Today's Headlines

Bloomberg:

- Ford Motor Co.(F), working to avoid a federal bailout, posted a first-quarter loss that beat analysts’ estimates as it cut cash use almost in half. The shares soared to the highest since September. “This is a fantastic performance,” John Wolkonowicz, an IHS Global Insight analyst in Lexington, Massachusetts, said today. “They’re burning cash at a much lower rate. They’re going to come out of this OK. I now believe they won’t need a government handout.” Ford chopped cash consumption 49 percent to $3.7 billion from the previous three months. It cited $1.9 billion in savings, including more-efficient manufacturing and engineering, and $700 million in price improvements in part because it offered fewer sales incentives. Ford jumped 73 cents, or 16 percent, to $5.22 at 11:20 a.m. in New York Stock Exchange composite trading.

- Orders for U.S.-made durable goods fell less than forecast in March, adding to signs the economic slump is easing. Bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, climbed 1.5 percent after a 4.3 percent gain the prior month that was also smaller than previously estimated.

- Microsoft Corp.(MSFT) and Amazon.com Inc.(AMZN) climbed in Nasdaq trading after reporting earnings yesterday that reassured investors, capping a week of reports by technology companies that showed the worst may be over. “A lot of the big negative surprises are behind us,” said David Rudow, an analyst with Thrivent Asset Management in Minneapolis. The company oversees about $65 billion, including Microsoft shares. “We’ve seen the worst. It’s just a question of when we see return to growth and normal spending again.”

- President Barack Obama has “100 percent” confidence in Federal Reserve Chairman Ben S. Bernanke, White House Chief of Staff Rahm Emanuel said. Emanuel made the comments in an interview with Bloomberg Television to be aired later today.

- US GDP contracted much less in the first quarter than most economists believe, according to Charles H. Blood Jr., a managing director at Brown Brothers Harriman. “There are signs that downside momentum has begun to diminish,” Blood wrote in a report yesterday. He estimated that GDP shrank at a 2% annual rate, a smaller decline than any of the 29 economists in a Bloomberg survey anticipate. “GDP should turn positive by the second half,” Blood wrote. After shrinking at a .4% pace this quarter, the economy will grow at rates of .8% in the third quarter and 2.2% in the fourth, he estimated.

- Al-Qaeda has threatened attacks on the European Union and its allies in a new video posted on the Internet, German ARD television said in an e-mailed statement. According to ARD, in the 80 minute video, a short section of which is in German, a masked man says: “The Mujahedeen are on their way to you and, god willing, will kill all of you. Foremost, of course, Denmark and Holland, which insult our prophet.”

- OPEC Secretary-General Abdalla El-Badri wants the group to fully implement supply cuts agreed last year before it discusses any further reductions.

- Cisco Systems’(CSCO) CEO John Chambers said the company will buy “a lot more” companies this year and that he is optimistic about the US. Cisco will invest aggressively in the U.S. and the US economy will recover in December-January timeframe, he said.

- General Motors Corp.(GM), facing the threat of a bankruptcy filing if it can’t meet a June 1 U.S. deadline, will preserve the GMC truck line and drop its 83-year- old Pontiac brand as part of a government-led recalibration of its business plan, people familiar with the decision said. The Detroit automaker will keep the GMC, Chevrolet, Cadillac and Buick brands, after a review that included profitability with the Obama administration’s automotive task force, said the people, who asked not to be named because the decisions have not been announced. GM may reveal next week the end of the make that produced the Grand Prix, Bonneville and Firebirds, they said.

- Taliban militants who took control of a district about 100 kilometers (60 miles) from Pakistan’s capital have begun pulling back to the northwestern Swat valley, a spokesman for the group said. Shortly before the pullback was announced, Prime Minister Yousuf Raza Gilani said the country will fight back against extremists.

- Investors stand to gain more than 80 percent betting that Bank of America Corp.(BAC) will convert some of its preferred shares into common stock, according to Jefferies Group Inc. Bank of America’s 6.204 percent preferred shares may be converted into equities worth 80 percent more after trading costs than their closing price of $11.26 yesterday, Patrick Neal, a Jefferies strategist, wrote in a note today. The 8.2 percent preferred could yield returns of about 59 percent if the Charlotte, North Carolina-based lender decides to convert them into common stock, Jefferies estimated.

- Credit-default swaps dealers and investors are planning a so-called Small Bang Protocol to create a standard for settling contracts in the event of debt restructurings. The protocol will allow trades to be moved to a central clearinghouse, according to Athanassios Diplas, global head of the counterparty portfolio management group at Deutsche Bank AG, one of the dealers involved in the discussions.

