Links of Interest

Market Snapshot Commentary
Market Performance Summary
Style Performance
Sector Performance
WSJ Data Center
Top 20 Biz Stories
IBD Breaking News
Movers & Shakers
Upgrades/Downgrades
In Play
NYSE Unusual Volume
NASDAQ Unusual Volume
Hot Spots
Option Dragon
NASDAQ 100 Heatmap
Chart Toppers
Real-Time Intraday Quote/Chart
HFR Global Hedge Fund Indices

Friday Watch

Late-Night Headlines
Bloomberg:

- An oil-shale formation in western Colorado may hold an estimated 1.53 trillion barrels of oil, 50 percent more than the last assessment, the U.S. Geological Survey said. The amount of oil in the Piceance Basin was last assessed in 1989, the survey said in an e-mailed release. There is no economically viable method of extracting it, the agency said. “The USGS scientific report shows significant quantities of oil locked up in the shale rocks of the Piceance Basin,” Interior Secretary Ken Salazar, a former Democratic senator from Colorado, said in a statement. “I believe it demonstrates the need for our continued research and development efforts.” The majority of the increase in potential oil was due to assessments of new geographic areas and subsurface zones that had too little data for previous estimates, the agency said. Salazar on Feb. 25 said he was withdrawing leases issued during the Bush administration to extract oil from shale formations on federal land. The technology still requires answers about water use, commercial viability and the environmental impact of development, Salazar said.

- Research In Motion Ltd.(RIMM), the maker of the BlackBerry phone, forecast first-quarter profit that beat analysts’ estimates as sales of new models including the Storm and Bold increased. The shares surged 23 percent in late trading after RIM said profit will be 88 cents to 97 cents a share in the period ending May 30, compared with the 82-cent average of estimates compiled by Bloomberg. Sales will climb to as much as $3.5 billion, RIM said today in a statement. That also topped estimates.

- The Markit iTraxx Australia index was quoted 12 basis points lower at 343 basis points as of 10:14 am in Sydney, Westpac Banking Corp. data show.

- Supermarket prices for 16 basic foods fell for a second straight quarter, led by declines in milk, cheese, eggs and vegetable oil, the American Farm Bureau Federation said. The average cost of items purchased by a typical consumer each week fell 5.6% to $47.41 in the first quarter from three months earlier, the group said. The cost of a pound of shredded cheddar cheese fell 14% to $4.24 in the first quarter from the previous three months. Milk fell 18% to $3.15 a gallon and a 32-ounce bottle of vegetable oil dropped 12% to $2.79, the farm group said. The cost of a dozen eggs slid 16% to $1.50.

- Britain wants an agreement from the Group of 20 nations to improve the way the International Monetary Fund uses its cash, including freeing up money for lending by selling gold reserves, International Development Secretary Douglas Alexander said. “Among the measures we hope we can affect is the commitment to provide more and better funds for the IMF and World Bank including by using profits from the sale of IMF gold reserves,” Alexander said at the Group of 20 nations summit in London today. “There have already been conversations with the South Africans and others in terms of whether the gold market can bear a phased and appropriate sale in a way that makes sense commercially.”

- Crude oil fell, paring yesterday’s 8.8 percent rally, after the head of the International Energy Agency said the group is likely to cut its energy demand forecast on declining economic growth projections. There is a “high probability” of a downward revision in the IEA’s next monthly report, due on April 10, Executive Director Nobuo Tanaka said yesterday in an interview with Bloomberg Television. “There’s nothing bullish in the fundamentals in the near future,” said Raymond Carbone, president of Paramount Options Inc. and a Nymex trader. He said oil gained “on hope” yesterday as the G-20 met. U.S. crude supplies climbed 2.84 million barrels in the week ended March 27 to the highest since July 1993, the Energy Department reported April 1. Oil prices “have bottomed out now and we hope they will improve, even though fundamentals are really the same,” OPEC Secretary-General Abdalla El-Badri said yesterday before the Paris oil conference.

- Wells Fargo & Co.(WFC), the second- biggest U.S. home lender, is planning to open a unit that will provide funding to independent mortgage bankers, according to two people familiar with the matter. The bank is telling lenders it may spend as much as $4 billion on a so-called warehouse-lending unit, said David Lykken of Mortgage Banking Solutions. Wells Fargo spokeswoman Susan Stanley declined to comment. “There’s such pent-up demand,” Lykken said today in an interview from Austin, Texas. “Wells Fargo is going to go after it in a big way.” Lykken said he works with clients that will be funded by the San Francisco-based bank.

- The Dow Jones Transportation Average of airlines, trucking companies and railroads surged as investors speculated that the $1 trillion of assistance pledged by world leaders will spur economic growth. The index created by Wall Street Journal co-founder Charles Dow in 1884 rose 7.9 percent, bringing its rally since March 9 to 38 percent. The measure has now soared at least 7.8 percent three times in the past two weeks, something it hadn’t done since August 1932, according to data compiled by Bloomberg. “We’re seeing renewed optimism about growth prospects across the board,” said Marvin Barth, chief investment strategist at Santa Monica, California-based Tennenbaum Capital Partners LLC, which manages $5 billion. “You could see more trade and more pressure on the transportation system.” YRC Worldwide Inc., JetBlue Airways Corp., Union Pacific Corp. jumped more than 8.7 percent as all 20 stocks in the transportation index advanced more than 4 percent.

