Tuesday Watch

Evening Headlines
Bloomberg:

• Radiation Danger Rises as Japan Nuclear Plant Crisis Worsens. Japan’s Prime Minister said the danger of further radiation leaks from a crippled nuclear power station is rising after three explosions and a fire at the site 135 miles north of Tokyo. Naoto Kan appealed for calm in a televised address, saying his government was doing its utmost to contain the radioactive leakage at Tokyo Electric Power Co.’s Fukushima Dai-Ichi plant following last week’s earthquake and tsunami. Blasts have occurred at three of the station’s six reactors since March 12 and a fire was discovered in a fourth unit’s building today. Citizens living within a 30-kilometer (19 miles) radius of the plant should stay indoors, Kan said.
• Japanese Stocks Head for Record Two-Day Loss as Radiation Risk Increases. Japan’s shares tumbled, with the Topix index suffering its worst two day decline since records began in 1949, as concern grew about the safety of nuclear plants damaged by the country’s worst earthquake on record. Tokyo Electric Power Co., Asia’s biggest power generator, was set to retreat by the daily limit of 25 percent after the company confirmed an explosion at a third reactor and a fire at a fourth today at its nuclear plant in Fukushima, north of Tokyo. Hitachi Ltd., which provides nuclear power generation systems, plunged by the daily limit of 19 percent. Sony Corp., Japan’s biggest exporter of consumer electronics, declined 13 percent after the company yesterday said it halted production at some factories. The Nikkei 225 Stock Average fell 14 percent to 8,313.73 as of 1:02 p.m. in Tokyo, the lowest since April 2009 and its worst two-day decline since at least 1970, according to data compiled by Bloomberg. The broader Topix index declined 13 percent to 735.72, set for the lowest close since March 2009 and its biggest intraday decline since October 1987.
• US Treasuries Jump in 'Violent' Rally as Kan Warns of Further Radiation Leaks. Treasuries surged to become the world’s best-performing bonds over the past week after Japanese Prime Minister Naoto Kan said the danger of further leaks from a damaged nuclear power station is increasing. “The market is moving aggressively,” said Colin Embree, Singapore-based head of fixed-income trading and sales at Bank of Nova Scotia Asia Ltd., a unit of Canada’s third-largest lender. “This isn’t a flight to quality. It’s a flight from disaster. The moves tend to be quite violent.”
• Saudi Arabia, GCC Troops Enter Bahrain as Protests Threaten Gulf. Saudi Arabian troops moved into Bahrain yesterday as part of a regional force from the Gulf Cooperation Council, the first outside intervention since a wave of popular uprisings swept through parts of the Arab world. Security forces from the United Arab Emirates will also take part, the state-run Emirates News Agency said yesterday. The UAE contingent is part of the GCC’s Joint Peninsula Shield, a military coalition established to protect the six member states from outside attack. More than 100 military vehicles have crossed into Bahrain, al-Jazeera television reported. The deployment signals that the Bahraini regime has lost confidence it can deal with the protests and underscores Saudi Arabian concerns about uprisings at home, according to Christopher Davidson, a scholar in Middle East politics at Durham University and author of “Power and Politics in the Gulf Monarchies,” “Clearly, this is not an UAE force, this is a Saudi force with a few UAE policemen,” Davidson said in a telephone interview late yesterday. “It is in Saudi’s interest that nothing serious happens in Bahrain, because it would embolden similar protests in its eastern provinces.”
• Qaddafi's Advance Puts Forces 100 Miles From Rebel's Capital. Muammar Qaddafi’s warplanes attacked rebels in the town of Ajdabiya, as opposition officials asked Secretary of State Hillary Clinton for airstrikes on Qaddafi’s airfields and military equipment. Ajdabiya, about 100 miles (160 kilometers) from Benghazi, the rebel capital, came under bombardment yesterday as insurgents prepared to defend it, a resident said. Rebel troops fled Brega, an oil port to the southwest, though fighting continued around the town, the Associated Press reported. Libyan state television showed footage of what it said was Brega “purged of armed terrorist gangs.”
• Shipping Rates Poised to Decline 34% After Two-Week Rally: Freight Markets. The rebound that more than doubled commodity freight costs in two weeks is peaking as idled ships haul anchor and compete for cargoes of iron ore and coal. There were 282 capesizes anchored worldwide March 14, down from 300 Feb. 26, data compiled by Bloomberg show. The glut will mean second-quarter costs of $10,000 a day, 34 percent less than prices in the forwards market, said Sverre Bjorn Svenning, the analyst at Fearnley Consultants A/S who correctly predicted the industry’s crash in 2008. Forward freight agreements, traded by brokers and used to hedge or bet on future shipping rates, were at $15,175 by 6:50 p.m. in London yesterday.
• Commodity futures require tighter trading rules to curb speculation and check gains in food prices that have reached all-time highs, the head of the UN's Food and Agriculture Organization said. While natural disasters have driven up food prices, "speculation is exacerbating price volatility by giving the impression that there is additional demand when there is no additional demand," FAO Dirctor General Jacques Diouf said. "We should return to the regulation that existed before 1999" in U.S. commodities markets, Diouf said.
• HP(HPQ) to Start Cloud Service, App Stores; Raises Dividend. Hewlett-Packard Co. (HPQ) plans to introduce a cloud-computing service and will increase its quarterly dividend, early efforts by Chief Executive Officer Leo Apotheker to boost sales and reverse a share-price decline. HP will also put its WebOS mobile-operating system onto a broader range of devices for consumers and businesses, in a bid to make the company’s various products work better together, Apotheker said today at an event in San Francisco.
• Texas Instruments(TXN) Says Japan Plant Damage to Hurt Sales. Texas Instruments Inc. (TXN), the second- largest U.S. chipmaker, said “substantial” damage to one of its plants in Japan from last week’s earthquake will hurt sales in the first and second quarters. The plant in Miho, Japan, produced about 10 percent of Texas Instruments’ output by revenue and won’t be able to return to full shipment capacity until September, the Dallas-based company said in a statement today. The company is working to shift production to its other facilities and has identified alternatives for about 60 percent of that lost production.
• Microsoft(MSFT) Said to Stop Releasing Zune as Demands Ebbs. Microsoft Corp. (MSFT) will stop introducing new versions of the Zune music and video player because of tepid demand, letting the company shift its focus to other devices, according to a person familiar with the decision.
• The Markit iTraxx Japan Index jumped 35 basis points to 145.5 basis points, set for its biggest one-day increase since Feb. 17,2009, according to prices from Deutsche Bank AG and CMA in NY. Contracts to protect Japanese government debt for five years climbed 5 basis points to 100.5, Deutsche Bank prices show. That's the highest since March 2009.
  

