Tuesday Watch

Late-Night Headlines
Bloomberg:

- Temperatures in northern China may fall to the lowest in half a century today as the Chinese capital recovers from the heaviest snowfall in almost six decades. Beijing temperatures are forecast to drop to as low as minus 16 degrees Celsius (3.2 degrees Fahrenheit) tonight, according to the China Meteorological Administration. Northern China may have 50-year low temperatures today, China Central Television reported yesterday. The Chinese capital was hit by the heaviest daily snowfall since 1951 on Jan. 3, the official Xinhua News Agency reported.

- Dubai renamed the world’s tallest building in honor of the ruler of Abu Dhabi less than a month after receiving a $10 billion lifeline from the neighboring emirate that defused a financial crisis. The 200-story Burj Khalifa, or Khalifa Tower, was known until yesterday as Burj Dubai. Sheikh Khalifa Bin Zayed Al Nahyan, who has ruled Abu Dhabi since 2004, is also president of the United Arab Emirates.

Wall Street Journal:

- Even for the ETF industry's dominant player, maintaining a big lead on rivals isn't easy when the field is growing. But that is exactly what iShares did in 2009. This exchange-traded-fund brand—which was sold to BlackRock Inc. by Barclays PLC last year—not only maintained but also increased its market share in the ETF business in 2009, the first time it has done so since 2006. At year-end, iShares ETFs held about $373 billion, or about 50.1% of the assets in all U.S. ETFs, according to fund researcher Morningstar Inc. In 2008, iShares had 47.7% of ETF assets in 2008.

- Kia Motors America and Microsoft Corp.(MSFT) are partnering to provide a new system that will allow drivers and passengers to make phone calls and control a car's audio system through voice commands. Called UVO, the hands-free system will be offered in several Kia vehicles by the end of the year.

- Looking to build on the momentum of its iPhone and iPod, Apple Inc.(AAPL) will unveil a new multimedia tablet device later this month, but isn't planning to ship the product until March, say people briefed by the company. While the device's ship date hasn't been finalized and could still change, people briefed on the matter said the new product will come with a 10 to 11-inch touch screen—which would make it closer in size to Apple's line of MacBook laptops than its smart phone. The tablet is expected to be a multimedia device that will let people watch movies and television shows, play games, surf the Internet and read electronic books and newspapers. Though companies like Toshiba Corp. and Hewlett-Packard Co. have introduced Windows-based tablet computers before and Amazon.com Inc. and others sell similarly-sized digital-book readers, people briefed by Apple say the company intends to carve out a new product category. With the new device, Apple wants to change the way consumers interact with a variety of content, these people said. Textbooks and newspapers, for example, could be presented differently through color screens, a touch interface, and the integration of live up-to-the-minute information from multiple sources. As Apple readies a tablet device, the company has also been working on revamping its iTunes service so it can offer people more ways to access and manage their content. Apple acquired music-streaming service La La Media Inc. in December, and it has been in talks with TV networks regarding a monthly subscription service for shows. Though Apple has historically preferred to unveil products when they are ready to ship, analysts believe it wants to show a tablet early before related key patents become public and so it can generate the excitement necessary to convince TV networks to commit to licensing deals. Apple took a similar strategy with the original iPhone when it announced it six months earlier than its ship date in June 2007.

- Less than three weeks after "Avatar" hit theaters, the high-tech science fiction epic is already the most successful movie ever in Russia, with $55.5 million in box-office receipts. In France, the movie has raked in $85.6 million—more money than in any country besides the U.S—while Germans have bought $56.1 million worth of "Avatar" tickets. The movie's resonance with audiences abroad is a crucial propellant behind "Avatar's" ascent to the box-office stratosphere, where it topped the $1 billion mark in ticket sales this past weekend. Two thirds of the total box-office receipts so far have been generated abroad. "Avatar" sold $352.1 million worth of tickets in the U.S. and Canada after 17 days, while its international haul stood at $670.2 million as of the weekend, according to Hollywood.com. Foreign audiences routinely flock to Hollywood "event" movies like the "Harry Potter" series, "The Lord of the Rings" trilogy and the "Pirates of the Caribbean" franchise. Those films also took in about two-thirds of their revenue overseas—underscoring the growing importance of foreign audiences for American studios that have seen their revenue from DVD sales dwindle. In France, "Avatar" is the second-most successful American-made movie in history, right behind 1997's "Titanic"—Mr. Cameron's previous movie. (Four French-made movies have done better than both.) Some moviegoers abroad are drawn to what they see as an anti-capitalist message in the film's plot. In the movie, the villains work for a corporation intent on mining a mineral on a far-off planet, dislocating a population of nature-loving humanoids in the process. The movie's hero, a former Marine, eventually changes sides to lead the inhabitants' fight against the destructive, capitalist Earthlings. The plot line has drawn complaints from some conservative U.S. moviegoers, while the left-leaning French daily Liberation praised Mr. Cameron, the director, as the "galaxy's eco warrior." Francois Eygun, a 19-year-old student in Paris, saw in the film's plot a message about U.S. foreign policy: "With what is happening in Iraq and Afghanistan it is quite relevant."