- Gary Stern, the Federal Reserve’s longest-serving policy maker and an outspoken critic of bank bailouts, will retire from the central bank within months. Stern, 64, has led the Federal Reserve Bank of Minneapolis since 1985 and is the only member of the Federal Open Market Committee to serve with three central-bank chairmen: Ben S. Bernanke, Alan Greenspan, and Paul Volcker.

- The U.S. Senate rejected a proposal by President Barack Obama to finance an overhaul of the nation’s health-care system by limiting the ability of the well-to-do to take tax deductions for charitable contributions. The chamber unanimously approved an amendment to a pending budget plan that rejects the proposal to limit the size of itemized deductions that can be taken by those earning more than $250,000. Obama proposed using the estimated $318 billion such a change would generate to help finance a health-care overhaul, which he says will cost at least $630 billion. Lawmakers said they feared the effect of such a tax change on charities. “The Senate sent a clear message to the president,” said Senator Bob Bennett, a Utah Republican who sponsored the amendment. “Charities benefit greatly from the donations made by individuals in this income bracket, and raising taxes on these contributions would be a disservice to Americans and the millions of charities across the country.”

- The European Central Bank is facing a day of reckoning in its response to Europe’s worst recession since World War II. After months of delay and internal debate, President Jean- Claude Trichet said yesterday the ECB will announce its decision on new policy tools next month as interest rates edge toward zero. The danger is that the economy will slip further into recession the longer the bank delays. “By again buying time, the ECB risks falling further behind the curve,” said Carsten Brzeski, an economist at ING Groep in Brussels. “You cannot buy time forever.”

Wall Street Journal:

- Even before he took office six years ago, former Illinois Gov. Rod Blagojevich, his brother and a circle of associates conspired to use the governor's office to enrich themselves at the expense of taxpayers and "honest government," a federal grand jury indictment charged Thursday. The 75-page, 19-count indictment charged Mr. Blagojevich, 52 years old, Robert Blagojevich, 53, two of the ex-governor's former aides and two business associates with a variety of felonies, including allegations the former governor schemed to auction off the U.S. Senate seat vacated by President Barack Obama. Prosecutors say the six men named in the indictment sought to profit from the governor's authority to award money and jobs in construction, legal work, consulting and investments. Mr. Blagojevich, a Democrat, was charged with 16 felony counts, among them: racketeering conspiracy, wire fraud, extortion conspiracy and lying to federal agents. He has denied any wrongdoing. On Thursday Mr. Blagojevich was vacationing with his family in Florida and released this statement: "I'm saddened and hurt but I am not surprised by the indictment. I am innocent. I now will fight in the courts to clear my name. I would ask the good people of Illinois to wait for the trial and afford me the presumption of innocence that they would give to all their friends and neighbors."

- Venezuelan President Hugo Chávez moved to jail a prominent opposition figure for a second time in recent weeks -- an apparent bid to tighten his grip on power amid a sharp downturn in economic growth. Some observers say the moves illustrate how Mr. Chávez is using government institutions to punish political opponents. "All available information suggests that this is selective prosecution motivated by political reasons," says Jose Miguel Vivanco, the executive director of Human Rights Watch's Americas program. Mr. Vivanco was expelled from Venezuela at gunpoint last year after releasing a report critical of Mr. Chávez.

- Daniel Zwirn, the hedge-fund manager whose firm has been hobbled by a federal probe and client discontent, stands to relinquish substantial control of nearly $3 billion in assets within days. A deal to transfer management of his holdings could mark a victory for Mr. Zwirn's investors, some of whom urged him to cede control after the Securities and Exchange Commission opened an investigation into his firm and he froze withdrawals.

- Citigroup Inc.'s (C) Smith Barney retail brokerage recently recruited financial advisers from Merrill Lynch Wealth Management, a unit of Bank of America Corp. (BAC), and UBS AG (UBS).

- Six Democratic and Republican senators sent a letter this week to Securities and Exchange Commission Chairman Mary Schapiro saying they will take legislative action if the SEC fails to address "abusive" naked short-selling. In a two page letter, Sens. Carl Levin, D-Mich., Arlen Specter, R-Pa., Saxby Chambliss, R-Ga., Jon Tester, D-Mont., Ted Kaufman, D-Del., and Johnny Isakson, R-Ga., said they were troubled by the findings in the SEC inspector general's recent report which found that the enforcement division ...

