Bear Radar

Style Underperformer:

• Mid-Cap Growth -1.92%

Sector Underperformers:

• 1) Networking -3.03% 2) Internet -2.66% 3) Hospitals -2.41%

Stocks Falling on Unusual Volume:

• IRE, BOFI, EQIX, CBS, MCP, CPL, CLF, MPW, LPLA, ONXX, OSIR, MLU, VIPS, CSCO, GPI, VTRB, CREE, PEB, BITA, AZN, ALDW, SWHC, WCC, PRGO, TRIP, CHKR, NQ, HMIN, YELP, STRA, ISG, LVB, MTZ, JDSU, WGO and PPC

Stocks With Unusual Put Option Activity:

• 1) MAS 2) JDSU 3) IYR 4) LOW 5) TOL
  

Stocks With Most Negative News Mentions:

• 1) BGC 2) OII 3) UPS 4) ONXX 5) N
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Value -1.31%

Sector Outperformers:

• 1) Gold & Silver +.07% 2) Telecom -.20% 3) Oil Service -.52%

Stocks Rising on Unusual Volume:

• RCI, VLTR, SPEX, DDS, KSS and EL

Stocks With Unusual Call Option Activity:

• 1) HUN 2) SLM 3) SWHC 4) SPXU 5) BAX
  

Stocks With Most Positive News Mentions:

• 1) T 2) HRS 3) IART 4) MDCO 5) MMLP
  

Charts:

• ETFs Rising on Unusual Volume

• Stocks Rising on Unusual Volume

Thursday Watch

Evening Headlines 
Bloomberg:  

• India Fighting Worst Crisis Since ’91 Limits Capital Flows. India increased efforts to stem the rupee’s plunge and stop capital outflows that are pushing the economy towards its biggest crisis in more than two decades. The Reserve Bank of India, whose Governor Duvvuri Subbarao steps down next month, cut the amount local companies can invest overseas without seeking approval to 100 percent of their net worth, from 400 percent, according to a statement late yesterday. Residents can remit $75,000 a year versus the previous $200,000 limit. Rupee forwards rose for the first time in three days. 

• Asian Stocks Fall Amid Mixed Earnings, Fed Concern. Asian stocks fell, snapping the regional benchmark’s longest winning streak in six weeks, amid mixed corporate earnings across the region and after economists predicted the Federal Reserve will reduce stimulus next month. Sony Corp., an electronics maker that gets about 68 percent of sales from overseas, slid 1.6 percent, pacing declines among Japanese exporters as the yen rose. Thai Beverage Pcl (THBEV), the brewer controlled by billionaire Charoen Sirivadhanabhakdi, sank 6.1 percent in Singapore after posting lower sales and profit. Li & Fung Ltd. jumped 13 percent after saying business is recovering, leading an advance in Hong Kong’s Hang Seng Index, which briefly erased losses for the year. The MSCI Asia Pacific Index dropped 0.4 percent to 135.51 as of 11:49 a.m. in Tokyo, with five shares falling for every two that rose.

• WTI Rises for Fifth Day on Egypt Crackdown, U.S. Oil Stockpiles. West Texas Intermediate rose for a fifth day as worsening violence in Egypt fanned concern over Middle East oil supplies and U.S. crude stockpiles declined for a second week. Futures climbed as much as 0.5 percent in New York, extending the longest rising streak since April. Crude inventories fell by 2.8 million barrels last week, Energy Information Administration data showed, almost double a median 1.5 million drop forecast by analysts in a Bloomberg News survey. Egypt declared a state of emergency and hundreds were killed after security forces broke up sit-ins by protesters. 

• Rubber Retreats From 11-Week High as Stronger Yen Cuts Appeal. Rubber fell from an 11-week high as the Japanese currency strengthened after a U.S. Federal Reserve official cautioned against excessive optimism over the economy. Rubber for delivery in January on the Tokyo Commodity Exchange declined as much as 1.1 percent to 263.1 yen a kilogram ($2,693 a metric ton) and was at 265 yen at 11:25 a.m. Futures settled at 265.9 yen yesterday, the highest close for a most-active contract since May 29. Rubber has lost to 13 percent this year.

