Bear Radar

Style Underperformer:
Large-cap Value (-.31%)

Sector Underperformers:
Oil Tankers (-3.40%), Insurance (-3.0%) and HMOs (-2.59%)

Stocks Falling on Unusual Volume:
EBS, CAH, MBT, ABT, HES, CHTT, PCLN, SPWRA, ATHN, UTHR, GENZ, ESRX, NTES, SAM and MCK

Stocks With Unusual Put Option Activity:
1) EXC 2) BDK 3) SPWRA 4) XTO 5) BWA

Bull Radar

Style Outperformer:
Small-cap Growth (+1.61%)

Sector Outperformers:
Banks (+4.59%), I-Banks (+4.10%) and Computer Hardware (+3.29%)

Stocks Rising on Unusual Volume:
CS, PNC, CMA, RTP, SLF, FCX, REP, EAT, SLH, PFCB, HPT, HMY, APA, WAG, DXPE, LHCG, APEI, CMTL, ZEUS, AAON, MCHP, LOPE, GTIV, JDAS, ANEN, ASCA, BWLD, PENN, SIVB, FSYS, RATE, XSD, WPC, TGP, AKO/A, KSP, TOO, BKE, JCG, BGH and MTN

Stocks With Unusual Call Option Activity:
1) CMCSK 2) MU 3) YRCW 4) NSM 5) PRU

Links of Interest

Market Snapshot Commentary
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Top 20 Biz Stories
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In Play
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Wednesday Watch

Late-Night Headlines
Bloomberg:

- Jeremy Grantham, who oversees $85 billion as chief investment strategist of Grantham Mayo Van Otterloo & Co., urged investors to start moving money from cash to stocks before “rigor mortis” sets in. “Typically, those with a lot of cash will miss a very large chunk of the market recovery” because they are paralyzed by fear, Grantham wrote in a March 4 commentary posted today on the Boston-based firm’s Web site. “Remember that you will never catch the low,” wrote Grantham, one of the co-founders of GMO. He expects stocks to return 10 percent to 13 percent after inflation in the next seven years.

- Bernard Madoff, the New York money manager accused of leading the largest Ponzi scheme in U.S. history, will plead guilty later this week to 11 criminal charges, his lawyer told a federal judge. Madoff, 70, will admit he directed a fraud that prosecutors alleged began in the 1980s. By last November, Madoff told 4,800 investors their accounts held $64.8 billion, according to court papers filed in Manhattan federal court. Prosecutors will seek forfeiture from Madoff of as much as $170 billion. Madoff, free on $10 million bail, faces 150 years in prison.

- Paulson & Co., the hedge-fund firm run by billionaire John Paulson, may have made 311 million pounds ($428 million) since September by short selling Lloyds Banking Group Plc and HBOS Plc, bringing its potential profit from shorting U.K. banks to 606 million pounds. Paulson, which oversees about $30 billion, made more than $3 billion in 2007 by betting the U.S. housing market and subprime mortgages would collapse. The firm has held a short position of 1.17 percent in Barclays Plc since Oct. 30, according to regulatory filings. Shares of the third-largest U.K. bank have fallen 67 percent since that date.

- The cost of protecting Asia-Pacific bonds from default fell from records, according to traders of credit-default swaps. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan dropped 17 basis points to 433 as of 9:15 am in Hong Kong, according to ICAP Plc. The Markit iTraxx Japan index fell 15 basis points to 540 at 10:15 am in Tokyo, BNP Paribas SA prices show. The level reached a record 556 yesterday, according to CMA DataVision. The Markit iTraxx Australia index fell 30 basis points to 415 as of 12:15 pm in Sydney, Citigroup Inc. prices show.

- China, the world’s largest steel producing nation, exported 1.56 million metric tons of the metal in February, the lowest level since 2006, industry researcher Umetal Research Center said today.

- Prime Minister Vladimir Putin said Russia has enough oil and gas to meet demand for the next century as OAO Gazprom seeks to increase its market share in Europe with two new pipeline projects. “Russia has enough hydrocarbon resources to meet our own growing needs and the demand of our European consumers for at least 100 years,” Putin said after meeting with Hungarian Prime Minister Ferenc Gyurcsany in Moscow today.