- The Treasury Department has cut the amount of cash it intends to invest in two key programs, part of a shuffling of resources designed to give the government wriggle room in case it needs to launch fresh bailouts. The biggest changes are to the government's program to boost consumer lending, the Term Asset-Backed Securities Loan Facility, or TALF. Initially, the Treasury said it planned to invest $100 billion from its bailout funds. Now, it will contribute $55 billion. The Treasury's program to provide capital infusions into the nation's banks has also shrunk, to $218 billion from $250 billion. The changes are designed to free up more cash in the government's $700 billion bailout fund, in case of emergencies. The Troubled Asset Relief Program is running low and lawmakers say there is almost no chance Congress will authorize more bailout money in the near future. The cut in the TALF investment could be reversed if Congress signs off on more bailout spending.

- The robust rise of CEO pay reversed in 2008 as shrinking profits led to smaller bonuses. The median salaries and bonuses for the chief executives of 200 big U.S. companies fell 8.5% to $2.24 million, according to an analysis for The Wall Street Journal by Hay Group, a management consulting firm. The analysis examined proxy statements for companies with more than $5 billion in annual revenue. Including the value of stock, stock options and other long-term incentives, total direct compensation for the CEOs dropped 3.4% to a median of $7.56 million. The decline was the first in seven years and only the second drop since the Journal began tracking CEO pay in 1989.

MarketWatch.com:
- Mitsubishi Motors Corp. is planning to double production capacity for the i MiEV electric vehicle to 20,000 units a year by 2011, according to a published report.

CNBC.com:
- When it comes to job losses in this recession, March will be the cruelest month, while April may be the beginning of the end of the misery. “It almost can’t get any worse,” says economist David Jones of DMJ Advisors.

- Worth tells us he’s closely watching the 150-day moving average on the S&P which he calls the smoothing mechanism. “When the smoothing mechanism flattens by definition the market will be in the throws of a bearish to bullish reversal.” And he thinks this one technical indicator could speak volumes to investors. “In fact of the last 11 bear markets of the post-War period if you just waited for that alone you would have been at or near the lows when you committed capital.” So now the trillion dollar question. When will the 150-day moving average flatten on the S&P? According to Worth, not long from now. Looking at patterns he concludes, “the moving average should go flat in the next 3-4 weeks. “ In other words the S&P could begin a bearish to bullish reversal as soon as early May!

NY Times:

- Banks Face Big Losses From Bets on Chinese Realty. Back in the good old days — early 2007 — bankers from Merrill Lynch, Deutsche Bank and other financial giants placed their bets on a 48-year-old property tycoon who was supposed to be China’s next billionaire. They lent his company $400 million, encouraged him to acquire large tracts of land and in early 2008 promoted a proposed $2.1 billion public stock offering by the company, the Evergrande Real Estate Group, in Hong Kong. One year later, China’s housing market has collapsed, Evergrande is mired in debt and the Wall Street bankers are facing huge losses because the company never sold stock to the public. Now, analysts say, Evergrande has become a symbol of China’s go-go era of investing, when international bankers, private equity deal makers and hedge fund managers rushed here hoping to cash in on the world’s biggest building boom. By making short-term and sometimes hasty bets on China’s property market, analysts say, some of the world’s biggest financial institutions may have lost as much as $10 billion. While the scale of the property downturn is still unclear — sales have rebounded slightly after falling more than 50 percent in some big cities — investment in big property projects has stalled. To earn big returns, many global investors used complex offshore investment vehicles, like convertible bonds and preferred equity, which gave them tax advantages and allowed them to more easily bypass Beijing’s strict controls on investing in Chinese companies. Often the investments were routed through places like the Cayman Islands or the British Virgin Islands. “Many developers are now or will soon be in default,” says Jack Rodman, a specialist in distressed property who is a senior adviser for King & Wood, the big Chinese law firm, trying to help creditors manage offshore real estate deals. “Many deals were syndicated, so there are huge creditor meetings going on.” Mr. Rodman says that because so many of the deals were made offshore, unwinding them is proving difficult. The creditors in many of these deals are big United States-based private equity funds, hedge funds and nearly all the major Wall Street banks.

- During the last eight years, the Air Force has twice botched efforts to award one of the Pentagon’s richest contracts, a $35 billion order for tankers that can refuel warplanes in midair. But now, as the Pentagon prepares to reopen the competition, some leading lawmakers and military analysts are suggesting a seemingly heretical notion: split the giant contract between the two rivals — Boeing and a joint venture involving Northrop Grumman and the European company that makes the Airbus planes.

Reuters:

- Gilead Sciences Inc(GILD) said on Thursday its experimental drug to treat patients whose high blood pressure is not controlled by other medicines met both the primary goals of a late-stage study, sending its shares 5 percent higher. The drug, darusentan, proved statistically significantly superior to placebo at all three doses tested in goals of change from baseline at 14 weeks in trough sitting systolic blood pressure (SBP) and trough sitting diastolic blood pressure (DBP), Gilead said. Darusentan is being tested for the treatment of resistant hypertension in patients who failed to achieve blood pressure goals, while taking a three-drug regimen that includes a diuretic.