• European Recovery Means Little for Jobless Generation. Francisco Justicia Carrasco has been sending off 50 resumes every Monday for more than three years. He doesn’t expect a job for a long time to come yet. “The situation is screwed up,” said the 28-year-old who lives in Ripollet, close to Barcelona, and has worked in a range of jobs from shop cashier to packaging over the past decade. “I don’t see any improvement at all from last year or even the year before.”

• Henkel CEO Sees No Short-Term Catalyst for Europe Rebound. Henkel AG Chief Executive Officer Kasper Rorsted, whose company makes products from Right Guard deodorant to Loctite adhesives, said he sees no short-term catalyst for improvement in Europe’s economy. “The only economy that gives us worries is the European economy,” with the region’s 28 million unemployed, he said yesterday in an interview at Bloomberg headquarters in New York.  

• U.S. Re-Evaluating Egypt Assistance After Protest Crackdown. The Obama administration is considering canceling planned military exercises with Egypt and is re-evaluating other aid following the violent crackdown on protesters by the country’s military-backed government, according to a U.S. official. The U.S. and Egypt are scheduled to start the “Bright Star” exercises next month. Other military assistance already in the pipeline may also be held up to put pressure on Egypt’s interim government, said the official, who asked for anonymity to discuss internal deliberations.

• Who Will be the Next Fed Chair? (video)

• Cisco(CSCO) Cutting Jobs as Revenue Forecast Misses Estimates. Cisco Systems Inc. (CSCO), the biggest maker of networking equipment, said it’s cutting about 5 percent of its workforce after issuing a fiscal first-quarter sales forecast that missed most analysts’ estimates. Cisco is eliminating 4,000 jobs as weaker sales in Japan, China and Europe weigh on revenue growth, Chief Executive Officer John Chambers said on a conference call today. Revenue for the current quarter through October will be $12.2 billion to $12.5 billion, the San Jose, California-based company said in a statement. Analysts on average were projecting sales of $12.5 billion for the current period. Chambers is grappling with concerns that Cisco’s growth rate may slow as companies and network operators postpone costly overhauls of their networks. The results suggest the CEO is struggling to deliver on his turnaround plan for the company, said Bill Kreher, an analyst at Edward Jones & Co. in St. Louis, Missouri. “The guidance is below the long-term plan, which can be concerning,” said Kreher, who has a hold rating on Cisco shares. “Cisco has eliminated low-hanging fruit and has effectively managed their costs, but looking forward the company must continually find ways to generate new sources of revenue.” Cisco fell as much as 11 percent in extended trading.

• Paulson Cuts SPDR Gold(GLD) Stake 53% as Soros Sells Out. Billionaire John Paulson, the biggest investor in the SPDR Gold Trust, reduced his holdings by 53 percent as the metal plunged into a bear market. George Soros sold his entire position. Paulson & Co. reduced its stake to 10.2 million shares in the three months ended June 30 from 21.8 million at the end of the first quarter, and Soros Fund Management LLC sold its 530,900 shares, Securities and Exchange Commission filings showed today. The SPDR fund is the world’s largest exchange-traded product backed by gold.

Wall Street Journal:

• Hundreds Dead in Egypt Crackdown. Security Forces' Efforts to Clear Cairo Sit-Ins Sparks Violence; At Least 278 People Killed Across Egypt. Egypt's military regime, aided by snipers and bulldozers, swept the streets of Islamist protesters—setting off a day of violence that left more than 278 people dead, the government fractured and ties with its international partners in tatters. Muslim Brotherhood sympathizers stormed police stations, burned down churches and battled with government supporters in several neighborhoods, after police sweeps left scores of protesters dead at two Cairo squares. The raid ended more than a month of sit-ins by thousands of Brotherhood supporters—sometimes joined by families, and daring the government to disperse them—who demanded the reinstatement of ousted President Mohammed Morsi.

• Violence Draws Censure and Silence. International reaction to the Egyptian military's crackdown against protest camps Wednesday morning was swift and strident, with Turkish leaders who are ideologically close to the ousted President Mohammed Morsi calling the move a "massacre" and regional diplomats saying the escalating violence was worrisome for Middle East stability.