- Orders for Japanese machinery fell for a fourth month in January, the longest losing streak in at least 20 years, as exports crashed and profits evaporated. Bookings, an indicator of capital investment in the next three to six months, declined 3.2 percent from December, the Cabinet Office said today in Tokyo. The median estimate of economists surveyed was for a 4.8 percent drop.

- President Barack Obama’s administration is committed to Iraq’s stability and U.S. policy hasn’t been altered by a recent spate of suicide attacks in the country, White House press secretary Robert Gibbs said. Attacks like one today that killed at least 30 people on the western outskirts of Baghdad aren’t altering Obama’s plans for withdrawal of U.S. combat forces, Gibbs said.

- Royal Dutch Shell Plc and other international oil companies may get greater access to reserves as resource-rich nations seek capital and technology for fields that have become harder to develop since crude prices slumped. “Oil prices are lower, and may continue to stay low for a period, and that will ease access to reserves,” Shell Chief Executive Officer Jeroen van der Veer told Bloomberg News in an interview in London on March 4. “It is not happening now, but it will happen.” Cost deflation will make it easier for Shell to negotiate contracts with oil service companies and suppliers, according to van der Veer. It typically takes about “12 to 18 months” for the drop in prices to take hold, he said.

- The U.S. urged China to reconsider its policies in Tibet, saying they have created tensions and had a “harmful impact” on religion and culture in the region. In a statement marking the 50th anniversary of a Tibetan uprising yesterday, the State Department said it is “deeply concerned by the human rights situation in Tibetan areas.”

- China’s exports fell 25.7 percent in February from a year earlier and imports dropped 24.1 percent, the customs bureau said in a statement on its Web site.

Wall Street Journal:

- House Energy and Commerce Chairman Henry Waxman defended proposals for a public insurance option as part of health-care reform efforts, telling an audience of doctors Tuesday that a government plan is not "socialized medicine." Waxman, D-Calif., in a speech before a national meeting of the American Medical Association, defended proposals by some congressional Democrats for the creation of a government-run health plan to compete with private insurers as part of larger health-care reforms.

- Cities, counties and states across the nation are launching home-grown economic-stimulus plans aimed at spurring local spending and keeping small businesses afloat during the recession. Some are taking the traditional route of cutting corporate taxes. Others are trying all sorts of ideas: Paying residents to shop in local stores; giving real-estate brokers bonuses for bringing tenants to empty strip malls; reducing fees on new development; even critiquing local restaurants and giving owners feedback on how best to bring in customers.

- The Senate Tuesday approved a $410 billion spending bill for 2009, handing the Democrats a legislative and fiscal victory but putting them on the defensive regarding earmarks and the deficit. The 62-35 vote on the key procedural vote, including support from eight Republicans, reflected relatively strong backing for the long-delayed bill, which funds the government for the rest of fiscal 2009, which began Oct.1. Passage came on a voice vote after a barrage of criticism that the measure was too expensive and contained billions of dollars in earmarks. This first annual spending measure of the new Democratic era showed an 8% increase over last year and reflected new priorities. On the Senate floor, Senate Minority Leader Mitch McConnell (R., Ky.) charged Tuesday that the bill showed "no recognition whatsoever of the current economic climate," and that "this bill costs far too much for a government that should be watching every dime." The vote, however, did not fall strictly along party lines. The eight Republicans who supported the bill included members of the Senate Appropriations Committee who had helped to draft it. And three Democrats -- Sens. Evan Bayh of Indiana, Russ Feingold of Wisconsin, and Claire McCaskill of Missouri -- opposed the bill as wasteful. "The bloated omnibus requires sacrifice from no one, least of all the government," Mr. Bayh wrote in the Journal on March 4, announcing his opposition. The Democratic defections were small but could signal problems for Mr. Reid as he tries to hold his troops together as Congress faces an array of complex bills. Congressional Democrats said the omnibus was important and thoughtful, but White House officials did not defend it, saying only that it was time to pass it and move on.

