Thursday Watch

Late-Night Headlines
Bloomberg:

- Hewlett-Packard Co.(HPQ), the world’s biggest personal-computer maker, plans to buy 3Com Corp. for $2.7 billion, stepping up competition with Cisco Systems Inc. in the computer-networking market. 3Com shareholders will receive $7.90 a share in cash, 39 percent more than today’s closing price.

- Applied Materials Inc.(AMAT), the world’s biggest maker of chip equipment, reported its first profit in a year after a pickup in orders. Applied rose 2 cents to $13.27 in late trading after the announcement.

- CNN anchor Lou Dobbs is leaving the cable-television news network, the veteran news commentator announced today on his final show. Dobbs didn’t say what he will do next. CNN, once the leader in cable news, fell to fourth place last month among the 24-hour news channels in prime-time audience ratings. CNN averaged 201,000 viewers ages 25 to 54 from 8 p.m. to 11 p.m. Monday through Friday last month, according to Nielsen Co. data. Fox News finished first with 688,000 viewers a night in that age group; MSNBC came in second with 252,000; and HLN, also owned by Time Warner, averaged 220,000.

Wall Street Journal:

- There is a hint of that old boomtown feeling again in the Bay Area -- this time in living rooms and garages and cubicles where a cottage industry is unfolding around the iPhone app. Despite the recession, hundreds of start-ups have sprung up in the area since Apple Inc. launched the iPhone two years ago and opened up the device so third-party developers could create games and other software applications for it. "This is our dot-com boom," said Samir Shah, 26 years old, a co-founder of Mountain View-based Snapture Labs LLC, which makes a $1.99 camera app that has been one of the top-ranked photography apps since September.

- Organs and blood products, eggs, sperm, breast milk and other goods from the human body are bought and sold in a market that has burgeoned over the past two decades. The tax code hasn't kept up. The Internal Revenue Code has nothing specific to say about how, or even whether, taxpayers should report sales of their own body materials. Is there taxable income when a person sells an egg, a kidney or blood plasma? If so, should it be treated as ordinary income or capital gains?

- The fight over the future of the U.S. health-care system is heading outside the Beltway this week, as groups on all sides take advantage of Congress's Veterans Day recess to put pressure on lawmakers. Conservative groups are using the recess -- one week for the House and three days for the Senate -- to press lawmakers to vote no on the health-care overhaul plans. Groups in favor of the Democratic health plan are equally active, if not more so, after getting caught flat-footed this summer when groups opposing the plans packed town-hall meetings.

- The Federal Trade Commission expressed concern about the practices of brand-name drug makers after generic drug companies complained they can't get bulk supplies of some medicines they want to copy. GlaxoSmithKline PLC and Celgene Corp. are among the brand-name makers citing a federal drug-safety program in refusing to supply bulk quantities of certain drugs. They say the generic companies aren't authorized to buy drugs under the program. The generic companies say that's an excuse to block competition. The situation has gotten the attention of the FTC, which investigates anticompetitive behavior in consumer markets. "We're going to be very concerned about any practice that could increase prescription-drug costs to American consumers," FTC Chairman Jon Leibowitz said in an interview. "You can't let drug safety be used as a tool to delay generic competition."

IBD:

- Can Peet's Coffee & Tea (PEET) add some sizzle to its business by taking on a new market?

Business Week:
- President Hugo Chavez's government on Wednesday nationalized two coffee companies, including Fama de America, one of Venezuela's largest coffee producers. The state-run Bolivarian News Agency said presidential decrees published in the Official Gazette ordered the government takeover of Fama de America and Cafea, which together control about 80 percent of the local coffee market.

Forbes:

- The worst could be over for real estate trusts.

- The World’s Most Powerful People(List).

BigGovernment.com:

- Robert Rubin: The Nexus of Big Government and Wall Street by Charles Gasparino. For anyone who thinks that big Wall Street and Big Government aren’t joined at the hip, promoting policies and laws that keep each other fat and happy often at the expense of the American taxpayer, consider the career of Robert Rubin.

