Bull Radar

Style Outperformer:

• Small-Cap Value (+.39%)

Sector Outperformers:

• 1) Homebuilders +1.47% 2) Retail +.86% 3) Insurance +.84%

Stocks Rising on Unusual Volume:

• LOW, HD, UNS, SIGA, CBST, CCOI, MDMD, RITT, JVA, CROX, SPRD, SUG, KR, SCL, CPF and ATU
  

Stocks With Unusual Call Option Activity:

• 1) ETFC 2) OCZ 3) KR 4) SFD 5) HRBN
  

Stocks With Most Positive News Mentions:

• 1) IRBT 2) CBST 3) PKD 4) BBY 5) LXP
  

Charts:

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

Thursday Watch

Evening Headlines

Bloomberg:

• Papandreou Calls Confidence Vote in Bid to Hang On. Greek Prime Minister George Papandreou will reshuffle his Cabinet and seek a confidence vote today, battling to control a shrinking majority and push through austerity measures demanded by international lenders. Papandreou sought to reassert his authority in a televised address last night hours after police used tear gas to break up protests in central Athens and media reported he was in talks to step down in favor of a unity government. Thousands remained outside Parliament late into the evening, with police estimating the crowd at 8,000 people at 10:20 p.m. The political turmoil came as European Union talks on forging a new bailout to prevent the first euro-area default stalled. The impasse over the aid formula and speculation that a government shakeup would disrupt passage of budget cuts and asset sales sent Greek bonds and the euro plunging yesterday. “If the no confidence motion fails, the market reaction is just the beginning,” Charles Diebel, head of market strategy at Lloyds Bank Corporate Markets in London, wrote in a note. “Then Armageddon scenarios come into play, which include default and potentially the whole contagion scenario plays out.” The yield on two-year Greek notes exceeded 28 percent for the first time and rates on 10-year bonds gained 35 basis points to 17.73 percent. The cost of protecting Greece against default climbed 149 basis points to a record 1,754 in London, according to prices compiled by CMA.
• Euro Trades Near Three-Week Low on Concern Over Greece's Political Turmoil. The euro traded 0.2 percent from a three-week low against the yen on concern a reshuffling of Greek Prime Minister George Papandreou’s Cabinet will lead to a negotiation of the terms of the country’s rescue package. The shared currency was 0.7 percent from a record low against the Swiss franc on speculation the Irish government will ask bondholders to share losses of some of the nation’s lenders. Demand for the yen as a refuge increased as Asian stocks extended a global slide in shares. “The market is still quite concerned about Greece,” said Matthew Brady, executive director for foreign exchange at JPMorgan Chase & Co. in Sydney. “It’s going to be a choppy ride for the euro, there’s no doubt about that. I’d prefer to still sell any rallies in euro.”
  
• Interest Rate Swap Spreads Widen Most Since November on European Debt Woes. U.S. interest-rate swap spreads widened the most since November after Moody’s Investors Service said it may cut the credit ratings of three French banks with investments in Greece. The difference between the U.S. two-year swap rate and the comparable-maturity Treasury note yield, known as the swap spread, widened 4.6 basis points to 24.75 basis points. “There is some worry that with what is going on in Greece there will be downgrades and this will cause a problem in funding and result in a rise in Libor,” said Ira Jersey, an interest-rate strategist in New York at Credit Suisse Group AG. “Swap spreads are widening as direct result of these concerns.”
• Japan's Ad-Hoc Radiation Tests Raise Concerns. Kimie Nozaki, a mother of three children living 60 kilometers from the crippled Fukushima nuclear reactors, said she doesn’t trust the government’s testing program for radiation-contaminated food. “Information from the government lacks detail, which makes me even more nervous,” said Nozaki, who lives in Fukushima city about 35 miles from the plant that’s been emitting radiation since March 11 in the world’s worst nuclear disaster since Chernobyl. Three months after an earthquake and tsunami crippled the plant, Japan doesn’t appear to have a comprehensive food testing regime, said Peter Burns, the former chairman of the United Nations Scientific Committee on the Effects of Atomic Radiation. Prolonged exposure to radiation in the air, ground and food can cause leukemia and other cancers, according to the London-based World Nuclear Association. “My impression is the monitoring has been a bit piecemeal,” Burns said by phone from his home in Melbourne on June 14. “The Japanese are usually highly motivated and organized to implement such systems, so I would think they will get there, but certainly what I’ve seen to date hasn’t been awe- inspiring.” Products including spinach, mushrooms, bamboo shoots, tea, milk, plums and fish have been found to be contaminated with cesium and iodine as far as 360 kilometers from the station. Contamination was detected in 347 food samples from eight prefectures by June 9, according to the Ministry of Health, Labour and Welfare.
  
