Today's Headlines

Bloomberg:

• U.S. Consumer Spending Cools as Food, Fuel Costs Climb. Consumer spending cooled more than forecast in January as rising food and fuel prices caused Americans to cut back on post-holiday visits to malls and restaurants. Purchases rose 0.2 percent, the smallest gain since June, as winter storms may have also discouraged shoppers, according to figures from the Commerce Department today in Washington.
• Business Activity in U.S. Grew at Fastest Pace in 20 Years. Businesses in the U.S. unexpectedly grew in February at the fastest pace in two decades, indicating manufacturing remains at the forefront of the recovery. The Institute for Supply Management-Chicago Inc. said today its business barometer rose to 71.2 this month, the highest level since July 1988, from 68.8 in January. The Chicago group’s production gauge rose to 78.2 from January’s reading of 73.7. The gauge of new orders climbed to 75.9 from 75.7. The employment measure fell to 59.8 from 64.1 the prior month.
• Oman Youth Protests Enter a Third Night as Sultan Promises to Create Jobs. Hundreds of Omani protesters gathered in the city of Sohar for a third night, demanding that the government open talks on their demands for more jobs, higher pay and more representative political institutions. Khaled Maqbuli, a leader of the protest, called on the demonstrators at a roundabout in the center of Sohar, north of the capital, Muscat, to stay peaceful and avoid confrontation with the army and the police.
• Oil Fluctuates as Saudis Offer Supplies, Unrest Spreads to Oman. Crude oil fluctuated as Saudi Arabia offered to make up for supplies lost because of unrest in Libya and as Mideast tensions spread to Oman, the region’s largest oil producer outside of OPEC. Futures slipped as much as 1.2 percent in New York after Khalid Al-Falih, the Saudi Arabian Oil Co.’s chief executive officer, said the kingdom is ready to compensate for any shortfall in crude supply. Two demonstrators were killed and several wounded in clashes with police yesterday in Oman, according to hospital and government officials. “The threat to supply overall doesn’t look as dangerous as it did last week,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “Even the protests in Oman aside, events in Libya seem to be moving steadily in one direction, with oil production apparently not dropping further and some exports being loaded.” Crude oil for April delivery declined 12 cents to $97.76 a barrel at 11:34 a.m. on the New York Mercantile Exchange.
• The cost of hiring capesize ships to haul iron ore and coal dropped for a 10th day on a lack of cargo and excess vessels. Capesize rents fell 1.8% to $4,567 a day, the lowest since Dec. 9, 2008.
• Ford(F) is Most Improved Automaker on Consumer Reports List. Ford Motor Co., the only major U.S. automaker that didn’t receive a government bailout, improved the most since last year in Consumer Reports’s annual automaker rankings, bolstered by reliability for resale value.
• Fed's Dudley Says Growth Not Reason to 'Reverse' Stimulus. Federal Reserve Bank of New York President William Dudley said the “considerably brighter” economic outlook isn’t yet reason for the central bank to withdraw its record monetary stimulus. “We provided additional monetary policy stimulus via the asset purchase program in order to help ensure the recovery did regain momentum,” Dudley said today in a speech in New York. “A stronger recovery with more rapid progress toward our dual mandate objectives is what we have been seeking. This is welcome and not a reason to reverse course.”
• Pent-Up Demand Lifts U.S. Economic Recovery Outlook, Business Survey Shows. U.S. companies expect the economy to grow faster than previously estimated as demand from consumers, businesses and other countries picks up, a survey showed. Gross domestic product in the world’s largest economy will expand at a 3.3 percent pace in 2011, up from the 2.6 percent rate forecast in November, according to a survey by the National Association for Business Economics issued today in Washington. Consumer spending, business investment and exports will also increase more than previously projected. “Pretty much across the board there has been a better view with regard to the economic recovery,” Bill Strauss, a senior economist at the Federal Reserve Bank of Chicago, who analyzed the results, said in an interview. “The consumer sector is coming back, and we’re still looking at pretty good numbers coming from the business sector.”
• Capitulating Bears Push Short Sales to Lowest in Three Years. The biggest Standard & Poor’s 500 Index rally in more than five decades is forcing stock market bears to abandon short sales, cutting them to the lowest level since 2007 last month. Shares borrowed and sold to profit from declines dropped four straight months and represented 3.3 percent of all stock in January, according to data compiled by NYSE Euronext. Pessimists are giving up after missing the 95 percent rally in the S&P 500 spurred by the fastest earnings growth since 1994. The monthly decrease comes as individuals added $17.6 billion to U.S. mutual funds this year after withdrawing money since April. While short sales rose 2.8 percent in the two weeks ended Feb. 15, January’s low may foreshadow slower gains in equities as the pool of new investors shrinks, according to Doug Burtnick of Aberdeen, Scotland-based Aberdeen Asset Management Plc. To Laszlo Birinyi of Birinyi Associates Inc. in Westport, Connecticut, levels haven’t fallen enough to reverse gains or stop equities from climbing as the economy expands.
• Iran Arrests Opposition Leaders After Calls for Protest. Iran’s opposition leaders Mehdi Karrubi and Mir-Hossein Mousavi, who had been under forced seclusion at home, were transferred to a Tehran prison, as supporters prepared to hold a rally tomorrow, the opposition Kaleme website said. Mousavi and Karrubi, along with their wives, were “arrested and taken to Heshmatiyeh prison in Tehran,” Kaleme said on its website, which cited neighbors for some of the details.