- Federal Reserve officials, preparing for a policy meeting next week, are considering whether to pump more money into the economy by expanding their lending and securities-purchase programs. Struck by the sharp deterioration in stock markets -- despite Tuesday's rally -- and renewed strains in credit markets, Fed officials are likely at next week's meeting to assess what success they have had with existing efforts and what more they can do to ease financial strains and prop up the economy

- Big Labor's drive to eliminate secret ballots for union elections has united American business in opposition, so labor chiefs are putting on the brass knuckles: The new strategy is to threaten companies with government retaliation if they don't stop lobbying against turning U.S. labor markets into Europe.

MarketWatch.com:
- Short interest on the New York Stock Exchange and the Nasdaq rose during the final two weeks of February, a period when stocks in some of the country's largest companies fell sharply, the two stock exchanges said Tuesday. The NYSE Group, Inc. said the number of short-selling positions not closed out -- or short interest -- rose to 14.624 billion in the two weeks ended Feb. 27, up 3% from 14.189 billion shares in the two weeks ended Feb. 13. This was the highest level since the week ended Nov. 28, the NYSE said in an update to its Web site late Tuesday. Nasdaq OMX Group Inc. said short interest rose to 7.037 billion, up about 2% from 6.893 billion in the prior two weeks.

NY Times:

- Wal-Mart Stores(WMT) is striding into the market for electronic health records, seeking to bring the technology into the mainstream for physicians in small offices, where most of America’s doctors practice medicine. The company plans to team its Sam’s Club division with Dell for computers and eClinicalWorks, a fast-growing private company, for software. Wal-Mart says its package deal of hardware, software, installation, maintenance and training will make the technology more accessible and affordable, undercutting rival health information technology suppliers by as much as half.

Politico:

- The vast new left-wing conspiracy sets its tone every morning at 8:45 a.m., when officials from more than 20 labor, environmental and other Democratic-leaning groups dial into a private conference call hosted by two left-leaning Washington organizations.

USA Today.com:

- Recession Boosts Number of Stay-at-Home Mothers.

- U.S. officials say the Taliban's new top operations officer in southern Afghanistan is a former prisoner at the Guantanamo detention center. Pentagon and CIA officials say Abdullah Ghulam Rasoul was among 13 prisoners released to the Afghan government in December 2007. He is now known as Mullah Abdullah Zakir, a name officials say is used by the Taliban leader in charge of operations against U.S. and Afghan forces in southern Afghanistan. One intelligence official told The Associated Press that Rasoul's stated mission is to counter the growing U.S. troop surge.

Reuters:

- The $173 billion government rescue of American International Group Inc (AIG) is stoking resentment among investors who see it as a backdoor taxpayer bailout of Goldman Sachs (GS) and other banks. Six months after the U.S. government stepped in save an insurance giant overwhelmed by derivative losses, AIG continues to bleed red ink. Its stock and bond holders have been crushed, but one group has suffered almost no damage: banks that bought credit protection from AIG Financial Products. Regulatory filings show that since the Federal Reserve announced its rescue of AIG on September 15, about $50 billion of government money has passed through the company to banks. "Treasury is providing a massive wealth transfer from taxpayers to Goldman Sachs and other parties, and it's something that absolutely should be investigated," said Eric Hovde, chief executive of Hovde Capital Advisors, where he manages financial services-focused hedge funds. The bailout has stirred resentment not just in the U.S. Congress but on Wall Street, where investors speculate that Goldman and its connections helped it get a better deal. "The whole point of the bailout is to save Goldman Sachs," said Christopher Whalen, head of financial advisory services for Institutional Risk Analytics. "The whole thing is so rancid and so hideous." A Goldman Sachs spokesman declined to comment on the AIG bailout or how much of the government funds it has received. Goldman and Deutsche Bank AG (DBKGn.DE) were the largest trading parties, each receiving about $6 billion, the newspaper said. Goldman has been singled out by critics who question why Chief Executive Lloyd Blankfein attended meetings that discussed a bailout of AIG. A Goldman spokesman said Blankfein, at the invitation of then-New York Fed President Tim Geithner, attended a meeting at the Fed along with co-President Jon Winkelried and a group of investment bankers to discuss a private sector solution for AIG. Then-Treasury Secretary Henry Paulson, who left Goldman in 2006 as CEO, played a lead role in the negotiations. The chairman of the Federal Reserve Bank of New York, which hosted the meeting and invited Goldman officials to attend, is former Goldman head Steve Friedman. The results, investors say, have been poor. With no end in sight for the losses, some investors argue that taxpayers would be better off letting AIG go bankrupt. "AIG should be put through bankruptcy and the federal government should stop funding of all these losses," Hovde said. "I'm opposed to seeing parties that should be taking some financial consequences walking away free and clear off the taxpayer's back."