• China Development Bank Cancels Bond Sale. China Development Bank Corp. canceled one-year floating-rate bonds sale today on “market conditions”, according to statement on the Chinese government’s bond clearing house website.
• China's economy will likely grow at a slower pace than previously forecast in 2011 and 2012 amid inflationary pressures and continued monetary tightening, according to Credit Suisse Group AG. GDP may increase 8.7% this year, down from a previous estimate of 8.8%, and expand 8.5% in 2012, instead of 8.9%, Credit Suisse analyst Dong Tao wrote in a report.
• Oil Rises After Slumping to Four-Month Low; US Distillate Demand Drops. Futures climbed as much as 0.7 percent after plunging the most since May 11 yesterday. Crude’s 14-day relative strength index, a measure of how rapidly prices are advancing or declining, dropped to 38 yesterday, the lowest in four weeks. U.S. consumption of distillate fuel, a category that includes diesel and heating oil, tumbled 5.2 percent last week to 3.6 million barrels a day, the lowest level since January, according to the Energy Department.

Wall Street Journal:

• Regulators Set to Clash on Capital Rules for Banks. Two top U.S. regulators are set to clash over whether setting bank-capital requirements too high will restrict lending and hurt American companies trying to compete internationally. In remarks prepared for a hearing of the House Financial Services Committee on Thursday, Federal Deposit Insurance Corp. Chairman Sheila Bair and Acting Comptroller of the Currency John Walsh will offer starkly contrasting views of new requirements for banks’ capital cushions being imposed in the wake of the 2008 financial crisis. Their remarks, seen by Dow Jones Newswires, come as U.S. and international regulators are working on several efforts that will require the largest financial institutions to hold more and higher-quality capital. Walsh is particularly concerned with new surcharges proposed for the world’s biggest financial institutions, saying that he supports a capital surcharge for the largest banks, but believes the amount should be “moderate.” “We are concerned with how much more we can and should turn up the dial on our banks without having negative effects on lending,” Walsh said. Bair, however, will argue for robust standards. Bair said that European banks have implicit state support. That, she said, “is not the model we want for the U.S. banking system.” She added, “I am very concerned about the potential for the European banking system to become a future source of financial instability.”
• WSJ/NBC News Poll: $4-a-Gallon Gasoline Contributed to Growing Pessimism on Economy. Pessimism over the economy has soared to levels not seen since the summer of 2008, fueled in part by high gas prices, the latest Wall Street Journal/NBC News poll shows. Amid jitters over squeezed pocketbooks and a possible second recession, the poll found that only 29% of Americans think the economy will improve over the next year, while 30% think it will worsen. The last time the poll found more pessimists than optimists on the economy was in July 2008. The economy "is going nowhere, and the public is unbelievably pessimistic about the future," said Peter Hart, a Democratic pollster who directs the Journal/NBC News poll with Republican Bill McInturff. "Everyone has been affected by everything, from gas to home values to unemployment." Nearly seven in 10 of those polled said they had been affected "a great deal" or "quite a bit" by increased gas prices since the start of the year. Just over half said the same about higher food prices, more than complained about unemployment or falling home values. More than a third of all respondents said their personal economic situation had gotten worse over the last year, while less than one fifth said their situation had improved.

CNBC:

• CME Group Inc.(CME), the world's largest futures exchange, is talking with officials from other states about relocating because of Illinois' corporate tax rate increase to 7%, Executive Chairman Terry Duffy said.

