Bear Radar

Style Underperformer:

• Large-Cap Growth (-1.09%)

Sector Underperformers:

• 1) Networking -2.59% 2) Computers -2.0% 3) Defense -1.85%

Stocks Falling on Unusual Volume:

• CSCO, CNQR, NETL, PT, LLTC, ANW, RINO, AMSC, SNIC, DEER, MFB and TTM
  

Stocks With Unusual Put Option Activity:

• 1) ITUB 2) CSCO 3) RINO 4) BJ 5) MELA
  

Stocks With Most Negative News Mentions:

• 1) CPLA 2) CCF 3) CADE 4) BA 5) CSCO
  

Bull Radar

Style Outperformer:

• Mid-Cap Value (-.68%)

Sector Outperformers:

• 1) Coal +1.68% 2) Oil Tankers +.60% 3) Restaurants +.08%

Stocks Rising on Unusual Volume:

• HRB, TRGL, BEXP, PTR, CTRP, ACI, CNX, BKI, BT, AZPN, CHU, ASYS, VRNT, WFR, PLCM, AREX, HMIN, QNST, CBPO, UEPS, TTEK, DNDN, AFCE, BEXP, HTHT, HGSI, MAKO, MMYT, BIDU, SLXP, ACOM, VRNT, ATHR, TRGL, ROSE, TOD, IR, AHD and IHG
  

Stocks With Unusual Call Option Activity:

• 1) CSCO 2) LVLT 3) IR 4) NETL 5) SMH
  

Stocks With Most Positive News Mentions:

• 1) ADSK 2) ABC 3) NOC 4) PETM 5) NCIT

Thursday Watch

Evening Headlines
Bloomberg:

• Europe Swaps Diverge From U.S. as Default Concern Spreads: Credit Markets. The cost of insuring company bonds in Europe against default is the highest relative to the U.S. since May as concern rises that the euro-region’s most indebted governments may need a bailout, further damaging the economy. The Markit iTraxx Europe Index of 125 investment-grade companies climbed to 103 basis points this week, compared with 92 basis points for the Markit CDX North America Investment Grade Index, according to Markit Group Ltd. Credit-default swaps on Ireland’s two biggest lenders, Bank of Ireland and Allied Irish Banks Plc, are soaring on doubts about the ability of the nation to refinance in the bond market. European credit is being weighed down as governments struggle to convince investors they remain viable amid taxpayer resistance to budget cuts and after Goldman Sachs Group Inc. raised the prospect of Ireland and Portugal failing under the weight of “oversized” debt piles. “The focus is back on peripheral Europe,” said Mark Dowding, a senior money manager at BlueBay Asset Management Plc in London, where he helps oversee $22 billion of investment- grade assets. “Keep your eye on Italy and Spain. If we see any weakness there, that’s what will drive weakness elsewhere.” Contracts on Banco Espirito Santo SA, Portugal’s largest publicly traded bank by market value, rose the most in the Markit iTraxx Europe Index, climbing 125 basis points to 539.75, while energy company Energias de Portugal SA had the second- biggest increase, jumping 68 to 313.
• Irish Bank Default Swaps Surge to Distress on Cost of Bailout. The cost of insuring the bonds of Irish banks soared to distressed levels amid concern that the government won’t be able to afford the cost of bailing out the nation’s banks.
• China's Inflation Accelerates to 4.4%, Fastest Pace in Two Years. China’s inflation accelerated to the fastest pace in two years in October, building the case for the central bank to add to last month’s interest-rate increase. Consumer prices rose 4.4 percent from a year earlier, boosted by food costs, a statistics bureau report showed in Beijing today. That was more than the 4 percent median forecast in a Bloomberg News survey of 28 economists. None forecast such a large gain. In September, prices rose 3.6 percent.
• Bomb Timed to Explode Over Eastern U.S., Police Say. A bomb in a printer cartridge sent from Yemen that was intercepted at the U.K.’s East Midlands airport was timed to explode over the U.S. East Coast, London’s Metropolitan Police said. “Forensic examination has indicated that if the device had activated,” it would have been at 5:30 a.m. New York time on Oct. 29, the police said in an e-mailed statement today. “If the device had not been removed from the aircraft, the activation could have occurred over the eastern seaboard of the U.S.”
• California Budget Deficit May Swell to $25.4 Billion in Next 19 Months. California, the most populous U.S. state, may face a $25.4 billion budget deficit over the next 19 months, the fourth time in as many years the state has confronted a spending gap, its fiscal analyst said. The deficit includes $6.1 billion in the current fiscal year, which ends June 30, and about $19 billion the next year, according to a report released today by the nonpartisan Legislative Analyst’s Office. Governor-elect Jerry Brown, who will be sworn in Jan. 3, must propose a plan to erase the deficit by Jan. 10. The report warned against “patching over” shortfalls with temporary fixes. “Unless plans are put in place to begin tackling the ongoing budget problem, it will continue to be difficult for the state to address fundamental public-sector goals -- such as rebuilding aging infrastructure, addressing massive retirement liabilities, maintaining service levels of high-priority government programs and improving the state’s tax system,” the report said.
• Oil Contango Poised to Diminish as Cushing Storage Grows: Energy Markets. The longest period of contango in the U.S. oil market may end as storage capacity expands by more than a quarter at Cushing, Oklahoma, the biggest U.S. crude- trading hub. Companies have announced plans to build about 14 million barrels of tanks by the end of 2011. That would boost capacity as much as 27 percent, based on an estimated 51 million to 52 million of existing storage according to Bob Levin, a managing director at CME Group, the owner of Nymex. The additional storage “limits the opportunity for contango,” said Stephen Schork, the president of the Schork Group Inc. in Villanova, Pennsylvania. “If you do have that ability now to put those barrels into storage, you will see a return back to fundamentals.”
• China Has to Restrict Rare-Earth Exports to Protect Resources, Group Says. China, which produces more than 90 percent of the world’s rare earth metals, needs to control exports of the minerals to protect natural resources and cut pollution, said the Chinese Society of Rare Earths. Rare-earth prices have surged as much as sevenfold as China in July reduced its second-half export quota by 72 percent to ensure domestic supply of the mineral used in laptops, missile- guidance systems and hybrid cars.
• China Said to Have Raised Reserve Ratio Twice for Some Banks. China raised reserve requirements on some banks twice yesterday, taking the total increase to 100 basis points for a few lenders, said two people with direct knowledge of the situation. China ordered some lenders, including Bank of Communications Co., to increase their reserve ratios by 50 basis points from Nov. 15, a person with direct knowledge of the matter said yesterday. This was on top of another half percentage point increase announced late yesterday by the Chinese central bank, effective Nov. 16., the people said today.

