Friday Watch

Evening Headlines
Bloomberg:

• Dollar Index Set for Longest Losing Run in 6 Months on Economy. The Dollar Index headed for a fifth weekly decline, its longest losing streak in six months, before U.S. reports that economists said will show consumer spending cooled and businesses expanded at a slower pace.
• Gold Heads for Best Monthly Gain Since November 2009 on Inflation, Dollar. Gold is poised for its biggest monthly advance since November 2009 as a weakening dollar and accelerating inflation prompted investors to buy precious metals as a store of value. Immediate-delivery gold was little changed at $1,536.72 an ounce at 8:29 a.m. in Singapore after touching a record $1,540.85 an ounce earlier. The metal surged 7.3 percent this month. “The sinking dollar is driving people to the gold market as speculators betting on a further rally are adding more fuel to the fire,” said Lim Han Jo, a Seoul-based trader with Tongyang Futures Co. “I don’t exclude the possibility of gold hitting $1,800 this year.” The dollar fell to the lowest since December 2009 against the euro yesterday after the Federal Reserve kept borrowing costs at a record low. Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by gold, have expanded 1.5 percent this month, heading for the biggest gain since August.
• GE's(GE) Immelt Quits New York Fed Board of Directors Citing Demands on Time. General Electric Co. (GE) Chief Executive Officer Jeffrey Immelt resigned from the Federal Reserve Bank of New York’s board of directors, citing “increased demands” on his time. Immelt, 55, stepped down effective March 9, the New York Fed said in a statement today. He noted in his resignation letter to New York Fed President William C. Dudley that his other commitments include the President’s Council on Jobs and Competitiveness, which he has led since January. Immelt had served as a regional bank director since January 2006. Immelt’s decision is unrelated to plans by the Fed later this year to begin supervising GE Capital, the Fairfield, Connecticut-based company’s finance unit, GE spokesman Gary Sheffer said. “Clearly now the Fed is going to be regulating a financial services company like GE Capital and I don’t think he should be sitting on the New York Fed board” as a Class B director, said Sohn, who is also vice chairman of retailer Forever 21 Inc. “If GE Capital were to get into any kind of trouble, it would be the New York Fed that would have to deal with it so I don’t think it’s appropriate for him.”
• RIM(RIMM) Cuts Profit Forecast as BlackBerry Demand Falls Short. Research In Motion Ltd. (RIM), facing intensifying competition from Apple Inc. (AAPL) and Google Inc. (GOOG), plunged in late trading after cutting profit forecasts on slower-than-expected demand for BlackBerry smartphones. Profit this quarter will be $1.30 to $1.37 a share, Waterloo, Ontario-based RIM said today in a statement. The company last month forecast profit of $1.47 to $1.55 a share. Sales in the quarter ending May 28 will be “slightly below” the $5.2 billion to $5.6 billion the company had forecast. RIM fell $6.17, or 11 percent, to $50.43 in late trading, after closing at $56.59 on the Nasdaq Stock Market.
• Total to Buy Up to 60% of SunPower(SPWR) for $1.38 Billion. Total SA (FP), Europe’s third-biggest oil producer, agreed to buy as much as 60 percent of SunPower Corp. (SPWRA) for $1.38 billion, to profit from the global transition to clean energy. SunPower, the second-largest U.S. solar panel maker, described the deal price, $23.25 a share, as a “friendly tender” in a statement today. SunPower surged 40 percent to $22.53 at 6:20 p.m. after the close of regular Nasdaq Stock Market trading.
• Groupon Won't Place Ads on 'Apprentice' Site After Complaints About Trump. Groupon Inc. said it won’t let ads appear on the website for “The Apprentice” after customers complained about the political views of Donald Trump, the real estate developer who stars on the NBC television show. While Groupon isn’t a sponsor of the show, its ads occasionally appear on the related site, Julie Mossler, a spokeswoman for Chicago-based Groupon, said in a statement. “Enough consumers contacted us to warrant ensuring that we don’t place ads on ‘The Apprentice’ home page in the future,” the statement said. Political activist website ThinkProgress earlier today had urged Groupon to withdraw its ads appearing in connection with Trump properties.
• Morocco Cafe Blast Kills 14 in Widely Condemned 'Terrorist' Act. A blast ripped through a restaurant in downtown Marrakech, Morocco, killing at least 14 people, including Europeans, in what U.S. Secretary of State Hillary Clinton called a “terrorist attack.”

Wall Street Journal:

• Tornadoes Leave a Trail of Devastation. Nearly 300 Die in Six Southern States as City Neighborhoods and Farm Towns Are Leveled; FEMA Mobilizes for Cleanup. Residents of Alabama, Mississippi and four other Southern states picked through their splintered communities Thursday as state and federal authorities mobilized to clean up and rebuild after scores of powerful tornadoes killed nearly 300 people in the most deadly storm cluster to hit the nation in 37 years.
• Obama's Silence on Boeing(BA) Is Unacceptable by Nikki Haley. The president's appointees have moved to block the company from building planes in my state. He owes us an explanation. In October 2009, Boeing, long one of the best corporations in America, made an announcement that changed the economic outlook of South Carolina forever: The company's second line of 787 Dreamliners would be produced in North Charleston. In choosing to manufacture in my state, Boeing was exercising its right as a free enterprise in a free nation to conduct business wherever it believed would best serve both the bottom line and the employees of its company. This is not a novel or complicated idea. It's called capitalism. Boeing has since poured billions of dollars into a new, state-of-the art facility in South Carolina's picturesque Low Country along the Atlantic coast. It has created thousands of good jobs and joined the long tradition of distinguished and employee-friendly corporations that have found a home, and a partner, in the Palmetto State. This a win-win for South Carolina, for Boeing, and for the global clients who will see Dreamliners rolling off the North Charleston line at the rate of 10 a month, starting with the first one next year. But, as is often the case, a win for people and businesses is a loss for the labor unions, which rely on coercion, bullying and undue political influence to stay afloat. South Carolina is a right-to-work state, and we're proud that within our borders workers cannot be required to join a labor union as a condition of employment. We don't need unions playing middlemen between our companies and our employees. We don't want them forcefully inserted into our promising business climate. And we will not stand for them intimidating South Carolinians. That is apparently too much for President Obama and his union-beholden appointees at the National Labor Relations Board, who have asked the courts to intervene and force Boeing to stop production in South Carolina. The NLRB wants Boeing to produce the planes only in Washington state, where its workers must belong to the International Association of Machinists and Aerospace Workers.
• Tough New Rules Proposed on Food Advertising for Kids. The Obama administration is asking food makers to sharply limit any advertising to children and teens of foods high in sodium, saturated fat and added sugars, in an effort to curb obesity. The proposed standards released Thursday are voluntary, but they're widely expected to reshape how companies like McDonald's Corp., Coca-Cola Inc., General Mills Inc. and Kraft Foods Inc. pitch their products to millions of Americans. By one estimate, the new standards would affect advertisements on 1,700 television programs. They would ripple across about 20 types of marketing, including radio, print and Internet pitches. Some food advertisers said the guidelines—which wouldn't take effect until 2016—are too onerous and called for changes. "We can see right from the outset that this is going to be highly restrictive," said Dan Jaffe, an executive at the Association of National Advertisers, which represents food makers and other advertisers. Mr. Jaffe said he expected manufacturers would feel heavy pressure to comply because the guidelines come from regulators including the Federal Trade Commission, the Food and Drug Administration, the Centers for Disease Control and Prevention and the U.S. Department of Agriculture. "There's clearly a veiled threat here that if they don't act...someone's going to step further," either through legislation or regulation, Mr. Jaffe said.
• Harbinger's Falcone Discloses 'Market Manipulation' Probe. Hedge-fund manager Philip Falcone told investors Thursday that regulators are investigating whether his firm, Harbinger Capital Partners, engaged in "market manipulation." The investigation, disclosed in a year-end communication to Harbinger investors, relates to debt trading in a particular issuer in 2006 to 2008. Harbinger called the investigation "informal" and didn't disclose the name of the issuer.
• China's One-Child Plan Faces New Fire. China's latest census shows the nation's population is aging rapidly and its growth rate has declined sharply, raising new questions about the government's unwillingness to abandon its controversial one-child policy despite warnings of a looming demographic crunch.
• Egypt's Policy Upends Mideast Order. Egypt's brokering of a tentative power-sharing deal between two rival Palestinian factions underlines a more independent Egyptian foreign policy that could challenge U.S. and Israeli objectives in the Middle East, analysts said.
• Gadhafi's Troops Chase Rebels Into Tunisia. Libyan government forces drove rebels from a border outpost Thursday, the Tunisian state news agency reported, shutting off one of their vital supply lines, pursuing them across the mountainous frontier into Tunisia and provoking a sharp protest from that country.
• Officials Unfazed by Dollar Slide. The U.S. dollar fell Thursday to its lowest point since the summer of 2008, but officials aren't showing signs that they are alarmed by the currency's descent or acting to stem it. In recent days, the nation's top two economic policy makers—Federal Reserve Chairman Ben Bernanke and Treasury Secretary Tim Geithner—have publicly expressed their desire for a strong dollar. But there is little indication of a change in policy from either the Fed or Treasury—or in underlying economic conditions—that would alter the currency's downward course.
• U.S. Rebukes China, Cites 'Backsliding' on Rights. A senior U.S. State Department official rebuked China for "serious backsliding" on human rights amid the country's most severe crackdown on political dissent in more than a decade, and said it has already begun to hurt relations with the U.S. At the end of two-day talks that were dubbed a "human-rights dialogue," Michael Posner, assistant secretary of state for democracy, human rights and labor, lamented that the Chinese side had rebuffed U.S. efforts to find out about the status of lawyers, political activists, artists, religious leaders and others caught in a police dragnet in recent weeks.
• The Keynesian Growth Discount. The results of our three-year economic experiment are in. For three long years, the U.S. has been undertaking an experiment in economic policy. Could record levels of government spending, waves of new regulation and political credit allocation, and unprecedented monetary stimulus re-ignite growth? The results have been rolling in, and they represent what increasingly looks like an historic mistake that deserves to be called the Keynesian growth discount.

MarketWatch:

• Cerner(CERN) Profit Up on Higher Bookings. Cerner Corp.'s first-quarter profit climbed 28%, topping the company's guidance, as bookings and backlog surged. The health-care information-technology company Thursday raised its current-year earnings per share forecast to $3.55 to $3.62 from $3.50 to $3.60 and its revenue view to $2.07 billion to $2.12 billion from its earlier expectation of $2.05 billion to $2.1 billion.

CNBC:

• Microsoft(MSFT) Results Beat, But Windows Sales Dip. Microsoft posted earnings and revenue that outstripped estimates Thursday, but reported a dip in quarterly sales of its core Windows operating system, signaling a recent downturn in PCs.

Business Insider:

• Meet The Nationalist Leaders Who Want To Tear Europe Apart. The European Union may be facing its toughest test in years, as a once united front is stretched by economic turmoil. A new breed of nationalist, populist politician has tapped into the growing discontent. Looking less and less like the leaders of old, the new generation takes anti-EU sentiment and sometimes combines it with xenophobia and nationalism.
• Chart of the Day: Microsoft(MSFT) Keeps Burning Hundreds of Millions Online.
• Lara Logan Breaks Silence About Sexual Assault In Egypt. “For an extended period of time, they raped me with their hands,” Ms. Logan said in an interview with The New York Times. She estimated that the attack lasted for about 40 minutes and involved 200 to 300 men."
• Pennsylvanians Turn On Obama. A new Quinnipiac Pennsylvania Poll contains some very bad news for the president. His approval rating is at an all-time low (42%) in the Keystone State. More than half of all Pennsylvanians (53%) disapprove of his job performance. More alarming, a majority (52%) of Pennsylvanians now say that President Obama does not deserve re-election. Forty-two percent believe that he does. The "re-elect question" is one that political professionals watch carefully. Anything below 45% is viewed as political purgatory. Anything below 40% is considered political hell.

IBD:

• Oil Drilling, Earnings Boost Carbo Ceramics(CRR) Stock 15%.

Forbes:

• Coinstar(CSTR) Q1 Tops Estimates; To Add Video Game Rentals Nationwide; Shares Jump. For the quarter, the company reported revenue of $424.1 million and profits of 46 cents a share; the Street had been expecting $409.4 million and 22 cents. REvenue was up 31% from a year ago.

Politico:

• George Soros Considers His Options. For Democrats hoping George Soros will write an eight-figure check to boost their 2012 efforts, conservatives seeking to use Soros as a bogeyman to rally their base and market analysts trying to predict his next play, a top Soros aide has some advice: Read Karl Popper. Political operatives from across the ideological spectrum have become increasingly fixated on the question of whether the Hungarian-born billionaire investor will once again reprise the role he played in the 2004 election, when he contributed more than $20 million to Democratic causes, or whether he will continue to focus his domestic philanthropy elsewhere.
• AOL News to Cease Creating Content. AOL News will stop producing original content, according to a source with knowledge of the situation. The news was first reported by Mediaite. Mediaite writes that the website will cease production of original editorial content and shift to using Huffington Post’s content, a move that reveals more about the editorial stance between the two companies, which merged earlier this year in a $315 million deal.

