Thursday Watch

Late-Night Headlines
Bloomberg:

- The financial crisis is over and credit markets have healed, said Royal Bank of Canada President and Chief Executive Officer Gordon Nixon. “The financial crisis I think is over, if you define it as a crisis,” Nixon, 52, told reporters today at the International Economic Forum of the Americas/Conference of Montreal. “We are now returning to a much more normal environment.”

- China’s exports fell by a record as the global recession cut demand for goods produced by the world’s third-largest economy. Overseas sales dropped 26.4 percent in May from a year earlier, the customs bureau said in a statement on its Web site today. That compares with the median estimate for a decline of 23 percent in a Bloomberg News survey of 15 economists, and a 22.6 percent contraction in April.

- Comcast Corp.(CMCSA), the largest U.S. cable operator, will offer some television shows over the Internet to a test group of subscribers in the coming weeks, Chief Operating Officer Stephen Burke said. Comcast is teaming up with Time Warner Inc. on the feature, called OnDemand Online, Burke said in an interview. The cable operator plans to offer it to more customers by the end of the year, he said.

- The U.S. Treasury Department is considering issuing rules this summer to allow lenders to modify commercial real estate loans without triggering tax penalties on investors as the industry braces for an increase in defaults, a person familiar with the matter said. The Real Estate Roundtable, a Washington trade group, began in December to urge Treasury and the Internal Revenue Service to waive tax penalties that would otherwise be assessed on investor pools known as Real Estate Mortgage Investment Conduits and Real Estate Investment Trusts.

- House Republican staffers said Federal Reserve and Treasury officials overstepped their authority and pressured Bank of America Corp. to complete its Merrill Lynch & Co. purchase, in a memo obtained by Bloomberg. The memo prepared by the staffers for Republican lawmakers at a House Oversight Committee hearing tomorrow cites what it identifies as excerpts from internal Fed e-mails to support their stance. The committee issued a subpoena to the Fed yesterday for documents related to the transaction.

- BP Plc Chief Executive Officer Tony Hayward said demand for oil coming from the U.S. gasoline market “has probably peaked” as ethanol blending gains ground and Congress works on enforcing fuel efficiency. The U.S. has the potential to offset future higher energy demand with efficiency measures over the next 10 years, Hayward said at a presentation of BP’s Statistical Review of World Energy yesterday in London. At the same time, investment in more biofuel production and the possible end of ethanol import restrictions may lead to replacing petroleum in transport fuels. “We probably sold as much gasoline into the U.S. as we’ll ever sell” in the first half of last year, Hayward said. The U.S. “is not a growth market. Gasoline demand in the U.S. fell last year for the first time since 1991, according to the Energy Department in Washington. Motorists burned 8.964 million barrels of the fuel daily in 2008, 3.5 percent less than a year earlier, amid recession-driven job losses and wage cuts. The slump continued into 2009. World oil production may peak at some stage, driven by limited demand from consumers, Hayward said. Rising oil prices may encourage wider use of alternative sources of energy and biofuels production expansion to substitute crude. “The world has ample proven reserves” to “meet the world’s needs for decades to come,” Hayward said. “It will be a demand- side phenomenon, not a supply-side phenomenon,” which will limit global crude oil production. “Demand for fuel for transport in the U.S. has probably peaked” relating to hydrocarbons, he said. BP is targeting the U.S. ethanol market as it plans to invest between $5 billion and $6 billion to expand production of the biofuel in Brazil. In May, it has appealed to Californian regulators to set the first U.S. example by suspending state import tariffs on Brazilian ethanol. “We believe fundamentally in free and open energy markets and a tariff on imported ethanol is the tariff on the free energy markets,” Hayward said. “It would be a good thing” to cancel the Brazilian import restrictions, he said.

- Japan’s economy shrank less than the government initially estimated as business investment and inventories fell at a slower pace. Gross domestic product shrank at a record 14.2 percent annual pace in the three months ended March 31, less than the 15.2 percent reported last month, the Cabinet Office said today in Tokyo.

- Petroleo Brasileiro SA(PBR) had its debt rating cut to the lowest investment grade level by Standard & Poor’s, which said Brazil’s state-controlled oil company may need partners to help finance its investment plan.

