Wednesday Watch

Late-Night Headlines
Bloomberg:

- President Barack Obama said financial markets reacted negatively to his administration’s plan to unlock credit and deal with banks’ toxic assets because Wall Street was looking for a quick and painless solution. “Wall Street, I think, is hoping for an easy out on this thing and there is no easy out,” Obama said in an interview recorded for ABC’s “Nightline” program. “You can prolong the agony and shareholders will be happy until they’re not happy, and that could be a year from now or two years from now, or in the case of Japan, eight years later,” Obama said, according to a transcript released by ABC. “Or you can just go ahead and acknowledge that yeah, there’s, there’s a lot of work that has to be done to put these banks back on a firmer footing.” Obama declined to provide an estimate on the eventual price tag for the bank rescue. He discussed the tension between sounding dire warnings about the economy to goad Congress into action and not wanting depress consumer confidence.

- Banks receiving US government aid have stepped up purchases of prime-jumbo mortgage bonds, said Matthew Lambiase, chief executive officer of Chimera Investment Corp. “So far this year, we’ve seen a much more pronounced bid from banks” for prime mortgage-backed securities, Labbiase said today. “Prices have increased accordingly.”

- U.S. Interior Secretary Ken Salazar said he will delay a proposal made in the last days of the Bush administration to expand drilling for oil and natural gas in the Outer Continental Shelf. Bush in July lifted a presidential ban on drilling in the Outer Continental Shelf, a federally controlled area that extends from about 3 miles (5 kilometers) offshore to as much as 230 miles. Congress followed suit in October by allowing its own moratorium on drilling to expire. The actions were spurred in part by demands for more access for drilling on federal land as crude oil futures prices rose to a record high of $147.27 a barrel in July. “I’m really puzzled” at the prohibition against coastal drilling, Jeroen van der Veer, chief executive of Royal Dutch Shell Plc, said today at a Houston energy conference. “Companies can work very responsibly even in sensitive environments.” It “would be an easy win-win to get access to all of those areas,” said van der Veer, who runs the world’s third-largest oil company by market value. Coastal areas of the continental U.S. not currently available to drilling hold about 76 trillion cubic feet of natural gas and 18 billion barrels of oil, according to the Minerals Management Service. “We need to act quickly and aggressively to develop domestic energy resources that could provide energy, jobs and needed revenues for states,” Barry Russell, president of the Independent Petroleum Association of America, said in a statement. His organization’s members hold 90 percent of the leases in the Gulf of Mexico. “We hope that this decision to extend the comment period is not used to buy the administration time to close off energy exploration far off our coasts,” Antonia Ferrier, spokeswoman for House Republican Leader John Boehner of Ohio, said in an e- mail. “Any comprehensive energy plan by the administration must utilize American resources.” “We were hoping that they would slow down the implementation of the Bush timeline more than they did here,” said Athan Manuel, director of Sierra Club’s land protection program. “But this is going to come out on the side of keeping our coasts off limits to drilling.”

- Crude oil traded near $38 a barrel after falling yesterday on skepticism that the U.S. government’s bank rescue plan will revive the economy. Oil dropped more than 5 percent after Treasury Secretary Timothy Geithner said he is “exploring a range of different structures” to bail out lenders. Global oil demand will average 84.7 million barrels a day this year, down 1.17 million barrels from 2008, the U.S. Energy Department said in a report yesterday.

- Saudi Arabia, the world’s largest oil exporter, will have more than 4.5 million barrels a day of spare capacity by mid-year, more than double its previous goal of 1.5 million to 2 million barrels, Oil Minister Ali al-Naimi said. The capacity will come from Saudi Arabia’s Khurais project, which will bring on stream 1.2 million barrels a day of oil, more than the output of OPEC nations Qatar or Ecuador, al-Naimi told the Cambridge Energy Research Associates conference in Houston today. “There is no doubt in my mind that increased speculative interest in oil contributed to the extreme price volatility of the past few years,” he said. “Now that market sentiment has flipped, I expect continued volatility with exaggerated price weakness.”