Financial Times:
- Banks following international accounting rules will not get the break awarded to their US rivals, the international standard setter announced Thursday. The US Financial Accounting Standards Board agreed on a rushed change to its rules that relaxes “fair value” accounting by allowing banks more freedom to use their own valuation models, rather than current market prices, for assets where markets have become illiquid. The rule change is expected to boost first-quarter profits of many banks by allowing managers to recalculate the value of some troubled assets. But the International Accounting Standards Board, which sets rules for more than 100 countries including the European Union, has said that it would instead push forward with a full, faster review of how it accounts for financial instruments. A draft proposal is expected in less than six months.

- President Barack Obama will this weekend head to the 60th anniversary summit of Nato, held symbolically on the borders of Germany and France. His visit comes a week after the 10th anniversary of the Nato assault on the former Yugoslavia over Kosovo. The week also marks the re-integration of France into the Nato military command that it left 43 years ago. But amid all these military anniversaries what should Mr Obama’s message be for the Europeans and what will he get in response? He should ask the Europeans to do more in terms of security in return for a grand bargain – the US will remain connected to Europe’s security and prosperity.

- US banks that have received government aid, including Citigroup, Goldman Sachs, Morgan Stanley and JPMorgan Chase, are considering buying toxic assets to be sold by rivals under the Treasury’s $1,000bn (£680bn) plan to revive the financial system. The plans proved controversial, with critics charging that the government’s public-private partnership - which provide generous loans to investors - are intended to help banks sell, rather than acquire, troubled securities and loans. Spencer Bachus, the top Republican on the House financial services committee, vowed after being told of the plans by the FT to introduce legislation to stop financial institutions ”gaming the system to reap taxpayer-subsidised windfalls”. Mr Bachus added it would mark ”a new level of absurdity” if financial institutions were ”colluding to swap assets at inflated prices using taxpayers’ dollars.” Public opinion may not tolerate the idea of banks selling each other their bad assets. Critics say that would leave the same amount of toxic assets in the system as before, but with the government now liable for most of the losses through its provision of non-recourse loans. Goldman and Morgan Stanley have large fund management units and have pledged to increase investments in distressed assets.

Nikkan Kogyo:

- Sharp Corp., Japan’s largest maker of liquid crystal displays used in televisions, will raise4 the utilization rate at an LCD factory next month as demand climbs. The Osaka-based company will use 80% of capacity at the plant in Mie prefecture, western Japan, from early May, rising from less than 50% currently. Panel inventories are also rising.

Korea Economic Daily:

- Dubai may cancel an order worth $1.08 billion to Samsung C&T Corp., citing officials in the construction industry it didn’t identify. Nakheel PJSC, the Dubai developer that delayed construction of the world’s tallest tower in January, has requested cancellation of the order because of the global financial crisis. Samsung C&T Corp., South Korea’s second-largest builder, said on Dec. 31 it received a 1.38 trillion won order from the UAE to build homes and commercial buildings.

The Australian:

- Chinese spies have directly targeted Kevin Rudd, repeatedly attempting to infiltrate prime ministerial email and mobile phone communications. The Australian understands Mr Rudd and his traveling party were under constant cyber attack during his latest trip to China, in August last year, with authorities trying to access the laptop computers and mobile phones used by the Australians. The blatant nature of Beijing's electronic espionage is understood to have alarmed the Rudd Government and led to a further tightening of communications security procedures for senior government figures traveling to China. Intelligence sources said Beijing had also made repeated attempts to break into government and business IT networks, as well as foreign embassies based in Canberra.

Late Buy/Sell Recommendations
Citigroup:

- Reiterated Buy on (MON), target $98.

- Reiterated Buy on (GILD), target $56.

Canaccord Adams:

- Online search trends started to improve in March. Upgraded (GOOG), (VCLK) and (IAC) to Buy.

Night Trading
Asian Indices are -.25% to +1.50% on average.
S&P 500 futures -.36%.
NASDAQ 100 futures -.25%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Pre-market Stock Quote/Chart
Global Commentary
WSJ Intl Markets Performance
Commodity Futures
Top 25 Stories
Top 20 Business Stories
Today in IBD
In Play
Bond Ticker
Economic Preview/Calendar
Earnings Calendar

Conference Calendar

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

Earnings of Note
Company/EPS Estimate
- (AZZ)/.79

Economic Releases

8:30 am EST

- The Change in Non-farm Payrolls for March is estimated at -660K versus -651K in February.

- The Unemployment Rate for March is estimated to rise to 8.5% versus 8.1% in February.

- Average Hourly Earnings for March are estimated to rise .2% versus a .2% gain in February.

10:00 am EST

- ISM Non-Manufacturing for March is estimated to rise to 42.0 versus 41.6 in February.

Upcoming Splits
- None of note

Other Potential Market Movers
- Bernanke speaking at the Richmond Fed’s Credit Markets Symposium and the (GAS) analyst meeting could also impact trading today.