Zero Hedge:

• His Name Was John Paulson (And His Fund Was Down 20%). As the WSJ's Greg Zuckerman reports, Advantage Plus fund "lost more than 13% in the early part of this month, through June 10, leaving it down 19.65% for the year, according to two investors briefed on the performance.
• Why The Wheels Are Falling Off China's Boom.
  

RTT News:

• China Leading Index Rises in April. China's leading economic index rose at a slower pace in April, indicating a more moderate expansion of the economy in the coming months, the Conference Board said Thursday. The leading economic indicator rose 0.2 percent month-on-month to 154.5 in April, slower than a 0.9 percent increase in March.

Reuters:

• Finisar(FNSR) Q1 Forecast Disappoints; Shares Sink. Network equipment maker Finisar Corp (FNSR.O) forecast a dismal first quarter, hurt by a continued slowdown in demand from Chinese telecom equipment makers, sending its shares down 16 percent in extended trading on Wednesday.

Financial Times:

• Portugal's Coelho Warns of Two 'Terrible Years' Ahead. Portugal's incoming Social Democrat Prime Minister Pedro Passos Coelho said the country faces two "terrible years" of recession and joblessness, with a return to growth only possible if it follows "a very rigorous program of austerity and structural reforms," the FT said, citing an interview. The austerity and reform plan "cannot fail" as failure would mean Portugal is unable to return to the financial markets in 2013, Coelho said. Coelho plans to speed up the rate at which Portugal sells off state-owned companies.
• Germany Eases Stance Over Greece Bondholder Proposal. Germany is easing its stance on the timeframe for participation of private bondholders in any new bailout plans for Greece after the IMF indicated it was ready to support the payment of the next $17 billion portion of Greece's current rescue package next month, citing German officials. The country still insists that bondholders must make a "substantial and quantifiable contribution."
  

TimesOnline:

• The UK may have to contribute between 700 million euros and 1 billion euros to a second rescue fund for Greece if Germany succeeds in persuading other European Union nations to include an emergency fund of 6 billion euros to 8 billion euros in the new bailout, citing officials in Brussels.

Economic Information Daily:

• An interest rate increase by China isn't "far away" as not doing so would do more harm to the economy, the Economic Information Daily said in a front-page editorial signed by the newspaper's Wang Yinghui. The increase in banks' reserve requirement ratios on June 14 can't replace an interest rate increase, which is the most "powerful weapon" to contain inflation, according to the newspaper, which is run by the government's Xinhua News Agency.

China Daily:

• The China Banking Regulatory Commission will order banks to examine their guarantee businesses through July to prevent risks from guarantee companies, citing Zhu Yongyang, a deputy director at the regulator's financing guarantee department. The regulator also plans to inspect banks on the spot in the coming months to avoid such risks, citing Zhu.

Evening Recommendations
Citigroup:

• Reiterated Sell on (HSY), target $64.
  

Night Trading

• Asian equity indices are -1.50% to -1.0% on average.
• Asia Ex-Japan Investment Grade CDS Index 117.50 +4.0 basis points.
  
• Asia Pacific Sovereign CDS Index 119.50 +2.5 basis points.
  
• S&P 500 futures +.35%.
  
• NASDAQ 100 futures +.31%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (KR)/.64
• (PIR)/.11
• (SFD)/.81
• (WGO)/.13
• (ATU)/.46
• (JW/A)/.49
  

Economic Releases
8:30 am EST

• Initial Jobless Claims for last week are estimated to fall to 420K versus 427K the prior week.
• Continuing Claims are estimated to fall to 3670K versus 3676K prior.
• The 1Q Current Account Deficit is estimated to widen to -$130.0B versus -$113.3B in 4Q.
• Housing Starts for May are estimated to rise to 545K versus 523K in April.
• Building Permits for May are estimated to rise to 557K versus 551K prior.
  

10:00 am EST

• The Philly Fed for June is estimated to rise to 7.0 versus a reading of 3.9 in May.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Fisher speaking, Bloomberg Economic Expectations Index for June, weekly EIA natural gas inventory report, weekly Bloomberg Consumer Comfort Index, (HRL) investor day, (MCK) investor day and the (AOL) investor day could also impact trading today.
  

