s demand for the electricity. The project, announced today, would cross portions of North and South Dakota, Minnesota, Iowa, Wisconsin, Illinois and Indiana, according to the company.

- China said it was “seriously concerned” at Indian barriers to its exports, highlighting global trade tensions as the worst financial crisis since World War II sends demand plummeting. India’s use of sanctions may have “a serious impact on bilateral trade relations,” Ministry of Commerce spokesman Yao Jian said in a statement on the ministry’s Web site today. India imposed a six-month ban on imports of Chinese toys last month. “Buy American” provisions in a U.S. economic stimulus package were watered down last week after warnings from President Barack Obama and foreign leaders that they risked triggering a trade war. British Prime Minister Gordon Brown described “a retreat into protectionism” as the biggest danger facing the world economy.

- Barclays Plc reported second-half profit that exceeded analysts’ estimates, and President Robert Diamond said the investment bank had an “extremely strong” start to 2009 after buying Lehman Brothers Holdings Inc. assets. Barclays, the third-biggest U.K. bank by assets, rose 11 percent in London trading after saying writedowns this year will be less than last year’s 8.1 billion pounds.

- Hartford Financial Services Group Inc.(HIG), the Connecticut-based insurer that lost $2.75 billion last year, rose in New York trading on speculation the government and regulators will provide financial relief. Hartford advanced $2.66, or 21 percent, to $15.34 at 10:34 a.m. in New York Stock Exchange composite trading. Life insurers including Hartford may be approved for capital injections from the Treasury as soon as today, Reuters reported on Feb. 7, citing unidentified people. The firm may be allowed by its state regulator to reduce reserves to bolster finances, a person familiar with the matter said on Feb. 6.

- Lawmakers are “killing” hotels that rely on corporate events by forcing companies that get federal money to scale back on employee trips, said James Tisch, the chief executive officer of Loews Corp.(L) “Congress has done a great job of killing the resort hotel business with the way they’ve criticized a number of financial firms for having conferences,” Tisch told analysts today. “I just heard this morning of another investor conference that was canceled by another major investment firm because of fear of being criticized by members of Congress.”

Wall Street Journal:

- A substantial increase in the amount of electricity produced from renewable energy would require building a transmission system that would carry a price tag of up to $100 billion, according to a new study. The new system would be needed because the existing eastern grid couldn't handle the volume of power coming from the wind-producing states. In addition, the new grid would need to be able to handle the fluctuating nature of wind power, which can surge at some moments and drop sharply at others. There is strong political and public support for increasing production of renewable energy, and Congress is considering enacting a nationwide standard that would require utilities to garner more of their power from renewable sources. However, there is only an emerging understanding of how new standards would affect the country's existing electricity infrastructure.

- The European Central Bank has room to cut interest rates further as the euro area suffers its worst recession since WWII, Spanish Finance Minister Pedro Solbes said in an opinion piece in the Wall Street Journal.

- Last summer, gasoline prices soared, the economy soured, and Americans began driving less and driving slower. None of this felt good at the time, but nevertheless something good happened. Two separate studies of fatal auto accident statistics released recently indicate that traffic deaths fell significantly in 2008, possibly by as much as 10%. Moreover, the preliminary data on 2008 highway deaths suggests that fatal accidents declined faster than vehicle miles traveled – in other words, the decline in fatalities may not simply be the result of fewer people driving.

CNBC.com:
- Government action to shore up the economy and improve the housing climate probably will send mortgage rates to 4.5 percent, Bill Gross, co-CEO at the Pimco bond fund, said Monday. In addition to driving down mortgage rates and stimulating home-buying, the government's efforts also could include a move to cap Treasurys rates to encourage investors to take more risk, Gross said during a live interview on CNBC.