- U.S. Treasury Secretary Timothy Geithner pledged on Tuesday to "do what is necessary" to jolt the United States out of recession but said the rest of the world should agree to act in a coordinated way. On Public Broadcasting Corp's "Charlie Rose Show," Geithner claimed that steady overseas demand for U.S. Treasury debt was a vote of confidence that the Obama administration was on the right track in countering the "deep mess" the economy is in. "This president is going to do what is necessary to get us through this. ... We're a terrifically strong country with abundant resources, and we will get through this," said Geithner, referring to President Barack Obama's commitment to end the more than year-long U.S. recession. But ahead of this weekend's Group of 20 gathering of finance chiefs near London, and a later one in April for political leaders, Geithner said the United States will push for action by others to match the aggressive U.S. approach.

- U.S. Regulators will consider reviving the "uptick" restriction on short-sellers of stocks and a top monetary official lent his support on Tuesday to modifying an accounting rule that has forced banks to take billions of dollars in writedowns. Federal Reserve Chairman Ben Bernanke said he was opposed to suspending mark-to-market accounting but said the rule tended to reinforce economic trends and improvements could be made. The prospect of the changes helped U.S. stocks to their best day in four months, cheered by Citigroup (C) saying it was profitable in the first two months of 2009.

- Lobbyists, telecommunications industry officials and others crowded into a public meeting on Tuesday to suggest how the government should dole out $7.2 billion to spur development of high-speed Internet service. The meeting at the U.S. Commerce Department marked the first step in deciding which companies will benefit from broadband funding included in the Obama administration's economic stimulus program valued at nearly $800 billion.

- Suspected drug gang hitmen dumped five severed human heads in ice coolers on a road in western Mexico on Tuesday with a message threatening rivals, a state attorney general's office said. Police patrolling a highway on the edge of the Mexican colonial city of Guadalajara found the heads inside five coolers left on the roadside, the Jalisco state attorney general's office said.

Financial Times:
- Disagreements between the European Union and the US over how to combat the global recession widened on Tuesday as EU governments made clear they had little appetite for piling up more debt to fight the collapse in output and jobs. Finance ministers from the 27-nation bloc insisted in Brussels that it was doing enough to support world demand and did not need at present to adopt another fiscal stimulus plan, as Washington is urging.

Late Buy/Sell Recommendations
Citigroup:

- Reiterated Buy on (RIG), added to Top Picks Live list, target $98.

Night Trading
Asian Indices are +1.0% to +2.75% on average.
S&P 500 futures +.29%.
NASDAQ 100 futures +.41%.

Morning Preview
US AM Market Call
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Pre-market Commentary
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Today in IBD
In Play
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Conference Calendar

Who’s Speaking?
Upgrades/Downgrades
Rasmussen Business/Economy Polling

Earnings of Note
Company/EPS Estimate
- (BKE)/.73

- (KFY)/.10

- (SPLS)/.42

- (AEO)/.19

- (NSM)/-.05

- (MW)/-.17

- (ZQK)/-.10

- (NAV)/1.51

- (TITN)/.21

Economic Releases

10:30 am EST

- Bloomberg consensus estimates call for a weekly crude oil inventory build of +250,000 barrels versus a -757,000 barrel decline the prior week. Gasoline supplies are expected to fall by -1,000,000 barrels versus a +168,000 barrel increase the prior week. Distillate inventories are estimated to rise by +200,000 barrels versus a +1,662,000 barrel gain the prior week. Finally, Refinery Utilization is expected to remain unch. versus a +1.76% increase the prior week.

2:00 pm EST

- The Monthly Budget Deficit for February is estimated at -$205.0B versus -$175.6B in January.