• Chinese Banks Feel Strains After Long Credit Binge. Rapid Loan Growth Has Led to Serious Debt Problems at Local Governments. A cornerstone of China's financial edifice is beginning to show some cracks. The country's banking sector, a key part of a financial system that has powered China through three decades of breakneck expansion, is feeling the strain of years of rapid credit growth. Bank-fueled lending to state enterprises and local governments has led to overcapacity; serious debt problems for local governments, companies and lenders alike; and numerous white-elephant projects, from nearly empty malls and resorts to bridges to nowhere. Chinese banks now are trying to strengthen their balance sheets ahead of an expected rise in bad loans coupled with slower earnings growth. Raising capital will likely be expensive for the banks because investors, who have sold off shares of banks, are worried about their deteriorating health and China's slowing growth. "The problem [banks] face is that market sentiment is very bad," says Mark Mobius, executive chairman of Templeton Emerging Markets Group, a part of Franklin Templeton Investments, who manages more than $50 billion of emerging-market equities

• Many Health Insurers to Limit Choices of Doctors, Hospitals. Main Reason Behind These Limited Plans: Cost. This fall, Indiana's new online health-insurance marketplace will present some tough choices for consumers like John Nowak, who will be able to pick a plan from his current insurer—or go for one that includes his primary-care doctor. That is because Mr. Nowak's current insurer won't include Indiana's biggest health-care provider, 19-hospital Indiana University Health, in the plans it sells on the consumer exchange. If Mr. Nowak buys a new exchange plan from WellPoint Inc.'s WLP -0.41% Anthem Blue Cross and Blue Shield, he will generally have to pay the cost out of his own pocket if he sees the system's doctors, because they aren't in the network.

• Two Charged in J.P. Morgan(JPM) 'Whale' Trades. Prosecutors Allege Colleagues of Trader Attempted to Hide Losses; Trader Himself Isn't Charged.

Fox News:

• DOJ, FBI admit they inflated claims about mortgage fraud crackdown last year. The Justice Department and FBI have quietly acknowledged they grossly overstated the scope of a mortgage fraud crackdown, which the administration heralded with much fanfare a few weeks before last year's presidential election. According to a memo circulated by the FBI and a correction posted online by the Justice Department, the number of defendants, the number of victims and the size of the losses are, in reality, a fraction of what officials claimed last October.

• Summertime Blues: Polls show ObamaCare support eroding amid roll-out problems. As problems continue to pile up over the implementation of the Affordable Care Act, summertime polls from Fox News, Gallup and Rasmussen signal that growing confusion over the complexities of the law, how it will be rolled out and how much it will cost is eroding public support. A majority of Americans say they believe the new health care law will increase their medical costs and taxes, according to an Aug. 8 Fox News poll. The survey found 57 percent of those polled felt the way ObamaCare was being rolled out was "a joke." Overall, 63 percent of voters believe that the 2010 health care law needs to be changed. That number is up from 58 percent of those asked the question in July 2012.

Zero Hedge:

• US Consumer Bankruptcies Jump By Most In Three Years; Third-Party Collections At All Time High. (graph)

• Pictures From A Warzone (In Denial).

• The "Obamacare Part-Time Jobs" Effect Goes Mainstream.

• Stocks Slump Most In 7 Weeks As Silver Surges. (graphs)

• Santelli Slams Liesman: "There's A Difference Between Real-Life Inflation And The Government's". (video)

Business Insider:

• SEC Says Finance Twitterer Was Running A Ponzi, And Using Client Money As His Personal Piggy Bank. 

• Ex-NATO Chief: 15,000 Troops Should Stay In Afghanistan After 2014.

• 46 Charts That Every Gold Bull Will Love.

New York Times:

• How Hard Is It to Value Derivatives? See the Details of the JPMorgan(JPM) Case. On Wall Street, bets worth hundreds of billions of dollars are valued using a considerable amount of guesswork. The dangers of that approach were revealed on Wednesday in the government’s criminal complaints against two former JPMorgan Chase traders.

• Intermittent Nature of Green Power Is Challenge for Utilities.

• Once a Symbol of Brazil’s Might, Billionaire Sells Controlling Stake in a Company.

USA Today:

• Apple(AAPL) becomes hedge fund target, Soros doubles stake.