- OPEC is willing to cut oil output further at a meeting in March, the group's secretary-general said on Monday, adding he would like to see full compliance with existing curbs first. Abdullah al-Badri also told reporters in a briefing that OPEC's compliance with existing oil supply curbs of 4.2 million barrels per day (bpd) was about 80 percent, based on preliminary data, higher than some estimates.

- McDonald’s(MCD) said Monday that worldwide sales at its restaurants open at least 13 months rose 7.1 percent in January, driven by strength at home and abroad. The world's largest hamburger chain, whose shares were up slightly in early trading, said January same-store sales rose 5.4 percent in the United States due to demand for McDonald's core menu and breakfast items.

NY Times:

- MLB.TV Adds High-Definition Video, Custom Replays. Most media companies these days are desperately searching for ways to get people to pay for their content on the Web. Major League Baseball is not one of them.

- Would you trust a Web site created by anonymous individuals to give you better advice on stocks than professional advisers? Wikinvest hopes so.

Financial News:

- Wealthy US investors are pulling out of hedge funds at an unprecedented rate and will not return for a generation, according to the founder of Tiger 21, the networking group for high net worth and ultra-high net worth investors.

TechWhack:

- Apple(AAPL) working on a HDTV with iTunes and Apple TV built in? Gene Munster of Piper Jaffray has predicted that Apple is soon going to launch their own Apple branded television sets that would feature DVR functionality in addition to inbuilt support for Apple TV and iTunes. He said in a report: We expect Apple to design a connected television over the next two years (launching in 2011) with DVR functionality built in. These recorded shows could then sync with Macs, iPhones and iPods over a wireless network.

Reuters:
- US Treasury Secretary Tim Geithner will testify at 2:30 pm EST tomorrow before the Senate Banking Committee on the Troubled Asset Relief Program.

- U.S. bank shares rose on Monday, boosted by hopes that a government bailout plan due on Tuesday will spare shareholders and help troubled financial institutions rid their balance sheets of toxic assets. The KBW Banks Index .BKX was up 2.57 percent.

Financial Times:
- The brokerage arm of UBS has launched an aggressive hiring spree in the US, offering financial advisers large pay packages to lure them away from rivals such as Merrill Lynch, Morgan Stanley and Citigroup. The bank, which has suffered big credit-related losses and received a capital injection from the Swiss government, promised some brokers compensation equal to almost three times their yearly profits, according to documents seen by the Financial Times. UBS Financial Services has added more than 400 brokers to its 8,000-strong network in the past few months, insiders say. The moves have enraged rivals, who claim the Swiss group’s big pay offers have triggered a costly price war for brokers when most banks, including UBS, are struggling to cope with losses. Merrill Lynch is believed to have lost more than 100 brokers to the group.

Handelsblatt:

- Dailmler AG may reintroduce the four-seat version of its Smart small car to counter high gasoline prices and falling sales of its larger automobiles.

Aktualne:

- Czech Foreign Affairs Minister Karel Schwarzenberg said the plan for a US anti-missile shield in Europe may be delayed five years because of the global financial crisis.

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Xinhua:
- Beijing house prices may fall as much as 20% this year, citing Chen Xikang, a researcher at the Academy of Mathematics & Systems Science. Other major cities may experience similar declines, citing Chen, who’s also a World Bank consultant. Chinese house prices far exceed the actual incomes of the general public, citing Chen. The real-estate market is unlikely to recover quickly like it did in 1997 and 1998, when China used favorable policies to boost the market following the Asian financial crisis, citing Zhang Qi, a professor at Beijing Normal University.

