Stocks Mixed into Final Hour as Less Economic Fear, Short-Covering, Diminishing Credit Market Angst Offsets Swin Flu Worries, Bank Stock Weakness

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Biotech longs, Medical longs, Retail longs and Financial longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is positive as the advance/decline line is higher, most sectors are rising and volume is about average. Investor anxiety is high. Today’s overall market action is mildly bullish. The VIX is falling 1.91% and is very high at 37.65. The ISE Sentiment Index is about average at 149.0 and the total put/call is about average at .84. Finally, the NYSE Arms has been running very high most of the day, hitting 2.39 at its intraday peak, and is currently 1.42. The Euro Financial Sector Credit Default Swap Index is rising 3.14% today to 156.67 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 1.12% to 177.99 basis points. This index is also well below its Dec. 5^th record high of 285.99. The TED spread is falling 4.83% to 92 basis points. The TED spread is now down 371 basis points since its all-time high of 463 basis points on October 10th. The 2-year swap spread is falling 5.46% to 56.25 basis points. The Libor-OIS spread is falling 2.75% to 84 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is up 4 basis points to 1.51%, which is down 113 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 .12%, which is up 3 basis points today. Weekly retails sales rose for the 3^rd consecutive week, gaining .6%. April weekly retail sales averaged a +1.2% gain versus a -1.25% loss in March. Small-caps are outperforming today. Given the weak close in Asia last night, Europe’s losses this morning, Bank sector weakness and swine flu fears, today’s mixed performance in the major averages is a big positive. Nikkei futures indicate an +212 open in Japan and DAX futures indicate an +30 open in Germany tomorrow. I expect US stocks to trade mixed-to-higher into the close from current levels on less economic fear, short-covering and diminishing credit market angst.

Today's Headlines

Bloomberg:

- Consumer confidence jumped more than forecast in April as stocks rallied, mortgage rates dropped and Americans thought more jobs will become available, adding to signs the recession may be easing. The Conference Board’s sentiment index climbed to 39.2, the highest level since November, from 26.9 in March, the New York- based research group said today. The gain was the biggest since November 2005. The improvement raises the odds that recent gains in consumer spending, which accounts for 70 percent of the economy, will be sustained. The report indicates efforts by Federal Reserve policy makers, meeting today and tomorrow, to lower borrowing costs and unclog lending may be starting to pay off. A report from S&P/Case-Shiller today showed that the slide in home prices in 20 U.S. cities slowed in February for the first time since January 2007. The Conference Board’s measure of present conditions rose to 23.7 from 21.9 the prior month. The gauge of expectations for the next six months surged to 49.5, the highest level since the collapse of Lehman Brothers Holdings Inc. in September. The share of consumers who said more jobs will be available in the next six months gained to 13.9, the most since June 2007.

- Bill Gross, who helps run the world’s biggest bond fund at Pacific Investment Management Co., said the Federal Reserve may boost its Treasury purchases if yields on 10-year notes top a range of 3 percent to 3.1 percent. While the central bank announced ahead of tomorrow’s policy meeting it may buy as much as $300 billion in U.S. government securities, “that may increase,” Gross said in a Bloomberg Radio interview today. “It’ll be interesting tomorrow to hear their statement and to see what they suggest is the amount the Fed is willing to buy.”

- Iron ore producers are betting on an “impossible” revival in demand from China, the largest consumer of the material, and holding out on price reductions, the China Iron & Steel Association said. The expectation for the second quarter is unrealistic given the state of China’s economy, Luo Bingsheng, vice chairman of the association said today at a press conference, in Beijing. Chinese steelmakers are asking for price cuts of as much as 50 percent for annual contracts of iron ore, and are locked in talks with producers Cia. Vale do Rio Doce, Rio Tinto Group and BHP Billiton Ltd. Larger Chinese mills incurred losses for five straight months from October, the government said last week. “Miners are pinning hope for a recovery in the second quarter,” Luo said. “Chinese steelmills will still be in a relatively difficult period this quarter.” China’s benchmark steel price dropped 9 percent in the first quarter. Prices of hot-rolled coil, the benchmark, may fall further in the second quarter because of overcapacity and a surge in imports, Qi Xiangdong, deputy secretary general of the association said at the same conference. Iron ore stockpiled at ports in China reached a higher- than-normal level of 70 million metric tons, Jia Yinsong, an official with the raw material division of the Ministry of Industry and Information Technology, said today at a Metal Bulletin conference in Beijing.

