Bear Radar

Style Underperformer:

• Mid-Cap Growth (-.54%)

Sector Underperformers:

• 1) Networking -1.20% 2) Semis -1.11% 3) Road & Rail -1.0%

Stocks Falling on Unusual Volume:

• TDS, TZOO, TSL, HPQ, EVEP, RMBS, VQ, TIN, TXT, NATI, FRP, LBTYK, LPLA, ASCA, ICON, CTRP, CCIX, ENOC, ASYS, MASI, LCAPA, WRLD, GNET, EDMC, FWLT, MIDD, MCRS, BEAV, DKS, HXM, PVR, NYX, EEP, ICON, CAT, TJX, SHOR, TPC, JNS, ABH, DHX and TWI
  

Stocks With Unusual Put Option Activity:

• 1) HUN 2) HPQ 3) KBH 4) XLV 5) XLP
  

Stocks With Most Negative News Mentions:

• 1) EWY 2) CREE 3) CHK 4) HPQ 5) H
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value (-.55%)

Sector Outperformers:

• 1) Banks +.56% 2) Utilities +.53% 3) Airlines +.31%

Stocks Rising on Unusual Volume:

• AEP, MAKO, VOD, ERF, CCG, MNRO, AVEO, NLSN and ONE
  

Stocks With Unusual Call Option Activity:

• 1) KV/A 2) NRG 3) GIS 4) LYB 5) RAX
  

Stocks With Most Positive News Mentions:

• 1) QSFT 2) PMCS 3) SSS 4) MDT 5) A

Charts:

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

Tuesday Watch

Evening Headlines
Bloomberg:

