Thursday, July 24, 2008

Friday Watch

Late-Night Headlines
Bloomberg:
- New NYSE Short-Selling Targets. Here are the 25 NYSE stocks with the largest percentage increase in short interest relative to their float over the first two weeks of July:
- New Nasdaq Short-Selling Targets. Here are the 25 Nasdaq stocks with the largest percentage increase in short interest relative to their float over the first two weeks of July:

- Stephen Schork, president of the Schork Report, says oil may drop below $100 before October. (video)
- Platinum fell, extending the longest losing streak in more than a decade, and palladium slid on concern that an economic slowdown will cut demand for the metals. ``We suspect that the drift will be towards the downside in most metals,'' Edward Meir, an MF Global Ltd. analyst in Stamford, Connecticut, said today in a report. ``The uninspiring demand backdrop, high energy prices, and what seems to us to be a spreading global economic slowdown, have yet to be fully reflected in most metals prices.''
- Four New York state officials, including two top aides to former Governor Eliot Spitzer, unlawfully misused state police to discredit a political rival, the state Public Integrity Commission found.
- Short selling of Fannie Mae(FNM) and Freddie Mac(FRE) jumped in the first two weeks of July as the stocks fell on concern that shareholders would be wiped out even if the government bailed out the entities. Short interest on McLean, Virginia-based Freddie Mac rose 28 percent to 105.9 million shares between June 30 and July 15, according to data compiled by Bloomberg. Short interest on Washington-based Fannie Mae as of July 15 was 154.4 million shares, up 11 percent.

- French Mourn Lost Leisure Time as Sarkozy Ends 35-Hour Workweek.
- HIV-infected patients in North America and Europe are living at least 13 years longer on average as a result of combination drug therapies introduced in the mid-1990s, according to a study in the journal Lancet.
- Juniper Networks Inc.(JNPR), the second- largest maker of networking equipment, reported a 40 percent jump in profit and raised its forecasts for the year as phone companies boost spending. The shares surged 10.1 percent in after-hours trading
.
- Western Digital Corp.(WDC) fell 10.7 percent in extended trading to $30.01. The world's second-largest maker of hard-disk drives forecast first-quarter profit that missed analysts' estimates after an industry glut put pressure on prices.

Wall Street Journal:
- Energy Is Top Economic Issue for Voters. Conservation Steps Increase, Poll Finds; Support for Drilling. Congress will likely break for the summer without passing legislation to curb high gasoline prices. But Americans are fashioning their own energy policy, founded on conservation and support for more production. By margins of 22 to 31 percentage points, voters in each of the states -- Michigan, Colorado, Minnesota and Wisconsin -- said they support offshore oil drilling, according to the polls, which were released Thursday. Overall, the polls also show Sen. John McCain closing in on Sen. Obama in each state. Prospects look dim for major changes in U.S. energy policy before Election Day.

MarketWatch.com:
- Coastal wind turbines have been common electricity generators in Europe for years. Now they may be coming to the U.S. The wind industry has plans for turbines on the outer continental shelf.
- Energy and the candidates. Senators Barack Obama and John McCain have different energy priorities, but no matter who wins the White House, it will take a huge national effort for either man to succeed.

CNBC.com:
- Morgan Stanley(MS) is in active negotiations with top Merrill Lynch(MER) brokers to bring them to Morgan Stanley.
-
Officials at troubled brokerage firm Lehman Brothers

LEHMAN BROTHERS HLDGS INC
LEH

18.52 -2.58 -12.23%
NYSE












































































































































































































(LEH) have weighed the sale of at least part of its Neuberger Berman asset management unit, sources told CNBC.

IBD:
- Earnings A Shot In The Arm For Company That Keeps Hearts Beating.

CNNMoney.com:
- Gas prices fall for 7th straight day. Gasoline at the pump hits levels not seen since June 9.

