Bull Radar

Style Outperformer:

Large-cap Growth (+.15%)

Sector Outperformers:

I-Banks (+1.36%), Airlines (+.77%) and Restaurants (+.43%)

Stocks Rising on Unusual Volume:

FPO, TUP, BCA, CGX, OPY, FTD, JLL, UDR, WBSN, EGLT, BBOX, NETL, KNSY, SLAB, ZINC, CYBS, INFA, FLEX, JBHT, HLIT, UTEK, QMAR, RMBS, JRJC, ERTS, CHRW, IBCP, GILD, DSPG, ACV, ESRX, MHS, BA, SU, CLWR, DCM and DLLR

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Wednesday Watch

Late-Night Headlines
Bloomberg:
- Andrew Liveris, CEO of Dow Chemical(DOW), Doesn’t See Recession for US in 2008. (video)
- Copper Jumps the Most in Three Weeks as US Growth Concerns Ease.
- Uranium fell to a three-month low after Australia and Kazakhstan, two of the world’s three-biggest producers, reported higher output.
- Lehman Brothers Holdings(LEH) boosted the dividend on its stock by 13%, extending a 12-year streak of increases after posting smaller mortgage losses than rivals.
- The FBI is investigating 14 corporations for possible accounting fraud and other crimes related to the subprime lending crisis, officials said.
- Yahoo! Inc.(YHOO) said fourth-quarter profit fell 23% and projected revenue that missed some estimates after some customers switched to Google Inc.(GOOG) for online searches. The shares fell 10% in extended trading.
- JB Hunt Transport Services(JBHT) reported fourth quarter revenue rose 11% from year ago levels. The stock jumped 6.1% in after-hours trading.
- China deployed half a million soldiers to help restore transport links, power supplies and clear debris as the nation’s worst snowstorms in 50 years stranded migrant workers before the Lunar New Year holidays.

Wall Street Journal:
- Ford Motor(F) plans to bring its European commercial van, known as Transit Connect, to the US.
- The SEC and the China Banking Regulatory Commission will sign an agreement to allow Chinese banks to develop US mutual funds. The agreement is expected to be signed in the next few days and will let Chinese citizens invest savings in US markets.
- Arizona Sen. John McCain won Florida’s presidential primary, according to media projections, thrusting him into the forefront of the Republican race.

MarketWatch.com:
- The NY Insurance Department said on Tuesday that it hopes to have enough time to resolve bond insurer problems, ahead of possible decisions by rating agencies S&P and Moody’s Investors Service to downgrade leading companies in the $2.4 trillion industry.

CNBC:
- French Trader: Bosses Knew About Risky Trades.

Forbes.com:
- WaMu CEO Sees Boost From Fed Rate Cuts.

MSNBC.com:
- Former NYC mayor Rudy Giuliani will endorse Senator John McCain as the Republican nominee for president on Wednesday.

USA Today.com:
- Independent hotels cater to elite business travelers.
- Airlines blame fuel prices for losses but see solid demand.

Australian:
- Rio Tinto Group’s(RTP) advisers say BHP Billiton(BHP) can afford to increase its takeover offer to as much as five shares for one.

Business Times:
- Government of Singapore Investment Corp. could still invest in another distressed bank if the deal is worthwhile, citing Tony Tan, deputy chairman of the fund.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (LEA), target $42.
- Reiterated Buy on (GKSR), target $49.
- Reiterated Buy (STLD), target $66.

Night Trading
Asian Indices are -1.0% to unch. on average.
S&P 500 futures -.27%.
NASDAQ 100 futures -.30%.

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Earnings of Note
Company/EPS Estimate
- (D)/.55
- (AGN)/.58
- (BHI)/1.28
- (SEE)/.43
- (RCL)/.34
- (NCR)/.52
- (K)/.44
- (CEG)/1.42
- (WWW)/.44
- (MRK)/.73
- (KFT)/.44
- (EK)/.50
- (HES)/1.72
- (SO)/.24
- (BA)/1.33
- (UPS)/1.13
- (ITW)/.84
- (PHM)/-.76
- (SBUX)/ .27
- (AFL)/.80
- (NVLS)/.37
- (MUR)/1.24
- (ADS)/.68
- (AMZN)/.47
- (MBI)/-2.98
- (OI)/.42
- (MO)/.97

Upcoming Splits
- (KWK) 2-for-1

Economic Releases
8:30 am EST
- Advance 4Q GDP is estimated to rise 1.2% versus a 4.9% gain in 3Q.
- Advance 4Q Personal Consumption is estimated to rise 2.6% versus a 2.8% gain in 3Q.
- Advance 4Q GDP Price Index is estimated to rise 2.6% versus a 1.0% gain in 3Q.
- Advance 4Q Core PCE is estimated to rise 2.5% versus a 2.0% gain in 3Q.

2:15 pm EST
- The FOMC is expected to lower the benchmark fed funds rate to 3.0% from 3.5%.

Other Potential Market Movers
- The ADP Employment Change report, weekly EIA energy inventory report, weekly MBA mortgage applications report, (NNDS) Investor Day, (BLC) Analyst Meeting, (VDSI) Investor Conference and (CLWR) Investor Day could also impacting trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by shipbuilding and utility stocks 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.

Stocks Finish Near Session Highs, Boosted Again by Financials, Homebuilders, Retailers

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In Play

Stocks Higher into Final Hour on Less Economic Pessimism

BOTTOM LINE: The Portfolio is mixed into the final hour as gains in my Computer longs, Retail longs and Commodity shorts offset losses in my Internet longs and Medical longs. I added (IWM)/(QQQQ) hedges, added (ISRG) puts and added to my (EEM) short today, thus leaving the Portfolio 75% net long. The overall tone of the market is positive as the advance/decline line is higher, most sectors are rising and volume is about average. Investor anxiety is above average again. Today’s overall market action is bullish. Cyclicals, specifically transports, are especially strong. The heavily shorted and beaten-up financials, retailers and homebuilders are also strong again today. These groups have become very extended and short-term traders will likely take profits on tomorrow’s economic data and FOMC announcement. I wouldn't be surprised to see 4Q GDP and ADP Employment, which are released before the open tomorrow, surprise on the upside. This could also lead to weakness in the broad market, as traders cut expectations for a 50 basis point cut in the afternoon. I still sense there are a very large number of investors still on the sidelines who believe a complete retest or new lows are a certainty. This should keep pullbacks in the major averages relatively mild and short-term in nature. The VIX is falling 3.0% today, but remains high at 27.0. Weekly retail sales rose .7% this week, which is sluggish, but not recessionary. GM’s CFO said this afternoon that he does not see the US economy sliding into recession, as well. Fed fund futures now imply a 74% chance of a 50 basis point rate cut and a 26% chance for a 25 basis point cut tomorrow. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering and bargain-hunting.

Today's Headlines

Bloomberg:
- Goldman Sachs Group’s(GS) Global Alpha hedge fund, once the firm’s biggest, fell about 40% last year because of wrong-way bets on currencies, equities and bonds worldwide, according to a report sent to investors.
- The European benchmark speculative grade credit default swap index is falling 17 basis points today to 438, down from 530 a week ago.
- Travelers Cos.(TRV), the second-largest US commercial insurer, increased its holdings of securities backed by subprime mortgages in the fourth quarter. The company “took advantage of favorable pricing” to purchase the securities, an executive said.
- Ethanol tariffs will be addressed in the 2009 budget, Energy Secretary Samuel Bodman said. The ethanol industry is “close,” to being able to stand on its own, he said.
- Turkey plans to develop a wind-turbine industry worth as much as $15 billion alongside a new wind energy market, Energy Minister Hilmi Guler said. Record demand for wind turbines has companies like General Electric(GE), the world’s second-biggest turbine marker, sold out through 2009 and has driven the cost of the equipment higher.
- Clearwire Corp.(CLWR), the wireless Internet company founded by mobile-phone pioneer Craig McCaw, rose as much as 23% in Nasdaq trading after the Wall Street Journal said talks about a venture with Sprint Nextel(S) have restarted.
- NYC traffic and pedestrian fatalities dropped to a record low in 2007, Mayor Bloomberg said.
- Unisys Corp.(UIS) climbed the most in five years in NY trading after fourth-quarter revenue and profit topped some analysts’ estimates.
- Lexmark Intl.(LXK), the second-biggest US printer maker, posted fourth-quarter earnings that beat analysts’ estimates on record sales to business clients and new, more profitable products.
- Bank of America(BAC) said its purchase of Countrywide Financial(CFC) is proceeding and the bank doesn’t need more capital.
- The IMF cut its forecast for global growth this year to a still healthy 4.1%, down from 4.9% in 2007.

Wall Street Journal:
- Despite calls by the Bush administration and European governments for OPEC to pump more oil, the cartel may actually look to cut output this spring if signs continue to point to increasing oil supplies and diminishing demand.
- Studies Cite Head Injuries As Factor in Some Social Ills.

Forbes.com:
- Abengoa SA unit Abengoa-Solar expects solar panels to be available for every Spanish home within 5-10 years.

USA Today:
- Governor Kathleen Sebelius on Tuesday endorsed Barack Obama for president, a Super Tuesday boost in a GOP-leading state that Democrats hope to reclaim in the White House campaign.

The Hindu:
- The US offered to provide technical support and equipment to fight an outbreak of avian influenza in India. Drugs such as Tamiflu will be made available and the US will assist West Bengal state with diagnosing potential cases of human infection.

Nikkei English News:
- Sanyo Electric Co. will increase production of digital cameras 60% to 15 million units this business year.