Upcoming Splits
- None of note

Other Potential Market Movers
- The weekly MBA mortgage applications report, (COP) analyst meeting, (PL) investor conference, (BEN) shareholders meeting, Raymond James Institutional Investors Conference, Barclays Capital Healthcare Conference, JPMorgan Aviation & Transportation Conference, UBS Engineering & Construction Conference, Bank of America Consumer Conference, Merrill Lynch Consumer Conference and the Merrill Lynch Cleantech Leaders Conference could also impact trading today.

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

Stocks Soaring into Final Hour on Short-Covering, Lower Energy Prices, Less Financial Sector Pessimism, Diminishing Credit Market Angst

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Technology longs, Medical longs, Retail longs and Biotech longs. I covered all of my (IWM)/(QQQQ) hedges and some of my (EEM) short today, thus leaving the Portfolio 100% net long. The tone of the market is very positive as the advance/decline line is substantially higher, almost every sector is rising and volume is above average. Investor anxiety is about average. Today’s overall market action is very bullish. The VIX is falling 10.06% and is very high at 44.68. The ISE Sentiment Index is slightly below average at 134.0 and the total put/call is below average at .74. Finally, the NYSE Arms has been running low most of the day, hitting .25 at its intraday trough, and is currently .53. The Euro Financial Sector Credit Default Swap Index is falling 5.20% today to 194.33 basis points. This index is down from its record high, set this morning, of 208.75. The North American Investment Grade Credit Default Swap Index is falling 3.84% to 247.34 basis points. This index is still below its Dec. 5^th record high of 285.99. The TED spread is falling 1.05% to 110 basis points. The TED spread is now down 353 basis points since its all-time high of 463 basis points on October 10th. The 2-year swap spread is falling 5.23% to 77.0 basis points. The Libor-OIS spread is rising 1.06% to 107.0 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is rising 3 basis points to .88%, which is down 176 basis points since July 7th. 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 .23%, which is up 3 basis points today. Comments from Citigroup, hope for a relaxation of the mark-to-market rule and the possibility of bringing back the “uptick” rule are boosting stocks substantially today. While I am happy to hear talk of bringing back the uptick rule, its positive impact on stocks will likely be minimal as long as credit default swap manipulation persists and ultrashort etfs exist. If mark-to-market is relaxed, the uptick rule returns, credit default swap manipulation ends and ultrashort etfs are banned, I would expect to see an incredibly explosive and sustained rally in US stocks. Nikkei futures indicate an +320 open in Japan and DAX futures indicate a -6 open in Germany tomorrow. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, lower energy prices, declining credit market angst, technical buying, bargain-hunting and less financial sector pessimism.

Today's Headlines

Bloomberg:

- Citigroup Inc.(C) Chief Executive Officer Vikram Pandit said his bank is having the best quarter since 2007, when it last posted a profit. The shares rose as much as 38 percent and helped spur gains for finance company stocks. “I am most encouraged with the strength of our business so far in 2009,” Pandit wrote in an internal memorandum obtained today by Bloomberg. “We are profitable through the first two months of 2009 and are having our best quarter-to-date performance since the third quarter of 2007.”

- Federal Reserve Chairman Ben S. Bernanke urged a sweeping overhaul of U.S. financial regulations in an effort to smooth out the boom-and-bust cycles in financial markets. “We should review regulatory policies and accounting rules to ensure that they do not induce excessive” swings in the financial system and economy, the central bank chief said today in remarks prepared for an address to the Council on Foreign Relations in Washington. Bernanke recommended that lawmakers and supervisors rethink everything from the amounts firms set aside against potential trading losses and deposit-insurance fees to protections for money-market funds.

- Gold fell for a second day in London as a gain in equities may reduce demand for the precious metal as an alternative investment. Silver and platinum also declined. Trading of gold options and other derivatives through ICAP Plc, the world’s largest broker of transactions between banks, and spot gold through its EBS electronic trading platform has declined because of limited credit, said Michael Greenacre, manager of precious metals at ICAP in London. “A lot of our customers’ customers are the funds, and the funds are having a tough time,” he said. More trading is going to exchanges, he said. Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, were unchanged yesterday while investment in Gold Bullion Securities Ltd. on the London Stock Exchange rose 2,485 ounces to 4.09 million ounces, the highest since March 5, the ETF Securities Ltd. Web site shows.

