Bear Radar

Style Underperformer:

• Large-Cap Growth (+.45%)

Sector Underperformers:

• 1) Coal -1.37% 2) Gold & Silver -.25% 3) Alt Energy -.06%

Stocks Falling on Unusual Volume:

• IILG, PANL, ITMN, FNGN, HOLI, IOSP, PLCM, SIRO, MOBI, DIOD, EBIX, MDSO, SPRD, ROSE, JRCC, FMCN, CLNE, RIMM, SAFM, LINC, LRN, CNK, MDC, DHX and BID
  

Stocks With Unusual Put Option Activity:

• 1) BSX 2) EWA 3) SID 4) DIS 5) DOW
  

Stocks With Most Negative News Mentions:

• 1) AGP 2) RKT 3) TLB 4) CPB 5) APA
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value (+1.12%)

Sector Outperformers:

• 1) Education +1.70% 2) Utilities +1.48% 3) Oil Tankers +1.31%

Stocks Rising on Unusual Volume:

• TRNX, SNHY, FOSL, TRAK, FEIC, CVLT, PTRY, KITD, OPNT, HELE, CROX, EBAY, SXCI, AZPN, TWGP, GSM, GLBC, SREV, MED, DF, SLH, CE, AZPN, CVI, PPO, PLT, FE, DK, SHOR and CXW
  

Stocks With Unusual Call Option Activity:

• 1) TIE 2) LCC 3) STI 4) HOC 5) CIEN
  

Stocks With Most Positive News Mentions:

• 1) ALKS 2) SAM 3) ARG 4) CHD 5) XEC

Charts:

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

Tuesday Watch

Evening Headlines
Bloomberg:

• Euro Falls Before Greece Auctions Bills Amid Debt Restructuring Concern. The euro fell to a six-week low against the yen before Greece sells Treasury bills today amid speculation the nation will need to restructure its debt. The 17-nation currency dropped against 11 of its 16 major counterparts after Standard & Poor’s fourth downgrade of Greece since April 2010 rekindled concern the region’s debt crisis is escalating. Australia’s dollar slid before Treasurer Wayne Swan releases his budget today amid assurances of spending cuts. New Zealand’s dollar dropped after the International Monetary Fund said the currency may be as much as 20 percent overvalued. “The markets now view a restructuring of Greece’s debt as a possibility, whereas they hadn’t previously,” said Marito Ueda, senior managing director in Tokyo at FX Prime Corp., a foreign-exchange margin company. “The euro is likely undergoing a downward correction. We may see risk aversion, which would probably benefit the yen.” Greece is scheduled to sell 1.25 billion euros ($1.79 billion) in an auction of 182-day bills today.
• China Has Bigger-Than-Forecast $11.4 Billion Trade Surplus. China reported a more-than-estimated $11.4 billion trade surplus for April as U.S. officials pushed at talks in Washington for faster gains in the yuan. Today’s number, released by the customs bureau, compared with a surplus of $140 million the previous month and $1.68 billion a year earlier.
• Google's(GOOG) YouTube Adding 3,000 Rentals, Challenging Netflix(NFLX). Google Inc. (GOOG)’s YouTube website will add “The King’s Speech,” “Inception” and about 3,000 other titles to its movie-rental service, accelerating its shift into Hollywood entertainment and stepping up competition with Netflix Inc (NFLX). YouTube is adding films from Sony Corp. (6758), Time Warner Inc.’s Warner Bros., Comcast Corp.’s Universal Pictures and Lionsgate, according to a statement today. The additions will push YouTube’s total movie rentals available to more than 6,000. Most of the newer titles will cost $3.99 and up to rent.
• China Money-Supply Jump Potential 'Time-Bomb': Chart of the Day. The growth of China's M2 money supply, which has exceeded the U.S. total, signals further declines in commodities and stocks as it boosts prospects for more interest-rate increases, according to investor Marc Faber. Money supply in China, including money in circulation and deposits, is increasing even after the central bank raised borrowing costs four times and increased banks' reserve requirements seven times since mid-October. "The next time-bomb could be detonated by some adverse economic developments in China," said Faber. "When everybody thinks alike, I become very defensive," said Faber. "I'm deferring any new purchases of the beneficiaries of the inflation trade, except for gold," he said.
• Copper imports by China, the largest consumer, fell 14% in April from the previous month as ample domestic supplies weighed down local prices, curbing demand for more expensive foreign shipments. Inbound movements of copper and products dropped to 262,676 metric tons from 304,299 tons in March, the General Administration of Customs said on its Web site today. The imports were 40% lower than 436,345 tons in April 2010.
  

