Bull Radar

Style Outperformer:

• Small-Cap Value (+.31%)

Sector Outperformers:

• 1) Computer Hardware +2.71% 2) Networking +1.10% 3) Semis +.91%

Stocks Rising on Unusual Volume:

• LXK, VLTR, GEOY, BRCM, VOD, AAPL, CMI, AIXG, SI, SANM, ININ, HSII, CEVA, CYOU, RSTI, RDWR, BIDU, LGND, NTES, DWSN, ACIW, HMIN, AIXG, ACGL, CTRP, IDCC, RSH, GRA, GPI, BXS, HLX, DPZ, CNC, WU, CIT, DGI, AMG, MCP, WRB and FNF
  

Stocks With Unusual Call Option Activity:

• 1) KRE 2) RSH 3) TIN 4) STEC 5) ITW
  

Stocks With Most Positive News Mentions:

• 1) AAPL 2) BRCM 3) MSFT 4) BA 5) GOOG
  

Charts:

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

Tuesday Watch

Evening Headlines

Bloomberg:

• Default by U.S. Can Be Avoided Until September, Silvia Says. The U.S. government can avoid a default for at least a month after the Aug. 2 deadline to lift the debt ceiling set by the Treasury Department, said John Silvia, chief economist at Wells Fargo Securities LLC. “The Federal Reserve and the Treasury can work together to generate enough cash probably for the next two or three months to avoid any kind of automatic default on the Treasury debt,” Silvia, who is based in Charlotte, North Carolina, said in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. “There’s a way of getting around this issue for at least another month or two.”
• Greece Says It's Working With IMF, Hasn't Requested for More Financial Aid. Greek Finance Minister Evangelos Venizelos said his country is working with the International Monetary Fund on “procedural issues” regarding financing, while a debt official said the nation hasn’t made an additional loan request to the international lender. “Our goal is to return to positive growth and create primary surpluses by 2012,” Venizelos said during a speech in Washington yesterday. “Together we will succeed in rebuilding our country, restoring its fiscal independence and achieving the competitive position Greece deserves in the international market.” Greece’s credit rating was cut three steps by Moody’s Investors Service, which said the European Union’s rescue for the debt-laden nation will cause substantial losses for investors and amount to a default.
• FHA May Be Next in Line for Bailout: Delisle and Papagianis. The nationwide decline in house prices has created a vacuum in the U.S. mortgage market. Private financing for home loans has all but dried up and the U.S. government is now guaranteeing almost every new mortgage. Fannie Mae and Freddie Mac have received most of the media’s attention, but policy makers need to focus on the third leg of the housing- support stool: the Federal Housing Administration. The FHA has some major accounting problems. Left unaddressed, they could spook the markets, lead the FHA to seek a federal cash infusion and further enrage taxpayers. These outcomes can be avoided -- but only if policy makers are more transparent about the risks involved in guaranteeing mortgages. As private-financing options have disappeared, the role of the FHA has grown. Its market share has increased to about 30 percent today from 3-4 percent in 2007. That’s because the agency is now practically the only game in town, accepting borrowers with down payments of as low as 3.5 percent. As the last few years have made clear, sizable down payments -- or “skin in the game” -- are the key to avoiding defaults in the near term and to achieving a stable housing market in the long term.
• China's high-speed train crash three days ago may become a "turning point" for the nation's growth model, as it spurs a slowdown in infrastructure spending, Citigroup Inc. said. "Authorities may choose intentionally to slow GDP growth gradually but firmly to 7-8% in following years and spend more time to fix the problems created by artificial fast growth," Minggao Shen, an analyst at Citigroup, wrote. The accident will slow the pace of investment "at least in the near term" in subways, bridges and roads as well as in high-speed rail, which would affect demand for commodities, according to the note.
• Radiation Driving Japan Corn Cargo to Quarter-Century Low: Freight Markets. Japan, the world’s biggest corn importer, may buy the fewest cargoes in a quarter century as concern about radiation-tainted meat curbs livestock production.
• Crash Seen Giving 'Zero' Chance to China Train Exports. Chinese rail suppliers, who helped build the world’s largest bullet-train network in less than a decade, may struggle to sell equipment overseas after two locomotives collided, killing at least 39 people. Trainmakers CSR Corp. and China CNR Corp., builders including China Railway Construction Corp. and parts makers such as Zhuzhou CSR Times Electric Co., have targeted markets including the U.S. and Europe, touting experience gained from construction of the nation’s domestic network. The fatal crash, near Wenzhou on July 23, may undermine their sales pitches. “Their chances of selling high-speed trains are zero,” said Edwin Merner, president of Atlantis Investment Research Corp. in Tokyo, which manages about $3 billion in assets. “I don’t think they can ever get confidence back.”
• China's Stocks May Extend Worst Drop in 6 Months, UBS Says. China’s benchmark stock index may extend the biggest drop in six months and sink below this year’s low as slowing economic growth spurs analysts to reduce their earnings estimates by as much as 46 percent, according to UBS AG. A high-speed train crash may hurt profit growth for the nation’s two biggest trainmakers, said Chen Li, Shanghai-based head of China equity strategy at UBS. Analysts may cut their 2011 earnings growth forecasts for non-financial companies to as low as 15 percent from the current 28 percent, he said. The Chinese central bank is unlikely to ease its tighter monetary policies and may keep on raising interest rates to tame inflation that reached a three-year high last month, Chen said. “Investors’ expectations that tightening policies will be relaxed have been completely dashed after the government reiterated that current policies will remain in place,” Chen said in a telephone interview yesterday. The direction of economic controls shouldn’t change in the second half and will focus on curbing rapid price gains, China Central Television reported July 22, citing Premier Wen Jiabao.