Wall Street Journal:

• Nuclear Risk Rising in Japan. Crisis Spreads to Third Reactor as Operators Struggle to Prevent Large-Scale Radiation Leaks; New Explosion Reported. Japan's nuclear crisis showed signs of spinning out of control Tuesday, after officials reported a third explosion and warned of possible damage to a critical part of the cooling system at the troubled Fukushima Daiichi nuclear-power complex. Tuesday's explosion at the No. 2 reactor in the Fukushima complex, 150 miles north of Tokyo, for the first time raised the possibility that the key containment structure of the unit, which protects the reactor vessel and keeps dangerous radioactive materials from leaking out, had been damaged. The telltale sign, Tokyo Electric Power Co. officials said, was that pressure had dropped in the "suppression pool"—the part of the reactor that converts steam to water at the bottom of the container. Meanwhile, radiation levels outside the reactor building rose sharply. Tepco evacuated some of the workers from the unit as a precaution. Prime Minister Naoto Kan gave a brief address to the nation saying, "We will do our utmost to prevent further spreading of radiation leaks. I sincerely urge everyone in the nation to act calmly."
• Hedge Funds Had Bets Against Japan. Even Before the Disaster, Big Investors Were Wagering on Economic Problems.
• Nasdaq Nears Competing Bid for NYSE. Nasdaq Stock Market owner Nasdaq OMX Group Inc., in the latest salvo in the global exchange consolidation race, moved closer to making a competing bid for the New York Stock Exchange.
• Euro-Zone Ministers Stall on Bailout Details. Euro-zone finance ministers reached no agreement Monday on precisely how the bloc's 17 members will share the burden of enlarging bailout funds, and put off discussions until next week. But despite the unresolved details, markets reacted warmly to Saturday morning's announcement of a pact to expand the euro zone's current bailout capacity. In trading Monday, the prices of Spanish, Portuguese and Greek bonds jumped, bringing down their interest rates and reflecting improved investor confidence.
• More Mortgage Mischief. Elizabeth Warren revs up her Consumer Financial Protection Bureau.

CNBC:

• Top Hedgies Scaling Back on Stock Exposure. He says all the uncertainty introduced by the tragic events in Japan is a key factor influencing their decision. But it's not the only factor. There are two others. Another is the sharp increase in the price of oil “A 10-dollar increase per barrel in oil is something like a 3/10 of a percent move lower in GDP,” he says. Also Scaramucci says the smart money is worried about a slowdown in Europe.
• Greenberg: Another Chinese Stock Blow-Up. It’s getting hard to keep the Chinese reverse mergers straight, let alone those that are the focus of alleged accounting problems.

MarketWatch:

• GE(GE) Shares Drop on Japanese Nuclear Fears. Shares of General Electric Co. fell as much as 4.5% Monday on fears that a nuclear emergency in Japan could leave the global conglomerate vulnerable to liability.

Business Insider:

• Get Excited, Because Tuesday is FOMC Day - Here's What to Expect.

Zero Hedge:

• Gamma Radiation in Fukushima-Downwind Ibaraki Disclosed, 30 Times Above Normal.

IBD:

• ASML Holding(ASML) Rides Long Industry Upswing.

Forbes:

• Japan's Nuclear Woes Won't Help The Solar Sector, Analyst Says.

Consumer Reports:

• First Look: Apple(AAPL) iPad 2. (video)

Politico:

• President Obama Staying in Background on Deficits. When President Barack Obama opened the first meeting of his fiscal commission last April, he promised to be “standing with them” as they produced recommendations for curbing the nation’s escalating debt. Republicans and Democrats say they are still waiting.

Rasmussen Reports:

• Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Monday shows that 23% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty-three percent (43%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -20. That matches the president’s lowest ratings of 2011 (see trends).

Financial Times:

• Super-Catastrophe and Super-Banking Risk. We thought we’d present the Australian hedge fund manager’s latest thoughts on the financial fallout (no pun intended) from Japan’s devastating earthquake:

Sky News:

• Much of the unrest in north Africa is motivated by a desire for a better standard of life, and not in pursuit of democracy, Mohamed Ali Alabbar, chairman of Emaar Properties PJSC, said in an interview.

Yomiuri:

• The levels of radiation detected in Tokyo aren't high enough to affect health. The levels are about 20 times normal, or .809 microsieverts, citing city officials.

Kyodo News:

• Radiation levels in Saitama, north of Tokyo, rose to 1,222 nanosieverts, or almost 40 times normal levels as of 11 a.m. local time, citing the prefectural government.
• About 140,000 people within a radius of 20 to 30 kilometers from Tokyo Electric Power Co.'s Fukushima Dai-Ichi nuclear power plant were newly ordered to stay indoors, citing the prefectural government.
  

NHK:

• Live news broadcast in English.
  
• Radiation levels exceeded the legal limit in Tokai-mura, in Japan's eastern Ibaraki prefecture. The location is 110 kilometers south of Tokyo Electric Power Co.'s Fukushima Daiichi nuclear power plant.

China Business News:

• Some Chinese banks may face "relatively large" pressure from a loan-loss reserve ratio rule based on tests by China's banking regulator, citing Yan Qingmin, an assistant chairman with the China Banking Regulatory Commission.

Evening Recommendations
Citigroup:

• Rated (HBI) Buy, target $33.
• Rated (MFB) Buy, target $33.
  

Night Trading

• Asian equity indices are -4.0% to -1.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 116.0 +4.5 basis points.
  
• Asia Pacific Sovereign CDS Index 119.0 unch.
  