Reuters:

• NY Fed Deploys Senior Supervisors to Wall Street. Wall Street executives will soon get more face time with senior bank regulators as part of an effort to strengthen supervision and plug gaps in communication laid bare by the worst financial crisis since the Great Depression. The Federal Reserve Bank of New York has started to assign more senior officials to lead its on-site teams at big banks, aiming to strengthen its lines of communication with chief executives and directors, sources familiar with the matter said on Thursday. Each of the largest financial firms the Fed supervises will be assigned an on-site senior supervisory officer who will be closer to New York Fed regulatory policy discussions and should bring a better sense of how the firm fits into the broader global regulatory framework, one source said. The move to add more senior staff to on-site teams comes from a review by the New York Fed's new head of bank supervision, Sarah Dahlgren. It aims to address a lesson from the crisis: that supervisors often didn't engage with senior management as much as they arguably should have.
• Nasdaq(NDAQ)/ICE(ICE) May Go Hostile; Investors Press NYSE(NYX). Nasdaq OMX and IntercontinentalExchange are poised to go hostile in their bid for NYSE Euronext after shareholders ratcheted up pressure on the Big Board parent to get a better deal. Nasdaq OMX Group Inc and IntercontinentalExchange Inc are expected to soon take their $11.1 billion bid directly to NYSE's shareholders through a tender offer, two sources familiar with the situation said.
• Muslim Brotherhood Backs Syria Protests. The Muslim Brotherhood called on Syrians to take to the streets ahead of Friday prayers and help the besieged city of Deraa, where a rights group said civilian deaths from a tank-backed army attack rose to 50. It was the first time that the Brotherhood, ruthlessly crushed along with secular leftist movements under the rule of late President Hafez al-Assad, had called directly for protests in Syria since pro-democracy demonstrations against Assad's son, President Bashar al-Assad, erupted six weeks ago. A declaration by the Brotherhood, sent to Reuters by its leadership in exile on Thursday, said: "Do not let the regime besiege your compatriots. Chant with one voice for freedom and dignity. Do not allow the tyrant to enslave you. God is great."
• China's Frothy Internet Sector Seen Due For a Correction. China's red-hot Internet sector is due for a correction, with valuations reaching frothy levels, and some players will be eliminated, industry executives and venture capitalists say.
• Iron Ore Company Cliffs'(CLF) Q1 Profit Soars. Cliffs Natural Resources Inc reported more than a five-fold increase in first-quarter profit as demand and prices for its iron ore and steel-making coal soared.
• True Religion(TRLG) Q1 Beats Wall Street, Shares Rise. True Religion Apparel Inc's first-quarter results trounced analysts' estimates as the premium denim company sold more of its merchandise through its high-margin online and retail stores. Shares of the company rose 10 percent after the bell on Thursday.

21st Century Business Herald:

• Land sales in Beijing, Shanghai and Hangzhou fell from January to present as compared with the same period a year earlier. Beijing's land sales fell 55% during the period to 22.3 billion yuan, citing property agent Homelink. Shanghai's land sales declined 32% to 37.5 billion yuan, citing China Real Estate Information Corp.

Shanghai Securities News:

• China's export growth this year may be in the single digits, citing Wei Jianguo, a former Vice Commerce Minister and now secretary general of the China Center for International Economic Exchanges. Export growth will slow this year due to uncertainties with the European economy, yuan appreciation and rising commodity prices, Wei said.

Evening Recommendations
Citigroup:

• Reiterated Buy on (TWC), boosted target to $88.
• Reiterated Buy on (MWW), target $25.
• Reiterated Buy on (ACOM), raised estimates, boosted target to $52.
• Reiterated Buy on (IP), boosted target to $36.
  

ThinkEquity:

• Rated (DNDN) Buy, target $50.

Night Trading

• Asian equity indices are -1.0% to +.50% on average.
• Asia Ex-Japan Investment Grade CDS Index 103.0 -1.5 basis points.
  
• Asia Pacific Sovereign CDS Index 111.0 -1.0 basis point.
  
• S&P 500 futures -.03%.
  
• NASDAQ 100 futures -.10%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (AXL)/.38
• (B)/.29
• (CAT)/1.31
• (CVX)/3.00
• (CVH)/.52
• (DHI)/-.05
• (FLIR)/.36
• (GT)/.12
• (HMSY)/.36
• (ITT)/.93
• (LEA)/1.15
• (MRK)/.84
• (NWL)/.28
• (PBI)/.53
• (SPG)/1.54
• (VFC)/1.61
• (WY)/.15
  

Economic Releases
8:30 am EST

• The 1Q Employment Cost Index is estimated to rise +.5% versus a +.4% gain in 4Q.
• Personal Income for March is estimated to rise +.4% versus a +.3% gain in February.
• Personal Spending for March is estimated to rise by +.5% versus a +.7% gain in February.
• The PCE Core for March is estimated to rise by +.1% versus a +.2% gain in February.
  

9:45 am EST

• The Chicago Purchasing Manager for April is estimated to fall to 68.2 versus 70.6 in March.

9:55 am EST

• Final Univ. of Mich Consumer Confidence for April is estimated to rise to 70.0 versus 69.6 in March.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Bernanke speaking, NAPM-Milwaukee for April, (ETR) analyst conference, (AMED) investor day and the (NGSX) investor day could also impact trading today.
  

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

Stocks Rising into Final Hour on Falling Food/Energy Prices, Short-Covering, Less Financial Sector Pessimism, Technical Buying

Broad Market Tone:

• Advance/Decline Line: Slightly Higher
  
• Sector Performance: Mixed
  
• Volume: Around Average
  
• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• VIX 14.63 -4.69%
  
• ISE Sentiment Index n/a
  
• Total Put/Call .80 -9.09%
  
• NYSE Arms .99 +24.04%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 90.50 -1.90%
  
• European Financial Sector CDS Index 84.75 -3.65%
  
• Western Europe Sovereign Debt CDS Index 189.25 -2.41%
  
• Emerging Market CDS Index 204.22 -1.23%
  
• 2-Year Swap Spread 16.0 +1 bp
  
• TED Spread 24.0 +2 bps
  

Economic Gauges:

• 3-Month T-Bill Yield .04% -1 bp
  
• Yield Curve 269.0 -1 bp
  
• China Import Iron Ore Spot $181.50/Metric Tonne +1.11%
  
• Citi US Economic Surprise Index 3.50 -8.2 points
  
• 10-Year TIPS Spread 2.56% unch.
  