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

Stocks Finish Sharply Higher, Boosted by Transport, Commodity, Technology, Gaming, REIT and Homebuilding 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 Futures
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 Soaring into Final Hour on Less Economic Fear, Short-Covering, Diminishing Financial Sector Pessimism, Less Credit Market Angst

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Technology longs, Medical longs and Retail longs. I added to my (ISRG) long and took profits in another trading long 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 heavy. Investor anxiety is above average. Today’s overall market action is very bullish. The VIX is falling .54% and is very high at 42.04. The ISE Sentiment Index is below average at 122.0 and the total put/call is below average at .68. Finally, the NYSE Arms has been running low most of the day, hitting .11 at its intraday trough, and is currently .62. The Euro Financial Sector Credit Default Swap Index is dropping 6.8% today to 169.0 basis points. This index is down from its record March 10th high of 208.75. The North American Investment Grade Credit Default Swap Index is falling 4.65% to 193.54 basis points. This index is still below its Dec. 5^th record high of 285.99. The TED spread is falling 1.95% to 96 basis points. The TED spread is now down 367 basis points since its all-time high of 463 basis points on October 10th. The 2-year swap spread is down 1.05% to 56.50 basis points. The Libor-OIS spread is falling 2.54% to 95 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is unch. at 1.34%, which is down 130 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 .20%, which is down 1 basis point today. It is a major positive to see the meaningful decline in credit default swaps today. As well, this broad market move finally has some volume behind it. The MS Cyclical Index is jumping 8% and the Transportation Index is surging 8.5% as severe economic gloom and doom subsides. The (XLF) is slightly underperforming today, but that is likely a result of the “sell the news” reaction by traders that anticipated the mark-to-market changes. I said last year that a change in this rule would be a significant broad market positive and I still believe that to be the case. The bears have lost a MAJOR tool in their arsenal, in my opinion. While the market is extended short-term and tomorrow’s jobs’ report will be quite poor, I suspect any near-term weakness will remain muted. Underinvested bulls and the many bears will use any weakness to increase market exposure and cover shorts. I suspect there is now severe portfolio manager performance anxiety in many quarters right about now. Nikkei futures indicate an +325 open in Japan and DAX futures indicate a -5 open in Germany tomorrow. I expect US stocks to trade modestly higher into the close from current levels on short-covering, less economic fear, falling credit market angst and diminishing financial sector pessimism.

Today's Headlines

Bloomberg:

- The Financial Accounting Standards Board, pressured by U.S. lawmakers and financial companies, voted to relax fair-value rules that Citigroup Inc. and Wells Fargo & Co. say don’t work when markets are inactive. The changes to so-called mark-to-market accounting allow companies to use “significant” judgment when gauging the price of some investments on their books, including mortgage-backed securities. Analysts say the measure may reduce banks’ writedowns and boost their first-quarter net income by 20 percent or more. William Isaac, chairman of the Federal Deposit Insurance Corp. from 1981 to 1985, has called fair value “extremely and needlessly destructive” and “a major cause” of the credit crisis.

- World leaders agreed on a regulatory blueprint for reining in the excesses that fed the worst financial crisis in six decades and pledged more than $1 trillion in emergency aid to cushion the economic fallout. The Group of 20 policy makers, meeting in London, called for stricter limits on hedge funds, executive pay, credit-rating companies and risk-taking by banks. They also boosted the resources of the International Monetary Fund and offered cash to revive trade to help governments weather the economic and social turmoil. They sidestepped the question of whether to deliver more fiscal stimulus in their own economies.

- Fixed mortgage rates in the U.S. fell to a record low for the second consecutive week, signaling that Federal Reserve Chairman Ben Bernanke’s effort to spur the housing market is gaining traction. The 30-year rate dropped to 4.78 percent from 4.85 percent a week earlier, the lowest since records began in 1971, Freddie Mac said today in a statement. Rates are falling to historic lows as the Federal Reserve ramps up purchases of mortgage-backed bonds to support home lending. Mortgage applications in the U.S. rose for a fourth consecutive week as a decline in borrowing costs prompted more refinancing. “Lower rates will help increase demand for homes,” said Celia Chen, senior director at Moody’s Economy.com in West Chester, Pennsylvania. “We need to see stronger demand for homes to help end the housing correction.”

- The cost to protect against a default by banks including Citigroup Inc.(C) and Bank of America(BAC) fell as accounting regulators approved a rule change that may limit writedowns and boost profits. Credit-default swaps on NY-based Citigroup dropped 55 basis points to 610 basis points as of 11:57 am in NY, according to broker Phoenix Partners Group. Contracts on Bank of America fell 55 basis points to 345 basis points. Credit-default swaps on the Markit CDX North America Investment-Grade Index Series 12, linked to the bonds of 125 companies in the US and Canada, fell 9 basis points to 193 basis points. The Markit iTraxx Financial Index of 25 European banks and insurers declined 16 basis points to 169, JPMorgan prices show.

