Bull Radar

Style Outperformer:
Large-cap Value (+.39%)

Sector Outperformers:
Papers (+1.42%), Utilities (+1.05%) and Energy (+.44%)

Stocks Rising on Unusual Volume:
VIP, RTP, STP, UBS, ZEUS, ISLE, FUQI, VRSN, VPRT, LULU, LOGI, SPWRA, CTRP, NDN, OSG, OXM and GMR

Stocks With Unusual Call Option Activity:
1) WLP 2) DAL 3) CROX 4) SQNM 5) AXL

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Wednesday Watch

Late-Night Headlines
Bloomberg:

- Goldman Sachs Group Inc.(GS) and Morgan Stanley(MS) credit rallied after the U.S. Treasury said the lenders and eight other banks may buy back government shares, freeing them from oversight and pay curbs. Goldman Sachs’s $3.2 billion of 5.95 percent notes due in 2018 jumped 5.6 cents to a one-year high of 100.6 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Credit-default swaps on Morgan Stanley fell 11.5 basis points to 214.5 basis points, signaling an improvement in the perception of its credit, according to CMA DataVision in London. Credit-default swaps on Goldman Sachs fell 7.5 basis points to 137.5 basis points, according to CMA. Contracts on Citigroup Inc. declined 5 basis points to about 380, and Bank of America Corp. credit-default swaps dropped 15 basis points to 170 basis points.

- The U.S., the world’s largest corn producer, will harvest enough this marketing year to meet demand for feed, ethanol output and exports, U.S. Grains Council President Kenneth Hobbie said. “Will the U.S. have enough coarse grains to go around? The answer is yes,” Hobbie said at a conference in London organized by the International Grains Council today. “In the past two weeks, U.S. coarse grain producers got the job done.”

- Chesapeake Energy Corp., the second- largest producer of U.S. natural gas, and Southwestern Energy Co., the only company in the Standard & Poor’s 500 Energy Index to rise last year, say a bill in Congress threatens the technique that helped spur the domestic natural-gas boom in the past few years. Hydraulic fracturing would no longer be exempt from the Safe Drinking Water Act under a bill introduced today by U.S. Representatives Diana DeGette, Maurice Hinchey and Jared Polis, Democrats from Colorado, New York and Colorado, respectively. Companion legislation in the Senate was introduced by Senators Robert Casey, a Pennsylvania Democrat, and Charles Schumer, a Democrat from New York. The drilling method, which pumps one million gallons of water, 50,000 pounds of sand and chemicals into the ground at high pressure to fracture rock, would be in the U.S. Environmental Protection Agency’s jurisdiction should the bill pass. Production using hydraulic fracturing would almost come to a stop as the industry waits for the EPA to develop a system to handle millions of well permits, said Chris Tucker, a spokesman for Energy In Depth, a Washington-based energy coalition. Passage of the bill would mean drilling for so-called unconventional gas may plummet as much as 50 percent, according to a January study by the Energy Department’s Office of Fossil Energy. The bill would also be partly responsible for an annual 245 billion-cubic-foot drop in production, according to Energy In Depth. “We use a lot of water in whatever we do,” Southwestern Chief Executive Officer Steve Mueller said June 1 at a conference hosted by RBC Capital Markets. “From our perspective at our company, that’s one of the biggest issues out there, to make sure somebody in Washington doesn’t decide how you frack a well.” The bill could have a “significant impact” on the industry and Southwestern’s financial condition, the Houston- based company said in a regulatory filing. Legislative efforts to make permitting for hydraulic fracturing more stringent would have “an adverse effect” on operations, Chesapeake, based in Oklahoma City, said in a public filing. Hydraulic fracturing will be required for 60 to 80 percent of all the wells drilled in the U.S. over the next decade, said John Christiansen, a spokesman for The Woodlands, Texas-based Anadarko Petroleum Corp., the fourth-biggest producer of U.S. gas. “It’s already regulated by the states,” Christiansen said. “This is just another step that could stall development and end up impacting consumers by the amount they pay for their energy.” Hydraulic fracturing is “relatively far below the drinking-water level,” Jen Snyder, a principal at energy researcher Wood Mackenzie, said in a telephone interview.