- China’s exports fell by the most in almost 13 years as demand dried up in the U.S. and Europe, worsening the outlook for jobs and industrial production in the world’s third-biggest economy. Shipments declined 17.5 percent in January from a year earlier, the customs bureau said on its Web site today. That was more than the 2.8 percent decline in December. The median estimate in a Bloomberg News survey of 14 economists was for a 14 percent drop. China’s economic slide has already cost the jobs of 20 million migrant workers. Imports declined 43.1 percent in January from a year earlier, the biggest decline since Bloomberg data began in 1995, on the nation’s waning demand for raw materials for manufacturing and lower commodity prices, leaving a trade surplus of $39.11 billion. Imports fell 21.3 percent in December.

- Applied Materials Inc.(AMAT), the largest maker of chip-production machinery, forecast sales that missed analysts’ estimates as a plunge in semiconductor demand forces the company to halt production for weeks at a time. Applied, based in Santa Clara, California, fell 28 cents, or 2.9 percent, to $9.41 in late trading after closing at $9.69 on the Nasdaq Stock Market.

- Dongfeng Automobile Co., which makes diesel engines, light trucks and spare parts, said its vehicle sales fell 50% in January to 7,858 units. Sales of light-duty trucks dropped 52% to 5,601 units and sales of SUV and MPV vehicles dropped 42% to 2,257 units, the company said in a statement to the Shanghai stock exchange today.

- The number of residents leaving Dubai soared by 86% in January due to job cuts caused by the financial crisis. The emirate canceled 54,684 residency visas in January compared with 29,418 a year ago, Dubai’s Naturalization and Residency Department said yesterday.

Wall Street Journal:

- The stimulus package the Senate approved Tuesday may technically be free of "earmarks," but it nonetheless includes several provisions that would likely benefit only a handful of specific corporations. President Barack Obama said in his news conference Monday that the legislation contains no earmarks, the funds for pet projects that lawmakers often slip into bills -- and which were a big issue during the presidential campaign. But several sections of the Senate bill direct billions of dollars in spending that would benefit a limited number of big firms. One example: The Senate added $200 million for a "virtual fence" along the nation's Southwestern border, a project headed by Chicago-based Boeing Co.(BA) The bill directs that stimulus money for the program be spent by the end of September 2010. Boeing is the prime vendor under a contract that runs through this year and includes three one-year options ending in 2012. The government has approved at least $933 million of funding for Boeing on the project so far, but the project has stalled. Total costs are expected to reach about $8 billion. In an email exchange, a Boeing spokeswoman said she doesn't know how many jobs would be created through the $200 million of proposed stimulus funding. Another provision in the legislation would provide hundreds of millions of dollars to build a satellite system to monitor climate change. That would be a boon to Northrop Grumman Corp.(NOC) and Raytheon Co.(RTN), which have been working on such a satellite for a decade.

- The White House is seeking to restore funding cut by the Senate for schools, health insurance and computerizing health records as the economic-stimulus plan heads for a final round of negotiations in Congress this week. The Senate passed the $838.2 billion plan Tuesday by a 61-37 vote. As lawmakers meet to reconcile the House and Senate versions of the legislation, the White House's effort to reshape it is likely to lead to skirmishes among House and Senate Democrats, as well as with moderate Republicans and Democrats who pushed to cut the size of the original Senate package. To make room for added spending, the White House, joined by House Democratic leaders, is pressing to scale back certain Senate-passed tax breaks, including measures intended to boost auto and home sales. But in pushing for more generous spending, the White House risks alienating moderate Republicans and Democrats in the Senate, who supported the package only after more than $110 billion was trimmed from it. The three Republicans who voted for the plan -- Sen. Collins, Sen. Arlen Specter of Pennsylvania and Sen. Olympia Snowe of Maine -- are monitoring negotiations.

- Treasury Secretary Timothy Geithner promised forceful action to get credit flowing again in the economy, but the lack of detail in his much-anticipated speech helped drive stocks down nearly 5%, the worst selloff since President Barack Obama assumed office. Announcing the Obama administration's financial-rescue plan in the Treasury's ornate Cash Room, Mr. Geithner described a mix of efforts that were mostly already known in their outlines. They included a fresh round of capital injections into banks, an expansion of a Federal Reserve lending program and a public-private effort to relieve banks of soured assets. The steps are aimed at getting $1 trillion to $2 trillion in financing flowing through the economy to kick-start both consumer and business lending. The other prong of the administration's economic program advanced Tuesday as the Senate passed a $838 billion stimulus bill, setting up a conference with the House to reach a final bill, possibly by the end of this week.

