Bull Radar

Style Outperformer:

Large-cap Growth (+.11%)

Sector Outperformers:

Telecom (+1.64%), Oil Service (+1.57%) and Steel (+.48%)

Stocks Rising on Unusual Volume:

EOG, ROSE, PT, WFT, DWSN, BVN, T, NG, MKTX, NDAQ, SEAB, CVA, BRKR, HURC, VISN, MIDD, DBRN, GTLS, CTRP, XNPT, ULBI, SGMO, VTIV, NFLX, VMED, JAKK, MANT, LEAP, ACAP, BLOG, CRZO, LIFC, HSP, FRE and UHT

Links of Interest

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Thursday Watch

Late-Night Headlines
Bloomberg:
- Salesforce.com(CRM), the biggest seller of Internet-based customer-management software, reported profit and sales that topped analysts’ estimates after it added about 2,900 customers. The shares jumped 10% in after-hours trading.
- Flowserve Corp.(FLS) rose 9%, the most in more than five years in extended trading, after forecasting full-year earnings that topped analysts’ estimates.
- Dress Barn(DBRN) jumped 13% in after-hours trading. The NY-based retailer with more than 1,400 women’s clothing stores said that it earned .09/share in the fiscal second quarter versus analysts’ estimates of .06/share.
- Crude oil fell from a record after a government report showed that US inventories increased a seventh week. “Crude-oil inventories are starting to look very healthy and gasoline inventories are tremendous,” said Michael Lynch, president of Strategic Energy & Economic Research. “Demand is awful and there’s a lot of oil that’s on its way here. There is going to be serious downward pressure on this market within a few weeks.” Gasoline stockpiles rose 2.35 million barrels to 232.6 million barrels, the 16^th straight gain. Inventories of the motor fuel are the highest since 1994 and 17% above the five-year average.
- Baidu.com Inc.(BIDU) rose the most in a month on speculation the company may have acquired web browser Maxthon.
- Sanyo Electric rose the most in a week in Tokyo trading after the Nikkei newspaper reported Japan’s largest oil refiner agreed to distribute its solar-power panels to homes nationwide.
- Yahoo! Inc.(YHOO) said Microsoft’s(MSFT) unsolicited takeover bid has been a distraction to management and may require “significant” time and resources to review. The offer has also created uncertainty for employees, which may make it difficult to keep and hire new people, Yahoo said.
- NYC will require its 10,000 private limos to switch to hybrid models over the next five years, city taxi officials said.

Wall Street Journal:
- Bernanke Hints at More Rate Cuts Amid Multiple Economic Risks.

MarketWatch.com:
- Japan’s industrial output fell 2% in January from the previous month, led by a decline in the production of large passenger cars, memory chips and digital cameras.
- AIG seen easily absorbing mark-to-market hit. Insurer’s an ‘unsinkable ship,’ Friedman Billing Ramsey analysts say.
- Cerberus Capital Management may join a group of banks that are planning to help inject new capital into Ambac Financial(ABK) as the bond insurer tries to avoid losing its crucial AAA rating, CNBC reported.

BusinessWeek.com:
- Google(GOOG): Are Ad Concerns Overblown?
- Obesity Drugs: Worth a Weighty Investment.

CNNMoney.com:
- Google shares recover from sell-off. Analysts rise to the Internet search giant’s defense.

SmartMoney.com:
- Since becoming chief investment officer of Texas’ $100 billion-plus Teacher Retirement System in 2006, Britt Harris has been out front, guiding the pension plan into investments like hedge funds, private equity and real estate.

IBD:
- Atheros(ATHR) Maps Out Its GPS Chip Move.
- Netflix(NFLX) Dazzles As Competition Thins.

Reuters:
- Apple Inc.(AAPL) affirmed on Wednesday its iPhone sales goal for this year and said it will give details next week of how outside programmers can create software for its iPhone, a move expected to spur demand for the multifunction device. The shares surged another 3.5% in after-hours trading.
- Short interest on the Nasdaq rose another 4.9% in mid-February. Short interest soared more than 25% in shares of Microsoft(MSFT) and 30% in shares of Yahoo(YHOO). Short interest also jumped 49% in share of (DRIV), 26% in (GRMN), 37% in (CDNS) and 43% in shares of (VRSN).
- Sovereign funds, Cerberus eye bond insurer stakes.

Financial Times:
- This month is set to become the first February since 1992 in which IPOs were less than those of traditionally slow January. The value of cancelled or postponed deals is the highest on record for the first two months of any year, according to Thomson Financial.
- Private equity firms are now approaching sovereign wealth funds for loans for big leveraged acquisitions, filling the gap left by investment banks struggling with the credit squeeze, leading buy-out bosses said.

TimesOnline:
- The number of new European hedge funds introduced last year dropped to the lowest in at least seven years, citing data provider EuroHedge.

Kuwait Times:
- Saudi, France ink pact to combat terrorism and money laundering.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (UTX), target $86.
- Reiterated Buy on (CRM), raised target to $70.

Night Trading
Asian Indices are -1.0% to +.75% on average.
S&P 500 futures -.35%.
NASDAQ 100 futures +.15%.

