Friday, April 29, 2011

Market Week in Review

S&P 500 1,123.53 -4.69%*


The Weekly Wrap by

*5-Day Change

Weekly Scoreboard*


  • S&P 500 1,363.61 +1.96%
  • DJIA 12,810.50 +2.43%
  • NASDAQ 2,873.54 +1.89%
  • Russell 2000 865.29 +2.32%
  • Wilshire 5000 14,308.35 +1.99%
  • Russell 1000 Growth 627.13 +1.61%
  • Russell 1000 Value 693.76 +2.32%
  • Morgan Stanley Consumer 784.93 +1.39%
  • Morgan Stanley Cyclical 1,131.45 +2.17%
  • Morgan Stanley Technology 702.67 +1.25%
  • Transports 5,514.87 +4.24%
  • Utilities 429.06 +2.55%
  • MSCI Emerging Markets 49.91 +.05%
  • Lyxor L/S Equity Long Bias Index 1,060.74 +1.78%
  • Lyxor L/S Equity Variable Bias Index 898.98 +1.23%
  • Lyxor L/S Equity Short Bias Index 595.87 -3.11%
  • NYSE Cumulative A/D Line 127,442 +2.86%
  • Bloomberg New Highs-Lows Index 618 +384
  • Bloomberg Crude Oil % Bulls 60.0 +57.89%
  • CFTC Oil Net Speculative Position 258,068 +1.59%
  • CFTC Oil Total Open Interest 1,553,704 +.90%
  • Total Put/Call .92 unch.
  • OEX Put/Call 2.24 +19.15%
  • ISE Sentiment 74.0 -22.03%
  • NYSE Arms 1.27 +18.69%
  • Volatility(VIX) 14.75 +.41%
  • G7 Currency Volatility (VXY) 11.02 -.63%
  • Smart Money Flow Index 10,536.07 +2.35%
  • Money Mkt Mutual Fund Assets $2.727 Trillion +.60%
  • AAII % Bulls 37.90 +17.85%
  • AAII % Bears 30.65 -1.10%
Futures Spot Prices
  • CRB Index 370.56 +.85%
  • Crude Oil 113.93 +1.41%
  • Reformulated Gasoline 339.84 +3.67%
  • Natural Gas 4.70 +5.08%
  • Heating Oil 327.58 +1.80%
  • Gold 1,556.40 +3.43%
  • Bloomberg Base Metals 266.33 -1.56%
  • Copper 417.90 -5.11%
  • US No. 1 Heavy Melt Scrap Steel 416.0 USD/Ton -.16%
  • China Hot Rolled Domestic Steel Sheet 4,911 Yuan/Ton +.76%
  • UBS-Bloomberg Agriculture 1,652.69 -2.89%
  • ECRI Weekly Leading Economic Index Growth Rate 7.5% -20 basis points
  • S&P 500 EPS Estimates 1 Year Mean 94.26 -.08%
  • Citi US Economic Surprise Index 1.0 -10.6 points
  • Fed Fund Futures imply 52.0% chance of no change, 48.0% chance of 25 basis point cut on 6/22
  • US Dollar Index 73.03 -1.45%
  • Yield Curve 268.0 -5 basis points
  • 10-Year US Treasury Yield 3.29% -11 basis points
  • Federal Reserve's Balance Sheet $2.675 Trillion +.19%
  • U.S. Sovereign Debt Credit Default Swap 43.92 -2.40%
  • California Municipal Debt Credit Default Swap 203.54 -8.23%
  • Western Europe Sovereign Debt Credit Default Swap Index 187.25 -1.14%
  • Emerging Markets Sovereign Debt CDS Index 168.87 +6.27%
  • Saudi Sovereign Debt Credit Default Swap 111.25 -3.26%
  • Iraqi 2028 Government Bonds 91.71 +.17%
  • 10-Year TIPS Spread 2.57% -3 basis points
  • TED Spread 24.0 +2 basis points
  • N. America Investment Grade Credit Default Swap Index 88.55 -4.84%
  • Euro Financial Sector Credit Default Swap Index 85.01 -5.23%
  • Emerging Markets Credit Default Swap Index 199.43 -1.87%
  • CMBS Super Senior AAA 10-Year Treasury Spread 153.0 -26 basis points
  • M1 Money Supply $1.889 Trillion +.25%
  • Business Loans 632.60 -.14%
  • 4-Week Moving Average of Jobless Claims 408,500 +2.30%
  • Continuing Claims Unemployment Rate 2.9% unch.
  • Average 30-Year Mortgage Rate 4.78% -2 basis points
  • Weekly Mortgage Applications 441.20 -5.63%
  • Bloomberg Consumer Comfort -45.10 -2.5 points
  • Weekly Retail Sales +5.0% +10 basis points
  • Nationwide Gas $3.91/gallon +.07/gallon
  • U.S. Heating Demand Next 7 Days 8.0% above normal
  • Baltic Dry Index 1,269 -.16%
  • Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 37.50 unch.
  • Rail Freight Carloads 225,668 -2.08%
Best Performing Style
  • Small-Cap Value +2.39%
Worst Performing Style
  • Mid-Cap Growth +1.47%
Leading Sectors
  • Road & Rail +7.33%
  • Airlines +5.93%
  • HMOs +4.61%
  • Drugs +3.13%
  • REITs +3.02%
Lagging Sectors
  • Oil Service -.28%
  • Oil Tankers -.38%
  • Disk Drives -.87%
  • Gold & Silver -1.58%
  • Computer Hardware -1.90%
Weekly High-Volume Stock Gainers (37)
Weekly High-Volume Stock Losers (19)
Weekly Charts
*5-Day Change

Stocks Slightly Higher into Final Hour on Earnings Optimism, Buyout Speculation, Technical Buying, Lower Long-Term Rates

Broad Market Tone:

  • Advance/Decline Line: Higher
  • Sector Performance: Mixed
  • Volume: Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • VIX 14.82 +1.37%
  • ISE Sentiment Index 76.0 -33.2%
  • Total Put/Call .88 +7.32%
  • NYSE Arms 1.20 +21.0%
Credit Investor Angst:
  • North American Investment Grade CDS Index 88.55 -2.15%
  • European Financial Sector CDS Index 86.55 +1.61%
  • Western Europe Sovereign Debt CDS Index 187.25 -1.06%
  • Emerging Market CDS Index 199.33 -2.20%
  • 2-Year Swap Spread 17.0 +1 bp
  • TED Spread 24.0 unch.
Economic Gauges:
  • 3-Month T-Bill Yield .04% unch.
  • Yield Curve 268.0 -1 bp
  • China Import Iron Ore Spot $181.50/Metric Tonne n/a
  • Citi US Economic Surprise Index 1.0 -2.5 points
  • 10-Year TIPS Spread 2.57% +1 bp
Overseas Futures:
  • Nikkei Futures: Indicating +85 open in Japan
  • DAX Futures: Indicating +28 open in Germany
  • Higher: On gains in my Medical and Tech 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, rising food/energy prices and Mideast unrest. On the positive side, Airline, Homebuilding, Construction, Computer Service, Ag, Energy, Al Energy, Coal and Defense shares are especially strong, rising more than +1.0%. Cyclical and small-cap shares are outperforming again. Lumber is rising +2.64%. The 10-year yield is falling -3 bps to 3.28%. The Spain sovereign cds is falling -2.21% to 236.88 bps, the Greece sovereign cds is falling -3.58% to 1,350.38, the Israeli sovereign cds is falling -4.05% to 135.17 bps and the Saudi sovereign cds is declining -3.1% to 111.25 bps. Moreover, the US Muni CDS Index is dropping -3.81% to 135.57 bps. On the negative side, REIT, Biotech and Software shares are under pressure, falling more than -.75%. The US price for a gallon of gas is rising .02/gallon today to $3.91/gallon. It is up .79/gallon in 73 days. Gold is jumping 1.6%, Oil is rising +.7%, the UBS-Bloomberg Ag Spot Index is gaining +2.0% and Copper is falling -1.74%. Rice futures are breaking out technically. The US dollar continues to trade very poorly. One of my longs, (AAPL), is surging today on positive news out of Asia on sales of the white iPhone and iPad 2 as the negative effects of the Nasdaq 100 re-weighting fade. As well, RIM's poor results help. I still think (AAPL) is absurdly undervalued at 14.3x very conservative forward estimates. The broad US stock market continues to trade very well. After a brief pause early next week, further gains are likely. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, earnings optimism, buyout speculation, investor performance angst, lower long-term rates and technical buying.

Today's Headlines


  • Consumer Spending Climbs With Food, Fuel Costs. Americans increased their spending in March as they paid more for gasoline and groceries, suggesting income gains may need to pick up to prevent a bigger squeeze on household finances. Purchases rose 0.6 percent after a revised 0.9 percent gain the prior month that was higher than previously estimated, the Commerce Department said today in Washington. After adjusting for changes in prices, the spending that accounts for 70 percent of the economy rose 0.2 percent in March.
  • Gold Rises to Record; Silver Heads for Biggest Monthly Advance Since 1983. Gold futures rose to a record for the third straight day on bets that the dollar will extend a slump, enhancing the allure of the metal as an alternative asset. Silver headed for the biggest monthly gain in 28 years. The greenback headed for the fifth consecutive monthly decline against a basket of six major currencies. The Federal Reserve signaled this week that borrowing costs will remain at a record low for an extended period. Gold headed for the biggest monthly gain since November 2009. “The dollar will continue to lose ground for the foreseeable future, so it only makes sense to be invested in precious metals,” said Matthew Zeman, a strategist at Kingsview Financial in Chicago. Gold futures for June delivery rose $12.80, or 0.8 percent, to $1,544 an ounce at 10:41 a.m. on the Comex in New York. Earlier, the price reached a record $1,545.90. The metal has gained more than 7 percent this month. Gold for immediate delivery climbed as much as 0.6 percent to an all-time high of $1,544.90. 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.
  • Caterpillar(CAT) Boosts Forecast as Profit Beats Estimates. Caterpillar Inc. (CAT), the world’s largest maker of construction equipment, posted first-quarter profit that topped analysts’ estimates and raised its full-year earnings forecast as sales surged in developing countries. Net income rose more than fivefold to $1.23 billion, or $1.84 a share, from $233 million, or 36 cents, a year earlier, the Peoria, Illinois-based company said in a statement today. The average estimate of 21 analysts in a Bloomberg survey was $1.31 a share. Sales rose 57 percent to $12.9 billion from $8.24 billion. “We expect that the pace of world economic growth will support continued recovery in the key industries we serve,” Chief Executive Officer Doug Oberhelman said in the statement. “We are positive about the short-term U.S. economic outlook but believe bipartisan actions are needed in Washington to improve the long-run fiscal position of the U.S. government.”
  • Spanish Unemployment Rate Rises to More Than 21% as Inflation Accelerates. Spanish unemployment, the highest in Europe, rose more than expected as inflation accelerated and retail sales plunged, undermining the nation’s recovery from its worst recession in six decades. Joblessness rose to 21.3 percent in the first quarter, the National Statistics Institute said today in Madrid, compared with 20.3 percent in the previous three months and a median forecast of 20.7 percent in a Bloomberg News survey. Consumer prices gained 3.5 percent in April from a year earlier, based on a European Union measure, after increasing 3.3 percent in March. Retail sales fell 8.6 percent in March from a year earlier, the steepest decline in two years, INE said.
  • GM Vehicles Probed by U.S. Agency for Possible Faulty Fuel-Tank Readings. General Motors Co. (GM) trucks are being investigated by U.S. auto-safety regulators because faulty fuel- tank readings may lead drivers to think there’s more gasoline in the vehicles than there really is.
  • Goldman(GS), JPMorgan(JPM) Among 16 Banks Targeted by EU in Swaps Probe. Goldman Sachs Group Inc. (GS), JPMorgan Chase & Co. (JPM) and 14 other investment banks face the first-ever European Union antitrust probes into the swaps market, following investigations by U.S. regulators. The EU is examining whether 16 banks, including Citigroup Inc. (C) and Deutsche Bank AG (DBK), colluded by giving market information to Markit Group Ltd., a data provider majority-owned by Wall Street’s largest banks. It will also check if nine of the firms struck unfair deals with Intercontinental Exchange Inc.’s European derivatives clearinghouse, shutting out rivals.
  • Afghan War Progress at Risk From Corruption, Training Lags. Security progress in Afghanistan risks being undermined by the Afghan government’s failure to develop rapidly enough and tackle corruption and by shortfalls in the number of coalition trainers, the Pentagon said.
  • Libyan Fighting for Key Border Crossing Spills Into Tunisia. A battle between Libyan government forces and rebels for a key border crossing spilled into Tunisia, part of violence spreading throughout the country as rebels struggle to sustain an uprising against Muammar Qaddafi.
  • Syrian Protests Escalate Nationwide After Government Warns Demonstrators. Syrians took to the streets across the country today, defying warnings by the Interior Ministry not to hold demonstrations as the popular challenge to President Bashar al-Assad’s rule escalates.
  • Oil is Poised to Climb for Record Eighth Straight Month on Demand Outlook, Falling Dollar, Mideast Tensions. Oil was poised to rise for an unprecedented eighth straight month as better-than-expected consumer spending signaled fuel demand may increase. Futures traded near a 31-month high after purchases climbed in March as Americans spent more on food and fuel, according to a Commerce Department report. Equities advanced and the dollar weakened against other major currencies, boosting the appeal of commodities as an alternative investment. Crude for June delivery rose 50 cents, or 0.4 percent, to $113.36 a barrel at 12:03 p.m. on the New York Mercantile Exchange. Futures are up 6.2 percent in April and have advanced every month since August, the longest streak of gains since the contract began trading in 1983. Prices have climbed 1 percent this week and have jumped 33 percent in the past year. Brent for June settlement increased 67 cents, or 0.5 percent, to $125.69 a barrel on London’s ICE Futures Europe exchange.
Wall Street Journal:
  • Banks Rush to Improve Foreclosure Practices. The clock is ticking for the biggest U.S. banks to revamp their foreclosure practices. Under orders from U.S. regulators, 14 financial institutions have until mid-June to lay out plans to clean up their mortgage-servicing operations—and another 60 days to make the changes. It will be a daunting, expensive chore despite the work done since the foreclosure mess erupted last fall. J.P. Morgan Chase & Co. said it would take a $1.1 billion charge related to the consent order and other servicing-cost increases. Citigroup Inc., which services $602 billion of mortgage loans, predicted the changes will boost expenses by as much as $35 million a year.
Business Insider:
New York Times:
  • In Shift, Egypt Warms to Iran and Hamas, Israel's Foes. Egypt is charting a new course in its foreign policy that has already begun shaking up the established order in the Middle East, planning to open the blockaded border with Gaza and normalizing relations with two of Israel and the West’s Islamist foes, Hamas and Iran. Egyptian officials, emboldened by the revolution and with an eye on coming elections, say that they are moving toward policies that more accurately reflect public opinion. In the process they are seeking to reclaim the influence over the region that waned as their country became a predictable ally of Washington and the Israelis in the years since the 1979 peace treaty with Israel. Egypt’s shifts are likely to alter the balance of power in the region, allowing Iran new access to a previously implacable foe and creating distance between itself and Israel, which has been watching the changes with some alarm. “We are troubled by some of the recent actions coming out of Egypt,” said one senior Israeli official, citing a “rapprochement between Iran and Egypt” as well as “an upgrading of the relationship between Egypt and Hamas.” “These developments could have strategic implications on Israel’s security,” the official said, speaking on the condition of anonymity because the issues were still under discussion in diplomatic channels. “In the past Hamas was able to rearm when Egypt was making efforts to prevent that. How much more can they build their terrorist machine in Gaza if Egypt were to stop?”
LA Times:
Boston Herald:
  • Polls: Romney Leading Obama, Both Burdened On Health Care Front. A WMUR Granite State Poll by the University of New Hampshire Survey Center shows Romney with a 50-43 edge in a hypothetical matchup against President Barack Obama. The phone poll of 504 randomly selected New Hampshire adults was taken from April 15-26 and has a 4.4 percent margin of error. Fifty-two percent disapproved of Obama’s job performance while 44 percent said he’s doing a good job. Pollsters said Obama’s job performance rating was the lowest since his election, with his popularity knocked down by his handling of the economy – 40 percent approved and 57 percent disapproved - and health care policy – 40 percent approved and 56 percent disapproved.
  • Apple's(AAPL) White iPhone 4 Sold Out in China. “The white iPhone 4 goes on sale Thursday. Apple’s new white iPhone 4 has sold out in some Asian markets, analysts and sites reported today,” Gregg Keizer reports for Computerworld. “The long-delayed white iPhone 4, which went on sale in 28 countries earlier Thursday, sold out in Beijing, said Brian White, an analyst with Ticonderoga Securities,” Keizer reports. “‘Our checks today indicate that the ‘white’ iPhone 4 was sold out on launch day in Beijing,’ said White in an email. Keizer reports, “Other sources seconded the sell-out. According to the blog ElegentTech, Hong Kong stocks of the white iPhone 4 sold out in the first hour of availability.” Read more in the full article here.
Money Morning:
  • Asian iPad 2 Launches Greeted With Long Lines. Asian launches of the iPad 2 were met with long lines on Thursday, reports say. The most significant of these may be in Japan, which was first slated to get the tablet on March 25th, but had the introduction delayed because of the massive earthquake and tsunami that hit the north on March 11th. By the time Apple Japan's flagship Ginza store opened at 9AM on Thursday, the iPad2 lineup was reportedly three blocks long. AFP notes that in Hong Kong, around 400 people waited in the rain outside one store. Mall staff are said to have have handed out raincoats to people who had forgot an umbrella. Some of the buyers may have been gray marketeers, however, as several groups are said to have piled as many as a dozen iPads into shopping trolleys. AFP adds that Apple's online store for Hong Kong was out of stock by midday. Other Asia-Pacific launches are occurring in Macau, Malaysia, the Philippines, Singapore and South Korea. One Singapore reseller is noted to have had only 100 iPads in stock. In South Korea, 100 people lined up at the central Seoul outlet of carrier KT. Elsewhere in the world India, Israel, South Africa, Turkey and the United Arab Emirates are getting the device.
  • China will hold a campaign against "illegal" books, software, television series, moves and online music and games May 1 to Aug. 31 to market the 90th anniversary of the founding of the Communist Party of China on July 1, citing the Ministry of Culture. The government will conduct "strict" reviews of the content and licenses of performance and entertainment venues, and punish Internet cafes that allow minors to use their facilities.
  • Tibetan Human Rights Watch Group Expresses Deep Alarm at Chinese Military Crackdown on Monastery. The Tibetan Centre for Human Rights and Democracy (TCHRD) is deeply concerned at the massive security crackdown in Ngaba County, Sichuan, and other Tibetan areas in present day China. The crackdown has been severe in the past 43 days in Ngaba County and Kirti Monastery has been targetted particularly. Since the self-immolation of 20-year-old monk Phuntsok on 16 March 2011 in protest against Chinese rule in Tibet, scores of Tibetans have protested at the inhumane treatment given to him by the police while extinguishing flame. The extreme response by the Chinese security forces has led to around 37 detentions as well as four deaths (self-immolation by Phuntsok and three beaten to death) in the security crackdown. The Kirti Monastery has been under lockdown for over a month now. Armed security personals with police attack dogs patrol compound of the monastery. Work teams from the local religious bureau and government has been conducting rigorous "patriotic re-education" inside the monastery since 20 March. On 21 April, 300 monks have been transported in ten military trucks to an extralegal black jail. When the local Tibetans, mostly elderlies, sitting vigil at the monastery gate tried to stop the monks from being taken away, the police used extreme violence in controlling the crowd which led to death of two elderly Tibetans (65-year-old woman named Sherkyi and 60-year-old man Dongko). Another Tibetan, Chukpel, 24, died of injuries after being severely beaten by the police on 7 April when he along with two youths staged protest in front of a police station in Dzamthang Township, Ngaba Prefecture. The TCHRD is extremely concerned at fate of the monks led away by the security troops.

Bear Radar

Style Underperformer:

  • Mid-Cap Value (-.09%)
Sector Underperformers:
  • 1) Software -.95% 2) Hospitals -.79% 3) REITs -.67%
Stocks Falling on Unusual Volume:
Stocks With Unusual Put Option Activity:
  • 1) SPWRB 2) GT 3) MMI 4) SPPI 5) OXY
Stocks With Most Negative News Mentions:
  • 1) GPRO 2) OSK 3) WM 4) CRR 5) REGN

Bull Radar

Style Outperformer:

  • Small-Cap Growth (+.56%)
Sector Outperformers:
  • 1) Coal +2.47% 2) Airlines +2.41% 3) Energy +1.39%
Stocks Rising on Unusual Volume:
Stocks With Unusual Call Option Activity:
  • 1) XLI 2) LYB 3) GT 4) DOW 5) CSTR
Stocks With Most Positive News Mentions:
  • 1) K 2) CERN 3) PTEN 4) ZMH 5) CAT

Friday Watch

Evening Headlines

  • 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.
  • 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.
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.
  • 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.
  • 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
  • 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.
  • 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
  • (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.

Thursday, April 28, 2011

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
  • 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


  • 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 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.
  • 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:
Zero Hedge:
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:
  • 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.