- "We're lending," chief executives of major banks plan to tell Congress Wednesday, according to prepared remarks. In testimony prepared for the House Committee on Financial Services, bank chieftains including J.P. Morgan Chase & Co.'s Jamie Dimon, Bank of America Corp.'s Kenneth Lewis and Citigroup Inc.'s Vikram Pandit vigorously assert that they are lending despite economic headwinds, and are lending more because of the government capital they had received.

- Latin America Gets Squeezed by Dive in Commodity Prices.

CNBC.com:
- Warren Buffett Steadily Selling Constellation Energy(CEG).

- Stimulus Plan: Ranking Its Scale Against Other Spending. President Barack Obama is pressing an $800 billion economic recovery package to restore growth and end a year-long U.S. recession despite Republican reservations about the balance of new spending and tax cuts. The Democratic-controlled Senate passed an $838 billion version Tuesday after the House earlier approved an $819 billion plan. Negotiators from the two sides must now fashion a single, final package. Here are a few markers to compare the scale of the rescue proposal against the size of the U.S. economy, current federal budget and past stimulus plans: An $800 billion stimulus plan would represent 5.6 percent of the $14.3 trillion U.S. economy -- the size of U.S. gross domestic product last year measured in current, not inflation-adjusted, dollars. It is 1.8 times the size of the largest U.S. budget deficit in history -- $455 billion -- recorded in fiscal 2008. It also represents 27 percent of the $2.979 trillion in total outlays by the federal government in fiscal 2008, or 32 percent of total federal receipts. If it were given directly to Americans, rather than through a mixture of tax cuts and spending to upgrade infrastructure, it would be $2,622 for every man, woman and child in the United States. Obama's $800 billion plan is roughly 1.3 times the cost of the Iraq war so far, based on a bill that now stands at $595 billion, according to the National Priorities Project, a private non-profit group.

Pension & Investments:

- There were 18,396 hedge funds operating at the end of 2008 — much greater than the 10,000-fund figure commonly used to describe the size of the global industry, said a speaker at the Managed Funds Association’s Network 2009 conference today. Meredith Jones, managing director and head of global marketing for hedge fund analytics provider PerTrac Financial Solutions, told attendees her analysis also showed 1,400 new hedge funds or funds of funds opened in 2008 — 960 single-manager funds and 440 funds of funds. The 1,400 total was well below the annual average of 5,000 new funds.

Google Mobile Blog:

- Today, we're happy to announce a new AdSense product for both mobile network operators and mobile website owners across the globe. AdSense for mobile search is a quick and easy way for carriers and mobile publishers to embed a Google(GOOG) search box on their mobile portals and web sites.

The Detroit News:

- General Motors Corp.(GM) chairman and CEO Rick Wagoner said the company is conducting an intensive review of most aspects of its business, saying the company is in a "crisis." Wagoner didn't rule out more plant closures or eliminating additional vehicles when it sends the U.S. Treasury its restructuring plan on Tuesday.

Reuters:

- China's passenger car sales in January fell 7.76 percent from a year earlier, hit by a slowing economy. China, the world's fastest growing major auto market, had posted car sales growth above 20 percent for three years in a row until slowing economic growth began to erode demand last year. Demand for commercial vehicles remained weak, with sales for the month totaling 125,100 units, down 20.35 percent from December and 36.46 percent from a year earlier. That pulled down the growth of overall vehicle sales from buses to trucks, which came to 735,500 units in January, down 14.35 percent from a year earlier. China's consumer confidence index fell to 87.3 in December from 90.2 in November. It was the fifth consecutive monthly fall in the index, leaving it 9.6 points lower than a year earlier.

- Short interest edged higher on the Nasdaq and New York Stock Exchange in late January, the exchanges said on Tuesday, suggesting a slight increase in bearish sentiment in the stock market. On the NYSE, short interest rose 0.6 percent from mid-January to late January, while short interest was up 1.1 percent on the Nasdaq during the same period. Short interest had also edged higher on both exchanges in mid-January. The following list shows stocks that saw increased interest from short sellers, who bet that a certain stock's price will fall, and key recent news events for those stocks.