Wall Street Journal:

- Dell Inc.(DELL) is cranking up its mergers and acquisitions engine, just as competition for technology deals begins heating up again. While Dell officials have publicly said they want to do more deals, they have given few specifics. But Chief Executive Michael Dell expects his company to acquire a "significant-sized company" in coming months, according to a person who has spoken with the CEO. The computer maker wants to expand its data-storage and tech-services businesses, according to people who have recently spoken with its chief financial officer, Brian Gladden.

- A canny trade by a small brokerage firm in two markets at the heart of the financial crisis has left some of the biggest players on Wall Street crying foul. The trade, by Amherst Holdings of Austin, Texas, was particularly galling to the big banks because it turned what they believed was a sure-fire profit into a loss. The burned banks include J.P. Morgan Chase & Co., Royal Bank of Scotland Group PLC and Bank of America Corp. Some banks have reached out to two industry trade groups about Amherst's actions, and the groups are reviewing the transaction, according to people familiar with their thinking. "It's all-out warfare" between the banks and Amherst, said a senior banker at one firm that lost money. At issue is a move by Amherst to boost the price of bonds to avoid paying out on credit-default swaps it had sold. Banks are questioning whether Amherst set them up by selling credit-default swaps and then rendering them worthless.

- Rising interest rates threaten to dim prospects for a housing recovery and choke off a refinance wave that was a major plank of the Obama administration's economic-stimulus efforts. On Wednesday, rates on 30-year fixed-rate mortgages climbed to 5.79%, up from 5% two weeks ago, according to HSH Associates. That jump will cut roughly in half the number of borrowers with an incentive to refinance, according to FTN Financial.

- Long-term mutual funds saw overall buying, or inflows, for the 12th straight week, as inflows into both stock and bond funds picked up from the previous two weeks, according to figures released from the Investment Company Institute. Total estimated inflows were $13.6 billion in the week ended June 3. Stock funds had estimated inflows of $4.63 billion, up from $1.59 billion the previous week.

- One at a time the government's top critics seemed to go to jail, or simply disappear. Syrgak Abdyldayev, a local journalist, began to investigate whether the attacks had anything to do with a team of Russian-speaking specialists who arrived last year to advise the Kyrgyz government. He published several scathing articles accusing the government of shunting aside its opponents and turning to Moscow for financial support, including one in February that likened Russian aid to "oxygen for a sinking submarine." Then Mr. Abdyldayev became a victim. Three men attacked him with metal pipes as he left his newspaper one evening in March, broke both his arms, his ribs and a leg, and stabbed him 26 times in the buttocks.

- The World Health Organization will hold an emergency meeting on Thursday as the H1N1 swine flu virus continues to spread around the globe, increasing the likelihood a pandemic will be declared.

MarketWatch.com:
- "If gasoline prices stay elevated, it will dramatically dilute the tax-cut portion of the Obama stimulus plan," said Boockvar, who calculates that for every $1 move in the price of gasoline, "it's an extra $140 billion more in consumer spending at the pump."

CNBC.com:
- The Federal Reserve lost $5.25 billion in the first quarter on the securities it acquired with last year's bailouts of Bear Stearns and insurer American International Group, according to a report issued Wednesday.

NY Times:

- Tough words from Washington arrived by phone on Tuesday at Citigroup headquarters in New York. On the line was Sheila C. Bair, the head of the Federal Deposit Insurance Corporation — and a powerful behind-the-scenes player at the giant bank. She was calling to press directors once again to put Citigroup’s troubled house in order. Ms. Bair urged the board to take swift action to purge Citigroup’s troubled assets, sell money-losing businesses and assess senior management.

