Bull Radar

Style Outperformer:
Large-cap Value (-1.42%)

Sector Outperformers:
Drugs (+1.26%), HMOs (+.31%) and Education (-.54%)

Stocks Rising on Unusual Volume:
VNDA, NVS, MRK, FUJI, POT, AEM, BVN, GEOY, PTR, HELE, CFFN, ICLR, SAFM, GXP, MFB, SMG and JEC

Stocks With Unusual Call Option Activity:
1) STX 2) JWN 3) QSII 4) AMD 5) AMAT

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Wednesday Watch

Late-Night Headlines
Bloomberg:

- Intel Corp.(INTC) Chief Executive Officer Paul Otellini said orders this quarter are “a little better than expected,” signaling that the computer industry may start to recover from its worst slump since 2001. “A lot depends on June,” Otellini said today at a meeting at the company’s headquarters in Santa Clara, California. “So far so good.” Intel climbed 44 cents, or 2.9 percent, to $15.65 in late trading. The stock, up 3.8 percent this year, closed at $15.21 on the Nasdaq Stock Market. While corporations have put off replacing their PCs, demand from consumers “has held up reasonably well,” Sean Maloney, head of Intel’s sales and marketing, said today. Intel sees an opportunity to sell more server chips as companies replace older machines, he said. There is no “unhealthy” buildup of unsold parts, Maloney said. “We are at some kind of a new base -- we’ve seen things stabilize,” he said. “We’ve seen a return to confidence in some areas.”

- The cost of protecting investors in Asia-Pacific corporate and government bonds from default tumbled, according to traders of credit-default swaps. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan dropped 20 basis points to 212.54 as of 8:24 am in Singapore, according to Royal Bank of Scotland Group Plc. The Markit iTraxx Japan index was quoted 5 basis points lower at 245 as of 9:24 am in Tokyo, Barclays Plc prices show. The Markit iTraxx Australia index was quoted 17.5 basis points lower at 227.5 as of 10:28 am in Sydney, Citigroup Inc. data show.

- Republicans seized on an Obama administration document that says regulation of greenhouse gases by the Environmental Protection Agency is likely to cause economic harm to small businesses, communities and factories. Senator John Barrasso, a Wyoming Republican, cited the nine-page memo at a committee hearing today on the EPA’s proposed 2010 budget, saying it shows the agency’s finding in April that the gases are harmful to health was flawed. The document is a “smoking gun” that proves the decision was politically based, he said. The memo, part of an internal interagency review process that began in March, said EPA regulation of greenhouse gases under the Clean Air Act “is likely to have serious economic consequences for regulated entities throughout the U.S. economy.” It said there is concern the EPA “is making a finding based on ‘harm’ from substances that have no demonstrated direct health effects.” Republicans and Democrats on the Senate panel clashed today over the economic costs of climate-change legislation, a precursor to debate when the committee attempts to draft such a measure. “There exists no legitimate economic argument that regulating carbon dioxide would not significantly increase the cost of energy,” Senator David Vitter, a Louisiana Republican, said at the Senate committee’s hearing.

- Neelie Kroes, the European Union’s top antitrust enforcer, is seeking to fine Intel Corp.(INTC) more than 1 billion euros ($1.36 billion) for using rebates to thwart a competitor, a person with direct knowledge of the case said.

- Freddie Mac is seeking a $6.1 billion investment from the U.S. Treasury, a fifth of the aid tapped in March, as the mortgage-finance company used an accounting rule and gains on derivatives to help curtail losses. Freddie Mac said it will still need more financial help from the government and may have trouble coming up with the cash to pay dividends owed on Treasury funds already borrowed.

- A record 128,600 investment professionals have enrolled to take the Chartered Financial Analyst exam in June, angling to gain a hiring edge as the financial-services industry sheds jobs.