• S&P 500 futures -2.46%.
  
• NASDAQ 100 futures -2.36%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (BWS)/.15
• (FSS)/.08
• (WSM)/.98
• (DSW)/.47
• (RUE)/.43
• (FDS)/.87s

Economic Releases
8:30 am EST

• Empire Manufacturing for March is estimated to rise to 16.1 versus a reading of 15.43 in February.
• The Import Price Index for February is estimated to rise +.9% versus a +1.5% gain in January.
  

9:00 am EST

• Net Long-term TIC Flows for January are estimated to fall to $55.0B versus $65.9B in December.

10:00 am EST

• The NAHB Housing Market Index for March is estimated to rise to 17.0 versus 16.0 in February.

2:15 pm EST

• The FOMC is expected to leave the benchmark fed funds rate at .25%.

Upcoming Splits

• (LEA) 2-for-1
  

Other Potential Market Movers

• The weekly retail sales reports, William Blair Tech Symposium, Barclays Healthcare Conference, (IFF) investor day, (KKR) investor day, (PETD) analyst day and the (SIGM) investors day could also impact trading today.
  

BOTTOM LINE: Asian indices are sharply lower, weighed down by technology and commodity shares in the region. I expect US stocks to open sharply lower and to rally into the afternoon, finishing modestly lower. The Portfolio is 75% net long heading into the day.

Stocks Lower into Final Hour on Japan Concerns, Rising Energy Prices, Growing Mideast Unrest, Technical Selling

Broad Market Tone:

• Advance/Decline Line: Substantially Lower
  
• Sector Performance: Almost Every Sector Declining
  
• Volume: Slightly Below Average
  
• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• VIX 21.70 +7.87%
  
• ISE Sentiment Index 136.0 +29.53%
  
• Total Put/Call .73 -32.41%
  
• NYSE Arms 1.05 +136.55%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 86.57 -.21%
  
• European Financial Sector CDS Index 119.0 -1.62%
  
• Western Europe Sovereign Debt CDS Index 179.50 bps -1.55%
  
• Emerging Market CDS Index 215.70 +1.03%
  
• 2-Year Swap Spread 20.0 unch.
  
• TED Spread 23.0 -1 bp
  

Economic Gauges:

• 3-Month T-Bill Yield .07% unch.
  
• Yield Curve 275.0 -2 bps
  
• China Import Iron Ore Spot $166.30/Metric Tonne -.66%
  
• Citi US Economic Surprise Index +63.50 -4.8 points
  
• 10-Year TIPS Spread 2.44% -3 bps
  

Overseas Futures:

• Nikkei Futures: Indicating -280 open in Japan
• DAX Futures: Indicating +21 open in Germany

Portfolio:

• Slighltly Lower: On losses in my Tech and Medical longs
  
• Disclosed Trades: Added to my (IWM)/(QQQQ) hedges and then covered some of them
  
• Market Exposure: 75% Net Long

BOTTOM LINE: Today's overall market action is just mildly bearish as the S&P 500 cut losses into the afternoon, despite the Japan disaster, growing Mideast unrest, rising energy prices, recent technical damage and emerging market inflation fears. On the positive side, Steel, Oil Service, Energy, Alt Energy and Coal shares are higher on the day. Small-caps are outperforming. The UBS-Bloomberg Ag Spot Index is down -1.1%. The 10-year yield is declining -5 bps to 3.35%. The Spain sovereign cds is dropping -6.26% to 240.83 bps, the Italy sovereign cds is falling -9.79% to 161.57 bps, the Portugal sovereign cds is declining -4.47% to 492.39 bps, the Greece sovereign cds is declining -5.46% to 995.31 bps, the Belgium sovereign cds is dropping -5.47% to 155.79 and the UK sovereign cds is falling -5.9% to 55.52 bps. Moreover, the US Muni CDS Index is down -3.76% to 151.19 bps. On the negative side, Airline, Gaming, Restaurant, Homebuilding, HMO, Hospital, I-Banking, Telecom, Disk Drive, Computer Hardware and Utility shares are under meaningful pressure, falling more than 1.0%. (XLF) has been weak throughout the day. Tech is also underperforming again. Lumber is falling -1.13%. China Iron Ore Spot has declined -13.3% in less than 1 month. The Ireland sovereign sovereign cds is rising +1.36% to 605.04 bps. Moreover, the Japan sovereign cds is soaring +14.05% to 95.08 bps. The avg. US price for a gallon of gas is up +.02/gallon today to $3.56/gallon. It is up .44/gallon in 27 days. For the second day in a row, the major US averages are displaying exceptional resilience in the face of several potentially damaging catalysts, which is a major positive. Several key market leaders, such as (AAPL), continue to trade well. However, breadth and volume remain poor. The market trades like it wants to bottom, but it needs a positive catalyst. I expect US stocks to trade mixed-to-higher into the close from current levels on fund inflows, short-covering, bargain-hunting, buyout speculation and a bounce in the euro.

Today's Headlines

Bloomberg:

• Japan Appeals for International Aid in Fight Against Meltdown. Prime Minister Naoto Kan appealed for international help and workers battled to prevent a nuclear meltdown after a second blast rocked an atomic plant north of Tokyo. Millions remained without electricity or water following Japan’s strongest earthquake, which may have killed 10,000.
• Japanese Sovereign, Corporate Bond Risk Surges After Earthquake. The cost of protecting Japanese sovereign and corporate bonds from default surged after the nation’s most powerful earthquake on record, credit-default swap prices show. Swaps on Japanese government debt rose 7.5 basis points to 86 basis points as of 8:26 a.m. in Tokyo, according to Citigroup Inc. That’s the biggest increase since Nov. 30 and the highest level since Jan. 18, prices from data provider CMA show. The Markit iTraxx Japan index soared 21.5 basis points to 119 basis points as of 8:54 a.m. in Tokyo, the biggest rise since May 25 and the highest level since Aug. 16, according to Deutsche Bank AG and CMA in New York.
• Gulf Council Troops Enter Bahrain to Help Restore Security Amid Protests. Saudi Arabian troops moved into Bahrain as part of a regional force, the first cross-border intervention since a wave of popular uprisings swept through parts of the Arab world. The Bahraini army “urges citizens and residents to cooperate completely and welcome their brothers,” the official Bahrain News Agency said. More than 100 military vehicles crossed into Bahrain, Al Jazeera television said. The United Arab Emirates will also participate in the Gulf Cooperation Council force, the state-run Emirates News Agency reported. Mainly Shiite protesters in Bahrain have been demonstrating since Feb. 14, demanding democracy through free elections from their Sunni monarch, inspired by movements that have swept the region in the past two months and unseated longtime rulers in Tunisia and Egypt. Shiites comprise as much as 70 percent of the population. Khalil al-Marzooq, a member of al-Wefaq, the largest Shiite opposition party, said GCC intervention would “destroy the economy and cause a financial crisis.”
• Crude Falls to Two-Week Low as Japan Quake May Reduce Demand. Crude oil fell in New York to the lowest level in two weeks on speculation demand from Japan may decline after the 8.9-magnitude earthquake devastated the world’s third-largest economy. Prices tumbled 4.9 percent in five days of losses, the longest losing streak in a month, as the quake that hit the country on March 11 shut 29 percent of domestic refining capacity, according to Bloomberg calculations based on Petroleum Association of Japan data. “You are taking demand from the third-largest economy out of the market and oil is responding negatively,” said Tom Bentz, a broker with BNP Paribas Commodity Futures in New York. “The short-term trend still looks to be lower. The next support area is somewhere around $96.” Oil for April delivery fell 86 cents, or 0.9 percent, to $100.30 a barrel at 12:17 p.m. on the New York Mercantile Exchange. Futures touched $98.47, the lowest intraday price since March 1. Crude is up 23 percent from a year ago.
• Greece Leads Drop in Sovereign Bond Risk on Agreement of Bailout Expansion. Europe’s peripheral governments led a decline in the cost of insuring the region’s debt, after leaders agreed to expand the rescue fund for indebted nations. Credit-default swaps on Greece tumbled 94 basis points to 949, while contracts on Italy fell 19 to 161, Portugal dropped 39 to 484 and Spain declined 23 to 234, according to CMA. The Markit iTraxx SovX Western Europe Index of 15 governments was 11 basis points lower at 177.5, the biggest drop in five weeks.
• China to Build $2 Billion Iran Dam, Power Plant, Press TV Says. Iranian and Chinese officials will sign a $2 billion agreement for the construction of a dam and a power plant in Iran’s western province of Lorestan, Press TV reported. The agreement will be signed between Sinohydro Corp., China’s largest water projects developer, and Iran’s Farab, the state-run news channel said, citing Mohammad Reza Rezazadeh, the managing director of Iran’s Water and Power Resources Development Co. The contract will be completed this week and operations are to start in the next Iranian calendar year, which starts on March 21, according to the report, published on Press TV’s website today. The dam, to be built on the Bakhtiari river in the Zagros mountains, will hold Iran’s largest reservoir, with a capacity of 4.8 billion cubic meters of water, and support a 1,500- megawatt hydroelectric power station, it said.
• Buffett Commits $9 Billion for Lubrizol(LZ) After Auto, Train Bets. Warren Buffett’s $9 billion deal to buy Lubrizol Corp. (LZ), the Wickliffe, Ohio-based maker of engine lubricants, follows bets by his Berkshire Hathaway Inc. (BRK/A) on cars, trucks, freight railroads and luxury jets. Berkshire will pay $135 a share in cash, 28 percent more than Lubrizol’s closing price on March 11, Buffett’s firm, based in Omaha, Nebraska, said in a statement today.
• Brazil's Debt May Be Under Pressure as Japanese Repatriate Funds on Quake. Debt linked to Brazil’s real may fall as Japanese investors, the largest holders of the bonds, bring funds home to pay for reconstruction following the nation’s earthquake, according to Guggenheim Capital Markets. Japanese investors hold at least $50 billion worth of real- linked debts issued by the World Bank, European Bank for Reconstruction & Development and Goldman Sachs Group Inc., according to Andrew Brenner, managing director at Guggenheim, a New-York based brokerage for institutional investors. “Japanese mutual funds bought a huge amount of the papers,” Brenner said in a telephone interview. “Those bonds will be under pressure. Japanese will look at what they’ve got and put more money in their own country for infrastructure.”

Wall Street Journal:

• Japan Nuclear Plan Troubles Deepen. Japan's unfolding nuclear crisis deepened Monday at a stricken power plant, after overheating in one reactor may have led to a dangerous melting of nuclear fuels and an explosion that hindered efforts to cool two others. Japanese officials said late Monday there is a high possibility that all three of the stricken reactors at the Fukushima Daiichi nuclear complex in northeastern Japan are now experiencing some degree of melting of their reactor cores that contain fuels—a condition that, if it worsens, could lead to dangerous radiation leaks. This suggests that despite various attempts to cool the reactors since Friday's massive earthquake and tsunami, the temperatures inside them remained precariously high.
• Updates on Japan in Real-Time.
• Japan Headwind to Hit Asian Economies. Disruptions to Japan's economy in the aftermath of last week's earthquake and tsunami are expected to ripple across Asia in the coming weeks, further muddling the region's economic picture at a time when countries are already struggling with higher oil and food prices.
• Gadhafi's Push Adds Urgency to Global Plan. Opposition Setbacks in Key Oil Towns Lend Urgency to Arab League Call to U.N. for a No-Fly Zone.

Business Insider:

• Fukushima: Fuel Rods at Three Reactors Are Melting.
• Libya Live: America Backs the No-Fly Zone.
• Stunning Photos of Post-Apocalyptic Japan.
• The Companies Exposed to Each Failing Reactor in Japan.
• The SEC Employees Watching Porn at Work Were Making Over $200,000/Year.
  

Zero Hedge:

• Baseline Japan Disaster Cost Estimates: 3-5% of GDP; Could Be As High as $1 Trillion.

New York Times:

• Bank of America(BAC) Unit Tried to Hide Foreclosure Information, Hackers Say. A hacker organization known as Anonymous released a series of e-mails on Monday provided by a former Bank of America employee who claims they show how a division of the bank sought to hide information on foreclosures.