- Strong buying by China has helped lift commodity prices around the world this spring, but growing evidence suggests that a sizable portion of this buying has been to build stockpiles in China, and may not be sustainable. At least 90 large freighters full of iron ore are idling off Chinese ports, where they face waits of up to two weeks to unload because port storage operations are overflowing, chief executives of shipping companies said in interviews this week. Yet actual steel production from that iron ore is recovering much more slowly in China, and Chinese steel exports remain weak. Commodities and shipping executives describe Chinese stockpiling in recent months of a range of other commodities as well, including aluminum, copper, nickel, tin, zinc, canola and soybeans. Starting in April, China began stockpiling significant quantities of crude oil. “There has been enormous stockpiling of all commodities” by China, and this cannot continue indefinitely, said Tim Huxley, the chief executive of Wah Kwong Maritime Transport Holdings, a big shipping line based here. Moody’s Investors Service announced on Wednesday that it was putting a negative outlook on the base metals, mining and steel industries in Asia and the Pacific, having previously done so for these sectors elsewhere. One of the best leading indicators of international trade in commodities is the Baltic Exchange Dry Index, which measures the daily cost of chartering a large freighter. While the Standard & Poor’s GSCI has continued to rise in the last week, the freight index has fallen by a fifth in that period. Richard S. Elman, the chief executive of the Noble Group, Asia’s largest diversified commodities trading company, bounced up from the conference table in his office here when asked about freight rates during an interview on Tuesday morning. He walked over to his desk, dominated by three computer screens that partly obscure a perfect view of Hong Kong’s harbor, and quickly punched up on one screen a list of daily charter rates for large bulk carrier freighters. The list showed ship owners charging $58,000 a day now but just $24,000 a day for charters next year or in 2011 — an indication that there will be more ships than cargoes in the years ahead, particularly with shipyards still finishing vessels ordered during the recent boom. Pointing to the rates for the next two years, Mr. Elman said, “That’s the real market” for ships.

IBD:

- But many off-price chains and niche retailers have thus far held up well. Among them stands Citi Trends (CTRN), a Savannah-based discount chain that caters to urban shoppers in Atlanta, Charlotte and other cities in the southeastern U.S.

NY Post:

- Less than a month after being told by Donald Trump that she can keep her Miss California crown, Carrie Prejean is being fired, Foxnews.com has learned exclusively. K2 Productions, the independent producers of the Miss California USA pageant, under license from Miss Universe, cites continued breach of contract issues as the reason for Prejean's firing. The decision is revealed in documents obtained by FOXNews.com.

Politico:

- Alaska Gov. Sarah Palin took a second swipe at David Letterman on Wednesday, calling the CBS “Late Show” host’s jokes about one of her daughters “disgusting” and “sexually perverted.” In an e-mailed statement, the Republican governor said: “Laughter incited by sexually perverted comments made by a 62-year-old male celebrity aimed at a 14-year-old girl is not only disgusting, but it reminds us some Hollywood/N.Y. entertainers have a long way to go in understanding what the rest of America understands — that acceptance of inappropriate sexual comments about an underage girl, who could be anyone's daughter, contributes to the atrociously high rate of sexual exploitation of minors by older men who use and abuse others.”

- The White House has refused a request from Sen. Chuck Grassley for all the exemptions it’s granted to President Barack Obama’s ethics policy. And that’s got the Iowa Republican on a mission to make public every ethics waiver and recusal issued to administration officials. “The American people deserve a full accounting of all waivers ... to better understand who is running the government and whether the administration is adhering to its promise to be open, transparent and accountable,” Grassley wrote in a letter Wednesday to the director of the U.S. Office of Government Ethics.

Reuters:

- Wall Street may be losing its luster for new U.S. college graduates who are increasingly looking to the government for jobs that enrich their social conscience, if not their wallet.

- Goldman Sachs Group Inc (GS) is taking much more trading risk than rival Morgan Stanley (MS), and some analysts wonder if the largest investment bank could be making itself vulnerable to another downturn. Goldman's supporters say the bank is keeping to a strategy that served it well during the financial meltdown: fund itself in bond markets and trade actively, both for clients and its own account. But Goldman is also forgoing many of the safety measures that competitors like Morgan Stanley have embraced, such as building businesses less dependent on trading activity and finding reliable sources of cheap deposit funding. If the economy deteriorates and bond markets seize up again, the bank could find itself posting big losses.

Financial Times:

- General Electric(GE), the US industrial group, will announce a $500m deal on Thursday to supply new gas and steam turbines to the Kingdom of Bahrain as the company continues to push for a greater presence in the Middle East to counteract troubles in its domestic market. Through the deal GE will supply advanced power equipment and services to Al Dur, Bahrain’s largest power plant, which will generate 30 per cent of the country’s electricity when completed. The move is GE’s latest effort to embrace faster-growing emerging markets while it struggles domestically and works to shrink its finance arm, GE Capital. GE has signed more than $6bn worth of contracts in the Middle East during the last year, which the New York-based company notes is supporting domestic manufacturing jobs and boosting its wind business which is lacking a strong market in the US. In 2008 GE signed a $3bn contract with Iraq for 56 turbines for a project that was to double the country’s capacity to generate electricity. The company has more than 1,000 of its turbines operating throughout the Middle East.