- The Homeland Security Department plans a new emphasis on finding and deporting illegal immigrants convicted of crimes, Secretary Janet Napolitano told a House panel. Testifying before the House Appropriations homeland security subcommittee today, Napolitano said her department’s proposed budget for the fiscal year beginning Oct. 1 includes $39 million to hire 80 new law enforcement employees to pursue criminals who are in the U.S. illegally. She said the department is working with state and local authorities to begin deportation proceedings for prisoners shortly before they end incarceration.

- China’s industrial production grew less than economists estimated in April as electricity output fell and exports tumbled. Retail sales climbed. Output rose 7.3 percent from a year earlier, the statistics bureau said today, after gaining 8.3 percent in March. That was less than the 8.6 percent median estimate of 20 economists surveyed by Bloomberg News. “The recovery is still quite fragile -- exports are still very weak,” said Isaac Meng,” a senior economist at BNP Paribas SA in Beijing. A decline in power output accelerated to 3.5 percent in April from 1.3 percent in March, the statistics bureau said. “If inventory stockpiling and the refiring of production has been premature, production is at risk of falling in coming months,” said Glenn Maguire, chief Asia-Pacific economist at Societe Generale SA in Hong Kong.

Wall Street Journal:

- Goldman Takes Heat for Conflicts at Whitehall. One of Goldman Sachs Group Inc.'s(GS) premier real-estate funds is in discussions with its lender to restructure debt on some of its biggest investments: Nevada casinos, German office buildings and a U.S. hotel chain. The wrinkle: The lender is Goldman Sachs. Investors were warned about potential conflicts of interest when they put money into this group of real-estate vehicles, which use the Whitehall name. Such funds were billed as "opportunity funds," huge, highly leveraged investments backed directly by Goldman, its employees and a group of outside investors. Overall, Goldman has raised $31 billion for various Whitehall funds over the past 18 years, with outsiders usually investing two-thirds or more into each one. With commercial real-estate values plunging, investors and their advisers have begun focusing on the conflicts. They say that Goldman is able to use its position as investor, lender and fee-collector to benefit itself at the expense of outsiders. For Whitehall's biggest fund, Whitehall Street Global Real Estate Limited Partnership 2007, the news has been almost all bad. In 2008, it wrote down $2.1 billion of the $3.7 billion invested between May 2007 and August 2008. But all wasn't lost for Goldman. During 2008, Goldman made at least $88 million in fees for arranging financing for Whitehall 2007 deals, plus an additional $30 million in advisory fees, and $19 million in property-management fees, according to documents for the first, second and fourth quarters of the year that were reviewed by The Wall Street Journal. In addition, the Goldman fund charges a 0.5% management fee on the gross cost of the fund's investments, which was $17.2 billion as of Dec. 31. Assets under management change quarterly, but assuming a static value of $17.2 billion for 2008, that would have earned Goldman an additional fee of $86 million. Such high fees at a time of poor performance have upset some outside investors in the fund. Adding to the discord, says one such investor: Goldman offered to buy out its employees' interest in the fund at a discount to net asset value late last year, weeks before further marking down the equity value of the fund. Outside investors didn't get the offer and suffered the markdown. Goldman is in an especially tricky position when acting as both a borrower and lender to itself, critics say. Concessions granted by Whitehall may benefit Goldman, the lender, at the expense of Whitehall investors, the critics add.

- China is likely to surpass the U.S. to become world’s largest online game market this year, according to a recent report by market research firm iResearch. China’s online game market generated revenue of 20.8 billion yuan ($3.04 billion) in 2008, up 52.2% over the previous year. Over 80% of the revenue came from big, multiplayer online games, with the rest generated from Web games and mobile games.

