Stocks Surging into Final Hour on Less Financial Sector Pessimism, Diminishing Economic Fear, Short-Covering

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Technology longs, Retail longs, Medical longs and Financial longs. I covered all of my (IWM)/(QQQQ) hedges and some of my (EEM) short this morning, 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 above average. Today’s overall market action is very bullish. The VIX is falling 5.23% and is very high at 37.13. The ISE Sentiment Index is low at 95.0 and the total put/call is around average at .82. Finally, the NYSE Arms has been running high most of the day, hitting 2.32 at its intraday peak, and is currently .60. The Euro Financial Sector Credit Default Swap Index is falling 2.66% today to 156.33 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 rising 3.16% to 191.11 basis points. This index is also well below its Dec. 5^th record high of 285.99. The TED spread is falling 2.24% 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 rising 9.18% to 66.88 basis points. The Libor-OIS spread is falling .68% to 90 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is up 2 basis points to 1.24%, which is down 140 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 .14%, which is up 2 basis points today. The abrupt rebound today in financial and reit shares after recent sharp gains and yesterday’s swoon, is a large positive. I think it is indicative of how many large hedge funds are trapped short in these shares. As well, the most economically sensitive stocks are significantly outperforming today with the MS Cyclical Index surging 4.1%. Most news continues to be interpreted in a positive light. (CAT), for example, lowered its 2009 operating eps guidance significantly from $1.77 to $1.25, yet the stock is near session highs, rising 3%. After 22 consecutive weeks of declines, weekly retail sales gained for the second week in a row, rising .5%. This remains a big positive. Nikkei futures indicate an +159 open in Japan and DAX futures indicate an +38 open in Germany tomorrow. I expect US stocks to trade modestly mixed-to-higher into the close from current levels on short-covering, diminishing economic fear, less financial sector pessimism and bargain-hunting.

Today's Headlines

Bloomberg:

- Treasury Secretary Timothy Geithner said the “vast majority” of U.S. banks have more capital than needed, stoking a rally in stocks as investors await results of stress tests on the balance sheets of the biggest lenders. “Currently, the vast majority of banks have more capital than they need to be considered well capitalized by their regulators,” Geithner said in testimony to a congressional oversight panel on the government’s financial-rescue program. Geithner also said there are signs of “thawing” in credit markets and some indication that confidence is beginning to return. His remarks reflect an improvement in earnings in several lenders’ results for the first quarter, and a reduction in benchmark lending rates this month. The Treasury chief also said in comments released today that the government has sufficient funds remaining in the $700 billion Troubled Asset Relief Program to aid U.S. banks. The comments reinforced indications the administration doesn’t currently intend to ask Congress for more money. Geithner also said there are signs of “thawing” in credit markets and some indication that confidence is beginning to return. His remarks reflect an improvement in earnings in several lenders’ results for the first quarter, and a reduction in benchmark lending rates this month. The Treasury chief also said in comments released today that the government has sufficient funds remaining in the $700 billion Troubled Asset Relief Program to aid U.S. banks. The comments reinforced indications the administration doesn’t currently intend to ask Congress for more money.

- Delta Air Lines Inc.(DAL) and United Airlines parent UAL Corp.(UAUA) rose in U.S. trading after posting first-quarter losses that beat analysts’ estimates as fuel prices fell. Delta, the world’s largest carrier, said it sees “signs of stabilization” in demand, based on recent bookings, echoing comments by American Airlines last week that declines in travel may have hit bottom. Jet fuel prices averaged 52 percent less last quarter than a year earlier. “Stabilization is the first step toward improvement, and it will be enough for investors to feel better” about the rest of 2009, said Matthew Jacob, an analyst at Majestic Research LLC in New York. “It’s certainly encouraging.”

- Jim O’Neill, chief economist at Goldman Sachs(GS), reiterated in an interview with Bloomberg TV that his firm sees the US economy growing about 1% in the third quarter of 2009.

- DuPont Co.(DD), the third-biggest U.S. chemical maker, said demand will improve from first-quarter lows because most customers have used up inventories and are increasing purchases. The shares gained in New York trading. March sales were higher than in the preceding two months, and industrial demand will rise through the year, resulting in a “moderate” decline in full-year sales volumes, Chief Financial Officer Jeff Keefer said.

