Weekly Scoreboard*

Indices

• S&P 500 1,398.08 -.37%
  
• DJIA 13,060.10 -.65%
  
• NASDAQ 3,080.50 -.48%
  
• Russell 2000 818.18 -1.69%
  
• Wilshire 5000 14,509.90 -.50%
  
• Russell 1000 Growth 662.56 +.08%
  
• Russell 1000 Value 682.15 -.89%
  
• Morgan Stanley Consumer 803.18 +.65%
  
• Morgan Stanley Cyclical 998.84 -1.65%
• Morgan Stanley Technology 703.37 -1.80%
  
• Transports 5,284.33 +.54%
  
• Utilities 458.75 +.59%
  
• MSCI Emerging Markets 42.89 +.39%
  
• Lyxor L/S Equity Long Bias Index 1,036.32 +.15%
  
• Lyxor L/S Equity Variable Bias Index 818.40 +.16%
  
• Lyxor L/S Equity Short Bias Index 539.0 unch.
  

Sentiment/Internals

• NYSE Cumulative A/D Line 144,011 -.96%
  
• Bloomberg New Highs-Lows Index -155 -78
  
• Bloomberg Crude Oil % Bulls 18.0 +60.0%
• CFTC Oil Net Speculative Position 215,557 -6.1%
  
• CFTC Oil Total Open Interest 1,569,070 +.44%
  
• Total Put/Call .94 -8.74%
  
• OEX Put/Call 1.55 +32.50%
  
• ISE Sentiment 98.0 -16.95%
  
• NYSE Arms 1.61 +78.89%
  
• Volatility(VIX) 16.70 +7.88%
• S&P 500 Implied Correlation 64.35 +5.23%
  
• G7 Currency Volatility (VXY) 10.33 +2.68%
  
• Smart Money Flow Index 11,168.54 +1.28%
  
• Money Mkt Mutual Fund Assets $2.590 Trillion -.60%
  
• AAII % Bulls 38.17 -10.12%
  
• AAII % Bears 27.80 +9.11%

Futures Spot Prices

• CRB Index 306.49 +.18%
  
• Crude Oil 103.17 -.13%
  
• Reformulated Gasoline 333.73 -.14%
  
• Natural Gas 2.09 -3.50%
  
• Heating Oil 317.58 -.08%
  
• Gold 1,632.30 -1.89%
  
• Bloomberg Base Metals Index 216.63 -.32%
  
• Copper 379.0 -.58%
  
• US No. 1 Heavy Melt Scrap Steel 402.67 USD/Ton -.16%
  
• China Iron Ore Spot 147.60 USD/Ton unch.
  
• Lumber 265.80 +.61%
  
• UBS-Bloomberg Agriculture 1,553.94 +3.15%
  

Economy

• ECRI Weekly Leading Economic Index Growth Rate 1.0% +100 basis points
  
• Philly Fed ADS Real-Time Business Conditions Index -.0234 +17.60%
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 108.73 +.17%
  
• Citi US Economic Surprise Index 6.90 -12.0 points
  
• Fed Fund Futures imply 56.0% chance of no change, 44.0% chance of 25 basis point cut on 4/25
  
• US Dollar Index 80.06 +1.21%
  
• Yield Curve 184.0 -4 basis points
  
• 10-Year US Treasury Yield 2.18% -3 basis points
  
• Federal Reserve's Balance Sheet $2.848 Trillion -.45%
  
• U.S. Sovereign Debt Credit Default Swap 29.41 -2.50%
  
• Illinois Municipal Debt Credit Default Swap 253.0 +16.38%
  
• Western Europe Sovereign Debt Credit Default Swap Index 272.59 -.20%
  
• Emerging Markets Sovereign Debt CDS Index 275.22 +.81%
  
• Saudi Sovereign Debt Credit Default Swap 118.89 +.25%
• Iraqi 2028 Government Bonds 84.14 -.04%
• China Blended Corporate Spread Index 628.0 +2 basis points
  
• 10-Year TIPS Spread 2.29% -5 basis points
  
• TED Spread 40.25 unch.
  
• 3-Month Euribor/OIS Spread 41.0 -.25 basis point
  
• 3-Month EUR/USD Cross-Currency Basis Swap -54.0 -3.5 basis points
  
• N. America Investment Grade Credit Default Swap Index 94.73 +1.75%
  
• Euro Financial Sector Credit Default Swap Index 234.38 +7.69%
  
• Emerging Markets Credit Default Swap Index 253.93 +3.33%
  
• CMBS Super Senior AAA 10-Year Treasury Spread 159.0 -3 basis points
  
• M1 Money Supply $2.223 Trillion +.68%
  
• Commercial Paper Outstanding 931.40 -.70%
  
• 4-Week Moving Average of Jobless Claims 361,800 -3,200
  
• Continuing Claims Unemployment Rate 2.6% unch.
  