DealReporter:

• Nasdaq(NDAQ) is in talks with lenders on financing an NYSE(NYX) bid, citing two industry sources.

Forbes:

• Pfizer(PFE) Could Split Off 40% of Company, Analyst Says. Bernstein Pharmaceuticals analyst Tim Anderson has a note out this morning suggesting that Pfizer could sell, spin off, or otherwise divest divisions accounting for $32 billion of its $67 billion in sales, reinventing itself as a pure pharmaceutical research firm like Eli Lilly, Bristol-Myers Squibb, or AstraZeneca.

Daily Finance:

• Slackening Copper Demand in China Hurts Commodities Investors.
  

Dallas Blog:

• Chinese Premier Talks of Inflation 'Tiger'. At a press conference in Beijing, China, Premier Wen Jiabao spoke about global inflation as a “tiger” and is becoming more problematic nowadays.

Rasmussen Reports:

• 62% Favor Repeal of Health Care Law. Support for repeal of the national health care law has reached its highest level since May of last year. The number of voters who believe the plan will increase the cost of care has tied its highest level since the law’s passage last March. The latest Rasmussen Reports national telephone survey of Likely Voters shows that 62% favor repeal of the health care law, including 51% who Strongly Favor it. Only 33% of voters oppose repeal, with 24% who are Strongly Opposed.

Reuters:

• Online Readership and Ad Revenue Overtake Newspapers. For the first time, online readership and advertising revenue has surpassed that of print newspapers. Online advertising revenue in the United States is projected to overtake print newspaper ad revenue in 2010, according to the latest report, the State of the News Media, from the Pew Research Center's Project for Excellence in Journalism. The study also found that more people -- 46 percent of Americans surveyed -- said they get news online at least three times a week, versus 40 percent who said they get their news from newspapers and their companion websites. "The migration to the Web is accelerating," said Tom Rosenstiel, director of the Project for Excellence in Journalism. "The quick adoption of the tablet (computer) and the spread of the smartphone is only adding to that."
• India Shipping Corp Sees Adverse Impact on Sector From Japan Quake. Last week's devastating earthquake in Japan is expected to have a negative impact on India's local shipping industry, the country's largest shipping services firm told Reuters on Monday.

Irish Times:

• Ireland's Noonan Seek EU Help to Ease Cost of Bank Bailouts. MINISTER FOR Finance Michael Noonan will ask the European authorities today to examine radical new measures to ease the cost of the bank bailouts on the State. Mr Noonan will meet European Central Bank (ECB) chief Jean-Claude Trichet and EU economics commissioner Olli Rehn in Brussels ahead of his first encounter tonight with EU finance ministers. Only two days after a dispute over corporate tax led euro zone leaders to refuse an interest rate cut on Irish bailout loans, he will press the case for a working group to be set up to examine how they might take on a further burden from Ireland’s bank bailout.

Bear Radar

Style Underperformer:

• Mid-Cap Value (-.96%)

Sector Underperformers:

• 1) Homebuilders -1.97% 2) I-Banks -1.65% 3) Disk Drives -1.53%

Stocks Falling on Unusual Volume:

• ATPG, NSANY, TM, DCM, GNCMA, GE, TNDM, AMSC, CLNE, HRBN, VOLC, EBIX, NXPI, HSFT, HOLI, SPRD, HIT, CCJ, ITF, IX, KYO, CW, SNE, TPL, VPL, ETR, OI, AFL, UTF, TIF, ETR, COH, NUS, ABG, CW, BWC, BKS, KV/A and SHAW
  

Stocks With Unusual Put Option Activity:

• 1) EWJ 2) TM 3) CCJ 4) XLU 5) AMAT
  

Stocks With Most Negative News Mentions:

• 1) MTZ 2) STP 3) TOL 4) BAC 5) MSFT

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth (-.79%)

Sector Outperformers:

• 1) Coal +1.38% 2) Alt Energy +.31% 3) Steel -.33%

Stocks Rising on Unusual Volume:

• LZ, PKX, CNX, YZC, FOE, MTL, CAT, GPOR, LWSN, GLNG, TESO, DNDN, CTAS, SCMR, AIRM, FNSR, LULU, SINA, CRUS, IRBT, JDSU, RBCN, AMAG, EBS, LDR, WFR, TSO, MIG, STRI, ALJ, ASH, WLK, VLO and PFE
  

Stocks With Unusual Call Option Activity:

• 1) EWJ 2) TM 3) MWW 4) PFE 5) BBBY
  

Stocks With Most Positive News Mentions:

• 1) CERN 2) XLNX 3) PH 4) ANN 5) COP

Charts:

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

Monday Watch

Weekend Headlines

Bloomberg:

• Quake Toll May Top 10,000 as Japan Battles to Prevent Nuclear Meltdown. Japan worked to contain its worst nuclear accident in at least 33 years at a plant north of Tokyo as local media said the death toll from the nation’s biggest earthquake and ensuing tsunami may top 10,000. Radiation levels around the Tokyo Electric Power Co. station in Fukushima, 135 miles north (217 kilometers) of the capital, rose after cooling systems at a second reactor failed, heightening concerns about a possible meltdown following an explosion there over the weekend. Water levels fell at a third reactor, raising the possibility of a hydrogen explosion there, Japan’s top government spokesman said yesterday. The 8.9-magnitude temblor and subsequent tsunami may have killed 10,000 in Miyagi prefecture north of Tokyo, national broadcaster NHK reported, citing local police. The official toll reached 1,597, with 1,481 more missing and 1,683 injured, the National Police Agency said. More than 350,000 people are in emergency shelters.
  