Politico:

- Texas GOP Gov. Rick Perry accused President Barack Obama on Wednesday of “punishing” Texas and being “hell-bent” on turning the United States into a socialist country. Speaking at a luncheon for a Midland County Republican Women’s group, Perry said that “this is an administration hell-bent toward taking American towards a socialist country. And we all don’t need to be afraid to say that because that’s what it is.” Perry praised the tea party movement to the Republican activists in attendance, crediting the grassroots groups with discouraging some Democrats in Washington from pushing for a public option in the health care bill. “If you all think those tea parties didn’t work, then let me tell you something,” Perry said. “When they all came home in August for those town hall meetings, they got an earful. Then they went back to Washington, D.C. and the Senate voted that public option down in committee with a majority of Democrats in the Senate.” Perry also accused the Obama administration of intentionally dumping illegal immigrants from other western states in Texas, recalling a conversation he had with local officials notifying him that illegal aliens that were caught in Nogales, Arizona were being dropped off by federal authorities in Presidio, Texas. “Friday a week ago, I got not a phone call from Washington, not a letter from Washington and as a matter of fact, I don’t think any member of our congressional delegation was even notified. The first time we were contacted was by the superintendent of the school and the county judge of Presidio County,” Perry said. “They said, ‘do you all know what’s fixin’ to happen?’ I said, ‘well, no. What’s going on?’ They said ‘the government has just called us and said for us to get ready for an influx of illegal aliens who were captured illegally crossing the border.’” “It’s called the alien transfer-and-exit program,” Perry told the crowd, “trucking them from Nogales, past El Paso down to our western border in Presidio.” The Texas governor said he sees the action as “punishing this state” and urged the assembled Republicans to “stand up” to Washington. “I say it’s time to make tea parties twice as big as what they were,” Perry declared. “I think it’s time for us to stand up and say to Washington, D.C. that we are no longer going to accept that kind of stuff sitting down and being quiet.”

- Sen. John McCain (R-Ariz.) Wednesday called the Fort Hood killings an “act of terror” and joined a parade of GOP critics in suggesting that “political correctness” might have been a factor in not preventing the shootings. “We ought to make sure ‘political correctness’ never impedes national security,” McCain said in a speech at the University of Louisville. McCain’s comments echoed those of a variety of Republican politicians and commentators — as well as Sen. Joe Lieberman (I-Conn) — over the past few days as information about the background of the alleged shooter has surfaced in the media. The criticisms, which initially focused on the failure of the administration and the Army to use the word “terrorism” or “jihadism” in connection with Fort Hood, are now being merged with a larger Republican portrayal of the Obama administration’s approach toward terrorism generally. “It’s very important what we call” the Fort Hood tragedy, said former Bush White House press secretary Dana Perino. “The failure of the connecting of the dots may indicate that in some areas we still have a law enforcement approach to domestic terror threats,” Perino said.

The Business Insider:

- Chart of the Day: Apple’s(AAPL) Soaring Pile of Cash.

USA Today.com:

- NBC gives new meaning to the phrase "green screen" next week, spreading an environmental message across five prime-time entertainment programs. "30 Rock," where Al Gore takes a cameo role, leads the way. Environmental themes were also added to the scripts of "The Biggest Loser," "The Office," "Heroes" and "Community." Colleton says there was no attempt to be heavy-handed and interfere with the creative process. "We make sure we don't dictate to the show," she said. Producers decide the best way to absorb the message in a way that's appropriate for their audiences, she said. NBC News is also involved next week. The "Today" show will have a series on cost-efficient ways for families to live greener lives. Anne Thompson will do environmental stories from Greenland, Denmark and Arizona on "Nightly News," and David Gregory will bring up the topic on "Meet the Press." Activities on NBC Universal's cable properties include hosts on The Weather Channel advising viewers to turn down their thermostats. Green screens, by the way, are blank screens on which video or maps are projected behind anchors or actors. NBC and NBC Universal are units of General Electric (GE).

AP:

- A group of doctors overseeing Nidal Malik Hasan's medical training discussed concerns about his overly zealous religious views and strange behavior months before the Army major was accused of opening fire on soldiers and civilians at Fort Hood, Texas. Doctors and staff overseeing Hasan's training viewed him at times as belligerent, defensive and argumentative in his frequent discussions of his Muslim faith, a military official familiar with several group discussions about Hasan said. As a psychiatrist in training, Hasan was characterized in meetings as a mediocre student and lazy worker, a matter of concern among the doctors and staff at Walter Reed Army Medical Center and the Uniformed Services University of the Health Sciences military medical school, the official said.The concerns about Hasan's performance and religious views were shared with other military officials considering his assignment after he finished his medical training, and the consensus was to send him to Fort Hood, the official said. Fort Hood was considered the best assignment for Hasan because other doctors could handle the workload if he continued to perform poorly and his superiors could document any continued behavior problems, the official said. The group saw no evidence that Hasan, 39, was violent or a threat. It was more that he repeatedly referred to his strong religious views in discussions with classmates, his superiors and even in his research work, the official said. His behavior, while at times perceived as intense and combative, was not unlike the zeal of others with strong religious views, and some doctors and staff were concerned that their unfamiliarity with the Muslim faith would lead them to unfairly single out Hasan's behavior, the official said. The revelations about the concerns that Hasan's superiors had about his behavior before sending him to Fort Hood come amid a growing debate over what warning signs the military missed before last week's shooting rampage that left 13 dead and 29 wounded.

