Trading Links

BNO Breaking Global News of Note

Google Top Stories

Bloomberg Breaking News

Yahoo Most Popular Biz Stories

MarketWatch News Viewer

Briefing.com In Play

SeekingAlpha Market Currents

WSJ Today’s Markets

Briefing.com Stock Market Update

Stocks On The Move
Upgrades/Downgrades

WSJ Data Center

Markit CDS Market Summary

Commodity Futures

StockCharts Market Performance Summary

Morningstar Style Performance
Sector Performance
NYSE Unusual Volume
NASDAQ Unusual Volume
Hot Spots
Option Dragon
NASDAQ 100 Heatmap
Chart Toppers
CNBC Real-Time Intraday Quote/Chart
HFR Global Hedge Fund Indices

Wednesday Watch

Late-Night Headlines
Bloomberg:

- U.S. Senate Majority Leader Harry Reid wouldn’t commit to passing a U.S. health-care overhaul this year, fueling concern among some Democrats that the debate may continue as the 2010 midterm elections approach. “We’re not going to be bound by any timelines,” Reid told reporters in Washington today after a closed-door meeting of all Senate Democrats. With all 435 House seats and 38 of the Senate’s 100 seats on the ballot next year, some Democrats see risks because opponents of the health plan would have additional time to mobilize and lawmakers might focus more on getting re-elected. “This is a battle against the clock,” said Senator Ron Wyden, an Oregon Democrat. “When you’re in an election year, everything is seen through a different prism.” The legislation, President Barack Obama’s top domestic priority, has been beset by delays in Congress because of Republican opposition and lack of unity among Democrats.

- Satellite photos indicate that Iran has increased production at a uranium mine, underscoring the need for wider UN inspections to determine whether the country is trying to build a nuclear weapon. Evidence of stepped-up activity at the Gchine mine, near the Persian Gulf coast city of Bandar Abbas, is seen in pictures obtained by Bloomberg News and the Washington-based New America Foundation, according to four nuclear analysts who examined the images. The mine could produce enough uranium to craft at least two atomic bombs a year, experts said.

- Euro-region banks are failing to heed the European Central Bank’s calls to lend and credit conditions may not return to levels seen before the financial crisis for three years, Daiwa Securities SMBC Europe Ltd. said. “The commercial banks’ priorities at the moment are focused on shoring up their capital, making sure they can cope with their current and future bad loans.”

- It’s too late, too timid, and comes with too many questions attached. Even so, the U.K. government deserves some credit for finally moving to break up a bloated, failed banking industry. It has done two things that were urgently needed. The banks that were bailed out at such huge cost to the taxpayer will be forced to become more competitive. And they will finally have to curb the bonuses they pay to senior staff. The question now is whether the British break-up plan will provide a template for zombie banks in the U.S., and all the other countries where banking systems were rescued by taxpayers. So far, U.S. President Barack Obama’s administration has dithered. But maybe the U.K.’s action will prompt the U.S. government to stop molly-coddling Wall Street and start protecting consumers and taxpayers instead.

- Walt Disney Co.(DIS) received Chinese government approval to build a theme park in Shanghai as it seeks to boost earnings at its second-largest division. The approval allows Disney and its Shanghai partners to move toward a final construction and operation agreement, the company said in a statement today.

Wall Street Journal:

- Republican Chris Christie, a former federal prosecutor, pulled out a win for the New Jersey governor's race against a deeply unpopular Democratic incumbent whom voters blamed for the state's high taxes and budget woes. The Associated Press called the race for Mr. Christie over incumbent Gov. Jon Corzine just after 10 p.m. With 71% of precincts reporting Tuesday night, Mr. Christie had 50% of the vote to Mr. Corzine's 44%.

- The International Energy Agency next week will make a "substantial" downward revision to its long-term forecast for global oil demand, a person familiar with the matter said, marking the second year running the group has slashed its view of the world's thirst for oil. The forecast of slower growth in oil demand puts the IEA increasingly in a camp of contrarians bucking the popular view that crude demand will grow briskly in a postrecession world. That view holds that long-term demand will grow at a fast clip because of rising emerging-market wealth and consumption in places like China and India. Last year, the IEA shaved 10 million barrels a day off its long-term forecast and projected consumption in 2030 would hit 106 million barrels a day, or about 25% above current levels. It isn't clear yet how that compares with the cuts expected in this year's forecast by the IEA. In the past, the IEA has been criticized for being too optimistic in past projections. Its current stance puts it in line with a growing list of industry analysts taking a more bearish view on future demand. "The rise in global oil consumption over the next 10 years could be minimal," says Mr. Verleger. If demand pessimists are correct, future increases in the price of crude could be damped. Various analyst estimates maintain that the roughly 2% a year average growth rate in world oil consumption seen earlier this decade -- the biggest reason for crude prices hitting a record $147 a barrel last year -- may turn out to be an anomaly and that annual growth in the neighborhood of 0.5% to 1% is more the norm. "There is a market assumption today that we will head back to the old days of rapid oil demand, but we think we are heading into new days," in which the growth in consumption will be more subdued, said Dan Yergin, chairman of IHS Cambridge Energy Research Associates. Deutsche Bank says global demand will peak by 2016 as consumption reaches a top level of around 90 million barrels a day, versus about 85 million barrels a day currently, due to efficiency gains and technology improvements over time in electric vehicles.