• Average 30-Year Mortgage Rate 3.98% -1 basis point
  
• Weekly Mortgage Applications 695.70 +4.82%
  
• Bloomberg Consumer Comfort -31.4 +3.3 points
  
• Weekly Retail Sales +3.60% +20 basis points
  
• Nationwide Gas $3.94/gallon +.02/gallon
  
• U.S. Heating Demand Next 7 Days 6.0% above normal
• Baltic Dry Index 926.0 +.43%
  
• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 42.50 +6.25%
  
• Rail Freight Carloads 242,772 +4.46%
  

Best Performing Style

• Large-Cap Growth +.08%
  

Worst Performing Style

• Small-Cap Value -1.83%

Leading Sectors

• HMOs +2.39%
  
• Road & Rail +1.81%
• Restaurants +1.25%
• Biotech +.86%
• Utilities +.59%

Lagging Sectors

• Disk Drives -4.11%
• Gold & Silver -4.91%
  
• Networking -5.02%
• Education -5.04%
• Alternative Energy -5.66%

Weekly High-Volume Stock Gainers (12)

• CONN, AVP, RHT, MOV, LIZ, RNDY, BIO, VVUS, CZR, DDIC, MIND and IPHS
  

Weekly High-Volume Stock Losers (12)

• FX, NUS, TAP, FDML, WBMD, BCO, AYI, GWRE, GPN, FINL, AH and CLVS
  

Weekly Charts
ETFs

• High-Volume Gainers
• High-Volume Losers

Stocks

• High-Volume Gainers
• High-Volume Losers
  

*5-Day Change

Stocks Slightly Lower into Final Hour on Rising Eurozone Debt Angst, Rising Energy Prices, Global Growth Fears, Profit-Taking

Broad Market Tone:

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

Equity Investor Angst:

• VIX 16.88 +2.68%
  
• ISE Sentiment Index 104.0 +8.33%
  
• Total Put/Call .96 -2.04%
  
• NYSE Arms 1.58 +10.87%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 96.85 +4.39%
  
• European Financial Sector CDS Index 234.51 +3.24%
  
• Western Europe Sovereign Debt CDS Index 272.66 +.74%
  
• Emerging Market CDS Index 253.93 +1.46%
  
• 2-Year Swap Spread 29.0 +1.25 basis points
  
• TED Spread 39.75 unch.
  
• 3-Month EUR/USD Cross-Currency Basis Swap -54.0 -3.25 basis points
  

Economic Gauges:

• 3-Month T-Bill Yield .07% unch.
  
• Yield Curve 183.0 -6 basis points
  
• China Import Iron Ore Spot $147.60/Metric Tonne unch.
  
• Citi US Economic Surprise Index 6.90 +.1 point
  
• 10-Year TIPS Spread 2.28 -3 basis points
  

Overseas Futures:

• Nikkei Futures: Indicating a -32 open in Japan
• DAX Futures: Indicating a -19 open in Germany

Portfolio:

• Higher: On gains in my Tech, Retail and Biotech sector longs
  
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my (EEM) short
  
• Market Exposure: Moved to 75% Net Long

BOTTOM LINE: Today's overall market action is mildly bullish, as the S&P 500 hugs the flatline despite rising Eurozone debt angst, rising global growth fears, profit-taking and rising energy prices. On the positive side, Software, HMO, Restaurant and Road & Rail shares are especially strong, rising more than +.5%. The Transports are outperforming again. Lumber is rising +2.6%. The AAII % Bulls fell to 38.2 this week, while the % Bears rose to 27.8. On the negative side, Coal, Computer Hardware, Disk Drive, Networking, Construction, Oil Tanker, Alt Energy and Defense shares are under pressure, falling more than -.75%. The MS Cyclical Index(CYC) is underperforming again and is below its 50-day moving average. The UBS-Bloomberg Ag Spot Index is rising +.4%, Oil is up 1.2% and Gold is gaining +.76%. The 10-year yield is falling -5 bps to 2.17%. Major Asian indices were mostly lower overnight, led down by a -.95% decline in Hong Kong. Major European were flat on the day. Spanish equities are now down -10.6% ytd. As I have been cautioning for awhile, this remains a large red flag for the region. As well, the Bloomberg European Financial Services/Bank Index fell another -.6% today. This index is down -12.0% in about 2 weeks and is now below its 200-day moving average. The Germany sovereign rose +2.35% to 73.83 bps, the France sovereign cds is gaining +3.72% to 179.19 bps, the Italy sovereign cds is gaining +2.2% to 418.58 bps, the Russia sovereign cds gained +3.9% to 192.16 bps and the Belgium sovereign cds gained +4.0% to 244.44 bps. Moreover, the European Inv Grade CDS Index is gaining +2.2% to 132.22 bps and the Asia Pac Sovereign CDS Index jumped +4.9% to 132.70 bps. The Philly Fed ADS Real-Time Business Conditions Index continues to trend lower from its late-December peak despite investor perceptions that the US economy is accelerating. Moreover, the Citi US Economic Surprise Index has fallen back to mid-Oct. levels. Lumber is -6.0% since its Dec. 29th high despite the better US economic data, 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 -18.5% since Sept. 7th of last year. Shanghai Copper Inventories are right near a new record and have risen +741.0% ytd. Overall, credit gauges are starting to weaken too much as Spain’s economic troubles are intensifying at a faster pace than the “kick-the-can” crowd had hoped. The fact that German 2/5Y Yields hit new record lows today, despite perceptions that their economy is strong and labor costs are starting to rise too much, is another large red flag and also bodes well for the much-hated US T-Note. Global equities will likely take their cue from the US employment report tomorrow, however renewed stock weakness is likely next week unless Eurozone debt angst begins to subside soon. For the recent equity advance to regain traction, I would 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 US economic optimism and investor performance angst.