Overseas Futures:

• Nikkei Futures: Indicating +91 open in Japan
• DAX Futures: Indicating +22 open in Germany

Portfolio:

• Slightly Higher: On gains in my Medical and Biotech sector longs
  
• Disclosed Trades: None
  
• Market Exposure: 100% Net Long

BOTTOM LINE: Today's overall market action is mildly bullish as the S&P 500 trades slightly higher, despite some disappointing economic data, tech sector weakness, emerging markets inflation worries and Mideast unrest. On the positive side, Road & Rail, REIT, Bank, Insurance, HMO, Medical, Wireless, Software, Coal and Utility shares are especially strong, rising more than +.75%. Cyclical shares are outperforming again as the Transports surge to another new record. (IYR)/(XLF) have traded well throughout the day. The UBS-Bloomberg Spot Ag Index is falling another -2.06%, oil is declining -.47%, lumber is jumping +3.6% and copper is rising +.4%. The Spain sovereign cds is falling -6.16%, the Italy sovereign cds is declining -3.41%, the Greece sovereign cds is falling -3.22% and the Belgium sovereign cds is falling -3.9% to 146.17 bps. 10 10-year yield is falling -4 bps to 3.31%. The large decline in the Spain sovereign cds is a big positive. The AAII % Bulls rose to 37.9% this week, while the % Bears fell to 30.65. On the negative side, Education, Homebuilding, Networking, Semi, Steel, Ag and Oil Tanker shares are under pressure, falling more than -.75%. The US price for a gallon of gas is rising .01/gallon today to $3.89/gallon. It is up .77/gallon in 72 days. The US dollar continues to trade very poorly. The Shanghai Composite fell another -1.3% last night, finishing at session lows, and continues to trade very poorly given the ongoing rally in global equities. Brazil shares are also weak again today with the Bovespa dropping another -1.16%. The broad US stock market continues to trade very well. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, less real estate/financial sector pessimism, earnings optimism, buyout speculation, investor performance angst, falling food/energy prices, lower long-term rates, less fed uncertainty and technical buying.

Today's Headlines

Bloomberg:

• U.S. Economy's Growth Cools in First Quarter to 1.8% Annual Rate. Gross domestic product rose at a 1.8 percent annual rate from January through March after a 3.1 percent pace in the final three months of 2010, the Commerce Department said today in Washington. Economists projected 2 percent growth, according to the median estimate in a Bloomberg News survey. Household purchases, which account for about 70 percent of the economy, rose at a 2.7 percent pace last quarter after a 4 percent gain in the final three months of 2010. The increase in consumer spending from January through March compared with a 2 percent median forecast in the Bloomberg survey. Purchases added 1.91 percentage points to growth. Spending on equipment and software climbed at an 11.6 percent annual rate last quarter, up from 7.7 percent the previous three months.
  
• Pending Sales of Existing Homes in U.S. Increase 5.1%, More Than Estimated. The number of Americans signing contracts to buy previously owned homes rose more than forecast in March, a sign the industry that triggered the recession may begin to stabilize. The index of pending home resales climbed 5.1 percent after a revised 0.7 percent increase the prior month, the National Association of Realtors said today in Washington. The median forecast in a Bloomberg News survey called for a 1.5 percent rise. An improving job market, falling home prices and low borrowing costs may help to attract more buyers in coming months.
• Initial Jobless Claims in U.S. Increase to Three-Month High. Jobless claims increased by 25,000 to 429,000 in the week ended April 23, the most since late January, Labor Department figures showed today in Washington. The four-week moving average, a less volatile measure than the weekly figures, rose to 408,500 last week from 399,250 the prior week. The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 2.9 percent from 3 percent the prior week, today’s report showed.
• Taiwan Semiconductor's(TSM) Profit Beats Estimates on Smartphone, Tablet Demand. Taiwan Semiconductor Manufacturing Co., the world’s largest contract manufacturer of chips, posted first-quarter profit that beat analysts’ estimates after demand for smartphones and tablets drove sales of pricier chips. TSMC, whose clients include Qualcomm Inc. (QCOM) and Nvidia Corp. (NVDA), widened its profit margins as smartphones and tablets boosted demand for more-advanced chips. The March 11 Japan earthquake “probably has some impact” on second-quarter demand, and may “snap back” after the situation improves, Chairman Morris Chang said today.
• Buy Bullish JPMorgan(JPM), Wells Fargo Options, Morgan Stanley(MS) Says. Investors should buy bullish JPMorgan Chase & Co. (JPM) and Wells Fargo & Co. (WFC) options because profits will increase amid strengthening consumer credit, Morgan Stanley said. Christopher Metli and Sivan Mahadevan, derivatives strategists at Morgan Stanley, recommended buying JPMorgan’s July $47 call while selling a July $50 call, a strategy known as a call spread. The shares rose 0.8 percent to $45.50 yesterday. The strategists also recommended October $31-$35 call spreads on Wells Fargo, which added 1.4 percent to $29.27.
• China may raise interest rates as early as a public holiday on May 2 to counter rising prices, Credit Suisse Group AG said. "Rate hikes, in our view, are likely to be a major weapon, along with exchange rate appreciation, for the central bank to tighten," CSFB economist Tao Dong wrote. "The most likely timing could be May 2."
• Grantham Sees 25% Chance That China May 'Stumble' by Next Year. Jeremy Grantham said there is a 25 percent chance that China, the world’s second-largest economy, will “stumble” by next year over imbalances such as too much capital spending, an overheating real estate market or accelerating inflation. “You could have a financial stumble, a housing stumble, a stumble from rebalancing of capital spending, or any combination thereof,” Grantham, chief investment officer of Grantham Mayo Van Otterloo & Co., said in an April 26 interview in Boston. China’s economic growth may “slow to considerably less” than the 9.7 percent pace reported for the first quarter, Grantham said. The cost of insuring Chinese bank bonds against default rose more than that for lenders in Russia and India this month. “If the housing market takes a break, you have a lot of banking losses,” Grantham said in the interview. “They’ve made a lot of loans that look incredibly suspicious.” Grantham says his views on China’s economy are less grim than those of his colleague Edward Chancellor, who since last year has said that the nation has displayed symptoms of a “great speculative mania.” Hedge-fund manager Jim Chanos, who was among the first investors to predict Enron Corp.’s collapse, said last month that the property bubble in China is “as big or bigger than what we saw in the West” when compared with the size of the economy. In an April 25 letter to investors, Grantham said that a decline in China’s economy would hurt the commodity markets. If a Chinese decline were accompanied by better-than-expected weather globally, then “it will very probably break the commodity markets en masse,” he wrote in the letter. “If the weather and China syndromes strike together, it will surely produce the second ‘once in a lifetime’ event in three years,” Grantham wrote.
• U.S. Airline Surcharges Set Record at $420 as Oil Prices Climb. United Continental Holdings Inc. (UAL), Delta Air Lines Inc. (DAL) and rival U.S. carriers added a record $420 in fuel surcharges to round-trip European fares as soaring oil prices propelled first-quarter losses. Across the industry, surcharges are as much as 50 percent greater than those put in place when fuel prices reached a record three years ago, according to air-travel website BestFares.com. Jet fuel has become airlines’ biggest operating expense, surpassing labor and climbing to an average $2.96 a gallon from January through March, up 41 percent from a year earlier.
• Brazilian Central Bank Sees a 'Prolonged' Cycle of Interest Rate Increases. Brazil’s central bank said it will raise interest rates at a slower pace for a longer period than initially planned as the country’s inflation outlook worsens, according to the minutes of its April 19-20 meeting.
• Exxon(XOM) Profit Surges Amid Consumer Discontent Over Higher Gasoline Prices. Exxon Mobil Corp. (XOM), the world’s largest company by market value, posted its largest profit in almost three years as soaring gasoline prices fueled discontent among consumers and policymakers. With U.S. motorists paying the most for gasoline since prices reached a record $4.11 a gallon in the summer of 2008, Exxon said today that its first-quarter net income jumped 69 percent to $10.7 billion.