- Gold fell the most in more than a week on speculation the world economy will improve, eroding the appeal of the precious metal as a haven. Silver also declined. Global equity indexes rallied as Group of 20 leaders met to discuss economic stimulus plans amid mounting evidence the worst of the recession may be over. Manufacturing in China increased last month and home prices in the U.K. rose. “The fear is coming down, and so is gold,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois. “If gold is an indicator of fear and trepidation, as fear diminishes, people will sell gold.” “The mere mention of the possibility of IMF gold sales making the rounds at the G-20 today is pressuring gold prices,” said Ralph Preston, a commodity analyst at Heritage West Futures Inc. in San Diego. A drop below $890 may trigger more selling, he said. The IMF is the third largest holder of gold reserves after the U.S. and Germany, according to the producer-funded World Gold Council. “You’ve got the IMF selling gold -- maybe it’s not a lot, but psychologically it would weigh on the market,” Prospector’s Kaplan said.

- Crude oil rose the most in three weeks as leaders of the Group of 20 nations meeting in London agreed on measures to fight the global recession.

- The European Central Bank cut interest rates less than economists forecast and deferred a decision on what other tools it can use to rescue its ailing economy, suggesting a split on the bank’s Governing Council. The Frankfurt-based ECB lowered its benchmark rate by a quarter-point to 1.25 percent, less than the half-point reduction expected by 49 of 55 economists in a Bloomberg survey. President Jean-Claude Trichet indicated the bank may lower the rate further next month, when he said it will also decide on any new “non-standard measures.” “There was almost certainly a split,” said Nick Kounis, chief European economist at Fortis Bank in Amsterdam and a former U.K. Treasury official. “They can’t decide on what to do next so they’re buying time.” The ECB is lagging counterparts such as the U.S. Federal Reserve, the Bank of England and the Bank of Japan, which have cut their key rates to almost zero and are pumping money into their economies by buying government and company securities.

- Treasuries dropped as accounting regulators approved a rule change that may boost bank profits and world leaders at the Group of 20 nations summit agreed on measures to fight the recession. Ten-year notes dropped for the first time in four days as the Financial Accounting Standards Board voted to relax the “mark-to-market” rule. The Dow Jones Industrial Average exceeded 8,000 for the first time since February. The difference between what banks and the Treasury pay to borrow money for three months, the so-called TED spread, narrowed to 95 basis points from 2008’s high of 4.64 percentage points in October. The average gap for the past decade is 55 basis points.

- Global-warming policies being considered by the U.S. and Japan risk provoking trade barriers, Chinese and Indian officials said in interviews. Protectionism, rejected yesterday by world leaders meeting in London, has been discussed in the U.S. Congress and in France as a response to the competitive advantage of developing nations like China that refuse to regulate greenhouse gases. Potential import fees could prompt trade retaliation, said Su Wei, China’s lead negotiator for a new global climate-protection treaty. “If there’s going to be a border tax imposed, that would very much have the danger of triggering a trade war,” Su said in a telephone interview from Beijing. “That’s not something that we would be happy to see,” he said before the start of United Nations-led treaty talks in Bonn running to April 8. China and the U.S., the biggest greenhouse-gas producers, are negotiating a new agreement to stem greenhouse gases with 190 countries. India and China reject emissions limits for developing nations, saying rich nations must act first.

- The Federal Deposit Insurance Corp. is considering giving banks the chance to share in future profits on loans sold into a U.S. government-financed program to remove distressed assets. The FDIC may allow the sellers of a loan to get an equity interest in the vehicle that buys it, meaning they would gain from any future increase in the asset’s value. The aim is to give healthier banks an incentive to sell loans at a cheaper price, encouraging more investors to make bids.

- The Fed’s commitment to buy $1.25 trillion of bonds backed by US home loans is succeeding where $11.6 trillion of government lending, spending, and guarantees so far have failed. “This has been the most successful effort, at least so far in this crisis, to shore up the economy,” said Mark Zandi, chief economist at Moody’s Economy.com. “It’s reasonable to expect refinancings will reduce mortgage payments by about $25 billion, and most of that cash will go into spending.”

- Investors favored mutual funds over hedge funds for commodity investments in the first quarter, seeking the protection of regulated money managers, data from EPFR Global and Gardner Finance AG show. Mutual funds investing in commodities attracted a net $3.2 billion through March 25, swelling combined assets by 10 percent from the end of last year, Cambridge, Massachusetts-based researcher EPFR said. Commodity hedge funds’ assets were flat, said Michael Laznicka, chief executive officer of Gardner. Commodity mutual funds now manage about $34.4 billion, according to Ian Wilson, a managing director at EPFR. Last quarter’s growth in new money was the fastest since 2006, he said. Assets peaked at $68.8 billion in May 2008. Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by gold, are at a record 1,127.44 metric tons, more than the amount of bullion held by Switzerland’s central bank. The Reuters/Jefferies CRB Index of 19 commodities fell 4 percent in the first quarter, for the longest losing streak on a quarterly basis since 2001. Exchange-traded commodity products attracted $21 billion in the first quarter, the most since Barclays started collecting the data in 2005. The figure includes medium-term notes, which track commodities over a specific time period. Including index-linked investments, commodities attracted $24 billion of new money, taking total assets under management to $176 billion, according to Sen. Commodity hedge funds’ assets under management were $190 billion to $210 billion at the end of March, according to Gardner Finance.

