Thursday Watch

Late-Night Headlines
Bloomberg:
- China needs to “shock” the economy with more interest rate increases because it’s too late to use a stronger yuan to cool growth, said Jim Walker, chief economist at CLSA Asia-Pacific Markets.
- Duff & Phelps Corp., which provides valuations for mergers and acquisitions, filed for a $200 million IPO.
- US thrifts earned less while widening their profit margins in the first quarter, federal regulators reported.
- Imports of crude oil by Japan, the world’s largest consumer of oil after the US and China, fell 16% in April from a year earlier. Imports of oil products, which include gasoline and naphtha, dropped 18%.
- Alcoa Inc.(AA), seeking to acquire rival aluminum producer Alcan Inc.(AL) in a $27.6 billion hostile takeover, said its “full and fair” offer won’t be increased.
- The euro traded near a record high versus the yen before a report that’s likely to show business confidence in Germany rose to the highest since 1991.
- Jordin Sparks, a high school student from Glendale, Arizona, won the sixth season of “American Idol” on Fox television, defeating Blake Lewis of Bothell, Washington, in votes cast by telephone and text message. “Idol” enabled Fox network to win this year’s prime-time television ratings race in the 18-to-49 age group that sets national advertising rates.
- Congress branded yesterday’s US-China agreements on financial services and aviation inadequate and moved to consider new trade measures against China even as Vice Premier Wu Yi met with lawmakers.
- The yuan snapped a six-day rally after central bank Governor Zhou Ziaochuan said China gains in the currency are “already moving fast enough.

Financial Times:
- GE(GE) will reveal today that its sales of environmentally friendly products have doubled to $12 billion during the past two years, citing CEO Immelt.

South China Morning Post:
- Hedge funds have invested as much as $50 billion in China’s stock markets, according to a study by a government think tank. The amount is about a third of the $128 billion of assets managed by mutual funds in China, citing Zhang Yuewen, a researcher at the Chinese Academy of Social Sciences. China should enhance supervision of short-term capital flows and business between hedge funds and local investors, citing Zhang.

Securities News:
- A Shanghai-based bank told branches to increase scrutiny on fund transfers to prevent corporate customers using loans to fund investments in stocks, citing an internal document. The unidentified publicly traded bank also stopped offering loans that used stocks as collateral and stepped up monitoring of conglomerates with excess liquidity. The Chinese government is trying to shield the banking system from volatility created by the nation’s booming stock markets, where the total value of shares more than tripled in the past year to more than $2 trillion.

China Daily:
- China may introduce a rating system for online games, in a move that may ban younger players from titles with violent and sexual content, citing the Internet culture director of the Ministry of Culture.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (CIEN), target $35.
- Reiterated Buy (CRM), target $60.
- We are raising our price target on (DJ) to $55 to reflect the recent News Corp.(NWS/A) bid. We are assuming a 65% probability that the offer is raised to $65 and accepted, and a 35% probability that the offer is declined and the stock trades down to its pre-announcement price of $36. We still believe a bid from a third party is unlikely.

Think Equity:
- Rated (OSIP) Buy, target $50.

Night Trading
Asian Indices are -.75% to unch. on average.
S&P 500 indicated -.11%.
NASDAQ 100 indicated -.10%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
- (ARO)/.25
- (AMSC)/-.23
- (ANN)/.45
- (BKS)/.01
- (BWS)/.22
- (CHRS)/.20
- (CPWM)/-.58
- (GPS)/.24
- (HIBB)/.33
- (HRL)/.51
- (MM)/1.02
- (MYL)/.49
- (PDCO)/.45
- (RRGB)/.42
- (SAFM)/.29
- (SSI)/.18
- (SMRT)/.18
- (TBL)/.20
- (TTC)/1.68

Upcoming Splits
- (ATLS) 3-for-2
- (GIL) 2-for-1

Economic Releases
8:30 am EST
- Durable Goods Orders for April are estimated to rise 1.0% versus a 4.3% gain in March.
- Durables Ex Transports for April are estimated to rise .6% versus a 1.4% gain in March.
- Initial Jobless Claims for last week are estimated to rise to 305K versus 293K the prior week.
- Continuing Claims are estimated to rise to 2495K versus 2473K prior.

10:00 am EST
- New Home Sales for April are estimated to rise to 860K versus 858K in March.

Other Potential Market Movers
- The Fed’s Mishkin speaking, Fed’s Fisher speaking, weekly EIA natural gas inventory report, (AFL) financial analyst meeting, (TEX) analyst meeting, (ELX) analyst day, (RX) analyst meeting, Robinson Humphrey Financial Services Conference, Goldman Sachs Internet Conference, UBS Oil & Gas Conference and Citigroup Healthcare Conference could also impact trading today.

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