Today's Headlines

Bloomberg:
- The Organization of Petroleum Exporting Countries cut oil production targets for the first time in almost two years as the group battles to slow a collapse in prices. OPEC decided to lower supply by 1.5 million barrels a day from November, oil ministers said today at the end of a meeting at the group's Vienna's headquarters. ``OPEC has offered the market all the ammunition they had,'' said Robert Laughlin, senior broker at MF Global Ltd. in London. ``With the bearish economic outlook and manufacturing in freefall this accord is not good enough'' to revive prices, he said. ``I don't like the cut in production,'' U.K. Prime Minister Gordon Brown said from his home in Scotland, adding that OPEC has a crucial role to play in the recovery of the world economy. ``The high oil prices from the past year contributed to the slowdown in demand and the subsequent downturn in the economy,'' White House spokesman Tony Fratto said in a statement, which also criticized OPEC's policy of restricting supply.

- Home resales in the U.S. rose more than forecast in September, aided by foreclosure-driven declines in prices that made properties more affordable. Purchases of existing homes jumped 5.5 percent last month to a 5.18 million annual pace, the highest level in a year, the National Association of Realtors said today in Washington. Sales rose 1.4 percent compared with a year earlier, the first year-over-year increase since November 2005. The number of previously owned unsold homes on the market at the end of September represented 9.9 months' worth at the current sales pace, the fewest since February and down from 10.6 months' at the end of the prior month.

- Foreclosures Help Housing Market Find a Bottom. Home sales are booming once again in Prince William County, Virginia, an area hit hard by the housing bust.

- Russia's ruble fell to the lowest level in 20 months versus the dollar today as oil slumped, raising the prospect of the country's first budget deficit in a decade. The currency's decline challenges central-bank efforts to support the ruble by spending its reserves, the world's third largest. Russia's budget for 2009 breaks even based on an average oil price of $70 a barrel, according to the Finance Ministry. The currency has fallen almost 9 percent against the dollar since Aug. 8, when Russian tanks and troops invaded Georgia in a dispute over the breakaway region of South Ossetia. Investors have pulled $63 billion out of the country since then, according to UniCredit SpA.

- Scrap copper's discount to new metal widened in the past month as the slowing construction industry sapped demand, according to Metalsco Inc. Birch-Cliff No. 2 copper scrap, a benchmark product, is trading at 46 cents below the price of new metal, said Bret Tauben, vice president for copper at St. Louis-based Metalsco. That compares with a discount of 23 cents a month ago, he said.

- India's rupee dropped for an eleventh week, the longest losing streak since December 2005, as the nation's benchmark share index plunged the most in four years on signs global economies are headed for a recession. The currency weakened past 50 per dollar for the first time earlier as the Reserve Bank of India cut the economic growth outlook for the year ending March 31 to as little as 7.5 percent from an earlier estimate of 8 percent.

- Russia's Micex Stock Exchange suspended trading at 2:10 p.m. until next week after shares slumped. The next session will start on Oct. 28, Alexei Gerasyuk, a spokesman for the Moscow bourse, said by telephone.

- The U.S. government imposed sanctions on Russian, Chinese and Venezuelan companies for supplying what it said were materials used in making weapons of mass destruction to Iran, North Korea and Syria.

- The benchmark index for U.S. stock options soared to the highest intraday level in its 18-year history as stocks tumbled around the world on concern that the global economy is in recession. The VIX, as the Chicago Board Options Exchange Volatility Index is known, jumped 16 percent to 78.36 at 10:25 a.m. in New York after earlier rising as high as 89.53.

- PNC Financial Services Group Inc.(PNC), Pennsylvania's biggest bank, plans to buy National City Corp. for about $5.2 billion in stock after receiving U.S. Treasury funds.

Wall Street Journal:

- How’s Obama Going to Raise $4.3 Trillion? The most troublesome tax increases in Barack Obama's plan are not those we can already see but those sure to be announced later, after the election is over and budget realities rear their ugly head.