Bear Radar

Style Underperformer:
Small-cap Growth (-.77%)

Sector Underperformers:
Hospitals (-2.56%), Gold (-2.48%) and Medical Equipment (-1.29%)

Stocks Falling on Unusual Volume:
MMSI, HMY, CTRP, ITRI, NRT and MCY

Stocks With Unusual Put Option Activity:
1) MOT 2) GFI 3) BAX 4) WMI 5) PTEN

Bull Radar

Style Outperformer:
Mid-cap Value (+1.07%)

Sector Outperformers:
Oil Service (+3.27%), Banks (+2.83%) and Construction (+2.61%)

Stocks Rising on Unusual Volume:
GE, GMXR, PXD, MDR, NOV, DB, LUK, AU, MICC, BVN, BTH, APA, EZCH, SOHU, EXBD, ENER, JRJC, AMRI, UEPS, NICE, BIDU, QGEN, SINA, VOLC, WHG, GNI, HAS and HEW

Stocks With Unusual Call Option Activity:
1) NTAP 2) SOHU 3) CEPH 4) FITB 5) JCP

Links of Interest

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Monday Watch

Weekend Headlines
Bloomberg:

- The administration of President Barack Obama plans to use tens of billions of dollars from its Troubled Asset Relief Program to “accelerate dramatically modification of mortgages” to limit foreclosures, HUD Secretary Shaun Donovan said during an interview on CNN. The administration is working on a plan that will create incentives such as government loan guarantees for lenders to modify mortgages, Donovan said. He said the Obama administration was considering using the mortgage modification program implemented by Sheila Bair, chairman of the Federal Deposit Insurance Corp., at IndyMac Bank as a model for its program.

- The Markit iTraxx Japan index fell 7 basis points to 392.5 as of 10:25 a.m. in Tokyo, Credit Suisse Group AG prices show. The Markit iTraxx Australia index was 10 basis points lower at 315 at 9:48 a.m. in Sydney, Citigroup Inc. data show. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan fell 7 basis points to 345 at 9:40 a.m. in Singapore while the region’s high-yield benchmark was quoted at 1,150 basis points, according to ABN Amro Holding NV.

- The Taiwan dollar is starting to feel the pain of China’s economic slowdown as exports from the island to the mainland decline. Changshu Shengtian Knitting & Clothing Co. in China stopped ordering cloth from Taiwan this year and began buying less-expensive local fabric because “there’s no sign of even a slight increase in overseas orders this year,” said Tang Zhenya, a salesman at the company in the eastern city of Changshu. “So we turned back to cheaper mainland suppliers.” China’s customs bureau reported that imports from the rest of Asia plunged to $43 billion in December, from a record of $70 billion in July. Asian countries that depend on exports to their neighbors will suffer the most from the 39 percent collapse in the trade, according to CLSA Asia-Pacific Markets, which predicted last week that Taiwan and Singapore’s economies will shrink at least 10 percent this year. “Intra-Asian trade has collapsed,” said Wai Ho Leong, a regional economist in Singapore at Barclays, the third-biggest foreign-exchange trader. “Taiwan, Singapore and Malaysia, export-oriented economies, can be expected to see their currencies drift lower.”

- The Australian dollar may slip below 60 U.S. cents to the weakest in almost six years as inventory stocks build to a record in Japan, the biggest buyer of the South Pacific nation’s exports. “Japan is seeing an inventory back-up that is much more catastrophic than anything seen during the Asian crisis,” said Robert Rennie, chief currency strategist at Westpac Banking Corp. in Sydney. “With inventory backing up violently in Asia, our exports will start falling as well. We expect the Australian dollar to test 60 U.S. cents this quarter and push beneath it.” Japan, China and South Korea are Australia’s biggest export markets, buying the nation’s raw materials including coal, iron ore and alumina in order to produce manufactured goods for shipment to the U.S. and Europe. China’s exports dropped 2.8 percent, the most in almost a decade in December, while Korea’s January exports tumbled a record 32.8 percent.

- The South Korean economy may contract 4.5% this year as exports shrink by more than 20$, Macquarie Group Ltd. said. The brokerage said it previously expected gross domestic product to contract 2.5% in 2009.