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and commodity shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Stocks Falling into Final Hour on Soaring Eurozone Debt Angst, Rising Global Growth Worries, Emerging Markets Inflation Fears, Technical Selling

Broad Market Tone:

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

Equity Investor Angst:

• VIX 21.12 +15.66%
  
• ISE Sentiment Index 67.0 -58.13%
  
• Total Put/Call 1.36 +32.04%
  
• NYSE Arms 1.87 +205.51%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 97.76 +.78%
  
• European Financial Sector CDS Index 130.50 +15.20%
  
• Western Europe Sovereign Debt CDS Index 222.08 +3.90%
  
• Emerging Market CDS Index 225.85 +3.95%
  
• 2-Year Swap Spread 25.0 +5 bps
  
• TED Spread 20.0 unch.
  

Economic Gauges:

• 3-Month T-Bill Yield .05% unch.
  
• Yield Curve 259.0 -6 bps
  
• China Import Iron Ore Spot $173.0/Metric Tonne +.12%
  
• Citi US Economic Surprise Index -97.70 -2.3 points
  
• 10-Year TIPS Spread 2.22% -3 bps
  

Overseas Futures:

• Nikkei Futures: Indicating -105 open in Japan
• DAX Futures: Indicating -32 open in Germany

Portfolio:

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

BOTTOM LINE: Today's overall market action is very bearish as the S&P 500 trades near session lows as it approaches its 200-day moving average on global growth worries, emerging markets inflation fears, rising Mideast unrest, Japan nuclear concerns and soaring eurozone debt angst. On the positive side, Gaming, Restaurant, Biotech and Defense shares are relatively strong, falling less than -1.0%. The UBS-Bloomberg Ag Spot Index is declining -1.15% and oil is plunging -4.2%. Distillate demand has dropped -3.6% over the last 4 weeks versus last year. The potential downside in oil is rather large still, in my opinion. On the negative side, Coal, Alt Energy, Energy, Oil Service, Ag, Networking, Insurance, Construction, Education, Tobacco, REIT, Homebuilding, HMO, I-Banking, Wireless and Software shares are under significant pressure, falling more than -2.5%. Small-caps and cyclicals are underperforming. (XLF) has been relatively weak again today. Tech shares also continue to trade poorly. Lumber is falling another -3.0% and Copper is down -1.33%. Shanghai copper inventories are surging +20.1% today. Lumber has plunged -33% in less than 3 months. The 10-year yield is falling too much again, declining -13 bps to 2.96%. The US price for a gallon of gas is -.01/gallon today to $3.69/gallon. It is up .55/gallon in less than 4 months. The Greece sovereign cds is soaring +9.65% to 1,761.32 bps, the Spain sovereign cds is rising +5.72% to 288.67 bps, the Italy sovereign cds is rising +6.46% to 180.0 bps, the Portugal sovereign cds is rising +7.78% to 794.17 bps, the Ireland sovereign cds is gaining +5.82% to 767.67 bps and the UK sovereign cds is gaining +4.46% to 65.81 bps. The Spain and UK sovereign cds have broken out technically. The Greece, Ireland and Portugal sovereign cds are hitting new record highs again today. The jump in the 2-year swap spread over the last 2 days is also a big concern. 3-Month Shibor is also surging +36 bps to 5.28%. The Shanghai Composite finished at session lows last night, falling -.9% and India's Sensex also continues to trade poorly, dropping another -.96%. Both Chinese and Indian govt officials continue to sound hawkish as they deal with inflation problems that are more pronounced than many investors perceive. As well, Spanish and Italian equities fell over -2.0% today and remain under significant pressure. Israeli stocks have been very poor performers over the last 6 weeks and are now down -11.3% ytd. Gauges of investor angst are finally nearing levels that are more appropriate for the current macro backdrop, which is a large positive. However, it appears as though uncertainty regarding the current Greece debt situation will remain until late next week at the earliest. Many key stocks are breaking or are at key technical levels, as well. The S&P 500 will likely test its 200-day moving average by week's end. I expect US stocks to trade mixed-to-lower into the close from current levels on more global growth worries, rising eurozone debt concerns, technical selling, emerging markets inflation fears, rising Mideast unrest and more short-selling.