Today's Headlines

Bloomberg:

• Spain Left Behind in Global Debt Swaps Rally on Bailout Concern. Spain is the only country in the world that hasn’t benefited from the credit rally fueled by central bank cash as investors bet its government will be the fourth in the euro region to request a rescue. Credit-default swaps insuring Spanish bonds surged 21 percent since the start of the year to 461 basis points, according to CMA, signaling a worsening perception of credit quality. That compares with a 1 percent decline in swaps on Portugal, the next worst-performing nation, and more than 40 percent drops for Norway, Sweden and the U.S. Spain is in “extreme difficulty,” Prime Minister Mariano Rajoy said yesterday, raising the likelihood of a bailout for the second time this week. The government has raised its budget deficit target to 5.3 percent of gross domestic product from 4.4 percent and warned public debt will surge to a record 79.8 percent of GDP this year as it imposes the deepest austerity in at least three decades. “The market is slowly coming around to realizing that despite the fact the original target was abandoned, the current target is still ambitious,” said Ralf Preusser, head of European rates research at Bank of America Merrill Lynch. “Without growth, almost any debt burden is unsustainable.”
• Spanish, Italian Bonds Slide. Spanish and Italian bonds led losses among Europe’s higher-yielding government securities on speculation authorities will struggle to stop the region’s debt crisis from spreading. Spain’s 10-year bonds dropped for a third day after demand fell at a debt sale yesterday and an International Monetary Fund spokesman said the nation is facing “severe” challenges. Germany’s two- and five-year note yields dropped to records as investors sought the safest assets. The slide in Spanish securities pushed 10-year yields to the highest since the European Central Bank started providing three-year loans in December in its longer-term refinancing operations. “Spain is still the focus for the markets,” said Peter Chatwell, a fixed-income strategist at Credit Agricole Corporate & Investment Bank in London. “The LTRO bid has faded away, and that was evident from the auction results yesterday. The market is still positioning for event risk, and that has supported the move back to the safest assets.” The Spanish 10-year yield climbed six basis points, or 0.06 percentage point, to 5.75 percent at 4:33 p.m. London time after rising to 5.84 percent, the most since Dec. 13. The 5.85 percent securities due January 2022 dropped 0.44, or 4.40 euros per 1,000-euro ($1,306) face amount, to 100.70. The additional yield investors demand to hold Spanish 10- year bonds instead of similar-maturity German bunds expanded 11 basis points to 402 basis points after reaching 410, the widest since Nov. 30.
• Spain's Economic Woes Rattle Investors; Europe Markets Slide.
  