Wall Street Journal:

- Morgan Stanley(MS) is considering changes to its biggest proprietary-trading desk, including spinning it out into a hedge fund or opening up the unit to outside investors, according to people familiar with the discussions.

- Chrysler LLC is facing "no pending bankruptcy," Vice Chairman Jim Press told the company's auto dealers in a conference call Friday, according to three people who listened in on the call.

CNBC:

- The US government, releasing details of how it conducted "stress tests" on the nation's 19 largest financial institutions, said “most banks currently have capital levels well in excess of the amounts needed to be well capitalized." The report said the tests are a “forward-looking exercise designed to estimate losses, revenues and reserve needs” under two different macroeconomic scenarios, including an adverse one.

- General Motors(GM) has received another $2 billion loan from the Treasury for working capital but Chrysler has not received any new working capital, a transaction report for the Treasury's Troubled Asset Relief Program showed on Friday. The Obama administration has said it plans to provide up to $5 billion in working capital for GM and $500 million for Chrysler as they race to meet restructuring deadlines to qualify for additional government funds.

- Ford Motor(F) CEO Mulally told CNBC in an interview that he expects the automaker will start coming back in the third and fourth quarters.

NY Times:

- Jack Yang, a managing partner at Highland Capital Management, which manages $30 billion in debt investments, offers his views on the current state of the bank loan market. The fall in the loan market has far outpaced the deterioration in fundamentals, even assuming that global economic fundamentals continue to worsen. Measured by implied default rates, loan valuations are cheap. With the average price of loans around 65 at the end of March, the implied default rate, according to S&P Leveraged Commentary & Data, is roughly 45 percent, far exceeding the previous actual default peak of 8.2 percent in 2000 and the current 4.8 percent default rate, as measured by the number of issuers. While it is anticipated that defaults will rise above previous peaks, we believe it is highly unlikely they will come close to the level implied by current prices and spreads. This record disparity between actual and implied defaults means loans’ current risk premium should offer a sizable cushion against rising defaults. Loan prices are now trading about five points below their historical recovery rates of 70 percent (1990‐2008) 30 days after default, and well below their 80 percent historical recovery rate after a workout. By both measures, today’s levels are difficult to justify based on fundamentals.

Boston Globe:

- House Speaker Robert A. DeLeo has begun to seriously consider a plan to increase the sales tax from 5 percent to 7 percent, which would give Massachusetts one of the highest sales taxes in the country, said a State House official who has been briefed on the speaker's deliberations.

The Detroit News:

- In deciding to dramatically slash production this summer, General Motors Corp.(GM) is bracing for possible liquidation of bankrupt parts supplier Delphi Corp. and the resulting inability to build vehicles from a shortage of parts, industry experts said Thursday. GM's decision to idle 13 factories in the U.S. and Mexico for up to nine additional weeks -- a move impacting about 40 percent of the automaker's assembly plants -- might force other suppliers into filing for bankruptcy protection as work dries up. More than 22,000 workers will be affected by the closures.

- Congressional sponsors of two competing bills to offer cash vouchers to retire older vehicles and spur auto sales said Thursday they are nearing agreement on a compromise.

Seeking Alpha:

- Why High Inflation Will Not Take Hold.

Rick Bookstaber:

- If the calls I am getting from headhunters are any indication, the hot area now is high frequency trading. And no wonder. There are two areas that were spared in the 2008 debacle: macro and high frequency trading. Macro funds on average were up ten percent or so last year because most of them skirted the edge of the major dislocations; their strategies focus on liquid instruments and are not oriented toward credit. High frequency trading did well because it thrives in an environment of high volatility and demand for liquidity, and 2008 was a hot house for both. Every year, people pile on to whatever strategy did well the previous year – this tendency is worth a book or two on its own – and so this year high frequency is destined to be the darling of the fund of funds. But I think the days for high frequency trading are numbered.

Reuters:
- The inventory of new U.S. homes for sale at the end of the March plummeted at a record pace, government data showed on Friday, bringing a glimmer of hope of improvement in the housing market even as data on durable goods sales showed weakness in the economy as a whole. "Housing is probably forming a bottom, because even the supply of homes, the inventories, declined," said Asha Bangalore, an economist with Northern Trust in Chicago. "I think the housing market is stabilizing." The stock of new homes shrank to 311,000 from 328,000 in February. That left the supply of homes available for sale at 10.7 months' worth, compared to February's 11.2 months. The Commerce Department said the monthly change in inventories, of 5.2 percent, was the largest drop in more than 45 years and the year-on-year plunge of 33.7 percent was the largest on record. Builders appear to be burning through their supply and holding off on adding to their stocks. Sales of new homes dropped 0.6 percent in March, according to the Commerce Department, but February sales were much stronger than originally thought, with the report showing they rose 8.2 percent, compared to the 4.7 percent gain previously registered.

