Weekly Scoreboard*

Indices

• S&P 500 1,397.11 -.50%
  
• DJIA 13,080.73 -1.14%
  
• NASDAQ 3,067.92 +.41%
  
• Russell 2000 830.03 -.02%
  
• Wilshire 5000 14,524.94 -.50%
  
• Russell 1000 Growth 657.63 -.34%
  
• Russell 1000 Value 687.08 -.75%
  
• Morgan Stanley Consumer 792.03 -.37%
  
• Morgan Stanley Cyclical 1,020.17 -1.97%
• Morgan Stanley Technology 707.17 +.42%
  
• Transports 5,217.82 -2.50%
  
• Utilities 452.76 -.19%
  
• MSCI Emerging Markets 43.05 -2.0%
  
• Lyxor L/S Equity Long Bias Index 1,040.44 -.20%
  
• Lyxor L/S Equity Variable Bias Index 823.0 -1.50%
  
• Lyxor L/S Equity Short Bias Index 538.97 unch.
  

Sentiment/Internals

• NYSE Cumulative A/D Line 145,252 -.36%
  
• Bloomberg New Highs-Lows Index 3 -230
  
• Bloomberg Crude Oil % Bulls 13.0 -61.8%
  
• CFTC Oil Net Speculative Position 234,592 -3.53%
  
• CFTC Oil Total Open Interest 1,558,284 -1.32%
  
• Total Put/Call 1.04 +38.67%
  
• OEX Put/Call 1.03 +49.28%
  
• ISE Sentiment 107.0 -29.14%
  
• NYSE Arms .92 +37.31%
  
• Volatility(VIX) 14.82 +2.42%
• S&P 500 Implied Correlation 62.36 -8.75%
  
• G7 Currency Volatility (VXY) 10.14 +.20%
  
• Smart Money Flow Index 11,054.87 -.36%
  
• Money Mkt Mutual Fund Assets $2.622 Trillion -.60%
  
• AAII % Bulls 42.38 -7.08%
  
• AAII % Bears 27.81 +2.24%

Futures Spot Prices

• CRB Index 314.47 -1.09%
  
• Crude Oil 106.87 -.73%
  
• Reformulated Gasoline 338.52 +.71%
  
• Natural Gas 2.27 -2.11%
  
• Heating Oil 321.01 -2.43%
  
• Gold 1,662.40 +.11%
  
• Bloomberg Base Metals Index 219.48 -3.56%
  
• Copper 380.85 -1.96%
  
• US No. 1 Heavy Melt Scrap Steel 403.33 USD/Ton unch.
  
• China Iron Ore Spot 145.20 USD/Ton +.35%
  
• Lumber 238.60 -5.10%
  
• UBS-Bloomberg Agriculture 1,548.66 -.92%
  

Economy

• ECRI Weekly Leading Economic Index Growth Rate -.40% +100 basis points
• Philly Fed ADS Real-Time Business Conditions Index .0065 +71.05%
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 108.30 +.32%
  
• Citi US Economic Surprise Index 27.40 -5.7 points
  
• Fed Fund Futures imply 54.0% chance of no change, 46.0% chance of 25 basis point cut on 4/25
  
• US Dollar Index 79.35 -.16%
  
• Yield Curve 188.0 -5 basis points
  
• 10-Year US Treasury Yield 2.23% -6 basis points
  
• Federal Reserve's Balance Sheet $2.875 Trillion -.01%
  
• U.S. Sovereign Debt Credit Default Swap 31.0 -5.08%
  
• Illinois Municipal Debt Credit Default Swap 213.0 -1.11%
  
• Western Europe Sovereign Debt Credit Default Swap Index 227.99 +1.40%
  
• Emerging Markets Sovereign Debt CDS Index 205.17 +.49%
  
• Saudi Sovereign Debt Credit Default Swap 117.88 -1.72%
• Iraqi 2028 Government Bonds 84.38 +2.91%
• China Blended Corporate Spread Index 610.0 +24 basis points
  
• 10-Year TIPS Spread 2.37% -4 basis points
  
• TED Spread 40.25 +1 basis point
  
• 3-Month Euribor/OIS Spread 44.75 -4.75 basis points
  
• 3-Month EUR/USD Cross-Currency Basis Swap -52.0 +8 basis points
  
• N. America Investment Grade Credit Default Swap Index 91.52 +2.76%
  
• Euro Financial Sector Credit Default Swap Index 161.82 +12.07%
  
• Emerging Markets Credit Default Swap Index 239.07 +7.79%
  
• CMBS Super Senior AAA 10-Year Treasury Spread 155.0 -4 basis points
  
• M1 Money Supply $2.227 Trillion +.41%
  
• Commercial Paper Outstanding 931.20 -.60%
  
• 4-Week Moving Average of Jobless Claims 355,000 -.4%
  
• Continuing Claims Unemployment Rate 2.6% unch.
  