Financial Times:
- Don’t expect to see this in the classified ads, but the quiet trade in second-hand hedge funds is growing fast as investors desperate to raise cash offer to sell at far below the face value of the funds. Holdings in some of the biggest-name hedge funds are for sale at hefty discounts to their assets, after restrictions on withdrawals left many clients unable to raise the cash they want by redeeming. Multi-million dollar stakes in Citadel’s flagship Kensington fund, Harbinger Capital’s flagship and the Children’s Investment Fund are being hawked by investors on a new online trading facility set up by Cogent Alternative Strategies, a US hedge fund sales group. Meanwhile, Hedgebay Trading, until December the only platform for buying and selling second-hand holdings in hedge funds, says trades doubled to $1bn past year and are continuing to rise. Even some banks are getting in on the game, helping to link buyers and sellers of frozen funds, in deals that should help everyone involved. On Hedgebay, discounts have soared, with the average now at about 14 per cent, from zero a year ago.

Livemint.com:

- Nissan’s India plans under review; vendors told to cut supplies 30%.

Beijing News:

- Some real estate developers in Beijing cut unit prices by more than 30% after last month’s Lunar New Year holiday to attract buyers. Home prices in China’s capital may keep falling this year as developers try to boost transaction volumes. China’s average home prices dropped in December, the first decline since data was released in August 2005.

Gulf Times:

- Credit Default Swaps (CDS) on sovereign debt of economies in the Gulf Cooperation Council region have risen to record high levels as investors pay more for protection against defaults, a report said yesterday. Sovereign CDS spreads, or premiums, are rising sharply for countries which are perceived to face difficulties in issuing fresh debt, said Kuwait’s Global Investment House. According to CMA Datavision prices, CDS linked to Bahrain touched a record high of 474.2 basis points, or bps, on January 23, 2008, the highest among the GCC countries, Global said. The CDS on Abu Dhabi ended the week at 283.4 bps, again the highest for the state, however much lower in comparison to Bahrain. Similarly, Qatar and Saudi Arabia too were at their peaks of 278.3 bps and 267.7 bps respectively.

The News:

- The local Taliban leadership has decided to send its fighters to Islamabad as a reaction to the operations in Darra Adamkhel and Swat Valley and in this regard chalkings on the walls of Islamabad are already appearing, forcing the Islamabad administration to whitewash these messages quickly. Many religious scholars in Islamabad have also received messages from the Taliban that they have only two options, either to support the Taliban or leave the capital or they will be considered collaborators of the pro-American Zardari government which, they claim, is not different from the previous Musharraf regime.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (AMAT), target $14.

- Reiterated Buy on (CVH), raised target to $20.

Night Trading
Asian Indices are -1.50% to -.75% on average.
S&P 500 futures +.19%.
NASDAQ 100 futures +.16%.

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/EPS Estimate
- (CCE)/.19

- (AYE)/.53

- (DF)/.39

- (PFCB)/.26

- (CMG)/.48

- (TEX)/.54

- (PPS)/.39

- (NTAP)/.28

- (SQNM)/.18

- (MAS)/-.06

- (JNY)/-.05

- (GENZ)/1.02

- (MMC)/.32

- (LVS)/.03

- (BWLD)/.38

- (AIPC)/.43

Economic Releases

8:30 am EST

- The Trade Deficit for December is estimated to shrink to -$35.7B versus -$40.4B.

10:30 am EST

- Bloomberg consensus estimates call for a weekly crude oil inventory build of +2,750,000 barrels versus a +7,170,000 barrel increase the prior week. Gasoline supplies are expected to rise by +500,000 barrels versus a +362,000 barrel increase the prior week. Distillate inventories are estimated to fall by -1,500,000 barrels versus a -1,361,000 decline the prior week. Finally, Refinery Utilization is estimated unch. versus a +1.03% increase the prior week.

2:00 pm EST

- The Monthly Budget Deficit for January is estimated to widen to -$73.0B versus $17.8B in December.