Wall Street Journal:

• Obama Warns of Default Risk. With Congress deadlocked a week before the government runs out of cash to pay its bills, President Barack Obama warned Monday in his starkest terms yet that the U.S. is on the brink of a default that could trigger an economic upheaval.
  
• Live Blog: The U.S. Debt Battle.
  
• Crunch Time at Thomson Reuters. The family that controls Thomson Reuters Corp. has grown impatient with the company's performance and pressed for a recent shake-up, putting pressure on Chief Executive Tom Glocer to pull off a turnaround, according to people familiar with the matter.
• Big Fine in Metals Case. The former head trader at a hedge-fund giant settled regulatory allegations that he systematically attempted to manipulate prices of platinum and palladium, a sign that commodities regulators are intensifying efforts to crack down on manipulation in the futures markets. Christopher Pia—former head trader at hedge fund Moore Capital and a major player at the fund for 18 years—agreed to pay $1 million to settle civil allegations by the Commodity Futures Trading Commission, the regulator said in a release Monday.
• NFL and Players Agree on New Deal.
• The Latest Job Killer From the EPA. The agency's ozone rule will be the most expensive in history—and isn't required by law.
• A Leadership Default. The Obama Presidency has been unprecedented in many ways, and last night we saw another startling illustration: A President using a national TV address from the White House to call out his political opposition as unreasonable and radical and blame them as the sole reason for the "stalemate" over spending and the national debt. We've watched dozens of these speeches over the years, and this was more like a DNC fund-raiser than an Oval Office address. Though President Obama referred to the need to compromise, his idea of compromise was to call on the public to overwhelm Republicans with demands to raise taxes. He demeaned the GOP for protecting, in his poll-tested language, "millionaires and billionaires," for favoring "corporate jet owners and oil companies" over seniors on Medicare, and "hedge fund managers" over "their secretaries." While he invoked Ronald Reagan, the Gipper would never have used such rhetoric about his opposition on an issue of national moment.

CNBC:

• Greece Still Faces High Debt to GDP Ratio: IIF"s Dallara. Even after billions in debt forgiveness and a massive second bailout, Greece still faces a debt to GDP ratio of at least 100 percent, Charles Dallara, managing director of the Institute for International Finance, told CNBC in an exclusive interview Monday.
• Netflix(NFLX) Bracing for Slowdown in Subscriber Growth; Shares Skid. Netflix is bracing for a slowdown in its subscriber growth amid changes in the online video subscription service that will raise rates by as much as 60 percent for many customers.