Wall Street Journal:

• Deadly Tornadoes Slam South, Killing Hundreds. One of the most powerful storm systems to hit the South in years killed nearly 250 people, injured hundreds more, destroyed property and downed trees from Mississippi to North Carolina over the past two days. Hundreds of homes were flattened by more than 100 tornadoes, according to the National Weather Service.
• Magical and Revolutionary White Color Could Spike iPhone Sales By as Much as 1.5 Million Per Quarter.
• Inspector General Investigating US Education Dept. Over Rules - Source. The U.S. Department of Education's Office of Inspector General has launched a probe into possible influence by short-sellers on the Education Department's recent rulemaking process, according to a person familiar with the matter. In November, Sen. Richard Burr (R., N.C.) and Sen. Tom Coburn (R., Okla.) sent a letter asking the OIG to look into possible ties between the department and investors who were selling short the stock of various for-profit companies. Correspondence between the parties, which include FrontPoint Partners's Steve Eisman, had been released by the department after Citizens for Responsibility and Ethics in Washington, a watchdog group known as CREW, filed requests under the Freedom of Information Act. Additionally, lobbying groups supporting the for-profit colleges have alleged the Education Department leaked early copies of the rules to outside organizations and people with financial interests in the industry. Eisman, the hedge fund portfolio manager famous for his bearish bet on the mortgage industry, likened for-profit schools to sub-prime mortgages at an investor conference in May. He sent a copy of that presentation to the Education Department, according to documents released by CREW, and repeated many of the criticisms in front of a Senate committee hearing in June.
• NATO Strikes Forces Near Misrata Amid Reports of Rebel Deaths. NATO said its warplanes attacked combat vehicles near the besieged Libyan port city of Misrata yesterday, following reports that one of its strikes killed rebel fighters battling Muammar Qaddafi’s forces in the area. The North Atlantic Treaty Organization can’t confirm the strike yesterday 10 miles (16 kilometers) southeast of the port hit rebels, an alliance official said. Twelve rebels were killed in a strike carried out as part of the alliance’s air campaign, the Associated Press reported, citing a doctor in the city. NATO “deeply regrets” any loss of life, said the official by telephone from Brussels who declined to be identified in accordance with alliance policy. A deadly strike on rebel forces would be the third of its kind since the campaign began.
• U.S. ITC Votes to Impose Duties on Aluminum Goods From China. U.S. makers of most aluminum products are being harmed by imports from China, the U.S. International Trade Commission ruled in a decision that will lead to tariffs on those items. The final ruling today sets antidumping duties of about 33 percent and countervailing duties for subsidies that will be as much as 374 percent on importers from China. The products, used for construction and incorporated into window and door frames, accounted for $503 million of imports from China last year.

CNBC.com:

• Gold Settles Above $1,531 as Dollar Wilts; Silver Soars. Gold settled at a fresh record high above $1,531 on Thursday, while silver soared to an all-time high, as a falling dollar and signs that the Federal Reserve would maintain a loose monetary policy boosted precious metals' appeal as a hedge against inflation and economic uncertainty. Silver briefly climbed to within a whisker of $50 an ounce, eclipsing the peak hit when Texan brothers William Hebert and Nelson Bunker Hunt sought to corner the silver market three decades ago. The metal later pulled back on technical selling.

Business Insider:

• India's $11 Billion Rebuke To Obama.
• You Can't Appreciate How Huge These Tornadoes Were Until You See This Video.
  

Zero Hedge:

• Today's Chinese Fraud Du Jour: Sino Clean Energy(SCEI): "Complete Hoax" Per Alfred Little.

New York Times:

• Solar Panels Rise Pole by Pole, Followed by Gasps of 'Eyesore'. Like a massive Christo project but without the advance publicity, installations have been popping up across New Jersey for about a year now, courtesy of New Jersey’s largest utility, the Public Service Electric and Gas Company. Unlike other solar projects tucked away on roofs or in industrial areas, the utility is mounting 200,000 individual panels in neighborhoods throughout its service area, covering nearly three-quarters of the state.

Fox Business:

• Nasdaq(NDAQ) Tender for NYSE(NYX) Could Come Within a Week.

TechCrunch:

• Users Will Download 44 Billion Mobile Apps By 2016.
  

Reuters:

• Portugal Bailout Terms Seen Ready in Days: Source. A package of conditions for Portugal to meet in return for a bailout from Europe and the IMF should be ready within days, a source said Thursday as ministers voiced confidence the negotiations were on track. European Commission and IMF officials have been in Portugal since mid-April, poring over the heavily indebted country's public accounts to come up with measures in return for a bailout that is expected to reach about 80 billion euros.
• Gen-Probe(GPRO) Hires Morgan Stanley to Seek Buyer - Sources. Diagnostic-test maker Gen-Probe Inc (GPRO.O) hired Morgan Stanley (MS.N) to seek a possible buyer for the company, sources familiar with the situation said on Thursday. Gen-Probe stock was up 13.8 percent to $79.85 in Thursday afternoon trading after news of the potential sale was first reported by Bloomberg.
• Biggest Changes in NYSE Short Interest. Short interest on the New York Stock Exchange rose 3.4 percent in early April compared with the last half of March, according to information released by the exchange this week.
• US Seasonally Adjusted CP Market Rises in Week - Fed. The U.S. seasonally adjusted commercial paper market rose for a second consecutive week in the latest week, pointing to growing credit demand to fund payrolls and inventories, Federal Reserve data showed on Thursday.