Today's Headlines

Bloomberg:

• Greece Bailout Prospects Darken as European Bickering Weakens Papandreou. Greek economic prospects darkened as European bickering risked delaying the next rescue payment and defections weakened Prime Minister George Papandreou’s majority. An emergency session of euro finance chiefs in Brussels yesterday failed to break a deadlock on how to enroll investors in a second bailout without triggering a default, casting doubt on funds due from the International Monetary Fund next month. In Athens, Greek police used tear gas to disperse demonstrators around the Parliament as 20,000 people rallied against wage reductions and tax increases as lawmakers debated the budget cuts and asset sales that are conditions of the aid. Ports, banks, hospitals and state-run companies were paralyzed by strikes, while a Papandreou ally said he won’t support the austerity measures and another bolted his Socialist Party. Debt restructuring “seems to be increasingly probable,” Raghuram Rajan, a professor at the University of Chicago and a former chief economist at the IMF, said today in Singapore. “The political will required to do what would be necessary to service the level of debt that is building up is reaching the limits of what Greece can do.”
  
• Greek Crisis Threats Pose Main Risk to Euro Financial Stability, ECB Says. The European Central Bank said the threat of the Greek debt crisis spilling over into the banking sector is the biggest risk to the region’s financial stability. “Greece could have a contagion effect,” ECB Vice President Vitor Constancio said at a briefing in Frankfurt today, when presenting the bank’s semi-annual Financial Stability Review. “That’s the reason why we are against any sort of default with haircuts and any form of private-sector event that could lead to a credit event or a rating event.”
• Greek Unions Stage 24-Hour Strike to Oppose Papandreou's Cuts, Asset Sales. Greece’s ports, banks, hospitals and state-run companies ground to a halt today as the two biggest labor unions went on strike to oppose Prime Minister George Papandreou’s additional budget cuts and asset sales. ADEDY, the largest public-sector union, and the General Confederation of Labor, or GSEE, the biggest private-sector union, called the third general strike of the year to protest the government’s five-year fiscal plan and program of state asset sales, according to e-mailed statements. The two unions were due to march to parliament at 11 a.m. in Athens.
  