- Chinese home prices fell by a record last month, paced by a 15 percent plunge in the southern export hub of Shenzhen, where factories closed as growth in the world’s third-biggest economy slowed. About 40 percent of the factories in Guangdong, which accounts for 12 percent of China’s gross domestic product, extended their Lunar New Year, or Spring Festival, holiday this year because of the global recession, said Stanley Lau, vice chairman of the Federation of Hong Kong Industries last month.

- The U.S. reduced its forecast for global crude oil consumption this year as the economic slowdown cuts fuel purchases. World oil demand will average 84.27 million barrels a day this year, down 400,030 barrels from a forecast in February, the Energy Department said in its monthly Short-Term Energy Outlook. The estimate is down 1.38 million barrels from demand in 2008, according to the report, released today in Washington.

- Chevron Corp.(CVX), the second-biggest U.S. oil company, is drilling 43 major prospects from Australia to Canada after posting its biggest drop in output since 2003. New fields will allow Chevron to meet its target of 4 percent production growth this year without acquisitions, Chief Executive Officer David O’Reilly said today in a meeting with analysts in New York.

- OPEC, supplier of about 40 percent of the world’s oil, needs full compliance with production quotas before discussing a further reduction in output, Qatar’s oil minister said. “We cannot discuss another cut until we see the compliance at 100 percent,” Qatar’s Oil Minister Abdullah bin Hamad al- Attiyah said in an interview in the capital Doha today. “The first step is to make sure we see full compliance.”

- China faces a “grave” employment situation as the global recession increases the difficulty of finding jobs for the 24 million people entering the nation’s workforce each year, Labor Minister Yin Weimin said. China lost 3 million jobs in the fourth quarter, when economic growth hit a seven-year low, Yin said. About 11 million migrant workers that traveled to towns and cities from the countryside in search of work after the Lunar New Year holiday in January are still unemployed, he said. In previous years, the government has only been able to create enough jobs for half the new workforce, which in 2009 will include 6 million new graduates, Yin said. China has an estimated 225 million surplus laborers composed of farmers from rural areas. Of that total, 140 million have left their homes in search of work in other towns and cities. About half of those 140 million migrants went home for the Lunar New Year holiday and 80% of those who went home returned to the cities to look for jobs after the break, he said. Of those, 45 million have found work and 11 million are still looking.

- Hedge funds may cut 20,000 workers worldwide this year, a record 14 percent of the industry’s jobs, as investment losses and client withdrawals erode fees. The dismissals will come on top of the 10,000 jobs that disappeared last year at the investment partnerships, according to estimates by New York-based Options Group, an executive-search firm. Employment peaked at 155,000 in 2007, and has since dropped to about 145,000, the firm said.

- Brazil’s economy shrank the most on record in the fourth quarter, going against predictions that Latin America’s largest economy would be a bright spot in the deepening global recession. Gross domestic product fell 3.6 percent in the fourth quarter from the previous three-month period as companies slashed output, the national statistics agency said today in Rio de Janeiro. The drop exceeded forecasts from all 31 analysts surveyed by Bloomberg. The biggest quarterly contraction since the series started in 1996 may lead central bank policy makers to cut lending costs 1.5 percentage points tomorrow to bolster the economy. Analysts predict the bank will trim the lending rate to 11.25 percent, matching a record low reached in September 2007, according to the median estimate of 49 economists surveyed by Bloomberg.

Wall Street Journal:

- Barely a week after the third rescue of Citigroup Inc.(C), U.S. officials are examining what fresh steps they might need to take to stabilize the bank if its problems mount, according to people familiar with the matter.

- Over a third of U.S. companies in China -- a percentage that has grown sharply in the past year -- say they expect their revenues to drop in 2009, according to a survey by the American Chamber of Commerce in China, reflecting the slowdown in the Chinese economy. The annual survey to be released Tuesday shows that 35% of Amcham members expect revenue to decrease this year, up significantly from 13% who projected a decline last year. In all, 39% of respondents are postponing or have canceled planned investments this year, while 21% expect to shrink their China work force. Almost half the companies surveyed are pessimistic about this year's business prospects, and only 5% are optimistic. The Amcham investment numbers are in line with official Chinese data, which show that foreign-direct investment plunged 33% from a year earlier to $7.5 billion in January. This year's Amcham survey showed that 84% of U.S. companies felt China is losing some of its competitive edge because of rising labor and regulatory costs, compared with 72% last year.