Reuters:

• Cayman Islands, U.S. reach pact to fight tax evasion. The United States has cut a deal with the Cayman Islands that will smooth implementation in the Caribbean island nation of a new U.S. anti-tax evasion law, while pressuring other low-tax and no-tax countries to follow suit. Criticized by President Barack Obama and others as a tax haven, the Cayman Islands said it has agreed to cooperate with the Foreign Account Tax Compliance Act (FATCA), enacted in 2010 and set to take effect in July 2014.

• Japan govt spokesman: No truth PM Abe instructed corp tax cut. Japan's Chief Cabinet Secretary Yoshihide Suga said on Thursday there is no truth to a report that Prime Minister Shinzo Abe instructed ministers to consider cutting the country's corporate tax rate. The issue will be decided after taking into account various views from the business sector, Suga told a regular news conference. Citing government sources, the Nikkei newspaper reported on Tuesday that Abe could consider lowering the corporate tax rate to foster an economic recovery. 

• U.S. puts non-performing $50 mln green-tech loan up for auction. The U.S. Department of Energy will put up for auction this week a $50 million loan awarded to the now-closed Vehicle Production Group LLC, an unusual move by the DOE that may give U.S. taxpayers a chance to recoup a portion of their investment. 

• NetApp(NTAP) forecasts lackluster second-quarter, shares down. Data storage equipment maker NetApp Inc forecast current-quarter results largely below expectations, sending its shares down 4 percent in extended trading. The company forecast second-quarter adjusted earnings of 60 to 65 cents per share, while analysts on average were looking for 63 cents. The company expects revenue to be between $1.56 billion and $1.66 billion, largely below the $1.63 billion Wall Street had estimated according to Thomson Reuters I/B/E/S. Shares down 4 pct after market. 

• Nikkei falls on weak Wall St; profit-taking on brokers, realtors.

Financial Times:

• Indian Industrial Companies' Debt Rising as Economy Slows. Combined gross debt of 10 most indebted industrial conglomerates rose 15% in latest financial year, citing Credit Suisse research. Debt increased at 9 of the 10 cos. studied. The stagnation in the nation’s industrial sector was driven home again on Monday, as shares in state-run Bharat Heavy Electricals plunged 19 per cent, after the country’s largest power equipment manufacturer by sales released unexpectedly weak earnings. The group’s figures are only the latest in a series of disappointing results from companies providing capital goods to India’s power and infrastructure sectors, as well as those supplying other struggling heavy industries, such as steel and car making.

Telegraph:

• Bank warned that Help to Buy may be stoking housing bubble. The Bank of England has been warned that the Government’s subsidised mortgage scheme has already started to drive up house prices due to a shortage of properties for sale. 

• Spanish youth look abroad for jobs. In Spain the news that Europe's longest-ever recession had come to an end was met with some scepticism by the man on the street. 

Xinhua:

• China Xiamen Bans Govt Debt If Exceeds Fiscal Ability. Xiamen city in the eastern Chinese province of Fujian starts new rules this month to regulate local governments' borrowing in order to prevent risks, citing the city's fiscal bureau. Govts' debt will not be approved if the source for repayment is not clear, funds of the debt are used for projects banned by the government, the borrowing is more than governments' fiscal capability, citing the rules.

China Securities Journal:

• China Should Speed Up Fiscal, Tax Reform. China should speed up fiscal, tax reform to reduce local governments' dependence on land sale revenues, says a front-page commentary written by reporter Gu Xin. China should also allow local governments to see bonds in order to guard against the growth of "hidden" debt, the commentary said.

Economic Infomation Daily:

• China May Announce Long-Term Property Controls. China may this year announce property control policies that have long-term effects, citing Zhu Zhongyi, vice chairman of the China Real Estate Association. Zhu made the comments at a real estate forum in Hainan province's Boao. The nation will use more tax, credit and other economic measures to control the property market, the report said, citing Zhu.

Evening Recommendations 

• None of note

Night Trading

• Asian equity indices are -1.0% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 136.0 -2.0 basis points.

• Asia Pacific Sovereign CDS Index 108.0 +.75 basis point.

• FTSE-100 futures -.30%.

• S&P 500 futures -.08%.