• EU Ministers See Possible Greek Debt 'Reprofiling' in Follow-Up Aid Plan. European finance ministers for the first time floated the idea of talks with bondholders over extending Greece’s debt-repayment schedule, saying that last year’s 110 billion-euro ($156 billion) rescue has failed to restore the country to financial health. Europe would consider “reprofiling” Greek bond maturities as part of a package including stepped-up sales of state assets and deeper spending cuts, Luxembourg Prime Minister Jean-Claude Juncker said. “If all these conditions are fulfilled, we can discuss the question of reprofiling,” Juncker told reporters late yesterday after chairing a meeting of euro-area finance chiefs in Brussels. “It’s not reprofiling or nothing. It’s measures, measures and measures, and then maybe reprofiling.” Introducing that prospect marks a break in Europe’s crisis- fighting strategy, with governments potentially shifting some costs to bondholders instead of relying on taxpayer-funded bailouts to stamp out the debt crisis.
• China Data Suggests Rising Risk of 'Hard Landing,' JPMorgan(JPM) Says. Chinese economic data suggests that the risk of a “hard landing” in the world’s second-largest economy is rising, JPMorgan Chase & Co.’s Adrian Mowat said. Fixed-asset investment in real estate has increased 35 percent in the first four months of the year even amid “very weak” property sales demand, Mowat, the brokerage’s chief Asia and emerging-markets strategist, said in a Bloomberg Television interview in Hong Kong. This means that residential inventories will increase and lead to a contraction in construction activity this year, he said in the interview. “I’m quite worried about the Chinese data, which suggests to me the probability of hard landing is building in China,” Mowat said. Global markets, including commodities, will continue to be “correcting,” he said.
• Hewlett-Packard(HPQ) CEO Girds for 'Tough Quarter'. Hewlett-Packard Co. (HPQ) Chief Executive Officer Leo Apotheker told top executives that he’s bracing for “another tough quarter” in the July period and urged his deputies to “watch every penny and minimize all hiring.” The company’s existing headcount plans are “unaffordable given the pressures on our business,” Apotheker wrote in the May 4 memo to deputies including Todd Bradley, executive vice president of the personal systems business, and Chief Financial Officer Cathie Lesjak. The memo was obtained by Bloomberg. Hewlett-Packard, based in Palo Alto, California, dropped as much as 5.1 percent to $37.76 in extended trading. Following the release of the memo, Hewlett-Packard said it would move up its second-quarter earnings report to tomorrow morning, rather than the afternoon of May 18.
• Strauss-Kahn to Spend Night on Rikers Island. International Monetary Fund chief Dominique Strauss-Kahn, accused of sexually assaulting and attempting to rape a hotel housekeeper, was sent to New York’s Rikers Island jail complex, a corrections official said. A Manhattan judge today ordered Strauss-Kahn held without bail, two days after he was pulled off an Air France flight as it prepared to leave John F. Kennedy International Airport. Strauss-Kahn faces as long as 25 years in prison if convicted of the most serious charge, said prosecutors, who convinced Criminal Court Judge Melissa Jackson he presented a flight risk. Strauss-Kahn, 62, “restrained a hotel employee inside of the room,” Manhattan Assistant District Attorney Artie McConnell told the judge at a packed bail hearing in lower Manhattan. “He sexually assaulted her and attempted to forcibly rape her. When he was unsuccessful, he forced her to perform oral sex on him.”
• Oil Extends Drop as Concern Eases Over Mississippi Floods; Gasoline Slumps. Oil dropped for a second day in New York after the opening of spillways curbed speculation the Mississippi River will flood refineries and disrupt fuel supplies in the world’s biggest crude-consuming nation. Crude for June delivery slipped as much as 55 cents to $96.82 a barrel in electronic trading on the New York Mercantile Exchange and was at $96.93 at 9:10 a.m. Sydney time.
• Pimco's Gross Says 'Insolvent' Greece Is World's Biggest Default Candidate. Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said Greece is the world’s biggest candidate for default. “We suggest that Greece is insolvent and that at some point the can cannot be kicked down the road any further,” said Gross in an “InBusiness with Margaret Brennan” interview on Bloomberg Television. “Ultimately debt holders will have to bear some of the burden as well.” European finance ministers stepped up pressure today on Greece to sell assets and deepen spending cuts to win an increase of its 110 billion-euro ($156 billion) aid package and more time to repay the loans. Europe’s rich countries tied extra money to pledges by Greece to reap more revenue at home and considered whether to make bondholders share the pain. “Greece is the No. 1 candidate for default,” Gross said. “Greece, even with the stringent fiscal measures, can’t get above the line in terms of real growth. It becomes a question of solvency, as opposed to liquidity.”
• Soros Sold Most of His Gold ETP Holding During First Quarter, Filing Shows. Billionaire investor George Soros sold most of his holdings in the bullion-backed SPDR Gold Trust and iShares Gold Trust (IAU) funds in the first quarter and bought shares of mining companies Goldcorp Inc. and Freeport-McMoRan Copper & Gold Inc. (FCX), a government filing shows. Soros Fund Management LLC held 49,400 shares of SPDR Gold Trust as of March 31, compared with 4.721 million at the end of the fourth quarter, the filing today with the U.S. Securities and Exchange Commission showed. The New York-based fund sold all 5 million shares it held in iShares Gold Trust.
• John Paulson's Fund Took $1 Billion HP(HPQ) Stake, Bought Lubrizol(LZ) Last Quarter. Paulson & Co., the New York-based hedge fund founded by John Paulson, took a new stake in Hewlett- Packard Co. last quarter valued at about $1 billion and bought shares in Lubrizol Corp. (LZ).
• Falcone's Harbinger Holdings Adds Bunge(BG) Shares, Trims Gold Stake. Harbinger Holdings LLC, the hedge fund run by Philip Falcone, bought shares of food company Bunge Ltd. (BG) in the first quarter and sold shares of SPDR Gold Trust, according to a regulatory filing. Harbinger’s holdings of U.S. stocks declined to $1.1 billion from $1.6 billion in stocks at the end of 2010, according to today’s filing with the Securities and Exchange Commission.
• Obama Holding Assets of Up to $11.8 Million. President Barack Obama and first lady Michelle Obama reported holding total assets of between $2.8 million and $11.8 million last year, according to federal financial disclosure forms released today. The president’s assets were concentrated in U.S. Treasury obligations. He reported between $1 million and $5 million in U.S. Treasury bills and between $1 million and $5 million in Treasury notes, according to the forms, which report assets in ranges rather than specific amounts. Treasury bills have maturities of one year or less; Treasury notes have maturities of between one and 10 years. In his checking account, Obama, 49, reported a balance of between $250,001 and $500,000, held at JPMorgan Chase & Co.(JPM) The disclosure forms reveal that Obama’s holdings grew from 2009, when he reported assets of between $2.3 million and $7.7 million.
• Cohen's SAC Buys Newmont(NEM), Dendreon(DNDN) While Cutting Plains Exploration(PXP) Stake. SAC Capital Advisors LP, the hedge fund founded by billionaire Steven A. Cohen, boosted stakes in Newmont Mining Corp. (NEM), CenturyLink Inc. (CTL) and Dendreon Corp. (DNDN) during the first quarter, according to a regulatory filing.
• Australia Central Bank Foresees Need for Higher Rates to Contain Inflation. The Reserve Bank of Australia said a rising currency is helping contain inflation pressures that may need to be slowed “at some point” by higher interest rates, minutes of its May 3 meeting showed. “If economic conditions continued to evolve as expected, higher interest rates were likely to be required at some point if inflation was to remain consistent with the medium-term target,” according to the minutes released today in Sydney. “Members viewed the current mildly restrictive stance of monetary policy as remaining appropriate.”