• Japanese Stocks Plunge After Nation's Strongest Earthquake; Honda, Toyota Decline. Japanese stocks tumbled the most in two years after the nation’s strongest earthquake on record snarled production lines and shut down factories, raising concern economic growth will stall. Orders to sell overwhelmed the Tokyo Stock Exchange, leaving many shares untraded at the open. Tokyo Electric Power Co., Asia’s biggest power company battling to avoid a meltdown at its Fukushima nuclear plant, was untraded and set to tumble 23 percent. Tokio Marine Holdings Inc., the nation’s largest property and casualty insurer by market value was set to fall 20 percent. Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. retreated at least 5 percent after Japan’s three-largest carmakers said thousands of new vehicles were damaged. Canon Inc., the No. 1 camera maker, plunged 9.1 percent. The Nikkei 225 Stock Average fell 4.7 percent to 9,771.07 as of 9:49 a.m. in Tokyo, set for the biggest drop since January 2009. The broader Topix index declined 6.6 percent to 855.32, the most since October 2008.
• Qaddafi Presses Rebels in Oil Port as Allies Debate No-Fly Zone. Muammar Qaddafi’s forces pushed toward the rebel-held oil port of Brega as Western nations grappled with measures that would halt the Libyan leader’s advance. Qaddafi’s soldiers moved on Brega after seizing Ras Lanuf, about 410 miles (660 kilometers) east of the capital, Tripoli, rebel fighter Adel Idriss, 31, said yesterday by telephone from the frontline. The city was being bombarded by air, sea and land, Al Jazeera television said, citing its correspondent.
• Saudi Stocks Advance After 'Day of Rage' Fails to Occur, Led by Al Rajhi. Saudi stocks rose for a sixth day as investors looked for bargains after the world’s biggest oil producer survived a so-called Day of Rage. Saudi Basic Industries Corp., the world’s biggest petrochemical maker, climbed 1 percent, and Al Rajhi Bank, the kingdom’s biggest lender, jumped 3.3 percent. The Tadawul All Share Index climbed 3 percent, the steepest gain since March 7, to 6,297.
• Hedge funds' bullish oil bets rose to an all-time high for a third straight week as concerns about supplies increased amid fighting in Libya and threats of protests in Saudi Arabia. Large speculators and funds increased net-long positions, or wagers on higher prices, by 2 percent in the seven days ended March 8 to 311,632 futures and options, the most in records dating back to june 2006, according to the CFTC. The total has jumped 68% since Feb. 15.
• Oil Falls for a Fifth Day in New York as Japanese Quake May Limit Demand. Oil fell in New York to the lowest in two weeks amid concern an earthquake in Japan will limit demand in the world’s third-largest economy and crude user. Oil has dropped 5.6 percent since March 7, the worst losing streak since the period up to Jan. 25. “With the closure of the factories and refineries in Japan we can expect the oil price to take a hit,” said Ben Le Brun, an analyst at CMC Markets based in Sydney. “It’s not good for their near-term growth prospects.” Oil for April delivery fell as much as $1.98, or 2 percent, to $99.18 a barrel on the New York Mercantile Exchange, the lowest intraday price since March 1.
• EU Puts Burden on Bailout States to Stop Crisis: Euro Credit. European leaders are betting their retooled bailout plan can defuse the region’s debt crisis as they reject costlier remedies and put the onus for stopping the turmoil on cash-strapped governments. In a pact struck in the early hours of the weekend and two weeks sooner than investors expected, officials broadened the size and scope of their 440 billion-euro ($614 billion) bailout fund and eased the terms of Greek rescue loans. They resisted calls to buy bonds in the open market or finance buybacks. The test of the accord will be whether investors reverse a slump that sent yields on Greek and Portuguese debt to euro-area records last week. Greece is fighting to show it can remain solvent and Portugal may be the next to seek aid. Further selling may force policy makers back to the drawing board when they reconvene March 24-25. “Policy makers understand that market sentiment is crucial, and at least in the near-term, these measures are likely to improve sentiment,” said John Stopford, head of fixed income at Investec Asset Management Ltd. in London, which manages $80 billion. “I need to see how they are implemented. I’m happy to stay away from peripheral bonds for now.”
• Metals Demand in Japan May Tumble as Quake Damage, Power Cuts Halt Plants. Demand for industrial metals in Japan, Asia’s biggest importer of aluminum, may decline as factories shut because of damage or power shortages after the country’s strongest earthquake on record, analysts said. “You’ve got some production decline and certainly a consumption decline as well,” Jim Lennon, a senior analyst at Macquarie Group Ltd., said in a phone interview today. Japan is the world’s second-largest buyer of copper ore after China. The northern Tohoku region most affected by the 8.9- magnitude temblor and subsequent tsunami represents about 8 percent of gross domestic product, and is host to factories making products from cars to beer.
• BHP Billiton(BHP) to Resume Gulf of Mexico Drilling After Permit Win. BHP Billiton Ltd. (BHP), the world’s biggest mining company, will resume drilling of a production well at its Shenzi oil field in the Gulf of Mexico after winning the second U.S. deep-water permit since BP Plc’s spill last year.
• Fannie Mae Ex-CEO Mudd May Face Claims in SEC Subprime Loans Investigation. Daniel Mudd, the former head of Fannie Mae, became the latest target in a probe by U.S. regulators of whether financial institutions were honest with investors about their exposure to subprime loans. Mudd, now chief executive officer of Fortress Investment Group LLC (FIG), confirmed in a statement to Bloomberg News that the Securities and Exchange Commission notified him yesterday the agency intends to pursue civil claims against him.
• Netanyahu Seeks Palestinian Condemnation for Murder of 5 Israeli Settlers. Prime Minister Benjamin Netanyahu urged the international community and Palestinian Authority to issue “strong, unequivocal condemnations” of a West Bank settlement attack that killed five members of an Israeli family. Dismissing Palestinian statements as “stuttering and weak,” Netanyahu said today in Tel Aviv that he wouldn’t “allow acts of terror to determine the map of Jewish settlement” in the West Bank. The parents of the family from the West Bank settlement of Itamar were stabbed to death along with three of their children aged 11, 4, and 4 months, Netanyahu said. Three other children survived including the oldest, 14, who was at a youth group meeting at the time of the attack.
• LinkedIn Says China Blocking Website Poses New Risk to Potential Investors. LinkedIn Corp., the largest professional-networking portal, said the possibility that China may bar access to its website poses a new risk to investors in its initial public offering. A block by China is among circumstances under which “the value of our network could be negatively impacted,” LinkedIn said in an updated prospectus filed March 11. The company’s Jan. 27 offering document contained no such reference to China. “The government of the People’s Republic of China recently blocked access to our site in China for a short period of time,” the latest filing said. “We cannot assure you that the Chinese government will not block access to one or more of our features and products or our entire site in China for a longer period of time or permanently.”