Business Insider:

• Jefferson County Could Decide Thursday Whether To File For Largest-Ever Muni Bankruptcy. Officials in Jefferson County, Alabama could decide as soon as Thursday whether they will file for the largest municipal bankruptcy in U.S. history.
• GE(GE) Moves Healthcare Division's X-Ray Unit Headquarters To China. President Obama and Jeffrey Immelt are likely to face flak, since Obama appointed Immelt the top outside economic adviser and charged him with running a jobs-focused panel to help bring the U.S. economy back on track. GE came under scrutiny earlier this year after The New York Times reported the company did not pay any taxes in 2010. It has since been reported that GE had not finished its tax filing, and that the company expected to pay taxes. Immelt has also been criticized for employing 36,000 more people abroad, than in the U.S. and cutting 34,000 American jobs after becoming CEO, according to The Huffington Post.
  

Forbes:

• Government Induced Gloom.

WeeklyStandard:

• Is Obamacare the Source of Obama's Approval Woes? As of today, President Obama’s approval rating is only 42 percent in Gallup, while Rasmussen’s Presidential Approval Index shows that only 23 percent of likely voters “strongly approve” of Obama’s performance as president, compared to 44 percent who “strongly disapprove” — matching the highest “strongly disapprove” tally in Rasmussen’s index since November.

Politico:

• Harry Reid's Debt Ceiling Plan Faces Tough Odds. Senate Majority Leader Harry Reid’s new budget proposal to raise the national debt ceiling faces tough odds in his chamber, even with a White House endorsement. The Nevada Democrat’s proposal includes each party’s sacred cow: no revenue increases for Republicans, and no cuts to Social Security, Medicare or Medicaid for Democrats. But the bill calls for $1 trillion in savings from winding down the wars in Iraq and Afghanistan — a provision that Republicans, and even a Democratic caucus member, dismissed as a budgetary gimmick since the Pentagon already had planned to cut military spending through the troop drawdown. “I don’t think it’s a real cut,” Sen. Joe Lieberman (I-Conn.) told POLITICO, though he didn’t rule out supporting the plan. “It’s like a bookkeeping cut. It goes to an artificially high [Congressional Budget Office] number to just what we assume will be a reduction in overseas contingencies fund because we’re drawing our troops out of Iraq and Afghanistan.” Sen. Marco Rubio (R-Fla.) called it a “terrible plan” that “does not solve our problem.” And Sen. John Cornyn (R-Texas) pointed to the $1 trillion in savings from Iraq and Afghanistan and said, “I don’t know how you call that a savings.”

Rasmussen Reports:

• Generic Congressional Ballot: Republicans 44%, Democrats 38%.

USA Today:

• Texas Bucks National Unemployment Trend. Move to Texas. Finding work may not be quite that simple, but it sure seems that way. While the nation's job growth has limped along since the economic recovery began two years ago, the Lone Star State is enlarging payrolls in Texas-size fashion. From June 2009 to June 2011 the state added 262,000 jobs, or half the USA's 524,000 payroll gains, according to the Federal Reserve Bank of Dallas and the Bureau of Labor Statistics.

Reuters:

• Broadcom(BRCM) Results Beat Street Stock Leaps. Wireless chipmaker Broadcom (BRCM.O) gave a rosier-than-expected outlook for its revenues, dispelling worries about a tepid economy and high inventories and giving a hefty boost to its shares.
• Fed Should Raise Rates From Near Zero - Hoenig.
  

Passauer Neue Presse:

• European authorities may promote solar power in Greece as part of the country's aid package, quoting Guenther Oettinger, European Commissioner for energy, as saying in an interview.

Apple Daily:

• Asustek Computer Inc. expects third-quarter revenue to increase 30% from a year earlier, citing Kevin Lin, general sales manager of the company.

Financial News:

• China's high-speed train crash may lead to a rating downgrade for railway ministry bonds, citing a market participant. Liabilities for the Ministry of Railway may increase further as its spends tens of billion yuan each year on train and equipment purchases, the central bank-run paper reported, citing Zhao Jian, a professor at Beijing Jiaotong University.

Oriental Morning Post:

• Shanghai has tightened rules for home purchases by non-residents.

Evening Recommendations
Citigroup:

• Reiterated Buy on (ETN), boosted estimates, raised target to $67.
• Reiterated Buy on (NFLX), lowered estimates, target $300.

Piper Jaffary:

• Upgraded (VCLK) to Overweight from Underweight, target $23.
  

Night Trading

• Asian equity indices are -.25% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 117.0 +1.0 basis point.
  
• Asia Pacific Sovereign CDS Index 118.25 +1.75 basis points.
  
• S&P 500 futures +.17%.
  