Wall Street Journal:

• Insured Loss Estimate From Southern Tornadoes Hits $6 Billion. A new damage estimate shows the powerful tornadoes that hit the South in late April caused insured losses of up to $6 billion, the highest figure yet to emerge from disaster-modelers. A single tornado that struck Tuscaloosa and Birmingham in Alabama accounts for nearly 40% of the estimate from disaster-modeling company Risk Management Solutions.
• SEC Charges Another Adviser In Ponzi Scheme Tied to Venezuela.
• Appaloosa Trots Away From Bank Stocks, Cisco(CSCO). Reports of the 13-F filings of several hedge funds are starting to hit the wires. One very interesting tidbit grabbed our attention right away: It looks like David Tepper is leading Appaloosa Management away from the banking sector a bit. According to Dow Jones Newswires headlines, Appaloosa cut its stake in Citigroup(C) to 76.6 million shares in the first quarter of 2011 from 117.5 million in the fourth quarter of 2010. Tepper’s not the only one dumping Citi. Lone Pine and Tudor Investment have, too, reports Business Insider. Appaloosa also cut its holdings in Wells Fargo(WFC), Fifth Third(FITB), Capital One(COF), Bank Of America(BAC), J.P. Morgan(JPM) and Suntrust Banks(STI). Tepper & Co. reported no stake in Cisco this time and cut stakes in Micron Technology(MU) and Applied Materials(AMAT). On the flipside, Appaloosa raised its stakes in Goodyear(GT) and Dean Foods(DF) (a winning bet for him so far) and announced new stakes in Apple(AAPL), Beazer Homes(BZH), CVR Energy, DR Horton(DHI), KB Home(KBH) and Pulte Group(PHM).
• New York AG Probes Banks Over Mortgage Securities. New York Attorney Attorney General Eric Schneiderman has opened an investigation into the packaging of mortgage loans into securities, in the latest sign of increased scrutiny of the mortgage industry. Mr. Schneiderman will hold meetings with executives of several major banks, including Bank of America Corp.(BAC), Morgan Stanley(MS) and Goldman Sachs(GS), according to people familiar with the investigation. He intends to discuss securitization of mortgage loans and other mortgage practices and has requested related documents from the firms, these people said.
• U.S. Balks at Pakistani Bills. The U.S. and Pakistan are engaged in a billing dispute of sizable proportions, sparring behind closed doors over billions of dollars Washington pays Islamabad to fight al Qaeda and other militants along the Afghanistan border. Washington, increasingly dubious of what it sees as Islamabad's mixed record against militants, has been quietly rejecting more than 40% of the claims submitted by Pakistan as compensation for military gear, food, water, troop housing and other expenses, according to internal Pentagon documents.
• Israeli Leader Sees Rising Arab Threat. Israeli Prime Minister Benjamin Netanyahu gave a stark assessment of how he sees changes in the Arab world threatening his country, warning of the potential for more clashes like the protests on Israel's borders that left 14 people dead Sunday. Mr. Netanyahu, in a speech to parliament, also signaled Israel won't negotiate with a Palestinian government that includes the militant faction Hamas—his most explicit rejection yet of a recent truce between rival Palestinian factions that was forged under the pressure of Arab popular revolts.
• Muslim Brotherhood Raises Syria Profile. The exiled Muslim Brotherhood of Syria, the only antiretime group to ever seriously challenge the Assad government, said it was trying to take a larger role in organizing the disparate opposition as Syria's street protests appear to wane.
• U.N. Panel: North Korea Is Exporting Missiles. North Korea remains "actively engaged" in exporting ballistic missiles, components and technology to numerous customers in the Middle East and South Asia in violation of United Nations sanctions, a U.N. panel said in a new report. The seven-member panel said in a report to the U.N. Security Council obtained Monday by the Associated Press that North Korea has also completed or is about to complete construction of a second launch site for long-range rockets.