Wall Street Journal:

• CME(CME) Raises the Cost of Trading. Commodities exchanges are raising the cost of trading everything from soybeans to silver, amid the wave of speculative money that has flooded into the markets, increased volatility and sent prices new highs. On Wednesday, CME Group increased "margin requirements," or the minimum deposit a trader is required to pony up, for trading soybeans futures contracts. This follows a similar move by the Chicago exchange late Tuesday on silver futures, triggering a broad selloff among all precious metals.
• Blackstone(BX), Goldman(GS) Submit Withdrawal Notices to Harbinger. Some of the best-known investors in the hedge-fund world are lining up to withdraw money from a firm that once was among the biggest names in the business. Blackstone Group and Goldman Sachs Group Inc. are among investors who have submitted withdrawal notices to Philip Falcone's Harbinger Capital Partners LLC, according to people familiar with the matter.
• G-20 Nears Pact but Tensions Still Fester. World leaders gathered for the Group of 20 summit neared an agreement that appears to paper over many of the differences that have roiled discussions and financial markets in recent days, but one that's unlikely to end tension over currency and trade policies.
• Deficit Panel's Leaders Push Cuts. The leaders of a White House commission laid out a sweeping proposal to cut the federal budget deficit by hundreds of billions a year by targeting sacrosanct areas of U.S. tax and spending policy, such as Social Security benefits, middle-class tax breaks and defense spending.
• 'QE2' in the Dock: Some Yields Are Going Up. The Fed's latest "quantitative easing" program is designed to bring down interest rates, but some are moving up instead. Rates, which rise as the price falls, have risen lately as investors avoid U.S. government debt—including a new 30-year bond auctioned on Wednesday. That has generated market anxiety that the Federal Reserve has lost control of rates and inflation expectations.
• Iraq's Oil Patch Opens the Spigot. This dusty and ragged city in southern Iraq was notorious a couple years back for its vicious militia warfare and rampant smuggling. Today Basra has a very different rep: one of the world's newest oil boom towns. Some of the world's largest energy companies are ramping up drilling in Iraq. The drilling frenzy has triggered an investment and building boom in Basra itself.
• Labor Board's Recent Decisions Tilt in Favor of Unions. Unions are increasingly looking to the National Labor Relations Board to seek favorable workplace rulings, and the agency is showing a willingness to reopen matters previously decided in favor of employers.
• Health-Care Start-Ups Face Wobbly Investment Climate. Investing in Silicon Valley health-care start-ups appears to have cooled, at least temporarily. In the third quarter, venture-capital investment into closely held health-care-related companies in the Bay Area totaled $421.5 million, down 35% from $650.6 million in the same period a year earlier, according to research firm VentureSource.