• Corporate Bond Risk Rises in Europe, Credit-Default Swaps Show. The cost of insuring against default on European corporate debt rose, according to traders of credit- default swaps. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings climbed 4.25 basis points to 133.75 at 3:30 p.m. in London, JPMorgan Chase & Co. prices show. The gauge is up from 125 basis points March 30 and heading for the biggest weekly increase since Dec. 16. Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings jumped 13 basis points to 650, and is set for a third weekly rise. An increase signals deterioration in perceptions of credit quality. The Markit iTraxx Financial Index linked to senior debt of 25 banks and insurers rose 8.5 basis points to 235 and the subordinated index was 11 higher at 383.
• Obama Assails Ryan Budget Without Giving a Long-Term Alternative. President Barack Obama has rebuked Republicans for their "radical vision" of a scaled-down government and says it's time to "get serious about the deficit." His own budget fails to do that over the long term. White House projections show federal debt as a proportion of gross domestic product growing by more than three-quarters under Obama's plan to a record 124 percent in 2050, well above the 90 percent danger zone identified by economists Carmen Reinhart and Kenneth Rogoff. And the government's share of the economy climbs to levels not seen since World War II, largely because of surging spending on health care. That concerns Rogoff, a professor at Harvard University in Cambridge, Massachusetts, who co-wrote with Reinhart the book "This Time is Different: Eight Centuries of Financial Folly." Countries with excessive government liabilities historically have suffered "very long periods of tepid growth," he said. "You don't have to have a financial crisis" for that to occur, yet one is often "lurking" in the background, he said.
• Jobless Claims in U.S. Fall. Jobless claims fell 6,000 to 357,000 in the week ended March 31, the fewest since April 2008, the Labor Department reported today in Washington. The median forecast of 43 economists in a Bloomberg News survey estimated a decrease to 355,000. The number of people on unemployment benefit rolls also dropped, while those getting extended payments increased. The four-week moving average, a less- volatile measure than the weekly figures, decreased to 361,750 last week, from 366,000. In addition to the jobless claims, the number of Americans receiving extended benefits under federal programs increased by about 17,000 to 3.26 million in the week ended March 17. The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 2.6 percent, today’s report showed. Twenty-six states and territories reported a decline in claims, while 27 reported an increase.
• Oil Rises for First Time in Three Days. Crude for May delivery gained $1.46, or 1.4 percent, to $102.93 a barrel at 11:24 a.m. on the New York Mercantile Exchange, paring the weekly loss to 10 cents. Brent oil for May settlement rose 68 cents, or 0.6 percent, to $123.02 a barrel on the London-based ICE Futures Europe exchange.
• Seattle Shows Risk of Glut as Apartment Construction Surges. The biggest surge of Seattle-area apartment construction in a quarter century is threatening to undercut the growth in rents, a trend that's also emerging in such U.S. cities as Washington and Houston. Seattle went from “dead last” in rent increases three years ago, following the collapse of mortgage lender Washington Mutual Inc., to 13th out of 88 markets last year, according to Axiometrics Inc., a multifamily real estate research company. The construction boom spurred by rising rents is now stoking concern that revenue growth may stall as an increasing number of units compete for tenants.
• New York Fed Markets Group Chief Brian Sack to Resign. Brian Sack, markets group chief at the Federal Reserve Bank of New York, is resigning this year after leading operations implementing the central bank’s monetary policy since June 2009. Sack, 41, will remain at his current post until June 29, the district bank said today in a statement on its website. He will then be placed on leave until his resignation from the New York Fed effective Sept. 14, according to the statement. As head of the markets group, Sack oversaw the record expansion of the Fed’s balance sheet while policy makers turned to unconventional tools such as two quantitative-easing programs in the aftermath of the credit crisis. Using bond purchases as a stimulus tool, the central bank expanded its assets to a record $2.94 trillion on Feb. 15.
• China's Hawaii to Face Hotel Slump as Supply Triples. China’s resort city of Sanya is expected to face a “huge correction” in its hotel market in the next two years as the supply of luxury accommodation triples by early 2013, the head of its tourism association said. The average hotel occupancy rate in Sanya, located on the tropical island known as China’s Hawaii, will drop about 10 percentage points from last year’s 65 to 70 percent, Michel Goget, Ritz-Carlton Sanya’s general manager and chairman of the city’s Tourism Association, said in an interview yesterday. “There’s going to be a huge correction between now and 2014 because there’s an oversupply,” said Goget, citing new additions by international chains in the city. “The demand is still not there. And the airport is almost saturated, so we are going to be all looking for the same business.”
• Taiwan's Stocks Slump Most in 5 Months on Tax Concern. Taiwan’s stocks slumped the most since December and the currency weakened after the stock exchange chairman said the island is likely to impose a capital- gains tax on share transactions.
• Obama Risks Vote Backlash by Warning Court on Health Law. President Barack Obama has shown a willingness to campaign against the U.S. Supreme Court if the justices strike down his 2010 health-care law. It's a strategy that's as risky as it is rare. Taking on the court would mean fighting an institution that polls show is historically the most admired branch of government. That's one reason no major party nominee has made the court a central issue since 1968, when Richard Nixon tapped into voters' unease about rising crime by attacking the expansion of suspects' rights under Chief Justice Earl Warren. "The risk any president faces is that criticism of the Supreme Court can backfire," said William G. Ross, a constitutional law professor at Samford University in Birmingham, Alabama, who has written about the role of judicial issues in presidential campaigns. "People can perceive it as unduly disrespectful of an institution that commands tremendous amounts of public respect."
• Nasdaq Wins Facebook(FB) Listing as Market Fends Off NYSE, NYT Says. Facebook Inc. (FB) plans to list its shares on the Nasdaq Stock Market, according to the New York Times, further cementing the exchange operator’s position as the favored venue for the biggest U.S. technology companies.