- Deloitte is suffering from the slowdown in China, which is forcing the accountancy firm to impose unpaid leave on staff, its global head said on Wednesday. James Quigley, global chief executive of Deloitte, said that while the Chinese market for accountancy firms had been buoyant during the boom in initial public offerings and mergers and acquisitions, the firm had more recently been affected by a slowdown in activity.

- Iran’s presidential election campaign moved towards a gripping climax last night, ahead of a poll that has turned into a referendum on Mahmoud Ahmadi-Nejad’s performance. Thousands of demonstrators camped around the state broadcaster to protest against a final television address allocated to the controversial incumbent, while hundreds of thousands joined carnival-like parades through the country. The most hotly contested election in Iran’s post-revolutionary history could have a significant impact on the evolution of domestic and foreign policy. Mir-Hossein Moussavi, a reformist who poses a serious challenge to the fundamentalist president, has pledged to loosen social restrictions and to pursue detente with the west, while Mr Ahmadi-Nejad has vowed to continue his controversial economic and nuclear policies.

TimesOnline:

- Three British companies have been shortlisted to bid for contracts to work on Iraq's oil and gas fields, pitting themselves against 32 other non-Iraqi companies in a televised, two-day bidding procedure revealed at Baghdad's Oil Ministry.

Late Buy/Sell Recommendations
Citigroup:

- Reiterated Buy on (JCP), target $43.

Night Trading
Asian Indices are -.25% to +1.25% on average.

Asia Ex-Japan Inv Grd CDS Index +1.61%
S&P 500 futures +.46%.
NASDAQ 100 futures +.40%.

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Economic Releases

8:30 am EST

- Advance Retail Sales for May are estimated to rise .5% versus a -.4% decline in April.

- Retail Sales Less Autos for May are estimated to rise .2% versus a -.5% decline in April.

- Initial Jobless Claims for last week are estimated to fall to 615K versus 621K the prior week.

- Continuing Claims are estimated to rise to 6780K versus 6735K prior.

10:00 am EST

- Business Inventories for April are estimated to fall -1.0% versus a -1.0% loss in March.

Upcoming Splits
- None of note

Other Potential Market Movers
- The US Selling $11B 30-Year Bonds, Fed’s Lockhart speaking, weekly EIA natural gas inventory report, UBS Electronic Payments Summit, BofA/Merrill Transportation Conference, William Blair Growth Stock Conference, Needham Biotech & Medtech Conference, Goldman Sachs Healthcare Conference, UBS Basic Materials Conference, (SYMC) Analyst Meeting and the CSFB Convergence Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity 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 Slightly Lower, Weighed Down by REIT, Airline, Financial and Hospital Shares

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In Play

Stocks Lower into Final Hour on Rising Energy Prices, Higher Long-term Rates, More Shorting

BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Financial longs, Technology longs and Retail longs. I added (IWM)/(QQQQ) hedges and added (EEM) short today, 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 high. Today’s overall market action is mildly bearish. The VIX is rising 3.04% and is high at 29.13. The ISE Sentiment Index is below average at 115.0 and the total put/call is about average at .87. Finally, the NYSE Arms has been running about average most of the day, hitting 1.26 at its intraday peak, and is currently 1.19. The Euro Financial Sector Credit Default Swap Index is falling 1.13% today to 102.33 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 .75% to 123.98 basis points. This index is also well below its Dec. 5^th record high of 285.99. The TED spread is falling 1.83% to 47 basis points. The TED spread is now down 416 basis points since its all-time high of 463 basis points on October 10th. The 2-year swap spread is declining 5.16% to 47.13 basis points. The Libor-OIS spread is falling 2.43% to 41 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is rising 9 basis points to 2.09%, which is down 55 basis points since July 7th. The 3-month T-Bill is yielding .17%, which is unch. today. The rises in oil and long-term rates are pressuring the broad market. I continue to believe near-term equity gains are capped until we see these stabilize. However, the major averages are holding up well considering the rises in these two. A number of market leading stocks are just slightly lower or even higher on the day. The 10-year yield hit 4% today and has since pulled back 6 basis points. I suspect bonds will find some buyers around current levels. I will be monitoring tomorrow’s Treasury auction closely again. Nikkei futures indicate an -71 open in Japan and DAX futures indicate a -21 open in Germany tomorrow. I expect US stocks to trade mixed-to-lower into the close from current levels on more shorting, higher energy prices, rising long-term rates, financial sector pessimism and profit-taking.

