Stocks Surging into Final Hour on Less Eurozone Debt Angst, Financial/Tech Sector Optimism, US Economic Data, Short-Covering

Broad Market Tone:

• Advance/Decline Line: Substantially Higher
  
• Sector Performance: Almost Every Sector Rising
  
• Volume: Below Average
  
• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• VIX 15.93 +1.73%
  
• ISE Sentiment Index 98.0 -5.77%
  
• Total Put/Call .86 -18.87%
  
• NYSE Arms .36 -69.51%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 93.62 -2.1%
  
• European Financial Sector CDS Index 160.87 -6.91%
  
• Western Europe Sovereign Debt CDS Index 254.04 n/a
  
• Emerging Market CDS Index 229.26 -3.51%
  
• 2-Year Swap Spread 26.25 +.5 bp
  
• TED Spread 39.25 -.5 bp
  
• 3-Month EUR/USD Cross-Currency Basis Swap -63.75 -.25 bp
  

Economic Gauges:

• 3-Month T-Bill Yield .08% unch.
  
• Yield Curve 178.0 +7 bps
  
• China Import Iron Ore Spot $144.10/Metric Tonne +.56%
  
• Citi US Economic Surprise Index 41.0 +2.7 points
  
• 10-Year TIPS Spread 2.34 +5 basis points
  

Overseas Futures:

• Nikkei Futures: Indicating +166 open in Japan
• DAX Futures: Indicating +43 open in Germany

Portfolio:

• Higher: On gains in my Tech, Retail, Biotech and Medical sector longs
  
• Disclosed Trades: Covered all of my (IWM)/(QQQ) hedges and some of my (EEM) short
  
• Market Exposure: Moved to 100% Net Long

Today's Headlines

Bloomberg:

• Soaring Target2 Imbalances Stoke German Risk Angst: Euro Credit. German angst is growing as an entry on the Bundesbank’s balance sheet swells to a sum worth about 20 percent of economic output, a sign of the extent to which Europe’s largest economy is funding the region’s laggards. The European Central Bank’s Target2 system, which calculates debts between the euro region’s central banks, shows the Bundesbank is owed 489 billion euros ($656 billion), up almost 65 percent from a year earlier. German central bank President Jens Weidmann wrote to ECB President Mario Draghi last month to warn about growing systemic risks, Frankfurter Allgemeine Zeitung newspaper reported Feb. 29. “The Germans are very much justified in their concern,” said John Whittaker, an economist at Lancaster University Management School, who drew attention to the growing imbalances in papers published last year. “The Target2 liabilities are just as risky and just as real as holding the government bonds of Greece and other peripherals.”
  
• Greek Yield Curve Inverted on Bets Debt Control Effort Will Fail. Greece's bonds due in 2023 yield more than securities maturing in 2042 following a restructuring of the nation's debt, showing investors remain concerned the government will fail to control its finances. Yields on shorter-dated bonds climbed more than those on longer-term debt in the first full day of trading of the new securities today, inverting the so-called yield curve. Bondholders last week agreed to write off more than 100 billion euros ($130.6 billion) on their investments as Greece struggled to meet its target of cutting outstanding obligations to about 120 percent of gross domestic product by 2020, from 160 percent last year. "Greece still has problems, in spite of the debt swap and restructuring," said Orlando Green, a fixed-income strategist at Credit Agricole Corporate & Investment Bank in London. "It needs to meet its targets. Debt sustainability remains a key concern, and that's reflected in the prices and the shape of the yield curve."
• Paulson's Lacoursiere Said to Leave to Start Own Hedge Fund. Robert Lacoursiere, the Paulson & Co. partner who oversaw the $23 billion hedge fund’s financial investing, quit after four years to start his own fund, according to a person with knowledge of the matter. Lacoursiere, 49, plans to start an equity hedge fund within six months that will focus on financial companies, said the person, who asked not to be identified because the information is private. Founded by billionaire John Paulson, the firm suffered record losses last year as his bet on a U.S. recovery went awry. The hedge fund last quarter sold entire stakes in Citigroup Inc. and Bank of America Corp., which it had built up in 2009 as part of that wager, before the shares rallied this year.
• Crude Rises as Retail Sales and Equities Gain, Signaling Economic Growth. Oil for April delivery rose 80 cents, or 0.8 percent, to $107.14 a barrel at 12:17 p.m. on the New York Mercantile Exchange. The price is up 8.4 percent this year. Brent crude for April settlement on the London-based ICE Futures Europe exchange gained $1.11, or 0.9 percent, to $126.45 a barrel.
• U.S. Insider Stock Sales Turn Less Favorable: Technical Analysis. The number of insider sellers averaged about 43 a day in the 30 days through March 5, the highest level since at least 2004, according to Bloomberg data for S&P 500 companies. The last two peaks of insider selling, in March 2010 and March 2011, both came before market tops the next month.
• Syria Mines Borders With Turkey, Lebanon as Thousands Flee Assad's Forces. Syrian forces are sowing minefields along the border with Turkey and Lebanon even as thousands of refugees flee a widening crackdown by President Bashar al- Assad’s military. The landmines are already causing civilian casualties, Human Rights Watch said today in a statement on its website.
• Retail Sales in U.S. Rose in February by Most in Five Months. The 1.1 percent advance followed a 0.6 percent increase in January that was larger than previously estimated, according to Commerce Department data issued today in Washington. Sales rose in 11 of 13 categories, including auto dealers and clothing stores, showing gains in demand were broad based.
• Business Inventories in U.S. Expand More Than Forecast on Auto Stockpiles. Businesses in the U.S. increased inventories in January at a faster pace than projected, led by the biggest jump in automobile stockpiles in more than a year. The 0.7 percent rise followed a revised 0.6 percent advance the prior month that was larger than previously reported, Commerce Department data showed today in Washington. The median projection in a Bloomberg News survey called for a 0.5 percent gain. Sales climbed 0.4 percent.

Wall Street Journal:

• Apple(AAPL) Accuses Proview of Misleading. Apple Inc. elaborated on its claims to the iPad trademark in China, saying that the Chinese company on the other side of a lawsuit over the name is "misleading Chinese courts.
• El-Erian: Greece May Need Another "Messier" Restructuring - FT. Greece's debt reduction deal last week only provides a bit more time before another "messier" restructuring may be needed, Mohamed El-Erian, chief executive of the world's largest bond investor, Pacific Investment Management Co., writes in the Financial Times Tuesday.
• Faulty Wells, Not Fracking, Blamed for Water Pollution. Some energy companies, state regulators, academics and environmentalists are reaching consensus that natural-gas drilling has led to several incidents of water pollution—but not because of fracking.
• Greece Lenders Warn of Deeper Cuts Ahead. Greece's economy will remain in severe recession this year and activity will "at best" stagnate next year, forcing the country to make additional spending cuts of 5.5% of gross domestic product over the next two years to meet fiscal targets, a report by the country's lenders said.
• JPMorgan(JPM) Halts Fund Raising for Real-Estate Vehicle. J.P. Morgan Chase & Co. has ceased efforts for now to raise a new $750 million real-estate fund because of lack of investor interest in the type of high-risk, high-return deals that it was planning to do, according to people familiar with the matter.
• For Romney, South Offers Opportunity.
  

Barron's:

• Dell(DELL) Buys Firewall Firm SonicWall.

MarketWatch:

• Former CFTC Chief Sees Lack of Swaps Preparedness. Many companies that use swap contracts to hedge financial and commodity risks remain unprepared for pending regulations that will tighten practices in the market, a former member of the Commodity Futures Trading Commission said Tuesday. "I'm appalled at the lack of readiness" among so-called end users, said Michael Dunn, a commissioner from 2004 until last October. He said regulators share some blame for not yet detailing key aspects of the planned swap-market overhaul.

Business Insider:

• Striking Pictures of US Troops Serving Around The World.
• Art Cashin: The Experts I Talk To See Some Major Problems In The Latest Jobs Reports.
• Apple(AAPL) TV Production Starts In May, Goes On Sale At Year End, Says Jefferies.
• Why Everyone is Freaked Out About Portugal in One Huge Slide.
• SocGen: We're Getting Close to a Global Oil Tipping Point, And Manufacturing May Be Stalling.
  

Zero Hedge:

• A Visual Simplification of the CDS Market.
• FOMC Does Nothing, Notes Inflation Threat - Full Redline Comparison to January.
• Market Fisher Accused by CFTC of Pulling an MF Global, Depositing Customer Funds Into Non-Segregated Account.
  

New York Times:

• Is MF Global Getting a Free Pass?

Washington Post:

• US Job Openings Declined in January; Figures Suggest Hiring May Level Off. The Labor Department said Tuesday that employers posted 3.46 million job openings in January. That’s down from 3.54 million advertised in December. There were still 12.8 million unemployed people in January. That means an average of 3.7 people competed for each open job that month, the lowest ratio in three years. Still, the ratio is usually around 2 to 1 in healthy job markets.
  

American Banker:

• OCC Probing JPMorgan(JPM) Chase Credit Card Collections. JPMorgan Chase & Co. took procedural shortcuts and used faulty account records in suing tens of thousands of delinquent credit card borrowers for at least two years, current and former employees say. The process flaws sparked a regulatory probe by the Office of the Comptroller of the Currency and forced the bank to stop suing delinquent borrowers altogether last year.

Dealbreaker:

• If Citi’s(C) Ex-Hedge Fund Chief Had To Do It All Over Again He’d Still Invest Like No One Was Watching.

FINalternatives:

• Hedge Fund Launches Return To Pre-Crisis Levels in 2011. Hedge fund launches in 2011 totaled 1,113, the highest calendar year total since 1,197 funds launched in 2007, reports Hedge Fund Research. Fund liquidations were up slightly for the year at 775 compared to 743 in 2010. Those figures include 270 launches and 190 liquidations in the fourth quarter. The total number of funds rose to 9,523 in 2011, while total hedge fund industry capital rose by 3% to $2.02 trillion. In terms of strategy, 479 of the funds launched in 2011 were equity hedge (the highest total since 2006) and 265 were macro (the highest total since HFR began keeping track in 1996). Equity hedge funds also recorded the highest number of liquidations, with 293 such vehicles shuttering operations in 2011. That’s the highest figure since 2008 when 651 equity hedge funds liquidated. The fund of hedge funds sector saw liquidations decline to pre-financial crisis levels in 2011, with 215 funds of funds closing. Geographically speaking, more funds were launched in the United States than in Europe, and liquidations were higher in Europe.

Rasmussen Reports:

• Texas GOP Primary: Romney 32%, Santorum 30%, Gingrich 19%, Paul 9%.
  

Reuters:

• U.S. Asks Saudis To Lift Oil Output From July. The United States is pressing Saudi Arabia to boost oil output to fill a likely supply gap arising from sanctions on Iran, Gulf oil officials said, adding that an increase in production is unlikely to be needed before July. Saudi Arabia is the only producer with spare capacity and oil importers will rely on Riyadh to fill the gap should Iranian output drop. Saudi Arabia has made clear it will only raise output if it sees additional demand for crude and does not want its oil policy implicated in efforts to disrupt Iran's atomic programme which the West says aims to develop a nuclear weapon. "There were talks held between Saudi and the U.S. and the U.S. asked if Saudi could be accommodating once the sanctions take effect in July. And the Saudi response was that it was ready to meet demand in the market if required, but would not like to take part in the politics," one Gulf official said.

Telegaaph:

• EU Leaders are Using the Financial Transaction Tax to Hide a Spanish-Led Revolt Against Germany.
  

Financial Post:

• Greece Credit-Default Swaps Stripped From Sovereign Risk Index. Greek credit-default swaps were stripped from a benchmark measure of European sovereign debt risk after traders ruled that contracts on the nation can be paid out. The new version of the Markit iTraxx SovX Western Europe Index linked to credit-default swaps on 14 governments was trading at about 230 basis points at 11 a.m. in London, according to BNP Paribas SA. The gauge closed at 353 basis points yesterday before Greece was removed. Greek swaps will be settled following an auction March 19 after it was ruled last week that the use of collective action clauses to force all investors to take part in the nation’s debt restructuring was a credit event. The sovereign swaps index will roll into its seventh series on March 20. A conference call will be held at 5 p.m. in London today to agree the terms, Sproehnle said, and the final membership list will be published at 8 p.m.

Shanghai Daily:

• Shanghai Home Prices Viewed as Too High in Survey. NEARLY 80 percent of respondents think housing prices in Shanghai are still too high despite government tightening measures being in place for more than one year, according to a latest industry survey. Almost 90 percent of them said they could buy a home that's equivalent to a maximum 10 times their annual household income, revealed the online survey conducted by Soufun.com, which collated responses from over 3,600 people during the week between March 6 and Monday.

Bear Radar

Style Underperformer:

• Large-Cap Value +.69%

Sector Underperformers:

• 1) Defense -.60% 2) Utilities -.10% 3) Energy +.10%

Stocks Falling on Unusual Volume:

• MANT, KMP, CVS, ATK, MWE, BAH and URBN
  

Stocks With Unusual Put Option Activity:

• 1) S 2) LCC 3) EOG 4) ITW 5) MS
  

Stocks With Most Negative News Mentions:

• 1) MDR 2) FSLR 3) JPM 4) UPL 5) NC
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.78%

Sector Outperformers:

• 1) Steel +2.37% 2) Oil Tankers +2.13% 3) Gaming +1.59%

Stocks Rising on Unusual Volume:

• INVN, ALLT, FDS, GNC, JVA, AWI, FDS, TCB, GEOY, GDP, YELP, BKS, CNW, MCP, EBIX, SNI, SWK and STJ
  

Stocks With Unusual Call Option Activity:

• 1) ODP 2) URBN 3) AEO 4) RHT 5) CELG
  

Stocks With Most Positive News Mentions:

• 1) EBIX 2) T 3) XLNX 4) BEAV 5) WRC
  

Charts:

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

Tuesday Watch

Evening Headlines
Bloomberg:

• Spain Faces Call for Deeper Deficit Cuts as Juncker Calls Rajoy Plan Dead. European governments prodded Spain to make deeper budget cuts in a first test of stiffer fiscal rules designed to prevent the region’s debt crisis from flaring back up. Ten days after new Prime Minister Mariano Rajoy unilaterally raised the Spanish deficit target for this year, European finance chiefs called on Spain to prune an additional 0.5 percent of gross domestic product out of the 2012 budget. Rajoy’s goal of a deficit of 5.8 percent of GDP in 2012 “is dead,” Luxembourg Prime Minister Jean-Claude Juncker told reporters late yesterday after chairing a meeting of euro finance ministers in Brussels. Spain affirmed a target of reaching the euro area’s 3 percent limit in 2013.
  
• Euro Finance Chiefs Give Political Backing to $170 Billion Greek Aid Plan. Euro-area finance ministers signed off on a second Greek bailout, clearing the way for the first payment from the 130 billion-euro package ($170 billion) to be made this month. “The new Greek program is not only in its starting blocks, but has been politically adopted tonight by the euro group,” Luxembourg Prime Minister Jean-Claude Juncker, who heads the group of 17 finance ministers, said in Brussels late yesterday. Euro finance officials will give a formal approval on March 14, a day before the International Monetary Fund board votes on its contribution.
• Soaring Target2 Imbalances Stoke German Risk Angst: Euro Credit. German angst is growing as an entry on the Bundesbank's balance sheet swells to a sum worth about 20% of economic output, a sign of the extent to which Europe's largest economy is funding the region's laggards. The ECB's Target2 system, which calculates debts between the euro region's central banks, shows the Bundesbank is owed $656 billion, up almost 65% from a year earlier. German central bank President Jens Weidmann wrote to ECB President Mario Draghi last month to warn about growing systemic risks. "The Germans are very much justified in their concern," said John Whittaker, an economist at Lancaster University Management School. "The Target2 liabilities are just as risky and just as real as holding the government bonds of Greece and other peripherals."
• Pakistan Tells White House to Stop Drone Missions After Disputes Fray Ties. Pakistan has told the White House it no longer will permit U.S. drones to use its airspace to attack militants and collect intelligence on al-Qaeda and other groups, according to officials involved in the talks. U.S. officials, speaking on condition of anonymity because the drone program is classified, called the use of unmanned aerial vehicles such as San Diego-based General Atomics’ MQ-1 Predator and its MQ-9 Reaper a critical element in the Obama administration’s anti-terrorism strategy. Eliminating drone missions would “contribute to a resurgence of extremist groups operating in the tribal areas” along Pakistan’s border with Afghanistan, Peter Singer, author of “Wired for War: The Robotics Revolution and Conflict in the 21st Century,” said in an interview.
• Ore-Shipping Cost Seen Falling to Decade Low as China Cuts Target: Freight. Rates to ship iron ore, the second- biggest cargo after oil, are poised to drop to the lowest level in a decade after China cut its growth target, signaling weaker demand from the world’s biggest buyer of the commodity. Capesizes, each hauling about 170,000 metric tons of ore, will earn an average of $13,000 a day this year, the least since 2002, according to the median of 10 analyst forecasts compiled by Bloomberg. That’s 13 percent less than the median in January. Shares of New York-based Genco Shipping & Trading Ltd. (GNK), which operates nine of the vessels, will drop 19 percent in the next 12 months, the average of 11 estimates showed.
• Gillard's Labor Party Sinks in Poll as Mining Tax Vote Looms. Australian Prime Minister Julia Gillard’s Labor party sank to a six-week low in an opinion poll as the government, trying to recover from a leadership fight, seeks to pass into law an unprecedented tax on mining profits. Labor’s 31 percent trails opposition leader Tony Abbott’s coalition by 12 percentage points, compared with a 10-point margin in the previous survey, according to a Newspoll published in today’s Australian newspaper.
• Leukemia No Longer a Death Sentence as 90% of Children Live, Study Shows. Five-year survival rates for children diagnosed with acute lymphoblastic leukemia, the most-common type in the young, rose to 90 percent in the years 2000 to 2005 from 84 percent in 1990 to 1994, according to research today in the Journal of Clinical Oncology. Survival increased for all groups of children, except for infants 1-years-old and younger, the study said.
• Obama's Stimulus Helped Grow Debt, Not Economy: Ramesh Ponnuru.
• U.S. Will Ask for WTO's Help to Fight Chinese Curbs on Rare-Earth Exports. The U.S. will ask the World Trade Organization today to intervene with China over Chinese limits on exports of rare-earth materials used in high-tech products, according to an Obama administration official. The U.S. will join Japan and the European Union in asking the trade arbiter to begin consultations with China over its rare earths shipments, the administration official said yesterday in Washington, speaking on condition of anonymity ahead of the White House announcement. Rare earths are 17 chemically similar metallic elements used in making batteries, electric cars and wind turbines. The U.S. will argue that China’s curtailment of the exports has given the nation’s companies an unfair advantage by increasing production costs for American firms, the official said.

Wall Street Journal:

• Evergreen Solar to Abandon Massachusetts Factory. Evergreen Solar Inc. said it has failed to find a buyer for its Devens, Mass., plant and plans to walk away from the facility, which was launched with some $50 million in state aid. The company asked a bankruptcy judge for permission to abandon the property before a $543,000 property tax bill comes due.
• The New Cable-TV Guy: Intel. Chip Maker Working on a Web-Based Video Service to Compete With Cable, Satellite Providers.
• MF Global's Collapse Tars CME(CME) Chief's Exit. CME Group Inc.'s Chief Executive Craig Donohue will retire at year's end, in a surprise change at the world's largest futures-exchange operator as it wrestles with fallout from the collapse of brokerage MF Global Holdings Ltd.
• Fed Fights Subpoena on Bernanke. The Federal Reserve is fighting a subpoena from lawyers in a civil lawsuit who want the central bank's chairman, Ben Bernanke, to testify about conversations he had with Bank of America Corp. executives before the lender completed its purchase of Merrill Lynch & Co. The three-year-old class-action suit alleges that the Charlotte, N.C., bank and Kenneth D. Lewis, then its chief executive, misled shareholders about ballooning losses at Merrill before the $19.4 billion acquisition was approved.
• California's Greek Tragedy. No one should write off the Golden State. But it will take massive reforms to reverse its economic decline.

Business Insider:

• Obama's Approval Rating Is Now In Total Freefall. (graph) New CBS/NYT poll puts Obama's approval rating at 41%... his lowest level ever in the series. Freefall.
  
• Kyle Bass Explains Why He Had The University of Texas Take Physical Delivery of $1 Billion in Solid Gold. (video)
• In A Bid To Change The Italian Economy, Mario Monti Is Fighting The Cab Drivers.
• 84% of Actively Managed Mutual Funds Did Worse Than Their Benchmarks In 2011.
  

Zero Hedge:

• As US Rakes Largest Monthly Deficit In History, 2012 Tax Revenues Net Of Refunds Trail 2011. (graphs)
• Fed To Take Propaganda To The Schoolroom: Will Teach Grade 8-12 Students About Constitutionality Of... The Fed.
• After Greece, Here Are The Four Things That Keep Bank Of America(BAC) Up At Night.
  

CNBC:

• Sentiment in Homebuilders 'Gone Wild', Pros Say Steer Clear.
• Fed Unveils Doomsday Scenario for Banks. The Federal Reserve released its "worst-case scenario" bank stress test criteria Monday and said it will release full results Thursday at 4:30 p.m. ET.

Housing Wire:

• U.S. Subprime Mortgage Performance Weakens on Soft Home Prices. Declining home prices weakened the performance of U.S. subprime residential mortgage-backed securities collateral over the past three years, Fitch Ratings said. Fitch said changes in the remaining collateral backing the securities and an environment of falling home prices are weighing on the loans' overall performance.

Rasmussen Reports:

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

Reuters:

• Yahoo(YHOO) Sues Facebook(FB) for Infringing 10 Patents. Yahoo Inc sued Facebook Inc over 10 patents that include methods and systems for advertising on the Web, opening the first major legal battle among big technology companies in social media. The lawsuit, filed in a San Jose, California federal court on Monday, marks a major escalation of patent litigation that has already swept up the smartphone and tablet sectors and high-tech stalwarts such as Apple Inc, Microsoft Corp and Motorola Mobility Holdings Inc.
• Urban Outfitters(URBN) Sees More Full-Priced Sellings. Urban Outfitters Inc said it was selling more merchandise at full prices, cheering investors after a holiday season during which the clothing retailer resorted to steep discounts in an attempt to clear inventory. The company's shares, which had crossed the $40 mark about two years ago and since then have lost nearly a quarter of their value, jumped to $31 in after-market trade. They had closed at $29.51 on Monday on the Nasdaq.

Financial Times:

• Spain Pressed To Cut More From Its Budget. Eurozone finance ministers called on Spain to make new cuts in its 2012 budget to reduce its deficit by another 0.5 per cent of economic output, a stinging rebuke to the new government of premier Mariano Rajoy, which publicly flouted Brussels-imposed deficit targets less than two weeks ago. Despite the new cuts, Madrid will still be allowed to breach a previously agreed deficit limit of 4.4 per cent of gross domestic product this year by nearly a full percentage point; its new target will be 5.3 per cent, according to a senior eurozone official.
• Few Hedge Funds Gain in Greek Bond Saga. It was a high-risk, speculative bet in Greece’s tumultuous bond market: a wager that would pay off if the Greek government faltered in its landmark bond restructuring at the final hurdle. The gamble was thought to have been popular among the hedge fund denizens of well-healed Mayfair and leafy Connecticut – that Greece would be forced into an embarrassing repayment of its €14.4bn March 20 bond.

Telegraph:

• Chairman of the Treasury Select Committee Calls for Greece to Exit the Euro. Andrew Tyrie, chairman of the Treasury Select Committee, tonight called for Greece to exit the euro and for the resources of the International Monetary Fund (IMF) to be significantly boosted to tackle future financial crises.

Financial Times Deutschland:

• The European Commission plans to demand the U.S. government cut subsidies to Boeing Co.(BA) within six months, citing people in the aviation industry. The demands include canceling some NASA research projects, U.S. Defense Department projects for civil aviation, as well as some state subsides for Boeing plants.

China Securities Journal:

• The People's Bank of China, the National Development and Reform Commission and five other government agencies called for a stable lending policy for first-home buyers in a joint report. The government will crack down on any attempt to avoid home purchase restrictions, the report said.

Shanghai Securities News:

• Chinese local governments must explain measures for repaying debt when applying to the National Development and Reform Commission to sell municipal bonds. Municipal bond underwriters must provide opinions on issuers' guarantees on debt repayment.

Evening Recommendations
Citigroup Global Markets:

• Reiterated Buy on (NFLX), target $130.
• Rated (IPCM) Buy, target $43.

Stifel Nicolaus:

• Rated (IEX) Buy, target $49.
• Rated (ETN) Buy, target $59.

Night Trading

• Asian equity indices are +.25% to +1.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 155.50 -3.5 basis points.
  
• Asia Pacific Sovereign CDS Index 127.50 +.5 basis point.
• FTSE-100 futures +.68%.
  
• S&P 500 futures +.49%.
  
• NASDAQ 100 futures +.47%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (FDS)/1.12

Economic Releases
7:30 am EST

• The NFIB Small Business Optimism Index for February is estimated to rise to 94.5 versus 93.9 in January.
  

8:30 am EST

• Advance Retail Sales for February are estimated to rise +1.1% versus a +.4% gain in January.
• Retail Sales Less Autos for February are estimated to rise +.7% versus a +.7% gain in January.
• Retail Sales Ex Auto & Gas for February are estimated to rise +.5% versus a +.7% gain in January.

10:00 am EST

• Business Inventories for January are estimated to rise +.5% versus a +.4% gain in December.

2:15 pm EST

• The FOMC is expected to leave the benchmark Fed Funds rate at .25%.
  

Upcoming Splits

• (RES) 3-for-2
  

Other Potential Market Movers

• The IMF Meeting on Greek Bailout, Greece/Italian Bond Auctions, ECB's Draghi speaking, 10Y T-Note Auction, weekly retail sales reports, IBD/TIPP Economic Optimism Index for March, JOLTs Job Openings for January, CFTC final rule on swap data, (EPL) analyst day, (CVX) analyst meeting and the (APC) investor conference could also impact trading today.
  

BOTTOM LINE: Asian indices are higher, boosted 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 75% net long heading into the day.

Stocks Slightly Higher into Final Hour on Euro Bounce, Lower Energy Prices, Short-Covering, Investor Performance Angst

Broad Market Tone:

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

Equity Investor Angst:

• VIX 16.05 -6.20%
  
• ISE Sentiment Index 110.0 +18.28%
  
• Total Put/Call 1.05 +16.67%
  
• NYSE Arms 1.23 +6.77%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 95.71 +.89%
  
• European Financial Sector CDS Index 172.98 +4.36%
  
• Western Europe Sovereign Debt CDS Index 358.76 +2.04%
  
• Emerging Market CDS Index 237.95 -.45%
  
• 2-Year Swap Spread 25.75 -.25 bp
  
• TED Spread 39.75 -.25 bp
  
• 3-Month EUR/USD Cross-Currency Basis Swap -63.50 +2.25 bps
  

Economic Gauges:

• 3-Month T-Bill Yield .08% unch.
  