Bear Radar

Style Underperformer:

• Mid-Cap Growth (-.26%)

Sector Underperformers:

• 1) Steel -1.63% 2) Education -1.61% 3) Oil Tankers -1.20%

Stocks Falling on Unusual Volume:

• TRN, CINF, TDSC, HP, SAP, CAM, COP, TFM, REGN, AKAM, ARRS, WFMI, ITMN, UNFI, NVLS, OTEX, SSYS, FISV, OMX, UFI, FOE, BC, RYL, OI, AM, ABC, FLS, SFN, IPG, WLL, ETH and MTH
  

Stocks With Unusual Put Option Activity:

• 1) REGN 2) UUP 3) SPWRA 4) INFN 5) ZSL
  

Stocks With Most Negative News Mentions:

• 1) SFD 2) PMC 3) RKT 4) DV 5) TRAD
  

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume
  

Bull Radar

Style Outperformer:

• Small-Cap Growth (+.60%)

Sector Outperformers:

• 1) Road & Rail +2.21% 2) HMOs +1.41% 3) REITs +1.16%

Stocks Rising on Unusual Volume:

• LOOP, NSC, AET, BVN, AFL, VIA/B, SLG, CETV, SA, KSU, CTXS, BBBB, RNOW, REDF, BAP, HES, RAH, E, CSGP, AVEO, SFLY, FTNT, GPRO, EQIX, NTRI, ARGN, VOCS, STRA, WIRE, MOBI, NEWP, ECPG, PFCB, NUVA, WOR, CEG, VCI, KAI, TWI, DB, RCL, CRR, GGG, PAG, HRC, RLOC, XLNX, MSI, LNC and GTI
  

Stocks With Unusual Call Option Activity:

• 1) EQIX 2) WLL 3) HMY 4) TER 5) ODP
  

Stocks With Most Positive News Mentions:

• 1) ACI 2) BHI 3) CTXS 4) ATK 5) FTNT

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume
  

Thursday Watch

Evening Headlines
Bloomberg:

• Russell 2000 Climbs to Record as U.S. Small Caps Trump S&P 500. The Russell 2000 Index climbed to a record as a technology rally helped smaller stocks erase losses from the 2008 crisis faster than the rest of the U.S. market. The measure, which beat the Standard & Poor’s 500 Index from 2008 to 2010, has climbed 9.5 percent this year, exceeding the 7.8 percent advance by the benchmark gauge for U.S. stocks.
  
• Oil Rises a Second Day After U.S. Fuel Stockpiles Fall More Than Forecast. Oil climbed for a second day in New York on speculation fuel demand will increase after the Federal Reserve renewed its pledge to stimulate growth and U.S. gasoline stockpiles fell to the lowest since August 2009. Futures rose to a 31-month intraday high today after Federal Reserve Chairman Ben S. Bernanke signaled the Fed will maintain its record monetary stimulus. The Fed “said it would complete its latest $600 billion bond-buying program in June as scheduled and it would keep interest rates low for an extended period, which was positive for commodities,” Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne, said in an e-mailed note today. Crude oil for June delivery gained as much as 94 cents, or 0.8 percent, to $113.70 a barrel in electronic trading on the New York Mercantile Exchange, the highest since Sept. 22, 2008. The contract was at $113.54 at 9:29 a.m. Singapore time. Brent oil for June settlement increased 66 cents, or 0.5 percent, to $125.79 a barrel on the London-based ICE Futures Europe exchange.
• Gold Climbs to Record as Bernanke Maintains Stimulus, Dollar Extends Drop. Gold advanced to a record after the Federal Reserve pledged to keep interest rates near zero to bolster the recovery, weakening the dollar and boosting demand for precious metals as a store of value. Immediate-delivery gold gained as much as 0.2 percent to $1,530.22 an ounce, and traded at $1,528.32 at 10:06 a.m. in Singapore. “What’s behind gold’s rally is investors’ fear over the dollar’s decline,” said Hwang Il Doo, a Seoul-based senior trader at KEB Futures Co. “As long as the U.S. keeps interest rates low, it’s perceived by the market to buy more gold.”
• Exelon(EXC) Said to Be Near $7.7 Billion Deal for Constellation(CEG). Exelon Corp. (EXC), the largest operator of U.S. nuclear power plants, is near agreement to buy Constellation Energy Group Inc. (CEG) for about $7.7 billion, adding stakes in five reactors in Maryland and New York, according to a person with knowledge of the matter. In the transaction under discussion, Constellation shareholders would get 0.93 Exelon share for each of their shares, said the person, who declined to be identified because the talks are private. Based on Exelon’s closing stock price of $41.49 today, that would value Constellation at $38.59 a share, a 12.5 percent premium to its closing price.
• Palestinian Factions Seek Unit Government, Plan Elections. The rival Palestinian Hamas and Fatah groups have reached a preliminary agreement to end their almost four-year divide and form a unity government. The agreement also calls for legislative and presidential elections in a year, Fatah official Azzam al-Ahmad said in an interview yesterday after a joint press conference with Hamas negotiators. Egypt, which acted as mediator during the secret talks, will host a meeting of Palestinian factions next week for a formal signing ceremony, al-Ahmad said. “Today, we open a new page of unity and agreement, of closing ranks and struggling together,” Hamas official Musa Abu Marzouk said. The formation of a unity government of technocrats will begin next week after the accord is signed, he said. Israel said the deal would kill any chance for peace talks and the U.S. said Hamas can’t play a “constructive role” as long as it is unwilling to accept Israel’s right to exist. Hamas -- considered a terrorist organization by the U.S., the European Union and Israel -- rejects the peace negotiations and refuses to recognize the Jewish state. The Palestinian move follows protests in March in which thousands of Palestinians, inspired by the popular uprisings in Egypt, Tunisia and Libya, rallied in support of reconciliation between Hamas, which controls the Gaza Strip, and the Fatah-led Palestinian Authority, which rules the West Bank.
• NYSE(NYX) Board Is Failing Owners by Rebuffing Nasdaq(NDAQ), Legg Mason's Miller Says. Bill Miller of Legg Mason Inc. (LM), the fifth-biggest shareholder of NYSE Euronext, said the failure of the exchange operator’s board to meet with Nasdaq OMX Group Inc. (NDAQ) is inconsistent with its obligations to owners. “We think it is in the shareholder’s interest that the board work to maximize value for owners,” Miller wrote in an e- mail to Bloomberg News today. “We don’t see how being unwilling to meet with Nasdaq furthers that goal.” Twice this month, NYSE Euronext rejected a joint bid from Nasdaq OMX and IntercontinentalExchange Inc. (ICE) that was worth 12 percent more as of 4 p.m. New York time than Deutsche Boerse AG’s Feb. 15 agreement to purchase the company. Legg Mason, based in Baltimore, owned 7.48 million shares of NYSE Euronext as of Dec. 31. That makes it the fifth-biggest owner, according to ISS Proxy Advisory Services, the shareholder advisory unit of New York-based MSCI Inc. Miller is the chairman and chief investment officer of Legg Mason Capital Management Inc. T. Rowe Price held 19.1 million NYSE Euronext shares, making it the biggest owner.
• Yields Surge as Local Spending Boosts Inflation: India Credit. Spending by local governments before elections is stoking India's inflation, which has driven yields on the nation's benchmark bonds to their biggest monthly surge in more than a year. Gross state borrowings rose 39% in the year ended March, reversing an 8% drop in the previous 12 months. India's central bank warned last month that lax fiscal discipline threatens efforts to contain inflation. "Policy makers' efforts in fighting inflation are being offset by populist measures," S.C. Kalia, executive director of Union Bank of India in Mumbai, which buys regional government bonds, said in a phone interview on April 26. "States have to exercise fiscal discipline" to avoid a situation where "the panic button on inflation has to be pressed," he said.
• Japan Economy Took Bigger Hit in March Than Analysts Estimated. Japan’s economy had a bigger hit from last month’s disaster than anticipated, with factory output falling the most since at least the end of the U.S. occupation, underscoring calls for the central bank to add stimulus. Factory output dropped a record 15.3 percent from February and household spending plunged 8.5 percent from a year earlier, government reports showed today. Retail sales fell the most in 13 years, according to data released yesterday. The economy’s deterioration makes harder Prime Minister Naoto Kan’s task of sustaining confidence in Japan’s government debt after Standard & Poor’s yesterday downgraded its outlook for the nation’s rating. The Bank of Japan will today detail an emergency lending program for banks in devastated northeastern areas as a group of lawmakers and former Cabinet ministers presses for more purchases of government bonds.
• China Property Slowdown Poses Growth Risks, World Bank Says. China’s real-estate market is a “particular source of risk” to growth given the importance of property construction to the world’s second-biggest economy, the World Bank said today. “Shocks to the property sector that would slow down construction significantly could have a large impact on the economy and on bank balance sheets,” the Washington-based lender said in its China Quarterly Update released in Beijing. “A property downturn could affect the finances of local governments, which do a lot of the infrastructure investment.” Regulators told China’s banks last week to conduct more stress tests on their real-estate lending as the government steps up efforts to curb surging housing prices. A potential rise in bad debts on property loans and credit to local government financing vehicles risks triggering another state- funded bailout, Fitch Ratings said this month. “With tension between the underlying upward housing price pressure and the policy objective to contain price rises, interaction between the market and policy measures could lead to a more abrupt than planned downturn in the real-estate market,” the World Bank said in its report. High property prices should be controlled through “macroeconomic levers” rather than administrative measures, the bank said.
• China's B Shares Tumble to Five-Month Low on Capital Gains Tax Speculation. China’s B shares sank for a fifth day, driving the benchmark index to a five-month low, amid speculation the government will impose a capital gains tax on trading of the equities. The Shanghai SE B Share Index, comprising 53 companies whose shares are traded in U.S. dollars, slumped 4.1 percent to 290.7 at the 11:30 a.m. local-time break, extending a four-day, 7.8 percent plunge that included a 5.3 percent retreat yesterday.
  