- Technology stocks in the S&P 500 are off to the best start to a year since 1998 as investors buy companies with the most cash during the worst credit crisis since the Great Depression. The Information Technology Index of 75 software and computer makers in the S&P 500 rallied 9.7% this year, the steepest gain since 1998 and the most among 10 industries. The last time the gauge began a year faster, it went on to climb another 42%, spurring a 27% advance for the S&P 500. Technology companies in the S&P 500 on average have the most cash and least borrowings relative to total assets among 10 industries, according to Bloomberg data. Eighteen of them are debt free, including Apple Inc.(AAPL), Google(GOOG) and Qualcomm(QCOM), twice the number in all other industries combined.

- Piracy attacks worldwide almost doubled in the first quarter, led by a surge in incidents around Somalia, a group that monitors sea hijackings said. There were 102 attacks in the first three months, compared with 53 a year ago, the International Maritime Bureau said in a statement on its Web site today. The Gulf of Aden and eastern coast of Somalia accounted for 61 of the seizures or attempted hijackings worldwide, from six last year, the group said.

- Caterpillar Inc.(CAT), the bulldozer manufacturer President Barack Obama used to help push his $787 billion stimulus plan, called the program disappointing and less effective than measures approved by China. “The infrastructure portion of the stimulus package was disappointing in that it was less aggressive than other countries and missed an opportunity to correct past underinvestment in U.S. infrastructure,” Caterpillar said in economic commentary with today’s first-quarter earnings report. Chief Executive Officer Jim Owens, 63, is a member of the president’s Economic Recovery Advisory Board.

- New York Times Co.(NYT) posted a wider first-quarter loss after advertising revenue dropped 27 percent and said the rate of decline in ad sales will be similar in the second quarter. The shares slumped. The net loss expanded to $74.5 million, or 52 cents a share, from $335,000 a year earlier, the newspaper publisher said today in a statement. Sales fell 19 percent to $609 million, trailing the $634.3 million average of four analysts’ estimates compiled by Bloomberg.

- Assets owned by hedge funds including borrowings may have fallen by 75 percent to a decade- low, with less competition paving the way for better returns, said Blaine Tomlinson, chairman of Financial Risk Management Ltd. The total book size of assets owned by hedge funds may have declined to $2 trillion, from $8 trillion, he said at the GaimAsia 2009 hedge fund conference in Hong Kong today, reducing the industry to a level last seen a decade ago. Tomlinson founded Financial Risk Management, a London-based fund of funds manager overseeing $10 billion, in 1991. “This is pretty important because it means that there’s far less competition for alpha opportunities,” which refers to the premium that an investment earns over a certain benchmark, said Tomlinson.

- Shipments form the California ports of Los Angeles and Long Beach, which together handle about 40% of US container traffic, grew on a month-to-month basis in February and March, indicating a decline in exports may be bottoming out. “March improved meaningfully from February, after February improved from January,” Thomas Wadewitz and Alexander Johnson, analysts at JPMorgan wrote in a report. Outbound traffic from the two ports, when calculated on a two-year basis to account for the holidays, showed an increase in March of 1.6%, whereas February’s decline was 10% and January’s 17.1%, JPMorgan said. Inbound shipments, reflecting US imports, showed March improved from February.

Wall Street Journal:

- Broadcom Corp.(BRCM) Monday night was readying a roughly $800 million unsolicited cash offer for Emulex Corp.(ELX), according to a person familiar with the matter, in a sign that dealmaking continues unabated in the technology sector.

- Nearly 60% of China's semiconductor manufacturing capacity went unused in the first quarter, according to market researcher iSuppli Corp., which said it was the highest amount since it began tracking the market in 2000. Capacity utilization fell to 43%, marking a huge drop over the past several years from a high of 92% in the second quarter of 2004.

- President Barack Obama left open the possibility of legally pursuing the Bush administration officials who formulated the policies that led to "enhanced interrogation techniques" -- which critics have called torture.

CNBC:

- Price Is Right: Home Buyers Are Testing the Market Again.

- US junk bonds are posting their best start to a year since 1991 as hopes that the worst of a global financial crisis may be over entice investors back into riskier bonds. Boosted by a 7.1 percent gain in April to date, junk bonds have posted a 12.5 percent year-to-date total return, by far the best performance of any major category of U.S. bonds, according to Merrill Lynch data.