- Gold fell, heading for the sharpest drop in three weeks in New York, on concern that a swine-flu outbreak may delay a global economic recovery, cutting demand for the metal. Silver also declined and platinum tumbled. Platinum futures for July delivery plunged $62.30, or 5.4 percent, to $1,088 an ounce on Nymex. A close at that price would be the biggest drop for a most-active contract since Dec. 1. The price slid 2.8 percent yesterday. Palladium futures for June delivery fell $11.50 or 5 percent, to $217.45 an ounce in New York. A close at that price would be the biggest decline for a most-active contract since Feb. 23.

- Investors pulled $1.11 billion in the first quarter from U.S. stock funds that ranked in the top 1 percent of their categories prior to the 39 percent drop last year by the Standard & Poor’s 500 Index. The withdrawals came at mutual funds including Kenneth Heebner’s CGM Focus, which gave back the most, $219.2 million, Fidelity Leveraged Company Stock and Janus Contrarian, according to data compiled by Morningstar Inc. Each of those funds fell at least 48 percent in 2008. In the previous five years, their returns more than tripled, compared with a cumulative 83 percent gain by the S&P 500, a benchmark of the largest U.S. stocks. Investors often hurt themselves by moving into better- performing funds near the peak of rising markets and selling at the end of a decline. A March study of 20 years of investor behavior by Dalbar Inc., a Boston-based research firm, concluded that “investors panic and withdraw their assets at the worst possible times,” missing later recoveries. “There is no reason to bail out because a manager had one bad year,” said Daniel Wiener, the New York-based chief executive officer of Adviser Investments in Newton, Massachusetts, which oversees $900 million in mutual-fund assets. “If you do, it is almost a guarantee you will lose.”

- The U.S. Supreme Court revived a government attempt to fine broadcasters for isolated expletives on live television while hinting that the crackdown ultimately might be voided on free-speech grounds. Voting 5-4 in a case involving vulgar language used by entertainers Cher and Nicole Richie, the high court said the Federal Communications Commission gave a sufficient explanation to comply with a law governing administrative agencies. “The commission could reasonably conclude that the pervasiveness of foul language, and the coarsening of public entertainment in other media such as cable, justify more stringent regulation of broadcast programs” to protect children, Justice Antonin Scalia wrote for the majority.

Wall Street Journal:

- The government could be exposed to a host of conflicts and potential unintended consequences if it ends up -- as now appears likely -- with a controlling stake in General Motors Corp.(GM) Under GM's latest restructuring plan, the U.S. would get at least a 50% stake in the largest Detroit auto maker. Even without a majority stake, the government was able to use its muscle in March to oust GM Chief Executive Rick Wagoner. But such a major holding would turn GM into a sort of Government Motors, making the federal government the company's de facto boss and bank lender. direct stake could create other uncomfortable conflicts: The Obama administration would be setting emissions and mileage standards for cars in Washington while having to implement them in Detroit. It also would make the government a direct partner of the United Auto Workers, which would get a 39% stake in the company under GM's latest blueprint for survival.

- The number of confirmed cases of a deadly new flu strain continued to rise Tuesday, reaching to the Middle East and Asia-Pacific regions, as the World Health Organization moved one step closer to declaring a pandemic. In the U.S., the Centers for Disease Control and Prevention said the number of confirmed U.S. cases has risen to 64, including "a number of hospitalizations." CDC officials earlier had said there had been just one person hospitalized.