- White House Appears to Miscalculate Stimulus Jobs. Recipients' Reports on Use of Federal Funds Reveal Errors; Obama Administration Says It Plans Adjustment to Number. Recipients of the government grants and contracts appear to have made mistakes when estimating the number of jobs that have been saved or created, according to the Journal's review. Some recipients said they were confused by forms that asked how they spent the money. The Obama administration said Friday that spending from the $787 billion stimulus program had directly created or saved about 640,000 jobs through Sept. 30. Republicans challenged the claim, saying there was no concrete way to tally jobs "saved." Less than half the stimulus money has been spent so far. Ed DeSeve, the senior adviser to President Barack Obama on implementation of the stimulus plan, said Tuesday in a statement responding to questions from the Journal that the administration knew the reports were not "100 percent accurate" but that the plan was supposed "to create jobs, not count them."

- A closely watched deal that may help uncork the commercial-property debt market is picking up steam after being threatened by some queasiness by the Federal Reserve, according to people familiar with the matter. The Fed is sending signals that its concerns over the deal are easing, paving the way for the first sale of commercial-mortgage-backed securities, or CMBS, through a major rescue program called the Term Asset-Backed Securities Loan Facility, or TALF. The credit-starved real-estate industry has been hoping that the debt sale by shopping-center giant Developers Diversified Realty Corp. would lead to other CMBS sales. Developers Diversified announced in early October that it had obtained from Goldman Sachs Group Inc. a $400 million loan, which Developers Diversified and Goldman intended to be converted into a CMBS offering through the TALF program. But the Fed, mindful of protecting taxpayers' interest, had shown reservations about financing the deal because it involves just one borrower, according to the people with knowledge of the issue.

- Is it too early to buy condos in Florida? After all, the courts are jammed with foreclosure cases that are likely to keep large numbers of distressed properties flowing back onto the market for years. But Dizengoff Group, a family-owned commodity-trading and real estate company based in Israel, already is in the market. In September, it bought 118 condominium units in a complex called Portofino in Jensen Beach, Fla., for $6.75 million. That works out to $53 per square foot, compared with an average price of $204 when the units were offered by the developer in 2006, says Ronen Saban, the manager of Dizengoff’s office in Boca Raton, Fla. The company plans to rent out the units until the market recovers. “We have no intention of selling any units in the short term,” Mr. Saban says. Dizengoff is looking for more purchases in good locations and aims to buy at less than replacement cost.

- November is starting off with a bang for mergers and acquisitions dealmakers, with 41 announced U.S. deals worth $47.5 billion, according to Dealogic. This compares with November 2008 that had 575 deals worth $19.8 billion. Large Wall Street banks have been the biggest beneficiaries, but some boutique firms are also getting a slice of the action. Large banks such as Goldman Sachs Group Inc. and Barclays Capital and smaller firms such as Evercore Partners have advised on deals this month.

- The Securities and Exchange Commission has recruited Norm Champ, general counsel to a multibillion-dollar hedge fund, to lead its New York examinations group. For the past 10 years, Mr. Champ has run the compliance office for Chilton Investment Co., an adviser with $5 billion in assets under management.

- Lawmakers are adding sweeping exemptions to financial-regulation legislation that would benefit small businesses, a move that is irking some consumer groups and liberal lawmakers who contend that could compromise the effectiveness of the overhaul. Bills currently under consideration in the House exclude thousands of community banks from oversight by the proposed Consumer Financial Protection Agency, and transfer oversight of small investment advisers to state regulators. The latest move came Tuesday, when a House panel voted to exempt small public companies from complying with a provision of the 2002 Sarbanes-Oxley law, which was passed after a series of corporate scandals earlier this decade.

- Because so many people in their teens and early 20s are in this constant whir of socializing—accessible to each other every minute of the day via cellphone, instant messaging and social-networking Web sites—there are a host of new questions that need to be addressed in schools, in the workplace and at home. Chief among them: How much work can "hyper-socializing" students or employees really accomplish if they are holding multiple conversations with friends via text-messaging, or are obsessively checking Facebook?

CNBC.com:

- After looking at the action in transports, investors are wondering if Warren Buffett may have sent the bulls off to the races!

- Bailed-Out US Banks Preparing Pay Bonanza This Year: Study.