Wall Street Journal:

• Pro-Gadhafi Forces Attempt Raids on East. Libya's government moved Monday to recapture key sections of the country controlled by rebel forces, launching attacks in two coastal cities to the east of the capital Tripoli, according to witnesses and rebel army commanders. Forces loyal to Libyan leader Col. Moammar Gadhafi attempted to bomb Benghazi, Libya's second-largest city and a stronghold of opposition to the Gadhafi regime, with airplanes, according to an opposition commander there.
• Tech to the Rescue. An early look at three technologies that may provide more energy in the future.
• Walker Issues Ultimatum to Democrats. Wisconsin Gov. Scott Walker issued an ultimatum to the 14 state Senate Democrats blocking a vote on a bill restricting workers' collective-bargaining rights, saying the state will lose its chance to refinance $165 million in bonds if the bill isn't passed by Tuesday.
• Google's(GOOG) Search Cleanup Has Big Effect. Google Inc.'s move last week to lower the search rankings of websites that the company said offer little useful information appears to be having a dramatic impact, according to firms that study search-engine data. Many websites that previously ranked highly in searches for certain keywords on Google dropped sharply following the change in the company's search algorithms, the firms found.
• Google(GOOG) Executive Sees Online Display Ad Market Reaching $100 Billion Over Next Few Years. The online display advertising market could top $100 billion over the next several years and represents "a pretty enormous opportunity" for Internet search giant Google Inc. (GOOG), a company executive said Monday.

CNBC.com:

• Fed May Need to Take Break From Easing: Bullard. With the central bank about halfway through its purchases of $600 billion in Treasurys, Bullard said the Fed should consider a return to more normalized monetary policy. "Policy is a continuous process," he said. "I would see it as possibly finishing the program a little bit shy of where we intended initially then go on pause for a while, let more information come in on the economy, see how things develop. "If things continue to go as well as I think they will in 2011 then we can start the process of getting the balance sheet back to normal and getting interest rates up there eventually."
• No Inflation? That's Not What Food Prices Are Saying.
  

Business Insider:

• Why Americans Should Fear The Middle East And North Africa Revolutions.
• Prisoner Swap in Pakistan Rejected.
• Deutsche Bank Just Took Out The Hatchet to Its Economic Outlook.
  
  One of the biggest bulls on the street, Deutsche Bank's Joe LaVorgna just sliced his economic outlook.
• The BlackBerry PlayBook is a Huge Disappointment So Far.
• WikiLeaks Goes After Saudi Royal Family. Wikileaks just released a motherload of info on the taboo subject of Saudi Arabian royal rents.
  

Huffington Post:

• Obama Puts Single Payer and Public Option Back on the Table. At the National Governors Association, President Obama just threw his weight behind a bi-partisan effort in the US Senate to allow states to innovate with health reform, including adopting a public insurance system or single payer health care system by 2013 instead of 2017. The governors embraced the state innovations waiver proposal, since conservative states want to weed back the federal health reform and states like California might like to push ahead with public insurance options or single payer health care systems. The idea is to let states meet federal targets anyway they want to, rather than how the federal government prescribes, by 2013 rather than the current 2017 deadline.
  

Apple Insider:

• Apple's(AAPL) to Launch $500 Joint Venture Small Business Support Plan. Last week, AppleInsider exclusively reported that Apple had scheduled a secretive meeting Sunday for retail employees. Details emerged later that week, revealing that the meeting was called to prepare employees for the imminent announcement of a new enterprise service plan, dubbed Joint Venture. According to people in attendance, the meeting's agenda on Sunday did indeed involve an internal unveiling of the new Joint Venture priority service plan. Sources have told AppleInsider that the plan will cost around $500 a year and will be made available to businesses when purchasing a new Mac. Up to 5 systems will be covered by the plan, though additional systems may be added for $99 a year.
  