- The U.S. Securities and Exchange Commission sued two California men on claims they ran an $80 million Ponzi scheme promising Korean-American investors annual returns of as much as 36 percent in foreign-currency trading. Peter Son, 37, and Jin K. Chung, 46, had about 500 investors in the United States, South Korea and Taiwan, the SEC said today in a civil suit filed at federal court in San Francisco.

- A U.S. bankruptcy judge approved the dropping of 789 Chrysler LLC car dealerships, a court filing showed. U.S. Bankruptcy Judge Arthur Gonzalez ruled today that the bankrupt car company’s plan to cut the dealerships is “an exercise of sound business judgment” and “appropriate and necessary under the circumstances.” A lawyer for a group of Chrysler dealers that sought to delay the company’s asset sale in May called it “unprecedented and improper.”

- Japan’s wholesale prices fell at the fastest pace in more than 22 years in May, adding to signs that deflation may take root in the world’s second-largest economy. Producer prices, the costs companies pay for energy and raw materials, tumbled 5.4 percent from a year earlier, the biggest slide since March 1987, the Bank of Japan said today in Tokyo.

- BHP Billiton Ltd., the world’s largest mining company, settled annual coking coal contract prices at about 58 percent less than 2008 as demand for the product used to make steel declines.

Wall Street Journal:

- The Obama administration is dropping its plan to cap salaries at firms receiving government bailout money, leaving them subject to congressionally imposed limits on bonuses, according to people familiar with the matter. The move is likely to end months of confusion on Wall Street about separate pay directives from the White House and Congress. The administration is expected to announce the compromise on Wednesday. In addition to standing behind the restrictions passed by Congress in February, the administration plans to push for broad changes in compensation practices across the financial-services industry, these people say.

- Oppenheimer & Co. is expanding its investment-banking group and is looking to hire five to 10 investment bankers over the next several months. Marshall Heinberg, head of investment banking, said Oppenheimer wants to add bankers to its roster and pick up displaced talent in the market.

- The European Central Bank expects further financial-sector weakness could help keep the euro-zone economy from expanding before the middle of next year, a top policy maker said in an interview. ECB officials believe the euro-zone recession could weaken the 16-nation bloc's strained banking system. "That is the reason why we are also cautious about the gradual recovery path in our scenario," said Yves Mersch, who sits on the ECB's 22-member Governing Council. In the interview, he said financial-sector weakness, which could push more European banks to fail, is "already penciled in" to policy makers' calculations. He suggested policy makers see their role shifting from actively shoring up the bloc's financial system and economy to monitoring the effect of measures they have taken.

- If imitation is the sincerest form of flattery, Imax Corp. should feel sincerely flattered. The steady stream of Hollywood films flowing through Imax theaters, combined with the development of a digital-projection system, have resulted in a large expansion of Imax's commercial-theater network in the last year. With many of the best locations off-limits due to exclusivity agreements between Imax and customers, some cinema chains have come up with their own large-format-style auditoriums.

- Texas elected officials Tuesday railed against federal efforts to curb global warming, claiming it would throttle the state's economy -- one of the few that generated job growth last year. State comptroller Susan Combs said that if passed, a landmark climate change bill winding its way through Congress could cost the state 164,000 jobs and shave some $25 billion per year, or 2%, off the state's total economic output. "Texas is the kitchen of the country. We cook up all of the products that are used elsewhere," said Ms. Combs, a Republican, referring to the state's large petrochemical and plastics industry. "The recipe for disaster is being cooked up in Washington D.C.," she added.

- SEC Deluged by Support for Uptick Rule’s Return. If the Securities and Exchange Commission is seeking a consensus on its proposed measures to curb short selling of stocks, it has one. In the more than 800 letters the regulator has received since it put the proposal up for comment in April, investors, Mr. Adamson among them, are overwhelmingly calling for the return of the uptick rule, which restricts short selling when a stock's price moved downward in the most recent trade. It is seeking comment until June 19.

CNBC.com:
- The Supreme Court Tuesday evening, cleared the way for the U.S. government-backed sale of Chrysler to a group led by Italian carmaker Fiat, a victory for the bankrupt automaker and the Obama administration.