- Bitterness, anger and disbelief mixed with betrayal and even resignation are just some of the emotions boiling within Germany following Tuesday's shocking news that General Motors will scrap its sale of Opel. After months of protracted negotiations with a consortium led by Canadian auto parts maker Magna that finally led to GM approving a sale on Sept. 10 backed heavily by unions, the carmaker's board of directors reversed course and voted now simply to restructure Opel "in earnest" itself. GM confirmed the decision made by its 13-member board after a meeting of directors on Tuesday in Detroit, saying that improving business conditions and the strategic importance of Opel to its operations had prompted the move. Opel's labour leaders have agreed to contribute 265 million euros ($388 million) in annual savings as part of a much-needed restructuring plan, but made that contingent on a sale to Magna. "Unfortunately my suspicion seems to been confirmed that the decision to sell Opel to Magna was connected with the elections later that month in Germany," Opel's senior labour leader in Bochum, Rainer Einenkel, told Reuters. Chancellor Angela Merkel and key allies in her conservative party lobbied heavily in Magna's favour ahead of the parliamentary elections on Sept. 27, thinly veiling a threat that no German aid would flow should any other decision be taken.

- Did we witness the silencing of one of the greatest central bankers ever yesterday? Yesterday’s appearance on my show by former Federal Reserve Chairman Paul Volcker raised serious questions whether he is being silenced by the White House.

IBD:

- An ill wind is blowing some good McKesson's (MCK) way. First, San Francisco-based McKesson, the largest health care services company in the U.S., has the contract to distribute swine flu vaccine. Add to that the government incentive for development of health care electronic records, and the company is in good shape to outrun some 2008 setbacks.

CNNMoney.com:

- Mexico did not have an extreme economic makeover, but the global recession was enough to defeat China as the number one place for American assembly-for-export factories, or maquiladoras. "For many companies that want to export to the United States, like the maquiladoras, Mexico's exchange rate will be seen as a stable and permanent advantage and we are going to see much stronger investment flows associated to this industry," said Cesar Hernandez, general director of foreign trade at the Mexican Trade Ministry.

Newsweek:

- After Iran agreed to nuclear concessions on Oct. 1, President Obama said it was a "constructive beginning." But now, U.S. officials and Western diplomats say, Tehran is backtracking. This game of one step forward, two steps back is likely a result of Tehran's continuing power struggle, the officials say. It's also a standard Tehran ploy. "You move them, and then when they go back home, something happens there and they go back to a standstill," says the European diplomat. Secretary of State Hillary Clinton and other U.S. officials say they want to give the Iranians time to resolve internal disputes. Still, says the senior administration official, "it would seem they're trying to turn back the clock."

Politico:

- Republican gubernatorial candidates racked up major wins for the GOP in Virginia and New Jersey Tuesday night, as former Virginia Attorney General Bob McDonnell and New Jersey prosecutor Chris Christie claimed the governor's offices in both key states. As the GOP sought to send a warning shot to Democrats in Washington by scoring big in the 2009 off-year elections, McDonnell told an energetic crowd in Richmond that his victory represented the triumph of a broad new majority. "We had independents and Democrats that came over to support us," McDonnell said. "First and foremost, we are all Virginians and we are all Americans."

The Business Insider:

- Warren Buffett's giant $44 billion Burlington Northen deal (BNI) was conveniently advised by Goldman Sachs (GS) and Evercore partners. In case you forgot, Mr. Buffett has in-the-money warrants for Goldman Sachs shares. The Oracle really knows how to maximize the benefits he can wring from any situation. Combined with a Stanley Works and Black & Decker deal this week, Mr. Buffett's BNI deal has helped Goldman substantially close the gap between it and the #1 dealmaker this year, Morgan Stanley.

Reuters:

- A plurality of Americans see relations with China as the most important globally for the United States, a survey published on Tuesday showed, but more than half of those polled viewed China was an adversary. When asked to characterize China as either an "ally" or an "adversary," 56 percent characterized China as a foe, while only 33 put the country in the ally column, said Ipsos Public Affairs, which conducted the poll for Thomson Reuters.

- Warren Buffett's Berkshire Hathaway Inc (BRK/A) has joined Goldman Sachs Group Inc (GS) in a bid to buy $3 billion in tax credits from mortgage giant Fannie Mae, the Wall Street Journal's website reported, citing people familiar with the matter. On Sunday the Journal reported that Goldman, the largest and most profitable U.S. investment bank, is in talks to buy millions of dollars of tax credits from Fannie Mae. The Treasury Department, which controls Fannie Mae and Freddie Mac after pouring $100 million into the housing-finance giants, may block the sale on the grounds that it wouldn't benefit taxpayers, WSJ said. The sales would come as the public rails against government moves that aid banking giants, which are preparing to lavish big bonuses about a year after receiving trillions in taxpayer rescue funds. Goldman, which received federal bailout money last fall, in particular has come under fire for generating out-sized profits and preparing record bonuses as the economy continues to struggle. Buffett injected $9 billion into Goldman last fall through purchases of preferred stock.