Forbes:

• Apple(AAPL) Plots Move to Expand iPhone's Market Share. In a research note this morning, Bernstein Research analyst Toni Sacconaghi reports on a meeting he had last week with Apple COO Tim Cook, CFO Peter Oppenheimer and VP of Internet Services Eddy Cue. His high level takeaway is that the executives “projected a very confident tone,” and that Apple is focused on “the right things,” in particular expanding the market for the iPhone and capitalizing on “explosive” tablet demand. Here are some key points from Sacconaghi’s report:

CNN Money:

• SEC Casts Wide Net in Private Stock Trading Probe. Now the SEC is taking a closer look at so-called "pre-IPO" trading in Facebook and other private companies to see if securities laws were broken. An ongoing investigation is probing not just the exchanges themselves, but also several red-hot social media companies and at least three investment funds that specialize in buying up their shares.

Real Clear Politics:

• Why Middle America is Rejecting Big Government.
  

Rasmussen Reports:

• 58% Support Government Shutdown Until Spending Cuts Are Agreed Upon.

Reuters:

• China's Unipec Not Buying More Crude to Replace Libyan Supply. Unipec, the trading arm of top Asian refiner Sinopec, has so far declined Saudi Aramco's offer of more Saudi crude oil to replace Libyan crude supplies, trading sources said on Monday. The Chinese company is not buying any more crude oil to replace Libyan supplies, they said. "There is no shortage of crude overall in Sinopec," said one source. "We have the ability to adjust sweet and sour crudes among our refineries."
• SEC Top Attorney Didn't Recuse Himself on Madoff. The top attorney for the U.S. securities regulator was advised not to recuse himself from handling Bernard Madoff matters for the agency even though his family's estate had invested with the swindler.

Independent:

• Al Qaida Tries to Exploit Unrest. Al Qaida has attempted to exploit the uprisings in Egypt and Tunisia with a recorded message urging people to create Islamic states. Osama bin Laden's deputy Ayman al-Zawahri appeared to have made the audio tape between the January 14 fall of Tunisian president Zine El Abidine Ben Ali and before the February 11 overthrow of Egypt's Hosni Mubarak. Al-Zawahri urged Egyptians and Tunisians to keep up their protests and push out the interim governments that continue in place in both nations. The wave of popular protests in both countries was led by mainly secular youths calling for greater democracy and their success appears to have caught Osama bin Laden's terror network off guard. Al-Zawahri tried to depict the uprisings as aiming to set up Islamic governments.

Xinhua:

• China will take "firm" measures to curb "excessive and rapid" rise in property prices, citing Jiang Weixin, minister of Housing and Urban-Rural Development. Jiang said the country will continue to increase housing supply, and draw up measures to stabilize the property market in the medium and long term.

Bear Radar

Style Underperformer:

• Small-Cap Growth (-.69%)

Sector Underperformers:

• 1) Disk Drives -1.69% 2) Homebuilders -1.58% 3) Alt Energy -1.50%

Stocks Falling on Unusual Volume:

• TQNT, CSIQ, DRG, CRM, TZOO, HBC, AIG, NIHD, HXM, LINTA, SATS, TRS, JOBS, OVTI, TRLG, SPWRB, FELE, FSLR, AKAM, HANS, JDSU, AWI, SFY, DRQ and KCP
  

Stocks With Unusual Put Option Activity:

• 1) RRC 2) SPWRA 3) RMBS 4) WDC 5) SYMC
  

Stocks With Most Negative News Mentions:

• 1) YUM 2) RIG 3) CBS 4) MEE 5) OSG

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume
  

Bull Radar

Style Outperformer:

• Large-Cap Value (+.77%)

Sector Outperformers:

• 1) Hospitals +2.30% 2) REITs +1.49% 3) Ag +1.48%

Stocks Rising on Unusual Volume:

• TI, BT, ABT, SMSC, HLX, COHR, TESO, ARGN, MALL, OSTK, LGND, LPNT, ASCA, INSU, TRGT, GPRE, BOOM, MSG, ALLT, NXPI, SKYW, ENDP, GPOR, FIRE, CENX, EBIX, MRX, CDE, NHP, IPG, HMA, SRZ, HUM, CYH, KCI, HNR, WAG, EIX, MTZ, BGS, WCC, CLD, CLGX, CRR and PPL
  

Stocks With Unusual Call Option Activity:

• 1) SPLS 2) MTL 3) HBC 4) CHS 5) CDE
  

Stocks With Most Positive News Mentions:

• 1) BEXP 2) MRX 3) HMA 4) JOYG 5) FIRE

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume
  

Monday Watch

Weekend Headlines
Bloomberg:

• Saudi Stocks Drop to Nine-Month Low, Leading Mideast, on Region's Unrest. Saudi Arabia’s benchmark stock index plunged to a nine-month low, leading a drop in Middle East markets, on concern clashes in Libya that caused oil prices to surge to a more than two-year high will stall a global recovery. Al-Rajhi Bank, the kingdom’s largest publicly traded lender by market value, dropped 5.2 percent and Saudi Basic Industries Corp., the world’s largest petrochemicals maker, tumbled to the lowest since October. Saudi Arabia’s Tadawul All Share Index slid a 10th day, slumping 5 percent to 5,950.64, the lowest since June 6, at the 3:30 p.m. close in Riyadh. The measure has lost 11 percent since Tunisia’s former president Zine El Abidine Ben Ali fled the country amid protests that spurred similar uprisings in nations across the region. Oman’s measure decreased 2.8 percent as protests erupted in the sultanate.
  
• Oil Rises for Second Day as Middle East Turmoil Spreads to Oman. Oil advanced for a second day in New York after turmoil that has cut Libya’s output spread to Oman, raising concern Middle East production may be disrupted further. Futures posted the biggest weekly gain in two years last week amid estimates that Libya’s crude flow was cut by as much as two-thirds. Crude for April delivery climbed as much as $2.08, or 2.1 percent, $99.96 a barrel in electronic trading on the In Oman, two demonstrators were killed and several were wounded in clashes with police earlier yesterday, according to hospital and government officials. “When we look around the region we are seeing more visual concerns that unrest is continuing,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney. “There’s a little bit of fear in the markets.”New York Mercantile Exchange, and was at $99.61 at 12:48 p.m. Sydney time. The contract increased 60 cents, or 0.6 percent, to $97.88 on Feb. 25. Prices rose 14 percent last week, the biggest gain since the five days ended Feb. 27, 2009. Oman, with a population of about 2.7 million Omanis and 600,000 expatriates, produces some 800,000 barrels of oil a day.
• China's Wen Vows to Curb Graft as Police Head Off Protests. Chinese Premier Wen Jiabao pledged to punish abuse of power by officials and narrow the growing wealth gap as police blanketed Beijing and Shanghai to head off planned protests inspired by revolts in the Middle East. The root of corruption lies in a government that has too much unrestrained power, Wen said in a two-hour online interview with citizens yesterday. He promised to curtail food costs and tackle surging property prices. Wen also cut economic growth targets and said the government would focus on ensuring the benefits of expansion were more evenly distributed. Wen’s comments came as hundreds of police deployed in Beijing and Shanghai at the site of demonstrations called to protest corruption and misrule. At least seven people were bundled into police vans near Shanghai’s People’s Square, while in Beijing several foreign journalists were forcibly removed from the Wangfujing shopping district. “China is a rich country, yet food prices are sky high,” said a 23-year-old university student in Shanghai who declined to be identified because he feared arrest. “We can’t afford to buy property, yet all the corrupt officials gamble our money away in Las Vegas.” An August report by Zurich-based Credit Suisse AG put income inequality levels in China at levels not seen outside of sub-Saharan Africa. An open letter on the U.S.-based website Boxun.com called for people to gather in at least 27 sites around the country yesterday from Tibet to Manchuria for “jasmine” rallies, named after the uprising last month in Tunisia. “Come out and take a stroll at two o’clock on Sundays to look around,” the letter said. The letter called for the ruling Communist Party to fight corruption, create an independent judiciary and reduce income inequality or else “exit the stage of history.” “You see how the police try to control the crowd? They spend so many resources on this, yet why does the government do so little to improve people’s livelihoods?” said a 72-year-old retired car mechanic in Shanghai, who didn’t want to be named because he feared being detained. On the corner of Jinyu Hutong and Wangfujing Streets, police officers yesterday asked for passports of people who appeared foreign. Journalists were asked to show their press cards and their information was taken down in a notebook and they were reminded about the rules on interviews.