MarketWatch:

• Goldman(GS) Downgrades S. Korea Stocks to Marketweight.

CNBC:

• Dennis Gartman: 'Smartest People' Getting Out of Commodities. (video)

Business Insider:

• Moore Capital Dumps Financials and Ramps Up Energy Holdings.
• France Furious About Dominique Strauss-Kahn Perp Walk.
• STAY GRANTED: The NFL Lockout Isn't Going Anywhere.
• THE NEXT BAILOUT? The Post Office Has Lost Nearly $20 Billion in Four Years.
  

Zero Hedge:

• Paul Ryan Speaks On The "Catastrophic Trajectory" Of US Debt.
• Weekly Insider Buying and Selling: $2.8 Million in Purchases; $1 Billion in Sales.
  

IBD:

• Cyclical Maxim(MXIM) Enjoys Long Upswing.

NY Times:

• A Once-Tight Flock at Goldman(GS), Now Scattered.

gurufocus.com:

• David Einhorn's Hedge Fund Greenlight Capital Portfolio Update.
  

TechCrunch:

• California Bill to Give Parents Access To Kids' Facebook Pages. California SB 242, proposed by Sen. Ellen Corbett, would force social networks like Facebook to allow parents access to their child’s account(s) and, more importantly, force all privacy settings to their maximum level by default. Parents can request that images or text be removed from any social network page “upon request … within 48 hours upon his or her request.” Here’s the interesting part: any social network failing to perform these duties will get hit with a $10K fine per incident. Obviously this is a state-level law and does not apply nationally (yet) and it does smack of the nanny state.

Huffington Post:

• Confidential Federal Audits Accuse Five Biggest Mortgage Firms of Defrauding Taxpayers(Exclusive). A set of confidential federal audits accuse the nation’s five largest mortgage companies of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans, four officials briefed on the findings told The Huffington Post.

Reuters:

• Rule Change May Expose More Soured Bank Loans - Fitch. A recent accounting change and stepped up scrutiny from regulators may force U.S. banks to disclose more about restructured property loans, affecting earnings at some companies, Fitch Ratings said. Regional and community banks, with the highest concentration of commercial real estate loans, will likely be most affected by the accounting change when it goes into effect in the third quarter, Fitch said in a report on Monday.
• Urban Outfitters(URBN) Q1 Revenue Rises, Shares Up. Urban Outfitters Inc stores posted a rise in its first-quarter revenue that beat market estimates, helped by higher sales at its direct-to consumer and wholesale segments. Shares of the operator of Urban Outfitters, Anthropologie, Free People and Terrain stores rose 3 percent in after-market trading.
• Ackman's Pershing Capital Exits Target(TGT), General Motors(GM).
  

Economic Daily News:

• Taiwan Semiconductor Manufacturing Co. will cut its prices by three to five percent in the third quarter, the first time in 18 months, citing people in the industry.

Wen Wei Po:

• China must try to curb foreign exchange reserve growth to reduce risk from holding U.S. Treasury assets, citing Zhang Ming, economist of the Chinese Academy of Social Sciences. China can lower risk by widening the trading band of yuan, decreasing the trade surplus and scraping policies beneficial to foreign direct investment, Zhang said.

Hong Kong Economic Times:

• China needs to push down housing prices to fight a property bubble, Yi Xianrong, a researcher at the Chinese Academy of Social Sciences, wrote in a commentary. The central government can rely on taxation to achieve this goal, Yi said.

