Tuesday Watch

Late-Night Headlines
Bloomberg:
- China, the world’s largest importer of soybeans, increased purchases of the oilseed and animal feed by 27% in March as bird flu concerns dropped.

Fox News:
- Fox News commentator Tony Snow is “highly likely” to accept the position of White House press secretary.

Financial Times:
- US investors have put $68 billion in international mutual funds this year, more than twice the amount they have poured into US funds, citing TrimTabs Investment Research. The data suggests that US retail investors are fueling the mania for emerging market equities.

Koran Tempo:
- PT Astra Agro Lestari, Indonesia’s biggest publicly traded agriculture company, expects to start commercial operations on making biodiesel fuel from palm oil within about 3 years.

Late Buy/Sell Recommendations
- None of note

Night Trading
Asian Indices are -.75% to unch. on average.
S&P 500 indicated -.02%.
NASDAQ 100 indicated -.07%.

Morning Preview
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In Play
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Rasmussen Consumer/Investor Daily Indices
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Earnings of Note
Company/EPS Estimate
- (AFL)/.70
- (AGR)/.08
- (AMZN)/.12
- (T)/.48
- (BJS)/.53
- (BYD)/.73
- (EAT)/.61
- (BNI)/1.04
- (CDWC)/.74
- (CEC)/.83
- (CEN)/.23
- (CKFR)/.38
- (COH)/.27
- (CVG)/.25
- (GLW)/.23
- (DBD)/.23
- (ENR)/.73
- (ESV)/.89
- (FRX)/.35
- (HCA)/.89
- (IMCL)/.83
- (IM)/.34
- (JEC)/.73
- (JBLU)/-.20
- (LLL)/1.11
- (LH)/.74
- (LXK)/.69
- (LMT)/1.14
- (LU)/.03
- (MCHP)/.35
- (NOC)/.99
- (SWK)/.44
- (VLO)/1.32
- (VMC)/.65
- (WHR)/1.50

Upcoming Splits
- None of note

Economic Releases
10:00 am EST
- Consumer Confidence for April is estimated to fall to 106.2 versus a reading of 107.2 in March.
- Existing Home Sales for March are estimated to fall to 6.67M versus 6.91M in February.

BOTTOM LINE: Asian indices are mostly lower, boosted by financial and retail stocks in the region. I expect US equities to open modestly lower and to rally modestly into the afternoon, finishing mixsed. The Portfolio is 50% net long heading into the day.

Stocks Finish Modestly Lower on Growth Worries and Profit-taking

Indices
S&P 500 1,308.11 -.24%
DJIA 11,336.32 -.10%
NASDAQ 2,333.38 -.40%
Russell 2000 766.14 -.77%
Wilshire 5000 13,237.91 -.29%
S&P Barra Growth 610.86 -.25%
S&P Barra Value 694.71 -.23%
Morgan Stanley Consumer 603.85 -.08%
Morgan Stanley Cyclical 850.16 -.24%
Morgan Stanley Technology 546.23 -.42%
Transports 4,730.47 +.52%
Utilities 401.44 +.77%
Put/Call .93 +2.20%
NYSE Arms 1.15 +6.72%
Volatility(VIX) 11.75 +1.38%
ISE Sentiment 204.0 +43.66%
US Dollar 87.54 -.58%
CRB 352.55 -1.68%

Futures Spot Prices
Crude Oil 73.18 -.20%
Unleaded Gasoline 216.25 -.52%
Natural Gas 7.50 -.74%
Heating Oil 203.00 -.08%
Gold 622.90 -.14%
Base Metals 213.14 -.57%
Copper 308.10 -.96%
10-year US Treasury Yield 4.98% -.54%

Leading Sectors
Airlines +3.97%
Steel +1.71%
Coal +1.69%

Lagging Sectors
Energy -1.62%
Homebuilders -1.62%
Internet -3.19%

Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
Deutsche Bank:
- Rated (TOA) Outperform, $29 target.

Smith Barney:
- Rated (CRM)Buy, target $45.
- Rated (ADSK)Buy, target $52.
- Upgraded (ADBE) to Buy, target $45.
- Rated (RHAT) Buy, target $40.

Afternoon/Evening Headlines
Bloomberg:
- Gold and silver fell after crude oil dropped, easing concern that rising fuel prices will stoke inflation in the world’s biggest economies.
- Venezuelan President Hugo Chavez may rewrite the rules for ventures run by oil companies including Total SA and ConocoPhillips(COP) in the Faja, a region that rivals Canada’s oil sands as the Western Hemisphere’s biggest deposit.

BOTTOM LINE: The Portfolio finished higher today on gains in my Internet longs, Medical longs and Energy-related shorts. I did not trade in the final hour, thus leaving the Portfolio 50% net long. The tone of the market was negative today as the advance/decline line finished lower, sector performance was mostly negative and volume was above average. Measures of investor anxiety were mostly higher into the close. Overall, today's market performance was mildly bearish considering the fall in energy prices and long-term rates. I suspect most bulls and bears are unhappy with today's performance. I expect volume and volatility to increase over the next few days. Tomorrow's consumer confidence and existing home sales reports should lead to more bond market strength.

Stocks Slightly Lower Heading into Final Hour on Worries Over Slowing Growth

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Internet longs, Medical longs and Energy-related shorts. I added a (TLT) long and an (EEM) short today, thus leaving the Portfolio 50% net long. The tone of the market is negative as the advance/decline line is lower, sector performance is mostly negative and volume is about average. It continues to appear investors are viewing the recent parabolic rise in many commodity prices as a future hindrance to economic growth, rather than a catalyst for accelerating inflation. Weaker housing data should also prompt lower long-term rates. With 1Q economic growth poised to come in around 4.5% during 1Q and a media frenzy over the recent rise in commodity prices, long-term rates are likely near an intermediate-term peak. I expect US stocks to trade mixed-to-higher into the close from current levels on lower energy prices and long-term rates.

Today's Headlines

Bloomberg:
- Washington Mutual(WM) agreed to buy Commercial Capital Bancorp for about $983 million to increase returns from real-estate banking in California.
- Blackstone Group agreed to buy Deutsche Telekom AG(DT) shares for $3.3 billion from Germany, its first stake in a government-controlled company.
- Plans Exploration & Exploration(PXP), a US oil and natural-gas producer, agreed to buy Stone Energy(SGY) for about $1.46 billion to boost output in the Rocky Mountains and the Gulf of Mexico.
- Iran’s President Ahmadinejad said Israeli Jews should return back to the European countries from which they came.
- A federal jury awarded Rambus(RMBS) almost $307 million in a patent dispute with Hynix Semiconductor, the world’s second largest chipmaker.
- Crude oil fell from a record as OPEC said that the producer group is providing consumers with adequate supplies.
- US Treasuries are rising, pushing the benchmark 10-year note’s yield below 5%, amid speculation that high oil prices will restrain consumer spending.

Wall Street Journal:
- Cendant Corp.(CD) may put its travel unit up for sale today after some private equity firms said they would pay about $4.5 billion for it.
- TIAA-CREF CEO Allison is planning to regain lost business by introducing an online brokerage and other changes.
- The US is stepping up efforts to block funding to Hezbollah from concern that the Shiite organization is helping Iran stage terrorist attacks.
- A startup venture, DayJet Corp., will start air-taxi passenger services later this year between small cities in the southeastern US.
- Toyota Motor(TM) and News Corp’s(NWS) Fox network have reached an agreement for the automaker to sponsor and be featured in a spin-off series of the drama “Prison Break” for mobile phones.
- More companies are selling bonds convertible into shares, boosting profits at hedge funds that trade the securities.

NY Times:
- Intel Corp.(INTC) will introduce a new line of business products to manage large groups of personal computers as it tries to reverse its loss of market share to Advanced Micro Devices(AMD)
- Seven Roman Catholic cardinals and about a half-dozen archbishops are among some 50 religious leaders who have signed a petition to support a constitutional amendment banning same-sex marriage.

Economic Releases

- None of note

Links of Interest

Market Snapshot
Detailed Market Summary
Market Internals
Economic Commentary
Movers & Shakers
Today in IBD
NYSE OrderTrac
I-Watch Sector Overview
NYSE Unusual Volume
NASDAQ Unusual Volume
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Real-time Intraday Chart/Quote