Wall Street Journal:

• Deadly Storms Hit South. Dozens Killed Across Four States; In Flooded Midwest, a Battle Over Levee Plan. At least 72 people were killed Wednesday in storms across the South, including 58 in Alabama, where a tornado unleashed some of the heaviest damage on a university town. Meanwhile, in the Midwest, officials approved plans to blow up a levee, flooding farms but saving towns, should waters continue to rise at the confluence of the Mississippi and Ohio rivers. Powerful storms raged through the South, uprooting trees, knocking over houses and ripping down power lines. Swaths of Tuscaloosa, Ala., home to the University of Alabama, were reduced to rubble by a tornado reported to be a mile wide, the Associated Press reported. Fifteen people died there.
• The Stakes Are Real in the Yukon as a Modern Gold Rush Is On. Prospectors Must Claim Their Turf on Foot And Keep an Eye Peeled for Grizzlies.
• Chrysler Financing to Pave Way for New DOE Grant. Chrysler Group LLC is expected to disclose Thursday it has hired a group of banks to refinance its government loans, setting the stage for it to apply for additional funding from the Department of Energy, people familiar with the matter said. Chrysler will secure money from a bank group led by Goldman Sachs Group(GS), to repay the $5.8 billion it borrowed from the U.S. and the $1.7 billion it took from the Canadian government during its 2009 bankruptcy, according to these people. In addition to Goldman, the banking group includes Citigroup Inc., Morgan Stanley, and Bank of America Corp., these people said. The repayment of the government debt, coupled with Fiat SpA's intention to increase its current 30% stake in Chrysler to 46% once the loans are paid off, is expected to ease the DOE's concerns about Chrysler and allow the agency to grant the company as much as $3.5 billion in low-interest loans. The money would be used to re-tool its plants to build more fuel-efficient vehicles. The DOE has been reluctant to provide Chrysler the financing amid concerns about the auto maker's long-term financial health.
• High Court Clears Rule on Disclosing Creditor Data. The Supreme Court approved a new federal rule requiring distressed-debt investors and others to disclose details of their trades when banding together to influence bankruptcy proceedings. The new rule, drafted by a panel of bankruptcy judges and other restructuring experts, is poised to take effect in December, unless Congress blocks it, which isn't expected. The rule will require investors to reveal their "economic interest" in a company operating under Chapter 11 bankruptcy protection, including debt, stocks and bearish bets such as credit-default swaps.

MarketWatch:

• Facebook Investors to Sell $1 Billion in Stock.
• Citrix(CTXS) Net Up on Strong Revenue Growth. Citrix Systems Inc.'s first-quarter earnings rose 55% as the virtualization and infrastructure software company reported across-the-board revenue growth, led by product license and technical services, while margins expanded. Shares rose 3%, to $80.14 in after-hours trading, as results topped the company's expectations and Citrix raised its outlook for the year.
• China Dumps Proposed Income-Tax Cuts.
  

CNBC:

• EBay(EBAY) Tops Street View, Raises Full-Year Outlook. The internet commerce company reported a first-quarter profit of 47 cents, compared with 42 cents a share during the same period a year ago. Sales for the most recent quarter came in at $2.55 billion, versus $2.196 billion last year.
• China Census Shows Population, Older and More Urban. China's population grew to 1.34 billion by 2010, according to census figures released on Thursday, up 5.9 percent from the 1.27 billion counted in the last census in 2000, and lower than the 1.4 billion population some demographers had projected for the latest tally. Between 1990 and 2000, the total population increased by 11.7 percent. The proportion of mainland Chinese people aged 14 or younger was 16.60 percent, down by 6.29 percentage points from the number in the 2000 census. The number aged 60 or older grew to 13.26 percent, up 2.93 percentage points.

Business Insider:

• 7 Hedge Funds Hurt in Alleged Longtop Financial Technologies Fraud. Longtop Financial Technologies went down 25% during the past couple of days after a report by Citron Research alleged that every financial statement coming from LFT is fraudulent.
• New York Dominates Hedge Fund Industry. In a report on the global hedge fund industry, TheCityUK states that 41 percent of hedge fund assets were managed out of New York during 2010, compared with 19 percent in London.
  