- Apple(AAPL) is set to announce that it has acquired Quattro Wireless for $275 million, several sources confirmed. The announcement might come as soon as tomorrow, upping the ante in the mobile advertising business significantly. Google (GOOG) recently forked over an astonishing $750 million for AdMob, a Quattro competitor, which Apple (AAPL) had also made a bid to acquire.

- An Arctic blast swept across a large swath of the U.S. on Monday, sending temperatures plunging from Minnesota to Florida and bringing a bone-chilling start to the first workweek of the year. Growers in Florida kept a close eye on citrus groves, concerned that further cold could damage their crops, while icy roads gave children in Arkansas an extra day of winter break.

- The Obama Administration continues to negotiate with the Russians over a new Strategic Arms Reduction Treaty (Start), but one big question is whether it can get the result through the U.S. Senate. A group of Senators is telling the White House that it will have little or no chance of success unless it also moves ahead with nuclear-warhead modernization.

CNBC.com:
- The U.S. Federal Reserve sees a moderate economic recovery continuing in 2010, but needs to keep interest rates "exceptionally low" for an "extended period" to foster job growth, a Fed policymaker said on Monday.

Forbes:

- What's Next For the Virtual Economy.

- Semiconductor Mega-Trends In 2010. Entertainment and communications, energy and health care will be key growth areas for the chip sector.

Washington Post:

- The suicide bomber who killed seven CIA operatives in Afghanistan last week was a Jordanian informant who lured intelligence officers into a trap by promising new information about al-Qaeda's top leadership, former U.S. government officials said Monday. The attacker, a physician-turned-mole, had been recruited to infiltrate al-Qaeda's senior circles and had gained the trust of his CIA and Jordanian handlers with a stream of useful intelligence leads, according to two former senior officials briefed on the agency's internal investigation. His track record as an informant apparently allowed him to enter a key CIA post without a thorough search, the sources said. The bomber, identified as Humam Khalil Abu-Mulal al-Balawi, was standing just outside an agency building on the base on Wednesday when he exploded a bomb hidden under his clothes, killing the seven Americans along with a Jordanian officer who had been assigned to work with him. Six CIA operatives were wounded. The agency has declined to publicly identify the victims, a mix of career officers and contractors with backgrounds ranging from law enforcement to military Special Forces. Details about the suicide bomber's identity provided jarring insight into how a vital intelligence post in eastern Afghanistan was penetrated in the deadliest attack on the CIA in more than 25 years.

CNNMoney.com:

- Google(GOOG) is expected to take a giant leap forward into the smartphone arena Tuesday, with the much-anticipated unveiling of the Nexus One, the first smartphone completely designed by the search leader.

- Small business lending begins to rebound. Small businesses are still struggling to find financing, but for those seeking government-backed loans, the worst may be over. The Small Business Administration's flagship lending program backed 37% more loans in its latest quarter than it did a year ago, at the height of the financial crisis. In the three months ended Dec. 31, the SBA's 7(a) lending program processed 12,393 loans totaling $3.8 billion, according to preliminary data released Monday by the agency. That's a sharp increase from the 9,070 loans, totaling $1.9 billion, processed in the year-earlier quarter.

Business Insider:

- Dow Jones is combining two of its business units: Its consumer media group -- which includes The Wall Street Journal, Barron's and MarketWatch -- and its research tools and news wire services. In a top-management shake-up, Todd Larsen, the former head of consumer business, was named president of the company. Stephen Daintith, Dow Jones' chief financial officer, will take on the additional job of chief operating officer.

- Google's(GOOG) Eric Schmidt has been on Twitter for about a month, and he's yet to take a real liking to it. He's only blasted out eight tweets. So, on the rare occasion that he does send out an update to his 20,993 followers, we like to see what he's talking about. Today he sent out two tweets, one a link to the Op-Ed column from Ross Douthat at the NYT, another to a story that Douthat cited. Douthat's column deals with America's rise through the nineties, its stagnation in the last decade, and its prospects for this decade. Douthat isn't particularly optimistic about what the government is doing:

- Just when it looked like healthcare reform was a sure thing without anything standing in its way... Suddenly the special election in Massachusetts to replace Ted Kennedy is drawing interest among Republicans. There's no facts to suggest that the race is close, but the GOP is definitely motivated, and now David Weigel confirms that Rasmussen will conduct its first poll to see whether challenger Scott Brown can beat Attorney General Martha Coakley. If it's close and it looks like Brown can win it means the 60th vote is in jeopardy, meaning both the GOP and the Democrats will pull out all the stops on this one.