National Business Daily:

• China has approved cutting the tax-rebate for textile exports to 11% from 16%, citing market speculation. The reduction may be implemented in June or July.

21st Century Business Herald:

• China may raise on-grid electricity prices for coal-fired power plants in the provinces of Hunan, Guizhou and Jiangxi, citing a person familiar with the situation.

Shanghai Securities News:

• Limits on power usage in China caused by a shortage of electricity may reduce the nation's second-quarter economic growth by .5 percentage points, citing an analyst.

South China Morning Post:

• Chinese Homebuyers Driven Overseas. Held back by Beijing's measures to slow runaway housing prices, mainland investors are taking their money to markets from Hong Kong to Mexico.

Evening Recommendations

• None of note

Night Trading

• Asian equity indices are -.50% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 108.0 unch.
  
• Asia Pacific Sovereign CDS Index 115.75 +1.125 basis points.
  
• S&P 500 futures -.10%.
  
• NASDAQ 100 futures -.09%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (DKS)/.29
• (HD)/.50
• (WMT)/.95
• (SKS)/.16
• (TJX)/.80
• (ADI)/.68
• (DELL)/.43

Economic Releases
8:30 am EST

• Housing Starts for April are estimated to rise to 569K versus 549K in March.
• Building Permits for April are estimated to fall to 590K versus 594K in March.
  

9:15 am EST

• Industrial Production for April is estimated to rise +.4% versus a +.8% gain in March.
• Capacity Utilization for April is estimated to rise to 77.6% versus 77.4% in March.
  

Upcoming Splits

• (HLF) 2-for-1
• (TDSC) 2-for-1
  

Other Potential Market Movers

• The weekly retail sales reports, BMO Capital Farm Conference, Needham Cleantech Conference, Goldman Sachs BRICs Conference, Piper Jaffray China Growth Conference, Oppenheimer China Conference, (NE) analyst day, (INTC) investor meeting, (PWER) analyst day, (APA) investor day, (AAWW) investor day, (CSX) investor conference, (SSW) analyst event and the (ARMH) analyst day could also impact trading today.
  

BOTTOM LINE: Asian indices are mostly lower, weighed down 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 50% net long heading into the day.

Stocks Falling into Final Hour on Global Growth Concerns, Tech Sector Weakness, Growing Mideast Unrest, More Shorting

Broad Market Tone:

• Advance/Decline Line: Substantially Lower
  
• Sector Performance: Most Sectors Declining
  
• Volume: Slightly Below Average
  
• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• VIX 17.58 +2.99%
  
• ISE Sentiment Index 119.0 +35.23%
  
• Total Put/Call .92 -1.08%
  
• NYSE Arms .80 -52.94%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 88.76 +.59%
  
• European Financial Sector CDS Index 93.17 +.99%
  
• Western Europe Sovereign Debt CDS Index 176.25 -1.67%
  
• Emerging Market CDS Index 205.50 -.28%
  
• 2-Year Swap Spread 19.0 unch.
  
• TED Spread 24.0 unch.
  

Economic Gauges:

• 3-Month T-Bill Yield .02% unch.
  
• Yield Curve 263.0 -1 bp
  
• China Import Iron Ore Spot $178.50/Metric Tonne -.17%
  
• Citi US Economic Surprise Index -38.30 -3.9 points
  
• 10-Year TIPS Spread 2.35% -2 bps
  

Overseas Futures:

• Nikkei Futures: Indicating -2 open in Japan
• DAX Futures: Indicating -24 open in Germany

Portfolio:

• Slightly Lower: On losses in my Biotech, Retail and Tech sector longs
  
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and added to my (EEM) short
  
• Market Exposure: Moved to 50% Net Long

BOTTOM LINE: Today's overall market action is bearish as the S&P 500 trades near session lows despite falling energy prices, less eurozone debt angst and falling long-term rates. On the positive side, Airline, HMO and Paper shares are especially strong, rising more than +.5%. (XLF) and (IYR) have outperformed throughout the day. The transports are also relatively strong. Gold is down -.07%, oil is falling -2.23% and lumber is rising +.91%. Silver is down another -4.1% today and has collapsed -32.1% in less than 1 month. The 10-year TIPS spread continues to weaken. The 10-year yield is falling -2 bps to 3.15%. The Spain sovereign cds is falling -4.22% to 225.51 bps, the Portugal sovereign cds is down -4.05% to 593.32 bps, the Ireland sovereign cds is falling -4.9% to 600.11 bps and the Belgium sovereign cds is down -6.58% to 126.53 bps. On the negative side, Gaming, Biotech, Networking, Disk Drive, Computer, Software, Internet, Oil Tanker and Alt Energy shares are under significant pressure, falling more than -1.50%. Small-cap shares are underperforming again. The tech sector is very "heavy" today. The US price for a gallon of gas is falling -.02/gallon today to $3.96/gallon. It is up .82/gallon in 89 days. The UBS-Bloomberg Ag Spot Index is rising +.34% and copper is down -.16%. The China sovereign cds is gaining +1.0% to 71.30 bps, the Israeli sovereign cds is gaining +.75% to 145.03 bps and the US Muni CDS Index is rising +.91% to 125.48 bps. Commodities continue to trade as if further downside is in store. The last time the 10-year TIPS spread broke down technically, which is a longer-term positive, the S&P 500 began a -15% correction in early May 2010. Moreover, the very poor technical action in key stocks, remains a large concern. Asian equities finished near their lows overnight. India's Sensex fell another -1.01% and is now down -10.55% ytd. Brazil's Bovespa also displays very poor technicals, falling another -.8% today and is now down -9.3% ytd. It appears as though more weakness in US stocks is becoming more likely over the coming weeks. I expect US stocks to trade mixed-to-lower into the close from current levels on technical selling, more shorting, eurozone debt worries, rising Mideast unrest, global growth concerns, emerging market inflation fears and profit-taking.

Today's Headlines

Bloomberg:

• IMF's Strauss-Kahn Ordered Held Without Bail. International Monetary Fund chief Dominique Strauss-Kahn, accused of attempting to rape a hotel maid, was ordered held without bail by a New York judge.
  
• Manufacturing in New York Slows More Than Estimated on Raw-Material Costs. Manufacturing in the New York region expanded at a slower pace than forecast in May, showing that surging raw-material costs are hurting confidence. The Federal Reserve Bank of New York’s general economic index fell to 11.9 from a one-year high of 21.7 in April, the central bank reported today.
• Homebuilder Confidence Fell This Month on Sales Outlook, NAHB Index Shows. Confidence among U.S. homebuilders fell in April, led by a decline in the outlook for sales, a sign the residential construction market may languish near record-low levels. The National Association of Home Builders/Wells Fargo sentiment index declined to 16 this month from 17 in March, data from the Washington-based group showed today. A measure of sales expectations for the next six months dropped to the lowest level since October, and a gauge of current purchases also fell.
• Global Demand for U.S. Assets Fell in March. Global demand for U.S. long-term financial assets such as government bonds slowed in March as investors shifted into shorter-term securities and China trimmed its portfolio of Treasuries. Net buying of long-term equities, notes and bonds totaled $24 billion during the month, compared with net buying of $27.2 billion in February, according to statistics issued today in Washington.
• Tepco Says Fuel in 2 Reactors May Have Melted. Tokyo Electric Power Co. said fuel in other reactors at its damaged nuclear plant may have melted, after confirming rods in the No. 1 unit had fallen from their assembly, potentially delaying plans to resolve the crisis. “The findings at the No. 1 reactor indicate the likelihood that the water level readings in the other reactors aren’t accurate,” Junichi Matsumoto, a general manager at the utility known as Tepco, said today. “It could be that a meltdown similar to that in the No. 1 reactor has occurred.”Moody’s Japan K.K. cut Tepco’s credit ratings and put it on review for further possible downgrade after today’s news. Tepco has been struggling to cool reactors and stop radiation leaks to end the worst nuclear crisis since Chernobyl in 1986. The discovery that fuels rods melted within 16 hours of power being knocked out means it’s unlikely Tepco can meet its timetable for containing the leaks, a nuclear engineering professor said. “Tepco didn’t clearly indicate how much uncertainty and potential negative scenarios were factored into the road map,” said Hironobu Unesaki at Kyoto University. “I don’t think they gathered enough data before coming up with the plan.” Tepco fell 7.3 percent today to 420 yen in Tokyo.
• Pimco Sees Financial Repression in U.S. Amid 'Deteriorating Debt Dynamics'. Pacific Investment Management Co., which runs the world’s largest bond fund, said “deteriorating debt dynamics” will stoke faster inflation and financial repression in the U.S. as well as at least one sovereign-debt restructuring in Europe. “It is a world where several governments in advanced economies, and the U.S. in particular, opt for financial repression and mild inflation as the major way to accommodate their deteriorating debt dynamics,” Newport Beach, California- based El-Erian wrote in a report published today on the firm’s website. “It is a world that heals slowly and unevenly and remains structurally impaired.” Such tactics are evidence officials will continue to “hobble” through in their efforts to propel economies from the aftershocks of the global recession, he said. Europe will remain plagued by its fiscal crisis with “the virtual certainty of at least one, and probably more, sovereign-debt restructurings.”
• Oil Drops on Economy Risk; BofA's Blanch Sees Demand Destruction. Oil dropped for the first day in three in New York after President Barack Obama said failure to raise the U.S. debt ceiling may unravel global finances and threaten growth in the world’s biggest crude consumer. Futures slipped as much as 1.3 percent after Obama said the U.S. “could have a worse recession than we’ve already had,” according to a segment taped for CBS’s “Face the Nation” program. Prices also slid on concern Greece’s debt crisis may worsen, threatening Europe’s economic growth. Oil may drop in the second half of the year amid signs prices are causing demand to slow, said Francisco Blanch, head of Global Commodity Research, Bank of America Merrill Lynch. Crude for June delivery slid as much as $1.30 to $98.35 a barrel in electronic trading on the New York Mercantile Exchange and was at $98.79 at 1:06 p.m. Sydney time.