CNBC:

- Biotechnology firm Dendreon(DNDN) says its unique prostate cancer treatment, Provenge, extended the lives of men in a large clinical trial by more than four months. Researchers presented the highly anticipated test results Tuesday afternoon at the annual meeting of the American Urological Association in Chicago.

- Citigroup(C) is talking to the government about its capital levels after receiving the early results of its stress test, but if it needs more capital it does not expect the government to provide it, people familiar with the matter said.

IBD:

- Discovery Communications(DISCA) has emerged as a highly creative programming force that does not run with the network herd.

VentureBeat:

- New Enterprise Associates, Silicon Valley’s largest venture capital firm, has raised another $1 billion for its newest fund — its 13th — bumping the fund’s total size so far to $2.15 billion. That’s an impressive feat in today’s economic climate. The target for the fund is $2.5 billion, lowered from the $3 billion initially posed to the firm’s limited partners last year, reports VentureWire.

Detroit Free Press:

- With ranks of active UAW workers shrinking and the pool of retirees growing, the union's decision to accept half of what General Motors and Chrysler owe to the retiree health care trust is putting the fund on shaky ground. Called a Voluntary Employee Beneficiary Association, or VEBA, the trust fund was hailed as part of a transformational labor deal the UAW reached with Chrysler, Ford and General Motors in 2007. The union would take responsibility for managing health care benefits for retirees. The automakers, meanwhile, would get to take a crushing cost off their books. But to get it started, all three companies agreed to make huge initial payments -- GM had to pay $20 billion, while Chrysler's tab was $10.6 billion. Now, with the UAW's consent, each company will pay half those amounts. "I said a year ago it wasn't viable when the market was going up," said Lance Wallach, a consultant in New York. Now, he said the VEBA is even less feasible. "Instead of the VEBA failing in 15 years, now it will fail in 6," Wallach said.

ForexTV.com:

- Manufacturing activity in the U.S. Mid-Atlantic states continued to improve in April, according to a report from the Richmond Federal Reserve on Tuesday. The headline manufacturing index surged to a reading of -9 in April, beating expectations for a -17 reading. The index stood at -20 in March, and -51 in February. Shipments catapulted to a reading of -3 in April from -15, while the new orders component rose to -2 from a prior reading of -20. The employment index rose to -26 from -28. Capacity utilization ticked up to -13 in April from -14 in March, while the orders backlog rose to -15 from -37.

Politico:

- Republican Sen. Arlen Specter has decided to switch parties and become a Democrat, stunning his GOP colleagues in the Senate while pushing Democrats and President Barack Obama one step closer to unfettered power in Washington. Specter will be the 59th Democratic senator, and if Al Franken eventually pulls out his Senate race in Minnesota, Democrats will have a filibuster-proof 60 vote majority in the Senate, something the party could only have dreamed of at this time last year. Specter had been in secret talks with Senate Democratic leaders for months, according to Senate sources, but his final move to become a Democrat came after a recent poll showed him badly losing a Pennsylvania Republican primary next year.

Reuters:
- Hotel occupancy in the Middle East and Africa fell 11 percent in March and margins fell 16 percent from the same month in 2008, with regional tourism hubs Dubai and Egypt hardest hit by the downturn, a report said. "The pain continues for Egypt and Dubai, two of the biggest success stories in 2007 and 2008," James Chappell, managing director of STR Global, said in the report. "Dubai has lost over 30 percent in the first quarter of 2009." Hotel occupancy in Dubai, which lures Western tourists with its beaches and shopping, was down 15.8 percent in March while revenue per available room (revPAR) fell almost 41 percent, suggesting that hotels have been slashing prices. In Egypt, home of ancient monuments that have long attracted tourists, hotel occupancy rates fell almost 15 percent in March and revPAR was down over 18 percent compared to the same month of last year. That could have a severe economic affect in Egypt, where around 10 percent of the workforce is involved in tourism.