Barron’s:
- Nintendo(NTDOY) is cheap, especially for a company whose profits could jump 40% this year. Waning Japanese demand needs to be put in perspective.

NY Times:

- The Treasury Department’s most ambitious plans to rescue troubled banks — partnerships between the government and private investors, backed by the Federal Reserve — are inherently vulnerable to fraud and should not be started without stronger safeguards, a top government investigator warned in a report to be released Tuesday. The report also warned that the Treasury’s $700 billion Troubled Asset Relief Program has evolved into a $3 trillion effort of “unprecedented scope, scale and complexity” and comes with too little oversight and too little information about what companies are doing with the taxpayer money they are getting. “The American people have a right to know how their tax dollars are being used,” wrote Neil M. Barofsky, the special inspector general assigned to monitor the bailout program, in his second report to Congress.

MarketWatch:
- Coach Inc.(COH) on Tuesday said third-quarter profit fell 29%, hurt by costs related to job cutting and store closings and consumers paring back on spending. However, results were better than Wall Street had expected after the company noted improvement in North American comparable sales and traffic from the holiday quarter, and the decline in the region handily exceeded analysts' estimates.

- Jack Bauer can’t stop ‘The Goldman Conspiracy’ 10 reasons why Wall Street has absolute power over America’s democracy.

Washington Post:

- As Congress returns to begin an intense debate over reshaping the nation's $2.2 trillion health-care system, prominent left-leaning organizations and liberal House members are issuing a warning to their Democratic allies: Don't cave on us. The early skirmishing -- essentially amounting to friendly fire -- is perhaps the clearest indication yet of the uphill battle President Obama faces in delivering on his promise to make affordable, high-quality care available to every American. Disputes over whether to create a new government-sponsored insurance program to compete with private companies shine a light on the intraparty fissures that may prove more problematic than any partisan brawl. More than 70 House Democrats recently warned party leaders that they will not support a broad health reform bill that does not offer consumers a government-sponsored policy, and two unions withdrew from a high-profile health coalition because it would not endorse a public plan.

Miami Herald:

- A top House Republican will unveil legislation Tuesday that could open the door to the first oil and gas drilling off Florida's coast in decades. Rep. Dean Cannon, the Orlando Republican who is slated to become House leader in 2010, will ask the House Policy Council on Tuesday to pass a bill that lifts Florida's ban on oil drilling off state waters. If lawmakers agree to pass the bill, it would be a complete reversal in state policy since the state imposed a virtual ban on drilling nearly 30 years ago. But after years of resisting oil and gas drilling off Florida shores, the state's fiscal straits have made it politically practical for Cannon to pursue the change. The measure, which drew howls of protest from environmentalists, would replace the ban with a plan to allow the governor and Florida Cabinet to charge $1 million per application to explore state-controlled waters that stretch between 3 and 10 miles offshore.

Washington Times:

- On the day the new Congress convened this year, Sen. Dianne Feinstein introduced legislation to route $25 billion in taxpayer money to a government agency that had just awarded her husband's real estate firm a lucrative contract to sell foreclosed properties at compensation rates higher than the industry norms. Mrs. Feinstein's intervention on behalf of the Federal Deposit Insurance Corp. was unusual: the California Democrat isn't a member of the Senate Committee on Banking, Housing and Urban Affairs with jurisdiction over FDIC; and the agency is supposed to operate from money it raises from bank-paid insurance payments - not direct federal dollars.

Politico:

- Sen. John McCain (R-Ariz.) is calling on the Obama administration to apologize to veterans over a recently released Department of Homeland Security report warning that “right-wing extremists” will attempt to “radicalize returning veterans.” “The last people on Earth we need to worry about are our veterans,” McCain said during an interview Monday night with Fox News’ Greta Van Susteren. “It’s insulting.” “Timothy McVeigh didn't learn to make that huge bomb while he was in the military. He learned it afterwards,” McCain added. “So to point out one veteran who committed an act of atrocity I think is outrageous.”

- Connecticut Sen. Joe Lieberman has been a good Democratic soldier since Barack Obama covered his back during the kick-him-out-of-the-caucus imbroglio earlier this year. But the hawkish independent, who questioned Obama's experience level from the podium of the RNC last summer, is taking issue with the administration's release of the torture memos, telling Fox host Greta Van Susteren it was "a bad idea" that helps America's enemies.