• Policy Makers Pledge to Halt Any Inflation From Oil Price Surge. Federal Reserve Vice Chairman Janet Yellen and European Central Bank Vice President Vitor Constancio said they’ll act to prevent any surge in inflation sparked by rising oil prices. The Fed won’t “sit by” if higher oil prices are passed through to other costs, Yellen said yesterday in New York. Yellen and Constancio didn’t say whether they’ll act soon to control prices as Muammar Qaddafi struggles to retain power in Libya, Africa’s third-biggest oil producer. The U.S. central bank is watching inflation expectations “very closely,” and is monitoring the impact of rising commodity prices, Yellen, 64, said in response to audience questions after a speech. “It’s something we need to be very focused on, and any increase that would seem to be sustained in inflation expectations or in core inflation” would “really demand a response,” she said. “We couldn’t sit by.”
• Chinese Premier Wen Jiabao said the nation will curb inflation by controlling liquidity, boosting agricultural production, facilitating the transportation of agricultural goods and punishing hording and price manipulation.
• Bank of America(BAC), Wells Fargo(WFC) May Face Fines on Foreclosures. Bank of America Corp. and Wells Fargo & Co., the largest U.S. mortgage firms, said they may face fines or enforcement actions from regulators amid investigations into foreclosure procedures. The probes may also lead to “significant legal costs,” Charlotte, North Carolina-based Bank of America said yesterday in its annual report to the Securities and Exchange Commission. Wells Fargo, based in San Francisco, said in its filing that penalties are likely.
• MoveOn.org Rallies Gay Groups to Sierra Club Behind Public-Worker Unions. Labor unions, environmentalists, gay and lesbian organizations and anti-war activists rallied in U.S. cities to back public employees who say they are under siege by Republican governors. “This really is about collective bargaining and the rights of all people to work and support themselves,” said Thomas Cannady, the lead volunteer at a Washington rally today for MoveOn.org, an advocacy group formed to oppose the Iraq war. Today, the unions were joined by allies from causes they describe as progressive and from past Democratic Party campaigns, including those who worked for the election of President Barack Obama in 2008. Labor leaders are planning a $30 million campaign to counter the Republican efforts, which strike at the heart of a dwindling movement. Union membership in private industry fell last year to a record low of 6.9 percent, leaving public employees as the backbone of organized labor. Union membership fell to 11.9 percent of the workforce last year, down from a high of 28.3 percent in 1954. The attack on public workers can revive the labor movement, Van Jones, the former green-jobs adviser to Obama, said in an interview at a rally in Washington. “Wisconsin lit the spark, but now the candle has to be lit across America,” Jones said. MoveOn.org took the lead in organizing protests that it said would be held in all 50 state capitals and cities from Boston to Los Angeles. The Sierra Club, Health Care for America Now and the National Gay and Lesbian Task Force were among participants. The governors and Republican state lawmakers say benefits must be trimmed to reduce deficits that may reach a combined $125 billion in the next fiscal year.
• China's Bank Share Slide May Persist as Inflation Hits Growth. Chinese banks, set to post record profits, are trading at their cheapest level in two years and may stay depressed in 2011 as investors bet faster inflation and slower economic growth will erode earnings. Shares lost allure over the last three months, even as banks are forecast to have boosted earnings by more than 25 percent in 2010 and have slashed non-performing loan ratios. The nation’s five biggest lenders, with a combined $771 billion market value, trade at an average of 8.5 times forecast profits, compared with 10.4 times at the world’s 20 largest banks, according to data compiled by Bloomberg. India’s five largest banks trade at an average of 19 times. The combination of rising profits and cheap valuations has failed to lure investors concerned that China’s government will be forced to step up measures to combat inflation, creating a drag on the economic growth that has fueled demand for loans.
• North Korea Cranks Up War Rhetoric Over Propaganda, Drills. North Korea threatened to take military action if the South continues to drop leaflets and other propaganda encouraging revolt, threatening a return of tension on the peninsula that roiled markets last year.
• Five Questions for Bernanke on Capitol Hill: Caroline Baum.
  