Wall Street Journal:

• DOJ Threatened to Sue Over Nasdaq(NDAQ) - NYSE(NYX). Mystery solved. Nasdaq this morning dropped its noisy effort to take over the New York Stock Exchange. It slunk away saying it “became clear” regulators wouldn’t approve a merger of the U.S.’s dominant stock exchanges. Now, the U.S. Department of Justice is taking credit for squashing the Nasdaq deal. the DOJ said Nasdaq and its partner walked away from their $11 billion bid for NYSE “after the Department of Justice informed the companies that it would file an antitrust lawsuit to block the deal.”
• Why The Jobs Market Feels So Dismal by Edward Lazear. The number of hires is the same today as it was when we were shedding jobs at record rates.
• U.S. Condemns Syrian Involvement in Israel. The White House on Monday condemned Syria's involvement in protests along Israel's border over the weekend that led to the death of at least 13 people and urged the countries to show restraint. "We are also strongly opposed to the Syrian government's involvement in inciting yesterday's protests in the Golan Heights," White House Press Secretary Jay Carney said Monday. "Such behavior is unacceptable and does not serve as a distraction from the Syrian government's ongoing repression of demonstrators in its own country."
  

MarketWatch:

• Lowe's(LOW) Cuts Forecast as Sales Drop Unexpectedly.

CNBC.com:

• Medicare, Entitlements on the Table for Cuts: Pelosi. Everything must be on the table as the U.S. Congress works to cut the deficit, including Medicare, Social Security and entitlements, House Minority Leader Nancy Pelosi told CNBC Monday. "All the money is fungible, and at the end of the day the deficit has to be reduced," the California Democrat said the day the $14.3 trillion debt ceiling expired. The government has 11 weeks to raise the debt ceiling or be in default.
• High Commodity Prices to Lower 2011 Growth: Survey. High commodity prices will slow U.S. economic growth and raise inflation this year. The National Association for Business Economics' latest survey showed economists trimmed their 2011 annual average growth estimate to 2.8 percent from 3.3 percent in February. Economists lowered their growth estimates in response to the first-quarter's 1.8 percent annual pace, which was a sharp slowdown from the 3.1 percent rate in the final three months of 2010. Growth was held back by high food and gasoline prices. "Panelists are increasingly concerned about rising commodity prices and inflation," said NABE president Richard Wobbekind. The survey was conducted between April 13 and May 1, and covered 41 economists.
• IMF Chief's Arrest Could Mean Harsher Bailout for Greece.
  