- House Energy and Commerce Chairman Henry A. Waxman has signaled that he may accept further compromises to his bill to curb U.S. greenhouse-gas emissions as the Obama administration and congressional Democrats face stepped-up attacks from Republicans on the politically sensitive proposal. Mr. Waxman (D., Calif.) told representatives of the Sierra Club, the Environmental Defense Fund and the National Wildlife Federation in a meeting late Monday that he is considering amending the bill to require a cut in U.S. greenhouse-gas emissions of roughly 14% to 17% below 2005 levels by 2020 rather than a cut of 20% in that time frame, as the public version of his proposal calls for, according to three people who were briefed on the discussion but didn't attend the meeting. Republicans pounced Tuesday on a White House document that says regulating greenhouse gases under the Clean Air Act "is likely to have serious economic consequences for regulated entities throughout the U.S. economy, including small businesses and small communities." The document, an amalgamation of comments by government agencies sent from the Office of Management and Budget to the Environmental Protection Agency earlier this year, presents a more dire view of the consequences of regulating greenhouse gases under the Clean Air Act than the Obama administration has publicly stated.

- Amid the worst falloff in consumer spending in decades and a sharp decline in its own results, retailer Macy's Inc.(M) is chasing customers of fallen competitors to rebuild its sales.

- The Treasury Department is expected to notify a group of asset managers Wednesday that they've been culled from the 104 that applied to oversee the first wave of Public-Private Investment Program funds. The selected firms, widely expected to include mega-managers BlackRock Inc. and the Pacific Investment Management Co., will then negotiate with Treasury over the structure of their proposed funds before they're formally identified as qualified under PPIP, expected in early June, according to a Treasury official.

- The swine-flu outbreak has focused a spotlight on a looming risk for hospitals and their patients: a shortage of technicians to run critical lab tests. Vanderbilt University Hospital's lab had to pull staffers from other parts of the hospital and ask technicians to work double shifts to test incoming patients for swine flu earlier this month. "It was all hands on deck for a week," says Michael Laposata, chief pathologist at the large medical center in Nashville, Tenn. Swine flu has had minimal impact in the U.S. so far. But in the event of a major infectious-disease outbreak, labs at smaller hospitals around the country "would never have enough expertise or resources to mount a response," Dr. Laposata says. "This is a major patient-safety issue, right behind taking out the wrong kidney or giving 10 times the dose of a drug."

- Companies are rushing to raise money at the most frenzied pace in years and they are finding eager investors, a sign that markets are beginning to heal themselves. It is a startling shift. For much of the past year, even the largest companies found it difficult, if not impossible, to raise fresh money. Investors were more keen to safekeep their cash than to hand it over. Some companies had to drain their financial reserves or, sometimes, even close down, accelerating the global downturn. Now, the floodgates are wide open.

- Voting is drawing to a close Wednesday in India's largest election ever, and a slowing economy, terrorism and the rural poor have been front and center in the campaign. But of growing concern are the country's teeming new megacities, which are swelling rapidly even as jobs dry up and funding for infrastructure disappears.

- Google Inc.(GOOG) Tuesday said it would add a new menu to its search-results page to help users refine results by a broader range of variables. It also announced an online service that compiles search results into a spreadsheet.

NY Times:

- To go out in a small boat along Singapore’s coast now is to feel like a mouse tiptoeing through an endless herd of slumbering elephants. One of the largest fleets of ships ever gathered idles here just outside one of the world’s busiest ports, marooned by the receding tide of global trade. There may be tentative signs of economic recovery in spots around the globe, but few here. Hundreds of cargo ships — some up to 300,000 tons, with many weighing more than the entire 130-ship Spanish Armada — seem to perch on top of the water rather than in it, their red rudders and bulbous noses, submerged when the vessels are loaded, sticking a dozen feet out of the water. So many ships have congregated here — 735, according to AIS Live tracking service of Lloyd’s Register-Fairplay Research, a ship tracking service based in London — that shipping lines are becoming concerned about near misses and collisions in one of the world’s most congested waterways, the Strait of Malacca, which separates Malaysia and Singapore from Indonesia.