- The U.S. House of Representatives approved legislation on Tuesday intended to spur auto sales by providing consumers with up to $4 billion in cash vouchers to buy more fuel efficient vehicles. A similar proposal is working its way through the U.S. Senate where proponents continue to wrangle with political and procedural hurdles. President Barack Obama has urged Congress to quickly finalize the measure.

NY Times:

- In today’s recession-racked economy, penny-pinching is a national pastime. But people are still opening their wallets for smartphones. Sales of BlackBerrys, iPhones and other smartphone models are rising smartly and are projected to increase 25 percent this year, according to Gartner, a research business.

- The president of the Russian republic of Bashkortostan, who has hung on by his fingernails through repeated periods of friction with the Kremlin, pushed his luck last week when he gave a scathing interview to a Moscow newspaper, charging that Russia’s political institutions are “embarrassing to look at” and that the country "is walking away from the process of democratization."

- Don’t expect William A. Ackman to be appearing on any more episodes of “Squawk Box” any time soon. The outspoken hedge fund manger, who recently lost a high-profile proxy fight with Target, has decided to step away from the spotlight after receiving what he called “disappointing press,” including a highly critical article written by the New York Times financial columnist Joe Nocera.

- Fourteen months after being elevated to the governor’s job, David A. Paterson is deeply unpopular among New Yorkers, who doubt his ability to grapple with the state’s increasingly bleak economic situation, according to a poll by The New York Times, Cornell University and NY1 News. Voters have also taken a personal dislike to Mr. Paterson, who now is less popular in the state than his predecessor, Eliot Spitzer, who resigned in disgrace after being identified as the client of a prostitution ring. Only 21 percent of New York voters say they have a favorable view of Mr. Paterson. Seven in 10 respondents said he did not deserve to be elected in 2010.

IBD:

- He doesn't consider himself a bargain shopper. But he goes in for the deals he gets at the off-price Ross store. He says you can find the same brand-name clothes sold in department stores at Ross Stores (ROST) for a discount.

CNN:

- Two weeks change a lot in the oil markets. At the end of May CNNMoney.com ran a story asking if $60 oil will kill any economic recovery. 'No," most analysts said - consumers could shoulder $60 crude, and analysts didn't see prices going much higher. Now oil is touching $70 a barrel. Goldman Sachs recently said it sees crude at $85 by the year's end. With the economy still on life support, oil is drifting dangerously close to being the wet blanket at the recovery's party.

Rasmussen:

- Only 42% of those who currently own a General Motors car are even somewhat likely to buy a GM product for their next car. That figure includes just 30% who are Very Likely to do so. The latest Rasmussen Reports national telephone survey shows that 43% of current GM owners are not likely to buy another GM car, while 16% are not sure.

Politico:

- Sen. Ted Kennedy’s committee released a 615-page health care reform bill Tuesday, but left out the details for now on the most contentious issues, such as the public insurance option and the employer mandate. The Democratic bill from the Senate Health, Education, Labor and Pensions Committee includes some of the most liberal proposals under consideration on Capitol Hill – and was immediately met with deep skepticism from Republicans. “Unfortunately, the draft bill that Democrats released today is a partisan wish-list that will put us on the road to government-rationed health care,” said Sen. Mike Enzi (R-Wyo.), the ranking Republican on the HELP committee. “We’ve been meeting with Democrats for months to discuss health care reform, but from what I’ve seen in this proposal, it doesn’t look like they listened at all.”

Reuters:

- Google(GOOG) is looking to buy smaller technology companies to enhance its technology portfolio, Chief Executive Eric Schmidt said in an interview with the Fox Business network on Tuesday. Schmidt said Google plans to focus on the cloud, mobile, and open source distribution of software in the next year.

- Short interest on the Nasdaq and NYSE rose in late May, the exchanges said on Tuesday, suggesting bearish sentiment may be creeping back into the stock market after a three-month rally.

- A House of Representatives committee on Tuesday said it would subpoena the Federal Reserve to force the central bank to surrender documents regarding its role in Bank of America's takeover of Merrill Lynch last year. The subpoena comes two days before Bank of America Chief Executive Ken Lewis is set to testify before the House Oversight Committee, which is probing the transaction, what Lewis knew about Merrill's financial condition and potential regulatory pressure to complete the deal.