• The Simple Reason Warren Buffett Just Threw David Sokol Under The Bus. The purpose of the huge report Berkshire Hathaway just released about David Sokol is to insulate Warren Buffett from any suggestion that he did something wrong.
• David Sokol's Lawyer Just Accused Warren Buffett of Lying. David Sokol's lawyer says Warren Buffett lied or mis-remembered the facts: David Sokol told Buffett twice that he was invested in Lubrizol.
• You May Be Surprised To Learn Which Cable Network Spent The Most Time Talking About Birthers. Turns out that as much as FOX gets accused of pushing the birther myth about Obama, MSNBC has covered the story the most. Behold:

Zero Hedge:

• No QE3 Right - So Why Did The US Dollar Just Hit a New Cyclical Low? Citi Explains Why.

IBD:

• Fastenal's(FAST) Same-Day Service Fuels Growth.

Forbes:

• Visa(V) and Square: Why Goliath Is Investing In David. Square, the mobile payment start-up founded by Twitter creator Jack Dorsey, announced today that it has secured a “strategic investment” from Visa.
• Evergreen Solar(ESLR) Warns It May Need Cash Soon; Shares Swoon. Evergreen Solar is in big, fat trouble. The solar products company this afternoon warned that due to a variety of factors, including slower-than-expected demand and worse-than-expected pricing pressure, it is running into a cash crunch.

NY Post:

• Cab Drivers Ask for 15% Hike in Fares to Combat Rising Gas Prices.

Rasmussen Reports:

• 21% Say U.S. Heading in Right Direction, A New Low. Twenty-one percent (21%) of Likely U.S. Voters say the country is heading in the right direction, according to a new Rasmussen Reports national telephone survey taken the week ending Sunday, April 24. It's the fourth week in a row that the measurement has gone down, with confidence in the nation's course now reaching the lowest point of the Obama presidency. Seventy-one percent (71%) of voters now say the country is heading down the wrong track.

USA Today:

• Thefts Rise as Price of Gas Goes Up. As gas prices approach record highs, gas-related thievery is on the rise. Regular gasoline averages $3.88 a gallon, up $1.02 from a year ago and likely to climb higher. Increasingly, consumers are pumping gas and driving off without paying, stealing from other motorists and ripping off large quantities from municipalities and businesses.
• Unemployment Rates Down in 317 Cities, Most Since '09. The rate rose in 44 cities and was unchanged in 11. Nationwide, the unemployment rate dipped to a two-year low of 8.8% in March and has dropped a full percentage point since November. Businesses added a net total of more than 200,000 jobs in March and February, the fastest two-month hiring spree in five years.

Reuters:

• Norfolk Southern(NSC) Profit Jumps, Shares Rise. U.S. railroad Norfolk Southern Corp reported a quarterly profit that beat Wall Street estimates as shipments of goods from coal to autos picked up, even as higher fuel prices raised costs. Fuel costs and truck capacity shortages have driven more traffic to railroads and intermodal businesses, where transportation costs have risen less. "Looking ahead, we feel confident that the economic recovery is well under way and, barring some extraneous event, it will continue well on into 2012," Chief Executive Wick Moorman told analysts on a conference call. The company said there is a "pervasive interest" and "ongoing building momentum" in shifting from highway transport to more fuel-efficient intermodal for supply chain support.
• Equinix(EQIX) Sees Strong Q2, to Open More Data Centers. Equinix Inc forecast second-quarter sales above Wall Street estimates on higher demand for its data-center services and easing pricing pressures, and said it would build new data centers, sending its shares up 3 percent.
• Akamai(AKAM) Outlook Disappoints as Shares Plunge. Online content delivery company Akamai Technologies Inc issued a quarterly profit forecast that disappointed investors, sending its shares down 10 percent as it disclosed that spending will rise.

RTP TV:

• Bank of Portugal Governor Carlos Costa said that the levels of public debt at present are a barrier to the country's economic growth. "We fell in the debt trap," Costa said. "The deterioration of public accounts reflects increases in spending that are disproportionate in relation to the capacity to generate revenue through taxation," RTP said.

Xinhua:

• China's consumer price index may increase from 5.5% to 5.6% on a year earlier in May and June, citing an unidentified Ministry of Finance official.

National Business Daily:

• China may raise fuel prices in the second week of May, citing researcher C1 Energy.

Evening Recommendations
Citigroup:

• Reiterated Buy on (OC), boosted target to $49.
• Reiterated Buy on (PH), boosted target to $112.
• Reiterated Buy on (BA), boosted target to $90.
  

Night Trading

• Asian equity indices are unch. to +1.0% on average.
• Asia Ex-Japan Investment Grade CDS Index 104.50 unch.
  
• Asia Pacific Sovereign CDS Index 112.0 +.5 basis point.
  
• S&P 500 futures +.29%.
  
• NASDAQ 100 futures +.16%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (NYX)/.60
• (CME)/4.19
• (ABC)/.69
• (PHM)/-.14
• (MHS)/.88
• (UTHR)/.65
• (CAH)/.69
• (IP)/.59
• (HOT)/.25
• (STRA)/2.67
• (TWC)/.99
• (AET)/.98
• (PTEN)/.44
• (DOW)/.67
• (PG)/.97
• (ZMH)/1.12
• (PEP)/.73
• (RTN)/1.09
• (DISCA)/.47
• (APA)/2.57
• (BG)/1.31
• (ACOM)/.15
• (MCRS)/.44
• (VRSN)/.33
• (MSFT)/.56
• (CLF)/2.27
• (CERN)/.77
• (MWW)/.02
• (TRLG)/.26
• (CSTR)/.22
• (D)/.91
• (OMX)/.26
• (NBL)/1.13
• (BMY)/.53
• (VIA/B)/.62
• (CAM)/.56
• (EXPE)/.26
• (XOM)/2.07
• (RCL)/.14
• (CL)/1.16
• (BEC)/.82
• (OXY)/1.79
• (SWY)/.27
• (DECK)/.47
• (BWA)/.97
• (AM)/.54

Economic Releases
8:30 am EST

• The Chicago Fed National Activity Index for March is estimated at .5 versus -.04 in February.
• Advance 1Q GDP is estimated at 2.0% versus a +3.1% gain in 4Q.
• Advance 1Q Personal Consumption is estimated to rise +2.0% versus a +4.0% gain in 4Q.
• Advance 1Q GDP Price Index is estimated to rise +2.3% versus a +.4% gain in 4Q.
• Advance 1Q Core PCE is estimated to rise +1.4% versus a +.4% gain in 4Q.
• Initial Jobless Claims for last week are estimated to fall to 395K versus 403K the prior week.
• Continuing Claims are estimated to fall to 3680K versus 3695K prior.
  

10:00 am EST

• Pending Home Sales for March are estimated to rise +1.5% versus a +2.1% gain in February.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Lockhart speaking, weekly EIA energy inventory data, weekly Bloomberg Consumer Comfort Index and the (LIZ) investor day could also impact trading today.
  

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and automaker shares 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.