Bull Radar

Style Outperformer:
Large-cap Growth (+.87%)

Sector Outperformers:
Hospitals (+3.54%), Telecom (+3.01%) and Internet (+1.55%)

Stocks Rising on Unusual Volume:
ABAX, BRL, IDXX, ABAX, MASI, ATHR, STRA, WINN, CETV, RYAAY, PSYS, ISRG, SOHU, CBST, LPNT, AXYS, BIDU, FISV, AHG, KNM, DEG, CHH and IBA

Stocks With Unusual Call Option Activity:
1) VRSN 2) CCE 3) WHR 4) LIZ 5) MCO

Links of Interest

Market Snapshot Commentary
Market Performance Summary
Style Performance
Sector Performance
WSJ Data Center
Top 20 Biz Stories
IBD Breaking News
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Exchange Volume vs. Average
NYSE Unusual Volume
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Tuesday Watch

Late-Night Headlines
Bloomberg:
- Boeing Co.(BA) and machinists-union leaders agreed on ``tentative'' terms for a contract that if approved by members would end the third-longest strike in the union's 73-year history and reopen the planemaker's shuttered factories. The agreement for a four-year contract, rather than the usual three years, would provide job security for machinists ``and limit the amount of work outside vendors can perform in the workplace,'' the International Association of Machinists and Aerospace Workers said in an e-mailed statement today.

- The euro dropped to its lowest in more than two years against the dollar on speculation European interest rates will slide as recession looms.

- Investors should sell the Australian dollar against the greenback as the currency is likely to extend this year’s record declines because a weaker Chinese economy will sap demand for raw materials, RBC Capital Markets said. China’s economic growth may slow to 8% in the fourth quarter, after growing by a weaker-than-expected 9% in the three months ended Sept. 30, “exerting further downward pressure on commodities prices,” Trinh wrote.

- SAP AG(SAP), the world's biggest maker of business-management software, withdrew its 2008 sales forecast and lowered its margin projection, citing the economic slump.

- Japanese Finance Minister Shoichi Nakagawa said restrictions on short-selling of shares will take effect today to bolster the stock market.

- The European economy's close ties to emerging markets are turning from a blessing to a curse. Already skirting recession, the 15 euro nations face greater pain as economies which gave them an edge over the U.S. and Japan falter. Trade partners to the east, that buy about a third of the region's exports, are faltering as their banks weaken and currencies slide. Meanwhile, the halving of oil prices is slowing demand from the Middle East.

- Hong Kong's retail rents, declining since the third quarter, will probably drop further as the city's slowing economy dents consumer spending, real estate agents said. Rents at malls and street-level shops, down 10 percent from their peak earlier this year, may slide 10 percent more by the second quarter next year, said Pierre Wong, chief executive officer at Midland IC&I Ltd., the commercial property arm of the city's biggest publicly traded real estate agency.

Wall Street Journal:
- Electronics manufacturers and retail chains are slashing prices of Blu-ray players in a bid to boost adoption of the high-definition movie format, which has yet to catch on with American consumers.

- Republican John McCain promised Monday to break with President Bush's policies on the economy and put a tight lid on government spending. Flanked by some of his economic advisers, the Republican presidential candidate bashed Democratic rival Barack Obama, but also made clear he would steer a different course than the current GOP administration.

- The seemingly unstoppable rise of the Japanese yen is raising the prospect that, for the first time in years, the Japanese government could intervene to stifle its surge.

CNBC.com:

- A fast and furious as the crude oil market selloff has been, it's far from over, says one expert. "The pendulum does swing much faster than we give it credit for," says Peter Beutel of Cameron Hanover. Beutel says $37 a barrel is likely, even $20 a barrel isn't out of the question. (video)

CBS 2 TV:
- Todd Rokita, Indiana secretary of state, is asking federal, state and local prosecutors to open an investigation into alleged fraudulent voter-registration applications. Rokita said many registration applications filed by the Assoc. of Community Organizations for Reform Now, or Acorn, have indications of fraud, forgery or incomplete information.

IBD:

- Green Mountain Coffee Roasters(GMCR): Tully Deal Should Give Coffee Maker’s West Coast Push A Nice Jolt.

Reuters:

- The average U.S. retail gasoline price fell 26 cents over the last week to $2.66 a gallon, the cheapest pump price since March 2007, the Energy Department said on Monday. In addition to cheaper motor fuel, falling crude oil is also lowering heating oil prices, which will save consumers on their heating bills this autumn and winter.