USAToday:

- The plastic bag industry has an Earth Day surprise: less plastic. Under pressure from consumers, environmental advocates and retailers, the companies that make more than 80% of plastic bags used by the nation's big retailers on Tuesday will announce plans to make the plastic bags from 40% recycled content by 2015.

- A government watchdog has launched "almost 20" criminal investigations related to the $700 billion financial bailout program, according to a report to Congress to be released Tuesday. Neil Barofsky, the special inspector general for the rescue program, says in the report that the probes involve possible public corruption; corporate, stock and tax fraud; insider trading; and mortgage fraud. Barofsky provided no information on who is being investigated or why, saying details will not be released "until public action is taken."

Reuters:
- Honda Motor Co President Takeo Fukui said on Tuesday the U.S. market has shown signs of having bottomed out since the start of April.

- Citigroup Inc (C) Chief Executive Vikram Pandit said he expects the No. 3 U.S. bank to rebound from its current woes and pledged that it would repay "every dollar" it owes to the U.S. government.

- TD Ameritrade Holding Corp (AMTD) reported better-than-expected quarterly revenue driven by near-record trading volumes in March, lifting its shares, but low interest rates continued to pinch earnings.

- The Treasury Department is considering giving banks and investors billions of dollars in fresh incentives to modify troubled mortgages and save homeowners from foreclosure, sources familiar with official deliberations said. Under one scenario, investors in second liens would receive a cash payment if they agree to ease the terms of troubled loans and accept a smaller return on their mortgage investment, the sources said.

TimesOnline:

- Investors withdrew a near-record $104 billion from the hedge fund industry during the first quarter, according to research published today, as doubts persist about the beleaguered sector's ability to perform. A full $85 billion of the redemptions, the second highest on record, came from fund of fund investments, after the Bernard Madoff ponzi scandal blew a hole in investors' confidence in the approach. Redemptions in the first quarter were the second highest on record, according to HFR, second only to the four quarter last year, when more than $152 billion was pulled out of the sector worldwide. After peaking at about $2 trillion, hedge funds currently manage around $1.33 trillion of assets, HFR said. About $525 billion of this is invested in fund of funds, according to HFR.

Maeil Business:

- South Korea and the US may jointly develop and invest in a “smart” power grid to improve energy efficiency, citing a government official. Both countries will sign a preliminary agreement in June when US and South Korea hold a summit.

Bear Radar

Style Underperformer:
Large-cap Growth (+.76%)

Sector Underperformers:
Education (-8.20%), Gold (-2.47%) and Medical Equipment (-1.39%)

Stocks Falling on Unusual Volume:
ZION, PNFP, BK, OLN, COCO, APOL, GOLD, MRK, STJ, OMI, KNDL, ICLR, JDAS, FWRD, PFWD, NTRS, BRCM, MYGN, LINC, PPDI, OTEX, STRA, NFLX and AME

Stocks With Unusual Put Option Activity:
1) ZION 2) COH 3) CAT 4) ANN 5) PFE

Bull Radar

Style Outperformer:
Small-cap Value (+.25%)

Sector Outperformers:
Airlines (+5.28%), Hospitals (+5.10%) and Networking (+4.05%)

Stocks Rising on Unusual Volume:
BAS, NBR, CVLT, ERTS, UTX, STO, MICC, CMED, ASTE, QLGC, LNCR, HWAY, DNDN, YHOO, ORCL, SHOO, LMDIA, UMBF, SCHN, STBA, PALM, ARST, EVY, COH, MAN, PKG, ROG and DGX

Stocks With Unusual Call Option Activity:
1) WPI 2) COH 3) KEY 4) ALTR 5) CMA

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Tuesday Watch

Late-Night Headlines
Bloomberg:

- Regulators conducting the stress tests on the 19 largest U.S. banks are increasingly focusing on the quality of loans the companies made after finding wide variations in underwriting standards, a regulatory official said. Supervisors concluded that banks’ lending practices would need to be given as much weight as macroeconomic scenarios after finding a wide variation in standards for mortgages and other loans as about 200 examiners poured through the portfolios, the official said.

- International Business Machines Corp.(IBM), the world’s biggest seller of technology services, missed first-quarter revenue estimates after demand for services and computer hardware shrank and currency changes ate into sales. IBM declined $1.81 to $98.62 in extended trading, after closing at $100.43 on the New York Stock Exchange. The shares have climbed 19 percent this year.

