Bear Radar

Style Underperformer:

• Large-Cap Growth -.73%

Sector Underperformers:

• 1) Road & Rail -2.43% 2) Restaurants -2.21% 3) Steel -1.43%

Stocks Falling on Unusual Volume:

• QCOM, PLCM, PNRA, DB, TOT, PBR, MDC, AAPL, LTM, SWK, MYL, NGLS, SVVC, EGOV, GNTX, SQI, WERN, SCSS, SWKS, MRTN, POOL, WPRT, ULTI, TZOO, NTCT, OTEX, ZBRA, APOL, HMSY, GNI, COL, HNI, EMC, ABD and BAS
  

Stocks With Unusual Put Option Activity:

• 1) MDY 2) EA 3) EBAY 4) EMC 5) QIHU
  

Stocks With Most Negative News Mentions:

• 1) CHK 2) T 3) AAPL 4) MCD 5) INTC
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.69%

Sector Outperformers:

• 1) Coal +3.19% 2) Biotech +2.03% 3) HMOs +2.0%

Stocks Rising on Unusual Volume:

• HGSI, EBAY, GILD, YPF, TNGO, ELX, ARUN, APKT, CY, XBI, MLNX, FFIV, PENN, SXCI, SIMO, CBST, FRAN, RVBD, OPEN, CVI, SPPI, BTU, GT, LHO, TRV, VMW, ARIA and HOT
  

Stocks With Unusual Call Option Activity:

• 1) HGSI 2) MAR 3) EBAY 4) FFIV 5) RVBD
  

Stocks With Most Positive News Mentions:

• 1) MLNX 2) FFIV 3) AXP 4) EBAY 5) EMC
  

Charts:

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

Thursday Watch

Evening Headlines
Bloomberg:

• Spain Joins France to Seek $18 Billion in Bonds. Spain and France plan to raise as much as 13.5 billion euros ($17.6 billion) in debt today as Prime Minister Mariano Rajoy’s struggles to meet deficit targets and the French presidential elections drive up yields. Spain is issuing as much as 2.5 billion euros in two- and 10-year bonds, while France has set a maximum target of 11 billion euros for securities including 2017 notes and 2018 inflation-linked debt. Scrutiny of both countries is increasing amid the fading effect of the European Central Bank’s longer-term refinancing operation, which injected about 1 trillion euros of liquidity into the region’s financial system. The yield on Spain’s benchmark 10-year bond has jumped about 1 percentage point since the beginning of March to above 6 percent, while the yield on the equivalent French security has gained about 10 basis points with Socialist Francois Hollande leading in election polls. “It’s a difficult time for both countries to sell bonds,” said Marc Chandler, head of global currency strategy at Brown Brothers Harriman & Co. in New York. “The first quarter was really about the absorption of the LTROs. The second quarter is going to be more about politics.”
• Unemployment From Italy to Spain Fuels Debt Crisis: Euro Credit. Surging unemployment rates from Spain to Italy and Greece are threatening efforts to quell the region's debt crisis and keeping bond yields close to record premiums relative to benchmark German bunds. Joblessness is soaring as European nations reduce spending and hike taxes, igniting strikes and protests from Athens to Madrid. Unemployment in Spain surged to almost 24%, pushed the euro-region level to 10.8% in February, the highest in more than 14 years. Italy's rate is at 9.3%, the most since 2001, hampering efforts to spur economic growth. Deepening recessions in Italy and Spain contributed to a five-week slide in Italian and Spanish bonds as the shrinking tax base helped lead to both countries raising their deficit targets. "The higher the jobless rate, the more that has to be spent on benefits, creating the potential for a negative spiral," said Christian Schulz, an economist at Berenberg Bank in London and a former ECB official.
  
• To Thrive, Euro Countries Must Cut Welfare State. Most criticism of government profligacy in Europe lately has focused on the obvious sinners, such as Greece, which already had massive public debts and deficits when the global financial crisis struck almost four years ago. When it comes to overspending on social welfare, though, Europe has no angels. Even the “good” Scandinavians, and governments that appeared to be in sound fiscal shape in 2008, but were then undone by unsustainable private-sector debts, were spending too much and will have to restructure. The only question is whether this will be done gradually, or via shock therapy.
• BlackRock(BLK) May Shift Business From Banks If Moody's Downgrades. BlackRock Inc., the world's biggest asset manager, may be forced to reduce business with some banks if their credit ratings are downgraded by Moody's Investors Service. BlackRock is required to comply with clients' portfolio mandates, which may govern the credit rating a counterparty must have for specific holdings, said Bobbie Collins, a spokeswoman for the New York-based firm. Potential downgrades may prompt a shift away from them, Collins said. Moody's Investors Service is reviewing 17 banks and securities firms with global capital markets operations, including Morgan Stanley(MS) and UBS AG(UBS), which could have their ratings cut to the lowest level ever.
• Law School Student Debt Exceeds $100,000 Amid Poor Jobs Outlook. Law school graduates are leaving college with an average of $100,433 in debt at a time when new lawyers outnumber legal jobs, according to a survey from U.S. News & World Report.

Wall Street Journal:

• Europe's Rescue Plan Falters. Europe's bold program to defuse its financial crisis by injecting cash into the banking system is running out of steam. The European Central Bank's roughly €1 trillion ($1.31 trillion) of emergency loans caused interest rates of troubled euro-zone countries to plummet earlier this year, easing fears about Europe's debt crisis. But lately rates have again been marching higher. One big reason: After months of using that cash to buy their government's debt, banks in Spain and Italy have little left, say analysts and other experts.
• Egypt Candidate Warns on Islamists. As Race Takes Shape, Former Foreign Minister Says a Muslim Brotherhood Presidential Victory Could Imperil Democracy.
• George Clooney to Host Obama Fundraiser. As measured by money, power, glamour and celebrity, George Clooney’s dinner party on May 10th in Los Angeles is shaping up to be the party of the year. The guest of honor is President Barack Obama. Barbra Streisand won’t sing, but she’ll be mingling in the crowd. Jeffrey Katzenberg and other major Hollywood executives are expected to attend. And at the end of the evening, Mr. Obama’s supporters hope the campaign will walk away with several million dollars. Organizers predicted the event will turn out to be Mr. Obama’s most lucrative fundraiser yet.
• Small-Firm Loans Lagged in the U.S. Lending to small and medium-size businesses after the recession recovered more slowly in the U.S. than in other countries such as Canada, France and Italy, according to a report expected to be released Thursday by the Organization for Economic Cooperation and Development. The Paris-based OECD examined small-business lending across 17 countries from 2007 to 2010.
• Anji Capital Bets the Euro Will Tumble to 1.03 Swiss Francs. A newly formed New York hedge fund is betting the the Swiss National Bank’s efforts to protect the Swiss franc from gaining against the euro will fail. Anji Capital Management and its chief investment officer, Kevin Chen, expects the euro to fall 14% versus the franc before the end of the year.
• Tumi IPO Prices At $18 A Share, Above Expected Range. Tumi Holdings Inc. said its initial public offering of about 18.8 million shares priced at $18 a share, above its expected range of $15 to $17.
• India Launches Long-Range Missile. India test launched a new nuclear-capable missile Thursday that would give it, for the first time, the capability of striking the major Chinese cities of Beijing and Shanghai, according to television news channels. The government has hailed the Agni-V missile, with a range of 5,000 kilometers, or 3,100 miles, as a major boost to its efforts to counter China's regional dominance and become an Asian power in its own right.
• Henninger: It's 1936 All Over Again. The Obama 2012 campaign is channeling the ghost of Franklin D. Roosevelt in the Depression.

MarketWatch:

• French Election Stirs Fears of Euro-Zone Turmoil. In the end, the onus will be on the victor to convince markets he can cut France’s debt load, even as renewed sovereign-debt turmoil threatens to force the French government to pony up more money for Europe’s rescue fund, along with potential bailout funds for French banks, warned economists at Nomura. “Therefore, we expect a lot of fiscal tightening after the election,” they wrote. “And that is regardless of who wins.”

Business Insider:

• COLOMBIAN PROSTITUTE SPEAKS: Here Are The Details Of My Encounter With The Secret Service.
• Check Out These Photos Of Federal Workers Vacationing On Taxpayer Dollars.
• BOMBSHELL: Colombian Prostitutes Had Contact With 'Sensitive Security' Information.
• This is the Number You Need to be Watching in Spain.
• The 25 Hottest Small Companies In America.
  

Zero Hedge:

• Keynes For Muppets: Elmo Explains The National Debt.
• US Postal Service Bailout Imminent?
  