• NASDAQ 100 futures -.35%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (WMT)/1.25

• (KSS)/1.04

• (EL)/.21

• (DELL)/.24

• (JWN)/.88

• (AMAT)/.19

• (BYI)/.94

• (AZPN)/.08

• (BGG)/.19

• (RRGB)/.66

Economic Releases 
8:30 am EST

• Initial Jobless Claims are estimated to rise to 335K versus 333K the prior week.

• Continuing Claims are estimated to fall to 3000K versus 3018K prior.

• Empire Manufacturing for August is estimated to rise to 10.0 versus 9.46 in July.

• The Consumer Price Index for July is estimated to rise +.2% versus a +.5% gain in June.

• The CPI Ex Food and Energy for July is estimated to rise +.2% versus a +.2% gain in June.
  

9:00 am EST

• Net Long-Term TIC Flows for June are estimated at -$17.5B versus -$27.2B in May.
  

9:15 am EST

• Industrial Production for July is estimated to rise +.3% versus a +.3% gain in June.

• Capacity Utilization for July is estimated to rise to 77.9% versus 77.8% in June.

• Manufacturing Production for July is estimated to rise +.2% versus a +.3% gain in June.

10:00 am EST

• The NAHB Housing Market Index for August is estimated at 57.0 versus 57.0 in July.

• The Philly Fed for August is estimated to fall to 15.0 versus 19.8 in July.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Bullard speaking, UK retail sales reports, weekly EIA natural gas inventory report, weekly Bloomberg Consumer Comfort Index and the (F) analyst meeting could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and industrial shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon. The Portfolio is 25% net long heading into the day.

Stocks Lower into Final Hour on Rising Mid-East Urest, Emerging Markets Debt Angst, Rate Concerns, Homebuilding/Transport Sector Weakness

Click Here for Today's Market Take.

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 12.89 +4.71%

• Euro/Yen Carry Return Index 135.60 -.17%

• Emerging Markets Currency Volatility(VXY) 9.38 +.32%

• S&P 500 Implied Correlation 49.14 +2.48%

• ISE Sentiment Index 148.0 +21.31%

• Total Put/Call .80 +5.26%

• NYSE Arms .74 -15.93% 

Credit Investor Angst:

• North American Investment Grade CDS Index 75.34 +.07%

• European Financial Sector CDS Index 133.83 -.29%

• Western Europe Sovereign Debt CDS Index 82.50 +.61%

• Emerging Market CDS Index 300.51 +2.50%

• 2-Year Swap Spread 17.75 -.5 bps

• TED Spread 21.75  unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -8.75 unch.

Economic Gauges:

• 3-Month T-Bill Yield .05% unch.

• Yield Curve 231.0 -1 bp

• China Import Iron Ore Spot $142.80/Metric Tonne +.71%

• Citi US Economic Surprise Index 39.0 -1.2 points

• Citi Emerging Markets Economic Surprise Index -29.20 +.4 point

• 10-Year TIPS Spread 2.22 -3 bps

Overseas Futures:

• Nikkei Futures: Indicating -130 open in Japan

• DAX Futures: Indicating +5 open in Germany

Portfolio: 

• Slightly Lower: On losses in my retail/tech/medical/biotech sector longs

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 25% Net Long

Today's Headlines

Bloomberg: 

• Merkel Warns Against Debt Perils as She Begins Re-Election Bid. Chancellor Angela Merkel warned against the perils of excessive debt as she began campaigning for Germany’s Sept. 22 election, seeking to defend her lead in the polls to clinch a third term. Addressing a crowd of more than 1,000 in the Hessian city of Seligenstadt today, Merkel embraced a report that the 17-nation euro area had emerged from recession as “good news,” though she said growth must not be based on debt. “We’ve seen what can happen if you accumulate too much debt,” Merkel said. Higher borrowing costs spur rising interest rates, putting businesses in danger, she said. “Then you have unemployment -- and at that point you have a spiral." 