Upcoming Splits
- (LPHI) 5-for-4

Other Potential Market Movers
- The weekly MBA mortgage applications report, (BCE) analyst meeting, (BBT) investor & analyst day, (NYX) investor day, (DVA) capital markets day, the Fed’s Duke speaking, the Fed’s Evans speaking, Barclays Industrial Conference, UBS Global Healthcare Conference, BB&T Transports Conference, Deutsche Bank Growth Conference and Thomas Weisel Tech/Telecom Conference could also impact trading today.

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

Stocks Finish at Session Lows, Weighed Down by Financial, REIT, Homebuilding and Commodity Shares

Evening Review
Market Summary
Top 20 Biz Stories
Today’s Movers
Market Performance Summary
WSJ Data Center
Sector Performance
ETF Performance
Style Performance
Commodity Movers
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Commentary
After-hours Movers
After-hours Real-Time Stock Bid/Ask
After-hours Stock Quote
After-hours Stock Chart
In Play

Stocks Falling into Final Hour on More Economic Fear Mongering, More Shorting, Proft-taking and Rising Credit Angst

BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Computer longs, Medical longs, Financial longs, Internet longs and Biotech longs. I added (IWM/QQQQ) hedges, added to my (EEM) short, took profits in some trading longs and added to my commodity shorts today, thus leaving the Portfolio 50% net long. The tone of the market is very negative as the advance/decline line is substantially lower, every sector is falling and volume is above average. Investor anxiety is high. Today’s overall market action is very bearish. The VIX is rising 8.32% and is very high at 47.27. The ISE Sentiment Index is low at 106.0 and the total put/call is about average at .90. Finally, the NYSE Arms has been running extraordinarily high most of the day, hitting 6.53 at its intraday peak, and is currently 6.41. The Euro Financial Sector Credit Default Swap Index is rising 4.34% today to 112.33 basis points. This index is up from a low of 52.66 on May 5^th, but down from 157.81 on Sept. 16^th. The North American Investment Grade Credit Default Swap Index is rising 2.74% to 191.51 basis points. The TED spread is falling 4.37% to 92 basis points. The TED spread is now down 375 basis points in under four months. The 2-year swap spread is jumping 13.82% to 70.0 basis points. The Libor-OIS spread is falling 1.27% to 95 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is falling 14 basis points to 1.24%, which is down 146 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 .31%, which is up 3 basis points today. The financial sector’s reaction to Geithner’s rescue plan is a large negative. The ISE Sentiment Index hit 240.0 this morning, the highest level since September of last year, which is a negative. As well, the total put/call remains relatively subdued at .90, which is also a negative. I suspect government bonds(TLT) have reached another bottom, inflation expectations have hit another peak and the US dollar(UUP) is beginning another surge higher. On the positive side, the NYSE Arms is extraordinarily high at 6.41. As well, weekly retail sales fell -1.7% this week, up from a -2.3% decline the prior week, which is the best level in 5 weeks. Nikkei futures indicate a -160 open in Japan and DAX futures indicate a -50 open in Germany tomorrow. I expect US stocks to trade mixed-to-lower into the close from current levels on more shorting, profit-taking, rising financial sector pessimism, increasing credit market angst and more economic fear-mongering.

Today's Headlines

Bloomberg:

- The U.S. Senate approved an $838 billion economic stimulus package, clearing the way for negotiations with the House over a compromise plan lawmakers said they want to send to President Barack Obama quickly. The chamber today voted 61-37 to approve the measure.

- Treasury Secretary Timothy Geithner pledged government financing for as much as $2 trillion of efforts to spur new lending and address banks’ toxic assets, seeking to end the credit crunch hobbling the economy.

- U.S. regulators sued Finvest Asset Management LLC, Finvest Fund Management LLC and Grant “Gad” Grieve, the New York investment advisory firms’ managing principal, for allegedly defrauding investors in two hedge funds.

- Alcoa Inc.(AA), the largest U.S. aluminum producer, had its long-term debt ratings cut two levels by Standard & Poor’s to BBB-, the lowest investment grade, as falling metal prices make it more difficult to renew loans.

- Yields on Fannie Mae and Freddie Mac mortgage-backed securities held near the lowest since July 2007 relative to government notes, as the Federal Reserve’s buying pushes spreads lower and investors consider the latest U.S. government efforts to fix the financial system. The difference between yields on Washington-based Fannie’s current-coupon 30-year fixed-rate mortgage bonds and 10-year Treasuries today rose 1 basis point to 129 basis points as of 10:30 a.m. in New York, according to data compiled by Bloomberg.