Business Week:

- Emerging-market equity and bond funds closed 2009 with record annual inflows as a recovery from the global financial crisis boosted demand for riskier assets, EPFR Global said. Emerging-market equity funds received $64.5 billion while those investing in developing-nation bonds drew more than $8 billion, also an all-time high, EPFR said, citing initial figures from funds reporting daily and weekly.

- Stockpickers are making bets on which parts of the market could be hot in the coming year. Some corners of tech and health care have caught their attention.

Politico:

- The populist angst aimed at Wall Street banks is already spilling into Senate deliberations on regulatory reform, and a powerful new sentiment — big is bad — is being echoed by liberals and conservatives alike. The anger at the nation’s financial behemoths is taking shape in a variety of ways, most notably in a bill from Sens. Maria Cantwell (D-Wash.) and John McCain (R-Ariz.), who are targeting big financial institutions such as JPMorgan Chase and Citigroup. The bipartisan duo’s bill would reinstate the Depression-era law that built a wall between commercial banking and the riskier activities of investment banking. The separation — originally set up in the Glass-Steagall Act — was repealed in 1999. But reinstating Glass-Steagall has become something of a rallying cry among progressives, as well as some conservatives. They believe that allowing banks to provide all services to all people creates the very sort of “too big to fail” institutions that threatened the stability of the global financial order in 2008. In other words, big is bad. The idea has some powerful backers, including former Federal Reserve Chairman Paul Volcker — a giant in the financial world and also an outside economic adviser to President Obama — who literally has been traveling the world arguing in favor of returning to Glass-Steagall-type restrictions on what trading activities banks can engage in, though not a full return to the Depression-era restrictions.

- The health care debate resumes in earnest on Tuesday after more than a week of quiet following Senate passage of its landmark bill on Christmas Eve. The four relevant House chairmen will meet with Speaker Nancy Pelosi and her leadership team at 1 o'clock in the speaker's Capitol office to start setting the parameters for negotiations with the Senate. Then, Pelosi and House Majority Leader Steny Hoyer (D-Nev.) will head to the White House for an early-evening meeting with President Barack Obama to discuss the final bill, according to Democratic officials. Senate Majority Leader Harry Reid (D-Nev.) and party Whip Dick Durbin (D-Ill.) will participate in the meeting via conference call because neither has returned to Washington from the holiday break.

Rasmussen Reports:

- Voters feel more strongly than ever that Congress is performing poorly and that most of its members are in it for themselves. Fifty-eight percent (58%) of U.S. voters now say Congress is doing a poor job. That’s the highest negative finding since Rasmussen Reports began surveying on the question in November 2006. A new Rasmussen Reports national telephone survey finds that just 12% of voters believe Congress is doing a good or excellent job.

LA Times:

- For car buyers, four words mean the difference between going home in a new sedan or their old clunker: Your loan is approved. They are being uttered more often these days. Consumers are paying less to borrow. Interest rates have been at record lows since last December. Financial firms wrote 5.5 percent more car loans in the third quarter compared with the prior three months, Experian Automotive says. Fourth-quarter figures aren't yet available, but Jesse Toprak, vice president of the auto pricing tracker TrueCar Inc., says December saw an uptick in auto loan approvals for consumers with average or above-average credit as auto finance companies tried to clear out inventory. Paul Taylor, chief economist for the National Auto Dealers Association, said used-car prices also have stabilized due to limited supply, making used-car loans more attractive to banks. The proportion of loans — auto and other — requiring TALF support has declined steadily over the past several months and should continue to fall early this year as the market for securitized loans continues to improve, says Tom Deutsch, deputy executive director of the American Securitization Forum, an industry group that represents those who turn debt into bonds. "It should be relatively easy to wean off TALF," he says. In the meantime, the easier lending market has helped car buyers like Marissa Corbitt, who last month bought her first-ever car with a loan from Nissan's financing arm, NMAC. Corbitt, a 24-year-old accountant from Chattanooga, Tenn., was able to negotiate the cost of her 2010 Rogue down several thousand dollars to about $20,500 after some incentives. She said she was then pleasantly surprised by the interest rate NMAC offered her for the crossover. "Nissan was offering a 2.9 percent APR, so I got that," said Corbitt, whose top-tier credit score helped her case. "It's a good interest rate." George Pipas, Ford Motor Co.'s top U.S. sales analyst, says the industry appears to have passed through its lowest point and is trending toward a slow recovery.

