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Stocks Finish Lower, Weighed Down by Rail, Homebuilding, Steel and Energy Shares

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Bull Radar

Style Outperformer:

Large-cap Value (-1.39%)

Sector Outperformers:

Disk Drives (+3.41%), Education (+1.54%) and Retail (+.03%)

Stocks Rising on Unusual Volume:

EDU, DDUP, TSRA, CVLT, TECD, NTAP, NTES, MBFI, INTU and ROST

Stocks With Unusual Call Option Activity:

1) THC 2) TSRA 3) GME 4) INTU 5) QSII

Links of Interest

Market Snapshot Commentary
Market Performance Summary
Style Performance
Sector Performance
WSJ Data Center
Top 20 Biz Stories
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Thursday Watch

Late-Night Headlines
Bloomberg:

- U.S. stocks are at the start of a bull market that may spur an 88 percent advance in the Standard & Poor’s 500 Index in the next two or three years, Laszlo Birinyi said. “We’re confident we are in a bull market,” Birinyi, the founder of Westport, Connecticut-based research and money- management firm Birinyi Associates Inc., said in an interview with Bloomberg Television today.

- The Bank of Japan may raise its assessment of the economy for the first time since July 2006, even after a report yesterday showed a record contraction in the first quarter.

- Hedge fund manager George Schultze says he may avoid lending to any more unionized companies after being burned by President Barack Obama in Chrysler LLC’s bankruptcy. Obama put Chrysler under court protection on April 30 after lenders balked at a proposal giving them about 29 cents on the dollar for their $6.9 billion in debt. The investors said the president’s plan favored a union retiree medical fund whose claims ranked behind them for repayment. It was offered a 55 percent equity stake in the automaker. Pacific Investment Management Co., Barclays Capital and Fridson Investment Advisors have joined Schultze Asset Management LLC in saying lenders may be unwilling to back unionized companies with underfunded pension and medical obligations, such as airlines and auto-industry suppliers, because Chrysler’s creditors failed to block Obama’s move. The reluctance may put additional pressure on borrowers seeking capital in the worst financial crisis since the Great Depression.

- Mexico’s economy shrank the most since the 1995 Tequila Crisis in the first quarter, and the government lowered its forecast for the full year, as the global financial crisis and the outbreak of swine flu cut demand. Gross domestic product, the broadest measure of a country’s output of goods and services, fell 8.2 percent in the first three months of 2009 from a year earlier, the statistics agency said today.

Wall Street Journal:

- The Treasury Department is poised to inject more than $7 billion into GMAC LLC, the first installment of a new government aid package that could reach $14 billion, according to people familiar with the matter. As a result of the move, the government within months could end up owning both GMAC and General Motors Corp.

- In the Spirit of Spider-Man, the Border Patrol Casts Its Web.

- Within a few weeks, some of the nation's biggest banks will start disentangling themselves from the government's grip by repaying billions in federal bailout dollars.

But the moment, a symbolic bookend to a turbulent period, will likely be overshadowed by a parallel phenomenon: Many of the other emergency measures created to prop up the financial system are developing an air of permanence. As such, the move to repay funds from the Troubled Asset Relief Program might represent not the beginning of the end, but rather the end of the beginning.

- New opposition to Chrysler LLC's restructuring plan emerged as Indiana pension funds holding Chrysler senior debt filed objections to the plan, saying the U.S. government's involvement had "infected" the company's bankruptcy. The opposition was led by the Indiana State Teachers Retirement Fund, the Indiana State Police Pension Trust and the Indiana Major Moves Construction Fund, which together own about $42.5 million of Chrysler's $6.9 billion in secured debt, according to the funds' lawyer.

- The United Nations, which aspires to protect human rights around the world, is struggling to deal with an embarrassing string of sexual-harassment complaints within its own ranks. Many U.N. workers who have made or faced accusations of sexual harassment say the current system for handling complaints is arbitrary, unfair and mired in bureaucracy. One employee's complaint that she was sexually harassed for years by her supervisor in Gaza, for example, was investigated by one of her boss's colleagues, who cleared him.

- The "American Clean Energy and Security Act" is one of the most ambitious efforts to re-engineer American social and economic behavior in decades, presenting risks and opportunities for a wide array of businesses from Silicon Valley to the coal fields of the Appalachians. The legislation, better known as the Waxman-Markey bill, isn't yet law and has big hurdles to clear. A critical vote looms this week in the House Energy and Commerce Committee.

NY Times:

- An unreleased Pentagon report provides new details concluding that about one in seven of the 534 prisoners already transferred abroad from the detention center in Guantánamo Bay, Cuba, has returned to terrorism or militant activity, according to administration officials. The conclusion could strengthen the arguments of critics who have warned against the transfer or release of any more detainees as part of President Obama’s plan to shut down the prison by January 2010.

Politico:

- Nancy Pelosi and her staff thought they could end the controversy over her disputed 2002 briefing on Bush-era interrogations by rigorously prepping for a press conference last Thursday. But she shredded the script. According to people familiar with the situation, the speaker had agreed to say only that she had been “misled” by intelligence officials during a September 2002 briefing on interrogation techniques. But when reporters asked Pelosi if she thought the Bush administration had “lied” to her, she embraced the more emphatic word, nodding her head in agreement.