- Mexico’s economy will shrink 2.8 percent this year as the global financial crisis deepens, the Finance Ministry said in a report. Investment may fall 8.4 percent and consumption may drop 2.2 percent, the ministry said. Mexico will miss out on 145.5 billion pesos ($10.5 billion) of oil revenue this year because of falling crude prices, the report said.

- Fannie Mae and Freddie Mac, the mortgage-finance companies that have taken $60 billion in taxpayer-funded capital, will have less need for additional aid under new accounting rules for losses, their regulator said.

- Boeing Co.(BA) said airplane deliveries rose 5.2 percent from a year earlier to 121 in the first quarter as the world’s second-largest commercial-plane builder benefited from airlines seeking more fuel-efficient jets.

Wall Street Journal:

- Leaders of the Group of 20 nations Thursday announced a host of measures they said would help to reignite world growth but left themselves a long list of follow-up steps to turn their words into action. The summit of many of the world's leading economies in London announced a tripling of the lending power of the International Monetary Fund to around $750 billion. They also unveiled a $250 billion expansion in the IMF's reserve currency -- the special drawing right -- to boost liquidity in the global financial system by expanding member countries' foreign exchange reserves. They committed to selling IMF gold to help poor countries.

- A federal judge ruled on Thursday that prisoners in the war on terror can use U.S. civilian courts to challenge their detention at a military air base in Afghanistan. U.S. District Judge John Bates turned down a U.S. motion to deny the right to three foreign detainees at Bagram Airfield in Afghanistan.

CNBC:

- The S&P 500, which closed yesterday at 811.08 after falling as low as 666 this year, is a “safe zone” for buying stocks, Bob Doll of BlackRock Inc.(BLK) said.

- New orders received by U.S. factories rose in February, government data showed on Thursday, breaking a six-month streak of declines and bolstering hopes the economy may be beginning to crawl out of the depths of a recession. The Commerce Department said factory orders rose 1.8 percent in February after a revised 3.5 percent drop in January, initially reported as a 1.9 percent decline. Economists polled by Reuters had expected a February increase of 1.5 percent.

- Schork Oil Outlook: We’re In Bear Country.

NY Times:

- Secretary of Education Arne Duncan told the nation’s governors on Wednesday that in exchange for billions of dollars in federal education aid provided under the economic stimulus law, he wants new information about the performance of their public schools, much of which could be embarrassing. In a “Dear Governor” letter to the 50 states, Mr. Duncan said $44 billion in stimulus money was being made available to states immediately. To qualify for a second phase of financing later this year, however, governors will need to provide reams of detailed educational information.The data is likely to reveal that in many states, tests have been dumbed down so that students score far higher than on tests administered by the federal Department of Education. It will also probably show that many local teacher-evaluation systems are so perfunctory that they rate 99 of every 100 teachers as excellent and that diplomas often mean so little that millions of high school graduates each year must enroll in remediation classes upon entering college.

MarketWatch:
- International Business Machines Corp.(IBM) reportedly has cut its bid price for Sun Microsystems Inc. to the $9 to $10 range, in return for assurances that the buyout would go through, according to a media report Thursday.

- While he's seeing "mixed signals," Bank of America Corp.'s(BAC) chief executive says he expects the U.S. economy to bottom in the second half of this year, and he doesn't anticipate the government to ask the company to raise more capital.

- Viacom Inc. Chief Executive Philippe Dauman said Thursday that there's unlikely to be significantly negative consumer backlash against "TV Everywhere," a plan to tie online TV show viewing to a subscription to a cable, satellite or telecommunications service.

NY Post:

- Billionaire Steve Schwarzman's Blackstone Group is trying to roll out a new fund geared toward providing funds to companies on death's door. Sources tell The Post that Schwarzman is hoping to raise as much as $3 billion for a rescue fund that would provide financing to cash-strapped entities in or on the verge of bankruptcy.

Detroit Free Press:

- Three days into his new job, GM(GM) chief executive Fritz Henderson on Wednesday said he wouldn't rule out asking the UAW to restart labor contract talks -- again -- but emphasized that the automaker had not taken that step. "I don't think it's a real good idea at this point for us to take anything off the table," Henderson said in his first interview with the Free Press since taking the top job following Rick Wagoner's ouster by the White House. Henderson also said General Motors Corp. expects to keep its new focus on four core brands: Chevrolet, Cadillac, Buick and GMC. "Why on Earth would we rid ourselves of the Buick brand?" he said in response to speculation about the brand's future. Buick, he noted, is a top seller in the crucial Chinese market.

OrlandoSentinel.com:

- With a federal corruption indictment expected against him as early as Thursday, former Illinois Gov. Rod Blagojevich apparently was taking refuge in Fantasyland -- the Disney World resort in Florida. U.S. Attorney Patrick J. Fitzgerald has until Tuesday to get an indictment that would replace a complaint charging Blagojevich with plotting to trade or sell President Barack Obama's former U.S. Senate seat and a host of other crimes.