• Yield Curve 171.0 unch.
  
• China Import Iron Ore Spot $143.30/Metric Tonne +.49%
  
• Citi US Economic Surprise Index 38.30 -.7 point
  
• 10-Year TIPS Spread 2.29 unch.
  

Overseas Futures:

• Nikkei Futures: Indicating -16 open in Japan
• DAX Futures: Indicating +15 open in Germany

Portfolio:

• Higher: On gains in my Tech, Retail and Medical sector longs
  
• Disclosed Trades: None
  
• Market Exposure: 75% Net Long

BOTTOM LINE: Today's overall market action is mildly bullish, as the S&P 500 trades near recent highs despite high energy prices, rising Eurozone debt angst and rising global growth fears. On the positive side, Utility, and REIT shares are especially strong, rising more than +.75%. Oil is falling -.88% and Gold is down -.69%. On the negative side, Coal, Oil Service, Steel, Semi, Networking, Hospital, HMO, Construction, Education and Airline shares are under pressure, falling more than -1.0%. Lumber is down -.92%, Copper is down -.39% and the UBS-Bloomberg Ag Spot Index is rising +.29%. The Transports have lagged throughout the day. The 10Y T-Note Yield at 2.03%, remains a concern considering the recent stock rally, falling Eurozone debt angst and improvement in US economic data. As well, the Philly Fed/ADS Real-Time Business Conditions Index is down -14.0% over the last 5 days and continues to trend lower from its mid-December peak. Lumber is -5.0% since its Dec. 29th high despite the better US economic data, more dovish Fed commentary, improving sentiment towards homebuilders, equity rally and decline in eurozone debt angst. Moreover, the weekly MBA Purchase Applications Index has been around the same level since May 2010. The Baltic Dry Index has plunged over -60.0% from its Oct. 14th high and is now down around -50.0% ytd. The Western Europe Sovereign CDS Index is breaking back above its 50-day moving average for the first time since December and is only 28.0 bps away from its all-time high set on Jan. 9th. Overall, credit gauge improvement has stalled over the last few weeks and these gauges are still at stressed levels. China Iron Ore Spot has plunged -20.0% since Sept. 7th of last year. Shanghai Copper Inventories are up +705.5% ytd and are still very near their recent all-time high. I still think this is more of a red flag for falling demand rather than the intentional hoarding, which many suggest. Major Asian indices were mixed overnight as Taiwan fell -1.10% and India gained +.48%. Major European indices fell around -.5%, led lower by a -1.24% decline in Spanish shares. Spain is now down -4.51% ytd, which remains a red flag for the region. The Bloomberg European Financial Services/Bank Index fell -1.31%. Investors are shunning the new Greek bonds even as yields surge above those seen in Iraq, Venezuela and Pakistan. While the current European “can-kicking” may satisfy politicians’ needs for short-term stability, I continue to believe their recent actions will eventually result in an even more intense debt crisis over the intermediate-term. US stocks continue to consolidate recent gains in a healthy fashion, however investor complacency remains fairly high given the macro backdrop. Volume remains poor, but should pick up later in the week on the FOMC announcement and triple witching. I am still looking for signs that another pullback is developing. For an intermediate-term equity advance from current levels, I would still expect to see further European credit gauge improvement, a further subsiding of hard-landing fears in key emerging markets, a rising 10-year yield, better volume, stable-to-lower energy prices and higher-quality stock market leadership. Two of my longs, (AAPL) and (ISRG), are hitting new highs again today and continues to trade extraordinarily well. While the stocks are extended short-term, I still expect meaningful outperformance for the shares over the intermediate-term. I expect US stocks to trade mixed-to-higher into the close from current levels on a bounce in the euro, short-covering, investor performance angst and lower energy prices.