Tuesday Watch

Late-Night Headlines
Bloomberg:
- China’s government said an outbreak of avian influenza occurred in the eastern province of Anhui.
- Hurricane Wilma headed into the Atlantic Ocean after its path across southern Florida knocked down trees and power lines and flooded low-lying areas.
- Rosa Parks, the black woman whose 1955 arrest for saying “no” to an order to giver her bus seat to a white man served as a catalyst for the US civil-rights movement, died at the age of 92.

Wall Street Journal:
- Telefon AB LM Ericsson plans to buy Marconi’s telecommunications network-equipment unit for $2.12 billion.
- Wyeth asked the US to look into the sale and marketing of combinations of plan-based hormones to relieve menopause symptoms.

China Daily:
- Nokia Oyj plans to sell low-priced mobile phones in rural China to tap the country’s less-developed regions.

Japan Metal Daily:
- Chinese steelmakers such as Anshan Iron & Steel Group are cutting prices in Japan to try to sell more steel amid a slumping domestic market.

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on RE and EBAY.
- Reiterated Underperform on TCO.

Night Trading
Asian Indices are +.25% to +1.0% on average.
S&P 500 indicated -.09%.
NASDAQ 100 indicated -.22%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
AMZN/.10
AMTD/.22
AV/.17
BLS/.46
EAT/.47
BNI/1.00
CKFR/.39
CME/2.21
CHIR/.45
CB/.44
COH/.25
CA/.24
ESV/.47
FFIV/.38
FLEX/.19
HCA/.61
LM/.96
LXK/.47
LMT/.90
NOC/.69
JOE/.57
SWK/.86

Upcoming Splits
- None of note

Economic Releases
10:00 am EST
- Existing Home Sales for September are estimated to fall to 7.20M versus 7.29M in August.
- Consumer Confidence for October is estimated to rise to 88.0 versus a reading of 86.6 in September.

BOTTOM LINE: Asian indices are higher, boosted by exporting companies in the region. I expect US equities to open mixed and to rise modestly later in the day. The Portfolio is 100% net long heading into the day.

Evening Review

Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play

Stocks Higher Mid-day on Choice of Bernanke as Next Fed Chairman

Indices
S&P 500 1,193.41 +1.17%
DJIA 10,331.35 +1.14%
NASDAQ 2,103.02 +1.0%
Russell 2000 642.23 +1.50%
DJ Wilshire 5000 11,915.14 +1.21%
S&P Barra Growth 573.84 +.95%
S&P Barra Value 615.44 +1.39%
Morgan Stanley Consumer 583.97 +1.10%
Morgan Stanley Cyclical 699.99 +1.92%
Morgan Stanley Technology 502.23 +.92%
Transports 3,715.24 +2.53%
Utilities 393.47 +1.76%
Put/Call .77 -23.0%
NYSE Arms .62 -52.18%
Volatility(VIX) 15.39 -4.59%
ISE Sentiment 206.00 +47.14%
US Dollar 89.94 -.41%
CRB 320.23 -.71%

Futures Spot Prices
Crude Oil 60.10 -.87%
Unleaded Gasoline 160.00 -2.43%
Natural Gas 12.90 +.22%
Heating Oil 181.75 -2.63%
Gold 468.60 -.09%
Base Metals 131.97 +.54%
Copper 177.80 -.84%
10-year US Treasury Yield 4.45% +1.59%

Leading Sectors %
Steel +4.18%
Coal +3.84%
Oil Tankers +3.43%

Lagging Sectors
Disk Drives +.26%
HMOs +.26%
Hospitals -1.04%

BOTTOM LINE: The Portfolio is substantially higher mid-day on gains in my Internet longs, Medical longs, Airline longs and Retail longs. I added to my NTES and BRCM longs and existing shorts this morning, thus leaving the Portfolio 100% net long. The tone of the market is positive as the advance/decline line is substantially higher, sector performance is positive and volume is below average. Measures of investor anxiety are lower. Today’s overall market action is positive considering the rise in long-term rates. In my opinion, Ben Bernanke is the best choice for the position of next Fed Chairman. He is one of the few candidates that understands the extent of global deflationary forces on the US economy. I expect these forces to reassert themselves during the next economic slowdown. I expect US stocks to trade mixed from current levels into the close as short-covering offsets profit-taking.

Today's Headlines

Bloomberg:
- On the site of a former oil exchange built during Calgary’s first energy boom almost a century ago, EnCana Corp. plans to build Canada’s tallest office tower in almost two decades.
- Cendant Corp. will split into four parts and said fourth-quarter earnings won’t meet previous forecasts.
- Mittal Steel won an auction today for Ukraine’s biggest steelmaker Kryvorizhstal with a bid of $4.8 billion, allowing it to increase production capacity and cutting its dependence on coal and iron ore producers.
- Europe can control bird flu and prevent the disease from spreading as it has in Asia, the World Health Organization said.
- Global growth in oil demand may slow because Hurricane Katrina and Rita touched a “demand nerve,” prompting people to buy more fuel-efficient cars, seek out alternative energy sources and step up conservation, said Daniel Yergin, chairman of Cambridge Energy Research Associates.
- Hurricane Wilma crossed southern Florida today, knocking down trees and power lines and flooding low-lying areas on a path to Atlantic Ocean. The storm may cause $2 billion to $6 billion in damages, less than two of the four to hit the state last year.
- President Bush is expected to name White House economic adviser Ben Bernanke later today to succeed Alan Greenspan as Federal Reserve chairman.
- Oil, gasoline, and heating oil fell as Hurricane Wilma passed over Florida, missing refineries along the Gulf of Mexico.

Wall Street Journal:
- Computer Sciences may receive a takeover offer from a group of private-equity firms.
- The US Federal Trade Commission is likely to delay approval of a planned fusion of Boeing’s and Lockheed Martin’s rocket programs for the US government.
- Starwood Hotels & Resorts Worldwide, and HCA Inc. are among US companies that have announced stock buybacks at the same time they send back to the US profit earned overseas, under a special one-year tax break.
- UnitedHealth Group is at the forefront of a health care plan based on the idea that people will choose the best care at the lowest price if they have to pay more of the cost themselves.
- Insurance programs set up by Florida, Louisiana, Mississippi and other states to help owners rejected by private companies face higher rates after the unusually large number of hurricanes prompted a surge in claims.
- Tenet Healthcare, the second largest US hospital chain, plans to invest “hundreds of millions” of dollars to rebuild facilities and repair its central New Orleans hospital damaged by Hurricane Katrina.
- Venture capitalists spent $2.56 billion on Internet startups in the quarter ended Sept. 30, up 37% over the same period a year ago.

NY Times:
- The insolvency filing of Refco Inc., the US futures brokerage, was precipitated by a recently hired employee in the controller’s office, who asked why an interest payment that was larger than usual had been made to the company on an outstanding loan.
- Wal-Mart Stores plans to offer more affordable health insurance for its workers.
- The Bush administration is asking China and Central Asian government to deny airspace to flights the US suspects of carrying weapons technology to or from North Korea.

Economic Releases

- None of note

Links of Interest

Market Snapshot
Detailed Market Summary
Market Internals
Economic Commentary
Movers & Shakers
IBD New America
NYSE OrderTrac
I-Watch Sector Overview
NYSE Unusual Volume
NASDAQ Unusual Volume
Hot Spots
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Option Dragon
Real-time Intraday Chart/Quote