Financial Times:

- When I asked a Chinese academic last December what the main themes of 2009 would be, he named two big problems – the economy and Copenhagen. The economy was pretty obvious. At the time we spoke, there were dark warnings about millions of disgruntled workers roaming the countryside. On Copenhagen, his worry was that as the world’s largest emitter of carbon, China would become the lightning rod for global anxiety about climate change. If the December summit in Denmark collapsed without agreement, he pointed out, the inevitable demonisation of China could begin to threaten its development. Almost a year later, both concerns have faded. China’s economy is growing faster than most, and some factories in the south are already complaining about a shortage of workers. In the frantic round of talks ahead of Copenhagen, meanwhile, China’s negotiators can take comfort from the fact that the real pressure is being felt in other capitals. In truth, China has played its climate cards beautifully. Beijing has been helped by events elsewhere. In its early days, the Obama administration hoped to forge a close partnership on climate change with China that would allow it to nudge Beijing into important new commitments. But with its climate-change bill still languishing in Congress, Washington has little leverage. Todd Stern, US special envoy for climate change, has admitted the two countries will not sign any substantial agreement when President Barack Obama visits Beijing later this month. China has also been quite happy for India to strike a more belligerent tone in climate talks – a role often played by Jairam Ramesh, the Indian environment minister. Both governments feel strongly that the onus of dealing with global warming lies with the rich world. Last week they even signed an agreement to co-ordinate climate-change efforts, which will help them to take a united stance in Copenhagen. But it suits China for India to take a harder line in public. Some activists fear that ChinaBeijing is currently putting in place the next five-year plan for 2011-15 and the word is that local governments have been resisting another 20 per cent improvement in energy efficiency. Observers speculate that the government will instead announce a target to reduce carbon intensity by 20 per cent – with about 13-15 per cent coming from better energy efficiency and the rest from more renewable energy and reforestation projects. Such a reduction in energy intensity is still a big improvement. But it is easy to see the line of attack that other governments might take if such a policy were announced. They could say that under the guise of a new carbon-intensity target, Beijing was actually reducing pressure on its coal-addicted steel mills and power plants to use energy more efficiently. Copenhagen could still provide some uncomfortable moments for Beijing. could start to relax its policies.

- IntercontinentalExchange (ICE), the electronic futures exchange group, said on Tuesday that nearly all new credit default swap contracts would be cleared centrally by the end of the month, fulfilling a key demand from regulators for reducing risk in the over-the-counter derivatives market. ICE has taken a strong lead among exchanges in the race to clear credit default swaps, the OTC contracts widely blamed for aggravating the financial crisis, prompting Congress to demand that most be cleared centrally in order to guarantee the creditworthiness of both sides.

TimesOnline:

- A “supergiant” oilfield under the streets of suburban Baghdad is being prepared to go under the hammer in an Iraqi government auction next month. The East Baghdad oilfield is believed to contain 8.1 billion barrels of crude — more than twice the level of reserves left in the North Sea. It is one of ten oilfields and one gasfield that the Iraqi Government is likely to offer in a second round of bidding from December 11.

Business Standard:
- Cement prices have witnessed the greatest fall of about 5-10 per cent across India in the last two months. Moreover, in western and southern India, where a large amount of new stock is still arriving, the non-trade prices have been cut by 20-30 per cent to Rs 160-180 a bag.

Yomiuri:

- Toyota Motor Corp. raised its global production plan for the current fiscal year to 7 million vehicles from a previous target of 6.67 million.

Macao Daily News:

- Macau’s casino revenue rose 42% in October from a year earlier to $1.25 billion, citing Portuguese news agency Lusa.

Late Buy/Sell Recommendations
Citigroup:

- Reiterated Buy on (AMZN), target $140.

- Reiterated Buy on (AMT), target $48.

Night Trading
Asian Indices are +.25% to +1.75% on average.

Asia Ex-Japan Inv Grade CDS Index 120.50 +3.0 basis points.
S&P 500 futures +.33%.
NASDAQ 100 futures +.22%.

Morning Preview

BNO Breaking Global News of Note

Google Top Stories

Bloomberg Breaking News

Yahoo Most Popular Biz Stories

MarketWatch News Viewer

Asian Financial News

European Financial News

Latin American Financial News

MarketWatch Pre-market Commentary

U.S. Equity Preview

TradeTheNews Morning Report

Briefing.com In Play

SeekingAlpha Market Currents

Briefing.com Bond Ticker

US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Stock Quote/Chart
WSJ Intl Markets Performance
Commodity Futures
IBD New America
Economic Preview/Calendar
Earnings Calendar

Conference Calendar

Who’s Speaking?
Upgrades/Downgrades

Politico Headlines
Rasmussen Reports Polling

Earnings of Note
Company/EPS Estimate
- (BHI)/.35

- (FWLT)/.63

- (WRC)/.76

- (DVN)/.91

- (MMC)/.26

- (BDX)/1.25

- (PHM)/-.83

- (LIZ)/-.22

- (TWX)/.53

- (WCG)/.67

- (CMCSA)/.25

- (XTO)/.84

- (NWSA)/.18

- (ALL)/1.02

- (MCHP)/.25

- (QCOM)/.52

- (MUR)/.99

- (WFMI)/.18

- (PRU)/1.33

- (CSCO)/.31

- (CECO)/.17

- (N)/.00

- (THQI)/-.49

Economic Releases

8:15 am EST

- ADM Employment Change for October is estimated at -198K versus -254K in September.

10:00 am EST:

- ISM Non-Manufacturing for October is estimated to rise to 51.5 versus 50.9 in September.

2:15 pm EST:

- The FOMC is expected to leave the benchmark fed funds rate at .25%.

Upcoming Splits
- None of Note

Other Potential Market Movers
- The weekly MBA mortgage applications report, Challenger Job Cuts report, BOJ Minutes, Keefe Bruyette Brokerage & Market Structure Conference, Goldman Sachs Industrial Conference and the Oppenheimer Health Care Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by financial and technology shares 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 at Session Highs, Boosted by Transportation, Gaming, Commodity, Hospital and Biotech Shares

Evening Review
BNO Breaking Global News of Note

Google Top Stories

Bloomberg Breaking News

Yahoo Most Popular Biz Stories

MarketWatch News Viewer

Briefing.com In Play

SeekingAlpha Market Currents

WSJ Today’s Markets
Today’s Movers
StockCharts Market Performance Summary
WSJ Data Center
Sector Performance
ETF Performance
Morningstar Style Performance
Commodity Futures
S&P 500 Gallery View
Timely Economic Charts
Most Recent Guru Stock Picks
CNN PM Market Call
After-hours Stock Commentary
After-hours Movers
After-hours Stock Quote
After-hours Stock Chart

Stocks Slightly Higher into Final Hour on Less Economic Pessimism, Buyout Speculation, Short-Covering

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Biotech longs and Medical longs. I covered all of my (IWM)/(QQQQ) hedges and some of my (EEM) short this morning, thus leaving the Portfolio 100% net long. The tone of the market is slightly positive as the advance/decline line is about even, sector performance is mostly positive and volume is about average. Investor anxiety is very high. Today’s overall market action is mildly bullish. The VIX is falling -1.75% and is very high at 29.30. The ISE Sentiment Index is about average at 155.0 and the total put/call is above average at .96. Finally, the NYSE Arms has been running above average most of the day, hitting 1.53 at its intraday peak, and is currently .87. The Euro Financial Sector Credit Default Swap Index is rising +.09% today to 68.83 basis points. This index is down from its record March 10th high of 208.75. The North American Investment Grade Credit Default Swap Index is rising +2.06% to 108.09 basis points. This index is also well below its Dec. 5^th record high of 285.99. The TED spread is down -1 basis point to 23 basis points. The TED spread is now down 441 basis points since its all-time high of 463 basis points on October 10th. The 2-year swap spread is rising +7.69% to 36.75 basis points. The Libor-OIS spread is unch. at 13 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is up +1 basis point to 2.05%, which is down 60 basis points since July 7th. The 3-month T-Bill is yielding .04%, which is unch. today. Cyclicals are outperforming substantially today, rising +1.32%. The Transports are surging 4.81% on the (BNI) news. Road & Rail, Gaming, Gold, Oil Service and Coal shares are especially strong, rising 1.75%+. Given the weakness overseas last night/this morning and relative weakness in (XLF) this morning, today’s broad market rebound from morning lows is more impressive. As well, despite weakness in the Semis today on a downgrade, the MS Tech Index is near session highs, rising .1%. A number of key stocks seem to be finding support around their 50-day moving-averages. I have heard several predictions of a 10%+ unemployment rate, which is released on Friday. I will be surprised if it comes in above estimates of 9.9%. I wouldn’t be surprised to see it come in slightly better than estimates. I sense the bears are probably getting a bit impatient with their inability to gain meaningful downside traction over the last couple of days. Nikkei futures indicate a -17 open in Japan and DAX futures indicate an +23 open in Germany tomorrow. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, bargain-hunting, buyout speculation and less economic pessimism.

Today's Headlines

Bloomberg:

- Warren Buffett’s Berkshire Hathaway Inc. agreed to buy railroad Burlington Northern Santa Fe Corp. in what he described as an “all-in wager on the economic future of the United States.” The purchase, the largest ever for Berkshire, will cost the company $26 billion, or $100 a share in cash and stock, for the 77.4 percent of the railroad it doesn’t already own. Including his previous investment and debt assumption, the deal is valued at $44 billion, Omaha, Nebraska-based Berkshire said today in a statement. The railroad’s stock closed yesterday at $76.07.

- India, the world’s biggest gold consumer, bought 200 metric tons from the International Monetary Fund for $6.7 billion as central banks show increased interest in diversifying their holdings to protect against a slumping dollar. The transaction, equivalent to 8 percent of world annual mine production, was the IMF’s first such sale in nine years and propels India to the ninth-biggest government owner globally, according to figures from London-based research company GFMS Ltd.

- Russian stocks entered a correction, with the benchmark Micex Index slumping more than 10 percent from its high in October, as oil declined and concern deepened the withdrawal of stimulus measures will slow the global economic recovery. OAO Rosneft, Russia’s biggest oil company, lender OAO Sberbank and OAO Novolipetsk Steel lost more than 4 percent. The Micex sank 3.8 percent to 1,218.42, with all 30 stocks declining. The gauge has retreated 11.3 percent from its high on Oct. 21, exceeding the 10 percent threshold that defines a so-called correction.

- David Friehling, the accountant for con artist Bernard Madoff, will plead guilty on Nov. 3 for his role in the largest U.S. Ponzi scheme, prosecutors said.

Wall Street Journal:

- In a very early test of President Barack Obama's political influence, two states are choosing whether to continue Democratic rule while voters elsewhere elect a handful of congressmen and big-city mayors. Elected just a year ago, the president has spent a considerable amount of time and energy trying to ensure that Democrats win governor's races in Virginia and New Jersey and pick up a GOP-held congressional seat in upstate New York. In doing so, Mr. Obama raised the stakes of a low-enthusiasm off-year election season -- and risked political embarrassment if any lost. All three could.

- Some of the biggest companies backing the Blu-ray format for high-definition movies are hedging their bets by introducing players that can also show Internet video, which is making surprising inroads in the home-entertainment market. Electronics retailers and manufacturers including Best Buy Co., Samsung Electronics America Inc. and LG Electronics USA Inc. are selling Blu-ray disc players that tap into movies from online rental companies. The devices provide an alternative to pay-per-view cable services.

CNBC:

- The economy and the stock market have very good potential to climb, as the strength of the recovery will surprise many, two market experts told CNBC Tuesday. "I believe we're in a V-shaped recovery that's going to last for one-and-a half, two years," Brian Wesbury, chief economist at First Trust Advisors, told "Squawk Box."

- Former Vice President Al Gore thought he had spotted a winner last year when a small California firm sought financing for an energy-saving technology from the venture capital firm where Mr. Gore is a partner. The company, Silver Spring Networks, produces hardware and software to make the electricity grid more efficient. It came to Mr. Gore’s firm, Kleiner Perkins Caufield & Byers, one of Silicon Valley’s top venture capital providers, looking for $75 million to expand its partnerships with utilities seeking to install millions of so-called smart meters in homes and businesses. Mr. Gore and his partners decided to back the company, and in gratitude Silver Spring retained him and John Doerr, another Kleiner Perkins partner, as unpaid corporate advisers. The deal appeared to pay off in a big way last week, when the Energy Department announced $3.4 billion in smart grid grants. Of the total, more than $560 million went to utilities with which Silver Spring has contracts. Kleiner Perkins and its partners, including Mr. Gore, could recoup their investment many times over in coming years. Silver Spring Networks is a foot soldier in the global green energy revolution Mr. Gore hopes to lead. Few people have been as vocal about the urgency of global warming and the need to reinvent the way the world produces and consumes energy. And few have put as much money behind their advocacy as Mr. Gore and are as well positioned to profit from this green transformation, if and when it comes. Critics, mostly on the political right and among global warming skeptics, say Mr. Gore is poised to become the world’s first “carbon billionaire,” profiteering from government policies he supports that would direct billions of dollars to the business ventures he has invested in.

NY Times:

- A government report released Monday concludes that taxpayers will probably never recoup all — or even close to all — of the $67 billion that the Treasury Department lent to General Motors and Chrysler in the last year to prevent their collapse, Nick Bunkley of The New York Times reports from Detroit. The report, by the Government Accountability Office, estimates that G.M. and Chrysler would need to be worth a combined $121.7 billion, or roughly 30 percent more than their values about a decade ago, for the Treasury to break even on its investments. The report said it already was assuming that $6.4 billion of the money lent to the carmakers before their bankruptcies would not be repaid. “Treasury is unlikely to recover the entirety of its investment in Chrysler or G.M., given that the companies’ values would have to grow substantially above what they have been in the past,” the report said. The companies’ current value and recent financial performance are unknown because neither one is publicly traded. The Treasury hopes to have an initial public offering of G.M. shares as soon as 2010, and a sale of its share in Chrysler would occur after that. It owns 60.8 percent of G.M. and 9.85 percent of Chrysler, whose majority owner is the United Automobile Workers union’s retiree health care trust. But the report expressed concern that a plan to wind down the automotive task force created by President Obama to oversee the carmakers’ rescue would leave the government with insufficient expertise to protect its interests in the companies and to determine how and when to divest its stakes.