- The emerging-market corporate bond rally so far this year will reverse as the global recession and tight credit markets increase defaults, JPMorgan Chase said. Default rates for high-yield corporate bonds in developing nations may rise to 5.9%, compared with an earlier forecast of 2.8%, JPMorgan strategists Warren Mar and Victoria Miles wrote in a research note dated Feb. 6.

- Crude oil fell on skepticism that the U.S. government’s bank rescue plan will revive the economy, and on speculation that a report tomorrow will show U.S. inventories climbed for the 18th time in 20 weeks.

- The US dollar and the yen rose versus most of their major counterparts on bets Treasury Secretary Timothy Geithner’s financial recovery plan will fall short of reviving lending, increasing demand for a haven. The yen gained more than 3 percent versus the Australian dollar on speculation Japanese investors will repatriate funds after Geithner pledged financing for programs that may grow to as much as $2 trillion. The dollar increased for the first time in three days against a gauge of the currencies of six major U.S. trading partners. “It’s classic risk aversion as the market expresses its disappointment to the Treasury’s plan,” said Adam Boyton, a senior currency strategist in New York at Deutsche Bank AG, the world’s largest foreign-exchange trader. “Geithner’s plan lacks a lot of details.”

- Intel Corp.(INTC), the world’s largest maker of computer chips, will spend $7 billion on new plants in the U.S. over the next two years, an effort to extend its lead in manufacturing technology. The investment will boost production of so-called 32- nanometer chips at sites in Oregon, Arizona and New Mexico, Intel said in an e-mailed statement. Chief Executive Officer Paul Otellini will talk about the plans at an event today at the Economic Club of Washington.

- Earnings estimates for small-stock companies are being revised upward at the slowest rate since at least 1988, a sign that analysts’ expectations are starting to bottom out, according to Citigroup Inc.(C). Positive revisions fell to 16% at the end of October 2008, less than half as much as a year earlier, according to Citigroup data. Since 1988, the figure has been below 20% only twice before, in October 2001 at 17% and at 19% in October 1990. The peak, 67%, came in November 1997.

Wall Street Journal:

- The early verdict on the Geithner plan: Too little, too little. Markets are down, having had an adverse reaction to Treasury Secretary Tim Geithner’s presentation detailing the Obama Administration’s plan to pull the financial system out of its current morass, which many say is still too light on specifics. Certain facets of the plan resemble those that were entertained in the previous administration — with the exception of a stress-testing mechanism to determine which financial firms need assistance.

- SanDisk Corp.(SNDK) is disclosing new details of what it believes is a big leap for data-storage chips, using an approach that may be difficult to emulate. The Silicon Valley company, working with manufacturing partner Toshiba Corp., has been racing with other companies to store more information on chips known as flash memory.

- The global economic downturn is squeezing Russian natural-gas giant OAO Gazprom as falling demand for energy forces it to cut gas sales to Europe and deprives the company of valuable export revenue. In an interview, Alexander Medvedev, Gazprom's deputy chief executive, said the price its European customers pay for gas will fall 32% to $280 per thousand cubic meters this year from $409 per thousand cubic meters last year. Exports to Europe will decline 5% to 170 billion cubic meters.

- Disease philanthropy has entered the for-profit world. Until recently, groups like the Juvenile Diabetes Research Foundation and the National Multiple Sclerosis Society spent the money they raised from donors on counseling patients, advocacy in Washington and funding university researchers in the hopes they would discover cures. But charities, increasingly frustrated with the slow emergence of new disease treatments, are pouring millions of dollars into pharmaceutical start-ups to bring new drugs to market. Starting with a $76 million partnership between Vertex Pharmaceuticals Inc.(VRTX) and the Cystic Fibrosis Foundation, the practice has become an important new source of capital for small drug companies.

- In an effort to boost sales in a tough economic environment, Dell Inc.(DELL) on Tuesday plans to announce 0% financing terms on certain personal computers and servers for small and midsize businesses. The offer, described in a Dell news release, will be available for customers buying at least $25,000 worth of equipment.

- UBS AG's (UBS) financial chief Tuesday expressed cautious optimism that the Zurich-based bank's capital ratios will improve as it returns to profitability in 2009.