- A weekly measure of U.S. future economic growth remained unchanged, while its annualized growth rate rose to levels last seen in early October 2008, suggesting economic recovery for the near future, a research group said Friday. The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index was flat at 107.2 for the week ending April 17 . The index's annualized growth rate -- continuing its six-month upswing -- rose to negative 18.6 percent from the prior week's rate of negative 19.7 percent. It was the highest yearly growth reading since Oct. 10, 2008, when the rate was minus 17.0 percent, according to ECRI data. "With WLI growth rising to a 27-week high, U.S. economic growth, which is now at a record low, will soon begin to improve," said Lakshman Achuthan, managing director at ECRI.

- Finance leaders meeting on Friday see some signs that recession-fighting efforts are finally starting to work, but patience is wearing thin over the slow progress in cleansing bank balance sheets. The message from officials of the Group of Seven nations and the larger G20 club of advanced and emerging economies is likely to be at least somewhat optimistic, reflecting evidence that the pace of global recession is beginning to ease.

Financial Times:
- Chrysler has received a further setback in its struggle for survival after one of its biggest private-sector customers placed a sizeable order for new cars from Ford Motor(F), Chrysler's healthier Detroit-based rival. Dollar Thrifty, the car-rental group, said the proportion of Ford vehicles in its fleet would grow from a "small percentage" today to 15 per cent.

- The Obama administration should seize the political opportunity offered by Goldman Sachs’ and JPMorgan’s request to repay $45bn in troubled asset relief funds, says Barney Frank, the influential Democratic lawmaker. In an interview with the FT, Mr Frank said the Obama administration was missing a political chance to showcase the return of taxpayer money. “Geithner says I worry about it from the political standpoint,” Mr Frank said. “It’s the one argument for which I have no sympathy: If people could see, some people are taller than other people. Of course there are different levels of strength between the banks...compensation restrictions were a necessity to win support for Tarp.” “Loads of my liberal friends were a month ago demanding significant intervention (nationalisaton),” he said. “It was premature.” Mr Frank said that there were other ways for Mr Geithner to boost bank capital if next week’s stress tests revealed a big shortfall – for example by imposing a “haircut” on bondholders by mandating debt-for-equity swaps, a step the administration has been unwilling so far to take.

- Spain’s army of unemployed swelled to a record 4m in the first quarter of this year as hundreds of thousands of workers in services and construction fell victim to economic recession and the collapse of the country’s housing market. Jobless numbers jumped by more than 800,000 in the quarter to reach 4.01m or 17.4 per cent of the workforce, double the European Union average, according to the National Statistics Institute.

Interfax:

- Russia’s Economy Ministry expects the unemployment rate to average between 10.4% and 10.7% this year, compared with a previously forecast 8.2%. The unemployment rate advanced to 9.5% in March, as the total number of unemployed rose to 7.1 million people.

Bear Radar

Style Underperformer:
Large-cap Value (+1.15%)

Sector Underperformers:
I-Banks (-2.28%), HMOs (-1.34%) and Computer Services (-.64%)

Stocks Falling on Unusual Volume:
SEIC, CNS, BEAT, BLUD, IBKR, COLM, CYBS, EZPW, ALGT, DECK and ACI

Stocks With Unusual Put Option Activity:
1) MHK 2) OMC 3) STLD 4) SII 5) LO

Bull Radar

Style Outperformer:
Small-cap Value (+2.10%)

Sector Outperformers:
Oil Service (+4.60%), Networking (+4.34%) and Software (+3.75%)

Stocks Rising on Unusual Volume:
INFA, TIN, HES, NFX, MSFT, FO, MICC, E, EVR, IMN, CB, TECD, RVBD, ALGN, STAR, CAKE, OPLK, BAGL, DDUP, AMZN, POWI, JNPR, IDXX, MCRI, LOGI, AMGN, HITT, NTGR, SYNA, LNCE, MHK, DSG, LHO, NTY, RZG, PNK, DEG, LTM, SNS, DV and EMN

Stocks With Unusual Call Option Activity:
1) RVBD 2) IBKR 3) GRMN 4) ONXX 5) CIT

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Friday Watch

Late-Night Headlines
Bloomberg:

- Amazon.com Inc.(AMZN), the world’s biggest Internet retailer, reported first-quarter sales and profit that beat analysts’ estimates, bolstered by free shipping offers and demand for the Kindle electronic-book reader. Amazon.com rose 2.69 percent to $82.78 in extended trading after closing at $80.61 today on the Nasdaq Stock Market. The shares have soared 57 percent this year.