Wall Street Journal:

• Oil Flows as Rebels Gain. Libyan rebels pressed the regime of Col. Moammar Gadhafi Sunday, taking control of a key city near the capital of Tripoli, declaring a provisional government and allowing oil shipments to resume from territory under their control.
• Nasdaq(NDAQ) Looking for a Partner. Nasdaq OMX Group is pitting CME Group Inc.(CME) and IntercontinentalExchange Inc.(ICE) against each other in an attempt to decide which company would give the Nasdaq Stock Market parent the best shot at making an attractive bid for rival exchange NYSE Euronext's stock-trading business, according to people familiar with the matter.
• Wall Street Bets on Debt That Doesn't Exist. Fresh from Wall Street's alchemy labs: Credit derivatives tied to General Motors Co.(GM) debt. The rub is, no such debt exists. Banks and hedge funds are trading credit-default swaps, which make payments to holders of General Motors bonds in the event of a default. But GM canceled $40 billion of debt in bankruptcy and has pledged to cut its remaining $4.6 billion bank loan to the bone this year. That is merely a technicality for the banks and hedge funds that have been actively trading the CDS.
• Direct Edge to Stop 'Flashing' Orders on Monday. Electronic stock-exchange operator Direct Edge on Monday will end its practice of "flashing" customer stock orders, bringing an end to years of debate. The New Jersey-based company on Friday told customers that its practice of holding split-second auctions to trade on unfilled stock orders would cease at the close of business Monday, after the Securities and Exchange Commission this past week decided to take a second look at the practice.
• JPMorgan(JPM) to Seed Prop Trading Unit With $2 Billion. JP Morgan is pressing ahead with plans to move its proprietary trading unit out of its investment bank and into its asset management division. Mike Stewart, currently co-head of the bank's global emerging markets business, will lead the new group, which is expected to be seeded with about $2 billion by JP Morgan, according to a person familiar with the situation.
• In Tribute to Wells(WFC), Banks Try the Hard Sell. Since its acquisition of Wachovia Corp., Wells Fargo & Co. has emerged as the king of consumer banking, rolling out profitable banking products from its branches that it calls "stores." Without the volatile securities business that hobbled some banks, Wells is making hay from a consumer franchise once derided by its slicker Wall Street rivals as a Midwestern, cornpone operation after its 1998 merger with Minneapolis-based Norwest Corp. The cornerstone of that franchise is a strategy called cross-selling, in which Wells tries to sell additional products to existing customers.
• Libya to Resume Oil Shipments From Rebel-Held Area. Officials of the Arabian Gulf Oil Company, Libya's largest oil producer and the only one based in the country's rebel-controlled eastern territory, said they expect to resume oil shipments later on Sunday when an oil tanker departs from a port in northeastern Libya. It would be the first oil exported from the rebel-held east in over a week.
• E-Commerce Will Keep Rolling, Research Firm Says. Internet retail sales in the U.S. will grow 10% a year through 2015 as shoppers spend more time online, Forrester Research says, and the implications aren’t good for brick-and-mortar stores. According to a new report out Monday, U.S. e-commerce sales grew 12.6% in 2010 to $176 billion. That total will grow to $279 billion in 2015, writes Forrester analyst Sucharita Mulpuru.
• Blackstone(BX) Wins Bidding for Centro's U.S. Assets. Debt-laden Centro Properties Group agreed to sell its 588 U.S. shopping centers to private-equity giant Blackstone Group LP for $9.4 billion in a deal that will allow Centro's Australian operations to continue as a standalone company, according to people familiar with the matter.
• Why 2011 May Be The End of the Housing Crash.
• Unions vs. the Right to Work. How ironic that Wisconsin has become ground zero for the battle between taxpayers and public- employee labor unions. Wisconsin was the first state to allow collective bargaining for government workers (in 1959), following a tradition where it was the first to introduce a personal income tax (in 1911, before the introduction of the current form of individual income tax in 1913 by the federal government).
• The Libyan Uprising: Lessons From Iraq by Ahmad Chalabi. As we watch Libyan despot Moammar Gadhafi lash out at his subjects with all the murderous force at his disposal, those of us in Iraq are reminded of another uprising and another dictator who butchered thousands to preserve his reign of terror.

Bloomberg Businessweek:

• Buffett Seeks 'Major Acquisitions' After Berkshire(BRK/A) Profit Gains. Warren Buffett said he’s looking for “more major acquisitions” after the purchase of the Burlington Northern Santa Fe railroad helped increase fourth-quarter profit and cash holdings at his Berkshire Hathaway Inc. “Our elephant gun has been reloaded, and my trigger finger is itchy,” Buffett said of the outlook for deals yesterday in his annual letter to shareholders.

CNBC:

• Carmakers' Rush to China Could Fuel Another Bubble.

IBD:

• IBD 50's Ebix(EBIX) Software Automates Insurance Paperwork.

NY Times:

• Pakistan Demands Data on C.I.A Contractors. Pakistan’s chief spy agency has demanded an accounting by the Central Intelligence Agency of all its contractors working in Pakistan, a fallout from the arrest last month of an American involved in surveillance of militant groups, a senior Pakistani intelligence official said Friday.

Business Insider:

• This Week's Apple(AAPL) Event: What to Expect.
• 10 Best Restaurants in America.
• Qaddafi's Mercenaries Shoot Tripoli Protesters From Ambulances On Day That Is "Beyond a Massacre".
• Pension Costs Will Bankrupt California's Government. The Little Hoover Commission spent six months examining the finances and governance of public pensions in California. Their key findings are as follows:
• Why Rising Oil Prices Will Hurt China the Most.
  

Zero Hedge:

• JPMorgan(JPM) Seeks to Buy 10% in Twitter for $450 Million, As Dimon Tries to Copycat Goldman(GS) in Opening Tech Bubble Shadow Market to High Net Worth Clients.