DenverPost.com:
- 6 things you didn’t know about oil shale:

Reuters:
- The top U.S. securities regulator remains steadfast in a plan to broaden an emergency rule to curb abusive short selling despite opposition from the hedge fund industry and other short sellers. U.S. Securities and Exchange Commission Chairman Christopher Cox told lawmakers on Thursday the agency would soon propose expanding the rule covering the shares of 19 major financial firms to the entire market. The SEC is also considering other remedies to short selling abuses, such as requiring the reporting of substantial short positions, Cox told reporters after the hearing. Groups representing short sellers have urged the SEC not to extend the emergency order past July 29, nor beyond the current list of companies. Cox said the idea of using a price test or some sort of circuit breaker to regulate manipulative short selling is a "subject currently under consideration by the commission staff."
- Short interest jumped 7 percent on the Nasdaq in mid-July and rose 2.7 percent on the New York Stock Exchange to an all-time high, as investors continued to make bearish bets on the stock market. Short interest on the Nasdaq saw its biggest percentage increase since January, rising to 11.18 billion shares as of July 15, compared to 10.45 billion shares as of June 30. On the NYSE, short interest rose to about 18.61 billion shares as of July 15, topping the previous record of 18.13 billion shares as of June 30. "More and more people seem to be resting into the thought that a downside move in the market is the way of the future," said Dylan Wetherill, president and founder of short interest tracking Web site ShortSqueeze.com. "The shorts continue to sell shares at an erratic pace," he added. Short interest as of July 15 was equal to a record 4.86 percent of the total shares outstanding on the NYSE.
- U.S. private equity firm Lone Star Funds has raised two funds totaling $10 billion, significantly above a $6.5 billion target, a source familiar with the situation said on Thursday. Three-quarters of that is for one fund that will be for general investment purposes, and the other quarter is for real estate investments, the source said.
- US Senate on course to vote Sat. on housing bill.
- Newly merged media conglomerate Thomson Reuters is preparing to launch a business television news channel to rival that of Bloomberg and CNBC. The Daily Telegraph understands that the plan is for the channel to appear on both the internet and some form of cable or digital platform. The launch could be as early as January but may be pushed back as the company is conscious of Reuters' earlier unsuccessful foray into television.

Financial Times:
- The eurozone economy is fast running out of steam with growth prospects collapsing across the 15-country region, closely watched surveys indicated on Thursday.

Telegraph:
- JPMorgan Chase(JPM) is in talks with banks and private equity firms to acquire and break up HBOS Plc, the biggest UK mortgage lender.

China Daily:
- China’s Energy Subsidies Are Unsustainable.
- China Farmers Incomes Hit by Rising Prices.

Late Buy/Sell Recommendations
Citigroup:

- Reiterated Buy on (LLL), target $127.

CSFB:
- Reiterated Outperform on (CELG), raised target to $84.

Night Trading
Asian Indices are -2.0% to -1.0% on average.
S&P 500 futures -.05%.
NASDAQ 100 futures unch.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Pre-market Stock Quote/Chart
Before the Bell CNBC Video(bottom right)
Global Commentary
WSJ Intl Markets Performance
Commodity Movers
Top 25 Stories

Top 20 Business Stories
Today in IBD
In Play
Bond Ticker
Economic Preview/Calendar
Daily Stock Events
Upgrades/Downgrades
Rasmussen Business/Economy Polling

Earnings of Note
Company/EPS Estimate
- (ACI)/.64
- (B)/.60
- (BEC)/.87
- (BDK)/1.42
- (FSS)/.18
- (FO)/1.20
- (IDXX)/.456
- (ITT)/1.10
- (LM)/.13
- (TROW)/.60
- (NFLX)/.40

Upcoming Splits
- None of note

Economic Releases
8:30 am EST

- Durables Goods Orders for June are estimated to fall .3% versus unch. in May.
- Durables Ex Transports for June are estimated to fall .2% versus a .8% decline in May.

10:00 am EST
- Final July Univ. of Mich. Consumer Confidence is estimated to fall to 56.4 versus a prior estimate of 56.6.
- New Home Sales for June are estimated to fall to 503K versus 512K in May.

Other Potential Market Movers
- None of note.

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

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