- American Express Co., the biggest U.S. credit-card company by purchases, beat analysts’ profit estimates and said that it intends to repay the government’s rescue-fund investment. The bank rose 6.6% in late New York trading.

- Microsoft Corp.(MSFT) rose as much as 5.9 percent in extended trading after reporting a smaller drop in third-quarter profit than some investors anticipated and predicting bigger cost savings this year.

- A group of Democrats on the House Energy and Commerce Committee want alterations to climate-change legislation to benefit the coal, oil and gas industries. Among recommendations to revamp a draft measure offered by the committee’s Democratic chairman will be slowing the pace of cuts in greenhouse-gas emissions and distributing free some emission credits that large polluters may otherwise have to acquire under a proposed cap-and-trade system, members of the group said today.

- Ford Motor Co.(F), the only major U.S. automaker surviving without federal aid, has more than doubled in the past seven weeks even as it prepares to announce its largest first-quarter loss in 17 years. The company may say tomorrow it lost $3.2 billion, or $1.33 a share, the average estimate of four analysts surveyed by Bloomberg about the quarter. Investors pushed Ford up to $4.49 today in New York Stock Exchange composite trading from $1.87 on March 4 on expectations it will be a strong survivor when the U.S. industry emerges from the worst sales in 27 years. “Ford is a completely different animal” than General Motors Corp. and Chrysler LLC, said Jeffrey Spotts, a New York- based portfolio manager at the $250 million Prophecy Fund which has been accumulating Ford shares since February. “Consumers don’t want to buy a car from a company that took money from the government or that might go bankrupt.”

- The pound and the euro fell against the US dollar after the Daily Telegraph said Moody’s Investors Service and Standard & Poor’s are reviewing the U.K.’s AAA credit rating on concern about the nation’s rising debt burden.

- Samsung Electronics Co. reported first-quarter profit that beat analyst estimates, led by higher- than-expected earnings at the mobile-phone division.

- The Markit iTraxx Japan Index fell 5 basis points to 330 as of 9:40 am in Tokyo, according to Barclays Plc, while the Markit iTraxx Australia index was down 7.5 basis points at 317.5 as of 8:50 am in Hong Kong, Citigroup Inc. prices show.

Wall Street Journal:

- The U.S. government may end up acquiring a significant ownership stake in banks as it works to stabilize the financial system, according to a draft report from top regulators -- the starkest acknowledgment yet of the extent to which the government could become intertwined with the financial system. The draft report from the Financial Stability Oversight Board, which consists of officials from the Federal Reserve and the Treasury Department, among others, says U.S. ownership of individual firms "is not an objective," and that any such occurrence would be temporary. Such an outcome would nonetheless raise a host of thorny questions about government control over private companies, including how deeply officials would delve into daily management decisions and whether the U.S. would exercise stock voting rights.

- Leading nations have already agreed to commit more than $340 billion to boosting the International Monetary Fund's resources, a Treasury Department official said Thursday. The Treasury official was speaking to reporters ahead of key meetings in Washington this week of international finance ministers and central bankers. During the Group of 20 London summit earlier this month, leaders agreed to dramatically boost IMF resources by $500 billion to boost its capability to help developing countries grapple with economic turmoil. So far, concrete commitments by individual nations total more than $340 billion.

- Weak demand is likely to lead to increased losses in the world steel industry next quarter, which could prompt consolidation, the shakeout of marginal players and lower prices, much of the industry now predicts. "The demand for steel is virtually nonexistent," says Dan DiMicco, CEO of steelmaker Nucor Corp., which reported a $189.6 million loss and said it expected a wider loss in the second quarter.