- Texas Instruments Inc.(TXN), the second- largest U.S. chipmaker, reported earnings and gave forecasts that beat analysts’ estimates as chip orders recovered, sending the stock higher in extended trading.

- Toyota Motor Corp., the world’s largest automaker, will cut the base price of its Prius gas- electric hybrid model by $1,000 to $21,000, as it competes with Honda Motor Co.’s Insight, said a person familiar with the matter. Honda introduced the Insight on March 24 with a sticker price starting at $19,800, undercutting the 2009 Prius, which starts at $22,000. Toyota will announce prices on the 2010 model tomorrow, with details about the new car tomorrow, said the person, who asked not to be named because the statement is pending.

- Emerging-market governments’ credit quality “markedly” deteriorated in the past six months and policy responses will be key to avoid ratings downgrades, Standard & Poor’s Ratings Services said. The agency lowered 10 of 43 sovereign ratings among such debt issuers, including one default, and another 10 had their outlooks cut to negative in the six months ended March 31, S&P said in a report yesterday. Eighteen emerging markets are on negative outlook and none have positive outlooks, according to the statement.

Wall Street Journal:

- Just when you think the political class may have learned something in months of trying to fix the banking system, the ghost of Hank Paulson returns to haunt the Treasury. The latest Beltway blunder -- and it would be a big one -- is the Obama Administration's weekend news leak that it may insist on converting its preferred shares in some of the nation's largest banks into common equity. The stock market promptly tumbled by more than 3.5% yesterday, with J.P. Morgan falling 10% and financial stocks as a group off 9%, as measured by the NYSE Financials index. Note to White House: Sneaky nationalizations aren't any more popular with investors than the straightforward kind.

- China's government is considering measures to regulate the torrent of bank lending, arising from concerns that much of the credit surge that has helped keep the economy growing could be wasted. A senior official at a local branch of the China Banking Regulatory Commission, who declined to be named, said the commission is considering rules aimed at ensuring that loans go to the real economy, such as government stimulus projects, rather than being diverted into the asset markets or bank deposits.

- The Treasury Department kicked off meetings Monday with the heads of Chrysler LLC, Fiat SpA and the United Auto Workers union in Washington as signs increased that Chrysler could be headed for liquidation. Some officials in the Obama administration have come to conclude that Chrysler isn't worth trying to save because of its weak product line and lack of international reach, said people familiar with the matter.

- MBA Graduates Discover They Can’t Change Careers.

- Treasury Secretary Timothy Geithner indicated that the health of individual banks won't be the sole criterion for whether financial firms will be allowed to repay bailout funds, a position that might complicate their efforts to give back the cash. In an interview, Mr. Geithner laid out some broad principles, including the need to consider the overall health of the financial system and the flow of credit in judging whether banks can repay their government investment. Among large banks, Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. have both said they want to repay the government. "We want to make sure that the financial system is not just stable, but also not inducing a deeper contraction in economic activity. We want to have enough capital that it's going to be able to support a recovery," Mr. Geithner said.

- Federal Reserve Vice Chairman Donald Kohn said Monday that the pieces were falling into place for a modest economic recovery this year, with some chance it could be stronger than expected.

CNBC.com:
- Airplanes of the future may not look like something out of the "Jetsons" or "Star Trek," but they'll be powered by anything from vegetable oil to algae.

NY Times:

- Spain’s Falling Prices Fuel Deflation Fears in Europe.

- Cash in Hand, Technology Giants Go Shopping.

NY Post:

- Disgraced political consultant Hank Morris pocketed a placement fee on an $85 million deal between the city's largest employee pension fund and the investment firm headed by a President Obama appointee, The Post has learned. It's the first link between the accused pay-to-play power broker -- indicted for demanding kickbacks from firms looking to do business with the state's retirement fund -- and the New York City Employees Retirement System, which has an estimated worth of $30.4 billion.

Business Week:
- India’s Outsourcers Should Worry about Delta’s Move.

CNNMoney:

- President Obama told his Cabinet on Monday to come up with ways to collectively cut $100 million from their agencies' budgets. Call it a slow start to curbing Uncle Sam's spending. In essence the president has asked government agencies to trim the equivalent of .003% of the federal budget. Looked at another way, $100 million is .006% of this year's estimated budget deficit.

- The Fortune 500’s 20 biggest winners.