- About $12 billion was pulled out of accounts at Bernard L. Madoff’s firm in 2008, according to several people briefed on an analysis of Mr. Madoff’s business records. About $6 billion, or half, was taken out in just the three months before the financier was arrested in December and charged with operating an extensive Ponzi scheme, these people said. Those figures offer a bit of hope for Mr. Madoff’s thousands of defrauded customers.

- Nearly three months after President Obama approved a $787 billion economic stimulus package, intended to create or save jobs, the federal government has paid out less than 6 percent of the money, largely in the form of social service payments to states.

Business Week:
- Here is the case for a price bubble: Oil inventories are at a 19-year high; the U.S. alone has some 1 billion barrels sitting in storage tanks, according to Mark Williams at the Associated Press. Demand for oil is set to fall to its lowest level in five years, says the U.S. Energy Information Administration. Over at the Oil Drum, Rune Likvern says up to 3 million barrels a day of oil is being bought purely for storage, including on the sea. But he predicts that such purchases – which help to prop up prices – will decline because storage is becoming harder and harder to find; when they do, Likvern says, prices will fall substantially.

- China Looms Large in India’s Election.

LATimes:

- A federal jury in Miami convicted five men today of plotting with Al Qaeda to topple Chicago's Sears Tower and bomb FBI offices in hopes of igniting an anti-government insurrection. A sixth man was acquitted. The verdict allows government prosecutors to claim overall victory in a case that dragged on for years and cost millions of dollars, resulting in two hung juries and the acquittal of a seventh man originally charged in the case. According to prosecutors, the men, led by Batiste, wanted to bring down the U.S. government and sought an alliance with the Al Qaeda terrorist network to carry out attacks. Batiste recruited the other defendants as "soldiers" in his terrorist army, prosecutors said. The group's aims included blowing up the 110-story Sears Tower, poisoning salt shakers in restaurants and launching terrorist attacks "just as good or greater than 9/11," prosecutors said.

- Allegiant Air’s(ALGT) prudent ways help it soar amid slump in travel. The little known Las Vegas carrier is the nation’s most profitable; first-quarter profits rose nearly 200% to $28.2 million on revenues of $142.1 million. And that’s despite teaser fares as low as $9.

Fox News:

- Some lawmakers are questioning the wisdom of releasing hundreds of photos potentially showing U.S. military personnel abusing prisoners in Iraq and Afghanistan in the aftermath of the Sept. 11 terrorist attacks on New York City and the Pentagon. "If we release the pictures, the odds are that Al Qaeda and other terrorist groups will then use our pictures to recruit people to come into the war against us," Sen. Joe Lieberman. I-Conn., told FOX News. The Pentagon plans to release the photos by May 28 in response to a Freedom of Information Act lawsuit filed by the American Civil Liberties Union. A recent military study found a troubling connection. The study, based on the interrogation of 48 detainees, concluded that a motivating factor for bombers was the humiliation of Muslims, depicted in the photos shown repeatedly in the Arab media and on the Internet. The head of the American Legion warned in the Wall Street Journal that "a picture may be worth a thousand words, but is it worth the death of a single American soldier?...The Defense Department owes it to the soldiers to appeal to the U.S. Supreme Court in order to block the release of these photos." Lieberman told FOX News the release of the photos is not about transparency because the photos are old and Congress has moved aggressively to prevent abuse in the future through the Detainee Treatment Act. "This is voyeurism," he said. "There's no value to these pictures and again, tremendous potential harm to American and a lot of Americans, particularly those who are good enough to serve us in uniform."