Today's Headlines

Bloomberg:

- The Baltic Dry Index posted a fifth straight loss amid signs Chinese demand for iron ore may be slowing. The index tracking transport costs on international trade routes fell 66 points , or 1.9%, to 3,452 points. “We are seeing less orders in the market,” Kjetil Sjuve, a broker at Lorentzen & Stemoco A/S in Oslo, said, adding congestion at the nation’s ports is also clearing. “The market should head downwards and continue the slide but we’ve been surprised so many times this spring.” The index has probably already peaked this year, Martin Stopford, a director at Clarkson Plc, the world’s largest shipbroker, said today.

- The Federal Reserve said the U.S. downturn may be slowing in almost half of its regions, with the outlook at some companies improving while “stringent” loan conditions and a “weak” labor market persist. “Economic conditions remained weak or deteriorated further” from mid-April through May, while five of 12 Fed districts “noted that the downward trend is showing signs of moderating,” the Fed said today in its Beige Book business survey, published two weeks before officials issue their next monetary policy decision.

- Treasuries fell, pushing 10-year yields to the highest level since October, as the government sold $19 billion of the securities and Russia said it may switch some reserves from U.S. debt. The notes drew a yield of 3.99 percent, the highest since August 2008. The auction was the second of three sales this week that will raise $65 billion, part of the government’s record borrowing program. A Russian central bank official said the nation may buy International Monetary Fund bonds.

- Lawmakers are pushing to revive legislation in the Senate that would almost double an $8,000 tax credit for first-time homebuyers and expand the program to all borrowers. Senator Johnny Isakson, a Georgia Republican, plans to introduce a bill today that increases the tax credit to $15,000 and removes income and other restrictions on who can qualify for the credit, according to his spokesman, Sheridan Watson.

- Two U.S. auto-parts supplier trade groups asked the Treasury to provide as much as $10 billion in new aid as the industry struggles with cuts in car production.

- The U.S. budget deficit, already approaching $1 trillion so far this fiscal year, widened in May from a year earlier as the recession subtracted from revenue and the government spent more to rejuvenate the economy. The excess of spending over revenue climbed to $189.7 billion, a record for the month and compared with a gap of $165.9 billion a year earlier, the Treasury said today in Washington. Spending rose 5.8 percent to $306.9 billion and revenue fell 5.7 percent to $117.2 billion. For the fiscal year to date, the shortfall totaled a record $991.9 billion.

Wall Street Journal:

- A White House bid to push a $108 billion contribution to the International Monetary Fund through Congress is in danger of unraveling because of an unlikely coalition of Republicans, liberal Democrats and anti-globalization activists. A defeat would be a blow to the Obama administration's efforts to shape the global response to the financial crisis and continue its leadership at the IMF. The U.S. pressed hard at an April summit of the Group of 20 industrialized and developing nations to boost the IMF's lending coffers by about $500 billion. If the U.S. is unable to deliver on its share, that is bound to slow pledges from other nations.

- A government lawyer labeled him a terrorist. A top adviser to Chrysler LLC called him ridiculous. As the Obama administration pushed Chrysler through bankruptcy court in record time, no one caused it more angst than Thomas Lauria. The White & Case bankruptcy lawyer won a stay from Supreme Court Justice Ruth Bader Ginsburg on Monday that temporarily threw Chrysler's proposed alliance with Italian auto maker Fiat SpA into limbo. Late Tuesday, the court turned down the attorney's 11th-hour appeal on behalf of some Indiana pension funds. But Mr. Lauria, whom friends and foes alike say is tenacious to a fault, is likely to remain a thorn in the side of the administration's automotive task force. A hodgepodge of General Motors Corp. bondholders have asked him to represent them in a challenge to GM's bankruptcy filing.

- Iran's Organization of Petroleum Exporting Countries governor said Wednesday the group could consider increasing crude output if there is both a jump in oil prices and a reduction in OECD oil stocks.

- An armed man fired at a security guard inside the main lobby of the Holocaust Museum here early this afternoon before two other guards returned fire, according to Sgt. David Schlosser, a spokesman for the U.S. Park Police. The shooter, who remains unidentified, and one guard were transported to the George Washington University Hospital, Mr. Schlosser told reporters. Both were apparently shot during the brief gun battle. Their conditions weren't immediately available.

- 'We spent a fortune to elect Barack Obama," declared Andy Stern last month, and the president of the Service Employees International Union wasn't exaggerating. The SEIU and AFL-CIO have been spending so much on politics that they're going deeply into debt.