- The Obama administration and congressional Democrats got a clear view on Tuesday of the uphill political path they face in pushing for tighter regulation of U.S. banks and financial markets. With the economy showing some signs of recovery, Treasury Secretary Timothy Geithner told a Senate committee that President Barack Obama next week will unveil his long-awaited plan for sweeping financial regulation reform. Targeting not only banks and markets for change, but also executive pay, hedge funds and so-called "systemic risk" to the economy, the Obama plan has been evolving for six months. Some of its most ambitious proposals have softened amid aggressive lobbying by the financial services industry and intractable political realities in Congress.

- Leading Senate Democrats unveiled on Tuesday a plan to reshape U.S. healthcare that calls for sweeping insurance market reforms and prohibits insurers from denying coverage or charging more due to medical history. The measure also would require individuals to buy insurance, provide subsidies to help make coverage affordable and set up a new government plan to help provide medical coverage for the uninsured.

Financial Times:

- A top executive at SAP is set to outline a new strategy on Wednesday for delivering software over the internet, as the German software group struggles to respond to a market that poses a significant long-term threat to its business. The early pace in the market for on-demand software, also known as “software-as-a-service”, has been set by newcomers such as Salesforce.com, which normally charge a monthly subscription fee for customers to access their software over the internet.

Guardian:

- China is planning a vast increase in its use of wind and solar power over the next ­decade and believes it can match Europe by 2020, producing a fifth of its energy needs from renewable sources, a senior Chinese official said yesterday. Zhang Xiaoqiang, vice-chairman of China's national development and reform commission, told the Guardian that Beijing would easily surpass current 2020 targets for the use of wind and solar power and was now contemplating targets that were more than three times higher. In the current development plan, the goal for wind energy is 30 gigawatts. Zhang said the new goal could be 100GW by 2020. "Similarly, by 2020 the total installed capacity for solar power will be at least three times that of the original target [3GW]," Zhang said in an interview in London. China generates only 120 megawatts of its electricity from solar power, so the goal represents a 75-fold expansion in just over a decade. "We are now formulating a plan for development of renewable energy. We can be sure we will exceed the 15% target. We will at least reach 18%. Personally I think we could reach the target of having renewables provide 20% of total energy consumption."

CBC News:

- Lost in Apple Inc.'s unveiling Monday of the latest, faster version of its iPhone was the price cut of an older model to $99 US with a two-year contract with AT&T. The drop in price, announced at Apple's Worldwide Developers Conference in San Francisco, was expected, in one sense, as technology companies typically offer better deals on older models to get rid of excessive inventory and make way for pricier products, said Philip Redman, an analyst with Gartner. But in making a mobile handset with internet capabilities available for $99, Apple could also be signaling a shift in the mobile phone market, as smartphones move from a niche product to consumer mainstay.

Ming Pao Daily:
- China’s industrial output grew 8.9% in May from a year earlier. Consumer price4s fell 1.4% and exports declined by 24%. The export decline was the largest in three months.

China Securities Journal:

- China should prepare policies to combat potential stagflation risks as inflation may accelerate more rapidly than economic recovery, government researchers wrote. The central bank should adjust monetary policies to “neutral” from “proactive” if inflation rise higher than 3% while gross domestic product growth remains below 9%, they said.

Late Buy/Sell Recommendations
Citigroup:

- Reiterated Buy on (URBN), raised estimates, boosted target to $27.

- Rated (DNDN) Buy, target $35.

- Reiterated Buy on (VZ), target $35..

- Reiterated Buy on (MCHP), target raised to $30.

Night Trading
Asian Indices are +.25% to +1.50% on average.

Asia Ex-Japan Inv Grd CDS Index +.3%

S&P 500 futures +.13%.
NASDAQ 100 futures +.07%.

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Earnings of Note
Company/EPS Estimate
- (BF/B)/.49

Economic Releases

8:30 am EST

- The Trade Deficit for April is estimated to widen to -$29.0B versus -$27.6B in March.