Wall Street Journal:

• Lehman Probe Stalls; Chance of No Charges. The U.S. government's investigation into the collapse of Lehman Brothers Holdings Inc. has hit daunting hurdles that could result in no civil or criminal charges ever being filed against the company's former executives, people familiar with the situation said. In recent months, Securities and Exchange Commission officials have grown increasingly doubtful they can prove that Lehman violated U.S. laws by using an accounting maneuver to move as much as $50 billion in assets off its balance sheet, which made it appear that the securities firm had reduced its debt levels. SEC officials also aren't confident they could win any lawsuit accusing former Lehman employees, including former Lehman Chief Executive Richard Fuld Jr., of failing to adequately mark down the value of the large real-estate portfolio acquired in Lehman's takeover of apartment developer Archstone-Smith Trust or to disclose the resulting losses to investors, according to people familiar with the matter.
• Officials Struggle to Prevent Meltdown at Two Japanese Reactors. Japanese officials battled into early Monday to prevent meltdowns at two damaged nuclear reactors, saying their fuel rods may have been critically damaged by overheating. Japanese officials battled into early Monday to prevent meltdowns at two damaged nuclear reactors, saying their fuel rods may have been critically damaged by overheating.
• To Avert Criticism, Fed Avoids Saying 'Core'. As gasoline prices surge, Federal Reserve Chairman Ben Bernanke is changing his tune when discussing inflation in public—in part to avert criticism that central bankers are out of touch with consumers. Fed officials have for years cited "core inflation," a measure that excludes food and energy prices. That is because core inflation tends to be a useful predictor of inflation over a couple of years, which they call the medium term, a period that is key to monetary-policy decisions. But this focus has drawn criticism that Fed officials aren't facing economic reality, as if they don't eat or drive. Now, Mr. Bernanke is taking another tack in his public communications. In two days of testimony on Capitol Hill earlier this month, the Fed chairman never uttered the words "core inflation" while explaining the central bank's aims and policies. Instead of citing a specific measure, he emphasized the Fed's time frame. "Inflation can vary considerably in the short run," he told the House Financial Services Committee. "Our objective is to hit low and stable inflation in the medium term."
• EPA Tangles With New Critic: Labor. The Obama administration's environmental agenda, long a target of American business, is beginning to take fire from some of the Democratic Party's most reliable supporters: Labor unions. Several unions with strong influence in key states are demanding that the Environmental Protection Agency soften new regulations aimed at pollution associated with coal-fired power plants. Their contention: Roughly half a dozen rules expected to roll out within the next two years could put thousands of jobs in jeopardy and damage the party's 2012 election prospects. "If the EPA issues regulations that cost jobs in Pennsylvania and Ohio, the Republicans will blast the President with it over and over," says Stewart Acuff, chief of staff to the president of the Utility Workers Union of America. "Not just the President. Every Democratic [lawmaker] from those states."
• RIM(RIMM) Hits India's Email Demands. A top executive of BlackBerry-maker Research in Motion Ltd. said Indian security agencies are making "rather astonishing" demands for increased powers to monitor email and other data traffic, raising serious privacy issues that threaten to harm the country's reputation with foreign investors.
• The Federal Reserve Faces an Oil Dilemma.
  

IBD:

• Panera(PNRA) Bread Serves Up Tasty Results.

NY Times:

• Supply Disruptions of Power and Water Threaten Japan's Economy. As the humanitarian and nuclear crises in Japan escalated after the devastating earthquake and tsunami, the impact on the country’s economy appeared to be spreading as well.
• New Worries for Buyers Seeking Mortgages. The dread of not finding a lender after the market collapsed in 2009 has been replaced by uncertainty, confusion and frustration. According to brokers and lenders, the list of demands that stand between finding a place to buy and signing on the dotted line simply never stops morphing.
• Investigation of NY Bus Crash Proceeds on Several Fronts. Federal investigators and the State Police spent Sunday studying the wreckage of a tour bus and the stretch of Interstate 95 where the vehicle flipped and skidded nearly 500 feet into a signpost, killing 14 passengers in the Bronx the day before.

Business Insider:

• Survey Says: 70% of iPad 2 Buyers Were First-Time iPad Owners. Piper Jaffray's Gene Munster and team surveyed 236 people in line for the iPad 2 on Friday. Munster just summarized his findings in a note:
• Qaddafi's Odds of Surviving The Revolution Are Surging. The odds that Qaddafi is out of power, by the end of the year, have collapsed on Intrade. Previously they were in the 90s. Now they're just at 55.
• Here's What Protesting Public Employees Refuse to Understand or Admit.
• The Day After: Unforgettable Images of Destruction in Japan. (pics)
  

Zero Hedge:

• NHK Reports Hydrogen Explosion at Fukushima Reactor #3 as New Tsunami is Heading for the Plant. (NHK Live Video).
• Stunning New Footage of Japanese Tsunami. (videos) As per the BBC, newly emerged footage shows the force at which the tsunami struck Japan's coast. In the fishing port of Miyako, in Iwate prefecture, boats were overturned, while video from Kamaishi city shows cars being dragged down city streets by the water.
• OperationLeakS: "Ex-Bank of America(BAC) Employee Can Prove Mortgage Fraud".
• Saudi Arabia Prepares to Enter Bahrain.
  

FierceFinanceIT:

• iPad's Grip on Hedge Funds Tightens. In a terrific marketing coup, hedge fund IT provider Agio Technology hosted what it called its iPad Challenge. It gave iPads to 14 hedge fund managers who evaluated the impact of Apple's iPad on their jobs in real time. The iPad came pre-loaded with Agio's recommended top 10 financial apps for hedge funds. The results, which generated a bit of a buzz, bode well for the iPad as a mission critical technology at hedge funds. Some are now suggesting the iPad has the potential to muscle laptops out of the picture at many funds.
  