Wall Street Journal:

• Greek Woes Fuel Fresh Fears. A cut to Greece's credit rating sparked a selloff in the bonds of highly indebted euro-zone countries, fueling concerns that Europe's debt crisis is coming to the boil once more.
  
• Papademos on What Greece Must Do to Address Debt Crisis.
• Floodwaters Spill Into Memphis. Levees Hold as the Swollen Mississippi Nears Record Height, but Some Neighborhoods Are Inundated. The swollen Mississippi River rose to its highest level in nearly 75 years near Memphis, Tenn., Monday, inundating low-lying neighborhoods and acres of farmland and pushing up wholesale gasoline prices as fuel terminals along the waterway closed.
• A Venture-Capital Newbie Shakes Up Silicon Valley. As a newly minted venture capitalist, Marc Andreessen, co-founder of Netscape, aimed for nothing less than big. "Whale" size, as he puts it. Like other investors here, he'd been eying Web companies with explosive growth and global star power. But acquiring shares in tech titans like Facebook is tricky. Most are closely held and don't trade on a public stock market. Interlopers can't simply waltz in. So Mr. Andreessen set out to make his own rules—maneuvering his way into hot private deals at huge cost. Some of his more established rivals weren't amused.
  
• Andrew Hall, the $100 Million Man, Loses Big on Oil and Silver. Investors are trying to locate the biggest losers from the recent commodity-price meltdown. From the sound of a letter sent by well-known trader Andrew Hall to clients days before the tumble began, he would appear to be a prime candidate. And Reuters reported his flagship commodities fund posted declines of 12% last week as oil prices tumbled. But on May 2, Hall, the former star Citigroup trader who now runs Astenbeck Capital Management LLC and also trades for Occidental Petroleum unit Phibro, sounded remarkably bullish about oil, gold and silver – just days before each commodity began tumbling in price. “Some pundits have postulated that the rise in oil prices is sowing the seeds of its own demise” by reducing energy demand, he wrote. “We think not.”
• Paulson Plays the Lehman Bust. Hedge Fund Poised to Score Big on Doomed Bank's Bonds; a 78% Return? Hedge-fund manager John Paulson made $4 billion betting against subprime mortgages, the market that ultimately helped destroy Lehman Brothers Holdings Inc. Now, his fund is poised to make hundreds of millions picking through the investment bank's remains. Mr. Paulson's fund has been snatching up Lehman debt at steep discounts since the day the investment bank collapsed, betting prices would rise while panicked investors fled. Now, as Lehman's estate prepares to wind down, Mr. Paulson's fund could reap profits between $350 million and $726 million on the Lehman trades.
• Military Draws Up Afghan Exit Plan. U.S. military officers in Afghanistan have drawn up preliminary proposals to withdraw as many as 5,000 troops from the country in July and as many as 5,000 more by the year's end, the first phase of a U.S. pullout promised by President Barack Obama, officials say. The proposals, prepared by staff officers in Kabul, are likely to be the subject of fierce internal debate in the White House, State Department and Pentagon—a discussion influenced by calculations about how Osama bin Laden's death will affect the Afghan battlefield.
• Reports of Mortgage Fraud Reach Record Level. Reports of mortgage fraud, which have been increasing since the housing boom, rose to their highest level on record in 2010, Treasury Department figures showed. The Financial Crimes Enforcement Network, a Treasury agency, reported 70,472 "suspicious activity reports" related to suspected mortgage fraud, up from 67,507 in 2009, or a 5% increase. That's the highest number recorded by the government since tracking began in 1996. At the height of the U.S. housing boom, in 2006, more than 37,000 fraud reports were recorded. In 2001, before the housing market heated up, there were 4,695 reports of suspected mortgage fraud.
• Boehner's Debt-Limit Marker. Ah, but what about the bond markets—won't they panic as the debt limit draws near and Treasury predicts disaster? We doubt it. Bond holders want above all to know they'll be repaid, preferably in uninflated dollars, and the best guarantee of repayment will be evidence that Washington has finally donned a fiscal straightjacket. The real path to default is to keep raising the debt limit as if the Treasury can borrow more forever. Ask the Greeks (see below) how that's working out.