10:30 am EST

- Bloomberg consensus estimates call for a weekly crude oil inventory build of +100,000 barrels versus a +2,866,000 barrel increase the prior week. Gasoline supplies are expected to rise by +750,000 barrels versus a -215,000 barrel decline the prior week. Distillate inventories are estimated to rise by +1,500,000 barrels versus +1,661,000 barrel gain the prior week. Finally, Refinery Utilization is expected to rise by +.2% versus a +1.15% gain the prior week.

2:00 pm EST

- The Monthly Budget Deficit for May is estimated to widen to -$181.0B versus -$165.9B in April.

- The Fed’s Beige Book

Upcoming Splits
- None of note

Other Potential Market Movers
- The Fed’s Lacker speaking, Fed’s Duke speaking, US Selling $19B 10-Year Notes, Bloomberg Global Confidence Index, weekly MBA mortgage applications report, William Blair Growth Stock Conference, RBC Capital Tech/Communications/Media Conference, UBS Tech/Service Conference, Needham Biotech & Medtech Conference, BofA/Merrill Transportation Conference, Deutsche Bank Alt Energy Conference, (HD) Investor Conference, Piper Jaffray Consumer Conference, Goldman Sachs Healthcare Conference, CSFB Convergence Conference and the (AGU) Investor Day could also impact trading today.

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

Stocks Finish Higher, Boosted by Technology, Commodity, Homebuilding, Construction and Alt Energy Shares

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In Play

Stocks Rising into Final Hour on Stable Long-Term Rates, Short-Covering, Less Economic Fear

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Defense longs, Technology longs and Medical 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 gaining and volume is about average. Investor anxiety is high. Today’s overall market action is bullish. The VIX is falling 5.01% and is high at 28.28. The ISE Sentiment Index is about average at 144.0 and the total put/call is about average at .83. Finally, the NYSE Arms has been running above average most of the day, hitting 1.66 at its intraday peak, and is currently 1.16. The Euro Financial Sector Credit Default Swap Index is falling .16% today to 103.70 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 falling 2.82% to 123.06 basis points. This index is also well below its Dec. 5^th record high of 285.99. The TED spread is falling .52% 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 declining 8.34% to 46.0 basis points. The Libor-OIS spread is rising 3.06% to 42 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is unch. at 2.0%, which is down 64 basis points since July 7th. The 3-month T-Bill is yielding .17%, which is unch. today. It is a big positive to see long-term rates stable after today’s Treasury auction. The (XLF) is .6% higher today, but has been basing for about 4 weeks. Any meaningful reversal lower in rates, after tomorrow’s more important Treasury auction, could help push the (XLF) up through its 200-day moving average, which should further boost the broad market. It is noteworthy that gold is only .2% higher on the day despite the sharp US dollar decline. Despite relative weakness in defense stocks today, one of my longs (ASEI), is breaking out on above-average volume. This stock would make an excellent acquisition for a larger firm and I still see substantial upside in the shares from current levels. Nikkei futures indicate an +64 open in Japan and DAX futures indicate an +17 open in Germany tomorrow. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, investment manager performance anxiety, technical buying, stable long-term rates and less economic fear.

Today's Headlines

Bloomberg:

- JPMorgan Chase & Co.(JPM), Goldman Sachs Group Inc.(GS) and Morgan Stanley(MS) were among 10 lenders that won U.S. Treasury approval to buy back $68 billion of government shares, freeing them from added oversight that curbed lending practices, hiring and pay.

- Warren Buffett’s Berkshire Hathaway Inc. doubled its municipal-bond holdings in nine months amid record swings in the value of the securities that the billionaire investor labeled “unthinkable.” Berkshire increased its investment in debt issued by state and local governments to $4.05 billion as of March 31 from $2.05 billion on June 30, 2008, the Omaha, Nebraska-based company said in regulatory filings. Berkshire added $1.09 billion to the bet in last year’s third quarter and $985 million in the first three months of 2009.

- Treasury Secretary Timothy Geithner said federal bank regulators and the Securities and Exchange Commission will play key roles in the administration’s effort to change the way financial executives are paid. Geithner said the Obama administration is moving ahead with its guidelines on corporate compensation, part of a broader plan for an overhaul of financial regulation that will be announced next week.