HedgeFundBlogger:

- The 25 Highest Paid Hedge Fund Managers.

Politico:

- Here’s the poll shocker of the day. Embattled Sen. Chris Dodd (D-Conn.) is in severe political danger, trailing former GOP congressman Rob Simmons by 16 points, 50 to 34 percent, according to a new Quinnipiac poll. Among independent voters, Simmons leads Dodd by 31 points -- 56 to 25 percent. Dodd also trails little-known state senator Sam Caligiuri by four points, 41 to 37 percent. Dodd’s approval ratings are in the tank, with 58 percent of Connecticut voters disapproving of his job performance and only 33 percent viewing him favorably. He doesn’t even have support within his own party – only 51 percent of Democrats approve of him. “A 33 percent job approval is unheard of for a 30-year incumbent, especially a Democrat in a blue state. Sen. Christopher Dodd's numbers among Democrats are especially devastating,” said Quinnipiac pollster Douglas Schwartz. Voters are taking their anger out on Dodd for his involvement in legislation that allowed AIG executives to receive millions in bonuses. A whopping 74 percent of voters said they blamed Dodd for the bonuses. Meanwhile, 54 percent said they don’t believe Dodd is honest and trustworthy.

GlobeNewswire:

- Intuitive Surgical, Inc. (ISRG), the global leader in robotic-assisted minimally invasive surgery, today announced a new addition to its da Vinci(r) product line -- the da Vinci(r) Si(tm) Surgical System. The da Vinci Si System introduces several new features designed to provide additional clinical benefits and operational efficiencies: Enhanced 3D HD resolution offers superior visual clarity of target tissue and anatomy, potentially allowing for greater surgical precision; an updated and simplified user interface enhances operating room efficiency; newly upgradeable architecture and compatibility with existing OR suite technology facilitates the seamless integration of the da Vinci Si System into the OR of the 21st century; an optional dual console allows a second surgeon to provide a da Vinci-enabled assist and may also facilitate teaching da Vinci Surgery; and finally, the addition of new ergonomic settings to the surgeon console allows greater surgeon comfort during procedures.

Reuters:
- General Electric Co (GE) and Intel Corp (INTC) have joined forces to develop devices to help doctors monitor patients' health remotely, an area they believe could become a multibillion-dollar business. The U.S. conglomerate and the world's largest chip maker will develop devices that they expect to save money by allowing healthcare workers to monitor the sick and the elderly outside of hospitals or medical offices. They plan to invest $250 million in the field over the next five years.

- The start of the new quarter and growing signs that the global economy might have hit a trough are bringing a rally in stocks and other risky assets which many believe has stronger legs than before. World equities, measured by MSCI, have risen more than 6 percent in the past two days, having made their best monthly gains in March since December 1999. They are also up around 24 percent after hitting a 5-1/2 year low in mid-March. A combination of factors is behind the latest rally.

- Saudi Arabia did not contribute to the $500 billion of extra funds pledged to the International Monetary Fund at a G20 summit of world leaders, its finance minister said on Thursday.

RBC Daily:

- Moscow shopping mall vacancies are now at 10%.

Hong Kong Govt:

- The Hong Kong Land Registry today (April 2) released the land registration statistics for March 2009. The total number of sale and purchase agreements for all types of building units received for registration in the Land Registry in March 2009 was 8,062. This was 59.9% higher than in February 2009 but a decrease of 26.7% compared with March 2008. Using a 12-month moving average, the figure for March 2009 represented a decrease of 3.2% from February 2009 and 44.1% compared with March 2008. The total consideration of these agreements in the month was $28.6 billion, 80.1% higher than that in February 2009 but a decrease of 35% compared with the amount for March 2008.

CCTV:
- A strong US dollar is in the US’s interest, US Treasury Secretary Tim Geithner said. “I’ll make it crystal clear that a strong dollar is in America’s interest,” Geithner said. “We’re going to do what’s necessary to make sure that our markets remain the deepest, most liquid, safest markets in the world,” he said.

Haaretz.com:

- As early as this month, Prime Minister Benjamin Netanyahu and Foreign Minister Avigdor Lieberman could face international pressure to clarify their position on the creation of a Palestinian state. At a closed-door dinner of European Union diplomats held Friday in the Czech Republic, several senior officials said Israel must be required to present an explicit commitment accepting the principle of "two states for two peoples," and if it fails, the process of upgrading Israel-EU relations should be frozen.

Bear Radar

Style Underperformer:
Large-cap Value (+2.52%)

Sector Underperformers:
Gold (-4.27%), Drugs (+.01%) and Banks (+.65%)

Stocks Falling on Unusual Volume:
AU, KGC, MANH, AIPC, AMLN, GOLD, NTRS and CAVM

Stocks With Unusual Put Option Activity:
1) BIIB 2) CHRW 3) CSX 4) ITU 5) WDC