Investors.com:

- The stars are aligning for CardioNet (BEAT). Its focus on monitoring cardiac patients in their homes dovetails with the Obama administration's plans to both improve delivery and reduce costs of medical services.

The Detroit News:

- General Motors Corp.(GM) will get up to $5 billion and Chrysler LLC $500 million in short-term aid, according to a 250-page government report obtained Monday by The Detroit News.

Forbes.com:

- The agribusiness bubble was great for fertilizer bulls, and the rebound hasn't been bad either. But watch out.

AP:

- Wealthy Wall Street executives may be outcasts to some Americans, but not to Democratic Sen. Chris Dodd. Facing his toughest re-election fight, the chairman of the Senate Banking Committee is reaching out to the financial sector's deep-pocketed donors for the campaign cash he needs to hang onto his Connecticut seat. It's a practice that worked for Dodd in the past as millions flowed in and the five-term lawmaker cruised to victory. Down in the polls and looking at a tough Republican challenge next year, Dodd again is turning to the financial industry for campaign money, undeterred by the populist Main Street anger.

Financial Times:
- The European Commission’s plans to regulate hedge funds and private equity for the first time threaten to become a central issue in the European parliamentary election campaign. Some key parliamentarians criticized draft proposals on Monday as being “almost worthless”. In a letter to José Manuel Barroso, the Commission president, leaders of the Socialist group, the second-largest bloc in the parliament, said the proposal was so “filled with loopholes” that it would be “highly ineffective” in regulatory terms. Poul Nyrup Rasmussen, president of the Party of European Socialists and a former Danish prime minister, accused Mr Barroso of failing to live up to personal commitments given last year, and of falling short of the demands of this month’s G20 summit in London. He thought it was “a scandal” that the European parliament had had to wait six months for the legislation, only to find it so inadequate, and said the hedge fund issue would be “central” to campaigning for June’s poll.

Chosun Ilbo:

- The International Monetary Fund will cut its forecast for South Korea’s economic growth next year to about 1.5%. The estimate, which will be announced in the IMF’s World Economic Outlook report tomorrow, is a downgrade from the fund’s previous projection of 4.2% growth. The Bank of Korea this month forecast the economy will expand 3.5% in 2010, after shrinking 2.4% in 2009.

Nikkei:

- Morgan Stanley(MS) may acquire regional banks in the US, citing an interview with CEO John Mack. “We are looking for potential opportunities to buy a bank that has a presence in an important market in the United States,” Mack said.

Oriental Morning Post:

- China’s electricity usage in April may be less than March levels, citing Xue Jing, an official with the China Electricity Council.

Late Buy/Sell Recommendations
Deutsche Bank:

- Rated (ESI) Buy, target $125.

- Rated (APOL) Buy, target $80.

CSFB:

- Upgraded (AUO) to Outperform..

Night Trading
Asian Indices are -3.0% to -1.0% on average.
S&P 500 futures -.01%.
NASDAQ 100 futures +.17%.

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Earnings of Note
Company/EPS Estimate
- (FRX)/.75

- (CSL)/.16

- (KO)/.65

- (JCI)/-.17

- (USB)/.22

- (MAN)/-.09

- (LMT)/1.65

- (LXK)/.62

- (UNH)/.68

- (UTX)/.78

- (DGX)/.82

- (BLK)/.80

- (CMA)/-.10

- (BRCM)/.02

- (DD)/.53

- (BK)/.63

- (CAT)/.05

- (KEY)/-.21

- (AKS)/-.75

- (GILD)/.61

- (COF)/-.04

- (AMD)/-.63

- (NSC)/.55

- (ILMN)/.26

- (ALTR)/.16

- (SNDK)/-.86

- (YHOO)/.08

- (COH)/.36

- (MRK)/.77

- (STT)/1.03

- (EAT)/.44

- (UAUA)/-4.37

- (SGP)/.47

- (DAL)/1.00

- (NTRS)/.97

- (BJS)/.24

- (AMTD)/.23

Economic Releases

- None of note

Upcoming Splits
- None of note

Other Potential Market Movers
- The Fed’s Hoenig speaking, weekly retail sales reports, (C) shareholders meeting, (GR) shareholders meeting, (CF) annual meeting, (AGU) annual meeting, (WFR) shareholders meeting, (NTRS) shareholders meeting and the (V) shareholder meeting 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 higher and to weaken into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.