• Average 30-Year Mortgage Rate 4.08% +16 basis points
  
• Weekly Mortgage Applications 681.90 -7.41%
  
• Bloomberg Consumer Comfort -34.9 -1.2 points
  
• Weekly Retail Sales +3.30% +20 basis points
  
• Nationwide Gas $3.89/gallon +.06/gallon
  
• U.S. Heating Demand Next 7 Days 35.0% below normal
• Baltic Dry Index 908.0 +3.89%
  
• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 37.50 unch.
  
• Rail Freight Carloads 227.38 +.49%
  

Best Performing Style

• Small-Cap Growth +.02%
  

Worst Performing Style

• Mid-Cap Value -1.04%

Leading Sectors

• Internet +2.26
  
• Disk Drives +1.63%
  
• Computer Hardware +1.37%
• Biotech +.81%
• Gaming +.73%

Lagging Sectors

• Steel -3.24%
• Road & Rail -4.20%
  
• Homebuilding -4.32%
• Coal -4.94%
• Oil Service -5.34%

Weekly High-Volume Stock Gainers (10)

• GMAN, SCVL, ASGN, KNSY, IQNT, ABVT, WPI, MAPP, LGF and GIII
  

Weekly High-Volume Stock Losers (4)

• RBN, DOLE, MYGN and AIR
  

Weekly Charts
ETFs

• High-Volume Gainers
• High-Volume Losers

Stocks

• High-Volume Gainers
• High-Volume Losers
  

*5-Day Change

Stocks Slightly Higher into Final Hour on Euro Bounce, Financial Sector Optimism, Short-Covering, Investor Performance Angst

Broad Market Tone:

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

Equity Investor Angst:

• VIX 14.85 -4.62%
  
• ISE Sentiment Index 106.0 +63.08%
  
• Total Put/Call 1.07 -1.83%
  
• NYSE Arms .85 -51.42%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 91.52 +2.60%
  
• European Financial Sector CDS Index 161.82 +3.37%
  
• Western Europe Sovereign Debt CDS Index 227.99 unch.
  
• Emerging Market CDS Index 239.15 -.05%
  
• 2-Year Swap Spread 26.25 -.5 basis point
  
• TED Spread 40.25 -1 basis point
  
• 3-Month EUR/USD Cross-Currency Basis Swap -52.0 +1 basis point
  

Economic Gauges:

• 3-Month T-Bill Yield .07% unch.
  
• Yield Curve 188.0 -3 basis points
  
• China Import Iron Ore Spot $145.20/Metric Tonne unch.
  
• Citi US Economic Surprise Index 27.40 -1.6 points
  
• 10-Year TIPS Spread 2.37 -1 basis point
  

Overseas Futures:

• Nikkei Futures: Indicating a -56 open in Japan
• DAX Futures: Indicating a +20 open in Germany

Portfolio:

• Higher: On gains in my Tech and Biotech sector longs
  
• Disclosed Trades: Covered my (IWM)/(QQQ) hedges, added (SLB) long, then added some hedges back
  