Crain's Chicago Business:

- Citing enormous potential harm to local jobs and industry, Illinois will fight other states that want an immediate shutdown of Chicago-area shipping to keep the voracious Asian carp from invading the Great Lakes. The state is working closely with industry groups and the Illinois Chamber of Commerce to bolster its response, due Tuesday, to lawsuits filed by Michigan, environmental groups and other states seeking an emergency order from the U.S. Supreme Court to close locks on the Chicago Sanitary and Ship Canal.

ScienceDaily:

- An experimental drug currently being tested against breast and lung cancer shows promise in fighting the brain cancer glioblastoma and prostate cancer, researchers at UT Southwestern Medical Center have found in two preclinical studies.

USAToday:

- Property owners at four struggling and bankrupt resorts in Idaho, Montana, Nevada and the Bahamas have filed a $24 billion federal lawsuit against Credit Suisse Group, saying the banking giant gave predatory loans to the resorts' investors as part of a scheme to take over the properties. Property owners at Idaho's Tamarack Resort, the Yellowstone Club in Montana, Nevada's Lake Las Vegas resort and the Ginn Sur Mer Resort in the Bahamas contend that Credit Suisse set up a branch in the Cayman Islands to skirt U.S. federal bank regulations and appraised the resorts at artificially inflated values as part of a plan to foreclose.

Reuters:

- U.S. regional bank SunTrust Banks Inc (STI) is trying to sell RidgeWorth Investments, its multi-boutique asset management business, amid losses due to the financial crisis, people familiar with the matter said on Monday.

- Chinese banks must carefully pace their lending this year because heavy issuance of loans amid industrial overcapacity has created growing credit risks, China's central bank governor Zhou Xiaochuan said in comments seen on Tuesday. Zhou also said that the experience of the international financial crisis showed that it was not enough to simply focus on inflation and that the People's Bank of China considered a wider range of issues in determining its monetary policy, including international balance of payments.

- Speculators increased bets the U.S. currency has room to rise by going long the dollar for a second straight week, according to Commodity Futures Trading Commission data released on Monday.

Financial Times:

- There is an inexorable drive on both sides of the Atlantic to finalise new rules, regulations and laws to place the financial system on a sounder footing. But in their zeal to act, politicians and regulators are looking through the wrong end of the telescope. Too much attention is being paid to maintaining a status quo that allows banks to continue engaging in the full range of activities to which they have become accustomed – admittedly under a number of regulatory constraints – without dealing with the fundamental causes of today’s critical difficulties. Policymakers are intent on announcing all manner of new capital requirements, leverage ratios, “living wills” and directives on risk management, while brushing aside warnings by both Mervyn King, the governor of the Bank of England, and former US Federal Reserve chairman Paul Volcker that our banking system is unsound. Mr King and Mr Volcker are not alone in their concern that we may now miss a unique opportunity to secure core reforms.

- Tiaa-Cref has become the first large US asset manager to sell stakes in four Asian oil groups over concerns about human rights abuses in Sudan, a move that will increase pressure on other investors to sever ties with those companies. Tiaa-Cref, which has more than $400bn (£248bn, €279bn) under management, said on Monday that it had divested holdings in PetroChina, CNPC Hong Kong and Sinopec – three state-controlled Chinese oil companies, and India’s Oil and Natural Gas Corporation.

Telegraph:

- Britain told American intelligence agents more than a year ago that the Detroit bomber had links to extremists, Downing Street has announced. Umar Farouk Abdulmutallab was named in a file of people based in Britain who had made contact with radical Muslim preachers. The file was sent to the US authorities in 2008. The disclosure will embarrass President Barack Obama, who is already under pressure after failures by US intelligence to identify the bomber. It will also add to concern over the state of the “special relationship” between Downing Street and the White House following last year’s dispute over the early release of the Lockerbie bomber. It is extremely unusual for the Prime Minister’s office to comment on intelligence matters. The move could be seen as an attempt to rebuff criticism from senior American figures who claimed that Britain had nurtured Islamic extremism. At first it was thought that MI5 gathered only limited information on Abdulmutallab and had therefore not alerted the US. However, in an official briefing, the Prime Minister’s spokesman said that British intelligence was shared with the Americans. He said: “Clearly there was security information about this individual’s activities and that was information that was shared with the US authorities. That is the key point.”

Evening Recommendations

Citigroup:

- Reiterated Buy on (GLW), raised estimates, boosted target to $24.

- Rated (LEA) Buy, target $85.

Morgan Stanley:

- Rated (QCOM) Overweight, target $57.