Politico:

- The CIA has long been on the receiving end of harsh rebukes from Congress — on intelligence failures leading up to the war in Iraq, on secret prisons abroad and on the harsh interrogation techniques used on terrorism suspects. But with the release of records showing that it briefed members of Congress along the way, the CIA has effectively put lawmakers on the defensive. The 10-page document, which was prepared after an April 20 request by Rep. Peter Hoekstra (R-Mich.), lists 40 instances in which the CIA briefed members of Congress between September 2002 and March 2009. But they provide a vague description of the briefings, giving just enough information to fuel claims that House Speaker Nancy Pelosi (D-Calif.) and other top officials have long known about waterboarding and other tactics but did little to stop the techniques from being used. Sen. Orrin Hatch (R-Utah), the longest-serving member of the Intelligence Committee, said that if Pelosi or other Democrats objected to the interrogation techniques when they were briefed on them, they could have offered legislation — or withheld appropriations for the program. “We’re not without power up here,” Hatch said. “Now, they can make a fuss on policy differences, but to try and besmirch the people who had these tough decisions to make during those trying times is really offensive to people like me.” Asked if he felt the relevant lawmakers were kept informed of the interrogation tactics, Sen. Pat Roberts of Kansas, who was the top Republican on the Intelligence Committee, offered what he called “a strong, affirmative yes.”

Business Standard:

- India’s exports have declined for the seventh consecutive month in April. Quick estimates available with the commerce ministry reveal that the country’s exports dipped by 33 per cent to $10.7 billion. Similarly, imports too contracted by 35 per cent to $16 billion in April 2009, as against $16.07 billion in the year-ago period.

Late Buy/Sell Recommendations
Citigroup:

- Upgraded (HD) to Buy, target $32.

Night Trading
Asian Indices are -.25% to +.75% on average.
S&P 500 futures +.21%.
NASDAQ 100 futures +.04%.

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Earnings of Note
Company/EPS Estimate
- (M)/-.20

- (DPS)/.29

- (TDW)/1.96

- (LIZ)/-.22

- (CLWR)/-.34

- (CA)/.29

- (ASEI))/1.04

- (JACK)/.44

- (WFMI)/.19

Economic Releases

8:30 am EST

- The Import Price Index for April is estimated to rise .6% versus a .5% gain in March.

- Advance Retail Sales for April are estimated unch. versus a -1.2% decline in March.

- Retail Sales Less Autos for April are estimated to rise .2% versus a -1.0% decline in March.

10:00 am EST

- Business Inventories for March are estimated to decline -1.1% versus a -1.3% decline in February.

10:30 am EST

- Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,000,000 barrels versus a +605,000 barrel increase the prior week. Gasoline supplies are expected unch. versus a -167,000 decline the prior week. Distillate inventories are estimated to rise by +1,250,000 barrels versus a +2,428,000 barrel gain the prior week. Finally, Refinery Utilization is expected to rise by +.4% versus a +2.65% increase the prior week.

Upcoming Splits
- None of note

Other Potential Market Movers
- The Fed’s Lockhart speaking, Fed’s Plosser speaking, weekly MBA mortgage applications report, BMO Capital Ag/Protein/Fertilizer Conference, Bank of America Healthcare Conference, (IBM) Analyst Meeting, (MA) Investor Meeting, Robert Baird Growth Conference and the UBS Financial Services Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by automaker and technology stocks in the region. I expect US equities to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the day.

Stocks Finish Mostly Lower, Weighed Down by Bank, Airline, Gaming, Homebuilder and Technology Shares

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In Play

Stocks Most;ly Lower into Final Hour on More Shorting, Financial Sector Pessimism, Rising Energy Prices

BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Technology longs and Medical longs. I added (IWM)/(QQQQ) hedges this morning, thus leaving the Portfolio 75% net long. The tone of the market is negative as the advance/decline line is lower, most sectors are declining and volume is above average. Investor anxiety is above average. Today’s overall market action is mildly bullish. The VIX is falling 3.65% and is very high at 31.64. The ISE Sentiment Index is below average at 121.0 and the total put/call is about average at .86. Finally, the NYSE Arms has been running high most of the day, hitting 2.16 at its intraday peak, and is currently 1.78. The Euro Financial Sector Credit Default Swap Index is rising 1.28% today to 122.33 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 2.53% to 151.68 basis points. This index is also well below its Dec. 5^th record high of 285.99. The TED spread is falling 4.56% to 73 basis points. The TED spread is now down 390 basis points since its all-time high of 463 basis points on October 10th. The 2-year swap spread is falling 3.76% to 44.75 basis points. The Libor-OIS spread is rising 4.11% to 71 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is rising 1 basis point to 1.53%, which is down 111 basis points since July 7th. The 3-month T-Bill is yielding .18%, which is up two basis points today. The major averages are rallying from morning lows this afternoon, however bank and tech shares remain somewhat “heavy.” Nikkei futures indicate an +92 open in Japan and DAX futures indicate an +45 open in Germany tomorrow. I expect US stocks to trade mixed-to-lower into the close from current levels on more shorting, rising financial sector pessimism and higher energy prices.

Today's Headlines

Bloomberg:

- U.S. stocks erased declines after former Federal Reserve Chairman Alan Greenspan said the nation is seeing a “very significant” increase in the availability of money and he expects continued market improvement.

- Prudential Financial Inc.(PRU), the second-largest U.S. life insurer, plans to seek “opportunistic acquisitions,” Chief Executive Officer John Strangfeld said.

- A clip on Google Inc.’s YouTube of a congressman scolding the Federal Reserve’s inspector general on her oversight of taxpayer funds has garnered more than 166,000 viewings in six days since a hearing on Capitol Hill. Representative Alan Grayson, a Florida Democrat, chastised Inspector General Elizabeth Coleman for what he deemed a lack of oversight of the central bank’s off-balance-sheet transactions. The video titled “Is Anyone Minding the Store at the Federal Reserve?” was posted a day after Coleman’s May 5 testimony to a House Financial Services subcommittee. “Do you know who received that $1 trillion-plus that the Fed extended and put on its balance sheet since last September?” Grayson asked. Coleman responded by saying she didn’t know. “We have not looked at that specific area,” she said in the nearly five-and- a-half minute clip.

- India’s industrial production fell the most in 16 years in March as the worst global recession since World War II damped demand for the nation’s exports. Output at factories, utilities and mines declined 2.3 percent from a year earlier after a revised 0.7 percent drop in February, the statistics agency said in New Delhi today. That was more than three times analysts’ estimates and the worst performance since January 1993, according to Bloomberg data.

- India’s opposition Bharatiya Janata Party will cut spending and increase tax collection if it returns to power this month to plug a revenue shortfall that imperils growth, former finance minister Yashwant Sinha said. “You will have to cut back on whatever expenditure you can without cutting back on essentials,” Sinha, 71, said in an interview in New Delhi yesterday, without specifying how much he would seek to curb expenditure.

- The rally in US stocks may continue as the largest money managers shift their record levels of cash into equities, according to Bank of America Corp. Professional investors had $2.51 trillion in money-market funds on April 27, suggesting they are still shunning risk, Bank of America’s Mary Ann Bartels wrote. “This cash is a future source of demand for US equities and a contrarian bullish signal,” said Bartels, who ranked second among analysts who study price charts in Institutional Investor magazine’s most recent survey.

- India’s steelmakers, facing increased competition from producers in China and Russia, have asked the government to raise tariffs on imports they say are being sold at prices that don’t reflect costs. “These countries are willing to sell at any price,” said Seshagiri Rao, joint managing director at JSW Steel Ltd., India’s third-biggest producer. “Chinese steelmakers enjoy subsidies.” China, Russia and Ukraine accounted for 57% of global output in March, from 46% in November. The joint stake of Japan, India, the US, South Korea and Germany fell to 22% from 29%, according to the World Steel Assoc.