TimesOnline:
- A new front is opening up in the battle between London and New York to be the world's dominant financial centre. Hedge funds, and the thorny question of where they decide to do business over the coming months, could mark a turning point in the delicate balance of power between the two market capitals. Despite widespread fears that hundreds of funds are poised to collapse, any shake-out in the industry will still leave hundreds of healthy firms with billions to invest. Experts say that some of the industry's biggest funds are considering whether to move billions of dollars worth of assets across the Atlantic to the United States in the wake of the collapse of Lehman Brothers, the Wall Street investment bank.

AFP:

- John McCain renewed his bid to paint Barack Obama as a "socialist" Monday, saying remarks made by his rival in a 2001 interview proved he was hellbent on large-scale redistribution of wealth. In the interview, which surfaced on the Internet over the weekend, Obama discussed the failure of the civil rights movement to achieve "redistributive change" -- comments seized upon by McCain. "In a radio interview revealed today, he said that one of the quote -- 'tragedies' of the civil rights movement is that it didn't bring about a redistribution of wealth in our society," McCain said. "That is what change means for Barack the Redistributor: It means taking your money and giving it to someone else," he told a crowd of around 2,000 at a sports hall in this key battleground state.

Straits Times:

- Singapore’s construction industry will be hit by the global financial crisis as more developers delay their projects, citing the city-state’s contractors’ association.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (EQT), target $38.

- Reiterated Buy on (RIGL), target $32.

- Upgraded (PHM) to Buy, target $11.

- Reiterated Buy on (HUM), target $38.

- Reiterated Buy on (VECO), target $13.

Night Trading
Asian Indices are -5.0% to -.50% on average.
S&P 500 futures +.50%.
NASDAQ 100 futures +.24%.

Morning Preview
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Earnings of Note
Company/EPS Estimate
- (IPG)/.06

- (MAS)/.18

- (TIN)/.05

- (X)/6.96

- (SII)/.97

- (SCHN)/2.53

- (MSO)/.00

- (MHP)/1.23

- (HMA)/.08

- (RCL)/1.67

- (EL)/.23

- (VLO)/1.45

- (WHR)/1.69

- (BYD)/.19

- (UA)/.50

- (OXY)/2.71

- (MCK)/1.06

- (CEPH)/1.23

- (BXP)/1.21

- (APOL)/.68

- (CTX)/.95

- (DRIV)/.46

- (ADVS)/.17

- (FLS)/1.73

Economic Releases
9:00 am EST

- The S&P/CaseShiller Home Price Index for August is estimated at 165.0 versus 166.2 in July.

10:00 am EST

- Consumer Confidence for October is estimated to fall to 52.0 versus 59.8 in September.

Upcoming Splits
- (BKE) 3-for-2

Other Potential Market Movers
- The weekly retail sales reports, Richmond Fed Manufacturing Index, BIOCOM Investor Conference, Sidoti Emerging Growth Forum, (DPZ) analyst meeting, (PFE) analyst meeting, (PFWD) analyst meeting and (PLL) analyst meeting could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by technology and financial stocks in the region. I expect US equities to open lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

Stocks Finish at Session Lows, Weighed Down by Airline, Commodity, I-Bank, Hospital, HMO and REIT Shares

Evening Review
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PM Market Call
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In Play

Stocks Lower into Final Hour on Global Growth Worries and Earnings Concerns

BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Medical longs, Computer longs and Internet longs. I covered some of my (IWM)/(QQQQ) hedges and some of my (EEM) short and then added back (IWM)/(QQQQ) hedges today, thus leaving the Portfolio 75% net long. The tone of the market is negative as the advance/decline line is lower, sector performance is mixed and volume is about average. Investor anxiety is very high. Today’s overall market action is mildly bullish. The VIX is falling 6.0% and is historically elevated at 74.43. The ISE Sentiment Index is low at 121.0 and the total put/call is above average at 1.08. Finally, the NYSE Arms has been running above average most of the day, hitting 2.32 at its intraday peak, and is currently .93. Nikkei futures indicate an +218 open in Japan and DAX futures indicate a -23 open in Germany tomorrow. I expect US stocks to trade mixed-to-lower into the close from current levels on more shorting, global growth worries and earnings concerns.