• Market Exposure: 75% Net Long

BOTTOM LINE: Today's overall market action is bullish, as the S&P 500 trades near session highs despite rising Eurozone debt angst, rising energy prices, recent equity gains, rising global growth fears and more disappointing US housing data. On the positive side, Coal, Oil Tanker, Oil Service, Ag, Construction and Energy shares are especially strong, rising more than +1.25%. Small-caps are outperforming. Financial shares have traded well throughout the day. Copper is rising +1.0% and Lumber is gaining +2.2%. The France sovereign cds is down -1.4% to 173.58 bps, the Portugal sovereign cds is down -1.8% to 1,200.57 bps and the Japan sovereign cds is down -1.6% to 104.34 bps. On the negative side, Homebuilding and Education shares are under mild pressure, falling more than -.5%. Oil is rising +1.4%, the UBS-Bloomberg Ag Spot Index is gaining +.5% and Gold is gaining +1.3%. The 10Y Yld is falling -4 bps to 2.23%. Major Asian indices were mixed overnight as a +.96% gain in Indian shares offset a -1.14% decline in Japan. Major European indices were slightly higher, however Spanish stocks fell -.86%. Spanish equities remain one of the world’s worst-performers ytd, falling -3.3%, which remains a red flag for the region. The Bloomberg European Financial Services/Bank Index is rising +.32%. The Russia sovereign cds is gaining +2.0% to 178.02 bps, the Germany sovereign cds is up +.5% to 73.80 bps and the Hungary sovereign cds is up +1.69% to 542.95 bps. Moreover, the European Investment Grade CDS Index is rising +3.82% to 100.00 bps. The Philly Fed ADS Real-Time Business Conditions Index continues to trend lower from its mid-December peak despite investor perceptions that the US economy is accelerating. Lumber is -8.0% since its Dec. 29th high despite the better US economic data, dovish Fed commentary, improving sentiment towards homebuilders, equity rally and decline in eurozone debt angst. Moreover, the weekly MBA Home Purchase Applications Index has been around the same level since May 2010. The Baltic Dry Index has plunged around -60.0% from its Oct. 14th high and is now down around -45.0% ytd. China Iron Ore Spot has plunged -20.0% since Sept. 7th of last year. Shanghai Copper Inventories are right near a new record and have risen +746.0% ytd. I still think this is more of a red flag for falling demand rather than the intentional hoarding, which many suggest. The most economically sensitive stocks are substantially underperforming today. The blow-up in the (TVIX) ETN, (BATS) IPO debacle and wild trade in (AAPL) shares today are concerns for market psychology. US stocks still trade pretty well as most negatives continue to be ignored. The Homebuilding Index is recouping morning losses despite more disappointing home sales data. Commodity-related equities are leading the major averages today. (USO) is surging +1.4% on above-average volume. (UNG) has stabilized over the last 10 days. (OIH) is down around -7% over the last month. The beaten-up oil service stocks should see a further lift into quarter-end on short-covering/bargain-hunting. I took a long trading position in (SLB) into morning weakness. For the recent equity advance to maintain traction, 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. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, more financial sector optimism, euro bounce and investor performance angst.

Today's Headlines

Bloomberg:

• Italy’s Labor Reform Won’t Spur Firings, Napolitano Says. Prime Minister Mario Monti's Cabinet approved a bill to overhaul Italy’s labor laws that will ease firing rules, facing down opposition from unions and political allies needed to pass the measure in Parliament. The Cabinet in Rome passed the changes as a draft law, as Monti decided against resorting to a decree that would have implemented the measures immediately and limited parliamentary debate on changing the draft. The government didn’t say when the measures would be presented to Parliament. The law “intends to create a dynamic, flexible and inclusive labor market capable of contributing to growth and creating quality employment,” Monti’s office said in an e- mailed statement.
• Oil Rises Almost $3 a Barrel on Iran Report. Oil surged almost $3 a barrel after Reuters reported Iranian oil exports will drop by 300,000 barrels a day this month because of tighter sanctions. Futures jumped more than 2 percent in three minutes on the New York Mercantile Exchange, topping $108 a barrel for the first time in four days, following the report, which cited Petrologistics, a Geneva-based consultant. Stephen Schork, president of the Schork Group in Villanova, Pennsylvania, said the gain may have triggered traders’ automatic buy orders. Crude oil for May delivery rose $1.60, or 1.5 percent, to $106.95 a barrel at 12:22 p.m. on the New York Mercantile Exchange. Earlier, it touched $108.25 a barrel. Prices have slipped 11 cents this week and are up 8.2 percent this year. Brent oil for May settlement gained $1.89, or 1.5 percent, to $125.14 a barrel on the London-based ICE Futures Europe exchange.
  
• Sales of New Houses in U.S. Decrease for Second Month: Economy. Purchases of new homes in the U.S. unexpectedly fell in February for a second month, a sign the recovery in the housing market may be uneven. Sales dropped 1.6 percent to a 313,000 annual pace, the slowest since October, from a 318,000 rate in January that was weaker than previously reported, figures from the Commerce Department showed today in Washington. The median estimate of 78 economists surveyed by Bloomberg News called for 325,000.
• KB Home(KBH) Falls the Most Since June After Orders Declined. KB Home (KBH), the Los Angeles-based homebuilder that targets first-time buyers, fell the most in almost nine months after it reported a decline in orders and government data showed new-home sales dropped in February. KB Home had a net loss for the three months ended Feb. 29 of $45.8 million, or 59 cents a share, down from $114.5 million, or $1.49, a year earlier, the company said today in a statement. Analysts expected a loss of 23 cents a share, the average of 17 estimates in a Bloomberg survey. Net orders fell 8 percent from a year earlier to 1,197 homes. KB Home dropped as much as 15 percent in New York trading, the most since June 29. It lost 9.5 percent to $10.18 as of 11:27 a.m.
• NYC Office Leasing Lowest Since 2009 as Wall Street Cuts Back. Manhattan office leasing in the first quarter is poised to be the lowest in almost three years as Wall Street cut jobs and needed less space, according to preliminary data from brokerage Studley Inc. Agreements will be signed for the rental of about 5.7 million square feet (530,000 square meters) this year through March, according to New York-based Studley's projection. That's the smallest three-month tally since the 4.5 million square feet leased in the second quarter of 2009, months after the credit crisis pushed Lehman Brothers Holdings Inc. into bankruptcy and froze demand for space in the biggest U.S. office market.
• China Banks Said to Underestimate Local Government Risks. Chinese banks misclassified about 20 percent of their outstanding loans to local governments, understating the risk that slowing revenue will cut borrowers’ ability to repay, a person with knowledge of the matter said. The China Banking Regulatory Commission told lenders last month that they had incorrectly placed about 1.8 trillion yuan ($286 billion) of loans to local government financing vehicles in the safest category of lending, the person said, declining to be named because the matter is private. The banks erred in calculations and underestimated risks when they decided the loans were fully covered by cash flows from the projects, the person said.
• BATS Global(BATS) IPO Turns Ugly After Apple(AAPL) Halt, Quote Error. Bats Global Markets Inc. (BATS), the six-year-old equity exchange, saw its debut as a public company go haywire as a system error caused incorrect price quotes and Apple Inc. (AAPL) was halted due to a transaction on its platform.
• Dartmouth President Kim Nominated by Obama for World Bank. Dartmouth College President Jim Yong Kim was nominated today to head the World Bank, making him the first physician and Asian-American to lead the $57 billion lender that’s seeking to improve health care and education in developing nations. Kim, 52, a Seoul-born U.S. citizen who emigrated with his parents from South Korea at age five, would succeed Robert Zoellick, a former U.S. trade representative whose term ends in June. The U.S. is the biggest shareholder in the Washington- based bank, and its president has always been an American.

Wall Street Journal:

• Shipping Data Indicates Rise In Iranian Floating Storage - ICAP. The number of Iranian supertankers storing crude long term rose this week, data from major brokerage ICAP showed Friday.

CNBC.com:

• Average Investors May Finally Be Lured Back Into Stocks. Bullish sentiment among the most active clients of Charles Schwab hit its highest level since the current bull market began, according to a recent survey by the firm.
• Gasoline Theft Spikes as Prices at Pump Rise. (video)
• Contagion Risk in Europe Is Back and Spain Is Top Worry.
  

Business Insider:

• LeBron James Just Tweeted This Powerful Photo Of The Miami Heat In Hoodies To Protest The Trayvon Martin Killing.
• This Letter Mocking President Jim Kim Is Getting Passed Around Dartmouth Today.
• China Has Censored All Mention Of The Rumored Coup.
• Spotify Is Raising At A Stunning $3.5 Billion Valuation, Multiple VCs Say.
• A Blatant Example Of How Corruption Is Destroying The Indian Economy.
  

Zero Hedge:

• 3 Charts On Why Eurosis Never Really Went Away.
• About That $20 Trillion In Public Debt...
• LTRO Stigma Reaches All-Time High.
  

Seeking Alpha:

• 6 Reasons Why HFT Is Taking Over The Markets.

Gallup:

• Romney Expands National GOP Lead. (graph)
  

Rasmussen Reports:

• Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Friday shows that 24% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty-one percent (41%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -17 (see trends).