Washington Times

- Want to dine with five U.S. senators? Then just drop by Wednesday night and, oh, by the way, bring $30,400. That's what it costs to be a "co-chair" of the Democratic Senatorial Campaign Committee's Women's Senate Network party, thrown by power lobbyist Heather Podesta. "What do you get when you put the minds of key Democratic Women Senators, the brush strokes of Women Artists, the recipes of Women Chefs, and the design of a Woman Architect together in the same house?" Mrs. Podesta said in an e-mail addressed "Dear friends." Who knows? But it will cost you to find out, according to the e-mail, which lays out contributions required for access to the event. "Those people who gave $30,000 have a seat at the table, the dining table with you, and they sit down and they explain to you what they want, what they're concerned about and perhaps even specific legislation they care about," said Craig Holman, a government affairs lobbyist for Public Citizen, a Washington watchdog group.

FINalternatives:

- Having all but liquidated its fund of hedge funds portfolio in the wake of a pay-to-play scandal, New York’s state pension fund plans to pour more than $1 billion into single-manager hedge funds by the end of the year. The $116 billion New York State Common Retirement Fund is in talks with several potential managers, already awarding a $50 million mandate to Stamford, Conn.-based Diamondback Capital, Crain’s New York Business reports.

The Business Insider:

- Beware a surprise economic crash in China. The country is expanding like crazy, and while this may look great in the short term, there are many signs that the country's economic path is unsustainable. The government itself realizes the problem, but must balance the country's bubble concerns with the zealous economic expectations of its population, and most importantly, the massive need for job creation. It's also a huge country and the government has far less control over the economy than it would like to admit.

- Shares of AIG are up almost five percent this morning, even while the broader indexes and many financial stocks are down. So what's going on? There is chatter running between trading desks that the government is preparing to announce a plan to reduce its stake in AIG on very favorable terms.

Detroit News:

- United Auto Workers President Ron Gettelfinger said "fatigue" from givebacks by Ford Motor Co. workers caused them to soundly reject proposed changes to their labor contract. Speaking on Fox Business Network on Tuesday morning, Gettelfinger conceded UAW leaders did a poor job in convincing a majority of the 41,000 Ford workers the latest concessions were a "win-win" for members and the automaker. "We just did not do a good job selling it to our membership," Gettelfinger said. "We underestimated the fatigue, if you will, or the people constantly having to make a decision on a contract," Gettelfinger said. The official results of the vote show 70 percent of production workers and 75 percent of skilled trades workers voted against the proposed changes.

Intrade:

- The odds that Chris Christie wins NJ’s race for governor have risen to 56%.

Rassmussen:

- Voters for the first time are blaming President Obama nearly as much as President Bush for the country’s continuing economic problems. A new Rasmussen Reports national telephone survey finds that 49% still blame the economic situation on the recession that began under Bush. But 45% now say the nation’s economic problems are caused more by Obama’s policies. Just a month ago, 55% pointed the finger at Bush, while only 37% said the policies Obama has put in place since taking office were at fault. These findings had remained largely unchanged since May.

- The Rasmussen Reports daily Presidential Tracking Poll for Tuesday shows that 28% 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 -13 (see trends).

Politico:

- Democrats have blown so many deadlines for getting health reform done this year that insiders are increasingly skeptical they can finish by year’s end — and some even suggest the effort might slip to a new deadline, before the State of the Union address. The discussions are an acknowledgment that with only two months left in the year, Democrats are still a long way from sending a bill to the president’s desk. The House could take up reform on the floor as early as this week, with a good shot at passing something by Veterans Day. But in the Senate, Majority Leader Harry Reid is still wrangling with his moderate members to corral 60 votes just to get the debate started. And on Monday, Reid sent a letter to Republicans acknowledging that he is waiting on the Congressional Budget Office’s cost estimates and analysis to finish drafting a bill. Democrats signaled that those estimates would not be ready this week, casting further doubt on their ability to finish reform this year.