- The U.S. reported the first budget deficit for April in 26 years, recording a shortfall in the month that usually sees a jump in tax payments before the Internal Revenue Service’s mid-month deadline. The excess of spending over revenue climbed to $20.9 billion, compared with a surplus of $159.3 billion in the same month a year earlier, the Treasury said today in Washington. For the fiscal year to date, the shortfall totaled $802.3 billion, more than four times the year-to-date gap of $153.5 billion in April 2008. For the fiscal year that ends Sept. 30, the deficit is projected to reach a record $1.75 trillion, according to a Congressional Budget Office forecast, as the recession crimps revenue and President Barack Obama’s administration spends and cuts taxes in a bid to spur growth. That would be almost four times the previous fiscal year’s $454.8 billion shortfall. “When the government can’t post a surplus in April, you know things are dire,” said Richard Yamarone, director of economic research at Argus Research Corp. in New York.

- DigitalGlobe Inc.(DGI), the provider of satellite images to Google Earth and U.S. intelligence agencies, plans to sell $264.6 million in stock, becoming just the third U.S. technology initial public offering this year. The deal, scheduled to price tomorrow, will raise $16.6 million for the Longmont, Colorado-based company, with the rest going to hedge funds and institutional investors, according to a regulatory filing.

Wall Street Journal:

- Senate leaders are considering new federal taxes on soda and other sugary drinks to help pay for an overhaul of the nation's health-care system. The taxes would pay for only a fraction of the cost to expand health-insurance coverage to all Americans and would face strong opposition from the beverage industry. They also could spark a backlash from consumers who would have to pay several cents more for a soft drink. On Tuesday, the Senate Finance Committee is set to hear proposals from about a dozen experts about how to pay for the comprehensive health-care overhaul that President Barack Obama wants to enact this year. Early estimates put the cost of the plan at around $1.2 trillion. The administration has so far only earmarked funds for about half of that amount.

- Inflation-linked U.S. government debt has rallied since the start of this year, but now the market is setting up for a short-term correction with the inflation outlook remaining subdued in coming months. For Mihir Worah, manager of the $12.1 billion Real Return Fund at bond-fund giant Pacific Investment Management Co., that means trimming the fund's short-term position in Treasury inflation-protected securities, or TIPS, "close to neutral" from the bullish view held two months ago.

- Pakistani army commandos on Tuesday landed in the high mountains of the Swat Valley where top militant commanders were believed to be hiding, a significant new move in a conflict the army says has created 800,000 new refugees.

- U.S. oil field service company Weatherford International Ltd. (WFT) has won a deal worth $224.4 million to drill 20 wells in the Buzurgan oil field in southern Iraq, an Iraq cabinet spokesman said Tuesday.

- Microsoft Corp.(MSFT) is developing a new videocamera for its Xbox 360 videogame console that will allow players to control games with the movement of their bodies, according to people familiar with the matter.

CNBC:

- Several large US banks undertook big capital-raising efforts on Tuesday, hoping to satisfy regulators who want to see bigger cushions against a deep recession, or proof they have enough of a buffer already.

- The Standard & Poor's 500 could hit 1,050 within the next year even as the economy struggles to recover, noted Goldman Sachs analyst Abby Joseph Cohen told CNBC.

- Former New York Governor Eliot Spitzer hasn’t learned a thing from his recent ordeals and has destroyed as much value as anybody else in America, Kenneth Langone, former director of the New York Stock Exchange, told CNBC Tuesday.

- This is not a bear market rally but a cyclical bull market, said Barton Biggs, managing partner at Traxis Partners. “I don’t think it’s too late [to get into the market],” Biggs told CNBC. “We’re about half or 60 percent of the way through the upside.” “So we’ve still got significant room on the upside,” he said.

Barron’s:
- While Bank of America (BAC) and others dilute common shareholders with new stock, Bank of New York Mellon (BK), or BONY, looks like a much better bet to us. As a non-traditional bank, BONY owes the government less and could well rise further with a rebound in overall market activity.