• NASDAQ 100 futures +.18%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (LMT)/1.94
• (WDR)/.57
• (WPI)/1.00
• (NOV)/1.00
• (RSH)/.37
• (CPLA)/.90
• (SPG)/1.58
• (BIIB)/1.37
• (AMLN)/-.21
• (JBLU)/.09
• (CEVA)/.17
• (TROW)/.77
• (CSL)/.91
• (GRA)/.89
• (F)/.61
• (EK)/-.67
• (UA)/.08
• (RF)/.00
• (HSY)/.55
• (WAT)/1.14
• (CMI)/2.01
• (MMM)/1.59
• (UPS)/1.04
• (PCAR)/.69
• (ITW)/1.02
• (AVY)/.77
• (AKS)/.50
• (GILD)/.99
• (CHRW)/.69
• (SLG)/1.03
• (JNPR)/.33
• (ERTS)/-.40
• (LZ)/3.05
• (DWA)/.41
• (AMZN)/.34
• (LVS)/.44
• (PNRA)/1.17
• (IGT)/.22
• (JLL)/1.12
• (ILMN)/.37
• (LLTC)/.55
• (NSC)/1.29
• (BWLD)/.60
• (VLO)/1.45
• (OXY)/2.17
• (DPZ)/.36
• (AMG)/1.65
• (LXK)/1.03
  

Economic Releases
9:00 am EST

• The S&P/CS 20 City MoM% SA for for May is estimated unch. versus a -.09% decline in April.

10:00 am EST

• Consumer Confidence for July is estimated to fall to 56.0 versus a reading of 58.5 in June.
• Richmond Fed Manufacturing for July is estimated to rise to 5.0 versus 3.0 in June.
• New Home Sales for June is estimated to rise to 320K versus 319K in May.

Upcoming Splits

• (CLH) 2-for-1
  

Other Potential Market Movers

• The 2-Year Treasury Note Auction, 1-Year T-Bill Auction and the weekly retail sales reports could also impact trading today.
  

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

Stocks Falling into Final Hour on Rising Eurozone Debt Angst, US Debt Ceiling Concerns, Emerging Markets Inflation Fears, Global Growth Worries

Broad Market Tone:

• Advance/Decline Line: Substantially Lower
  
• Sector Performance: Most Sectors Declining
  
• Volume: Light
  
• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• VIX 19.17 +9.42%
  
• ISE Sentiment Index 114.0 -10.24%
  
• Total Put/Call .94 +13.25%
  
• NYSE Arms .88 -7.11%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 94.32 +1.33%
  
• European Financial Sector CDS Index 144.50 +6.22%
  
• Western Europe Sovereign Debt CDS Index 283.17 -.70%
  
• Emerging Market CDS Index 215.27 +1.60%
  
• 2-Year Swap Spread 22.0 -2 bps
  
• TED Spread 22.0 unch.
  

Economic Gauges:

• 3-Month T-Bill Yield .03% unch.
  
• Yield Curve 259.0 +2 bps
  
• China Import Iron Ore Spot $174.10/Metric Tonne unch.
  
• Citi US Economic Surprise Index -89.0 +3.8 points
  
• 10-Year TIPS Spread 2.44% +7 bps
  

Overseas Futures:

• Nikkei Futures: Indicating +45 open in Japan
• DAX Futures: Indicating +11 open in Germany

Portfolio:

• Slightly Lower: On losses in my Biotech and Retail sector longs
  
• Disclosed Trades: Added (IWM)/(QQQQ) hedges, added to my (EEM) short
  
• Market Exposure: Moved to 75% Net Long

BOTTOM LINE: Today's overall market action is just mildly bearish as the S&P 500 trades well off session lows despite terrorism fears, recent stock gains, rising eurozone debt angst, some earnings disappointments, US debt ceiling concerns, emerging markets inflation fears and global growth worries. On the positive side, Utility, Oil Service, Energy, Software, I-Banking, Construction, Ag and Road & Rail shares are flat-to-higher on the day. The Transports are just slightly lower on the day. The UBS-Bloomberg Ag Spot Index is falling -1.22% and oil is down -.62%. On the negative side, Airline, Hospital, Biotech, HMO, Alt Energy, Disk Drive, Networking, Telecom and Oil Tanker shares are under pressure, falling more than -1.0%. Cyclicals are relatively weak. Small-caps are substantially underperforming. (XLF) is underperforming again after recent gains. Gold is jumping +.7% and lumber is falling -.9%. Rice is jumping +2.5%, remaining near a multi-year high, and has soared about +31.0% in less than 3 weeks. The US price for a gallon of gas is unch. today at $3.69/gallon. It is up .55/gallon in less than 5 months. The Belgium sovereign cds is gaining +7.33% to 177.81 bps, the Germany sovereign cds is gaining +8.07% to 62.08 bps, the Spain sovereign cds is rising +9.03% to 336.90 bps, the Italy sovereign cds is jumping +10.2% to 278.99 bps, the UK sovereign cds is gaining +5.5% to 70.98 bps and the France sovereign cds is rising +10.2% to 113.72 bps. Chinese equities, which were unable to rally with the rest of the world last week, fell -3.0% last night and are down -4.2% ytd. Italian and Spanish stocks finished near session lows, falling -2.48% and -1.92%, respectively. I continue to believe the rises in German/French cds are large red flags regarding the recent debt deal. Moreover, Italian bonds are already weakening materially, again. As well, slowing growth and rising inflation in key emerging markets remains a larger problem than perceived, in my opinion. Notwithstanding some politicians apparent attempts to spook the equity and bond markets, stocks remain quite resilient in the face of still substantial headwinds. Debt ceiling political posturing will likely continue through week's end. Growth stock leaders continue to trade much better than the broad market. I expect US stocks to trade mixed-to-lower into the close from current levels on rising eurozone debt angst, global growth worries, US debt ceiling concerns, profit-taking and emerging markets inflation fears.

Today's Headlines

Bloomberg:

• Greece Rating Cut to Second-Lowest Level by Moody's on 'Orderly Default'. Greece’s credit rating was cut three steps by Moody’s Investors Service, which said the European Union’s rescue for the debt-laden nation will cause substantial losses for investors and amount to a default. Greece’s long-term foreign currency debt was downgraded to Ca, its second-lowest rating, from Caa1, the company said in a statement in London today. Moody’s said it will reassess the risk profile of any outstanding or new securities issued by Greece after the debt exchange that’s part of the new rescue plan has been completed. “The combination of the announced EU program and the debt exchange proposals by major financial institutions imply that private creditors will experience substantial losses on their holding of Greek government bonds and this is something we need to reflect in the rating,” Moody’s senior analyst Sarah Carlson said in an interview.
  
• Boehner Debt Plan Seeks $1 Trillion, $1.6 Trillion Debt Ceiling Raises. House Speaker John Boehner’s two- step debt-limit plan would raise the U.S. borrowing limit by up to $1 trillion and later by $1.6 trillion, according to Republican aides. The plan would require $1.2 trillion in spending cuts in the first phase and $1.8 trillion in the second step, the aides said. A committee would be created to identify spending cuts, one aide said, and Congress would vote later on a constitutional amendment requiring a balanced budget, another aide said. Boehner will present his plan to fellow House Republicans at a 2 p.m. closed-door meeting today.
• Sovereign Debt Risk Rises on Bets Greek Rescue Won't End Crisis. The cost of insuring against default on sovereign and corporate debt rose for the first time in five days on concern Greece’s rescue may not end Europe’s crisis as the U.S. struggles to break a stalemate on its budget. The Markit iTraxx SovX Western Europe Index of credit- default swaps on 15 governments increased 6 basis points to 265.5 at 3:30 p.m. in London. Investors are betting Greece’s second bailout in 15 months won’t be enough to stop the crisis from spreading to the rest of the euro area as Moody’s Investors Service cut the nation’s credit rating to its second-lowest grade. “A new outbreak of contagion remains a very real risk,” said Bill Blain, co-head of strategy at broker Newedge Group in London. Last week’s rescue “stemmed immediate fears of Greek catastrophe and contagion overwhelming Italy and Spain. But there remain nagging doubts.” Credit-default swaps on Greece fell 5 basis points to 1,590, adding to last week’s decline from a record 2,568 basis points July 18, CMA prices show. Swaps on Italy increased 15 basis points to 270, Spain climbed 17 to 327 and Portugal rose 12 to 919, while Belgium was 7 higher at 172 and Ireland was unchanged at 875, according to CMA. Swaps on the Netherlands jumped 7 basis points to 53, Austria rose 10 to 86 and Denmark climbed 7 to 66, according to CMA. Norway increased 3 to 27.5, Finland was 5 higher at 45 and France was up 9 at 112, while Germany rose 3 to 60. The Markit iTraxx Financial Index linked to senior debt of 25 banks and insurers increased 10 basis points to 171 and the subordinated index jumped 16 to 300, according to JPMorgan Chase & Co. Contracts on the Markit iTraxx Crossover Index of 40 companies with mostly high-yield credit ratings increased 14 basis points to 428. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings rose 3.75 basis points to 114.75 basis points.
• Dodd-Frank Reducing Bank Revenues by $9 Billion Spawns New Fees. Bank of America(BAC), JPMorgan(JPM) and Wells Fargo(WFC) are among the 10 largest U.S. banks that may lose more than $9 billion in annual revenue from two parts of the Dodd-Frank regulatory overhaul. The Dodd-Frank Act, passed in July 2010, may cost 23 U.S. financial companies - including the top-10 banks - at least $22 billion in additional expenses or lost revenue, according to a Bloomberg government study. Banks laid out plans this month to recoup some of that revenue with new fees and fewer customer perks such as debit-card rewards.
  