Wall Street Journal:

• US Retailers Report Strong Momentum For March Sales. Retailers generally reported strong sales for March, as warmer weather, an earlier Easter and appealing fashions drew customers in. Standouts included Gap Inc. (GPS) and Target Corp. (TGT), while Costco Wholesale Corp. (COST) and teen retailer Buckle Inc. (BKE) came up short. Easter falls two weeks earlier this year than in 2011, which provided a sales boost for everything from apparel to seasonal goods. March also benefited from unseasonably high temperatures in many parts of the country, which brought customers into malls and other shopping locations. Compelling fashions also played a role, analysts said, with people more willing to pay fuller prices for fresh merchandise. Retailers were also able to move older merchandise at promotional prices.
• Romney Plays Down Pennsylvania Hopes.
• High Gas Prices Other Victim: The Gas Station Owner. Many Independent Owners Lose Money Amid Falling Demand; Competition From Warehouse Clubs Is Another Challenge.
  

CNBC.com:

• Bullard: Fed's Rate Language Too Pessimistic. A top Federal Reserve official said on Thursday that the central bank's projection of late 2014 for the first likely increase in interest rates sends too pessimistic a signal as the economic recovery strengthens.

Business Insider:

• Greeks Riot Like Crazy Following Yesterday's Tragic Suicide.

Zero Hedge:

• LTRO #Fail and Two Types of Credit Losses. (graphs)
• Complete YTD Hedge Fund Performance Summary.
• On The Pain in Spain.
  

Reuters:

• World Food Prices Rise Further, Raising Fears of Unrest. Global food prices rose in March for a third straight month with more hikes to come, the UN's food agency said on Thursday, adding to fears of hunger and a new wave of social unrest in poor countries. Record high prices for staple foods last year were one of the main factors that contributed to the Arab Spring uprisings in the Middle East and North Africa, as well as bread riots in other parts of the world.
• Gold Rising, Fading Stimulus Hopes Weigh. Gold inched higher on Thursday after falling to a near three-month low the previous day as weaker prices tempted some buyers, but gains were capped by a stronger dollar and fading hopes for a fresh round of monetary stimulus in the United States. Spot gold was up 0.2 percent at $1,622.30 an ounce at 1121 GMT, while U.S. gold futures for June delivery were up $9.60 an ounce at $1,623.70. The metal has fallen nearly 3 percent this week and while prices regained some ground on Thursday, it was still hovering around its lowest since early January.
• Oil Hedge Fund BlueGold to Liquidate. BlueGold Capital, an oil-focused hedge fund that shot to fame in 2008 by calling the peak of the market, told its investors on Thursday it was liquidating after four years. BlueGold is conducting an "orderly closure" of the business and expects to return about 98 percent of investor capital before the end of the year, the London-based fund said in a letter to investors, a copy of which was obtained by Reuters. It did not give a reason for its closure.

Financial Times:

• Spanish Bonds/Banks/Bonds/Banks. Beyond Thursday’s back-up in Spanish bond yields — questions about Spain’s banks. How could there not be when they’ve been buying so much sovereign debt since the LTRO. Ever since December’s record jump of €22.5bn in purchases in fact, as banks began washing LTRO cash through the domestic bond market. (Chart via Nomura)
• Employers Attack Italy's Labour Reforms. Italy’s leading industrialists and employers have slammed Mario Monti’s revised labour market reforms as inadequate and counterproductive after initial plans were watered down to appease trade unions and the centre-left Democratic party.

Shanghai Daily:

• Existing Housing Index Slips. SHANGHAI'S existing housing index fell for the sixth straight month in March, with nearly 60 percent of monitored areas recording value decreases. The index, which tracks price variations of previously occupied homes, lost 0.13 percent from February to 2,577 points last month, the Shanghai Existing House Index Office said yesterday. "Transaction volume of used homes rebounded last month amid recovering demand from end-users though a sustainable recovery is yet to be confirmed," said Zhang Shu, an analyst at the office. "A revised criteria for 'normal' housing that went into effect in March also helped trigger sentiment among home seekers."
  

Style Underperformer:

• Large-Cap Value -.70%

Sector Underperformers:

• 1) Disk Drives -1.90% 2) Networking -1.70% 3) Gold & Silver -1.30%

Stocks Falling on Unusual Volume:

• PMTC, VELT, BV, SU, TI, DOV, CKEC, PLCM, SPPI, HCSG, SHLM, STX, SVVC, PODD, ALGT, HAIN, SZYM, VELT, QSII, MMYT, COST, FSLR, PAAS, STZ. EWK, EWO, KSS, KMX and BKE
  

Stocks With Unusual Put Option Activity:

• 1) HOV 2) BBT 3) STX 4) EWW 5) SVU
  

Stocks With Most Negative News Mentions:

• 1) MCD 2) IOC 3) PLCM 4) SBUX 5) LNKD
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.42%

Sector Outperformers:

• 1) Restaurants +.81% 2) Oil Service +.69% 3) Retail +.40%

Stocks Rising on Unusual Volume:

• BBBY, PPG, LAD, AVD, TLK, LORL, CLVS, DEST, SCHN, TIBX, ONXX, LQDT, PSMT, MIND, SKUL, ALLT, SBUX, ROST, CXW, CNK, AP and PRX
  

Stocks With Unusual Call Option Activity:

• 1) KMX 2) BBBY 3) TJX 4) JWN 5) TIBX
  

Stocks With Most Positive News Mentions:

• 1) M 2) ROST 3) DEST 4) PPG 5) PNC
  

Charts:

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

Thursday Watch

Evening Headlines
Bloomberg:

• Draghi Scotches ECB Exit Talk as Spain Keeps Crisis Alive. European Central Bank President Mario Draghi quashed talk of an early exit from emergency stimulus measures as Spain struggled to borrow in financial markets, a reminder of the risk that the region’s debt crisis could flare again. Speaking just hours after Spanish Prime Minister Mariano Rajoy warned his country faces “extreme difficulty,” Draghi said yesterday that talk of the ECB starting to withdraw its support for euro-area banks is “premature.” At the same time, in a nod to growing inflation concerns in Germany, he said the ECB won’t hesitate to counter price risks if needed. Policy makers left their benchmark rate at a record low of 1 percent. The ECB has expanded its balance sheet by about 30 percent since Draghi took office in November, pumping more than 1 trillion euros ($1.3 trillion) into the banking system in a bid to stem the debt crisis. Pressure to unwind the emergency measures is rising in Germany, where workers are winning some of the biggest pay increases in two decades, threatening to stoke inflation. “Premature Bundesbank calls for an ECB exit strategy have now triggered a new round of market wobbles, with a focus on Spain,” said Holger Schmieding, chief economist at Berenberg Bank in London. “The risk of a new irrational market panic remains serious.”
• Spain Not Greece Is The Real Test For The European Union. The decisive test of the euro area’s plans for economic recovery was never Greece but Spain, and the European Union shows every sign of failing it. The Spanish government’s new austerity plan hasn’t won investors’ confidence, and this creates a threat not just to Spain but to the whole EU. Europe’s governments need to change course before it’s too late. An auction of Spanish bonds on Wednesday was the first verdict on Spain’s new budget. It didn’t go well. Demand was poor and prices fell. The country’s borrowing costs rose with 10 year bond yields in the secondary market hitting 5.7 percent, the highest since the beginning of the year. The premium over German government bonds increased to nearly four percentage points, the highest since November. The problem is not that Spain’s new austerity plan is too timid. Just the opposite: Under EU orders, Spain is promising what might be the tightest fiscal squeeze that it or any other European economy has ever faced. The new plan calls for the budget deficit to fall from 8.5 percent of gross domestic product to 5.3 percent this year. Since the economy is already shrinking, this requires a discretionary fiscal tightening of roughly 4 percent of GDP -- with the unemployment rate already standing at about 23 percent.
• World Bank Needs Capital Injection, Ocampo Says in FT Op-Ed. Jose Antonio Ocampo, a former Colombian finance minister and one of three candidates to become the next World Bank president, said the lender needs a capital increase. “The institution is a very successful, indeed profitable, global financial co-operative,” Ocampo wrote in an op-ed piece published in the Financial Times. “But its recent response to the global financial crisis, in the absence of a substantial capital injection, has diminished its lending capacity.” The bank needs a capital injection that is based on “a clear, shared set of priorities,” he wrote.
• JPMorgan(JPM) Awards CEO Dimon $23M Pay Package. JPMorgan Chase & Co. (JPM), the largest and most profitable U.S. bank, gave Chairman and Chief Executive Officer Jamie Dimon $23 million in pay and bonuses for 2011, about the same as the previous year. Dimon’s base salary was raised to $1.5 million beginning in March 2011 from $1 million and he received $17 million in restricted stock and options for his performance in 2011, down from $17.4 million the previous year, the New York-based company said today in a proxy statement. His cash bonus was $4.5 million, down from $5 million in 2010, the bank said. The CEO took a salary of $1 million for 2009 and gave up bonuses that year and in 2008 after receiving $49.9 million in total compensation for 2007. Dimon and his wife control almost 5.2 million shares valued at more than $209 million as of March 2, when his total holdings were last disclosed.
• President Scapegoat Can't Stop Picking on Big Oil by Caroline Baum. Obama has elevated scapegoating to a new level.
• Dimon Letter Derides Contrived Financial Rules. Jamie Dimon, chairman and chief executive officer of JPMorgan Chase & Co. (JPM), used his annual letter to shareholders to rail against “contrived” and confusing financial rules that he said may stymie lending. U.S. and international officials “made the recovery worse than it otherwise would have been,” Dimon wrote in the letter released yesterday. They almost botched the U.S. debt-ceiling vote, constrained bank leverage “at precisely the wrong time” and adopted bad and uncoordinated policy, he wrote. Dimon, 56, defended a banking industry that has been besieged by new rules and public contempt after lax mortgage lending contributed to the worst economic slump since the Great Depression. He championed the use of derivatives and the right of banks to lobby lawmakers, and hailed the U.S. economy and corporations as engines of job growth. “We have hundreds of rules, many of which are uncoordinated and inconsistent with each other,” Dimon said in the 38-page letter, his longest since becoming CEO in December 2005. “Complexity and confusion should have been alleviated, not compounded.” Dimon called a cap on debit-card transaction fees, a provision of the Dodd-Frank Act, “price-fixing by the government that will have the unfortunate consequence of leaving millions of Americans unbanked.” Stricter capital rules will make it “prohibitively more expensive” for banks to lend to consumers with subprime credit scores, about 40 percent of all Americans, he said.

Wall Street Journal:

• Probe of Insurers Gains Steam. New York's top financial regulator is expanding an investigation of insurers that force homeowners policies on borrowers after turning up evidence that consumers were charged too much, according to people familiar with the situation. Benjamin M. Lawsky, superintendent of the New York Department of Financial Services, is issuing new subpoenas and formal document requests to several insurers, demanding justification for how their rates and loss ratios were calculated, these people said.
• As Carbon Prices Sink, Unease Rises. The market for carbon emissions is running out of gas. Prices of emission allowances, which award the holder the right to release carbon dioxide into the atmosphere, have tumbled this week to a record low. They are down 11% from the start of the year and now trade at less than one-fourth of their July 2008 value.
• Henninger: The Supreme Court Lands in Oz. Like the original wizard, Barack Obama doesn't want anyone to look behind the curtain.

MarketWatch:

• Taiwan Stocks Plunge in Latest Tax-Driven Sell-Off. Taiwan stocks returned from a one-day holiday to plunge in Thursday morning trade. The benchmark Taiex was down -2.8%, putting its losses for the week at -4.9%. Taiwan is considering reviving a capital-gains tax, with the possibility sparking across-the-board selling by both foreign and domestic investors. Among some of the market's better-known names, Acer Inc. and Formosa Plastics Corp. each fell 2.2%, while China Airlines Ltd. swooned 4.7% lower.

Business Insider:

• Goldman's(GS) Gloomy Outlook In One Huge Slide.
• The Trailer Is Out For Frontline's New Documentary On The Financial Crisis — And It's EPIC. (video) "Here we are three years plus after, and nothing has changed," said one commenter. It's like they're inside our brains!

Zero Hedge:

• Retail Celebrates Highest Stock Prices Since 2007 With Biggest Redemptions Of 2012. (graph)
• Corzined Marvell Muppets Sue Vampire Squid.
  

CNBC:

• Facebook's(FB) Final Private Trade Values Company at $109 Billion. Facebook’s highly-anticipated final private market transaction has priced on SecondMarket at $43.50 (a record for the private market exchange), according to people familiar with the trade. That final trade values Facebook at roughly $109 billion.
• Exclusive: Falcone Mulls Voluntary Bankruptcy For LightSquared. Hedge fund manager Philip Falcone said in an interview on Wednesday he is "seriously considering" filing a voluntary bankruptcy for LightSquared, the struggling telecom startup in which his Harbinger Capital Partners is the majority owner.

NY Times:

• Huffington Gains More Control in AOL(AOL) Revamping.
  

Institutional Investor:

• Ken Griffin's Citadel, Dan Loeb's Third Point Gain in First Quarter. An initial picture of hedge fund results for the first quarter is emerging. Hedge funds performed pretty well in the first quarter, but still lagged the S&P 500 and Nasdaq Composite, which had their best quarters in years. Ken Griffin’s Citadel has picked up where it left off last year. The Chicago-based hedge fund manager is up more than 8 percent in the first three months after posting a nearly 3 percent gain in March alone. Dan Loeb of Third Point, who is currently waging a proxy fight with Yahoo, posted a 6.5 percent gain in the first quarter.

CNN:

• Exclusive: Bernanke Breaks Bread With Top Bankers. After completing a series of public lectures in Washington, D.C. last week, Federal Reserve Chairman Ben Bernanke quietly slipped into New York City for a private luncheon on Friday with Wall Street executives. Fortune has learned that attendees included Jamie Dimon (J.P. Morgan), Bob Diamond (Barclays), Brady Dougan (Credit Suisse), Larry Fink (Blackrock), Gerald Hassell (Bank of New York Mellon), Glenn Hutchins (Silver Lake), Colm Kelleher (Morgan Stanley), Brian Moynihan (Bank of America), Steve Schwarzman (Blackstone Group) and David Vinar (Goldman Sachs).
• Car Prices At Record Highs - And Rising.
  

Real Clear Politics:

• The Chickens Are Coming Home To Roost by Ed Koch. The chickens are coming home to roost in the Middle East. The experts who supported the removal of President Hosni Mubarak of Egypt, e.g., The New York Times’ Tom Friedman and many others, are perhaps now wondering if they were right to do so. Mubarak was a loyal friend of the United States, a guarantor of the rights of minority Egyptians such as Coptic Christians, and a protector of the peace agreement negotiated by Egyptian President Anwar Sadat and Israeli Prime Minister Menachem Begin under the auspices of President Jimmy Carter at Camp David.

Rasmussen Reports:

• Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Wednesday shows that 23% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty-one percent (41%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -18 (see trends).

Reuters:

• New Foreclosure Wave to Hit 'Everyday' Borrowers. Subprime loans caused first crisis, now job losses, economy will cause a bigger run. A painful part two of the slump looks set to unfold: Many more U.S. homeowners face the prospect of losing their homes this year as banks pick up the pace of foreclosures.
• One-Fifth of U.S. Adults Read E-Books As Market Booms - Survey. One in five American adults read an electronic book in the last year, as gift-giving sped the shift away from the printed page, a Pew Research Center survey showed on Wednesday.
• Paulson Hedge Funds Mixed in First Quarter. Closely tracked hedge fund manager John Paulson's oldest fund rose and his Enhanced fund scored double-digit gains in the first quarter but his Advantage funds remained in the red, a source familiar with the numbers said on Wednesday. The firm's oldest portfolio, Paulson Partners, gained 6.6 percent during the quarter while the Paulson Enhanced fund jumped 13.3 percent. Both funds' returns were fueled by the Express Scripts Medco acquisition and gains at Delphi Automotive. The Paulson Advantage fund fell 3.96 percent in March to stand 1.05 percent lower for the year while its Paulson Advantage Plus fund fell 5.45 percent in March and was off 2.23 percent for the quarter. Last year these funds suffered double-digit losses.
• Detroit Avoids State Takeover, More Oversight Looms. Detroit avoided a takeover by the state of Michigan on Wednesday after both a review team and the city council approved a consent agreement that will put the city's struggling finances under stricter control.
• For Some Prominent US Hedge Funds, A Strong 1st Quarter. A handful of prominent hedge fund managers reported strong first quarter results after the industry recorded dismal returns in 2011, but only a few managed to top the performance of the rallying U.S. stock markets.
• Bed Bath & Beyond(BBBY) 4th-qtr beats estimates, shares up. Bed Bath & Beyond Inc reported quarterly results that beat Wall Street expectations as shoppers spent more to spruce up their homes, sending the retailer's shares up more than 4 percent after the bell.
• Ruby Tuesday(RT) 3rd-qtr sales misses, sees weak FY. Ruby Tuesday Inc's quarterly revenue missed Wall Street expectations hurt by a fall in same-store sales, and the casual dining chain forecast full-year adjusted earnings below analysts' estimates. Shares of the company fell 10 percent in extended trade.

Financial Times:

• Morgan Stanley(MS) Tries to Stave Off Ratings Cut. James Gorman, Morgan Stanley’s chief executive, has been in discussions with Moody’s in an attempt to maintain its credit ratings and stave off a downgrade that could diminish the bank’s ability to buy the rest of Citigroup brokerage Smith Barney, according to people familiar with the matter.
• JPMorgan's(JPM) Practices Bring Scrutiny. Three times a pallbearer, never a corpse – that is JPMorgan Chase’s experience of the brutal financial markets of the past few years. At the demise of Bear Stearns, Lehman Brothers and, most recently, MF Global, the bank has been deeply involved: in a rescue bid for Bear and in a complex network of relationships with Lehman and MF Global. Its unrivaled reach raises inevitable questions about its role.

Telegraph:

• Portugal May Need Bailing Out Within A Year, Warns Olli Rehn. Political leaders should be ready to provide a further bail-out for Portugal within the next year, Europe's economic and financial affairs commissioner Olli Rehn has warned.

Evening Recommendations

• None of note

Night Trading

• Asian equity indices are -1.25% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 159.50 +5.0 basis points.
  
• Asia Pacific Sovereign CDS Index 128.75 +.5 basis point.
  
• FTSE-100 futures +.48%.
  
• S&P 500 futures +.12%.
  
• NASDAQ 100 futures +.16%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (STZ)/.39
• (SCHN)/.32
• (KMX)/.40
• (PIR)/.48

Economic Releases
8:30 am EST

• Initial Jobless Claims are estimated to fall to 355K versus 359K the prior week.
• Continuing Claims are estimated to rise to 3350K versus 3340K prior.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Bullard speaking, ICSC Chain Store Sales for March, Challenger Job Cuts report for March, BoE Rate Announcement, RBC Consumer Outlook Index for April, weekly EIA natural gas inventory report and the weekly Bloomberg Consumer Comfort Index could also impact trading today.
  

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