MarketWatch:
- Shares of Foundation Coal(FCL) rallied more than 20% Tuesday after it agreed to be bought by Alpha Natural Resources(ANR) in a deal valued at around $2 billion.

NY Post:

- Billionaire corporate raider and activist investor Carl Icahn plans to continue his assaults on companies he feels need change, but he's doing it more through bonds rather than stocks, according to an investor letter obtained by The Post. The 73-year-old agitator said he sees a "once in a generation" opportunity to buy distressed debt, according to the letter from hedge fund Icahn Partners, which is dated May 1 and is signed by Icahn.

Washington Times:

- President Obama's nominee for the Treasury Department's top legal job still can receive almost $3 million in pay over the next three years from one of the nation's largest financial-services companies under a compensation plan approved by government ethics lawyers. If confirmed as the department's next general counsel, George W. Madison would earn a government salary of $153,200 and get an additional $955,000 next year from his previous employer, TIAA-CREF, as a participant in the New York-based company's "long-term compensation plan," according to a government ethics filing. Retirement-planning company TIAA-CREF manages more than $300 billion in retirement and other assets for 3.6 million members, mostly working in the medical, research and academic fields. The company has a big presence in Washington, spending more than $1 million to lobby Congress, the White House, the Treasury Department and other agencies over the past year. Ethics specialists say Mr. Madison's continuing financial relationship with TIAA-CREF, which has lobbied government officials on numerous issues, including the Troubled Asset Relief Program (TARP), deserves close scrutiny, given the company's broad interests on issues in which the Treasury Department holds sway.

Business Insider:

- Lenny Dykstra's creditors are becoming an angry mob, says Keith Kelly at the Post. Especially now that he's lost a self-described $3 million stock-advice deal with TheStreet.com. LENNY "Nails" Dykstra, the former big-league outfielder turned financial-stock picker and glossy-magazine publisher, is drowning in a sea of bad debts and lawsuits that have pushed his total indebtedness to around $50 million, according to one source.

USAToday:

- In a bid to win over Internet-savvy travelers, AirTran Airways (AAI) this summer will become the first large U.S. airline to offer wireless Internet access on every flight nationwide. AirTran plans to have all 136 of its Boeing 737 and 717 jets equipped with in-flight wireless service by late July, CEO Bob Fornaro said Monday. For a fee, the Orlando-based, low-fare carrier will offer Wi-Fi for passengers' wireless-enabled laptops, smartphones and personal digital assistants.

VentureBeat:

- Developers may be making tens of millions of dollars through games and virtual goods on Facebook’s platform, but the social network itself hasn’t had a way to get a share of that money. This may be about to change, as it plans to begin testing a payments system with developers in several weeks, according to industry sources.

Reuters:
- General Motors Corp(GM) stock plunged more than 22 percent to a 76-year low on Tuesday, a day after GM's top executives dumped their shares as the automaker heads toward a bankruptcy or a restructuring that would all but wipe out existing shareholders.

- The risk of Dendreon Corp's (DNDN) Provenge prostate cancer vaccine failing to win U.S. approval in its second attempt is "low," the biotechnology company's CEO said on Tuesday.

Globe and Mail:

- Great-West Lifeco Inc. GWO-T is looking for acquisition opportunities in the U.S., where the life insurance industry will be transformed by a wave of deals, its chief executive officer says. "We are looking there, and we are interested in doing acquisitions," Allen Loney, the head of the Winnipeg-based company, said of the U.S. as well as Britain.

CTV:

- Best Buy Co. Inc. (BBY) is looking to lessons it learned in Canada to help double its annual sales to $100-billion (U.S.) within a decade, as it aggressively pursues the kind of growth that has made it one of the best-performing American stocks over the past two decades.

GulfNews.com:
- A total of 27 real estate projects are up for possible cancellation in Dubai as the Land department review the status of them. Bin Galita had said earlier that he expected around 25 per cent of projects in Dubai would be cancelled, a figure he said is now "almost the same".