- U.S. Rep. Barney Frank, chairman of the House of Representatives Financial Services Committee, said on Tuesday he would introduce a bill next week to overturn a three-year-old U.S. ban on Internet gambling. The legislation, likely to be opposed by anti-gambling Republicans, would overturn a law imposed during the Bush administration that has hurt U.S. trade ties with the European Union.

- The U.S. banking system could be free of government money within a year, the powerful chairman of the U.S. House of Representatives Financial Services Committee said on Tuesday. Representative Barney Frank, a Democrat from Massachusetts, said it would be "good for public confidence" if large banks repay funds from the government's $700 billion Troubled Asset Relief Program, noting he had a difference of opinion with Treasury Secretary Timothy Geithner. "We're hoping there won't be any government funds in banks a year from now," Frank told the Reuters Global Financial Regulation Summit.

- IBM (IBM) said Tuesday it is raising its dividend and buying back more shares, underscoring its relative strength amid weakening business conditions. International Business Machines Corp said on Tuesday that it would begin paying a quarterly dividend of 55 cents per share, up 10 percent from the previous 50 cents. It is the 14th year in a row for the company to raise its dividend.

- Steve Wynn, chairman and chief executive at Wynn Resorts Ltd, (WYNN) sees "a little bit of stabilization" in Las Vegas, where the global recession has pushed revenue down about 20 percent. Speaking on Tuesday at the Milken Institute Global Conference, Wynn said visitors to Las Vegas were still spending less and room rates were lower, but the percentage of occupied hotel rooms was back up in the 90s.

- David Rubenstein, co-founder of the private equity firm Carlyle Group [CYL.UL], said the U.S. government program to buy toxic bank loans and securities should provide opportunities for good returns, but he needs to see the rules before committing to it. "We're always interested in looking for opportunities for good returns. I suspect this will be a good opportunity, but we need to know what the rules are. They haven't been formulated yet," Rubenstein said Tuesday on the sidelines of the Super Return private equity conference in Miami.

- Most Americans oppose a U.S. congressional investigation into harsh interrogation methods used on terrorism suspects during the Bush administration, a poll said on Tuesday. A CBS News/New York Times poll found that 62 percent of Americans do not think Congress should hold hearings to investigate the treatment of detainees, about the same proportion as in a similar poll in February. The poll found that 89 percent of Republicans opposed Congress holding hearings on interrogation policies, and 60 percent of independents also opposed such hearings. Democrats were more divided, with 46 percent saying Congress should hold hearings, and 51 percent saying they were not necessary. The poll found mixed views on Obama's decision to close the Guantanamo Bay U.S. prison for terrorism suspects by next January. The poll found that 47 percent think the prison should remain open, while 44 percent want it to be shut.

National Post:

- Canadian oil-and-gas explorer Nexen Inc. is one of 32 international oil companies competing to bid US$2.6-billion to work on some of Iraq's biggest oil and gas fields. Nexen, the only Canadian company in the group revealed by Reuters yesterday, has qualified to participate in the first bidding round for oil and gas contracts since the U. S.-led liberation in 2003. Iraq plans to award 20-year service contracts to boost output at the six oil fields on offer and to develop two gas fields in June.