• European Stocks Climb for Fifth Day on Euro-Area Growth. European stocks rose for a fifth day, with the benchmark Stoxx Europe 600 Index advancing to a 12-week high, as a report showed the euro area’s economy emerged from a record-long recession in the second quarter. Subsea 7 SA, an offshore oil services provider, surged the most in three years after reporting a smaller-than-expected quarterly loss. Rentokil Initial Plc (RTO) jumped to the highest price in more than two years after reporting an increase in first-half earnings and sales. RWE AG lost 4.5 percent after second-quarter net income missed analysts’ estimates. The Stoxx 600 rose 0.3 percent to 308.62 at the close of trading.

• India Inflation Tops Estimates as Rupee Plunge Tests Rajan. Indian inflation accelerated more than economists estimated in July as a plunging rupee stoked import costs, with the central bank today announcing curbs on foreign-exchange outflows to try and support the currency. The wholesale-price index rose 5.79 percent from a year earlier, a five-month high that exceeded the median 5 percent estimate in a Bloomberg News survey of 34 analysts, a government report showed today. The Reserve Bank of India later reduced the amount some companies can invest overseas, as well as the limit on resident individuals’ remittances abroad. 

• China Banks’ Bad Loans Rise for Seventh Quarter as Economy Slows. Chinese banks’ bad loans rose for a seventh straight quarter, extending the longest streak in at least nine years as the world’s second-largest economy continued slowing. 

• Cathay Profit Misses Estimates on Cargo Slump, North Asia. Cathay Pacific Airways Ltd. (293), Asia’s biggest international carrier, reported first-half profit that missed analyst estimates as cargo revenue dropped and declining yields in North Asia masked gains from carrying more passengers. Net income totaled HK$24 million ($3.1 million) in the six months ended in June, Cathay said in a stock exchange statement today, compared with the HK$590 million median profit estimate in a Bloomberg News survey of five analysts. It was the smallest profit in at least 15 years for the Hong Kong-based airline. 

• Gold Rises for Fifth Time in Six Sessions as Dollar Drops.

• S&P 500 Valuation vs VIX Shows Concern Lacking: Chart of the Day. Investors are becoming overly content about the prospects for stocks after more than four years of gains, according to David Bianco, chief US equity strategist at Deutsche Bank AG. Bianco's P/E-VIX ratio closed yesterday at 1.2. At that level, a lack of concern that share prices may fall starts to supplant "realistic and disciplined" investing, he wrote.

• Janus Funds Post Highest Withdrawals in More Than Three Years. Janus Capital Group Inc. (JNS) had its biggest monthly mutual-fund withdrawals in more than three years after a large client pulled money from the money manager’s oldest fund. Investors pulled a net $2.2 billion from the Denver-based company’s long-term funds in July, the most since May 2010, according to research firm Morningstar Inc. (MORN) A single client redeemed $1.3 billion from the now $7 billion Janus Fund in July, John Groneman, head of investor relations at Denver-based Janus, said today in a telephone interview.

Wall Street Journal:

• Egypt's Deadly Crackdown Spurs Street Violence. Health Ministry Says 149 Killed in Effort to Clear Antigovernment Sit-Ins in Cairo. Egypt's efforts to end Muslim Brotherhood protests turned deadly Wednesday morning, with well over 100 people killed across the country in violence set off when police, later backed by Egyptian soldiers, moved in against two antigovernment sit-ins in Cairo. The move to clear supporters of former President Mohammed Morsi, which had been anticipated since his ouster by the military on July 3, set off violent upheaval across Cairo. Protesters tried to storm police stations across Egypt's capital, while entire neighborhoods succumbed to fighting between neighbors on opposite sides of the political divide, an early taste of the bloodshed that has been feared for weeks by many Egyptians. Several observers worried that the violence has spiraled out of control and taken on sectarian shadings. Egypt's interim president declared a monthlong national state of emergency to start Wednesday afternoon. 

• Two Charged in J.P. Morgan(JPM) 'Whale' Trades. Prosecutors Allege Colleagues of Trader Attempted to Hide Losses; Trader Himself Isn't Charged.