CNBC:

• Qualcomm(QCOM) Earnings Beat but Shares Fall on Guidance. Qualcomm delivered quarterly results that beat Wall Street's expectations on guidance that trailed expectations.
• Sanctions Not Impacting Iranian Oil: Report.

IBD:

• Bed Bath & Beyond(BBBY) Reaps Hefty Profit Gains.

NY Times:

• Volcker Rule Gets Murky Treatment. The path to gaming the Volcker Rule has always been clear: Banks will shut down anything with the word “proprietary” on the door and simply move the activities down the hall. To look as if they were ready to comply with the Volcker Rule, the part of the Dodd-Frank Act that aims to prevent banks from gambling on their own account with money that taxpayers insure, financial firms quickly spun off or shut down their hedge funds, private equity firms and proprietary trading desks. But the suspicious-minded among us wonder whether it was all that simple.
• European Rescue Fund May Face Biggest Test Yet. The euro zone’s rescue fund has already helped mount full-scale bailouts of three of Europe’s smaller economies. But concern over the health of Spain’s financial institutions — laid low by a festering home-mortgage crisis — has fueled speculation that, for the first time, the bailout fund might be needed to help recapitalize the banks of a big country.

Forbes:

• U.S. Energy Independence in 15 Years?

CNN:

• Moms: 'I can't afford to work'. After factoring in the rising cost of child care, the daily commute and other work-related expenses, a growing number of mothers are figuring out that having a job just doesn't pay. "It comes down to a cost analysis and I have several clients that have taken the route of quitting," said Anna Behnam, a financial advisor at Ameriprise Financial in Rockville, Md. "Factor in taxes, transportation costs, clothing and lunch -- what is the true net that you bring home after salary?"

Rasmussen Reports:

• Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Wednesday 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:

• EBay(EBAY) Quarterly Results Top Expectations. EBay Inc said quarterly sales and profit grew more than expected and raised its 2012 forecasts, citing growth in the e-commerce company's Marketplaces and PayPal businesses. Ebay's stock rose 6.9 percent to $38.35 in extended trading, after hitting $38.83 - the highest level since late 2007.
• F5 Networks(FFIV) 2nd-Qtr Beats, Co Reaffirms FY Revenue Target. F5 Networks Inc posted second-quarter results above market expectations and forecast a muted third quarter, leading to a fall in shares, but the stock recovered after the company reaffirmed its full-year growth target. The network gear maker's shares, which fell 4 percent immediately after F5 announced its results, reversed course after the company allayed fears of a slow down in its business.
• Yum(YUM) China Disappoints as Chinese Growth Cools.
• Stanley Black & Decker(SWK) 1st-qtr profit misses Street estimates. Stanley Black & Decker Inc posted a quarterly profit that missed market expectations, sending its shares down 4 percent in extended trade, as the toolmaker was hit by a rise in costs.
• Brazil Cuts Rate, Surprises With Dovish Tone. Brazil has been flirting with recession since the second half of last year, and President Dilma Rousseff has expressed hopes that lower rates will help spur spending and spark a return to the high growth rates that made the country one of the world's most dynamic economies.

Hedge Fund Alert:

• Pershing Square Details Plan for Listed Fund.
  

Financial Times:

• Spain Eyes Retaliation for YPF Seizure. Britain and Mexico came out with unequivocal support for Spain’s position soon after the renationalisation. The US – which had been criticised by Mr Soria on Spanish state television for its “unenthusiastic” reaction to the expropriation of Argentina’s largest oil group – on Wednesday sharpened its rhetoric over the move, saying it was “very concerned” about it.

Telegraph:

• Dozens Under Arrest in China in Connection with Bo Xilai Scandal. China has detained dozens people with connections to Bo Xilai, it was claimed as the Communist party pledged to "thoroughly investigate" the politician and his wife's alleged role in the death of British businessman Neil Heywood.
• This Crisis Cannot Be Resolved While Monetary Union Remains. "One has the feeling that at any moment, things could get very bad again.” With these words, Olivier Blanchard, the International Monetary Fund’s chief economist, has set the tone for this year’s spring meeting of the IMF.
• Fitch doubts Dutch AAA as property slump reaches 'coma'. Fitch Ratings has issued the clearest warning to date that Holland faces losing its AAA rating if it fails to deliver austerity cuts or lets political conflict intrude on economic management.

The Standard:

• Bo Xilai's Wife Dying From Bone Cancer. The wife of disgraced former Chongqing chief Bo Xilai is suffering from bone cancer and has only a short time to live. According to a source in Beijing, that may explain the sudden change in the character of Gu Kailai, 53, who is accused of murdering British businessman Neil Heywood.
  

Evening Recommendations

• None of note

Night Trading

• Asian equity indices are -.75% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 166.50 +5.0 basis points.
  
• Asia Pacific Sovereign CDS Index 134.0 -1.0 basis point.
  
• FTSE-100 futures +.19%.
  
• S&P 500 futures +.17%.
  
• NASDAQ 100 futures +.42%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (SHW)/.94
• (TRV)/1.52
• (GPC)/.87
• (BBT)/.58
• (LH)/1.67
• (BX)/.40
• (BSX)/.08
• (ADS)/2.19
• (DO)/.99
• (BTU)/.55
• (KEY)/.19
• (DHR)/.71
• (UNH)/1.17
• (DD)/1.53
• (LUV)/-.05
• (FITB)/.36
• (BAC)/.12
• (BAX)/1.00
• (EMC)/.36
• (PM)/1.19
• (MS)/.44
• (VZ)/.57
• (FCX)/.87
• (UNP)/1.63
• (PPG)/1.78
• (NUE)/.39
• (CMG)/1.93
• (SNDK)/.67
• (COF)/1.39
• (ALTR)/.36
• (MSFT)/.57
• (AMD)/.09
• (TPX)/.84
• (CB)/1.51
• (RVBD)/.20
• (WYNN)/1.42
  

Economic Releases
8:30 am EST

• Initial Jobless Claims are estimated to fall to 370K versus 380K the prior week.
• Continuing Claims are estimated to rise to 3300K versus 3251K prior.

10:00 am EST

• Philly Fed for April is estimated to fall to 12.0 versus a reading of 12.5 in March.
• Existing Home Sales for March are estimated to rise to 4.62M versus 4.59M in February.
• Leading Indicators for March are estimated to rise +.2% versus a +.7% gain in February.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The weekly EIA natural gas inventory report, Bloomberg Economic Expectations Index for April, weekly Bloomberg Consumer Comfort Index and the 5Y TIPS auction could also impact trading today.
  

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

Stocks Dropping into Final Hour on Rising Eurozone Debt Angst, Some Key Earnings Disappointments, Rising Global Growth Fears

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 18.30 -.87%
  
• ISE Sentiment Index 130.0 +38.30%
  
• Total Put/Call .98 +15.29%
  
• NYSE Arms .91 +107.89%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 99.35 +.87%
  
• European Financial Sector CDS Index 250.03 +2.61%
  
• Western Europe Sovereign Debt CDS Index 279.90 +.39%
  
• Emerging Market CDS Index 269.29 +2.13%
  
• 2-Year Swap Spread 29.25 +.75 basis point
  
• TED Spread 40.0 +1.0 basis point
  
• 3-Month EUR/USD Cross-Currency Basis Swap -49.0 +3.0 basis points
  

Economic Gauges:

• 3-Month T-Bill Yield .07% -1 basis point
  
• Yield Curve 171.0 -2 basis points
  
• China Import Iron Ore Spot $148.50/Metric Tonne -.47%
  
• Citi US Economic Surprise Index 9.0 -.2 point
  
• 10-Year TIPS Spread 2.27 -4 basis points
  

Overseas Futures:

• Nikkei Futures: Indicating a -31 open in Japan
• DAX Futures: Indicating +13 open in Germany
  

Portfolio:

• Higher: On gains in my Technology and Medical sector longs
  
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my (EEM) short
  
• Market Exposure: Moved to 50% Net Long

BOTTOM LINE: Today's overall market action is bearish, as the S&P 500 trades lower on rising Eurozone debt angst, some key earnings disappointments, rising global growth fears, less financial sector optimism and less US economic optimism. On the positive side, Oil Service, Computer Hardware and Restaurant shares are especially strong, rising more than +.75%. Tech shares are outperforming. Oil is falling -1.5%, Lumber is rising +1.9%, Gold is down -.64% and the UBS-Bloomberg Ag Spot Index is down -1.1%. Major Asian indices rose around +1.25% overnight, led by a +2.1% gain in Japan. On the negative side, Coal, Alt Energy, Oil Tanker, Networking, Computer Service, Insurance and Homebuilding shares are under pressure, falling more than -1.0%. Small-caps are underperforming. Financial are also relatively weak. Copper is dropping -.42%. Major European indices are falling around -2.25% today, led lower by a -4.0% decline in Spain. Spain is now down -17.4% ytd and very close to its March 2009 low. The Bloomberg European Bank/Financial Services Index is falling another -2.2% and is down -14.9% in less than one month. The Germany sovereign cds is gaining +1.09% to 78.68 bps(+7% in 5 days), the France sovereign cds is jumping +5.2% to 200.5 bps(+7.5% in 5 days), the Italy sovereign cds is gaining +2.0% to 441.0 bps and the Spain sovereign cds is gaining +1.2% to 495.0 bps. Moreover, the European Investment Grade CDS Index is rising +4.1% to 142.60 bps. US Rail Traffic continues to soften. 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 -9.0% since its Dec. 29th high despite the better US economic data, improving sentiment towards homebuilders and the broad equity rally. Moreover, the weekly MBA Home Purchase Applications Index has been around the same level since May 2010 despite expectations for a strong spring home selling season. The Baltic Dry Index has plunged around -55.0% from its Oct. 14th high and is now down around -40.0% ytd. China Iron Ore Spot has plunged -18.0% since Sept. 7th of last year. Shanghai Copper Inventories are right near a new record and have risen +760.0% ytd. China's March copper imports fell -4.6% on the month. Singapore Electronics exports decelerated to a gain of +2.8% in March from a +23.3% gain in February. The MBA Home Purchase Apps Index plunged -11.2% this week. This index is now back in the middle of the range it has been trapped in since May 2010. This week’s decline is one of the biggest during this period, as well. I continue to believe that nationwide housing, while stabilizing, is nowhere near in the vigorous recovery that many perceive. The recent erratic technical action in shares of (AAPL), a market-leader and the largest company in the world, is a bit disconcerting. Long AAPL. Copper still trades poorly, bonds still trade too well and the euro can’t sustain a bounce. As well, the ongoing rises in German/French cds are also red flags. In my opinion, the still persistent aggressive dip buying in US equities on any swoon indicates a fairly high level of complacency regarding the rapidly deteriorating situation in Europe. 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 modestly lower into the close from current levels on rising Eurozone debt angst, less US economic optimism, less financial sector optimism, rising global growth fears and some key earnings disappointments.

Today's Headlines

Bloomberg:

• Banks in Europe Face $3.8 Trillion in Assets Sales. European banks could be forced to sell as much as $3.8 trillion in assets through 2013 and curb lending if governments fall short of their pledges to stem the sovereign debt crisis or face a shock their firewall can’t contain, the International Monetary Fund said. In a study of 58 banks including BNP Paribas SA (BNP) and Deutsche Bank AG (DBK), the IMF forecast that under such circumstances, gross domestic product in the 17-country euro region would be 1.4 percent lower than now expected after two years. Even under its baseline scenario, the IMF sees banks’ combined balance sheets possibly shrinking by as much as $2.6 trillion.
• Italian Bonds Slide on Monti Deficit as Bunds Outperform. German bunds outperformed most of their euro-region peers as fresh concern about Europe’s debt crisis boosted demand for the safest assets while the nation’s borrowing costs dropped to a record at a sale of two-year notes. Italian bonds reversed gains after Prime Minister Mario Monti pushed back his balanced-budget goal and predicted a deeper contraction of the economy. Spanish government bonds pared an advance after the Bank of Spain said the country’s bad loans ratio climbed. The nation will auction two- and 10-year securities tomorrow.
• European Stocks Decline; Repsol, Santander Retreat. European stocks declined as Bank of England policy maker Adam Posen ended his support for more stimulus, falling house prices signaled slowing growth in China and bad loans surged in Spain. “The debt crisis is far from over still and I think Spain will be worse before it gets better,” Henrik Drusebjerg, a senior equity strategist at Nordea Bank AB in Copenhagen, said in a Bloomberg Television interview with Maryam Nemazee. “European leaders need to address the key issues to move Europe out of this crisis and that is how to create growth under this environment and that has been almost unaddressed so far during this crisis.”
• Corporate Bond Risk Rises in Europe, Credit-Default Swaps Show. The cost of insuring against default on European corporate debt rose, according to BNP Paribas SA. The Markit iTraxx Crossover Index of credit-default swaps on 50 companies with mostly high-yield credit ratings climbed 12.5 basis points to 669.5 at 2:42 p.m. in London. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings rose five basis points to 142 basis points. The Markit iTraxx Financial Index linked to senior debt of 25 banks and insurers increased 6.5 basis points to 250.5 and the subordinated index climbed 11 to 409.
• Bank Credit Worst to Companies Since Crisis Peak. The debt of banks is trading at the biggest discount to the broader corporate bond market since the depths of the funding squeeze in November as Europe’s sovereign crisis again threatens to rattle global financial markets. From Spain’s Banco Santander SA (SAN) to Morgan Stanley in New York, the cost of credit-default swaps on a basket of the largest banks in Europe and the U.S. is 266 basis points, compared with 137 for the Markit iTraxx Europe Index of 125 companies with investment-grade ratings. The 129 basis-point spread is the most since it reached 133 on Nov. 30.
• Worst Yet to Come as Crisis Rescue Cash Ebbs, Deutsche Bank(DB) Says. The worst may be yet to come in the global financial crisis as the central bank spending that kept defaults low runs out, according to Deutsche Bank AG. (DBK) Credit-default swap prices imply that four or more European nations may suffer so-called credit events such as having to restructure their debt, strategists led by Jim Reid and Nick Burns said in a note. The Markit iTraxx SovX Western Europe Index of contracts on 15 governments including Spain and Italy jumped 26 percent in the past month as the region’s crisis flared up. “If these implied defaults come vaguely close to being realised then the next five years of corporate and financial defaults could easily be worse than the last five relatively calm years,” the analysts in London said. “Much may eventually depend on how much money-printing can be tolerated as we are very close to being maxed out fiscally.”
• Oil Falls as U.S. Supply Rises Twice as Much as Forecast. Crude fell for the first time in three days on a U.S. Energy Department report showing a larger- than-expected supply gain. Prices dropped as much as 1.8 percent after the government said oil inventories rose 3.86 million barrels last week, more than double the increase forecast in a Bloomberg survey of analysts. Refineries operated at a rate below 85 percent for a second week.
• Intel(INTC), (IBM) See Sales Stall as Europe Crisis Crimps Orders.
• SXC(SXCI) to Buy Catalyst(CHSI) in $4.4 Billion Pharmacy Services Deal. SXC Health Solutions Corp. agreed to buy Catalyst Health Solutions Inc. in a cash and stock transaction valued at $4.4 billion to stay competitive as larger pharmacy benefits managers join forces. Catalyst investors will receive $28 in cash and 0.6606 shares of SXC stock for each Catalyst share under the terms of the agreement, the companies said today in a statement. That implies a purchase price of $81.02 per Catalyst share, 28 percent above yesterday's closing stock prices.
• Default Concern Mounts in Brazil as State Banks Cut Rates. President Dilma Rousseff is pushing state-run banks Banco do Brasil and Caixa Economica Federal to lower interest rates and boost lending to less-creditworthy borrowers, fueling concern that delinquencies will rise. The consumer default rate in Latin America's biggest economy held at 7.6 percent in February, the highest since December 2009, the central bank said in a report last month. The overall default rate in Brazil was unchanged at 5.8 percent, compared with 2.47 percent in Mexico.
• Webb Sees Virginia Question for Obama After Health-Law Fight. Democratic Senator Jim Webb of Virginia said it's a "big question mark" whether President Barack Obama will be able to carry his state again in this year's election because Obama's handling of the health-care overhaul harmed his credibility.

Wall Street Journal:

• Italy's 2013 Budget Miss Is No Sign of Laxity. Italy’s decision Wednesday to announce it won’t balance its budget as pledged next year is destined to complicate the debate about whether the euro area is too focused on austerity. A closer look indicates that Italy is not following Spain in loosening its fiscal targets so as not to over-penalize economic growth. Italy is in fact tightening its fiscal policy, a subtle point noted by Deputy Economy Minister Vittorio Grilli.
  

Business Insider:

• The 10 Hedge Funds That Give A Ton Of Money To Politicians.
• Regulators Decide At The Last Minute They're Not Going To Regulate 85% of Derivatives Traders.
• LA Times Publishes Awful Afghan Photos Over Strong Objection From The Army.
• This is the Chart That's Causing Spain to Get Crushed Today.
• Goldman(GS): Apple(AAPL) is a Screaming Buy.
  

Zero Hedge:

• A Quick Reminder Ahead of Tomorrow's Spain Debt Auction.
• Is This The Canary of Australia's Collapsing Housing Coalmine?
• Contagion Returns: France CDS Over 200 For First Time Since January. (graph)
  

Washington Post:

• SEC Approves New Rules for Dealers of Credit Default Swaps; Regulators Face Challenge. More than three years after the financial system teetered on the brink of collapse, federal efforts to impose tighter regulation are facing a major challenge. Business groups that denounce various rules as wasteful and misguided have found a powerful legal tactic to oppose regulators and potentially blunt their work. Their argument: Rulemakers have done too little to analyze the costs and benefits of the rules, thereby creating an unwarranted drag on the economy and giving courts grounds to intervene.

Securities Technology Monitor:

• France Biggest Default Risk, Not Spain. If you thought Spain was the country that most investors were now worried about defaulting on their credit obligations, think again. France tops the list. And Hungary is rising fast. The French republic ranked as the top sovereign entity with the most outstanding credit default swaps, net after offsetting contracts are accounted for, in the week ending April 13.

Reuters:

• Exclusive: Weidmann Says Not ECB Job to Tackle Spain's Problems. Spain should take a rise in its bond yields as a spur to tackle the root causes of its debt woes, not look to the European Central Bank to help by buying its bonds, European Central Bank policymaker Jens Weidmann told Reuters. Weidmann, who has led a push by some policymakers from core euro zone countries for the bank to begin planning an exit from its crisis mode, said no ECB policymakers favored using the bank's bond-buying plan to target specific interest rates on sovereign bonds, and ECB board member Benoit Coeure was simply stating a fact by saying last week that the program still existed. In a wide-ranging interview, Weidmann, who turns 44 on Friday, also said he saw no reason to discuss a third LTRO, the funding instrument with which the ECB has pumped over 1 trillion euros into financial markets since late last year. Weidmann, who is head of Germany's Bundesbank, which gives him a powerful voice on the ECB's 23-man Governing Council, spoke to Reuters against a backdrop of growing tensions in Spain, where benchmark sovereign bond yields are near the closely watched 6 percent level."We shouldn't always proclaim the end of the world if a country's long-term interest rates temporarily go above 6 percent," he said.
• Exclusive: Chesapeake(CHK) CEO Took Out $1.1 Billion in Unreported Loans. Aubrey McClendon, the CEO of Chesapeake Energy Corp, has borrowed as much as $1.1 billion over the last three years against his stake in thousands of company wells - a move that analysts, academics and attorneys who reviewed loan documents say raises the potential for conflicts of interest. The loans, which haven't been previously detailed to shareholders, are used to fund McClendon's operating costs for an unusual corporate perk that offers him a chance to invest in a 2.5 percent interest in every well the company drills. McClendon in turn is using the 2.5 percent stakes as collateral on those same loans, documents filed in five states show.
• Copper Steadies Near $8,000; Europe Caution Weighs.
  

Frankfurter Allgemeine Zeitung:

• Germany's leading economic institutes said the European Central Bank's response to the region's debt crisis jeopardizes its independence, citing a yet unpublished report. "The independence and credibility of the ECB is at stake," the institutes will say in their biannual report to be published tomorrow. "There's a danger that monetary policy won't be able to free itself from the predicament it has entered," the institutes said.
  

Il Corriere della Sera:

• Prime Minister Mario Monti is not planning to adopt new austerity measures this year to meet its deficit-reduction goal, citing his comments in a meeting with the representatives of the three main political parties last night.
  

Bear Radar

Style Underperformer:

• Large-Cap Value -1.18%

Sector Underperformers:

• 1) Oil Tankers -3.74% 2) Computer Services -2.70% 3) Homebuilders -2.16%

Stocks Falling on Unusual Volume:

• YPF, IBM, MJN, EVEP, APH, CHKR, TEF, FSLR, CREE, DOV, TXT, CHK, TITN, ASML, MMYT, CYMI, INTC, VLCCF, MELI, SPRD, NTLS, MSTR, MIDD, UTHR, UNFI, NVLS, RVBD, MTR, PXQ, SBR, VCO, GNI, GHL, SKM and CHKM
  

Stocks With Unusual Put Option Activity:

• 1) NUAN 2) DISH 3) CHK 4) INTC 5) UAL
  

Stocks With Most Negative News Mentions:

• 1) RIG 2) TOL 3) WHR 4) MS 5) CHK
  

Charts:

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