Bear Radar

Style Underperformer:
Small-cap Value (-1.21%)

Sector Underperformers:
Gold (-2.72%), Oil Service (-1.84%) and Banks (-1.64%)

Stocks Falling on Unusual Volume:
OLN, DB, BMY, HSII, RCII, WMGI, CRDN, TRMB, STAR, SPWRA, RMBS, DFG, SMG, LAZ and FDP

Stocks With Unusual Put Option Activity:
1) PEP 2) HBC 3) SGR 4) GT 5) SWN

Bull Radar

Style Outperformer:
Small-cap Growth (+.50%)

Sector Outperformers:
HMOs (+3.49%), Hospitals (+2.33%) and REITs (+2.17%)

Stocks Rising on Unusual Volume:
DNDN, EW, CVS, DLTR, E, IBM, BP, IPCS, NVS, BIDU, NWPX, CNMD, VRTX, BWLD, TECH, AIRM, AMSC, SBUX, PCAR, LUFK, SYNT, CAKE, ENOC, CSTR, APEI, CTRN, PEZ, ASR, DSG, WAT, BCH, UHS, PAC, CUK and FPL

Stocks With Unusual Call Option Activity:
1) VRTX 2) ERTS 3) FST 4) SGR 5) GSK

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Tuesday Watch

Late-Night Headlines
Bloomberg:

- Industrial & Commercial Bank of China Ltd., the world’s largest by market value, said Allianz SE and American Express Co.(AXP) sold a combined $1.9 billion of shares as a lockup on their stakes in the Chinese lender ended today.

- Baidu.com Inc.(BIDU), operator of China’s most-used Internet search engine, posted a 24 percent increase in first-quarter profit as Web usage continued to grow in the world’s third-biggest economy. Baidu’s American depositary receipts rose $5.17, or 2.3 percent, to $230.03 in extended trading after closing at $224.86 on the Nasdaq Stock Market.

- Northern Trust Corp.(NTRS) plans to sell $1.25 billion in common stock and senior notes to fund a repurchase of the stake it sold to the U.S. Treasury.

- Petroleo Brasileiro SA(PBR), Brazil’s state-controlled oil company, plans to spend $111 billion through 2020 to develop the so-called pre-salt oil fields, Chief Executive Officer Jose Sergio Gabrielli said. The company and partners expect to produce 1.8 million barrels of oil a day from the pre-salt fields by 2020, Gabrielli said today at an event in Santos, Brazil. Petrobras’s total spending plan through 2013, including pre-salt investments, of $174.4 billion will likely create 243,000 jobs, Gabrielli said. Petrobras in November 2007 announced the discovery of the Tupi offshore field, which may hold as many as 8 billion barrels of oil beneath up to 3,000 meters of water and 7,000 meters of seabed, making it the largest find in the Americas since Mexico’s Cantarell. Tupi and nearby fields in Brazil’s pre-salt basin may almost double Petrobras’s oil reserves, the company said in January. The Iara field may start producing by 2013 and could hold as much as 4 billion barrels, Gabrielli said. Petrobras plans to set up a base in Rio de Janeiro or Sao Paulo states for exploration, development and production from the Santos Basin, Gabrielli said.

- Microsoft Corp.(MSFT), set to release a near-finished version of the Windows 7 operating system this week, said the program may go on sale by the year-end holiday season.

- A White House official apologized for sending an Air Force One backup plane swooping over New York Harbor for a photo shoot that frightened Wall Street workers and evoked fears of another terrorist attack. The director of the White House Military Office, Louis Caldera, said he had approved today’s flight and would take responsibility for “any distress” it caused. While federal officials “took the proper steps to notify state and local authorities in New York and New Jersey, it’s clear that the mission created confusion and disruption,” he said. “I thought, ‘Oh, hell,’ that it was 9/11 all over again,” said Kate Geraghty, a Verizon Communications Inc. sales executive who saw the airplane from Jersey City, New Jersey, across the Hudson River from Manhattan. “I thought, ‘Oh my God, this plane is going to crash.’”

- U.S. Steel Corp.(X), the largest U.S.- based steelmaker, reported a first-quarter net loss that was more than twice analysts’ estimates and cut its dividend as prices plunged. Moody’s Investors Service downgraded about $1.6 billion of the company’s debt to junk status. U.S. Steel fell $1.90, or 6.9 percent, to $25.81 at 6:32 p.m. in trading after the regular close of the New York Stock Exchange.