Reuters:

• Iran Oil Exports Fall As Sanctions Take Toll. Iranian oil exports have fallen significantly in March, industry sources said on Friday, as some buyers stop or scale back purchases to abide by Western sanctions aimed at slowing Tehran's nuclear programme. Crude exports from Iran appear to have fallen this month by around 300,000 barrels per day (bpd), or 14 percent, according to estimates from industry consultant Petrologistics and a large European oil company. It is the first sizeable drop in oil shipments from the OPEC producer since the European Union announced in January plans to embargo Iran's crude from July and Washington and Brussels sanctioned Iran's central bank.
• Gold Rises More Than 1%, Set To End 3-Week Drop.
  
• Akamai(AKAM) CEO Sets $5 Billion Revenue Target by 2020.
  

USA Today:

• Romney: Why I'd Repeal ObamaCare. Friday is the second anniversary of ObamaCare. It is past time to abolish the program, root and branch. The Supreme Court will soon have a crack at this; arguments about the program's constitutionality open before it next week. But whatever the justices decide in what is certain to be a landmark decision, the case against ObamaCare extends far beyond questions about its constitutionality. President Obama's program is an unfolding disaster for the American economy, a budget-busting entitlement, and a dramatic new federal intrusion into our lives.

International Business Times:

• Japan Readies Missile Defense Against North Korea Rocket Launch. Japan's military is preparing its missile defense systems in response to a planned rocket launch next month by North Korea, according to reports. "I have ordered officials to prepare to deploy the PAC-3 [surface-to-air missiles] and Aegis warships [destroyers]," Defense Minister Naoki Tanaka told reporters. "We are talking to relevant local governments about the deployment."

Bear Radar

Style Underperformer:

• Mid-Cap Growth +.10%

Sector Underperformers:

• 1) Homebuilding -1.43% 2) Education -.93% 3) Retail -.49%

Stocks Falling on Unusual Volume:

• HNP, MXWL, DELL, KORS, NKE, GEL, AIR, MAPP, WTW, CVG, KBH, LAYN, SNDK, WF and DGX
  

Stocks With Unusual Put Option Activity:

• 1) KBH 2) WLL 3) RRC 4) TOL 5) XLV
  

Stocks With Most Negative News Mentions:

• 1) XLNX 2) AET 3) KBH 4) ANR 5) CNX
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value +.44%

Sector Outperformers:

• 1) Gold & Silver +2.15% 2) Coal +1.93% 3) Oil Service +1.27%

Stocks Rising on Unusual Volume:

• SLW, CRZO, VELT, INFI, WIFI, AFFY, CPWM, UTIW, GPOR, MDSO, ESL and MWW
  

Stocks With Unusual Call Option Activity:

• 1) NKE 2) LSI 3) STD 4) ERX 5) KBH
  

Stocks With Most Positive News Mentions:

• 1) DG 2) DFS 3) FDX 4) MO 5) MWW
  

Charts:

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

Friday Watch

Evening Headlines
Bloomberg:

• Portugal Town Halls Face Default Amid $12 Billion Debt. Portugal’s town halls face default amid 9 billion euros ($12 billion) of debt unless the government provides aid soon, said Fernando Ruas, president of the nation’s association of municipalities. “At a company we call it insolvency,” Ruas said in a telephone interview from Lisbon on March 21. “It could happen that some town halls could have to restructure their debt if the government doesn’t intervene.” Ruas blamed a sharp decline in money transfers from the government in Lisbon to municipalities for their growing financial woes. Portugal last year became the third euro-area country to request external aid, following Greece and Ireland. Prime Minister Pedro Passos Coelho is cutting spending and raising taxes to meet the terms of the 78 billion-euro rescue. “A sharp decrease in money transfers has made it harder for many town halls to comply with their ongoing commitments,” said Ruas. His association estimates town halls face about 9 billion euros in liabilities. The southern European country’s 308 town halls and two semi-autonomous regions face similar problems to those of Spain, whose regions have been shut out of capital markets due to the credit squeeze, leaving many bills to suppliers unpaid. Spain’s government is offering credit lines to help regions meet bond redemptions and pay suppliers.
• China's Stocks Drop on Earnings, European Concerns. China’s stocks fell, extending the benchmark index’s biggest weekly loss in four months, as European manufacturing weakened and concern intensified slowing economic growth is hurting earnings. China United Network Communications Ltd. (600050), which controls the nation’s second-largest cell phone operator, dropped 0.9 percent after the company reported profit that trailed analyst estimates. Agricultural Bank of China Ltd. declined 0.4 percent after the lender posted its first quarterly profit decline in two years. Poly Real Estate Group Co. and Gemdale Corp. slid more than 1 percent after the Economic Information Daily said the nation may expand property tax trials. “The prospect of negative earnings in the first quarter hasn’t been priced in yet,” said Wang Weijun, an analyst at Zheshang Securities Co. in Shanghai. “Bad data from Europe may also change investors’ risk appetite.” The Shanghai Composite Index (SHCOMP) dropped 16.20 points, or 0.7 percent, to 2,359.57 at the 11:30 a.m. local-time break, the lowest level since Feb. 17.
• Fed's Bullard Says Monetary Policy May Be at a Turning Point. Federal Reserve Bank of St. Louis President James Bullard said monetary policy may be at a turning point and the Fed should be cautious about stepping up accommodation as the U.S. economy rebounds. With policy currently “on pause, it may be a good time to take stock of whether we may be at a turning point,” Bullard said in a speech in Hong Kong today. “As the U.S. economy continues to rebound and repair,” further action “may create an overcommitment to ultra-easy monetary policy.” “With numerous monetary policy actions still on the table, and others still affecting the economy with a lag, it may be especially difficult to remove policy accommodation at the appropriate pace and at the appropriate time,” Bullard said at an investment conference sponsored by Credit Suisse Group AG. “One may want to approach such a situation with caution.” Inflation remains higher than the Fed’s target of 2 percent, which may indicate the U.S. economy has less slack than most economists estimate, he said.
• Copper Bear Streak Extends as Manufacturing Shrinks: Commodities. Copper traders extended a bearish streak into a second week on mounting concern that demand is weakening after manufacturing contracted from China to Europe. Twelve of 29 analysts surveyed by Bloomberg expect the metal to decline next week and seven were neutral. Inventories at bonded warehouses in Shanghai more than doubled since the fourth quarter, a survey of seven traders and analysts showed. Separate stockpiles monitored by the Shanghai Futures Exchange are their highest in at least nine years, bourse data show. China consumes 40 percent of the world’s copper.
• Volcker Rule Delay and Simplification Gains Support in Congress. A bipartisan group of U.S. lawmakers is backing a delay in finalizing a ban on proprietary trading by banks without urging regulators to ease the rule. Six senators introduced legislation yesterday that would postpone implementation of the so-called Volcker rule from the July 21 deadline set by the Dodd-Frank Act and align it with regulators' completion of detailed rules for the trading ban. Meanwhile, Representative Barney Frank, the Massachusetts Democrat who co-authored the law that requires regulators to impose the ban, released a statement urging banking agencies to complete a simplified version by Sept. 3.
• Credit Swaps in U.S. Rise by Most This Year on Global Concerns. A benchmark gauge of U.S. company credit risk rose by the most since December on declining confidence in the global economy as reports showed manufacturing contracted in Europe and China. The Markit CDX North America Investment Grade Index of credit-default swaps, which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, increased 3.7 basis points to a mid-price of 90.5 basis points at 4:50 p.m. in New York, according to Markit Group Ltd.
• JPMorgan(JPM) Told to Pay $373 Million in American Century Funds Case. JPMorgan Chase & Co. (JPM) was ordered by arbitrators to pay $373 million to American Century Investments over claims that executives led by Jes Staley enriched the bank at the expense of the fund-management firm.
• Living Together Trumps Matrimony for Recession-Wary Americans. The probability of a woman getting married by age 25 dropped to less than half as more Americans opt to cohabitate with their romantic partners rather than tie the knot, a U.S. government study shows. The proportion of women living with men without marriage almost quadrupled to 11 percent as of 2010 from 3 percent in 1982, according to data released today by the Centers for Disease Control and Prevention. For men, the proportion rose to 12 percent in 2010 from 9 percent in 2002, said Casey Copen, a demographer at the National Center for Health Statistics.
• Missing Nukes Fuel Terror Concern as Obama Drawn to Seoul. The legacy of the Soviet Union’s breakup, inadequate atomic stockpile controls and the proliferation of nuclear-fuel technology mean the world may be awash with unaccounted-for weapons ingredients, ripe to be picked up by terrorists. “If material is loose, it may already be impossible to contain or account for it,” said Graham Allison, director of Harvard University’s international security program and a former nuclear-security adviser to President Ronald Reagan. “There are no precise figures for how much high-enriched uranium or plutonium is missing.”