- The incoming chief investment officer for Calpers, the nation's largest public pension fund, may be one of the most powerful investors in the U.S. But in choosing Joseph Dear last month, the California fund is breaking from its own past and the industry norm. Calpers's previous "CIO"s were almost always investment whizzes who papered their walls with diplomas for advanced degrees in finance. Mr. Dear's background is primarily in government, managing staff rather than managing money. Most recently, he was the executive director of the organization that invests Washington state's pension funds. His selection worries those who say the $175 billion fund could stumble further under the reign of anyone not steeped in markets.

- Hedge funds started the year on a positive note but saw net redemptions of $30 billion in January, according to private-equity company EurekaHedge.

Barron’s:

- On a forward price-to-earnings basis, P&G(PG) is now cheaper than it's been in 20 years.

NY Times:

- A plan to raise income taxes on wealthy New Yorkers is gaining momentum in the State Legislature as lawmakers continue to grapple with the state’s gaping budget deficit. A group of Senate Democrats plans to introduce a bill on Tuesday that would impose an income tax of 10.3 percent on the highest-earning New Yorkers, a rise of 3.45 percentage points, and increase taxes on all households that earn more than $250,000 a year.

- Federal investigators have raided the offices of the PMA Group, one of Washington’s biggest lobbying firms, as part of an investigation into potentially improper campaign contributions, a person briefed on the investigators’ questions said Monday night. The firm specializes in helping its clients obtain multimillion dollar earmarks, the pet items inserted by a single lawmaker into major spending bills that have played a role in several recent Washington scandals. While the firm lobbies other congressmen, it is best known for its ties to Representative John Murtha, the Pennsylvania Democrat who for decades has dominated the House defense spending subcommittee. The firm’s founder, Paul Magliochetti, previously worked for Mr. Murtha, and PMA’s executives and clients are one of Mr. Murtha’s biggest sources of campaign contributions.

Seeking Alpha:

- China and the Baltic Dry Index – What’s Really Going On? I'd like to write a comprehensive entry about the recent love for all things China and commodities in the past few days.

Google Blog:

- Over the last several months, Google’s(GOOG) engineers have developed a software tool called Google PowerMeter, which will show consumers their home energy information almost in real time, right on their computer. Google PowerMeter is not yet available to the public since we're testing it out with Googlers first. But we're building partnerships with utilities and independent device manufacturers to gradually roll this out in pilot programs. Once we've had a chance to kick the tires, we'll make the tool more widely available.

Boston Herald:

- Top White House economic adviser Larry Summers hooked a freebie flight on a posh Citigroup corporate jet mere months before he began weighing the bank’s fate with other policymakers trying to save the banking system. Summers’ decision to accept the freebie raises questions about his ability to remain impartial in those crucial deliberations, critics said. One source said Summers took a number of flights on Citi aircraft.

NorthJersey.com:

- These are good times to be selling cellphone, Internet and cable TV service, and not so good to be selling luxury handbags or high-end cosmetics, according to a survey released today by the National Retail Federation. The study found at least 60.5 percent of Americans surveyed consider cellphone service, Internet service and cable TV to be “untouchables” or off limits when they are trimming spending. Haircuts and coloring, eating out at fast-food restaurants and discount shopping for apparel also scored high on the “won’t give up” list. “The big three were the Internet, text messaging and basic cable,” said Susan Reda, executive editor of Stores magazine, an NRF publication that sponsored the survey, in a telephone interview.

LA Times:

- The collapse of the construction industry and a slump in the restaurant and food service sector have sent thousands of people back to looking for work on California farms, which not so long ago were hurting for workers.

The Detroit News:

- Automakers planning future products are trying to appease many masters, not all of whom agree. The companies are being told to build fuel-efficient models to meet federal and state conditions. Yet consumers have shown they won't buy expensive hybrids or tiny cars if gasoline prices remain reasonable. "People only change when they are hit in the pocketbook," said Aaron Bragman, an auto analyst with IHS Global Insight in Troy, "not because Congress legislates demand." But that's what Detroit's automakers are up against: Congress versus consumers. Federal legislators are mulling a number of regulations that would cost automakers billions of dollars to meet at a time when General Motors Corp. and Chrysler LLC seek federal aid to simply stay afloat. The rules, which range from potential state jurisdiction over emissions standards, to increased federal corporate average fuel economy standards (CAFE) and other conditions attached to the company's loans, increase the pressure to invest in smaller and greener vehicles. That means splitting limited resources between efficiency improvements to existing gasoline engines and new technology involving batteries, electric motors and fuel cells. But with U.S. auto sales starting the year at the weakest level in 27 years and most major automakers reporting financial losses in their North American operations, it is hard to invest in expensive technology that doesn't sell well.