- ArcelorMittal(MT), the world’s biggest steelmaker, will probably seek to renegotiate terms on 27.5 billion euros ($36 billion) of loans after cutting production by almost half amid collapsing demand. The Luxembourg-based company, which will likely report a second consecutive quarterly net loss tomorrow, has to boost earnings over the rest of the year to avoid a breach of debt covenants, said Jonathan Pitkanen, a bond analyst at Aviva Plc. Steel demand must recover to avoid such an outcome, said Ingo Schmidt, an analyst at Hamburger Sparkasse in Hamburg.

- European Central Bank Governing Council member Ewald Nowotny said the ECB is prepared to expand its range of policy tools if necessary to ease the flow of credit through the economy. Officials “stand ready to use unconventional measures of quantitative easing to assure European firms and consumers access to credit at appropriate conditions,” Nowotny said in the text of a speech in New York yesterday. The central bank will also keep rates low for “as long a time as is required.”

Wall Street Journal:

- Regulators have told Bank of America Corp. and Citigroup Inc. that the banks may need to raise more capital based on early results of the government's so-called stress tests of lenders, according to people familiar with the situation. The capital shortfall amounts to billions of dollars at Bank of America, based in Charlotte, N.C., people familiar with the bank said. Executives at both banks are objecting to the preliminary findings, which emerged from the government's scrutiny of 19 large financial institutions. The two banks are planning to respond with detailed rebuttals.

- China Faces a Grad Glut After Boom at Colleges.

- DUBAI -- Developers here are scrambling to prevent a wave of investor defaults as they struggle to survive this city-state's real-estate bust. During a frenzied property boom, many investors bought property on speculation, expecting to be able to quickly flip homes -- sometimes entire floors in buildings -- before construction was finished. But in recent months, prices have cratered, some falling by more than 50%.

- As unemployment rises and discretionary income shrinks, millions fewer Americans are driving. For commuters, that means some of the worst bottlenecks in the country are easing. Americans drove 8.6 billion fewer miles in January and February than during the same months in 2008, according to the U.S. Department of Transportation. Mileage has been declining since the end of 2007.

- Negotiations continued unsuccessfully throughout the weekend between Senate Democratic lawmakers and mortgage industry representatives over legislation that would grant bankruptcy judges the ability to modify mortgage terms during bankruptcy proceedings. With no deal in sight, the bill's champion in the Senate, Sen. Richard Durbin, D-Ill., is facing the possibility that housing legislation may be brought to the Senate floor without the bankruptcy provisions, known as "cramdown," included.

- India’s Infrastructure Funds Fall.

- The United Auto Workers union would eventually own 55% of the stock in a restructured Chrysler LLC under the deal reached by the union and the auto maker, according to a summary of the agreement that was reviewed by the Wall Street Journal. Fiat SpA will "eventually" own 35% of Chrysler, and that the U.S. government and Chrysler's secured lenders together will end up owning 10% of the company, once it is reorganized, that summary said. The summary was distributed Monday afternoon at a gathering of union leaders in Sterling Heights, Mich., to discuss the pact. According to the summary, Chrysler will also issue a $4.59 billion note to the health care trust fund that the union will manage for retired workers. The agreement says Chrysler will pay $300 million in cash into the trust fund in 2010 and 2011, and increasing amounts up to $823 million in the years 2019 to 2023. The trust fund will also own a "significant" amount of Chrysler stock and will be allowed to appoint a representative to Chrysler's board, the summary says.

- Securities and Exchange Commission Chairman Mary Schapiro told a group of business journalists Monday that the agency is pursuing more than 50 investigations involving credit-default swaps and another 150 into active hedge funds. "In the short time I've been chairman, I have begun efforts to revitalize the agency," Schapiro said in prepared remarks before the Society of American Business Editors and Writers in Denver, Colo. "I've looked at things we can do differently. And I have let it be known far and wide that things must change." Both hedge funds and credit-default swaps are among the things that the Obama Administration is targeting for new regulations as Congress prepares to embark on a sweeping overhaul of the country's financial regulatory structure.