CNBC:

• Cisco(CSCO) Profit Tops Forecast, But Shares Slide Lower. Cisco Systems reported improved earnings, but the recovery was mostly as expected, and the company's shares retreated 4 percent as investors cashed in on their recent gains. The computer networking giant said it earned $2.4 billion, or 42 cents a share in its fiscal first quarter, excluding one-time items, against a profit of 36 cents a share during the same period last year. Sales rose to $10.75 billion in the most recent quarter, up from $9.021 billion last year. Analysts who follow Cisco predicted on average that the company would report a profit of 40 cents a share on sales of $10.74 billion.
• China's SAIC Near GM IPO Stake Buy: Report. General Motors is in the final stage of talks to sell equity to long-time Chinese partner SAIC Motor in conjunction with its landmark initial public offering, two people familiar with the matter said. The two government-funded automakers are currently finalizing how much of a stake SAIC would buy in the top U.S. automaker after discussions involving technology sharing and SAIC's ambitions to move beyond the China market, the people said.
• Obama's Asian Outreach Under Scrutiny at G20. U.S. President Barack Obama will hold delicate meetings with China and South Korea on Thursday as he seeks to advance key security issues while navigating tough talks on currencies and trade.

Business Insider:

• Bruce Berkowitz Ups His Bet on MBIA(MBI), Now Owns 16.5% of the Company.

Zero Hedge:

• Gonzalo Lira And the Boiling Frog: Effects of QE2 on the Bottom 80% of the U.S. Population.
• 27th Consecutive Week of Domestic Fund Outflows. (graph)
  

IBD:

• Here Come 'Hedge' Mutual Funds.

Forbes:

• NY Times Editor on the 'Beauty' of Readers' Ignorance. The New York Times cultivates an image as the preferred read of the intellectual elite, but at least one of the paper’s higher-ups seems to think its customers aren’t all that bright.

Rasmussen Reports:

• Most Voters Favor Investigation of Health Care Law's Potential Impact. A new Rasmussen Reports national telephone survey finds that 55% of Likely U.S. Voters favor having House Republicans investigate the projected costs and implications of the health care law passed by Congress earlier in the year. Thirty-two percent (32%) oppose such an investigation.

Politico:

• Nancy Pelosi Faces New Resistance from Democrats. Nancy Pelosi is struggling to stand her ground as the effects of last week's Democratic debacle shift the political earth beneath her feet. Pelosi announced Friday that she’s running for minority leader in the new Congress, and her election still seems on track. But a movement by conservative Blue Dogs to block her ascent has picked up support from some liberals and even a handful of longtime Pelosi allies, who question whether she is the best person to lead the battered party in the House.

Reuters:

• South Korea Central Bank Report: US Fed Move Poses May Risks. The U.S. Federal Reserve's latest move to buy more bonds to stimulate the U.S. economy poses many risks, not only for emerging-market economies but for U.S. policy as well, South Korea's central bank said in a report. In addition to swamping emerging markets with dollars, the Fed's move will also fan commodities prices, making it difficult for the Fed itself to implement an exit from stimulus later, it said in a report posted on its website late on Wednesday. If the Fed has to start selling off government bonds later to absorb liquidity or raise the benchmark interest rate, bond prices will fall sharply and incur huge losses for the Federal Reserve, which has greatly expanded bond holdings of late. If it delayed policy normalisation because of this fear, it would cause inflation to flare up, the Bank of Korea said.
• Private Equity Deals Up for 5th Straight Quarter. The number of investments made by private equity firms rose in the third quarter, marking the fifth straight quarter of gains, with Europe marking the largest increase, according to data from Thomson Reuters released on Wednesday.
• U.S. Pursuing Dollar Weakening Policy - Alan Greenspan. The United States is pursuing a policy of weakening its currency, driving up exchange rates in the rest of the world, former Federal Reserve Chairman Alan Greenspan warned on Wednesday. In a guest column for the Financial Times, Greenspan also said that as China holds down the renminbi, the upward pressure on other currencies risks a return to widespread protectionism. "America is also pursuing a policy of currency weakening. The suppression of the renminbi and the recent weakening of the dollar are, of necessity, producing firming exchange rates in the rest of the world," Greenspan wrote ahead of the Group of 20 summit in Seoul on Thursday. "Something has to give in this arena of zero-consolidated current account balances." Greenspan said while the global trading system can tolerate a modest amount of protection, "the flaws in the global trading system are large and worrisome."
• 'Moderate' Evidence Backs Dendreon(DNDN) Vaccine - US CMS. All of the available data for Dendreon Corp's controversial Provenge prostate cancer vaccine shows 'moderate' support for its use, according to a government analysis by the nation's Medicare agency. The Centers for Medicare and Medicaid Services (CMS), which meets with outside advisers next Wednesday to discuss paying for the vaccine, analyzed all the available evidence for the therapy that has had drawn scrutiny for its large price tag amid praise from cancer advocates. Shares of Dendreon, which closed at $34.83, rose 5.4 percent to $36.70 in after-hours trading.