- Amazon.com Inc.(AMZN) is holding a press conference at the Morgan Library and Museum in New York tomorrow, fueling speculation that the company will release a new version of the Kindle, its electronic-book reader. Amazon.com hasn’t given a topic for the event, hosted by Chief Executive Officer Jeff Bezos. Still, blogs and analysts say the timing is right for a new Kindle. The current model sold out before the holidays -- the second year in a row that demand eclipsed supply.

- General Motors Corp.(GM) executives, advisers, bondholders and union officials plan to meet this week in Detroit to negotiate the government-ordered debt restructuring of the automaker, two people close to the talks said. The discussions, which are said to include all global debt holders, follow previous informal talks as part of the Detroit automaker’s plan to reduce $27.5 billion in unsecured debt to about $9.2 billion by swapping for equity, the people said. They asked not to be named because the meetings, scheduled for tomorrow and Feb. 10, are private.

- Chrysler LLC, working on a viability plan to submit to the U.S. government after receiving a $4 billion loan, will meet with union leaders and creditors this week as the Feb. 17 deadline to show progress approaches.

- More than 4,000 Chinese toy companies closed last year as the global recession cut demand and some countries tightened safety standards.

- The U.S. pushed European NATO allies to send more troops to Afghanistan, warning of a resurgence in terrorist violence in the country that gave rise to the Sept. 11 attacks.

- Former Iranian president Mohammad Khatami is likely to heed the people’s “invitation” and run against Mahmoud Ahmadinejad in the Persian Gulf country’s presidential election on June 12, a close associate said. The comments by Mohammad Ali Abtahi, who served as a vice- president under Khatami between 2001 and 2004, were the strongest indication yet that Khatami will run and followed an announcement yesterday that Ahmadinejad will seek a second term.

Wall Street Journal:

- Senate Democrats are confident they can push for a final vote on a revamped, $827 billion economic-stimulus package early this week, setting the stage for fresh battles as Democratic congressional leaders and the White House try to meld competing House and Senate bills. After cutting deals Friday with three moderate Republicans to pare the cost of the package, Senate Democrats, who control the chamber with a 58-41 majority, are confident of attracting the 60 votes needed to close off debate Monday. If approved as expected, the package would go to a vote Tuesday.

- William Ackman, the hedge-fund manager known for criticizing insurers and other companies over their performance, scrambled over the weekend to ease investor ire stemming from losses of his own. Investors smarting from a decline in Mr. Ackman's fund that bets exclusively on a resurgence of retailer Target Corp. are expected to be told about new breaks on fees and will be allowed to withdraw completely from the fund, a person familiar with the matter said.

- Last year's credit crisis hit the economy with a surprising jolt, and most economists expect the recession to drag on until at least the end of 2009, with only a meager recovery after that. But just as economists were caught flat-footed by the sharpness of the downturn, history says they could be surprised by the speed and strength of the recovery -- once the economy shows signs of turning around.

Barron’s:

- As financial markets came apart in October, more than 600,000 viewers turned to his Mad Money show -- the biggest crowd since the Nielsen Company started tracking the CNBC series. Jim Cramer is giving advice to huge audiences on NBC's Today Show and getting awestruck coverage in Esquire magazine. And why not? An earthquake has hit Wall Street, and the 53-year old broadcaster has spent more time there than most any TV journalist. He dispenses thousands of Buy/Sell recommendations a year and has declared that those stock picks will help you get rich. The only regrettable thing about any of this is that CNBC and Cramer won't meaningfully discuss how his advice pans out. Cramer's recommendations underperform the market by most measures. From May to December of last year, for example, the market lost about 30%. Heeding Cramer's Buys and Sells would have added another five percentage points to that loss, according to our latest tally.