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Earnings of Note
Company/EPS Estimate
- (DLM)/.25
- (BRL)/.76
- (OMG)/1.33
- (RDC)/1.18
- (FLR)/1.16
- (TK)/.38
- (SHLD)/3.34
- (SFD)/.22
- (CVC)/.11
- (FRE)/-2.06
- (S)/.18
- (FAF)/.13
- (KSS)/1.30
- (NOVL)/.05
- (GPS)/.34
- (SGMS)/.24
- (NX)/.51
- (HANS)/.39
- (AIG)/.69
- (DELL)/.36
- (CPHD)/-.08
- (OVTI)/.47
- (DECK)/2.26
- (WCG)/1.62
- (BE)/-.43
- (VIA/B)/.83

Upcoming Splits
- (NJR) 3-for-2
- (PRXL) 2-for-1

Economic Releases
8:30 am EST
- Preliminary 4Q GDP is estimated to rise .8% versus prior estimates of a .6% increase.
- Preliminary 4Q Personal Consumption is estimated to rise 2.0% versus prior estimates of a 2.0% increase.
- Preliminary 4Q GDP Price Index is estimated to rise 2.6% versus prior estimates of a 2.6% increase.
- Preliminary 4Q Core PCE is estimated to rise 2.7% versus prior estimates of a 2.7% gain.
- Initial Jobless Claims are estimated to rise to 350K versus 349K the prior week.
- Continuing Claims are estimated to rise to 2785K versus 2784K prior.

Other Potential Market Movers
- The Fed’s Bernanke speaking, weekly EIA natural gas inventory data, (EOG) analyst conference, (CAI) analyst meeting, (ETN) analyst meeting, (DTV) investor day, CSFB Specialty Pharma Conference, CSFB Aerospace/Defense Conference, CSFB Transport/Logistics Conference, Robert Baird Business Solutions Conference, Wachovia Homebuilding Conference, Goldman Sachs Tech Symposium, Pacific Crest Data Center Conference and Keefe Bruyette Regional Bank Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by automaker and financial stocks in the region. I expect US equities to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.

Stocks Finish Slightly Higher, Boosted by Technology, Homebuilding and Financial Shares

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In Play

Stocks Mixed into Final Hour on Healthy Consolidation of Recent Gains

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Internet longs, Computer longs and Alternative Energy longs. I added to my (AAPL) long and took some profits in another long today, thus leaving the Portfolio 100% net long. The overall tone of the market is mildly negative as the advance/decline line is slightly lower, most sectors are declining and volume is about average. Investor anxiety is high, despite today’s mixed performance in the major averages. Today’s overall market action is neutral. The VIX is rising 4.0% today and remains relatively high at 23.0. The ISE Sentiment Index hit a depressed 68.0 and the total put/call hit a high 1.23 today. Finally, the NYSE Arms has been running above-average most of the day. Considering today’s economic data, recent stock gains and fall in the US dollar, today’s action is more impressive. I still think the recent parabolic rise in short interest, high cash levels at most funds, historically bearish sentiment readings and recent technical breakout in the S&P 500 should keep pullbacks relatively mild and short-lived. There looks to be a strong bid now under many market leading stocks that had been under severe pressure during this correction, which is a big positive. IBM’s(IBM) CFO said today that he feels better about their US business now than he did during the fourth quarter. (AAPL) said today that it will host a media event on March 6 and will discuss new iPhone “enterprise” features and release its software developer toolkit. MBIA’s(MBI) CEO said today that he does not expect rating agencies to take action on the companies’ ratings over the next year or longer, which is another large positive. (GS), which has recently been under significant pressure, is trading at session highs, up 4.2%. The 10-year swap spread is falling to 68.8 basis points over Treasuries today, down 13 basis points over the last week. Nikkei futures indicate a -120 open in Japan and DAX futures indicate a -5 open in Germany tomorrow. I expect US stocks to trade modestly higher into the close from current levels on short covering, diminishing bond insurer angst and bargain hunting.

Today's Headlines

Bloomberg:
- Federal Reserve Chairman Ben S. Bernanke signaled the US central bank is prepared to lower interest rates again even amid signs of accelerating inflation.
- US regulators for Fannie Mae(FNM) and Freddie Mac(FRE) removed limits on the companies’ $1.5 trillion mortgage portfolios, bringing an end to a restriction that stifled their ability to provide financing for the housing market.
- The risks to European economic growth are on the ‘downside’ and the inflation rate may rise further because of higher oil and other commodity prices, European Central Bank board member Lorenzo Bini Smaghi said. He said that the US economy would not likely slip into recession.
- Prime Minister Gordon Brown’s plans to increase taxes on wealthy foreigners living in Britain may prompt hedge funds to expand operations abroad instead of in the UK, a poll by accounting firm Phoros Management showed.
- Stony Brook University, part of the State University of New York, received a $60 million donation from hedge fund manager Jim Simons, former head of the schools’ mathematics department.
- High-yield, high-risk loan prices have rebounded as interbank lending rates steadied, according to Bank of America(BAC) analysts. The average price of US leveraged loans rose to 90.45 cents on the dollar yesterday, up from a low of 86.28 on Feb. 7, citing S&P LCD data.
- The US Centers for Disease Control and Prevention recommended all children get vaccinated against influenza, expanding the number of people who should get flu shots by 50%.

NY Times:
- GM(GM) Voices Confidence in Lending Business.
- Now on the Campaign Trail, a Reined-In Bill Clinton.

Philadelphia Inquirer:
- The University of Pennsylvania and Drexel University are in serious talks with the Philadelphia School District to jointly operate two small high schools in University City – the first venture of its kind for the district at the high school level.