Financial Times:

• Wall Street to Sidestep 'Volcker Rule'.

Canadian Press:

• 'Major' Human Smuggling Cell Busted in Arizona; 9 Arrested, Accused of Smuggling Thousands. Authorities have dismantled a major cell of a human smuggling ring that may be responsible for the transportation of thousands of illegal immigrants from the U.S.-Mexico border to Phoenix and other parts of the country, investigators said Wednesday. Nine people were arrested Wednesday after a yearlong investigation. They have not yet been charged but are accused of picking up illegal immigrants after they crossed the border by foot, and taking them to what are known as drop houses in Phoenix before they were distributed to other parts of the country.

People's Daily:

• China should tighten money supply this year and in 2011 to stabilize economic growth and ease inflation pressures, Chen Jiagui, a researcher with the Chinese Academy of Social Sciences, wrote. The nation should maintain a proactive fiscal policy, Chen wrote.

Evening Recommendations
Citigroup:

• Reiterated Buy on (STWD), boosted target to $24.
• Downgraded (GWW) to Sell, target $118.
• Reiterated Buy on (CBI), target $36.
• Reiterated Buy on (KSS), raised target to $72.
• Reiterated Buy on (M), lowered target to $33.
• Reiterated Buy on (CHKM), target $31.
  

Night Trading

• Asian equity indices are -.75% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 101.0 -2.0 basis points.
  
• Asia Pacific Sovereign CDS Index 97.0 +1.0 basis point.
  
• S&P 500 futures -.26%
  
• NASDAQ 100 futures -.69%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (VIA/B)/.70
• (DIS)/.47
• (SPWRA)/.12
• (NVDA)/.14
• (CPKI)/.19

Economic Releases

• None of note

Upcoming Splits

• (HCSG) 3-for-2
• (WCN) 3-for-2
• (RAI) 2-for-1
• (AOS) 3-for-2
  

Other Potential Market Movers

• The Fed's Lockhart speaking, BofA Merrill Global Energy Conference, BMO Capital Digital Entertainment Conference, CSFB Healthcare Conference, (OC) analyst meeting and the (AMP) financial community meeting could also impact trading today.
  

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

Stocks Reversing Higher into Final Hour on Less Economic Fear, Diminishing Financial Sector Pessimism, Short-Covering

Broad Market Tone:

• Advance/Decline Line: Higher
  
• Sector Performance: Most Rising
  
• Volume: Slightly Below Average
  
• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• VIX 18.83 -1.31%
  
• ISE Sentiment Index 133.0 +29.13%
  
• Total Put/Call .72 -14.29%
  
• NYSE Arms .73 -50.19%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 92.0 bps +6.37%
  
• European Financial Sector CDS Index 113.50 bps +7.10%
  
• Western Europe Sovereign Debt CDS Index 172.50 bps +.58%
  
• Emerging Market CDS Index 203.72 bps +1.73%
  
• 2-Year Swap Spread 22.0 +2 bps
  
• TED Spread 16.0 -1 bp
  

Economic Gauges:

• 3-Month T-Bill Yield .12% +1 bp
  
• Yield Curve 223.0 +1 bp
  
• China Import Iron Ore Spot $160.30/Metric Tonne +1.26%
  
• Citi US Economic Surprise Index +36.10 +3.5 points
  
• 10-Year TIPS Spread 2.11% -2 bps
  

Overseas Futures:

• Nikkei Futures: Indicating +45 open in Japan
• DAX Futures: Indicating +39 open in Germany

Portfolio:

• Higher: On gains in my Tech and Biotech long positions
  
• Disclosed Trades: Covered all of my (IWM), (QQQQ) hedges and some of my (EEM) short
  
• Market Exposure: Moved to 100% Net Long

BOTTOM LINE: Today's overall market action is bullish as the S&P 500 trades near session highs despite recent sharp equity gains, losses in overseas equities today and rising euro sovereign debt angst. On the positive side, REIT, Restaurant, Road & Rail, Coal, Oil Tanker, Oil Service, Gold, Networking, Wireless, Bank, I-Banking, Hospital, HMO, Insurance and Construction shares are especially strong, rising more than 1.0%. (XLF)/(IYR) have traded well today, especially considering yesterday's losses. Small-Cap and cyclical shares are outperforming. Lumber is rising +1.02%. On the negative side, Gaming, Ag and Utility shares are under pressure, falling more than 1.0%. Copper is down -1.36%. Shanghai copper inventories are rising another +7.74% today and are now at the highest level since early June. The Spain sovereign cds is gaining +4.3% to 276.52 bps, the Ireland sovereign cds is rising +3.47% to 590.99 bps and the Portugal sovereign cds is gaining +2.0% to 466.40 bps. Moreover, key global cds indices continue to surge higher, which is a large negative. Stocks remain very resilient. However, these cds indices must reverse course soon to keep the recent global equity uptrend in tact. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, less economic fear, diminishing financial sector pessimism and technical buying.

Today's Headlines

Bloomberg:

• Corporate Bond Risk Rises in Europe, Credit-Default Swaps Show. The cost of protecting European corporate bonds from default rose, according to traders of credit-default swaps. Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings climbed 17 basis points to 453, according to JPMorgan Chase & Co. at 4:01 p.m. in London. The Markit iTraxx Europe index of 125 companies with investment-grade ratings rose 4.25 basis points to 103. The cost of protecting bank bonds from default also rose, with the Markit iTraxx Financial Index linked to the senior debt of 25 banks and insurers up 7 at 144 and the subordinated index 13 higher at 224, the highest since June.
• The Baltic Dry Index, a measure of commodity shipping costs, matched its longest losing streak since July as rents fell for three of the four vessel types tracked by the gauge. The index lost 13 points, or .5%, to 2,454 points. The drop was the 10th in a row.
• LCH Clearnet Increases Irish Government Bond-Margin Payments From Tomorrow. LCH Clearnet Ltd. demanded its clients place a larger deposit when trading Irish government bonds after the yield on the nation’s debt soared, and may impose similar measures on other European securities. The additional margin requirement of 15 percent, which takes effect tomorrow, will be charged on investors’ net position in Irish debt from Nov. 11, and the change will be reflected in a margin call on Nov. 12, LCH said on its website. The London-based company is the world’s second-largest fixed- income clearing house. The move by LCH pushed Irish bonds lower, extending their two-week decline as investors speculate costs to bail out the nation’s banks have made the government debt load unsustainable. “This is LCH recognizing that the markets are quite serious about the potential for Ireland to default or restructure,” said Simon Penn, a market analyst at UBS AG in London. The yield on Irish 10-year debt surged 44 basis points to 8.52 percent as of 1:24 p.m. in London. The spread over the Bloomberg Fair Value Sovereign Benchmark 10-year bond widened 32 basis points to 585 basis points, according to Bloomberg generic data. It was at 370 basis points as recently as Oct. 26. “Irish banks are not LCH members, so this should not directly affect their funding,” Francesco Garzarelli, chief interest-rate strategist at Goldman Sachs Group Inc. in London, said in a research report today. “However, this could amplify the re-assessment of counterparty risk.”
• U.S. Jobless Claims Fell Last Week to Lowest Level Since July. The number of Americans filing initial jobless claims last week fell to the lowest level in four months, reinforcing evidence the U.S. labor market is healing. Applications for jobless benefits declined by 24,000 to 435,000 in the week ended Nov. 6, lower than the median forecast in a Bloomberg News survey, Labor Department figures showed today in Washington. The four-week moving average, a less volatile measure than the weekly figures, dropped to 446,500 last week, the lowest since Sept. 13, 2008, from 456,500, the report showed. The unemployment rate among people eligible for benefits, which tends to track the jobless rate, dropped to 3.4 percent in the week ended Oct. 30, from 3.5 percent in the prior week.
• Mortgage Applications in U.S. Increase on Gain in Purchases. The number of mortgage applications in the U.S. rose as purchases increased for a third straight week and refinancing picked up. The Mortgage Bankers Association’s index increased 5.8 percent in the week ended Nov. 5, the Washington-based group said today. Refinancing rose 6 percent and purchase applications were up 5.5 percent, the most since Oct. 1.
• Copper Imports by China Drop to One-Year Low as Rising Prices Deter Buyers. Copper imports by China, the world’s largest consumer, declined for the second month to the lowest level in a year, as high international prices and ample domestic supplies reduced the appeal of buying from overseas. Shipments of copper and products fell 26 percent to 273,511 metric tons from 368,410 tons in September, the General Administration of Customs said on its website today. China’s copper output increased in September, after dipping in July and August, as high prices and high raw-material supplies encouraged production. Inventories in Shanghai warehouses increased 21 percent last month. Copper inventories at Shanghai Futures Exchange-monitored warehouses expanded to the highest level in two months as of last week, according to the bourse. Imports stored in Shanghai’s bonded warehouses have at least doubled in the past three months, Na Liu, Scotia Capital’s China strategy advisor, said in an e-mail yesterday. China also imported 310,000 tons of scrap copper, down 24 percent from 410,000 tons in September, data from the Beijing- based customs showed.
• Crude Oil Increases to Two-Year High on Unexpected Drop in U.S. Supplies. Crude oil rose to a two-year high after a report showed an unexpected decrease in inventories as imports declined and refineries bolstered fuel production. Oil climbed as much as 1.5 percent as supplies dropped 3.27 million barrels to 364.9 million last week, the Energy Department said. Crude oil for December delivery increased $1.17, or 1.4 percent, to $87.89 a barrel at 12:03 p.m. on the New York Mercantile Exchange. Futures touched $88.02 a barrel, the highest level since Oct. 9, 2008. Crude-oil imports tumbled 5.7 percent to 8.09 million barrels a day, the lowest level since January.
• Wall Street Collects $4 Billion From Taxpayers as Swaps Backfire. The subprime mortgage crisis isn’t the only calamity Wall Street created that’s upending the finances of U.S. states and cities. For more than a decade, banks and insurance companies convinced governments and nonprofits that financial engineering would lower interest rates on bonds sold for public projects such as roads, bridges and schools. That failed promise has cost more than $4 billion, according to data compiled by Bloomberg, as hundreds of borrowers from the Bay Area Toll Authority in Oakland, California, to Cornell University in Ithaca, New York, quietly paid Wall Street to end agreements since 2008.
• Polo Ralph Lauren(RL) Boosts Sales Forecast for the Year. Polo Ralph Lauren Corp., the New York-based seller of the namesake brand clothing, raised its sales projection for the year as customers snapped up footwear and apparel. Sales will increase at “a low double-digit” rate, the company said today in a statement. In August, the company projected a “mid-to-high single-digit” rate. Net income in the quarter ended Oct. 2 climbed 16 percent to $205.2 million, or $2.09 a share, from $177.5 million, or $1.75, a year earlier. Revenue climbed 11 percent to $1.53 billion, fueled by the wholesale business in the U.S. and Europe. Consumers are beginning to spend again as they recover from the worst economic slump in about 70 years. Ralph Lauren, led by its namesake chief executive officer, gets about 70 percent of sales from North America. The shares climbed $5.54, or 5.5 percent, to $106.46 at 9:39 a.m. in composite trading on the New York Stock Exchange.
• Attorneys General Foreclosure Probe on 'Fast Track,' Miller Says. The investigation by attorneys general in 50 U.S. states into banks’ foreclosure practices is on “a fast track” and any resolution might involve multiple settlements, Iowa Attorney General Tom Miller said.
• Palestinian Authority to Get $150 Million Additional U.S. Aid to Pare Debt. Secretary of State Hillary Clinton today said the U.S. gave $150 million in direct aid to help the cash-strapped Palestinian Authority close its budget deficit, after direct peace talks with Israel stalled. The assistance to the government led by President Mahmoud Abbas is an advance on $200 million requested in fiscal 2011 for the Economic Support Fund, the State Department said. Total aid to the Palestinians for fiscal 2010 is almost $600 million. This “underscores the strong determination of the American people and of this administration to stand with our Palestinian friends even during difficult economic times as we have here at home,” Clinton said, during a video conference with Palestinian Prime Minister Salam Fayyad.
• Goldman Sachs(GS) Said to Pull $120 Million From Falcone Hedge Fund. Goldman Sachs Group Inc. plans to pull all of its $120 million from Philip Falcone’s main hedge fund after returns lagged behind peers and Falcone disclosed he borrowed $113 million from a smaller fund that had suspended redemptions, said three people briefed on the matter.
• Permanent Tax-Cut Extensions Needed to Reduce 'Uncertainty,' Boehner Says. A permanent extension of tax cuts is needed “to reduce the uncertainty in America” that’s chilling business investment and hiring, John Boehner, the presumptive U.S. House speaker, said today. Asked whether he’s willing to compromise with President Barack Obama on the tax reductions enacted in 2001 and 2003, the Republican leader said he wants the cuts, which expire at the end of this year, to be made permanent for all taxpayers.

Wall Street Journal:

• Quant Veteran to Retire From Goldman(GS). Senior Goldman Sachs Group Inc. quantitative-investing director Robert C. Jones is retiring at year end, according to a memo sent to Goldman asset-management executives Wednesday morning.
• Ultra-Rich Pour Back Into Hedge Funds. Memories sure are short among the rich. Just a year after getting burned by the steep losses, high fees and lock-up windows of hedge funds, the wealthy are piling back into these investment vehicles. A survey from Spectrem Group shows that half of all households surveyed with $25 million or more in net worth had investments in hedge funds in 2010. That is a big jump from 2007, before the depths of the financial crisis, when just 35% of such households had hedge-fund investments. They also are putting in sizable amounts of cash. The mean hedge-fund holding for this group is $4.6 million in 2010.
• Panel Chairman Recommend Cutting Federal Spending by $200 Billion. The co-chairs of a deficit commission established by the White House would seek to limit federal spending on health care, gradually raise the retirement age and lower the corporate tax rate to 26%, according to a draft set of proposals released Wednesday.

CNBC:

• State of the Hedge Fund Industry. (video)
• After Three Long Years, Families Dining Out Again. Grab the crayons and the kids' menus, families are dining out again. Restaurant visits from families or parties with children in tow this past summer rose after three years of declining traffic, according to market researcher NPD Group.
• US Posts $140 Billion Budget Deficit in October.
• Morgan Stanley Says Equities are 'Crazy Cheap.' Global stocks are in the middle of a multi-year bull market that began in March 2009 and will last for at least two more years, Morgan Stanley Smith Barney's investment strategists said on Wednesday.
• Fed to Buy $105 Billion of Securities Through December. The Federal Reserve will buy about $105 billion of Treasurys and Treasury inflation-protected securities in 18 operations from Nov. 12 through Dec. 9, the New York Fed said on Wednesday.

Business Insider:

• The Fed's QE2 Misadventure Will Cost U.S. Households $4.6 Trillion. The Fed's Quantitative Easing Part 2 has destroyed $4.6 trillion in household wealth, all to boost the stock portfolios of the top 10%. The Federal Reserve's stated goals in launching QE2 were to trigger a "wealth effect" and boost inflation. The net result of their program is a massive destruction of household wealth.

New York Post:

• Stop Overtaxing the Rich: Andrew Cuomo. After repeatedly bashing the ineptitude of Albany on the campaign trail, Gov.-elect Andrew Cuomo yesterday finally admitted there was one thing state government has a talent for -- taxing the wealthy. "We have no problem telling rich people they have to pay taxes. We do it extraordinarily well. We do it better than almost any state in the nation," Cuomo said at Gov. Paterson's East Side offices after their first face-to-face meeting since the election. "At what point do the rich people say, 'I'm moving'? That's the question." Cuomo predicted the state's prospects will be bleak if Albany continued slapping taxes on residents to pay the bills.

CNNMoney:

• Boeing(BA) Cancels Dreamliner Test Flights. Boeing said Wednesday it has canceled test flights of its 787 Dreamliner, after one of the new airplanes made an emergency landing in Texas. "Until we understand the event, we're not going to schedule any new flights," said Boeing spokeswoman Lori Gunter.

McClatchy:

• Obama Officials Moving Away From 2011 Afghan Withdrawal Date. The Obama administration has decided to begin publicly walking away from what it once touted as key deadlines in the war in Afghanistan in an effort to de-emphasize President Barack Obama's pledge that he'd begin withdrawing U.S. forces in July 2011, administration and military officials have told McClatchy. The new policy will be on display next week during a conference of NATO countries in Lisbon, Portugal, where the administration hopes to introduce a timeline that calls for the withdrawal of U.S. and NATO forces from Afghanistan by 2014, the year when Afghan President Hamid Karzai once said Afghan troops could provide their own security, three senior officials told McClatchy, along with others speaking anonymously as a matter of policy.