- Honda Motor Co. said orders for its recently launched Insight hybrid vehicle are more than triple the budget-priced vehicle's monthly sales target. The Japanese auto maker said it had received orders for about 18,000 Insights as of Monday.

CNBC.com:
- Hedge funds of funds, the middlemen that pension funds and endowments often use to create alternative portfolios, lost roughly one-third of their assets last year, according to new data released Tuesday. The industry's largest funds of funds, managing more than $1 billion, now jointly control $744 billion in assets, according to industry publication InvestHedge. In all, the hedge fund industry has $1.8 trillion under management, the magazine estimated. Some industry trackers have said that number is much lower — closer to $1 trillion or $1.5 trillion, after last year's worst-ever returns.

- The so-called uptick rule, which limits short-selling in stocks, could be restored soon, Rep. Barney Frank of the House Financial Services Committee said. "I've spoken to Chair (Mary) Schapiro of the SEC. I am hopeful the uptick rule will be restored within a month," Frank told reporters.

NY Times:

- Down Economic Times Elicit Upbeat Ad Campaigns.

- The five detainees at Guantánamo Bay charged with planning the Sept. 11, 2001, terrorist attacks have filed a document with the military commission at the United States naval base there expressing pride at their accomplishment and accepting full responsibility for the killing of nearly 3,000 people. The document, which may be released publicly on Tuesday, uses the Arabic term for a consultative assembly in describing the five men as the “9/11 Shura Council,” and it says their actions were an offering to God, according to excerpts of the document that were read to a reporter by a government official who was not authorized to discuss it publicly.

CNNMoney.com:

- Revealed: 15 AIG bailout counterparties. A list obtained by Fortune includes the names of many foreign banks – as well as US giants such as Goldman Sachs(GS).

NYPost:

- The top online publishers are moving beyond boring banners and other display ads that adorn most Web sites, seeking more attention-grabbing alternatives. The Online Publishers Association, whose members include ESPN, CNN, The Wall Street Journal and The New York Times, is unveiling several ad formats to breathe new life into the lowly banner ad.

Washington Post:

- The government's plan to strip banks of troubled assets could force some firms to record large losses, but the painful purge would help restore confidence in the banking system, according to Sheila C. Bair, chairman of the Federal Deposit Insurance Corp. Bair said yesterday that the effort might require more money than the $700 billion Congress has approved to aid the financial industry, but she added that taxpayers would probably reap an eventual profit on the asset purchases. She said the greatest challenge was persuading banks and taxpayers to accept the necessity of the costly program.

- Democratic leaders in Congress did not expect much Republican support as they pressed President Obama's ambitious legislative agenda. But the pushback they are receiving from some of their own has come as an unwelcome surprise. As the Senate inches closer to approving a $410 billion spending bill, the internal revolt has served as a warning to party leaders pursuing Obama's far-reaching plans for health-care, energy and education reform. Climate-change legislation is months away from emerging, but some Democrats already worry about the political consequences of creating a cap-and-trade system that could result in higher utility bills.

Miami Herald:

- Imagine going to Burger King(BKC) and ordering barbecued ribs, a grilled salmon sandwich or a steak kabob. Those sound more like choices at a casual dining restaurant than a fast-food chain, but they are some of the more than 45 new menu items the Miami-based company has in various stages of testing.

Reuters:
- Shares of General Electric Co (GE) soared 15.9 percent on Tuesday amid a broad rally in U.S. stocks triggered by assurances from Citigroup Inc (C) that the big bank was profitable through the first two months of 2009.

Boersen-Zeitung:

- European Central Bank Executive Board member Lorenzo Bini Smaghi said the bank is ready to lower interest rates to zero if necessary. “If the situation deteriorates, the ECB is ready to lower interest rates further, even to zero,” Bini Smaghi said. “That’s especially the case if the economy is in fact threatened by sustained deflation. In such a situation, it would be the best strategy to react sooner rather than later.”