LA Times:

• U.N. Leader Asks Hollywood for Help in Fight Against Global Climate Change. 'Together we can have a blockbuster impact on the world,' U.N. Secretary-General Ban Ki-moon tells Hollywood heavyweights at a forum on global climate change. Ban Ki-moon, the normally buttoned-up Secretary General of the United Nations, swept into Los Angeles during Oscar week playing the role of Hollywood pitchman. His message: Make global warming a hot issue. "I need your support," he told entertainment industry insiders during a daylong forum Tuesday that focused on recent heat waves, floods, fires and drought, which scientists link to human-induced climate change. "Animate these stories!" Ban pleaded. "Set them to music! Give them life! Together we can have a blockbuster impact on the world." If the pitch sounds a tad desperate, it's not surprising. In recent years, public concern over climate change has plummeted in the polls, U.N. efforts to craft a new global climate treaty have been unsuccessful, and Congress has rejected federal legislation to curb greenhouse gas emissions. The U.N. has long courted such celebrities as Audrey Hepburn, Mia Farrow, George Clooney and Angelina Jolie to be "goodwill ambassadors" for peacekeeping and anti-poverty efforts, but reaching out to writers, directors and producers to incorporate climate change issues in movies, television and social media is new. "We need to integrate climate change into what people watch on TV," he said. To coordinate with Hollywood, the U.N. has set up an office, the "Creative Community Outreach Initiative" in partnership with the United Nations Foundation, funded by media mogul Ted Turner. "There's a huge gap between what governments can do, given political constraints, and what they should do," Figueres told Hollywood executives. "That's where you come in. ... We need you to make it sexy and cool to bring about the energy revolution that has to happen." One questioner suggested that the U.N. model its efforts on Hollywood, Health & Society, an initiative funded by the Centers for Disease Control and Prevention and other agencies and foundations to incorporate into television shows information on such issues as cancer, diabetes, and AIDS. Assistant Secretary-General Robert Orr agreed, saying, "It's a darn good playbook."

CNN Money:

• Gas Surges 17 Cents in a Week.

Forbes:

• Jasmine Revolution's Throw China's Africa Strategy Into Limbo. While many China observers have wondered about the effect of North Africa’s jasmine revolutions on Chinese society, there has been far less discussion about how they will affect China on the business front.

Washington Post:

• If It Comes to a Shutdown, the GOP Should Stick to Its Principles. The Washington establishment believes that the government shutdown of 1995 was a disastrous mistake that accomplished little and cost House Republicans politically. The facts are exactly the opposite.
• SEC Probing Citigroup(C) Actions During Crisis. Citigroup reported Friday that the Securities and Exchange Commission is investigating the company's conduct in areas related to the financial crisis. "The SEC, among other regulators, is investigating Citigroup's subprime and other mortgage-related conduct and business activities, as well as other business activities affected by the credit crisis," the company said in an annual report filed with the SEC. The subjects the SEC is investigating include Citigroup's structuring and sale of derivatives known as collateralized debt obligations, the company reported.

MercuryNews.com:

• Creating Tomorrow's Abortion Providers at UC and Stanford. This is the face of the new foot soldier in the battle to maintain access to abortion: the girl next door. Graduating in record numbers from medical schools, young women are increasing the ranks of tomorrow's abortion providers, bringing the procedure out of the margins and into mainstream medicine -- and securing its place within academia's safe and supportive structure. UC San Francisco and Stanford are among the universities leading the way.

USA Today:

• Trucking Rates Forecast to Roll Higher. Trucking firms are expected to capture their biggest rate increases in years in 2011, adding another threat to growing inflation worries.

Reuters:

• Tremont Investors in $100 Million Pact Over Madoff. Investors who lost money in Bernard Madoff's Ponzi scheme have reached a $100 million settlement with a group of funds affiliated with Tremont Group Holdings Inc that funneled their money to the now imprisoned con man.
• Rising Oil Prices Could Stall US States' Recoveries. Rising oil prices could trample prospects for economic recovery in many U.S. states, three governors warned on Sunday, as a leading economist said they also threaten the country's economic comeback. "Oil prices -- I hope don't go any higher," said Indiana Governor Mitch Daniels, a possible contender for the Republican presidential nomination in 2012. "But everywhere now one hears there's more than a minor risk they're going to go a lot higher." A spike could freeze business investment and consumer spending, he said during a meeting of the National Governors Association. "There is nothing more threatening to our economic prospects than higher oil prices," Moody's Analytics chief economist Mark Zandi told the governors, calling it "our number one problem today." Zandi said the national economy can probably withstand oil remaining at $100 per barrel or below but "if we go above that, I think there is reason to be nervous."

AFP:

• Saudi Activistts Call for Major Reforms. More than 100 Saudi academics, activists and businessmen have called for major reforms including the establishment of a "constitutional monarchy" in the kingdom, in an Internet statement on Sunday. "We will submit these requests to King Abdullah at a later stage," said Khaled al-Dakhil, a political science professor at the King Saud University and one of the 132 signatories of the petition. "We have high hopes that these reforms will be implemented," Dakhil told AFP. "Now is the time."