MarketWatch.com:

- A key Obama administration official said Sunday that new, soon-to-be-announced financial measures by the Treasury will include creating incentives for the private sector to invest in troubled banks. "It can't all be private capital, but with the right kinds of government guarantees and the right kinds of financing, strategic approaches, [Treasury Secretary Timothy] Geithner believes we can bring in substantial private capital," said Obama's chief economic advisor Lawrence Summers on Fox News Sunday. One measure the Treasury is considering would create a "bad bank" or "aggregator bank" that would buy illiquid mortgage securities. It would be partly funded by some of the remaining money from the existing $700 billion Troubled Asset Relief Program fund, but the majority of the funds would come from the private sector, according to a Wall Street Journal report Sunday. In addition to the creation of a bad bank, the Treasury plans to guarantee mortgage securities, provide new capital injections into financial institutions, help out troubled homeowners on the verge of foreclosure and expand a consumer lending program. Geithner was scheduled to propose a "comprehensive" financial rescue plan Monday, but a Treasury statement Sunday said the announcement of such a program won't take place until Tuesday.

- Five reasons to buy a home this year. Affordability returns to housing, and buyers have loads of negotiating power. People are afraid to buy a home in times like these, with the economy tanking and home prices continuing to fall. But if you're brave enough to stray from the herd, you might be in for the home-buying opportunity of a lifetime.

CNBC.com:
- Stimulus Plan Is Full of ‘Pork Barrel Politics.’ (video)

Fox News:

- President Obama is meeting Friday afternoon with the families of victims of the Sept. 11 attacks and the bombing of the USS Cole -- but some invited guests say they worry that the gesture is window-dressing, since the administration has suspended trials of detainees at Guantanamo Bay and a military judge on Thursday dropped charges against a suspect in the 2000 Cole bombing.

NY Times:

- Small Businesses Critical of Stimulus. “Small businesses are a job engine for the economy,” said David French, vice president for government relations at the International Franchise Association. “Unfortunately,” he said, the stimulus package offers “a thimble-full of fuel for this engine.” By his estimation, only 0.05 percent of the House bill is dedicated to small-business lending programs, and the Senate version is only slightly better. “It’s not a lot of money relative to the scale of the credit market problems,” Mr. French said.

- Environmentalists dream of a bigger and “smarter” electric grid that could move vast amounts of clean electricity from windswept plains and sunny deserts to distant cities. Such a grid, they argue, could help utilities match demand with supply on the hottest afternoons, allow customers to decide when to run their appliances and decrease the risk of blackouts, like the one that paralyzed much of the East in 2003. The Obama administration has vowed to make the grid smarter and tougher, allocating $11 billion in grants and loan guarantees to the task in the economic stimulus package passed by the House last week. But it will take a lot more than money to transform the grid from a form that served well in the last century, when electricity was produced mostly near the point of consumption, and when the imperative was meeting demand, no matter how high it grew. Opposition to power lines from landowners and neighbors, local officials or environmental groups, especially in rural areas, makes expansion difficult — even when the money for it is available.

- Does the Taganrog Automobile Factory have a deal for you! Rows of freshly minted Hyundai Santa Fe sport utility vehicles are available right now. In exchange — well, do you have any circuit boards? Or sheet metal? Or sneakers? Here is a sign of the financial times in Russia: Barter is back on the table.

- For the backers of Proposition 8, the state ballot measure to stop single-sex couples from marrying in California, victory has been soured by the ugly specter of intimidation. Some donors to groups supporting the measure have received death threats and envelopes containing a powdery white substance, and their businesses have been boycotted. The targets of this harassment blame a controversial and provocative Web site, eightmaps.com.

- Ticketmaster is expected on Monday to announce an agreement to merge with Live Nation in a deal that could reshape the music and live entertainment business.

Washington Post:
- Kansas Gov. Kathleen Sebelius is near the top of President Barack Obama's list of candidates to head the Health and Human Services Department at least partially on the strength of her long and close working relationship with the president, a senior administration official said. Other candidates, including former Clinton White House chief of staff John Podesta, remain in the mix. A decision is not imminent, a senior administration official said, speaking on the condition of anonymity to discuss private administration deliberations.

