Bear Radar

Style Underperformer:
Mid-cap Value (+.06%)

Sector Underperformers:
HMOs (-1.62%), Defense (-.88%) and Hospitals (-.45%)

Stocks Falling on Unusual Volume:
VIP, CRDN, BTH, CI, PMTI, ULTA, ARL and CAE

Stocks With Unusual Put Option Activity:
1) VMED 2) KMP 3) NAV 4) AMX 5) AET

Bull Radar

Style Outperformer:
Mid-cap Growth (+.70%)

Sector Outperformers:
Semis (+2.52%), Alt Energy (+2.20%) and Road & Homebuilders (+1.52%)

Stocks Rising on Unusual Volume:
MRVL, STEC, BLK, OMTR, INFY, SEIC, NOK, CLMT, PCZ, OSK, MFW, PFWD, CSKI, FUQI, CRAI, JOYG, MCHP, URBN, OGXI, SLAB, SPTN, FWRD, TRMB, MPWR, ECLP, CEPH, ASEI, GIII, BCA, CRT, MW, TXN and AXR

Stocks With Unusual Call Option Activity:
1) MIR 2) LEA 3) TXN 4) MCHP 5) VRSNS

Links of Interest

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

Tuesday Watch

Late-Night Headlines
Bloomberg:

- Texas Instruments Inc.(TXN), the second- largest U.S. semiconductor maker, raised its second-quarter sales and profit forecasts as customer replenish inventories. The shares advanced 4.5 percent in extended trading.

Wall Street Journal:

- Lack of a coordinated and aggressive cleanup plan for euro-zone banks could hamper economic recovery in the 16 countries that share the euro, the International Monetary Fund said Monday in a report that suggests recent glimmers of hope could yet be quashed by banking-sector weakness across Europe's economic heartland. "To secure recovery and a return to self-sustaining growth, policy makers need to take further decisive action, especially in the financial sector," the IMF said in its twice-yearly assessment of the euro-zone economy.

- Two pressure points are emerging in Congress's rush to pass health-care legislation by the August break: how to pay for the package and whether to create a new public health-insurance plan.

- A top executive for NYSE Euronext (NYX) will ask lawmakers Tuesday to put some pressure on the Securities and Exchange Commission to tighten its regulation of dark pools by regulating them just like exchanges.

- The Obama administration wants Europeans to put their banks through more rigorous public stress tests to help ensure that the institutions survive if the economy slips from bad to worse. Treasury Secretary Timothy Geithner will likely discuss the issue in Italy later this week during closed-door meetings with finance ministers from the Group of Eight leading nations. The U.S. has an ally in the International Monetary Fund, which on Monday warned that economic recovery in the euro zone could be retarded by banks burdened with bad assets.

- The Securities and Exchange Commission has asked investment and brokerage firms to turn over information concerning their dealings with public pension funds, people familiar with the matter say. The agency has asked firms to give them an array of information about their workings with public pension funds, including about advisory fees and the use of placement agents, the middlemen who earn fees by helping investment firms secure pension-fund business, a person familiar with the matter said.

- All the companies listed on the Nasdaq exchange will now get at least some form of research coverage, courtesy of the Nasdaq OMX Group Inc., including nearly 900 that currently don't get any analyst coverage. Nasdaq OMX said Monday that it entered an agreement with the Chicago-based independent research firm Morningstar Inc.(MORN) to provide research profiles targeted at retail investors.

CNBC.com:
- All 10 of the largest U.S. banks under orders to raise additional capital as a buffer against further economic shocks have submitted their plans to do so, the Federal Reserve said on Monday.

NY Times:

- After just a few months of relief at the pump, cheap gasoline is disappearing. Gas prices have risen 41 days in a row, to a national average of almost $2.62 a gallon. That is a sharp increase from the low of $1.62 a gallon that prevailed at the end of last year. Refinery problems are producing especially high prices in the Midwest, a region that was already reeling from the economic crisis. Michigan, the state with the highest unemployment rate, at 12.9 percent, is now paying the highest gasoline prices, averaging $2.93 a gallon. The national jump in prices, far larger than the normal seasonal increase, is pulling billions of dollars from the pockets of drivers. It threatens to curtail a modest recovery in consumer spending on items like apparel and electronics. “This hits everyone,” said Robert J. Shiller, an economist at Yale. “It has the potential to affect your confidence.” He said that the recent rise in gasoline prices could effectively offset the new $400 to $800 payroll tax cut most employees are receiving this year as part of the Obama administration’s effort to stimulate the economy. Consumers last summer were pulling $1.5 billion a day from their wallets to fuel their vehicles. By January, as oil prices collapsed, they were spending only $600 million a day. But now they are back to daily spending of around $1 billion, Tom Kloza, chief oil analyst at the Oil Price Information Service, said. The price increase mystifies some analysts, who say that oil demand remains weak. According to the International Energy Agency, worldwide demand is down 2.6 million barrels a day from last year, mostly because of declines in driving and slower economic activity in the United States and other industrialized countries. Oil inventories are high. “I’m scratching my head,” said Adam Sieminski, chief energy economist at Deutsche Bank, who attributes oil’s rise to an influx of investment dollars. Because of the economic downturn, petroleum refiners around the country slowed gasoline production at the end of last year, and more recently they took extra time to complete the switch from winter to summer fuel blends.

- After weeks of labor strife and 12-hours of voting, members of the Newspaper Guild at the Boston Globe narrowly rejected a proposed package of wage and benefit cuts, despite a threat from the newspaper’s owner, The New York Times Company, that such a rejection could precipitate a unilateral, 23 percent cut in pay.

Business Week:
- Google(GOOG) boosted its share of the fast-expanding China search business by three percentage points in the first quarter as the market boomed. Google took 32.8% of search revenues, up from 29.8% in Q4 and 25.8% a year ago, according to iResearch. However, its share of total searches fell to 20.9% from with 23.0% in Q4. Its share was 18.7% in Q1 2008. Google and market leader Baidu together accounted for 95.3% of search revenues in China in the first quarter, with the remainder taken by smaller rivals such as Yahoo China, Sogou, Sina and NetEase. China's search service market surged 41.2% year-on-year in the first quarter, boosted by an increase of search engine marketing activities by SMEs, iResearch said.

MSN Finance:

- Canada is launching a major arm-twisting effort in Washington on Tuesday that targets American congressmen and senators vulnerable to tit-for-tat retaliation against U.S. protectionism. Trade Minister Stockwell Day said Canadian trade officials from across the United States are descending on Congress and will be meeting with lawmakers armed with numbers about how many jobs in their districts could be lost if Canada retaliates against Buy America provisions. "This is the ongoing full-court press to get the attention of Congress that the Buy America provisions as currently constituted are going to wind up hurting jobs, hurting business on both sides of the border," he said in an interview.

Rasmussen:

- Wal-Mart’s(WMT) still number one, and Costco has a way to go to catch up. Sixty-four percent (64%) of Americans have at least a somewhat favorable view of Wal-Mart, including 24% who are very favorable toward the merchandising giant.

CBS News:

- New York State Senate Republicans on Monday replaced Malcolm Smith as Majority Leader after two dissident Democrats switched sides, giving the GOP control, CBS 2 has learned. The flip of senators Pedro Espada Jr. of the Bronx and Hiram Monserrate of Queens gives Republicans a 32-30 edge in the chamber. Call it a coup, call it a devious plan to change leadership, but at the end of the day Democrats are out of power in the New York State Senate and Republicans were.

Politico:

- The Supreme Court delayed the pending sale of Chrysler to Italian carmaker Fiat Monday, dealing a potential blow to the Obama administration’s hopes for a quick sale of the ailing American giant. Justice Ruth Bader Ginsburg issued a stay of pending bankruptcy proceedings “pending further order.” The delay could just be a hiccup in the proceedings, or an indication of the Court’s intent to take a more in depth look at the deal. A group of Indiana-based secured debt holders filed suit against the deal, saying they had been treated unfairly by the way the Obama administration structured the bankruptcy.

USA Today.com:

- To launch its new Taurus sedan, Ford Motor(F) today embarks on a summer of bull sessions. CEO Alan Mulally is dispatching executives to 100 cities — from Olympia, Wash., to Winston-Salem, N.C. — to build enthusiasm before Taurus hits showrooms in August. Executives are supposed to talk up the Taurus and other new vehicles in the lineup as they visit broadcasters, newspapers and just about any other place.