• Consumer Prices in U.S. Rose in May. The cost of living in the U.S. rose more than forecast in May as prices for everything from autos to hotel rooms climbed, signaling raw-material expenses are filtering through the economy. The consumer-price index increased 0.2 percent last month and was up 3.6 percent from May 2010, the biggest year-over-year advance since October 2008, according to figures from the Labor Department today in Washington. Prices excluding food and fuel climbed 0.3 percent in May, the biggest one-month gain since July 2008, highlighting efforts by companies like McDonald’s Corp. (MCD) and Abercrombie & Fitch Co. (ANF) to charge customers more. The report may concern Federal Reserve policy makers like Chairman Ben S. Bernanke who are trying to maintain record stimulus while avoiding inflation. The cost of other goods and services also advanced. Hotel rates climbed 2.9 percent last month, clothing prices increased 1.2 percent and recreation expenses increased 0.3 percent. “We’re seeing a broad-based bleed-through of energy and commodity-price pressures into components throughout the core,” said John Herrmann, a senior fixed-income strategist at State Street Global Markets LLC in Boston, who correctly forecast the gain in core inflation. “The Fed has to be more adamant about their credibility as an inflation fighter.” Food costs increased 0.4 percent, today’s report showed. The 1.5 percent jump in meats, poultry, fish and eggs was the biggest since November 2003.
• Manufacturing in New York Area Unexpectedly Contracts on Parts Shortages. Manufacturing in the New York region unexpectedly shrank in June, a sign the industry still faces parts shortages following the disaster in Japan. The Federal Reserve Bank of New York’s general economic index dropped to minus 7.8, the lowest level since November, from 11.9 in May. The median forecast in a Bloomberg News survey of economists was 12. The employment measure decreased to 10.2 from 24.7. Fewer manufacturers in June said they expect to boost payrolls in the coming year compared with January, according to a supplemental question in the Fed’s survey of businesses. An index of prices paid fell to 56.1 from 69.9, while prices received dropped to 11.2 from 28. Factory executives in the New York Fed’s district were less optimistic about the future. The gauge measuring the outlook six months from now declined to 22.5 from 52.7.
• Homebuilder Confidence in U.S. Slides to Nine-Month Low on Sales Outlook. Confidence among U.S. homebuilders slumped in June to the lowest level in nine months as executives turned more pessimistic on the outlook for sales, a sign that any pickup will take time to develop. The National Association of Home Builders/Wells Fargo sentiment index unexpectedly fell to 13 from 16 in May, the biggest drop in a year, data from the Washington-based group showed today. The builders group’s index of sales expectations for the next six months decreased to 15, matching the lowest level on record, from 19. A gauge of current single-family home sales declined to 13, the lowest since September, from 15. The index of buyer traffic fell to 12 from 14 in May, the biggest one-month drop since July. “Builder confidence has waned even further as economic growth has stalled, foreclosures have continued to hit the market and the cost of building a home has risen,” NAHB Chief Economist David Crowe said today in a statement.
• Papndreou Offers to Quit for Unity Cabinet. Greek Prime Minister George Papandreou offered to step aside to permit the formation of a unity government, as long as all opposition parties agreed to cuts required by an international bailout, said a person with direct knowledge of the matter. Papandreou’s bid, coming amid mounting popular protests and defections among his allies, countered a demand by the New Democracy opposition party that he quit and allow a so-called technical government renegotiate the terms of the rescue. The political turmoil came as European Union talks on forging a new bailout to prevent the first euro-area default stalled. The impasse over the aid formula and speculation of an impending government shakeup sent Greek bond yields surging to a record high and the euro weakening today. “When a government has so profoundly misjudged the anger, frustration and disillusionment in the population it is a matter of time until changes have to set in,” Jens Bastian, a visiting economist at St. Antony’s College, Oxford University in England, said in an interview.
• Euro Plunges Most in Month as Greek Leader Loses Support Amid Debt Talks. The euro dropped the most in more than a month against the dollar after the Greek prime minister’s government lost political support as the European Union struggled to break a deadlock on a second financial rescue for the nation. Europe’s shared currency fell versus most of its major counterparts, except for Sweden’s krona and Norway’s krone, which dropped as commodity prices slumped. Demand for assets linked to growth also eased after reports showed slowing manufacturing in the U.S. Sterling fell versus the dollar after a report showed Britain’s jobless claims rose in May more than economists forecast. “The Greek issue doesn’t look like it’s going to go away any time soon,” said Aroop Chatterjee, a currency strategist at Barclays Plc in New York. “We see more downside risk for the euro area on the macro front, and for the euro as well.”
• Europe's $103 Billion Yard Sale May Come Up Short as Buyers Seek Bargains. Prime Minister George Papandreou vowed in 2009 to scrap an agreement to sell a stake in Greece’s biggest phone company in a bid to get elected. This month, forced to raise cash, Greece triggered an option to sell 10 percent of Hellenic Telecommunications Organization SA (HTO), known as OTE, to Deutsche Telekom AG. (DTE) The price: less than one-third of what Europe’s largest phone company paid for shares when it last bought OTE stock in 2009. That deal underlines the challenge facing European countries such as Greece and Ireland, awash in debt, that are hoping to raise as much as 71.5 billion euros ($103 billion) in the continent’s largest yard sale of state assets in more than a decade. The push may founder as investors seek better returns in Asia and lower prices than governments are willing to accept, bankers and investors say. The threat of Greek default or euro breakup is scaring buyers and depressing prices, they say.
• Crude Oil Falls on New York Manufacturing Slowdown and Europe Debt Crisis. Crude oil fell after manufacturing in New York unexpectedly contracted and concern grew that Europe’s debt crisis will deepen, reducing economic growth and fuel demand. “Crude oil is finding it hard to stay near $100 with all of the negative economic news,” said Sean Brodrick, a natural resource analyst with Weiss Research in Jupiter, Florida. Crude oil for July delivery fell $1.60, or 1.6 percent, to $97.77 a barrel at 12:21 p.m. on the New York Mercantile Exchange. Prices are up 27 percent from a year ago. “We’ve had a slew of negative economic data, which is a bad signal for fuel demand in the months ahead,” said Phil Flynn, vice president of research at PFGBest in Chicago. “The Greek crisis continues to overhang the market. This points to lower European demand and has triggered a flight to the dollar.” Demand for distillate fuel, a category that includes diesel and heating oil, tumbled 5.2 percent to 3.6 million barrels a day, the lowest level since January, the report showed.
• Corn, Soybeans Fall on Bets Sluggish U.S. Economy to Damp Commodity Use. Corn fell, extending a slide to a four-week low, and soybeans declined on bets that the sluggish economy will curtail demand for food, animal feed and biofuel. Industrial production in the U.S. rose less than forecast in May and confidence among U.S. homebuilders slumped in June to the lowest in nine months, government and industry reports said today. Last week, output of ethanol, made mostly from corn, fell 3.8 percent, the biggest drop since mid-April. Corn futures for December delivery fell 15 cents, or 2.2 percent, to $6.70 a bushel at 11:24 a.m. on the Chicago Board of Trade. Earlier, the price touched $6.6775, the lowest for the most-active contract since May 12.
• Democrats Propose Cutting Corporate Tax Breaks. Democrats gave Republicans a “menu of options” for phasing out tax expenditures benefiting corporations as part of a series of debt-reduction negotiations led by Vice President Joe Biden, said Maryland Representative Chris Van Hollen, a Democratic member of the bipartisan negotiating group. During today’s meeting, talks centered on how to control the debt long-term through caps on the budget deficit that could include automatic spending cuts and higher taxes to control its rate of growth, which Democrats favor, Van Hollen said. Republicans favor dollar-specific spending caps. Lawmakers and White House officials met for the tenth time today with a goal of wrapping up discussions by early next month to slash the federal debt and deficit by trillions of dollars, a condition Republicans have set for increasing the nation’s $14.3 trillion debt ceiling in the coming weeks.
• The euro may fall below $1.40 for the first time in three weeks, according to Citigroup Inc., citing technical indicators.
• Pandora(P) Surges After Pricing Shares Above Range. Pandora Media Inc., the online-radio company, surged as much as 63 percent on its first day of trading, a sign of accelerating demand for the limited number of Internet companies issuing shares.