- Treasury notes maturing in five years and less gained as yields near a seven-month high helped spur investor demand at the government’s record-tying auction of $35 billion of three-year securities.

- France plans to sell 30-year and inflation-protected bonds this year as the economic slump forces the country to raise a record amount of debt.

- Goldman Sachs Group Inc.(GS) and UBS AG will stop publishing independent stock-research reports in the U.S. next month after a settlement forcing banks to produce them expires. Goldman Sachs and UBS both said in e-mailed statements today that they will stop offering third-party research after the agreement expires on July 26.

- The Standard & Poor’s 500 Index is approaching a so-called golden cross that’s considered a buy signal by analysts who make predictions based on patterns in price charts. A golden cross occurs when the 50-day moving average, which is currently at 878.04 for the S&P 500, rises above the 200-day moving average, which is at 918.33, Bloomberg data show. The formation implies further gains for the stock market, according to this type of technical analysis.

- U.S. 10-year Treasury yields may have peaked, MIG Investments SA said, citing technical indicators. The TD Combo indicator, which examines a security’s price patterns to determine whether a trend is losing momentum, signaled the increase in 10-year yields may be coming to an end, according to Paul Day, chief market analyst at MIG in Neuchatel, Switzerland. A second technical indicator, called the TD D-Wave, also shows a possible top in yields, he said.

- The Wall Street firms that trade directly with the Federal Reserve say speculators betting that interest rates may head higher this year are wrong. Policy makers will keep the target for overnight loans between banks in a range of zero to 0.25 percent this year, according a survey of 15 of the 16 primary dealers of U.S. government securities that trade with the central bank. A majority predict no increase until at least the second half of 2010.

Wall Street Journal:

- The Obama administration is backing away from seeking a major reduction in the number of agencies overseeing financial markets, people familiar with the matter say, suggesting that the current alphabet-soup of regulators will remain mostly intact. Administration officials had suggested they might push for major regulatory consolidation in the wake of the financial crisis. But now they expect to call for most existing agencies to have broader powers to limit risk-taking by financial institutions, say the people familiar with the planning.

- Internet traffic will increase fivefold over the next five years, driven in large part by a jump in the amount of video transmitted across the network, according to Cisco Systems. The finding highlights a study of the demand on communications networks between 2008 and 2013 that the computer-equipment maker plans to release Tuesday. By 2013, Cisco expect Internet traffic—in this case a broad category that includes delivery of content to televisions and mobile phones—to reach about 56 exabytes per month, up from about nine exabytes per month in 2008. More than 90% of this traffic will come from video–be it television, video on demand, or file sharing between computers. Cisco also predicts that video chat will increase tenfold between 2008 and 2013. Another place where Cisco predicts the amount of data will explode is mobile, as the amount of data flowing to mobile devices will double each year, increasing 66 times by 2013. Again, video will be the fastest growing category.

- Hedge fund assets continued to shrink in the first quarter, but outflows have started to slow, according to the newest Lipper TASS Asset Flows report. Net outflows amounted to US$115.71 billion in the first three months of the year, 21% less than outflows in the previous quarter. Globally, hedge fund assets are estimated to have decreased to US$1.18 trillion at the end of March, from US$1.29 trillion at the end of December 2008. All hedge fund strategies continued to post outflows in the first quarter as the industry faced more investor redemptions amid volatile global markets. Equity long-short funds recorded the most outflows, losing US$34.04 billion, followed by event-driven and multi-strategy funds.

- Suicide attackers in a truck launched an assault Tuesday on a luxury hotel commonly used by foreigners in Peshawar, firing guns as they stormed past guards and then setting off a huge blast that killed at least five people and wounded 65 more, Pakistani officials said. No one immediately claimed responsibility for the attack in the largest city in Pakistan's restive northwest, but it fit the pattern of recent Taliban attacks the militants said were in retaliation for a military campaign against militants in the Swat Valley region.

CNBC:

- A Senate committee has approved opening the eastern Gulf of Mexico to oil and gas drilling within 10 miles (16 kilometers) of the Florida Panhandle and within 45 miles (72 kilometers) of the rest of the state's coastline.