NY Times:
- Washington is pushing measures to help hard-pressed homeowners, but some Wall Street investors are pushing back. Hedge funds are fighting proposals to ease the terms of home mortgages, arguing that such a move would hurt their investments, The New York Times’s Vikas Bajaj and Barry Meier write. Two funds recently warned mortgage companies that they might take action if the companies participated in government-backed plans to renegotiate delinquent loans in a way that undercut the funds’ interests. In letters sent to banks and others, Greenwich Financial said that it was particularly concerned about the impact of a relatively new government program, Hope for Homeowners. That plan, which Congress approved over the summer, allows some borrowers to refinance their mortgages into fixed-rate loans with terms up to 30 years.

Reuters:
- European Central Bank council member Ewald Nowotny said the bank has room to lower borrowing costs further. He said that it’s sometimes good for central banks to act in a coordinated way, but sometimes good for central banks to act in a coordinated way, but sometimes also necessary for a central bank to lower borrowing costs on its own. The global financial market turmoil should be past the worst, said Nowotny said.

- The U.S. government is expected to shortly announce a list of about 20 banks in the next round of companies receiving capital injections under a $700 billion rescue package, according to a source familiar with the U.S. Treasury Department's thinking.

- The U.S. Treasury Department is closely studying how it could give relief to bond and mortgage insurance companies under a $700 billion financial services rescue package, two sources familiar with the deliberations said on Friday.

Economic Times:

- Tata Motors Ltd. cut production of medium and heavy commercial vehicles by as much as 50%. The company is “calibrating” the production of commercial vehicles because of slowing demand. Tata Motors is India’s largest makers of trucks and buses.

Bear Radar

Style Underperformer:
Large-cap Value (-3.15%)

Sector Underperformers:
Oil Service (-8.39%), I-Banks (-8.28%) and Construction (-7.51%)

Stocks Falling on Unusual Volume:
IDXX, WOFF, AVID, CETV, IIT, GNI, ZMH, UBB and EWY

Stocks With Unusual Put Option Activity:
1) BUD 2) HOV 3) IR 4) VMC 5) SNV

Bull Radar

Style Outperformer:
Small-cap Value (-2.71%)

Sector Outperformers:
Airlines (-1.21%), Homebuilders (-1.68%) and Semis (-1.74%)

Stocks Rising on Unusual Volume:
IPCR, COLM, SIAL, STMP, INSU and DV

Stocks With Unusual Call Option Activity:
1) AGN 2) SYNA 3) PCLN 4) JNPR 5) ATVI

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Friday Watch

Late-Night Headlines
Bloomberg:
- Microsoft Corp.(MSFT), the world's largest software maker, reported profit and sales that beat analysts' projections as demand for Office and the Xbox video-game console held up amid the economic slowdown.

- Ford Motor Co.'s(F) reliability increased this year and is now close to Toyota Motor Corp. and Honda Motor Co., according to a survey by Consumer Reports. The Yonkers, New York-based magazine disclosed the results today at an Automotive Press Association meeting in Detroit. ``This has been a systematic, structural change within Ford,'' said David Champion, director of the magazine's auto test center. Almost all Ford vehicles have above-average reliability, he said.

- A fake Internet report that Apple Inc.(AAPL) Chief Executive Officer Steve Jobs had suffered a heart attack was posted by a teenager, and investigators haven't found evidence he tried to profit from driving down the stock, two people with knowledge of the matter said. The U.S. Securities and Exchange Commission is examining the 18-year-old's motives after the article on CNN's iReport.com sent Apple shares down as much as 5.4 percent Oct. 3.

- Since the era of Charles de Gaulle, France has rebelled against the American-style capitalism that put a ``Made in U.S.A.'' stamp on the world economy. Now, as convulsions on Wall Street shake the global financial system, French President Nicolas Sarkozy is seizing the opportunity to remake the free-enterprise model along more state-managed Gaullist lines. Emboldened by the U.S. pursuit of a European-style bailout, Sarkozy has packed his wish list for an upcoming international summit with calls for everything from stiffer bank supervision and limits on executive pay to state aid for hand-picked industries. While the moment is in his favor, history is working against him: throughout the postwar era, French attempts to subdue globalization and come up with an exportable economic model have misfired.

- Brazil's central bank will pump the equivalent of $50 billion into currency markets, its boldest move yet to stem a two-month, 28 percent tumble in the real that has saddled companies with losses and stoked inflation. The real soared after the announcement, climbing 5.2 percent and erasing an initial slump of as much as 5.8 percent. Today's plan responds to concerns that the real's tumble will bankrupt companies in Latin America's biggest economy after some of the biggest exporters reported more than 5 billion reais ($2.22 billion) in derivatives losses. Those worries stem in part from the collapse in Mexico of retailer Controladora Comercial Mexicana SAB this month following a rout in the peso.