Forbes:

- CB Richard Ellis Inc stock rose more 13 percent on Wednesday after the world's largest real estate services firm said it agreed to sell 13,440,860 shares to hedge fund Paulson & Co and expected to generate $100 million from the sale.

Boston Globe:

- The New York Times Co.(NYT) has hired an investment bank to manage the possible sale of The Boston Globe, and the company plans to request bids for Boston's major daily in the next couple of weeks, according to two people who say they may make offers on the newspaper.

- A handful of investors made fortunes predicting the current financial crisis, but one Wall Streeter may try to parlay his prescient warnings into a political career. Brokerage executive Peter Schiff, who as early as 2006 predicted the financial market meltdown and current recession, is considering a run for the U.S. Senate as a Republican, challenging incumbent Connecticut Democrat Christopher Dodd.

Miami Herald:

- The chain that claims it's "way better than fast food" did better than its competitors in a new survey. Wendy's has been named the top fast-food chain by restaurant guide publisher Zagat.

Politico:

- Republicans released a long-awaited energy plan on Wednesday that's heavily focused on nuclear energy, offshore and Arctic drilling and development of alternative fuels. Yet their alternative proposals were also designed as a critique of Democratic climate change proposals, which the GOP believes are too expensive and would essentially create a national "energy tax." The Republican plan promises to bring 100 new nuclear reactors online by 2029, permit oil exploration in off-shore and Arctic areas, and speed up the development of alternative fuels, including controversial carbon capture and sequestration technology.

- House Speaker Nancy Pelosi and Majority Leader Steny Hoyer are double-teaming powerful chairmen and rank-and-file members to save health care reform from a repeat of the Democratic Party infighting that helped kill it in 1994.

Dailypress.com:

- The Rev. Jeremiah Wright says he does not feel any regrets over his severed relationship with President Barack Obama, a former member of the Chicago church in which Wright was the longtime pastor. Wright also said that he had not spoken to his former church member since Obama became president, implying that the White House won't allow Obama to talk to him. He did not indicate whether he had tried to reach Obama. Asked if he had spoken to the president, Wright said: "Them Jews aren't going to let him talk to me. I told my baby daughter, that he'll talk to me in five years when he's a lame duck, or in eight years when he's out of office. ... "Ethnic cleansing is going on in Gaza. Ethnic cleansing (by) the Zionist is a sin and a crime against humanity, and they don't want Barack talking like that because that's anti-Israel," Wright said.

Interfax:

- The head of Russia’s nuclear missile forces, Nikolai Solovtsov, said the country’s military contends that the nuclear arsenal shouldn’t be cut below 1,500 warheads.

Yonhap News:

- Kia Motors Corp. will start production at its new US plan in Georgia in January next year as part of Hyundai Motor Group’s plans to increase market share, citing Chairman Chung Mong Koo.

- Russia rejected the UN Security Council’s latest draft of a resolution to punish North Korea for its May 25 nuclear test, citing a South Korean official. Russia objects to new language in the Security Council resolution demanding North Korea desist from “any” launch using a ballistic missile, according to the report.

Haaretz.com:

- The U.S. must create the conditions for the speedy resumption of Israeli-Palestinian peace talks, Washington's envoy to the region said Wednesday in Ramallah, as he assured Palestinians that America would never abandon their "legitimate aspirations." "The only viable solution for this conflict is for the aspirations of both sides to be met in two states," former U.S. senator Mitchell told journalists after meeting Palestinian President Mahmoud Abbas in the West Bank city. "The U.S. has an obligation to create conditions for the prompt resumption and early conclusion of negotiations," he said, adding that "America will not turn our back to the legitimate Palestinians aspirations for dignity, opportunity and a state of their own." Israelis and Palestinians, he said, had to meet their obligations under the international Road Map peace plan.

Bear Radar

Style Underperformer:
Small-cap Value (-1.58%)

Sector Underperformers:
REITs (-3.25%), Road & Rail (-2.76%) and I-Banks (-2.50%)

Stocks Falling on Unusual Volume:
CLF, CLMT, CMC, LHO, AMP, OXPS, EFUT, SINA, PSYS, TNDM, PALM, LHO, PLL, CMO, AXR and UHT

Stocks With Unusual Put Option Activity:
1) LDK 2) SGR 3) CX 4) GGB 5) SLM

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