CNNMoney.com:

- Lists of the fastest-growing companies tend to be dominated by smaller firms. That makes sense; it’s a lot easier for a $30 million dollar enterprise to double in size than a $30 billion one. Which makes it all the more surprising to find Apple (AAPL) appearing for the first time in Forbes‘ ranking of America’s 25 Fastest-Growing Tech Companies — especially given the pummeling its shares have undergone over the past year (from nearly $200 a share in Dec. ‘07 to less than $100 today). But there Apple is, at the No. 14 spot, the largest company on the list — a Gulliver among Lilliputians — with sales of $33 billion, yet still growing at an annualized rate of 40% a year over the past five years.

Business Week:
- Across the nation, once-quiet farming villages and industrial towns were transformed over the past decade into boomtowns. Their rapid growth was fueled by cheap land, nearby job centers, easy transportation, and a steady influx of homebuyers seeking large spaces at affordable prices. Low interest rates and easy mortgages brought about a real estate explosion in much of the country in recent years. But in boomtowns, development powered on at a supercharged pace—sometimes sparked by a new sewer line, a new regional mall, or a new highway exit. It was good while it lasted. But the housing crisis and the recent economic downturn have forced many of the America's fastest-growing towns to adapt to the new reality of falling home prices and rising unemployment. And it's not clear whether the builders will return or whether the nation's next boomtowns will rise elsewhere.

Sarbanes-Oxley Compliance Journal:

- Until we address the root of the problem—fear and not greed—we’ll continue shooting ourselves in the collective foot wondering why poor impulsive choices persist long after greed has disappeared from the equation. Like our superstitious ancestors, we’ll continue trying to end a drought with the modern equivalent of human sacrifices and rain dances. We will try to cure a problem caused by fearful impulsivity by invoking a frightfully impulsive bailout, or some other knee-jerk reaction. If we are going to get out of this mess, we must stop digressing into the same old game of pin-the-blame-on-greed. It is time for cooler heads to prevail. It is time that all of us—congress, bankers, Americans—start addressing the real problem, and stop letting fearful impulses guide our decisions.

Politico:

- Sen. John McCain (R-Ariz.) said on Sunday he'll vote against President Barack Obama’s stimulus bill, calling the legislation “generational theft” in an interview on CBS’ “Face the Nation.” “I thought we were going to have change," he said, in a shot at Obama's campaign slogan, "and that change meant we work together. This is a setback. This is a setback to all Americans because you promised Americans we’d work in a more bipartisan fashion, and that certainly is not the case in this bill,” McCain said. McCain said the bill would saddle Americans with billions in future debt, and contained protectionist provisions that could be damaging to the economy.

Miami Herald:

- South Florida housing prices becoming affordable again.

USA Today:

- OK, let's just get it out there: The 2010 Ford(F) Fusion hybrid is the best gasoline-electric hybrid yet. What makes it best is a top-drawer blend of an already very good midsize sedan with the industry's smoothest, best-integrated gas-electric power system. It's so well-done that you have to look to the $107,000 Lexus LS 600h hybrid to come close.

Rasmussen Reports:

- The Rasmussen Reports daily Presidential Approval Index for Sunday shows that 36% of the nation’s voters now Strongly Approve of the way that Barack Obama is performing as President. Twenty-five percent (25%) Strongly Disapprove to give Obama a Presidential Approval Index rating of +11. One week ago today, 44% Strongly Approved and 23% Strongly Disapproved to give Obama a Presidential Approval Index rating of +21. In the first set of interviews conducted after inauguration day, 45% Strongly Approved of his performance while 16% Strongly Disapproved for a Presidential Approval Index rating of +29.

CFTC:

- The Commodity Futures Trading Commission has launched, on a six-month trial basis, a new monthly report: “This Month in Futures Markets.” The report, produced by the Commission’s Office of the Chief Economist, will add transparency to the information the Commission provides the public concerning regulated futures markets by providing graphical and tabular displays on the Commission’s website.