Wall Street Journal:

• Greek Yields Soar Amid Protests. Greek bonds were pummeled Wednesday, sending yields to their highest levels since the inception of the euro as mass rallies against austerity measures turned violent in Athens' streets. The cost of insuring Greek debt against default risk continued to rise to new record levels, with the five-year credit default swap spread on the country 1.36 percentage points wider at 17.25 percentage points, according to data provider Markit. This means it now costs an average of $1,725,000 a year to insure $10 million of debt issued by the country. The protests that roiled Athens on Wednesday underscore the challenge the government faces as it tries to reduce its budget deficit with harsh spending cuts to reassure investors, the European Union and the International Monetary Fund. Fresh fears that these measures could trigger a political upheaval are seen complicating efforts to find a fix for the country. Yield on the benchmark 10-year Greek bond soared 0.54 percentage point in thin volumes to 17.7%, with the bond now trading at close to half its face value in price terms. The two-year yield surged by 1.6 percentage points to 26.77%, according to Tradeweb. Bonds issued by other highly indebted euro-zone nations also fell across the board. Portugal and Ireland also hit new records, with the Portuguese five-year spread 0.31 percentage point wider at 7.8 percentage points. Ireland's five-year CDS spread was 0.29 percentage point wider at 7.6 percentage points. Tier-2 euro-zone bonds were also weaker Wednesday, with Spain increasingly coming under the spotlight as worries persist that the country's 17 regions won't be able to keep within their 2011 budgets. Spanish 10-year bonds now yield 5.55%, around 2.58 percentage points more than German bunds, and are close to breaking through the 5.60% cap under which they have traded all year.
  

CNBC.com:

• All Really Is Not Well in Muniland.