- Rated (PALM) Overweight, target $14.

- Rated (MOT) Underweight, target $8.75.

- Rated (RIMM) Overweight, target $90.

Night Trading
Asian indices are +.25% to +1.25% on avg.

Asia Ex-Japan Inv Grade CDS Index 91.50 -3.0 basis points.
S&P 500 futures -.11%.
NASDAQ 100 futures -.08%.

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
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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/Estimate
- (MOS)/.37

- (SONC)/.13

Economic Releases

10:00 am EST

- Factory Orders for November are estimated to rise by +.5% versus a +.6% gain in October.

- Pending Home Sales for November are estimated to fall by -2.0% versus a +3.7% gain in October.

Afternoon:

- Total Vehicle Sales for December are estimated to rise to 11.0M versus 10.92M in November.

Upcoming Splits

- (EBIX) 3-for-1

Other Potential Market Movers
- The Fed's Hoenig speaking, weekly retail sales reports, API energy inventory report, Google "Android Press Gathering" and the ABC Consumer Confidence reading could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by industrial and commodity stocks in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.

Stocks Finish Sharply Higher, Boosted by Commodity, Gaming, HMO, I-Banking and Disk Drive Shares

Evening Review
BNO Breaking Global News of Note

Google Top Stories

Bloomberg Breaking News

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Briefing.com In Play

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After-hours Movers
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After-hours Stock Chart

Stocks Sharply Higher into Final Hour on Less Economic Fear, Diminishing Financial Sector Pessimism, Short-Covering, Technical Buying

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Financial longs, Biotech longs, Retail long, Technology longs, Defense longs and Medical longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is very positive as the advance/decline line is substantially higher, almost every sector is rising and volume is below average. Investor anxiety is high. Today’s overall market action is bullish. The VIX is falling -6.92% and is high at 20.17. The ISE Sentiment Index is above average at 161.0 and the total put/call is below average at .66. Finally, the NYSE Arms has been running below average most of the day, hitting .43 at its intraday trough, and is currently .61. The Euro Financial Sector Credit Default Swap Index is rising +3.12% to 64.11 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 -3.32% to 82.76 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 20 basis points. The TED spread is now down 443 basis points since its all-time high of 463 basis points on October 10^th, 2008. The 2-year swap spread is falling -2.18% to 27.88 basis points. The Libor-OIS spread is unch. at 9 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is unch. at 2.41%, which is down -24 basis points since July 7^th, 2008. The 3-month T-Bill is yielding .05%, which is unch. today. Today’s gains are broad-based. Gaming, HMO, Disk Drive, Steel, Gold, Oil Service, Energy, Oil Tanker, Coal and I-Banking shares are especially strong, rising 2.75%+. (XLF) is trading better today. On the negative side, (IYR) has been a bit heavy throughout the day and market volume is lackluster. (IYR) has been trending lower over the last week. It needs to begin to participate for the market to build meaningfully on recent gains. Nikkei futures indicate an +216 open in Japan and DAX futures indicate an unch. open in Germany tomorrow. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, less economic fear, technical buying, stable long-term rates, buyout speculation and less financial sector pessimism.

Today's Headlines

Bloomberg:

- The cost of insuring against losses on corporate bonds fell on the first trading day of 2010 as investors bet a rebound in Chinese and US manufacturing will help spur recovery in the global economy. The Markiet CDX North America Investment Grand Index fell 2.5 basis points to 82.75, according to broker Phoenix Partners Group prices at 11 am in NY. The Markit iTraxx Crossover Index of credit-default swaps on 50 European companies with mostly high-yield credit ratings dropped 15.5 basis points to 416.5, the lowest since May 2008.

- Barton Biggs, who piled into stocks at the bottom of the global bear market in March, is loading up on the biggest U.S. companies and speculating commodities will drop in 2010. The 77-year-old manager of Traxis Partners LP is buying household-product manufacturers, drugmakers and computer companies on speculation they will prove bargains as earnings surge. The hedge fund, which gained three times the industry average in 2009, is shorting raw materials and says banks will trail the Standard & Poor’s 500 Index for five years. “Big capitalization, high-quality U.S. stocks are very, very cheap compared to everything else,” said Biggs, who cited Procter & Gamble Co. and Johnson & Johnson in a Dec. 29 interview. He called commodities “an investment vehicle for maniacs” that will probably fall in 2010. “I don’t know what’s going to happen in the second half of next year. I’m just saying that in the next three to six months, the economy is going to keep recovering and stocks are going to go up again.”