- The number of confirmed cases of a deadly new strain of the flu continued to rise Monday, as the World Health Organization moved one step closer to declaring a pandemic. The United Nations public health agency raised its global alert one notch, moving to a phase 4 alert from phase 3. The change recognizes that the new A/H1N1 virus spreads from person to person, and it signals that governments should prepare for outbreaks. Phase 6 declares a pandemic.

NY Times:

- Seeking to strengthen its presence on the iPhone and iPod Touch, Amazon has acquired Lexcycle, the company behind Stanza, a popular free e-book application for the iPhone, according to Lexcycle’s blog.

Reuters:

- Nigerian crude oil exports will exceed its implied OPEC production target in June with shipments averaging 1.83 million barrels per day (bpd), against 1.82 million scheduled for May, trade sources said on Monday. The Organization of the Petroleum Exporting Countries (OPEC) has set Nigeria an implied production target of 1.67 million bpd that came into effect on Jan. 1. Nigeria is one of a handful of countries that industry surveys have found to be significantly exceeding its OPEC production limit. Iran, Venezuela and Angola have also been exceeding their implied OPEC production targets, analysts say.

- A switch by some big investors chastened by the Madoff scandal and the credit crisis into managed accounts at hedge fund firms could end up penalizing smaller clients in mainstream funds. Managed accounts offer greater visibility and flexibility for larger investors such as funds of funds and big institutions by giving them direct ownership of underlying assets and the option to sell the portfolio if they want to get out quickly. However, investors in the mainstream hedge funds such as so-called high net worth individuals and small institutions unable to stump up $25 million (17.12 million pounds) or more to set up a managed account could be disadvantaged if managed account holders pull out of an asset before they do. "Who pays for your better liquidity? With managed accounts the problem doesn't go away, it's just been shifted on to investors who don't go down that route," said Robert Macrae, managing director of hedge fund firm Arcus Investment.

South China Morning Post:

- Harbin Power Equipment, one China’s three largest producers of power generation equipment, plans to cut output this year by 10 per cent to 20 per cent after customers delayed delivery or pulled orders.

- Shanghai, the mainland's financial and port hub, registered less than expected economic growth of 3.1 per cent for the first three months of the year, sparking concerns it might miss the 9 per cent target for the year.

China Securities Journal:

- China’s companies posted a combined profit of $9.8 billion, a decline of 26% from a year earlier.

Financial Express:

- India’s exports may contract 2% in the year ending March 31, the first time in seven years, citing GK Pillai, secretary at the Ministry of Commerce and Industry.

Late Buy/Sell Recommendations
Citigroup:

- Reiterated Buy on (URBN), target $20.

Night Trading
Asian Indices are -.75% to +.50% on average.
S&P 500 futures -.99%.
NASDAQ 100 futures -.69%.

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Earnings of Note
Company/EPS Estimate
- (CPO)/.46

- (FPL)/.78

- (BDX)/1.17

- (PFE)/.49

- (VLO)/.51

- (SMG)/1.26

- (JEC)/.88

- (CVH)/.25

- (BMY)/.47

- (MHP)/.18

- (UA)/.03

- (JAVA)/-.16

- (BEC)/.60

- (PNRA)/.56

- (CERN)/.51

- (AG)/.20

- (BWLD)/.47

Economic Releases

10:00 am EST

- Consumer Confidence for April is estimated to rise to 29.9 versus 26.0 in March.

Upcoming Splits
- None of note

Other Potential Market Movers
- The weekly retail sales report, S&P/CaseShiller Home Price Index, Richmond Fed Manf. Index, (CB) shareholders meeting, Barclays Retail/Restaurant Conference, (X) shareholders meeting and the (FO) shareholders meeting could also impact trading today.

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