Business Insider:

• The 21 Countries Most Likely to Default.
• Meet Obama's New Best Friends. Wall Street's richest Democrat donors, and recruiters to the cause.
• 10 Congressman and a Law Professor Just Sued to Stop the War in Libya. According to a press release today, Turley filed the litigation on behalf of:
• This Scary Chart Shows Just How Much Farmed Seafood Comes From China.
• Here is John Edwards' Mug Shot.
• Simon Johnson Accuses Bankers of Outright Lying So They Can Keep Their Riskiest Units.
  

Zero Hedge:

• Telvizing the (Second) Greek Revolution - Three Live Video Streams From Syntagma Square.

LA Times:

• Cable is the Only Cord Getting Cut. For the last year, top cable industry executives have dismissed the idea that consumers are cutting the cord and opting to get their content online. Turns out they're right. Consumers are cutting the cable cord, but not for the Internet. Instead they're signing up with satellite companies and phone companies offering the same services.

UpstreamOnline:

• GE(GE) Pens Petrobras(PBR) Subsea Deal. GE Oil & Gas has bagged a lucrative four-year subsea contract with Brazilian oil giant Petrobras. The $120 million deal for the US equipment stalwart follows another large deal from the Brazilian outfit for its Wellstream business and another smaller subsea contract with Shell. Under the newest contract, GE is to repair, maintain and retrofit Petrobras’ subsea fleet operating in the Campos Basin. This week Petrobras handed GE a $200 million contract to provide flexible pipe and subsea equipment logistics services. GE is to invest $90 million in a logistics base adjacent to recently-acquired Wellstream’s flexible pipe manufacturing facility in Niteroi, near Rio de Janeiro. Yesterday it was reported that GE had tied up a $30 million, three-year deal with supermajor Shell for the provision of subsea equipment.

Miami Herald:

• City of Miami Faces Estimated $40 Million Budget Shortfall. A year after filling a huge budget deficit with deep cuts in pay and pensions, Miami is staring at a budget shortfall that could reach $40 million, and is looking at reducing department budgets by 10 percent across the board.

Politico:

• Top Barack Obama Donors Net Government Jobs.

Rasmussen Reports:

• Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Wednesday shows that 23% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty percent (40%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -17 (see trends).

DigiTimes:

• DRAM Contract Prices Face Continuing Downward Pressure, Says DRAMeXchange. With PC end-user demand remaining weak and slow growth in DRAM content per PC, DRAM contract prices are likely to further slip in the second half of June 2011, according to DRAMeXchange.

Caixin Online:

• China won't loosen its current monetary tightening "easily" for some time, citing Xia Bin, an adviser to the People's Bank of China.

Bear Radar

Style Underperformer:

• Large-Cap Value (-1.81%)

Sector Underperformers:

• 1) Coal -3.03% 2) Energy -2.65% 3) Networking -2.43%

Stocks Falling on Unusual Volume:

• HNR, CWEI, STD, STO, TI, TEF, BCS, BBL, BHP, WGO, THO, SRDX, AVEO, BSFT, MDVN, INFA, SPRD, SPWRA, NICE, MIND, RMTI, ATPG, CTSH, CREE, FNSR, SLGN, TTWO, RBCN, CAR, CCMP, WF, VCO, SMG, OI, FCE/A, DHR, EWO, EWQ, LUX, NYC, ISI, PUW, JCP, ENH, CPF, AF, FSP, GEO, CU and BBEP
  

Stocks With Unusual Put Option Activity:

• 1) FXC 2) VIA/B 3) RCL 4) COH 5) APKT
  

Stocks With Most Negative News Mentions:

• 1) C 2) KEY 3) MAR 4) TIF 5) MF
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth (-.31%)

Sector Outperformers:

• 1) Gaming +.98% 2) Education +.62% 3) Biotech +.47%

Stocks Rising on Unusual Volume:

• BBY, NTAP, WMS, JVA, REGN, TTMI, CECO, TZOO, AMLN, DST, KFY, AGM, HPT and CXW
  

Stocks With Unusual Call Option Activity:

• 1) GD 2) LLY 3) CREE 4) EMN 5) REE
  

Stocks With Most Positive News Mentions:

• 1) HPT 2) SWFT 3) MIPS 4) ARUN 5) HST
  

Charts:

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