- Novartis AG offered to buy the rest of Alcon Inc.(ACL), the world’s largest eye-care company, from Nestle SA and minority shareholders for about $39.3 billion, as Chief Executive Officer Daniel Vasella expands into eye surgery. Nestle will sell a 52 percent stake to the Basel, Switzerland-based drugmaker for an average of $180 a share, or a total of $28.1 billion, Novartis said today.

- Cold, windy weather enveloping the U.S. from the northern Plains to the East Coast may continue to break temperature records today. In south Florida, orange growers may escape most crop damage. The National Weather Service issued hard-freeze warnings for last night and this morning for southern Alabama and Georgia and the northern part of Florida, including the panhandle. Such warnings alert growers of temperatures that may fall below 32 degrees Fahrenheit (zero Celsius) for more than three consecutive hours. A low of 20 degrees was forecast for Jacksonville, Florida, overnight, which would break the existing record of 22 degrees, said Dave Samuhel, a meteorologist for AccuWeather.com Inc. in State College, Pennsylvania. Typical temperatures for Jacksonville this time of year are 42 degrees, he said. A cold blast expected next weekend “is supposed to be stronger” than the current weather pattern, Jack Scoville, a Price Group Inc. vice president in Chicago, said in an e-mail yesterday.

- The heaviest snowfall to hit Beijing and Seoul in more than half a century grounded hundreds of planes in the two capitals as temperatures in northern China were set to fall to the lowest in 50 years.

- Charlotte, North Carolina-based Bank of America(BAC) along with Citigroup(C), Morgan Stanley(MS) and Goldman Sachs Group Inc.(GS), all based in New York, added a combined $2.74 billion of the debt, for which there were few buyers as recently as March, to their short-term trading assets during the third quarter, up 13 percent from the second quarter, the most-recent data show. Prices of these securities may slump again, leaving the banks exposed to potential losses that the Treasury Department’s rescue plan was designed to mitigate, said Joshua Rosner, a managing director at New York-based Graham Fisher & Co., which advises regulators and institutional investors. “It’s a trade that will likely work out, but it’s still a speculative trade, which is not what a taxpayer should want from firms that have only recently come out of critical care,” Rosner said.

- Heating oil surged more than 3 percent amid a forecast that weather in the northeast U.S. will remain frigid through the middle of the month, increasing demand for home-heating fuel. The U.S. Climate Prediction Center forecast below-normal temperatures from Texas to Maine from Jan. 9 to Jan. 17. Distillate stockpiles were at the lowest level since July in the week ended Dec. 25, according to the Energy Department. “It’s all about the cold weather up and down the East Coast, which translates into greater demand for heating oil, so I’m expecting distillate inventories to have substantial draws over the next couple of weeks,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

- Crude oil’s rally to a two-month high may sputter around $82 a barrel as the commodity’s relative strength index signals that gains have been excessive, according to technical analysis by MF Global Ltd.

- Total SA, Europe’s third-largest oil company, accelerated its expansion in unconventional energy by agreeing to buy a stake in Chesapeake Energy Corp.’s(CHK) assets in the biggest U.S. natural-gas field for as much as $2.25 billion. Total will pay $800 million for the 25 percent stake and as much as $1.45 billion over as long as six years by funding 60 percent of Chesapeake’s costs in the Barnett Shale formation of North Texas, the companies said today in separate statements. The Barnett field produces about half of all shale gas in the U.S., according to Oklahoma City-based Chesapeake. Shale-gas successes prompted the Potential Gas Committee, a group of industry, academic and government volunteers, to boost its estimate of U.S. gas reserves by 39 percent last year.

- China’s securities regulator may introduce futures contracts on the country’s stock indexes as early as March, an official with knowledge of the matter said.

- Warren Buffett recorded his worst performance against the stock market in a decade last year after committing $26 billion to a railroad takeover and lowering his expectations for investment returns.

- The Internal Revenue Service said it will regulate the tax-preparation industry for the first time, requiring companies including H&R Block Inc.(HRB) and Jackson Hewitt Tax Service Inc.(JTX) to register and pay a fee. The plan, which won’t take effect until at least next year, will require paid tax preparers to pass a competency test and supply an identification number when they file clients’ returns.

- U.S. manufacturing expanded in December at the fastest pace in more than three years, capping a late-2009 global factory rebound that helped pull the world out of the worst slump since the 1930s. The Institute for Supply Management’s factory index rose to 55.9, the highest level since April 2006, according to the Tempe, Arizona-based group. Readings greater than 50 signal expansion. Construction spending dropped for a seventh month, the Commerce Department said in a separate release. “There is a broad-based global manufacturing recovery occurring right now,” said Dean Maki, chief U.S. economist at Barclays Capital Inc. in New York. Maki was the No. 1 forecaster of economic growth from January through September in a Bloomberg News survey. “Manufacturing was picking up speed as we moved into the end of 2009, and we expect growth will be picking up further.” The production index climbed, while the new orders gauge rose to the highest level in five years. The employment index increased to 52 from 50.8, the third straight month of expansion.