Financial Times:

• Fund of Hedge Funds' Share Slips. Fund of hedge funds have seen their share of the overall hedge fund industry slump from 50 per cent before the financial crisis to less than 40 per cent, according to Standard & Poor’s. And although the rate of decline is slowing, S&P has forecast this figure is likely to fall further. Worse still, while the initial outflows from funds of funds in 2008 and the first half of 2009 were driven by the perceived failures of the sector – such as liquidity problems and substandard due diligence on the part of vehicles that invested with Bernard Madoff – the industry’s continuing decline in importance is driven by a factor out of its control, according to S&P: the increasing incidence of large institutional investors investing directly.
• 3M(MMM) Chief Warns Obaam Over Business Regulation. The head of one of the US’s biggest industrial groups has launched a scathing attack on Barack Obama’s attempts to repair relations with companies, dubbing him “anti-business”. Manufacturers could shift production out of the US to Canada or Mexico as a result, warned George Buckley, chief executive and chairman of 3M. “I judge people by their feet, not their mouth,” he told the Financial Times. “We know what his instincts are – they are Robin Hood-esque. He is anti-business.”

Business Spectator:

• RBA's McKibbin Warns on Global Price Bubble. Reserve Bank of Australia board member Warwick McKibbin has warned Australia might be caught in a global bubble that could inflict more damage than the global financial crisis. According to The Australian, Professor McKibbin says the current bubble in Asian property and commodities markets – once burst – could end Australia's record high terms of trade and push down the dollar. This would see the central bank under pressure to fight inflation by raising the official interest rate despite falling export prices. "This is shaping to be much bigger than 2004 to 2007," he said in comparing the new excess of global liquidity with the recent bubble, which led to the worst global financial crisis since the 1930s. Professor McKibbin further suggested that the bursting of the bubble could challenge the government's budget.

People's Daily:

• Bank of China Ltd.'s Chairman Xiao Gang said there's room for interest rate increases, citing Xiao in an interview. China should only increase the yuan's flexibility gradually as the economy and companies can not sustain a one-time "large" appreciation, Xiao said.

South China Morning Post:

• China police asked several foreign media in Beijing to follow reporting rules that require prior consent for interviews after the "Jasmine" protests, citing a release issued by the Foreign Correspondents' Club of China. The phone calls and summons to meet officials from the police show there may be "tighter-than-usual reporting conditions," the release said.

Weekend Recommendations
Citigroup:

• Reiterated Buy on (DRC), raised estimates, boosted target to $60.
• Reiterated Buy on (CBE), target $74.
• Reiterated Buy on (ETN), raised target to $124.
  

Night Trading

• Asian indices are -.25% to +.50% on average.
• Asia Ex-Japan Investment Grade CDS Index 109.50 -1.0 basis point.
• Asia Pacific Sovereign CDS Index 121.50 -1.5 basis points.
  
• S&P 500 futures -.17%.
• NASDAQ 100 futures -.17%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (OSG)/-1.95
• (KWK)/.14
• (EIX)/.59
• (SLXP)/.50
• (WRC)/.71
• (VC)/1.29
• (KCP)/.31

Economic Releases
8:30 am EST

• Personal Income for January is estimated to rise +.4% versus a +.4% gain in December.
• Personal Spending for January is estimated to rise +.4% versus a +.7% gain in December.
• PCE Core for January is estimated to rise +.1% versus unch. in December.
  

9:45 am EST

• Chicago Purchasing Manager for February is estimated to fall to 67.5 versus 68.8 in January.

10:00 am EST

• Pending Home Sales for January are estimated to fall -2.3% versus a +2.0% gain in December.

Upcoming Splits

• (WEC) 2-for-1
• (DEST) 2-for-1

Other Potential Market Movers

• The Fed's Dudley speaking, Fed's Rosengren speaking, $32 Billion 3-Month and $30 Billion 6-Month Treasury Bills Auctions, Morgan Stanley Tech/Media/Telecom Conference, NAPM-Milwaukee, Dallas Fed Manufacturing Activity and the (VPRT) investor day could also impact trading today.
  

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and financial 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 week.

Weekly Outlook

U.S. Week Ahead by MarketWatch (video).
Wall St. Week Ahead by Reuters.
Stocks to Watch Monday by MarketWatch.
Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week mixed as Mideast unrest, emerging market inflation worries, more shorting and US housing concerns offset earnings optimism, fund inflows, buyout speculation and mostly positive economic data. My intermediate-term trading indicators are giving mostly bullish signals and the Portfolio is 100% net long heading into the week.

Market Week in Review

S&P 500 1,319.88 -1.53%*



The Weekly Wrap by Briefing.com.

*5-Day Change