CNBC:

• Dennis Gartman: Early Stages Of EU Falling Apart? Though it may sound dramatic, investors are honestly starting to wonder if the financial situation in Europe is about to cause another crisis.

Business Insider:

• Microsoft(MSFT) Close To Buying Skype For $7+ Billion.

Zero Hedge:

• Greece: What's Next? Restructuring. When? Sooner Than You Think.
• And Here They Go For Round Two: CME(CME) Hikes Brent, Crude Margins by 25%, First of Many Such Moves.
  

NY Times:

• House Financial Services Committee Goes Digital. The House Financial Services Committee, which oversees Wall Street and its regulators, caught up with the digital age on Monday as it unveiled a revamped Web site and a blog entitled The Bottom Line.

Forbes:

• Stop Demonizing Drug Companies Over Pay-To-Delay Deals. Drug companies have done their share of sinning over the past decade, but that’s no reason to turn every controversy over drug development into a morality play in which Big Pharma is a villain.
  

Real Clear Politics:

• Wallace to Donilon: If Shooting Bin Laden Is OK, 'Why Can't You Do Waterboarding?' Wallace: We'll stipulate -- I think we'll all stipulate -- that bin Laden was a monster, but why is shooting an unarmed man in the face legal and proper while enhanced interrogation, including waterboarding of a detainee under very strict controls and limits -- why is that over the line?

Reuters:

• PIMCO Raises Bet Against U.S. Government Debt. PIMCO's Bill Gross, the manager of the world's largest bond fund, raised his bet against U.S. government-related debt in April to 4 percent from 3 percent, according to the company's website on Monday.
• "Frothy" U.S. Farmland Values Sideline Some Investors. Rising prices for farmland in the U.S. Midwest and fears that values may be creating an artificial bubble are driving some investors to the sidelines, though strong farm balance sheets are sustaining interest in many sectors, investment experts said on Monday. Surging prices for key row crops, such as corn, soybeans and wheat, are helping support rising values that jumped more than 10 percent in the U.S. Midwest last year and have continued to climb. But if crop prices should plummet, land values could fall rapidly. Farmland values have jumped more than 50 percent above their 2000 levels in inflation-adjusted terms, with investors competing against farmers for accumulation of high-quality land.
• US Republicans Press For Results From US - China Talks. Congressional Republicans on Monday urged the Obama administration to hold China's feet to the fire over currency and industrial policies they said are hurting American companies. "The U.S.-China relationship is critically important. But much work needs to be done to strengthen that relationship and improve U.S. market access into China," Republican members of the House of Representatives Ways and Means Committee said. They put their message in a letter to U.S. Treasury Secretary Timothy Geithner and Secretary of State Hillary Clinton, who hosted Chinese officials beginning on Monday two days of high-level talks on economic and geopolitical concerns.
• Dutch Fund Among Hardest Hit by Commodities Rout - Source. Dutch hedge fund Transtrend, owned by Rabobank NV, was one of the biggest losers in last week's commodities slide, an industry source told Reuters on Monday. An official at the fund confirmed it was a "very bad week". The fund's $6 billion flagship portfolio suffered a loss of around 9 percent, according to a fund manager who has seen its reports to client.

Telegraph:

• Greece Angered by S&P Rating Cut. At the same time, the rating agency cut Greece's credit rating from BB- to B, dragging its debt further into junk territory to reflect its more gloomy views. Greece hit back at the downgrade, angrily denying any imminent restructuring. The Greek finance ministry said that there have been "no new developments or decisions since the last rating action" by S&P a month ago so the agency's views were "not justified." In a statement, the ministry added: "Decisions by ratings agencies must be based on objective data, policy makers' announcements and realistic assessments on the conditions facing an economy... When such decisions are based simply on rumours, their validity is seriously cast in doubt".