Wall Street Journal:

- A veteran value manager is taking another step back from investment decision-making at his firm. Third Avenue Management LLC plans to announce Monday that Martin J. Whitman is relinquishing his role as the firm's co-chief investment officer, leaving protégé Curtis Jensen as the sole investment chief. Mr. Whitman, the firm's 85-year-old founder, will remain co-manager of the flagship Third Avenue Value Fund.

- Financial markets staged a remarkable recovery in 2009, coming back from the brink of disaster thanks to unprecedented rescue efforts by governments around the globe. The question now facing investors is how the markets will stand on their own in 2010.

MarketWatch.com:

- Global semiconductor sales rose 8.5% to $22.6 billion in November compared to a year earlier, a key trade group reported Monday, in a trend that reflects a recovering economy and improved demand for technology products.

- Retail stocks started the first day of trading in 2010 on a positive note as analysts projected December sales likely turned out better than Wall Street initially expected. Bolstered by last-minute shopping heading to Christmas and consumers snatching up post-holiday bargains in the last week of the month, retailers likely made or exceeded their plans for December, their biggest selling month of the year, analysts said.

- Wal-Mart(WMT) new favorite among top-performing advisers.

CNBC:

- Commerce Secretary Gary Locke told CNBC Monday that the US is not in a trade war with China but must enforce fair trade laws no matter the trading partner.

Barron’s:

- Google (GOOG)has gotten the year off to an impressive start, in part thanks to a bullish note this morning from FBR Capital analyst Heath Terry. Terry repeated his Outperform rating, and lifted his price target to $810, from $680. He also moved up his 2010 EPS estimate to $26.16, from $25.59. “We continue to believe that Google is the best-positioned of the large-cap Internet companies, particularly as the advertising environment continues to improve, online gains share of both advertising and commerce dollars, and overall online/mobile consumer activity increases,” he writes in a research note. “Our checks suggest that search advertising is strengthening - gaining share as advertisers return dollars to the highest ROI forms of advertising.” Terry thinks that the company should see “noticeable incremental revenue growth” from the mobile segment by year end.

NY Times:

- Even in the midst of a devastating real estate crash, Dubai pulled out all the stops Monday to celebrate the opening of the world’s tallest building: a rocket-shaped edifice that soars 828 meters, or 2,717 feet, with views that can reach 100-kilometers, or 60-miles.

The Business Insider:

- 10 Blasphemous Trade Ideas That Spit In The Face Of Conventional Wisdom.

- Wow. JP Morgan analyst Imran Khan is really, really optimistic about 2010. Check out his "key investment themes" from his 2010 Internet Sector Outlook:

LATimes:

- Commercial spots for the NFL championship game are nearly sold out. But the Internet is changing the advertising market.

ABCNews:

- President Obama recently named Amanda Simpson to be a Senior Technical Advisor to the Commerce Department. In a statement, Simpson, a member of the National Center for Transgender Equality's board of directors, said that "as one of the first transgender presidential appointees to the federal government, I hope that I will soon be one of hundreds, and that this appointment opens future opportunities for many others." A 2004 YWCA "Woman on the Move," Simpson recently served as Deputy Director in Advanced Technology Development at Raytheon Missile Systems in Tucson, Arizona. At Raytheon, Simpson -- a former test pilot who had worked for the company for more than a generation -- transitioned from male to female and was instrumental in convincing the military contractor to add gender identity and expression to its equal employment opportunity policy. She later ran unsuccessfully for Congress and was a delegate for then-Sen. Hillary Clinton, D-NY, to the Democratic National Convention in 2008.

MacRumors.com:

- In a brief report [Google translation], French site Mac4Ever claims that Apple's special media event now reportedly scheduled for January 27th will see both the introduction of the company's much-rumored tablet device and the launch of beta versions of iPhone OS 4.0 and the associated Software Development Kit for developers. According to the report, the SDK will include a "simulator" to assist developers in adapting their existing App Store applications to support the tablet's screen resolution. The deployment of tools for supporting multiple screen resolutions could also pave the way for a higher-resolution iPhone in the future.

paidContent.org:

- The juggernaut called Politico keeps on rolling, nevermind the recession, thank you. And some changes in company structure may hint at what could come next for it. The site and print paper, started in January 2007 by Allbritton Communications (ACC), has in two years grown to be a $20 million operation, according to paidContent figures, and finish calendar 2009 with operating profits of about a million or more.