- A day before President Barack Obama lays out his vision for closing Guantanamo Bay prison, two of his top officials Wednesday offered sharply different views about bringing the prisoners onto U.S. soil. The Pentagon No. 3 official, Michele Flournoy, said the only way the United States can get European nations to accept some of the 240 detainees at the military prison is by agreeing to bring some of them to the United States as well. But FBI Director Robert Mueller warned Congress that releasing some of the Gitmo prisoners in the United States would raise concerns that they might radicalize others, raise money for terrorist groups, or carry out attacks.

Chronicle of Philanthropy:

- In a quiet meeting closed to the news media and the public, Bill Gates, David Rockefeller Sr., Oprah Winfrey, and other leading philanthropists met in New York this month to discuss ways to promote efforts to solve growing social problems in America and abroad. The unusual event occurred May 5 at Rockefeller University and was organized by the Bill & Melinda Gates Foundation. Among the high-profile participants were Ted Turner, Warren E. Buffett, George Soros, and New York City Mayor Michael R. Bloomberg. Several of the people at the meeting confirmed their involvement, but declined to tell The Chronicle about what was discussed or why they gathered almost in secret.

Reuters:

- JPMorgan Chase & Co and Morgan Stanley are emerging as the top beneficiaries of the biggest boom in U.S. secondary offering activity, stoked by banks' rush to sell stock after government "stress tests." May saw the biggest ever U.S. follow-on activity, based on proceeds, with $39.2 billion so far this month across all industries, based on Thomson Reuters data. The second largest was in October last year with $26.1 billion. Banks collected $1 billion of fees from underwriting U.S. equity issues in the first two weeks of May alone, compared with $1.2 billion for the entire first four months of the year, according to the data.

- China's economic recovery may have slowed or even gone slightly into reverse over the past month, two international banks said in separate reports. Credit Suisse economists said economic activity appeared to have softened in the second half of April and that the trend was more pronounced in May, with weakness in the materials sector and power consumption spreading to retail sales.

- New U.S. rules for the trading of derivatives could drive market enemies into each other's arms, as dealers and exchanges look to strike more partnerships to yield shared profits from the revamped landscape. The Obama administration's proposals, announced last week, favor exchange and clearinghouse operators because they require "standardized trades" to move onto exchanges, and require all over-the-counter derivatives to be cleared by regulated central counterparties. That would effectively transfer a very lucrative business from derivatives dealers, blamed by many for the financial crisis, to exchanges and clearinghouses, which have touted their durability since markets plunged last year.

- The Federal Reserve said on Wednesday it saw modest improvements in the U.S. economy last month, but it still saw big risks and left open the possibility of increasing its purchases of mortgage-related and government debt to keep credit flowing and spur recovery.

Financial Times:

- Bank of America(BAC) wants to pay back $45bn in bail-out funds by the end of the year, in a faster-than-expected move made possible by an accelerated program to raise capital. BofA is on track to raise more than $35bn in capital by the end of September, say people familiar with the matter, which it must do before paying back the $45bn bail-out money it received under the Troubled assets relief program.

The Economic Times:

- India buys $20 billion in US treasury bills in just six months.

Gulfnews.com:

- The UAE on Wednesday officially pulled out of the proposed Gulf monetary union, jeopardizing the future of the region's single currency aspirations. Sources in the UAE Central Bank told Gulf News that the move follows reservations about the recent decision to locate the Gulf central bank in Saudi Arabia.

Late Buy/Sell Recommendations
Citigroup:

- Reiterated Buy on (NVDA), target $14.50.

Night Trading
Asian Indices are -1.25% to -.25% on average.
S&P 500 futures -.47%.
NASDAQ 100 futures -.41%.

Morning Preview
US AM Market Call
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Pre-market Commentary
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In Play
Bond Ticker
Economic Preview/Calendar
Earnings Calendar

Conference Calendar

Who’s Speaking?
Upgrades/Downgrades
Rasmussen Business/Economy Polling

Earnings of Note
Company/EPS Estimate
- (GME)/.42

- (TECD)/.34

- (PDCO)/.50

- (BKS)/-.15

- (PLCE)/.74

- (SSI)/-.03

- (ROST)/.72

- (GPS)/.30

- (DBRN)/.31

- (CRM)/.11

- (ARO)/.48

- (ADSK)/.08

- (FL)/.14

Economic Releases

8:30 am EST

- Initial Jobless Claims for last week are estimated to fall to 625K versus 637K the prior week.

- Continuing Claims are estimated to rise to 6650K versus 6560K prior.

10:00 am EST

- Leading Indicators for April are estimated to rise .8% versus a -.3% decline in March.

- Philly Fed for May is estimated to rise to -18.0 versus -24.4 in April.

Upcoming Splits
- None of note

Other Potential Market Movers
- The Fed’s Plosser speaking, weekly EIA natural gas inventory report, (BA) investor conference, Fox-Pitt Kelton Securities Industry Conference, UBS Oil & Gas Conference, (BLK) shareholders meeting, (YUM) shareholders meeting, (STLD) shareholders meeting, (BWLD shareholders meeting and the Goldman Alt Energy Conference could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by automaker and technology 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 Lower, Weighed Down by Bank, Computer and Homebuilding Shares

Evening Review
Market Summary
Top 20 Biz Stories
Today’s Movers
Market Performance Summary
WSJ Data Center
Sector Performance
ETF Performance
Style Performance
Commodity Futures
S&P 500 Gallery View
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Commentary
After-hours Movers
After-hours Real-Time Stock Bid/Ask
After-hours Stock Quote
After-hours Stock Chart
In Play