Washington Post:

- Rather than engage in a spirited dialogue with members of the press corps, Obama filibustered. After an eight-minute opening statement, he got through only 13 questions in an hour -- and allowed no follow-up questions. His answers were an oddly unexciting combination of familiar talking points and wonky dissertations. It wasn't particularly good TV, and it wasn't necessarily what Obama needed, either. Worst of all, Obama engaged in one of the most frustrating rhetorical techniques: The straw-man argument. It wasn't fair for Obama to repeatedly suggest that the core opposition to his stimulus plan comes from people "who just believe that we should do nothing." The basic Republican position is considerably more nuanced than that, favoring tax cuts and opposing big-government spending. Obama told a town hall audience in Elkhart, Ind., that without a stimulus bill, "our nation will sink into a crisis that at some point we may be unable to reverse." Loven asked: "Can you talk about what you know or what you're hearing that would lead you to say that our recession might be permanent, when others in our history have not? And do you think that you risk losing some credibility or even talking down the economy by using dire language like that?"

USAToday:

- The global economic storm is hitting what once was the most profitable part of the airline industry: international travel. With demand for international trips in free fall, most U.S. and foreign airlines are cutting international service to and from the USA. They're reducing the number of scheduled flights or parking big jets and putting passengers on smaller ones to avoid flying money-losing, half-empty flights. In March, there will be about 466,000 fewer seats — about 15,000 seats a day — on scheduled non-stop flights from the Lower 48 states to foreign destinations, according to OAG-Official Airline Guide flight schedules analyzed by USA TODAY. Industrywide, that's a 5.3% March reduction year over year. Some carriers have cut capacity to and from the USA by a third.

CBCNews:

- A coalition of Canadian and U.S. environmental groups has launched a cross-border campaign ahead of Barack Obama's visit to Canada, urging the U.S. president to stick to his new energy plan amid possible pleas for him to support oil production from the Alberta oilsands. Toronto-based Environmental Defence, Washington-based Earthworks and 14 other groups have produced a newspaper advertising campaign that will start running Tuesday. They are also launching Obama2Canada.org and urging supporters to sign petitions to Prime Minister Stephen Harper and Obama, who will visit Ottawa on Feb. 19. One ad — aimed at lawmakers and running in Roll Call, a prominent Capitol Hill newspaper in Washington — says: "On February 19 Canadian Prime Minister Stephen Harper will try to sell President Obama on a North American climate pact that gives special treatment to the tarsands in Alberta, the source of the dirtiest oil on earth. Tarsands don't fit into the new energy economy."

Bear Radar

Style Underperformer:
Mid-cap Value (-4.83%)

Sector Underperformers:
Banks (-12.50%), Homebuilders (-7.56%) and REITs (-6.57%)

Stocks Falling on Unusual Volume:
CBST, LDSH, NUAN, ORLY, ZION, VRTX, NTAP, SPLS, WFC, TKC, GE, CXW, PFG, GEO, AP, CUK, DEG, TAP and TK

Stocks With Unusual Put Option Activity:
1) FRP 2) CBS 3) FDO 4) SVU 5) OMC

Bull Radar

Style Outperformer:
Small-cap Growth (-.75%)

Sector Outperformers:
Construction (-1.70%), Software (-2.09%) and Education (-2.32%)

Stocks Rising on Unusual Volume:
EXPD, UBS, MBT, WIRE, ASEI, QGEN, EXBD, ENER, PPDI, SYNT, PSYS, VOCS, POWL, JNPR, JRJC, ADVS, SPWRA, MFLX, FSLR, BECN, AFG and CRL

Stocks With Unusual Call Option Activity:
1) YGE 2) ARNA 3) CTXS 4) MCHP 5) MFE