Wall Street Journal:

• Health Law Slow to Win Favor. When the health-care overhaul became law after a bitter debate, many Democrats predicted Americans would grow to like it as they started enjoying some of the early benefits. The day after the president signed the bill into law, which happened exactly two years ago, an average of major polls collated by the website Real Clear Politics showed 50.4% of Americans opposed. This week, that had changed only by a tenth of a percentage point, ticking up to 50.5%.
• Liberty and ObamaCare.
  
• A French Killer's Path to Jihadist Rampage. The death of Mohamed Merah, the suspected French killer who met his end Thursday in a barrage of special-forces gunfire, left officials piecing together how he became the alleged homegrown terrorist behind the most violent attacks on French soil in almost two decades.

MarketWatch:

• Boom Times Roll On For U.S. Gun Industry. Sturm Ruger(RGR) stops taking new orders, citing enormous backlog.

Business Insider:

• Delta's(DAL) New 'Basic Economy' Fare Could Be A Game-Changer.
• Facebook Is About To Be About The Size Of Google(GOOG) With 1/10th The Revenues.
  

Zero Hedge:

• Credit Suisse Publicly Announces Reopening Of TVIX Share Issuance, Hours After 'Private' Leak Crushes TVIX.

CNBC:

• Oil Boom to Create Jobs: SandRidge Energy(SD) CEO. “There’s been a renaissance in production in not only Canada but the United States just recently,” he said. “In the next three years, we believe our industry will be creating over 100,000 jobs just in Kansas and Oklahoma.”

IBD:

• Francesca's(FRAN) Makes A Fashion Statement With Growth Plan.
  

Washington Post:

• Intelligence Community Can Keep Data On Americans With No Ties To Terrorism For Up To 5 Years. The U.S. intelligence community will now be able to store information about Americans with no ties to terrorism for up to five years under new Obama administration guidelines. Until now, the National Counterterrorism Center had to immediately destroy information about Americans that was already stored in other government databases when there were no clear ties to terrorism.

Detroit Free Press:

• Detroit's Credit Rating Downgraded by Second Agency. Another blow came to Detroit fiscal health today as a second bond rating agency downgraded the city’s credit rating. Fitch Ratings cited the potential for the city to run out of cash and “a lack of progress in resolving an acute situation” as reasons for the downgrade. “The downgrade and maintenance…are based on delays in implementation of actions at the city and state level that might avert a fiscal crisis for the city,” the Fitch report said. “Fitch sees no assurance that the considerable hurdles to implementing urgently needed changes in the city's financial profile will abate.”

Reuters:

• Exclusive: UAW Steps Up Bid To Organize VW U.S. Plant: Sources. The United Auto Workers union is soliciting signatures of support from workers at Volkswagen AG's U.S. factory, an escalation of its effort to establish a foothold outside the Detroit automakers. In early March, the UAW started passing out authorization cards for workers to sign in an early formal step needed for union representation, workers at the factory in Chattanooga, Tennessee, told Reuters. UAW President Bob King has said organizing U.S. plants run by foreign automakers, known in the industry as transplants, is crucial for the union's survival. After three decades of declining membership, the UAW faces a financial crunch that has been exacerbated by the U.S. economic downturn. This has forced America's richest union to sell assets and dip into its strike fund to pay for activities.
• Nike(NKE) Sees Strong Demand, Better Margins in Spring. Nike Inc headed into the spring quarter with strong demand and improving margin trends, as the top sporstwear retailer forecast a strong year with plans to cash in on the Olympics. The Beaverton, Oregon-based company saw futures orders for delivery from March through July rise 15 percent even as rival Adidas expects a slowdown in sales growth in 2012.
• Micron(MU) Posts Mixed Results as Low Chip Prices Weigh. Micron Technology posted mixed quarterly results, and investors pushed its shares lower after the company said persistently low prices for its memory chips had yet to recover. The slide into bankruptcy of Japanese DRAM chipmaker Elpida in February has created expectations that chipmakers' pricing power, diminished by oversupply, will bounce back this year. But Micron said DRAM prices had yet to rise and that prices for NAND had fallen compared with the prior quarter. In after-hours trade, its shares were down 3.2 percent at $8.43, after having closed at $8.71 on the Nasdaq.
• Clinton to Let Military Aid to Egypt Continue: State Department Official. Secretary of State Hillary Clinton will allow U.S. military aid to Egypt to continue despite Cairo's failure to meet pro-democracy conditions, a senior State Department official said on Thursday, a move sharply criticized on Capitol Hill. The office of Senator Patrick Leahy, who chairs the Senate subcommittee on foreign aid, revealed Clinton's decision and made clear his deep unhappiness with it, arguing that Clinton should now limit the amount of military aid that is released. Clinton should "release no more taxpayer funds than is demonstrably necessary, withholding the rest in the (U.S.) Treasury pending further progress in the transition to democracy" in Egypt, Leahy said in a statement. Congress has approved $1.3 billion in military aid to Egypt - the same level the country has received for years - for the current fiscal year, which ends on September 30. Congress also approved $250 million in economic aid and up to $60 million for an "enterprise fund."
• Weak Recovery, Job Cuts Seen Ahead Of French Election. France will see a slow economic recovery and unemployment will keep rising until the middle of the year, national statistics agency INSEE said on Thursday, less than five weeks from a presidential election.

Irish Times:

• Spain's Borrowing Costs Up Amid Fresh Deficit Fears. SPAIN’S BORROWING costs rose above 5.5 per cent for the first time since January as investors fretted about another escalation of the euro zone crisis amid signs of further economic weakening even in Germany. Investors, already nervous about Madrid’s deficit and weak growth prospects, pushed Spain’s benchmark 10-year bond yields up 14 basis points (bp) to as high as 5.53 per cent. Italy’s borrowing costs also rose with the yield on its 10-year bond breaking through 5 per cent. Markets have been calmed in recent weeks by the European Central Bank’s cheap loans for lenders, known as the longer-term refinancing operation. But investors are becoming nervous that the impact of the two LTROs is wearing off. Marc Chandler, currency strategist at Brown Brothers Harriman, noted that Italian 10-year yields have fallen 180bp so far this year while Spain’s have risen 39bp. “That is after two LTROs,” he said. “That definitely concerns me. When the bonds rally it helps the banks’ balance sheets. But when yields start rising it hurts the banks even more. It is a vicious circle.”

Globe and Mail:

• Canada's Mortgage Body Moves To Slow Booming Housing Market. Canada Mortgage and Housing Corp. has signalled it will dramatically curtail its growth in the mortgage market in the coming years in an effort to cool Canada’s sizzling housing sector. Documents released by the Crown corporation this week show CMHC expects to increase mortgage insurance over the next few years at only a fraction of the pace seen recently.

Japan Times:

• Fear of Radiation Creeping South. Some parents with young kids relocating from Tokyo area. Lingering concerns about radiation a year into the Fukushima nuclear crisis have prompted people even as far away as the Tokyo area, some 100 to 250 km from the Fukushima No. 1 power plant, to move away.

Economic Information Daily:

• Guangzhou, Shenzhen May Start Property Tax Trial. The Chinese cities of Guangzhou and Shenzhen may follow Chongqing and Shanghai to start property tax trials, citing Jia Kang, head of the Finance Ministry's research institute for fiscal science, and Wang Haibin, an analyst at Shenzhen World Union Properties Consultancy Co. Property tax trials should be widened to target existing home owners, they said.

Evening Recommendations

• None of note

Night Trading

• Asian equity indices are -1.0% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 154.50 +1.5 basis points.
  
• Asia Pacific Sovereign CDS Index 118.50 +5.0 basis points.
• FTSE-100 futures +.39%.
  
• S&P 500 futures +.16%.
  
• NASDAQ 100 futures +.20%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (DRI)/1.23
• (KBH)/-.23
  

Economic Releases
10:00 am EST

• New Home Sales for February are estimated to rise to 325K versus 321K in January.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Bernanke speaking, Fed's Lockhart speaking and the (HLF) analyst day could also impact trading today.
  

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and industrial 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.