San Francisco Chronicle:

- California's political leaders, who are facing the daunting challenge of closing an estimated $20.7 billion budget deficit this year, are looking to Washington for help. Just don't call it a bailout. Senate President Pro Tem Darrell Steinberg, D-Sacramento, said he plans to head to the nation's capital "early and often" seeking federal assistance. Gov. Arnold Schwarzenegger already has put the federal government on notice that he wants billions he says the state is owed. And outgoing Assembly Speaker Karen Bass, D-Baldwin Vista (Los Angeles County), said she would head east as soon as this month. It is not just cash that California wants. Schwarzenegger is calling for permanent changes to the formula that determines the amount of money the federal government contributes to Medi-Cal, California's Medicaid program, noting that the state is among the lowest in the country in reimbursement rates. He also wants money for the costs of providing special education in schools and incarcerating illegal immigrants, both unfunded federal mandates.

Rassmussen:

- A new Rasmussen Reports national telephone survey shows just 27% of voters nationwide believe the federal government should provide bailout funding for California. Fifty-five percent (55%) think the federal government should let the state go bankrupt instead.

Politico:

- After four relatively low-profile years pushing the official party line as chairman of the Democratic National Committee, Dean is once again the tribune of frustrated liberals. And after he called out President Barack Obama and his congressional allies over their concessions on health care, those close to him predict he’s just getting warmed up. Dean’s health care stand has infuriated party leaders, who have alternately tried to marginalize him and to bring him on board. Yet at the same time, his provocative approach has re-energized the political group he founded and thrilled legions of progressive activists, many of whom were drawn to politics by Dean's insurgent 2004 presidential campaign, then deflated when he didn’t land an Obama Cabinet post. They have grown increasingly disenchanted with Obama’s presidency.

- In governor’s races across the country, top GOP candidates are concentrating their attacks on the White House, the surest sign yet that Republicans see opportunity in nationalizing the 2010 election and a departure from the strategy that elected two Republicans to governorships in November. While Chris Christie in New Jersey and Bob McDonnell in Virginia both refrained from overt criticism of President Barack Obama in their successful 2009 races, the current crop of GOP gubernatorial contenders seems intent on making the 2010 election a referendum on Obama’s policies.

zerohedge:

- Is The US Government Buying Stocks?

HedgeCo.Net:

- Trends in Hedge Fund Capital Raising for 2010.

Reuters:

- Amsterdam airport operator Schiphol Group said on Monday it would buy 60 body scanners and denied allegations of lax security after a Nigerian was charged with trying to blow up a plane that took off from Schiphol.

National Post:

- A new study by the Alzheimer Society of Canada says the country urgently needs a strategy to minimize the impact of the Baby Boomers' march toward dementia. The study, Rising Tide: The Impact of Dementia on Canadian Society, suggests that 1.1 million Canadians will have Alzheimer's disease, or a related dementia, by 2038. If not mitigated, dementia's prevalence will create a tenfold increase in the demand for long-term care beds and cost the Canadian economy a staggering $97-billion annually, the study found. It also suggests the amount of time Canadians spend caring for parents and spouses with dementia will triple in the next three decades, to 756 million hours a year. "If we do nothing, dementia will have a crippling effect on Canadian families, our health-care system and economy," said Richard Nakoneczny, president of the Alzheimer Society of Canada.

Nikkei English News:
- Panasonic Corp., in partnership with Skype Technologies SA, plans to introduce plasma televisions equipped with videoconferencing functions.

Bear Radar

Style Underperformer:
Mid-Cap Value (+1.42%)

Sector Underperformers:
REITs (-.40%), Airlines (+.21%) and Education (+.29%)

Stocks Falling on Unusual Volume:

ANN, RMBS, ABFS, ODFL and ACL

Stocks With Unusual Put Option Activity:
1) ACL 2) JTX 3) ESV 4) BUCY 5) STP

Bull Radar

Style Outperformer:
Small-Cap Growth (+2.05%)

Sector Outperformers:
Coal (+5.90%), Disk Drives (+3.50%) and Gaming (+3.02%)

Stocks Rising on Unusual Volume:
BEXP, FTO, IVN, NIHD, MICC, BW, STO, SHOO, TSCO, WGO, CALM, OSIS, HMIN, ASEI, CAGC, SCHS, IART, ARST, SEED, PRAA, IVAC, MINI, VOLC, ULTA, KONG, SHLD, MASI, TKTM, HTCH, SYNA, FSYS, DSC, TEX, RGR, TDG, CUK, BSI, KSP, DSG, CFI and IYW

Stocks With Unusual Call Option Activity:
1) FTO 2) RDN 3) ELN 4) MED 5) KBH

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