NJ.com:

• N.J. Small-Business Loans Reached $82M in October, Nearly Triple Last Year's Amount. New Jersey small businesses received $81.7 million in loans last month, nearly triple the amount they secured during the same period last year, the U.S. Small Business Administration said yesterday. Nationwide, loan amounts rose 60 percent to $1.4 billion last month, compared to October 2009.

TechCrunch:

• The 158,221st Best-Selling Kindle Book: The Pedophile's Guide to Love And Pleasure. One thing Amazon loves to tout about their Kindle bookstore is their huge collection of wide-ranging titles. I’ll say. Here’s a great example of something I’m pretty sure you won’t find in rivals e-bookstores: The Pedophile’s Guide to Love and Pleasure. Yep, that’s the actual title.This book can’t actually be about that, can it? Well, here’s the description: This is my attempt to make pedophile situations safer for those juveniles that find themselves involved in them, by establishing certian rules for these adults to follow. I hope to achieve this by appealing to the better nature of pedosexuals, with hope that their doing so will result in less hatred and perhaps liter sentences should they ever be caught. “Liter” aside, yes, this is outrageous. And Amazon customers are letting their feelings be known about such a book. Of the 59 customers reviews of the product, 58 give it the minimum 1 star (while one joker gave it 5 stars). And it looks like just about all of them are from today, and they’re all basically either calling for a boycott of Amazon for carrying such a book, or for Amazon to remove it immediately. A few of them say they’ve called or email Amazon and that the company has said it’s looking into it. But one commenter says that Amazon already got back to them with the following: “Let me assure you that Amazon.com does not support or promote hatred or criminal acts; we do support the right of every individual to make their own purchasing decisions.” “Amazon.com believes it is censorship not to sell certain titles because we believe their message is objectionable.”

USA Today:

• Number of Federal Workers Making More Than $150,000 Soars. The number of federal workers earning $150,000 or more a year has soared tenfold in the past five years and doubled since President Obama took office, a USA TODAY analysis finds. The fast-growing pay of federal employees has captured the attention of fiscally conservative Republicans who won control of the U.S. House of Representatives in last week's elections. Already, some lawmakers are planning to use the lame-duck session that starts Monday to challenge the president's plan to give a 1.4% across-the-board pay raise to 2.1 million federal workers.

Reuters:

• US Democrats Applaud Fed's Bond Buying Program. Two leading U.S. Democratic lawmakers on Wednesday expressed support for the Federal Reserve's controversial $600 billion bond buying program, which has come under sharp criticism at home and abroad. "We applaud the Fed's action and are especially encouraged by its clear signal that it stands ready to do more," Representatives Barney Frank and Sander Levin said in a statement.

Telegraph:

• David Cameron Warns China Over Economic Policies. David Cameron has warned of that “dangerous tidal wave of money” moving from one side of the world to the other could bring globalisation into “reverse.”

Kathimerini:

• Greece's budget shortfall this year will be 9.5% of gross domestic product after a revision of 2009 data. The deficit will be about 22 billion euros, exceeding the 18.5 billion euros, or 8.1% of GDP, originally projected. The revision of last year's shortfall to 15.5% followed the inclusion of debt from state-owned companies and other agencies in the wider public sector, adding 1.8 billion euros to the 2010 budget gap. The higher figure is also due to a 2 billion-euro shortfall in revenue this year.

Caijing:

• China should raise interest rates as inflationary pressure rises, citing the People's Bank of China's adviser Xia Bin.

Bear Radar

Style Underperformer:

• Large-Cap Value (+.30%)

Sector Underperformers:

• 1) Gaming -1.45% 2) Tobacco -.80% 3) Agriculture -.71%

Stocks Falling on Unusual Volume:

• BA, GEOY, ARCC, IDSA, ENOC, CAGC, CVVT, DEER, UEPS, SNIC, EBIX, CCME, LOGI, RINO, MDRX, DPM, EEP, AIZ and MFB
  

Stocks With Unusual Put Option Activity:

• 1) EWH 2) MDY 3) DF 4) ARG 5) FLR
  

Stocks With Most Negative News Mentions:

• 1) CCL 2) TRB 3) SLB 4) AAPL 5) SHLD