Rasmussen Reports:

• Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Sunday shows that 24% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty-two percent (42%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -18 (see trends).
• 3% Say Ivy League Schools Produce Better Workers.
• Investor Confidence Now at Lowest Level of the Year.
  

Politico:

• GOP Hugs Bill Clinton to Slam Obama on Oil Drilling. Republican leaders are turning to former President Bill Clinton to pummel President Barack Obama over his energy policies. Both House Majority Whip Kevin McCarthy (R-Calif.) and Senate Minority Whip Jon Kyl (R-Ariz.) used a joint Sunday show appearance to seize on Clinton's comments last week calling delays in issuing drilling permits "ridiculous."

USA Today:

• Heating Oil Use Falls as Prices, Irritation Rise.

AP:

• White House Urges Cuba to Release US Contractor. An outraged White House said Saturday it wants the Cuban government to immediately release an American international development worker sentenced to 15 years in prison for crimes against the state. National Security Council spokesman Tommy Vietor said the prison term "adds another injustice" to Alan Gross's ordeal. Vietor said Gross, a Maryland native arrested in December 2009 while on a U.S.-backed democracy-building project, has already spent too many days in detention and "should not spend one more."

Reuters:

• Clegg Unleashes Tirade Against Bankers. Deputy Prime Minister Nick Clegg said on Friday he wanted to "wring the neck" of bankers who award themselves big bonuses so soon after being bailed out by the government during the financial crisis. Clegg, leader of the Liberal Democrats and the son of a banker, also called financial market players "terrifying people in pinstripe suits" and said Britain needed "to look at the basic structure of banking."
• Portugal Opposition Won't Back New Cuts But Ready to Talk. Portugal's main opposition Social Democrats said they would not back additional budget consolidation measures unless the government amends them, meaning they may block some of the steps, deepening the country's debt crisis.
• Interview - Libyan Rebel Chief Says More Fighters Available. The head of Libya's rebel council said on Saturday there were plenty of fighters to attack the forces of Muammar Gaddafi, but said without restrictions on his ships and planes, civilians would suffer. In the east, Gaddafi forces have retaken the oil port of Ras Lanuf, and in the west, the revolt in Zawiyah has been crushed after days of fierce attacks by government forces. Asked if parts of the rebel army are being held back from the front line, Libyan National Council chief Mustafa Abdel Jalil said: "The volunteers now at the front are less than 30 percent of the people who are willing to go and fight, our people are ready and determined to fight Gaddafi's forces." On the question of securing arms supply from abroad, the former justice minister said in the interview with Reuters: "Some people (in the revolution) in their capacity are making efforts to get some weapons. If a no-fly zone and restrictions on Gaddafi's ships are not imposed, Libya's civilians are going to suffer."

Financial Times:

• Funds of Funds Curb Returns. Accessing hedge funds via fund of funds vehicles reduces annual returns by almost 3 percentage points, according to research by the Universities Superannuation Scheme, the UK’s second-largest pension fund. The findings coincide with a poll of 60 pension fund managers, with $56bn invested in hedge funds, showing that 63 per cent plan to increase their allocations to direct hedge funds, while just 2 per cent are looking to augment exposure to funds of funds. Simon Ruddick, managing director of Albourne Partners, which conducted the survey, said: “I don’t think funds of hedge funds add more value than they charge”.

Sunday Independent:

• Irish banks may need between 15 billion euros and 25 billion euros more in capital. The requirement for additional funds emerged during stress tests of the banks. The funds would be in addition to a 10 billion-euros capital injection deferred by former finance minister Brian Lenihan.

Expansion:

• Moody's Investors Service may lower its ratings on Spanish lenders and savings banks in coming days after it downgraded Spain's sovereign rating earlier this week, citing Moody's analyst Kathrin Muehlbronner. Moody's put 30 banks under watch on Dec. 20 and set a three-month time limit to make a decision on their ratings.
  

Welt am Sonntag:

• Stephen Roach, non-executive chairman of Morgan Stanley Asia Ltd., said China and India must do more to halt inflation before it "gets out of control" with "devastating consequences," citing an interview. If the central banks in the two countries wait too long to halt inflation, they may be forced to raise interest rates faster and steeper than if they move now, which could lead to a "hard landing," Roach said.

Xinhua:

• Members of the Chinese People's Political Consultative Conference, the nation's top political advisory body, urged the country to maintain "basic" price stability, citing the conference.

Beijing Times:

• China needs to pay "high attention" to the relatively large inflation pressure, citing Su Ning, former deputy governor of the People's Bank of China. The country should limit the growth in fixed-asset investments, Su said.

Caijing:

• China central bank adviser Xia Bin suggested a "relatively large" one-time yuan revaluation when necessary to reflect the development of the real economy, according to a commentary he wrote.

China's Securities Journal:

• China's "main" state-owned banks may need to raise $22.8 billion of capital in the next five years based on their current pace of lending, citing estimates by Jesse Wang, an executive vice president at China Investment Corp.

Al-Arabiay:

• Libyan rebels will receive weapons from friendly countries as they battle troops loyal to leader Muammar Qaddafi, Gen. Abdel-Fattah Younis, Libya's interior minister before joining the rebels, said in an interview. Persian Gulf countries were very supportive of the rebels' cause and the foreign minister of the UAE called them and offered help, Younis said. Younis said the U.S. had a very "conflicted" position with regard to the conflict in Libya.
  

Weekend Recommendations
Barron's:

• Made positive comments on (HPQ).

Night Trading

• Asian indices are -1.50% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 111.50 +2.5 basis points.
• Asia Pacific Sovereign CDS Index 119.50 +.5 basis point.
  
• S&P 500 futures -.55%.
• NASDAQ 100 futures -.73%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (EBIX)/.33
• (GEOY)/.36

Economic Releases

• None of note

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Citi Property Conference, CSFB Services Conference, Lazard Tech/Media Conference, (XLNX) analyst meeting, (CVX) analyst meeting and the $32 Billion 3-Month/$30 Billion 6-Month Treasury Bills Auctions could also impact trading today.
  

BOTTOM LINE: Asian indices are mostly lower, weighed down 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 75% net long heading into the week.