• Fake Apple(AAPL) Stores Ordered Shut by Chinese City. Chinese authorities shut two unauthorized Apple Inc. stores in Kunming for operating without business licenses, a newspaper run by the southwestern city’s government reported. Investigators also examined three other stores that used Apple’s logo without the company’s permission, though they were found to have operating permits, according to the Dushi Shibao newspaper report posted today on the Kunming government’s website. The findings were part of a probe into more than 300 electronics vendors in the city, according to the report. The move comes about a week after the “BirdAbroad” blog began posting photographs of a fake Apple store complete with an acrylic staircase and crew of blue-shirted sales staff, showing the extent some dealers will go to profit from booming demand for iPhones and iPads. The company’s network of more than 900 retail outlets has failed to keep up with demand, forcing customers to buy from vendors not sanctioned by Apple. “In areas outside of the biggest cities, it’s difficult to find Apple products, and there is strong demand,” said Jim Tang, a technology analyst at Shenyin & Wanguo Securities Co. in Shanghai. “For a big country like China, Apple’s sales network doesn’t go far enough, and the company needs to expand.”
• Food Costs Rising as Coke(KO), Chipotle(CMG) Pass on Commodity Gains. Food prices in the U.S. may be rising faster than the government forecast as companies including Coca-Cola Co., Safeway Inc. and Chipotle Mexican Grill Inc. pass higher commodity costs on to consumers. Rallies in meat, grain and dairy products since February may mean the increase in food costs will surpass the 3 percent to 4 percent that the U.S. Department of Agriculture predicts, said Christopher Hurt, an agricultural economist at Purdue University in West Lafayette, Indiana. The USDA today left its forecast for this year’s gains unchanged and said 2012 prices will increase 2.5 to 3.5 percent. “Food inflation will continue to increase through this summer to this fall,” Hurt said July 19 in a speech in Washington. “We can’t replenish supplies until a new crop comes in, and that puts a lot of basic pressure on food prices.” Costs for groceries and restaurant meals rose 3.7 percent in the 12 months through June, government data show.
• Strike Contagion Afflicts BHP(BHP), Anglo as Miners Seek Bigger Share. Mine workers across three continents are striking over pay, disrupting production as near-record prices for coal, copper and gold boost profit at BHP Billiton Ltd. (BHP), Xstrata Plc (XTA) and Anglo American Plc. (AAL) BHP workers voted yesterday to extend their strike at the Escondida copper mine in Chile, the world’s largest.
• Petrobras(PBR) to Raise as Much as $91 Billion in Debt to Fund Spending Program. Petroleo Brasileiro SA, Brazil’s state-controlled oil producer, said it will boost debt and sell assets after approving a $224.7 billion investment plan. Petrobras, as the Rio de Janeiro-based company is known, will raise as much as $91 billion in debt and sell up to $13.6 billion of assets as part of the spending program for 2011 through 2015, the company said after markets closed on July 22. The crude producer is spending more than any other major oil company to develop fields located deep beneath a layer of salt under the ocean floor that are the Western Hemisphere’s largest discoveries in about three decades.
• HCA(HCA) Shares Slump After Earnings Miss Estimates on Fewer Complex Surgeries.
  