- Congressman Henry Waxman played to the crowds this week with high-profile hearings designed to boost his climate legislation. To listen to the Energy and Commerce committee chair, a House global warming bill is all but in the recyclable bag. To listen to Congressman Jim Matheson is something else. During opening statements, the Utah Democrat detailed 14 big problems he had with the bill, and told me later that if he hadn't been limited to five minutes, "I might have had more." Mr. Matheson is one of about 10 moderate committee Democrats who are less than thrilled with the Waxman climate extravaganza, and who may yet stymie one of Barack Obama's signature issues. If so, the president can thank Democratic liberals, who are engaging in one of their first big cases of overreach. Not that you couldn't see this coming even last year, when Speaker Nancy Pelosi engineered her coup against former Energy chairman John Dingell. House greens had been boiling over the Michigan veteran's cautious approach to climate-legislation. Mr. Dingell's mistake was understanding that when it comes to energy legislation, the divides aren't among parties, but among regions. Design a bill that socks it to all those manufacturing, oil-producing, coal-producing, coal-using states, and say goodbye to the very Democrats necessary to pass that bill.

- President Obama's global warming agenda has been losing support in Congress, but why let an irritant like democratic consent interfere with saving the world? So last Friday the Environmental Protection Agency decided to put a gun to the head of Congress and play cap-and-trade roulette with the U.S. economy. The pistol comes in the form of a ruling that carbon dioxide is a dangerous pollutant that threatens the public and therefore must be regulated under the 1970 Clean Air Act. This so-called "endangerment finding" sets the clock ticking on a vast array of taxes and regulation that EPA will have the power to impose across the economy, and all with little or no political debate.

NY Times:

- Alarm Grows Over Pakistan’s Failure to Halt Militant Gains.

Business Week:
- Sales of existing homes declined 3% in March, reversing February's surprising gain, the National Association of Realtors said on Apr. 23. But the market continues to show signs of stabilizing as first-time home buyers and investors jump in to scoop up bargains, analysts said.

CNNMoney:

- 24 Top-performing Stocks.

- The Cash Bubble Hasn’t Burst Yet. With the S&P 500 up 25% since early March, some investors -- particularly professional money managers -- may feel the need to chase the market's performance or face questions from customers about why they sat out the rally. Still, a lot of cash continues to sit on the sidelines. According to figures from ISI Group, the amount of money invested in money market funds and small certificates of deposit (CDs) make up more than 60% of the market's total valuation, as measured by the Wilshire 5000 index. The last time this measure of cash reserves was so high was in 1985. What's more, 28.5% of all U.S. stock mutual funds have more than 5% of their assets in cash, according to fund tracker Morningstar. Typically, any fund with more than 5% in cash is considered to be not fully invested in the market. In addition, more than 100 mutual funds are being ultra-conservative: they have more than 25% of their assets in cash.

Investors.com:

- Except for companies that have nowhere to go but up, MasterCard's (MA) business seems a lot like many others these days: It's apt to slow a bit before picking up speed. But MasterCard is doing a lot better than most.

Reuters:

- US officials testing the health of the nation's top banks must walk a tightrope when they disclose the exams' results: The scrutiny must be tough enough to be credible, but not so harsh as to rattle an already shaken system. "The challenging thing here is presumably they're going to be talking about some information that is not going to be at all flattering for some institutions," said Kevin Petrasic, a banking lawyer at Paul, Hastings, Janofsky & Walker in Washington.

- Chrysler's first-lien lenders are preparing another counter-offer to the U.S. Treasury that involves reducing the automaker's debt, sources familiar with the matter said on Thursday.

- Honda Motor Co expects to see some recovery in U.S. auto sales by summer and expects its own inventory levels to normalize by June, the company's president and chief executive said on Thursday. "I don't know the industry-wide sales trend in April, but by summertime we expect some recovery," Honda's Takeo Fukui told reporters on the sideline of an auto industry event sponsored by the automaker in Detroit.

- The global economic downturn has shown signs of easing in recent weeks, although significant risks remain, U.S. Treasury Secretary Timothy Geithner said before a meeting of G20 officials in Washington on Friday. Writing in the Financial Times newspaper, Geithner said the decline in world trade may be abating and conditions in some financial markets have improved.

Financial Times:
- Bankers’ bonuses and golden parachutes would be capped in all European Union countries under a draft policy circulating in Brussels that amounts to one of the broadest responses yet to concerns about executive pay. Under the European Commission recommendations, a copy of which has been seen by the Financial Times, the 27 EU countries would be asked to bring in tougher remuneration rules for financial institutions with an office within their borders, covering all staff whose activities affect the firm’s risk profile. The rules would also apply to subsidiaries of EU-based parents, including those in offshore centers. Directors’ termination payments would be limited to no more than two years of their fixed remuneration and they would also face a minimum three-year vesting period for share options. Financial companies would be able to withhold bonuses entirely or partly when performance criteria were not met and a major part of bonuses should be deferred, the policy says.