Reuters:

- Microsoft Corp (MSFT) is planning to offer new programs and services for mobile phones, including an "online bazaar" for software, the Wall Street Journal reported on Sunday.

- Thousands of groups of ardent fans of U.S. President Barack Obama met across the country during the weekend in hopes of converting the grassroots energy that fueled his election campaign into a durable movement. The meetings were the first test of Organizing for America, a body that wants the army of 13 million people who signed up for Obama's record-shattering campaign to be harnessed to his presidential agenda. But even supporters say they fear it could be difficult to sustain the campaign's momentum. A survey of nearly a dozen meetings out of thousands that occurred from Alaska to Florida showed mixed results.

Financial Times:

- Lloyd Blankfein, Goldman Sachs(GS)’ chief executive, has called for banks to adopt more stringent accounting practices, accept tougher regulation and give greater power to risk managers, in a trenchant analysis of the causes of the financial crisis and how they might be remedied. In an article for Monday’s Financial Times, as the Obama administration prepares to rewrite the rule book governing the US banking industry, Mr Blankfein outlines seven areas of misdemeanor – ranging from “complexity [getting] the better of us” to the “outsourcing of risk management” to ratings agencies.

- The black mood in the hedge fund industry began to lift in January as the leading operators made their first profits in months and the convertible bond market – dominated by hedge funds – started to move again.

- Steven Spielberg is on the verge of announcing a six-year, 30-film distribution deal with Walt Disney(DIS) after the collapse of negotiations last week with Universal Studios. The deal, which would combine Hollywood’s most commercially successful director with its most sophisticated marketing and distribution machine, could be unveiled by Monday.

TimesOnline:

- Every baby born a decade from now will have its genetic code mapped at birth, the head of the world's leading genome sequencing company has predicted. A complete DNA read-out for every newborn will be technically feasible and affordable in less than five years, promising a revolution in healthcare, says Jay Flatley, the chief executive of Illumina(ILMN).

The Financial Express:

- Even as the Indian steel companies have reduced their production to cope up with the shrinking demand, Steel Minister Ram Vilas Paswan today exuded confidence that India will become the world's second-largest steel maker after China by 2015. "We are already the world's fifth-largest steel producer and are poised to clinch the second slot by 2015 on the back of the capacity expansion lined up by the companies," Paswan told reporters after addressing the Golden Jubilee of state-run SAIL.

Business Times:

- Singapore’s economy may contract as much as 5.8% in the first quarter, citing a business-climate survey. Singapore’s economy will probably shrink as much as 5% this year, citing the Ministry of Trade and Industry.

Weekend Recommendations
Barron's:
- Made positive comments on (T), (UNH), (NTAP), (GE), (JNJ) and (BDX).

Citigroup:

- Reiterated Buy on (ETR), target $92.50.

Night Trading
Asian indices are -.25% to +1.25% on avg.
S&P 500 futures -1.27%.
NASDAQ 100 futures -1.18%.

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
- (NYX)/.55

- (HAS)/.76

- (ENER)/.30

- (BZH)/-2.00

- (HEW)/.60

- (AS)/.43

- (AG)/1.00

- (CNA)/.52

- (ROH)/.67

- (WHR)/.76

- (NUAN)/.21

- (CUZ)/.26

- (VMC)/.31

- (BEC)/1.22

- (GNW)/.38

- (ASEI)/.89

Upcoming Splits

- (LPHI) 5-for-4

Economic Releases

- None of note

Other Potential Market Movers
- The Fed’s Fisher speaking, Thomas Weisel Tech/Telecom Conference, Barclays Industrial Conference, Sterne Agee & Leach Financial Services Symposium, UBS Global Healthcare Conference and BIO Investor Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by financial and technology shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon. The Portfolio is 100% net long heading into the week.