NY Times:

- The crisis has presented the European Union with its greatest challenge, but even many committed Europeanists believe that the alliance is failing the test. European leaders, their focus on domestic politics, disagree sharply about what to do to combat the slump. They have feuded over how much to stimulate the economy. They argue about whether the European Central Bank should worry more about the deep recession or future inflation. And they have rushed to protect jobs in their home markets at the expense of those in other member countries.

LA Times:

- Broadcasters compete to put TV on cellphones. The digital switch will let live video be sent to mobile devices -- phones, computers, car systems -- on the newly available analog spectrum. Contenders include MobiTV, Qualcomm's(QCOM) Flo TV and Transpera.

FINalternatives:

- Renaissance Technologies finally turned the corner in May, although its positive return paled in comparison to that of its fellow hedge funds and of the broader markets. RIEF rose between 0.61% and 0.8% in May, depending on which of its eight share classes one invests with. But the fund is still down by double digits after a brutal March and April; through the first four months of the year, the fund was down between 16.86% and 17.61%, while the average hedge fund is up in excess of 10%.

Reuters:
- Global revenue in the chip foundry market is expected to post a sequential rise in the second quarter after three quarters of declines, but 2009 will remain challenging for foundries, market search firm iSuppli said. Global revenue for foundries, or contract chipmakers, including sector leaders TSMC, UMC and Chartered Semiconductor, was set to rise to $3.6 billion in the second quarter, iSuppli Corp said in a statement seen by Reuters on Tuesday. That would be an increase of about 60 percent from the first quarter's $2.25 billion, iSuppli said.

- As the economic crisis squeezes U.S. government budgets and priorities shift beyond defense, the world's top defense contractors will likely turn to acquisitions to ensure they can keep growing. They won't be looking for blockbuster deals but takeovers for less than $1 billion in niche areas that have been identified by governments as high priorities.

Financial Times:
- Standard & Poor’s, the ratings agency, on Tuesday warned that sovereign ratings of a number of Asian economies had come under pressure as their massive economic stimulus measures put a strain on their budgets. The warning came as Fitch Ratings cut Malaysia’s long-term currency rating from A+ to A on concerns over the country’s mounting budget deficit. Malaysia has introduced M$67bn (US$19bn) in stimulus packages. “The worst of the economic dislocation in Asia Pacific appears to be over, if recent indicators are to be believed, but fiscal deterioration resulting from stimulus and banking sector support measures will continue to put pressure on a number of sovereign ratings in the medium term,” it said. Fitch Ratings did not appear to agree with S&P that the worst was over, as it downgraded the outlook for a number of Asian economies on Tuesday.

Telegraph:

- Lord Rothschild, the head of the English branch of the banking dynasty, has withdrawn his investment from Atticus Capital, the hedge fund where his son is co-chairman.

YnetNews.com:
- Palestinian officials said Monday they were close to reaching an agreement with the US according to which the Obama administration would demand an Israeli withdrawal from positions that were manned by Palestinian forces prior to the outbreak of the second intifada at the end of September 2000.

Emirates Business 24/7:
- Emirates NBD's (ENBD) non-performing retail loans (NPLs) have increased by double digits in the past six months. The bank has also seen an increase in fraudulent activities, primarily in documentation, a senior bank executive said. "For the retail business, NPLs have increased by double digits in the past six months especially from unsecured business such as personal loans and credit cards," Suvo Sarkar, Executive Vice-President and General Manager, Retail Banking, Emirates NBD told Emirates Business.

Haaretz.com:

- Prime Minister Benjamin Netanyahu believes that U.S. President Barack Obama wants a confrontation with Israel, based on Obama's speech in Cairo last week, Netanyahu's confidants say. In Netanyahu's opinion, the Americans believe an open controversy with Israel would serve the Obama administration's main objective of improving U.S. relations with the Arab world, the aides say. Israel historically has depended on the White House to balance the consensus of officials in the state and defense departments; this consensus usually leans toward the Arab side. Israeli officials say that under Obama, the White House has become the main problem in relations.

Aswat al-Iraq:

- Iraq started developing crude oil deposits near its borders with Kuwait and Iran, citing an Oil Ministry spokesman.