Reuters:

- Veteran banking analyst Richard Bove said shares of Bank of New York Mellon Corp (BK) should be selling at a multiple double its current valuation based on its growth prospects, and strongly recommended buying the stock."Bank of New York is one of the most compelling stories in the financial sector and one of the worst performing stocks. This dichotomy creates an unusually attractive opportunity for capital gains," the Rochdale Securities analyst said in a note to clients.

- Home buyers in much of the United States paid thousands of dollars below asking prices in September, but had slightly less negotiating power than in August, real estate website Zillow.com said on Wednesday. According to the September Zillow Real Estate Market Reports, buyers paid 2.9 percent less, or a median of $6,161, below the listing price on homes bought in September, down from 3 percent, or $6,525, for homes bought in August. Buyers' negotiating power peaked in January, when buyers paid 4.5 percent below list price, a median of $10,096, Zillow said. Meanwhile, 22.7 percent of all homes listed for sale on Zillow had at least one price reduction as of the end of September. The median U.S. reduction was 6.5 percent off the original listing price, the reports showed. Despite the overall weakness in prices, buyers paid more than asking price in seven metro areas. Most of these were in areas of California that have been hardest-hit by foreclosures.

- Morgan Stanley's (MS) brokerage unit is getting more aggressive in trying to lure financial advisers as the wider retail brokerage job market heats up.

- Comcast Corp's(CMCSA) bid for a controlling stake in NBC Universal to create a media powerhouse could be hurt by conflicting interests on Capitol Hill and conditions that hurt synergies, but the deal will likely be approved by regulators after a lengthy review.

Financial Times:

- Best Buy(BBY), the US consumer electronics retailer, yesterday insisted it had not abandoned its ambition to become a leading force in Europe. Brian Dunn, Best Buy's chief executive, promised an "aggressive" roll-out of stores across Europe in spite of the economic downturn. Last October, Best Buy Europe, Best Buy's European joint venture with the UK's Carphone Warehouse, held out the possibility of having 200 large consumer electronics stores across Europe by 2013. But the companies confirmed yesterday that the plans now involve opening up to 100 European stores in the next three years, with 70-80 in the UK. The first UK stores were due to open this year, but the roll-out was delayed until next year. Two stores will open in the spring. "We are not dipping our toe in the water here," Mr Dunn told the Financial Times. "We are coming, we are excited."

Late Buy/Sell Recommendations

FBN Securities:

- Rated (ATHR), (BRCM), (RFMD), (SKYW) Outperform.

- Rated (CAVM) and (ANAD) Underperform.

Night Trading
Asian Indices are -.25% to +.75% on average.

Asia Ex-Japan Inv Grade CDS Index 101.0 -6.5 basis points.
S&P 500 futures -.05%.
NASDAQ 100 futures -.07%.

Morning Preview

BNO Breaking Global News of Note

Google Top Stories

Bloomberg Breaking News

Yahoo Most Popular Biz Stories

MarketWatch News Viewer

Asian Financial News

European Financial News

Latin American Financial News

MarketWatch Pre-market Commentary

U.S. Equity Preview

TradeTheNews Morning Report

Briefing.com In Play

SeekingAlpha Market Currents

Briefing.com Bond Ticker

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

Conference Calendar

Who’s Speaking?
Upgrades/Downgrades

Politico Headlines
Rasmussen Reports Polling

Earnings of Note
Company/EPS Estimate
- (ATK)/2.05

- (URBN)/.35

- (WMT)/.81

- (KSS)/.61

- (DIS)/.41

- (JWN)/.38

- (CRI)/.67

- (GES)/.50

- (MSCC)/.23

Economic Releases

11:00 am EST

- Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,000,000 barrels versus a -3,936,000 barrel decline the prior week. Gasoline supplies are expected to fall by -400,000 barrels versus a -287,000 barrel decline the prior week. Distillate inventories are expected to fall by -800,000 barrels versus a -378,000 barrel decline the prior week. Finally, Refinery Utilization is expected to rise by +.10% versus a -1.17% decline the prior week.

Upcoming Splits
- None of Note

Other Potential Market Movers
- The Treasury’s Geithner speaking, weekly MBA Mortgage Applications report, Treasury’s 30-Year Bond Auction, (GHDX) analyst meeting, (CVG) analyst meeting, (K) analyst day, Piper Financial Services Summit, CSFB healthcare conference, BMO Capital Digital Entertainment Conference, Citi Industrial Manufacturing/Transport Conference and the Needham Broadband Tech Day could also impact trading today.

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