AppleInsider:

- Apple(AAPL) on Monday closed out its presentation at WWDC 2009 by introducing the new iPhone 3G S, the fastest iPhone yet with up to twice the speed of the iPhone 3G, longer battery life, a high-quality 3 megapixel autofocus camera, easy to use video recording and hands free voice control. It goes on sale June 19th, while the existing 8GB iPhone 3G drops to $99 starting today.

Financial Times:

- Citigroup on Monday confirmed it would launch a long-awaited $33bn capital raising this week in a move aimed at allaying investors’ fears over the offering and concerns over mounting regulatory pressure. The announcement came as the Federal Deposit Insurance Corporation, one of Citi’s regulators, continued to press the bank to replace Vikram Pandit, Citi’s chief executive, and his closest lieutenants, according to people close to the situation. However, the FDIC has so far failed to persuade Citi’s other main regulators – the Treasury, the Office of the Comptroller of the Currency and the Federal Reserve – to oust Mr Pandit and his team.

Times of India:
- Are fake drugs manufactured in China being pushed into various African countries with the `Made in India' tag? The Indian government has long suspected this to be the case, but it now has definite evidence for the first time.

Late Buy/Sell Recommendations
Citigroup:

- Reiterated Buy on (VFC), target $73.

- Reiterated Buy on (STI), target $22.

Night Trading
Asian Indices are -.25% to +.50% on average.
S&P 500 futures +.09%.
NASDAQ 100 futures +.27%.

Morning Preview
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Today in IBD
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Conference Calendar

Who’s Speaking?
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Rasmussen Business/Economy Polling

Earnings of Note
Company/EPS Estimate
- (TITN)/.13

- (TLB)/-.49

- (NDN)/.05

- (KFY)/-.05

- (THO)/.10

- (NAV)/.94

Economic Releases

10:00 am EST

- Wholesale Inventories for April are estimated to fall 1.2% versus a 1.6% decline in March.

Upcoming Splits
- None of note

Other Potential Market Movers
- The weekly retail sales reports, IBS/TIPP Economic Optimism Index, US selling $35B 3-Year Notes, UBS Tech & Service Conference, CSFB Convergence Conference, Needham Internet & Digital Media Conference, (IP) Investor Day, William Blair Growth Stock Conference, Piper Jaffray Consumer Conference, Goldman Sachs Healthcare Conference, Merrill Lynch Samurai Conference, RBC Capital Tech/Communications/Media Conference and the Morgan Stanley Shipping/Commodities Conference 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 higher and to weaken into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the day.

Stocks Finish Slightly Lower, Weighed Down by HMO, Airline and Restaurant Shares

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In Play

Stocks Slightly Higher into Final Hour on Less Financial Sector Pessimism, Short-Covering

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Defense longs, Financial longs and Biotech longs. I added (IWM)/(QQQQ) hedges this morning and then covered them, thus leaving the Portfolio 100% net long. The tone of the market is mildly negative as the advance/decline line is slightly lower, sector performance is mixed and volume is about average. Investor anxiety is high. Today’s overall market action is mildly bullish. The VIX is rising .07% and is very high at 29.63. The ISE Sentiment Index is about average at 147.0 and the total put/call is above average at .93. Finally, the NYSE Arms has been running above average most of the day, hitting 1.87 at its intraday peak, and is currently .71. The Euro Financial Sector Credit Default Swap Index is rising 2.52% today to 104.33 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 7.92% to 126.63 basis points. This index is also well below its Dec. 5^th record high of 285.99. The TED spread is rising 4.96% to 48 basis points. The TED spread is now down 415 basis points since its all-time high of 463 basis points on October 10th. The 2-year swap spread is rising 6.74% to 52.69 basis points. The Libor-OIS spread is rising 5.15% to 41 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is falling 2 basis points to 2.0%, which is down 64 basis points since July 7th. The 3-month T-Bill is yielding .17%, which is unch. today. Nikkei futures indicate an +25 open in Japan and DAX futures indicate an +56 open in Germany tomorrow. I expect US stocks to trade mixed-to-lower into the close from current levels on higher long-term rates, rising credit market angst, more shorting and profit-taking.