- The tight New Jersey governor’s race, likely the most competitive of the three most closely watched contests in the nation Tuesday, is a rare test of which electoral factor is more decisive — an incumbent’s unpopularity or the structural politics of a state. Gov. Jon Corzine, the Democrat, is seeking a second term with approval ratings in the basement and at a time when the economy is deeply troubled. Yet he’s doing so in a state that has become solidly Democratic and while running against a conservative Republican, Chris Christie, who has his own challenges, not the least of which is an independent candidate whose presence makes it possible for the governor to win without capturing 50 percent of the vote. Here’s POLITICO’s list of five things that will determine if it's disapproval of Corzine or New Jersey’s deep-blue demography that wins the day:

Reuters:

- Liberia may have oil resources of over a billion barrels, with the first well expected to be drilled next year, a senior national oil company official said on Tuesday. Marie Leigh-Parker, NOCAL's senior vice president for administration and finance, said the first well would be drilled by Anadarko Petroleum (APC) next year. "We are hoping to get more than a billion barrels of oil," she told Reuters on the sidelines of an Africa oil conference.

- Governments are unlikely to agree on all the details of a new global climate change deal when they meet in Copenhagen next month, U.N. Secretary-General Ban Ki-moon said on Tuesday. While optimistic that the 192 countries will be able to reach some sort of political agreement, Ban warned it would not be the last word on a successor to the United Nations' carbon-cutting Kyoto Protocol. "We need the political will because if there is the political will I am sure that there is a political way that we can conclude a binding agreement in Copenhagen," he said after talks with British Prime Minister Gordon Brown in London. Rich and poor nations are divided over how to share cuts in greenhouse gas emissions and over the amount of money developing countries need to adapt to global warming and how to raise it. Speaking later at a conference on religion and the environment near London, Ban urged rich states to take the initiative. "First and foremost, the developed countries should lead this campaign, considering all these historic responsibilities and also considering that they are the countries that have most of the capacities -- financial and technological," he said. In a sign of the divisions to be overcome, African nations boycotted U.N. climate talks in Barcelona on Tuesday in a protest to urge rich countries to set deeper 2020 cuts in greenhouse gas emissions.

- Ford Motor Co(F) said on Tuesday its U.S. sales in October rose 3 percent and it gained market share due to strong demand for cars and crossover vehicles. "Consumer demand for our new ... products is driving Ford's market share gains," Ken Czubay, Ford's U.S. sales chief, said in a statement. At the end of October, Ford officials were unsure whether October sales would finish up or down, but several analysts had forecast a decline.

- New orders received by U.S. factories rose a stronger-than-expected 0.9 percent in September, while inventories continued to shrink, the Commerce Department said on Tuesday in a report suggesting manufacturing activity is feeding the economic recovery. It was the fifth month out of six that orders rose, the department said. Inventories have now fallen for 13 months in a row, with factories paring their stocks by 1 percent in September. This is the longest streak of shrinking inventories since they fell 15 months in a row beginning in February 2001. While factories cut inventories more sharply in September than in August or July, the Commerce Department said last week inventory liquidation by all businesses slowed in the July through September period, adding nearly a percentage point to the increase in third-quarter Gross Domestic Product. In September, machinery, which makes up roughly 7 percent of factory orders, had the largest surge of 7.9 percent in its biggest increase since March 2008.

- Polo Ralph Lauren Corp (RL) posted a quarterly profit far above Wall Street estimates and strengthened its full-year revenue outlook, as demand for its fashions picked up as the quarter progressed. The maker of clothing brands such as Ralph Lauren, Chaps and Club Monaco saw its shares rise 2.6 percent as investors hoped results indicated more sustainable demand. "I am of the opinion the customer has begun to move back into a more balanced point of view," Chief Operating Officer Roger Farah said on a conference call. "Those that have money are beginning to spend it again."

- Small businesses would be granted a permanent reprieve from complying with part of the Sarbanes-Oxley corporate reform laws, under a draft U.S. House of Representatives bill discussed on Tuesday. Small companies have not had to comply fully with the rules since the Sarbanes-Oxley law was approved in 2002 in response to the Enron and WorldCom corporate scandals. Companies with a market capitalization below $75 million have argued that they faced disproportionately higher costs compared with larger companies and have convinced regulators to delay compliance at least five times. The Securities and Exchange Commission is now requiring small companies to report on the effectiveness of their internal controls as of June 15, 2010. But Republicans, hoping to thwart this SEC requirement, introduced an amendment on Tuesday to a House Financial Services Committee draft bill to do just that.

- Institutional investors are going to gang up on "arrogant" hedge funds, a pension fund chairman warned, as investors increasingly press for changes that would link lucrative fees more closely to genuine outperformance. A key complaint of investors has been that while many of them lost money during the financial crisis, hedge fund managers were still able to rake in millions of dollars in fees. Last year, average hedge fund returns were a minus 19 percent. "If they want money from us they will have to offer ... alignment of interests. If hedge funds remain arrogant and not humble, I think money will go elsewhere," Philip Read, chairman of the British Coal Staff Superannuation Scheme, said on Tuesday. "We're increasingly going to gang up against you... Institutional investors are totally disillusioned with funds not delivering what was on the tin," he told the Hedge 2009 conference in London.