Wall Street Journal:

• Live Blog: The U.S. Debt Battle.
  

CNBC.com:

• Europe's Troubled Economies Join the Rescue Team. Can a bailout fund whose backers include some of the countries it may be called upon to bail out really succeed?
• Mortgage Interest Tax Deduction Big in Budget Play. It's not like the housing market needs any more headwinds, so here's the government potentially giving us another: The mortgage interest deduction is back in big play in the budget deal. It never exactly came off the table, but the bigger the budget deal, the more likely the mortgage deduction will take a bigger hit.
• Debt Talks? Investors Are More Interested in Earnings. While the controversy over the US debt ceiling gets all the scary headlines, many investors appear to be focused elsewhere.

Business Insider:

• The Developer of this $179 Million Wind Farm Could Go To Prison If A Turbine Kills One Bald Eagle.
• Dan Loeb Blasts Obama: "While Washington Burns, President Obama is Fiddling Away" and "Stirring Up Class Warfare".
  

Zero Hedge:

• Italy Cancels August Bond Auction.
• "Do Not Question" - Full Directive From China's Ministry of Truth on High Speed Train Wreck Censorship.
  

NY Post:

• Debt-Fight Doomsayers by Charles Gasparino. Obama's Absurd Default Talk. I've lost count of how many times President Obama and Treasury Secretary Tim Geithner have said over the last three days that America might default if the debt-ceiling impasse continues. For the good of the country, let's hope the markets have forgotten as well. It's hard to see how Obama, Geithner or White House Chief of Staff Bill Daley could have had the good of the country in mind as they made the rounds of the Sunday talk shows -- spreading dire predictions about default if the debt ceiling isn't raised in the fashion that they and their Democratic allies believe appropriate. For all their apocalyptic talk, they're still demanding a budget deal filled with jobs-killing taxes, even as unemployment remains north of 9 percent.

New York Times:

• Merchants Leery of Wi-Fi as China Imposes New Controls. New regulations that require bars, restaurants, hotels and bookstores to install costly Web monitoring software are prompting many businesses to cut Internet access and sending a chill through the capital’s game playing, Web-grazing literati who have come to expect free Wi-Fi with their lattes and green tea. The software, which costs businesses about $3,100, provides public security officials the identities of those logging on to the wireless service of a restaurant, cafe or private school and monitors their Web activity. Those who ignore the regulation and provide unfettered access face a $23,000 fine and the possible revocation of their business license.

Politico:

• Poll: Pessimism Hits 15-Year High. Americans are more pessimistic about where the economy will be a year from now than they have been at any time in almost the last 15 years, a new poll Monday showed. In all, 59 percent of those surveyed for a CNN/Opinion Research Corporation poll said they expect economic conditions in the United States to be poor a year from now, while 40 percent expect conditions to be good. That’s the highest percentage since CNN began asking the poll question in October, 1997. Twenty-nine percent of those surveyed said they expect the economy to be “very” poor a year from now, while 30 percent said they think it will be “somewhat” poor. At the same time, just four percent of those surveyed said they think the economy will be in “very” good shape next year.
• David Wu Won't Resign. Embattled Rep. David Wu will not seek reelection in 2012, but he won’t resign from office now despite allegations that the Oregon Democrat had an “unwanted sexual encounter” with the teenage daughter of a close friend last Thanksgiving.

Rasmussen Reports:

• Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Monday shows that 23% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty-four percent (44%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -21 (see trends).
  
• 57% Favor Repeal of Health Care Law. The latest Rasmussen Reports national telephone survey of Likely Voters shows that 57% favor repeal of the health care law passed in March of last year, including 46% who Strongly Favor its repeal. That’s the strongest support for repeal since early May. Thirty-six percent (36%) oppose repeal of the law, including 24% who are Strongly Opposed.

Reuters:

• Rail Crash Drops China Shares to a One-Month Low, Hong Kong Weak Too. Stocks linked to railways led Hong Kong and China shares broadly lower on Monday after the worst train accident in the mainland since 2008 compounded continuing concerns over a potential United States default. The Shanghai Composite Index had its biggest single day fall in six months, 3.0 percent, and it closed at 2,688.8 points, the lowest level in a month. In a clear bearish sign, the index broke below the 70-point range it has moved in for the last three weeks as turnover hit 120 billion yuan, almost 7 percent above the 20-day average. In the wake of the weekend's deadly train disaster, some investors dumped shares linked with rail stocks. The accident further weighed down markets already fragile after China's banking regulator said last Thursday it will strictly control risks associated with lending to property developers in second and third-tier cities. Property counters were also underperformers with the Shanghai property sub-index down 4.1 percent. A Credit Suisse report on Monday said developments in cities along new railway lines could be compromised in the near term after Saturday's high-speed train accident. "Land sales in several cities along the Beijing-Shanghai high-speed train line surged in 2009 and 2010," Credit Suisse property analysts said, adding that extra scrutiny on the property sector could be in store after Premier Wen Jiabao demanded investigations last week.
  
• CNH Global(CNH) Q2 Blows Past Wall Street. Farm equipment maker CNH Global N.V. posted market-topping results for the ninth straight quarter and raised revenue growth outlook for the year, helped by higher crop prices, sending its shares up 10 percent.

Financial Times:

• The Eurosion of Sovereign CDS. Here’s the smart thing in the eurozone plan unveiled last week. Whatever it does for Greece’s debt sustainability (little) and to ensure private sector involvement (nothing) it really sticks a knife, so to speak, into holders of CDS on Greek debt. That, we’d argue, is something that European politicians have been gunning for for some time.

Telegraph:

• UK Household Squeeze At Its Worst for Two Years. British household finances have deteriorated to the lowest point since the depths of the recession, heightening concerns that the economy may be slipping back into a double-dip downturn. Markit's monthly survey of consumers shows that the triple blows of rising fuel costs, the government's fiscal squeeze and faltering global growth are all eating deep into spending power.

Die Welt:

• German Chancellor Angela Merkel said German taxpayers may end up footing the bill for the aid package to Greece. Until now, Merkel has said loans to Greece could result in a profit.

Hamburger Abendblatt:

• Germany's National Democratic Party should be banned because of its extremist views according to Social Democratic Party vice chairman Olaf Scholz. Scholz, a former Labor Ministers in German Chancellor Angela Merkel's first-term government, said the NPD isn't "compatible" with Germany's constitution.

Deccan Herald:

• Pakistan Plans to Add 24 Nuclear-Capable Missiles to Its Arsenal. This will be the highest number of missiles Pakistan has ever produced in a year if the government achieves the target, The Express Tribune newspaper quoted its sources as saying. The air-to-air and surface-to-air missiles will be able to hit targets at a distance between 700 km and 1,000 km, thus putting nearly all major Indian cities within their range, the report claimed.

Shanghai Daily:

• Luxuries Cost Nearly 8% More. CHINA'S wealthy have forked out 7.7 percent more for luxury consumer products so far this year than a year earlier due to growing demand, import duties and fluctuating exchange rates, Hurun Report said yesterday.
  

Bear Radar

Style Underperformer:

• Small-Cap Growth (-.49%)

Sector Underperformers:

• 1) Oil Tankers -2.69% 2) Airlines -2.19% 3) Hospitals -2.19%

Stocks Falling on Unusual Volume:

• SLAB, MXWL, LPNT, MMSI, SREV, PAAS, EW, UHS, BPI and HCA
  

Stocks With Unusual Put Option Activity:

• 1) AMR 2) CX 3) HAS 4) ESRX 5) UAL
  

Stocks With Most Negative News Mentions:

• 1) NAT 2) SOLR 3) REV 4) MRCY 5) PODD
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth (-.29%)

Sector Outperformers:

• 1) Agriculture +.43% 2) Road & Rail +.31% 3) Construction +.11%

Stocks Rising on Unusual Volume:

• CNH, RPM, CAJ, GSK, SYT, NVS, PBR, VMED, ASBC, VIP, DTLK, CYOU, ETFC, AMED, AMTD, TZOO, EZPW, INTU, MSTR, BIDU, CSTR, NFLX, BC, ETFC, TZOO, BAS, AGCO, ETN and ROP
  

Stocks With Unusual Call Option Activity:

• 1) HAS 2) ETN 3) USB 4) XLY 5) IAG
  

Stocks With Most Positive News Mentions:

• 1) GOOG 2) ALK 3) NWSA 4) VZ 5) SLB
  

Charts:

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