- The euro headed for its biggest weekly decline against the yen since the common European currency's debut in 1999 on speculation the global credit crisis is spreading through the region. The euro was also set for a week of losses against the US dollar after Belarus, Ukraine, Hungary and Iceland joined Pakistan in requesting at least $20 billion of emergency loans from the International Monetary Fund. Standard & Poor's Ratings Services yesterday threatened to cut Russia's debt ratings.

- Crude oil rose for a second day on speculation OPEC will agree to cut production to stem a slump of more than 50 percent in prices from July's record. Venezuela and Iran are among members to have called for a cut at today's meeting in Vienna. OPEC President Chakib Khelil said there is a consensus to trim output without agreement on the size of the reduction. Oil is poised to drop for a fourth week, the longest losing streak since January last year. ``Prices have fallen a great deal, so a gain should be expected,'' said Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut. ``I think we are in a bear market where every rally will be followed by a move to a new low.'' Oil has lost its appeal among investors as a hedge against inflation, along with other commodities, as the U.S. dollar advances. The euro has fallen 20 percent versus the dollar since July 15.

Wall Street Journal:
- Two Chinese railroad companies disclosed a total of more than $300 million in losses on currency investments, just days after a Hong Kong conglomerate said it could lose as much as $1.9 billion from its own currency agreements. The disclosures came amid selloffs in several other stocks, in what some analysts described as an overreaction, in many cases, that underscored broader market jitters about exposure to currencies and commodities.

- The nation's largest business lobby, the U.S. Chamber of Commerce, has raised ire among Democratic leaders for pouring millions of dollars into an advertising push to prevent the party from winning dominance in the Senate next year. The Chamber says it has raised enough money this year from corporations to spend about $35 million on the election, double its budget for House and Senate races in the 2006 election. The group is supporting pro-business candidates, almost exclusively Republicans in contested Senate races. Business executives fear that Democrats, bouyed by heavy spending from organized labor, could gain enough muscle in the Senate to spark policies favoring increased unionization, higher taxes, more restrictions on trade and more regulation on the financial-services and housing sectors. Democrats currently control 51 Senate seats and are expected to add more. Should U.S. voters give Democrats a 60-seat majority in the Senate and elect Sen. Barack Obama president, the party would be able to thwart Republican filibusters and other procedural motions to enact sweeping policy changes.

MarketWatch.com:
- U.S. fixed-rate mortgages declined in the latest week, according to Freddie Mac's survey released Thursday. The national average interest rate on the benchmark 30-year, fixed-rate loan averaged 6.04% in the week ending Thursday, down from last week's 6.46% and the year-ago 6.33%.

- Bottom my be in sight. Stocks are getting into the range of historic lows.

BusinessWeek:

- Treasury is expected to announce as soon as Friday a new round of banks to get cash injections, including the first regional banks.

IBD:

- NuVasive(NUVA): When In Pain, Back Surgery Doesn’t Wait For Economic Recovery.

USA Today.com:

- YouTube tosses 10-minute limit to show full TV episodes.

Reuters:

- Standard & Poor's on Thursday slashed its ratings on the New York Times Co (NYT) into junk territory and cited concerns about the newspaper publisher's revenue outlook, after it posted a third-quarter loss. Moody's Investors Service also said it may follow the move, adding the publisher faces risks in refinancing its debt.

Financial Times:
- Hedge funds have held meetings in London this week with the Bank of England and the Financial Services Authority in an attempt to speed up the return of their assets stuck in Lehman Brothers (LEH) , the collapsed bank. The Managed Funds Association, which represents some of the largest US hedge funds, is pressing for a fast resolution, warning that the current log jam poses a systemic risk as funds struggle to value their frozen holdings and reconcile their positions.

- Signs are emerging that the European Central Bank will soon cut eurozone interest rates again, as plummeting growth prospects and tumbling inflation clear the way for a sustained loosening of monetary policy.

International Herald Tribune:

- Chinese banks brace for housing aftershock. As in the United States, Britain and Spain, the real estate bubble in China has turned into a bust in many cities; only one of the two dozen towering cranes at projects near Liu's home was in operation one recent afternoon. Banking experts and economists expect the bust to produce, by next spring or summer, a sharp increase in loan defaults that could erode the high profits earned by Chinese banks over the past three years.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (AMTD), target $22.

Night Trading
Asian Indices are -5.75% to -1.50% on average.
S&P 500 futures -1.70%.
NASDAQ 100 futures -.88%.

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Earnings of Note
Company/EPS Estimate
- (CPO)/.78

- (EXC)/1.13

- (FO)/1.07

- (IDXX)/.40

- (IR).99

- (ITT)/1.06

- (TROW)/.56

Economic Releases
10:00 am EST

- Existing Home Sales for September are estimated to rise to 4.95M versus 4.91M in August.

Upcoming Splits
- None of note

Other Potential Market Movers
- The OPEC production cut announcement could also impact trading today.

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

Today's Headlines

Bloomberg:
- Goldman Sachs Group Inc.(GS), the only firm among Wall Street's five biggest to remain profitable through the credit crisis, will shed about 3,200 workers, or 10 percent of its staff, as the revenue outlook worsens, according to a person briefed on the plans who declined to be identified.

- Developing nations' borrowing costs neared a six-year high after Standard & Poor's threatened to cut Russia's debt ratings as the global credit crisis deepened. The extra yield investors demand to own emerging-market government bonds instead of U.S. Treasuries surged 55 basis points, or 0.55 percentage point, to 8.57 percentage points, the biggest since November 2002, according to JPMorgan Chase & Co.'s EMBI+ index.

- Crude oil rose from a 16-month low as OPEC's president said that members had reached a consensus on the need to trim production and Iran said the cut may be as much as 2 million barrels a day.

- New York Times Co.(NYT), the third- largest U.S. newspaper publisher, will consider cutting its dividend after reporting a loss on severance costs and a steeper drop in advertising sales.

- Gold fell to a 13-month low in London as the dollar strengthened and fund investors liquidated their holdings across most commodities. Platinum also declined. The euro fell to the lowest in almost two years against the dollar, while the pound traded near its lowest in more than five years.

Wall Street Journal:

- The Bush administration is weighing a roughly $40 billion proposal to help forestall foreclosures, one of a series of ideas under consideration designed to address the root causes of the financial crisis.

- Sankaty Advisors LLC, the credit fund of private-equity firm Bain Capital LLC, has lost between 40% and 50% in two funds that had about $4 billion in assets.

- Fortress Investment Group has had a final closing of $3 billion for Fortress Credit Opportunities Fund LP, a significant jump from the $2 billion Fortress set out to raise when it came to market in February, said people familiar with the matter.

- If Barack Obama wins Nov. 4, it’s the pharma industry that stands to take the biggest hit, according to Boston Consulting Group. Its analysis concludes that Obama’s plan to let the federal government negotiate Medicare drug prices could cut industry revenues by a whopping $10 billion to $30 billion.

NY Times:
- Monsanto Co.(MON), the biggest agricultural biotech company, and scientists in the US and other countries are attempting to develop crops that need less water to supply growing demand for food. Monsanto plans to deliver its first drought-tolerant corn within four years.

- Senators Barack Obama and Joseph R. Biden Jr. seldom see each other as they campaign for the Democratic ticket. And they talk only occasionally. But on Wednesday, Mr. Obama delivered a long-distance message to his running mate. “I think Joe sometimes engages in rhetorical flourishes,” Mr. Obama said, gently chiding the vice-presidential nominee as he sought to sweep aside a dustup Mr. Biden touched off when he predicted that a world crisis would test Mr. Obama during his first six months in office.

Pittsburgh Tribune-Review:
- Two veteran warriors battling to represent the 12th Congressional District appear locked in the closest race in the district in years. Democratic Rep. John Murtha leads retired Army Lt. Col. William Russell by a little more than 4 percentage points, within the Susquehanna Poll's 4.9-point margin of error. The poll of 400 likely voters was conducted for the Tribune-Review on Tuesday, amid uproar over Murtha's statement that some of his constituents are racist.

Business Week:

- Gold price plummets again as hedge funds rush for the exits.

Daily Telegraph:

- Thousands of hedge funds are on the brink of failure as the global economy contracts with unexpected severity, according to the chief executive of GLG, Europe's biggest hedge fund.