- Alistair Darling was warned on Thursday his new 50p income tax rate would drive talent from the City and discourage entrepreneurs, but early polls suggest that the chancellor’s Budget tax rises have tapped into rising popular hostility towards the rich. Mr Darling’s tax raid on higher earners was widely criticized in the press as a populist gesture to divert attention from spiraling government borrowing and a political tactic to wrongfoot the Conservatives. “There’s a definite sensation of ‘what’s next?’ The message is that high earners are not welcome here,” said Anna Chapman, a director of Ernst & Young’s private client services team. The head of one City institution with a strong private client business fumed, “What are they trying to do, drive all the high-earners out of London?”

- US banks could be forced to hold more equity than initially expected after it emerged that “stress tests” organized by regulators take into account risks not commonly understood to be included in the assessment. In addition to looking at potential losses on loans and securities, bank examiners are looking at so-called “counterparty risk” on derivative contracts – the chance that the party on the other end of a derivatives deal might default, depriving the bank of a payment that is due.

- The Obama administration will on Friday get the first indication of investor interest in its $1,000bn toxic assets plan amid fears that the threat of government intervention and banks’ reluctance to sell will deter fund managers from participating. Applications to become one of the five asset managers charged with raising funds to buy mortgage-backed securities from banks are due today and groups including BlackRock, Pimco and Bank of New York Mellon are set to apply. However, financial executives warn that the plan is in danger of missing its goal of quickly shifting billions of dollars in troubled assets off banks’ balance sheets unless the government dispels investors’ concerns. Potential buyers of assets complain that, a month after Tim Geithner, US Treasury secretary, unveiled the public-private investment program, the authorities have yet to reassure them they would not be subjected to draconian Congressional scrutiny. The Treasury did say that, aside from the small group of asset managers, investors who receive the generous loans available under the PPIP will not have to abide by restrictions on employees’ pay imposed on the banks that got funds from the troubled assets relief program. Yet some fund managers fear Congress and the government may change the rules mid-course, as they did with Tarp.

- Chesapeake(CHK), the largest independent producer of natural gas in the US, paid its chief executive more than $100m in total last year, bought millions of dollars worth of his art, sponsored his basketball team and approved a $75m bonus at least one institutional investor believes was paid to bail him out of personal financial difficulties. Chesapeake revealed in its SEC filings that it spent $12.1m on antique maps of the American Southwest, watercolours and books owned by Mr McClendon, spent $177,000 at Deep Fork Catering, of which he owns 50 per cent, and supported - to the tune of $4.6m in 2008 and 2009 - the Oklahoma City Thunder, a basketball team of which he holds just less than 20 per cent. The company is also a major donor to Oklahoma State University of which Burns Hargis, one of its independent directors, is president. At least one analyst is now advising other shareholders to put pressure on Chesapeake to change its ways, citing concerns the board appeared to lack independence. Benjamin Dell, analyst at Sanford Bernstein, yesterday advised shareholders to vote against allowing the company to increase the number of authorized common shares, warning that its board structure, corporate governance and dilution of ownership stakes created a material overhang for the stock.

Late Buy/Sell Recommendations
Citigroup:

- Upgraded (RIMM) to Buy, target $100.

JPMorgan:

- Downgraded (PTR) to Underweight.

Night Trading
Asian Indices are -.25% to +.75% on average.
S&P 500 futures -.40%.
NASDAQ 100 futures -.13%.

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Earnings of Note
Company/EPS Estimate
- (MMM)/.86

- (AEP)/.85

- (ACI)/.24

- (F)/-1.24

- (HON)/.54

- (ITT)/.58

- (SLB)/.73

Economic Releases

8:30 am EST

- Durable Goods Orders for March are estimated to fall 1.5% versus a 3.4% gain in February.

- Durables Ex Transports for March are estimated to fall 1.2% versus a 3.9% increase in February.

10:00 am EST

- New Home Sales for March are estimated at 337K versus 337K in February.

Upcoming Splits
- None of note

Other Potential Market Movers
- Treasury Secretary Geithner meeting with G7 Finance Ministers, (ABT) shareholders meeting, (T) shareholders meeting, (PGR) annual meeting, (XL) shareholders meeting, and the (K) shareholders meeting could also impact trading today.

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

Stocks Finish at Session Highs, Boosted by Financial, REIT, Restaurant, Gaming and Rail Shares

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