Business Insider:

• The "Facebook of China", the "YouTube of China", and the "Amazon of China" Continue to Get Crushed.

Zero Hedge:

• Treasury Confirms Debt Ceiling To Be Breached Today; Will Tap Pension Funds.
• SocGen On a Chinese Slowdown: Buy China CDS, Sell Hard Commodities. That said, the risks to the global economy, should China implode, are far vaster, and we fail to conceive how the central planning cartel would ever allow this to happen, or the PBoC for that matter, considering today's earlier news of not one but two failed Chinese auctions. From SocGen:
• Full Complaint Against Dominique Strauss-Kahn Released:
• Here It Comes: Shi'ite Iran Sends "Solidarity" Flotilla To Sunni-Controlled Bahrain.
• 2 Chinese Bond Auctions Failed.
  

Internet Retailer:

• Texas Moves Ahead With An Online Sales Tax Bill. The Texas Senate approved by a 30-to-1 vote Friday a bill that would require online and catalog retailers with an in-state physical presence, such as stores or distribution centers, to collect and remit sales tax even if those facilities are operated by subsidiaries. Already approved by the Texas House of Representatives, the bill is expected to go before the governor by the end of this month.

MobileBeat:

• Seagate(STX) Debuts Mobile Wireless Storage for iPhones. Storage giant Seagate is announcing today the first mobile wireless storage device for iOS devices (iPhones, iPads, and iPod Touches). The GoFlex mobile wireless storage device is a battery-powered external hard drive that can wirelessly extend the storage capacity of any Wi-Fi-enabled device. The device can store 500 gigabytes of data and extend a device’s storage via 802.11 b/g/n wireless networking. It has enough storage capacity to back up the entire library of video, music, pictures and documents that most people have on their mobile devices.

Politico:

• Donald Trump Says He Won't Run in 2012. Donald Trump to Donald Trump: “You’re fired.” The publicity-loving New York developer and reality-TV star pulled the plug on his would-be 2012 presidential run Monday afternoon, saying he still believes he'd be best for the job but that he's not ready to give up on making money in the private sector.

Reuters:

• Angela Merkel, IMF Talks Cancelled After Dominique Strauss-Kahn Arrest. Talks between German Chancellor Angela Merkel and arrested IMF chief Dominique Strauss-Kahn, set for Sunday, have been cancelled as the International Monetary Fund will not send a replacement to Berlin, a government source said.

ECO:

• Niall Ferguson, a professor of history at Harvard University in the U.S., said Lehman Brothers Holdings Inc. seems like a "well-run bank" compared with the debt on some German lenders' balance sheets, citing an interview. A restructuring of Greek debt is "unavoidable," Ferguson said. The future of the eurozone largely depends on Germany, he said.

ABC News:

• Japan Extends the Exclusion Zone Around Fukushima. Japan has begun evacuating people from outside the official exclusion zone around the crippled Fukushima nuclear plant. With radiation levels remaining high, small children and pregnant women were the first to be moved with thousands more to be shifted into shelters and temporary housing. As the evacuation zone widened more details have emerged about the meltdown in Fukushima's reactor number one, with revelations the fuel rods probably melted in the hours after the magnitude nine earthquake in March - a fact not discovered until last week.

Bear Radar

Style Underperformer:

• Large-Cap Growth (-.84%)

Sector Underperformers:

• 1) Internet -2.04% 2) Software -1.66% 3) Networking -1.46%

Stocks Falling on Unusual Volume:

• FCX, REDF, ALLT, AMZN, DELL, ISYS, RMBS, HTLD, MDSO, RDEA, VRTU, MIDD, DEST, FEIC, SSRX, TITN, LCAPA, JAZZ, CHBT, NXTM, WBMD, MNRO, YHOO, PEGA, PSO, JCP, TLP, NYX, CXW, FUN, FNB, PXQ, ID, GEO, SEMG and DHX
  

Stocks With Unusual Put Option Activity:

• 1) DELL 2) LOW 3) NYX 4) JCP 5) JWN
  

Stocks With Most Negative News Mentions:

• 1) KEY 2) LOW 3) MSI 4) KNX 5) MGA
  

Charts:

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