China Daily:

• China's economic development faces a "bottleneck period" as the government acts to slow growth, cooling inflationary pressures and a "frenetic" real estate market, Zhang Monan, a researcher with the State Information Center, wrote. China's "high-speed growth" of the past 10 years is not expected to last as the country faces pressure from global competition in exports, rising wages and resources prices, and yuan appreciation, Zhang said.
  

Hong Kong Economic Times:

• China's expanding credit by banks raises the risk of a property bubble and constitutes a "huge" risk to the financial system, Yi Xianrong, a researcher with the Chinese Academy of Social Sciences, wrote in a commentary.

Evening Recommendations
Citigroup:

• Rated (MDVN) Buy, target $35.
• Reiterated Buy on (BEN), target $163.

CSFB:

• Rated (APO) Outperform, target $23.

Night Trading

• Asian equity indices are -.25% to +.50% on average.
• Asia Ex-Japan Investment Grade CDS Index 106.0 -1.0 basis point.
  
• Asia Pacific Sovereign CDS Index 113.50 -.75 basis point.
  
• S&P 500 futures -.22%.
  
• NASDAQ 100 futures -.08%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (MDC)/-.44
• (WEN)/.02
• (DF)/.06
• (FOSL)/.66
• (NUAN)/.31
• (DIS)/.57
• (GMR)/-.30
• (PEGA)/.17
• (MDR)/.28
• (EBIX)/.37
• (CVLT)/.23
  

Economic Releases
8:30 am EST

• The NFIB Small Business Optimism Index for April is estimated to fall to 91.8 versus 91.9 in March.
• The Import Price Index for April is estimated to rise +1.8% versus a +2.7% gain in March.

10:00 am EST

• Wholesale Inventories for March are estimated to rise +1.0% versus a +1.0% gain in February.

Upcoming Splits

• (ACGL) 3-for-1
  

Other Potential Market Movers

• The weekly retail sales reports, IDB/TIPP Economic Optimism Index for April, Jefferies Tech/Internet/Media/Telecom Conference, Interop Las Vegas, BofA Merrill Health Care Conference, Wells Fargo Industrials/Construction Conference, UBS Financial Services Conference, BofA Merrill Lynch Smid Cap Conference, BofA Metals/Mining Conference, Robert Baird Growth Stock Conference, (JKHY) analyst day, (XRX) investor conference and the (CE) investor meeting could also impact trading today.
  

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 75% net long heading into the day.

Stocks Higher into Final Hour on Short-Covering, Commodity Bounce, Buyout Speculation, Earnings Optimism

Broad Market Tone:

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

Equity Investor Angst:

• VIX 17.20 -6.47%
  
• ISE Sentiment Index 120.0 +57.89%
  
• Total Put/Call .79 -18.56%
  
• NYSE Arms 1.06 +21.70%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 90.0 +1.16%
  
• European Financial Sector CDS Index 93.67 +6.90%
  
• Western Europe Sovereign Debt CDS Index 191.56 +1.04%
  
• Emerging Market CDS Index 206.27 -.51%
  
• 2-Year Swap Spread 18.0 -1 bp
  
• TED Spread 26.0 unch.
  

Economic Gauges:

• 3-Month T-Bill Yield .00% unch.
  
• Yield Curve 260.0 unch.
  
• China Import Iron Ore Spot $179.70/Metric Tonne -.55%
  
• Citi US Economic Surprise Index -32.10 -.8 point
  
• 10-Year TIPS Spread 2.48% unch.
  

Overseas Futures:

• Nikkei Futures: Indicating +10 open in Japan
• DAX Futures: Indicating +38 open in Germany

Portfolio:

• Higher: On gains in my Biotech, Medical, Retail and Tech sector longs
  
• Disclosed Trades: Covered all of my (IWM)/(QQQ) hedges, then added them back
  
• Market Exposure: 75% Net Long

BOTTOM LINE: Today's overall market action is mildly bullish as the S&P 500 trades near session highs despite rising food/energy prices, rising eurozone debt angst, more Mideast unrest and emerging market inflation fears. On the positive side, Hospital, Biotech, Networking, Oil Service, Energy, Oil Tanker and Coal shares are especially strong, rising more than 1.50%. Cyclicals and small-caps are outperforming. The US dollar is stable. Copper is rising +1.57%. The 10-year yield is -1 bp to 3.13%, despite today's equity gains. On the negative side, Airline, Homebuilding, I-Banking and Bank shares are down on the day. (XLF) has been heavy throughout the day. The Transports are also relatively weak. The US price for a gallon of gas is falling -.02/gallon today to $3.96/gallon. It is up .84/gallon in 83 days. Oil is rising +4.91%, gold is jumping +1.5% and lumber is falling -2.28%. The Spain sovereign cds is rising +6.81% to 259.25 bps, the Belgium sovereign cds is climbing +5.86% to 152.50 bps, the Greece sovereign cds is soaring +8.1% to 1,459.08 bps, the Ireland sovereign cds is gaining +4.28% to 682.50 bps, the UK sovereign cds is climbing +4.79% to 60.69 bps, the Russia sovereign cds is rising +4.62% to 136.67 bps and the Italy sovereign cds is rising +7.02% to 162.67 bps. The Greece and Ireland sovereign cds are making new record highs and Spain's cds is close to a technical breakout, which is also a large neative. Spain's Ibex 35 was today's worst performer, falling -2.02% and breaking down below its 200-day moving average. The recent US equity rally remains of poor quality as volume, breadth and leadership are lacking. Many of the most beaten up stocks are leading the averages higher today on low volume, which is usually indicative of short-covering. However, unless the eurozone cds begin to come in soon, another decline in the euro currency is likely, which could lead to another wave of commodity selling. I expect US stocks to trade mixed-to-higher into the close from current levels on commodity sector strength, short-covering, earnings optimism, bargain-hunting and buyout speculation.

Today's Headlines

Bloomberg:

• Commodities Rally, Europe Stocks Drop on Greek Debt Downgrade. Commodities rebounded from the steepest weekly slump since 2008 amid optimism about economic growth and speculation recent declines were excessive. European stocks fell, the euro erased gains and Greek bonds tumbled as Standard & Poor’s cut its rating on the nation. The S&P GSCI Index of 24 raw materials jumped 2.2 percent, the most in seven weeks, at 11:35 a.m. in New York following last week’s 11 percent slide. Silver futures climbed 5 percent, oil rallied 3.7 percent and wheat advanced 3.3 percent.
• Greece Leads Surge in European Debt Risk on 'Selective Default' Concerns. Greece led a surge in the cost of insuring European government bonds as Standard & Poor’s cut its credit rating on concern the nation is heading for a “selective default” by extending debt maturities. Credit-default swaps on Greece jumped 30 basis points to a record 1,371 basis points, according to CMA. Swaps on Ireland reached an all-time high of 681 basis points and contracts on Portugal also rose. “One by one, they will all need to renegotiate,” said Bill Blain, co-head of strategy at broker Newedge in London. “As Europe’s most peripheral economy, Greece is just a canary in the coal mine.” Greece was cut two steps to B by S&P, five levels below investment grade, and kept on CreditWatch with negative implications. An extension of debt maturities will be regarded as “burden sharing” for private investors and constitute a “distressed exchange,” the ratings firm said. Swaps on Ireland climbed 22 basis points, according to CMA. Contracts on Portugal rose 16.5 basis points to 659, approaching the record 681 set April 26. Italy increased 11 basis points to 164 and Spain rose 13 to 259, helping push the Markit iTraxx SovX Western Europe Index of swaps on 15 governments up 8 basis points to 197. The Markit iTraxx Crossover Index of 40 companies with mostly high-yield credit ratings rose 6 basis points to 359, according to JPMorgan Chase & Co. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings rose 2.5 basis points to 98.25, JPMorgan prices show. The Markit iTraxx Financial Index of 25 banks and insurers increased 6 to 138.5 and the subordinated index was 14 higher at 242.5.
• Trichet Says Global Central Bankers United in Inflation Fight. European Central Bank President Jean- Claude Trichet said the world’s central bankers are united in fighting inflation fueled by surging commodity prices and fast- growing emerging economies. “There is a solid unity of purpose of all central bankers concentrated on solidly anchoring inflation expectations,” Trichet said today in Basel, Switzerland, after chairing the Global Economy Meeting. The global economic recovery has been “confirmed” and there is “potential for real overheating in emerging countries,” Trichet said. Global rate setters are growing more concerned about inflation as the world economy gathers strength and food and oil prices increase.
• LinkedIn Boosts IPO, Valuing Site at More Than $3 Billion. LinkedIn Corp. increased its planned initial public offering, valuing the largest professional social-networking website at more than $3 billion. The company now plans to sell as much as $315.6 million of shares to expand the business, according to regulatory filing today.
• McDonald's(MCD) April Sales Rise 6% as Drinks Lure U.S. Diners. Analysts projected comparable-store sales would rise 4.1 percent, according to the average of seven estimates compiled by Bloomberg News. Sales in the U.S. climbed 4 percent, the Oak Brook, Illinois-based company said today in a statement.
• Hertz(HTZ) Bids $2.24 Billion for Dollar Thrifty(DTG) to Thwart Avis(CAR). Hertz Global Holdings Inc. (HTZ), the largest publicly traded rental-car company, offered to buy Dollar Thrifty Automotive Group Inc. (DTG) for $2.24 billion in cash and stock, countering a bid by Avis Budget Group Inc. (CAR) Hertz offered $72 a share, 24 percent more than Avis’s offer, the Park Ridge, New Jersey-based company said today in a statement. Dollar Thrifty rose $8.76, or 13 percent, to $78.45 at 10:58 a.m. in New York Stock Exchange composite trading.
• Syria Attacks Protesters as Yemen Violence Flares, Threatening Peace Plan. Security forces in Syria renewed their assault on pro-democracy protesters across the country, shooting at people who joined in demonstrations and seeking to arrest their organizers. Two people were killed in Deir Al-Zour late yesterday as security forces attacked a protest and at least 12 people died in Homs in the past two days, Mahmoud Merhi, head of the Arab Organization for Human Rights, said in a phone interview from Syria today. Six people, four of them women, were killed in Banias on May 7, he said. Some 450 people have been arrested in the coastal city in the past two days, said Ammar Qurabi, head of Syria’s National Organization for Human Rights.

Wall Street Journal:

• Pakistani Leader Defends Military Over bin Laden. Pakistan's prime minister sought to assuage spreading anger at home over the U.S. raid that killed Osama bin Laden in a defiant speech to parliament, rejecting accusations that Pakistanis shielded the al Qaeda leader and suggesting the terror network was created by the U.S.
  

MarketWatch:

• How (CRM) Gets to $300 by Cody Willard.
• FDIC's Bair to Leave Agency July 8th.
  

Zero Hedge:

• Here We Go Again: German Government Advisor Says Eurozone May Not Remain Intact Over Next 12 Months.

Washington Post:

• US Administration Planning $1 Billion Debt Relief for Egypt. The Obama administration has decided to provide about $1 billion in debt relief for Egypt, a senior official said Saturday, in the boldest U.S. effort yet to shore up a key Middle East ally as it attempts a democratic transition. The aid would be part of a major economic aid package that also includes trade and investment incentives, officials said. Economic assistance for Egypt and Tunisia is “fundamental to our capacity to support their democratic transitions,” a senior State Department official said on the condition of anonymity. He said that officials were in the midst of “intense policy formulation” but that the economic package wasn’t finished. Parts of it will need congressional approval. The Egyptian finance and planning ministers visited Washington last month to seek forgiveness of the country’s $3.6 billion debt. Egypt pays about $350 million a year to service the debt, which it incurred buying American farm products. Rep. Dana Rohrabacher (R-Calif.) said at a recent hearing that the United States can’t afford to provide aid as it did in the past. “The stakes [in the Middle East] are very high ... but so is our level of deficit spending,” he said. Some lawmakers want to delay action until they have a better sense of who comes to power in the countries undergoing revolutions. Since the uprisings, the Obama administration has offered Egypt $150 million for economic development and democracy-building, and Tunisia $20 million. A U.S. government agency, the Overseas Private Investment Corp., has also pledged up to $2 billion in loans, loan guarantees and risk insurance for U.S. firms investing in the Middle East and North Africa, on top of an existing $2.6 billion.

The Detroit News:

• Michigan to Get $200 Million for High-Speed Rail. Michigan officials are expected to learn today the state has won about $200 million in federal funds to make high-speed rail a reality.
  

Seeking Alpha:

• Top Biotech Picks by Hedge Fund and Mutual Fund Gurus Concentrated in the Sector.
• The Oil Market Mirage. We want to look at the state of oil demand and the ongoing “China-Saves-the-World” premise.

TechCrunch:

• Apple(AAPL) May Not Have Bought Nuance(NUAN) But...

Real Clear Markets:

• Another Nail In The Keynesian Coffin. The coffin of Keynesianism has so many nails in it now that it is practically surfaced in steel. The notion that government deficits "stimulate" demand, has been proved wrong so many times, and in so many ways, that you would have to be Paul Krugman to still believe in it. However, in its April 28 news release on 1Q2011 GDP, the BEA drove yet another factual wooden stake into Keynesianism's vampire heart - a stake that no one seems to have noticed. What happened should also serve as a warning to Republicans that are still in the grip of the Keynesian superstition. The BEA reported that its first estimate of 1Q2011 real GDP growth was 1.8%. This represented a dramatic fall from 4Q2010 growth of 3.1%. What no one seems to have noticed is that the slowdown occurred in the face of another large dose of Keynesian stimulus.

Politico:

• Gay Donors Fuel Obama's 2012 Campaign. President Barack Obama’s reelection campaign is banking on gay donors to make up the cash it’s losing from other groups of wealthy supporters who have been alienated and disappointed by elements of Obama’s first term. Pleased by an all-out White House push to repeal “don’t ask, don’t tell,” gay donors have surprised campaign officials with the extent of their support. And the campaign’s new fundraising apparatus appears designed to capitalize on their enthusiasm: Obama’s finance committee included one gay man in 2008; there are 15 this year, a source said.

Rasmussen Reports:

• 57% Favor Repeal of Health Care Law. The latest Rasmussen Reports national telephone survey shows that 57% of Likely U.S. Voters now at least somewhat favor repeal of the law. Thirty-six percent (36%) oppose repeal. The new findings include 44% who Strongly Favor repeal of the measure and 26% who are Strongly Opposed.

Reuters:

• Attorney General Eric Holder Vows to Close Guantanamo. U.S. Attorney General Eric Holder said Monday the United States would close the Guantanamo Bay facility holding terrorism suspects in Cuba, despite missing a previous deadline to do so.
• Could Renren Be Vulnerable in a Chinese Crackdown? Imagine buying shares in a company that could be closed down overnight. That is in some ways what Renren (RENN.N), dubbed the Facebook of China, asked investors to do. This week, investors complied: Renren raised $743.4 million in an initial public offering and its shares jumped 29 percent on their first day of trading on the New York Stock Exchange. But Renren's operations, which include social networking, gaming and online commerce, walk a thin line of compliance with strict Chinese regulations around freedom of information -- and if they cross the line, the consequences could be very severe.
• Special Report: What Really Triggered Oil's Greatest Rout. When oil prices fell below $120 a barrel in early New York trade last Thursday, a few big companies that are major oil consumers started buying around $117. It looked like a bargain. Brent crude had been trading above $120 for a month. But the buying proved ill-timed. Crude kept on falling. "They were down millions by the end of the day, trying to catch a falling piano," an executive at a major New York investment bank said. Never before had crude oil plummeted so deeply during the course of a day. At one point, prices were off by nearly $13 a barrel, dipping below $110 a barrel for the first time since March.
• Biden, Clinton Bluntly Press China on Human Rights. Vice President Joseph Biden warned China Monday the United States would press hard on human rights, over which the two sides have a "vigorous" disagreement and criticizing Beijing's latest crackdown on dissent. Biden and Secretary of State Hillary Clinton both used unusually blunt language on human rights at the start of an annual meeting of top officials from the two nations, saying the United States was concerned about Beijing's recent clampdown, which has involving arrests, detentions and secretive confinement of human rights lawyers, protesters and dissidents. "No relationship that's real can be built on a false foundation. Where we disagree, it's important to state it. We will continue to express our views on these issues," Biden said at the opening of the Strategic and Economic Dialogue meeting in Washington.
• Memphis Braces for Mississippi River Flood Crest. More residents were warned on Monday to get out of the way of the raging Mississippi River as it surged toward a near-record crest in its southern reaches, prompting authorities in Louisiana to divert some of the flood waters. "This is the time to gather all important items and be ready to leave your property," Shelby County Mayor Mark Luttrell said, noting the river should crest later on Monday just inches short of a 1937 record.
• CME Group(CME) to Buy Back $750 Million of Shares.
  

International Business Times:

• Christian-Muslim Clashes in Egypt Upset Gains of Revolution. The clashes between Muslims and Christians in Egypt over the weekend left 12 people killed, 180 wounded and one al-Azraa church burnt, giving a new dimension to the post-revolutionary democracy. Egypt's justice minister, Abdel Aziz al-Gindi warned that those who threaten the country's security will face "an iron fist" while the ruling Supreme Council of the Armed Forces said, it is taking stringent “deterrent” measures to stop further violence. The radical movement of Muslims in Cairo known as Salafis has been blamed for the recent attacks on Christians and others whom they disapprove. The current ruling front has miserably failed to halt Salafis' hostility towards the Christians, say opponents.

TimesUnion:

• Portugal Opens Inquiry Into Rating Agencies. Portuguese authorities have opened a criminal inquiry into three international credit rating agencies following a complaint, the Attorney General's office said Monday. The inquiry is based on a complaint filed last month by four Portuguese academics, an official with the Attorney General's office said on condition of anonymity, in keeping with departmental regulations. The four economists claimed the agencies — Moody's, Standard & Poor's and Fitch — caused severe financial losses for Portugal and demanded to know whether they profited from the ratings.

Die Welt:

• Chancellor Angela Merkel's government wants Greece to negotiate an extension of maturities on its bonds before receiving a new European Union aid package, citing officials who participated in a May 6 meeting in Luxembourg. Germany is alone in favoring a debt restructuring for Greece, which would have to be voluntary and conducted in a way that limits writedowns at euro-region banks, citing German officials. The Greek government isn't doing enough to enforce the spending cuts and privatizations it accepted in exchange for help from its euro-region peers, citing members of Merkel's coalition.

Bild:

• Greece should be allowed to leave the euro area because that would cut losses for European taxpayers, Bild, Germany's most-read newspaper, said in an editorial. Letting holders of Greek sovereign debt, including German banks, take losses as a prelude to Greece leaving the euro is preferable to keeping the highly indebted country in the currency area and providing "endless costly rescue packages," columnist Hugo Mueller-Vogg said.

La Tribune:

• Jean-Pierre Jouyet, head of France's autorite des Marches Financiers, said in an interview that the activities of banks in commodities markets need to be regulated. He said that he expects commodity trading regulation to be agreed upon at the G20 summit in November.

Bear Radar

Style Underperformer:

• Large-Cap Value (+.30%)

Sector Underperformers:

• 1) Airlines -1.67% 2) Homebuilders -.38% 3) Banks -.34%

Stocks Falling on Unusual Volume:

• PETS, AUXL, MOBI, ZOLT, IPHI, RP, TC, TSN, HRB and PETS
  

Stocks With Unusual Put Option Activity:

• 1) TPX 2) MBI 3) ATVI 4) TSN 5) DB
  

Stocks With Most Negative News Mentions:

• 1) TE 2) CVLT 3) DYN 4) RADS 5) ZOLT
  

Charts:

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