Today's Headlines

Bloomberg:
- The cost to protect against default by U.S. insurers including Prudential Financial Inc. and Hartford Financial Services Group Inc. dropped the most in two weeks as the Treasury considered taking stakes in the industry. Credit-default swaps on Newark, New Jersey-based Prudential plunged 321 basis points to 538 basis points, according to CMA Datavision. Contracts on Hartford fell 230 to 440 and New York- based MetLife Inc. declined 120 to 446. The Markit CDX North America Investment Grade Index, linked to the bonds of 125 companies in the U.S. and Canada, fell 2.5 basis points to 222.5 basis points as of 9:22 a.m. in New York, according to broker Phoenix Partners Group.

- Investments in funds tracking the Dow Jones-AIG group of commodity indexes plunged $20 billion, or 36 percent, in the third quarter amid financial market turmoil and concerns the global economy may fall into a recession. About $35 billion tracked the commodity indexes at the end of the third quarter, Dow Jones said today in an e-mailed statement. That compares with $55 billion at the end of the second quarter as the index surged toward a record on July 3. ``It's been a bloodbath for commodities and that looks set to continue,'' said William O'Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey. ``There's been a big movement out of these markets.'' The ``tidal wave'' of funds flowing into commodities early this year has collapsed as the global growth outlook deteriorated, Citigroup Inc. said last month. Investors pulled $525 million from commodity and energy funds in the week ended Oct. 22 as ``recessionary fears took their toll,'' money-flow researcher EPFR Global said on Oct. 24.

- European Central Bank President Jean-Claude Trichet said he may cut interest rates next week, less than a month after slashing the key rate by half a point, as the financial crisis intensifies.

- Sales of new houses in the U.S. were unexpectedly rising before credit markets froze this month, having rebounded from a 17-year low thanks to a drop in prices. Purchases increased 2.7 percent in September to an annual rate of 464,000 from 452,000 the prior month that was less than previously estimated, the Commerce Department said today in Washington. builders cut inventories at a record pace. The number of homes for sale fell to a seasonally adjusted 394,000, the fewest since June 2004. The 7.3 percent decline from August was the biggest since record keeping began in 1963. The supply of homes at the current sales rate fell to 10.4 months' worth from 11.4 months.

- Fifteen regional U.S. banks, including SunTrust Banks Inc. and Capital One Financial Corp., accepted at least $34 billion in government cash as the Treasury rolled out the second half of its $250 billion package to shore up lenders and thaw frozen credit markets. Treasury Secretary Henry Paulson is doling out cash to recapitalize struggling lenders and jump-start takeovers.

- Emerging-market stocks dropped to a four-year low as Ukraine and Hungary became the latest countries to receive help from the International Monetary Fund and concern deepened that the global economy will fall into a recession. Equity indexes in the Philippines and Romania tumbled more than 6 percent, while Brazil, Colombia and other Latin American stock markets declined as commodity prices headed for their worst month in at least 38 years.

- The same tumbling oil prices that led OPEC to slash output last week threaten to send Venezuela's economy into a tailspin, and put an end to President Hugo Chavez's ambitions to expand his socialist revolution at home and abroad.

Wall Street Journal:

- Already struggling from the industry's worst stretch in decades, most of the largest U.S. newspapers saw a decline in print circulation in the six months through September, according to industry estimates of data the Audit Bureau of Circulations is releasing Monday.

CFO.com:

- The Incredible Shrinking Funds. High borrowing and the credit crisis are bad enough for hedge funds. Panicky clients are worse.

Wealth Bulletin:
- Hedge fund fees under fire as performance dives. “Two and twenty” are three words that have been music to the ears of hedge fund managers for decades. But this magical formula for fees is under intense pressure as performance collapses, and is set for the same upheaval that is facing the rest of the industry.

Reuters:
- New York City is exploring putting some of its pension fund of more than $100 billion (64 billion pounds) into U.S. infrastructure funds and whether this is "a good time" to invest in hedge funds, Comptroller William Thompson said on Friday. One impetus for considering such stakes now is the losses seen in the shares of companies the fund owns, the Democratic comptroller said in an interview on CNBC television.

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Valor Economico:

- Vehicle sales in Brazil have fallen 10% this month compared with the same period in September.

Yediot Ahronot:
- Hamas is planning a major attack inside Israel and has smuggled motorbikes into the Gaza Strip for this purpose.

National:

- The hotel occupancy rate in the Middle East fell 5.3% in September to 63% as the number of visitors declined because of the global credit crisis, citing a report from Smith Travel Research Inc.

Bahrain News Agency:

- Bahrain has set its national budget for the next two years with an estimated oil price of $60 a barrel.