Fox News:

• Former Rep. Jesse Jackson Jr. sentenced to 30 months in prison. Former Rep. Jesse Jackson Jr. was sentenced to two and a half years in prison Wednesday after pleading guilty to scheming to spend $750,000 in campaign funds on TV's, restaurant dinners, an expensive watch and other costly personal items. His wife received a sentence of one year. Jackson, the 48-year-old son of civil rights leader Jesse Jackson, had been a Democratic congressman from Illinois from 1995 until he resigned last November. In an emotional speech to the judge during which he became choked up and used tissues to blow his nose, he apologized and said he wanted to "take responsibility for my actions." "I misled the American people," he said.

CNBC:

• Mortgage apps defy rate dip, hit lowest in more than a month. Applications for U.S. home loans fell last week to their lowest level in more than a month despite a slight decline in interest rates, data from an industry group showed on Wednesday. The gauge of loan requests for home purchases, a leading indicator of home sales, fell 5.4 percent, resuming a downward trend that was interrupted with a slight rise the prior week.

• Newly revealed Obamacare delay draws fire. Obamacare might not be a "train wreck," but the wheels sure do keep coming off of it. Yet another delay in a key part of the Affordable Care Act gave critics more ammunition and raised further questions about the Obama administration's authority to delay implementing sections of the law without congressional approval.

Zero Hedge:

• Europe Returns To "Growth" After Record 6-Quarter Long "Double Dip" Recession; Depression Continues. (graphs)

• July PPI Unchanged, Pork Surge Offset By Plunge In Vegetables Prices. (table)

• Mortgage Activity Plunges 50% To April 2011 Levels. (graphs)

• 6th Hindenburg Omen In 8 Days Sends Stocks Slumping. (graph)

• Live Webcast: Things In Egypt Are Deteriorating Rapidly And Now The Vice President Resigns.

• This Video Clip From Egypt Is Likely Not Produced. (video)

Business Insider:

• More Than Two Years After The Meltdown, The Situation At Fukushima Remains Frighteningly Out Of Control.

Minyanville: 

• Twitter Legalizes Front-Running in Stocks.

Yahoo:

• Away from Egypt, Bahrain’s Own Arab Spring Uprising Heats Up Again. While violence rages in Cairo, the dysfunctional epicenter of the Arab Spring, another unresolved conflict from that season of unrest in the region is flaring. Amid increasing tension and violence in the tiny Gulf kingdom of Bahrain, pro-democracy protesters planned to mass in nationwide demonstrations on Wednesday that marked the two-and-a-half-year anniversary of the nation’s own frustrated Arab Spring moment.

Derivatives Intelligence:

• Asian Emerging Markets Spreads Widen On China Fears. Spreads on Asia's emerging market credit default swaps have widened in the last three months, as prices on developed market CDS have tightened, according to data from Markit. And China's economic situation suggests the trend may be set to strengthen.

Reuters:

• Deere(DE) posts strong profit, but farmbelt spending a concern. Deere & Co (DE.N) reported a much higher-than-expected quarterly profit on Wednesday on strong sales of its tractors and harvesters in the Americas, but some analysts said the results represented the high-water mark for the company in the current farm cycle. Deere also said sales for the current quarter would be 5 percent lower than a year earlier. Its shares fell more than 1 percent.

• Macy's(M) same-store sales fall 0.8 percent. Macy's Inc on Wednesday reported lower-than-expected sales and profit, citing consumers' limited willingness to spend on non-essentials, leading the department store chain to reduce prices on items. Macy's, which also operates the upscale Bloomingdale's chain, reported net income of $281 million, or 72 cents a share, for the quarter that ended Aug. 3, up slightly from $279 million, or 67 cents per share a year earlier. That was six cents per share less than expected, according to Thomson Reuters I/B/E/S, The retailer said comparable sales and overall sales fell 0.8 percent. Analysts expected comparable sales to be up 2.3 percent.

Bull Radar

Style Outperformer:

• Small-Cap Value -.25%

Sector Outperformers:

• Gold & Silver +4.39% 2) Steel +.81% 3) Biotech +.39%
  

Stocks Rising on Unusual Volume:

• WAGE, HMIN, JKS, GDP, TTM, AG, PAAS, ZLC and IMGN

Stocks With Unusual Call Option Activity:

• 1) PAYX 2) BRCD 3) CREE 4) XLU 5) M
  

Stocks With Most Positive News Mentions:

• 1) TXN 2) MRVL 3) SCHW 4) DE 5) PGR
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume