Wednesday Watch

Late-Night Headlines
Bloomberg:

- U.S. interest-rate swap spreads narrowed as the cost of three-month dollar loans in London fell for a 15th day and the government sold a record $38 billion in three-year Treasury notes. The difference between the two-year swap rate and the comparable-maturity Treasury note yield, known as the swap spread, narrowed 2.19 basis point to 33.81 basis points. The spread is based in part on expectations for the London interbank offered rate, or Libor, and is used as a gauge of investor perceptions of credit risk. Swap spreads with maturities of seven years or greater narrowed. “Libor rates have come down sharply in the past month,” wrote Joseph Abate, a money-market strategist in New York at Barclays Plc, in a note on Sept. 4. “At the same time, the Libor-OIS spread, a traditional measure of bank counterparty risk, has come in to less than 15 basis points and is returning to pre-crisis levels. We believe nearly all the compression has already occurred.”

- The slump in shipping rates signals that copper prices will decline after doubling this year as China cuts back on imports of the metal after building sufficient stockpiles, according to Calyon. “Less traffic going to China may be a warning of some cooling down because the pace has been pretty frenzied over the past six months,” Robin Bhar, a metals analyst in London for the Calyon unit of Credit Agricole SA, said in an interview. “China’s purchases were pretty much inventory adjustments and the restocking has ended. We’re not seeing a pickup in real economic demand or real activities.” Copper for three-month delivery on the London Metal Exchange could drop as much as 23% to $5,000 a metric ton within a few months, Bhar said. Prices of Capesize bulk carriers have fallen by as much as 50% from a June peak and the trend will continue as inventories remain high, Eugen Weinberg, senior analyst with Commerzbank AG, wrote in an Aug. 30 report. That, combined with China’s “bear market” for equities, point to a decline in metals prices, Weinberg said.

- Candidate Barack Obama pledged to stand up for workers by cracking down on imports from China. President Obama has promised to fight protectionism and trade barriers. His administration must decide which path to take starting today, in two of the biggest U.S. trade cases against China. U.S. Steel Corp. and the United Steelworkers union are behind a complaint on imported pipe. The union, an Obama political ally, is also pushing for curbs on Chinese auto tires. “These are decisions that can’t be avoided, so they’ll be perceived as setting the tone for what the Obama administration trade policy is,” said Timothy Keeler, the former chief of staff for the U.S. Trade Representative’s office. Keeler, a lawyer at Mayer Brown LLP in Washington, represents GITI Tire Pte Ltd., the largest Chinese maker of tires, in the trade case. The decisions may help shape the future of U.S.-China commercial relations. The two countries traded more than $400 billion last year, making China the second-largest U.S. trading partner after Canada. China is also the largest foreign holder of U.S. debt, with $776.4 billion.

- Carlson Capital LP, a $4.4 billion hedge-fund firm based in Dallas, hired Jason Karp, a former executive of SAC Capital Advisors LP, in the new position of co- chief investment officer, according to a letter sent to investors today. Until last year, Karp was director of research and portfolio manager of global equities at CR Intrinsic Investors, a unit of Steven Cohen’s Stamford, Connecticut-based hedge fund.

- NASA needs an extra $3 billion a year to send astronauts back to the moon or to deep-space flybys of Mars or asteroids and avoid an “unsustainable trajectory” of setting goals without adequate funding, a panel told President Barack Obama.

- California and Los Angeles County are offering $150,000 for information leading to the arrest and conviction of an arsonist who started the Station fire, which has killed two and burned an area larger than Chicago.

- With his job approval ratings slipping and his signature domestic undertaking in trouble, President Barack Obama will attempt to retake the initiative on health-care reform with a televised address to a joint session of Congress this evening. So what should the president try to achieve this evening when he attempts to enlist support for his health-care overhaul? He could start by explaining the seeming inconsistency in his plan to save money by spending money. “If I went to my board of directors with a similar proposal for ‘cost reduction,’ they would laugh me out of the conference room -- and then my job!” writes reader Michael Dunlop, vice president of operations/IT at Parts Associates Inc. in Cleveland.

- Chinese investors opened fewer new share trading accounts for a fifth week, the longest stretch of declines in more than a year, after the benchmark Shanghai Composite Index retreated. A total of 365,825 accounts were opened last week, down from this year’s high of 700,617 in the five days ended July 31, according to the China Securities Depository & Clearing Corp. Account openings slowed as the Shanghai Composite Index slumped 22 percent last month, the worst performance among 89 gauges tracked by Bloomberg worldwide.

- LG Group plans to increase this year’s hiring plan by 60% to 9,600 people, MoneyToday reported. In the second half of the year, LG Electronics Inc., LG Display Co. and affiliates will hire 4,200 people.

Wall Street Journal:

- Investors, corporate boards and managers' focus on short-term gain has become so detrimental to the economy that unless they voluntarily change their behavior, regulators should step in, according to an Aspen Institute statement to be released Wednesday that is signed by Berkshire Hathaway Chief Executive Officer Warren Buffett, Vanguard Group founder John Bogle and former International Business Machines CEO Louis Gerstner, among others. The Aspen Institute statement argues the problem is actually systemic and regulators need to change incentives to encourage long-term investing. The crux of the problem lies with changes in the investing climate, said UCLA Law School professor Lynn Stout, who helped draft the statement. "There's a bias in the system and as long as our system is biased toward short-term trading, we have to expect that's what we're going to get," she said. To encourage investors to take the long view, the statement suggests that the government could change the tax-code to reward long-term holders over short-term holders -- by, for example, setting capital gains tax rates that get gradually lower the longer an investor hangs on to a companies shares.

- Nearly one year after the collapse of Lehman Brothers sent shock waves across the globe, the world is a different place. The investment bank's messy death intensified the deepest recession since the Great Depression. It helped open the way to a bigger role for government in managing the economy. It cast doubts in the public's mind about the wisdom of relying on markets to correct themselves. But to a surprising degree, there are some big things that Lehman's demise hasn't changed. On the regulatory front, Democrats' efforts to rework the rules for finance have bogged down amid infighting between federal regulators, fury among bankers and opposition from many lawmakers who believe that further expanding the government's reach will only create new problems. The all-consuming debate over health care has damped enthusiasm for tackling such complex legislation. Meanwhile, major U.S. banks have regained their footing, and some of their swagger. Profits are off their lows. Large compensation packages are back. And so is risky business. Companies are selling exotic financial products similar to those that felled markets and the world economy last fall. And banks' appetite for risk has grown: The nation's top five banks collectively stood to lose more than $1 billion on an average day in the second quarter of 2009 should their trading bets go sour, a record level. Now, the federal government is locked in a kind of regulatory limbo. U.S. officials say they are committed to preventing history from repeating and have pleaded for fresh powers to do so. But today, they have few new options -- excepting another bailout -- should financial markets seize up again or a large institution totter. "There's no fundamental change in the way the banks are run or regulated," said Peter J. Solomon, a former Lehman vice chairman who runs an eponymous investment bank in New York. "There's just fewer of them."

- Obama and the Bureaucratization of Health Care by Sarah Palin. Writing in the New York Times last month, President Barack Obama asked that Americans "talk with one another, and not over one another" as our health-care debate moves forward. I couldn't agree more. Let's engage the other side's arguments, and let's allow Americans to decide for themselves whether the Democrats' health-care proposals should become governing law.

- The health-care debate threatens to keep energy and climate legislation on the back burner when the Congress returns from recess Tuesday and enters the final push of 2009.

- Before last year's panic, it seemed like the only thing hedge-fund investors cared about was getting into the hottest funds. Now the No. 1 goal for some of those investors is making sure they can get their money back. After learning the hard way that making a hedge-fund investment and cashing out of it are two very different things, pension funds, endowments and other investors are paying closer attention to the terms of redemption agreements -- and are tying up cash only if they are sure they won't need it anytime soon. "Assessing liquidity and the ability to get money out of hedge funds has become among the most important issues for investors," says Reid Bernstein, a veteran investor in hedge funds who helps run OneCapital Management Partners LLC in New York.

- NYSE Euronext(NYX) plans to bring in seven major Wall Street firms as partners to bolster its U.S. options-trading business. The New York Stock Exchange parent plans to announce Wednesday an agreement in principle to sell stakes in its NYSE Amex unit, which has seen its market share fall from above 30% a decade ago to about 7% now.

- The Obama administration, worried that tens of thousands of people could fall ill with H1N1 swine flu before a new vaccine is available later this fall, is urging Americans to adopt a series of preventive actions to slow the spread of the disease. The emphasis on measures such as washing hands often and staying home when sick comes as schools across the country report a surge in flu-like symptoms.

IBD:

- The CFTC seems poised to impose position limits on energy ETFs and on traders who use the regulated exchanges to buy and sell energy futures contracts.

- How do you fatten profits in a down economy? Michael McDevitt, chief executive of diet products company Medifast (MED), has found a good formula: Provide a meal plan that helps consumers shed pounds for a low price, and give them choices of weight-loss programs to meet their needs.

Forbes:

- Why Are These Health Care Fixes Ignored?

- As stimulus spending ramps up, a little-known executive order could prove a boon for America's unions.

Politico:

- As Congress waits on the president’s health care speech Wednesday, Barack Obama is in the unusual position of waiting on six senators most of the public couldn't pick out in a crowd. They’ll decide whether Obama has any hope of getting significant Republican votes for health reform — or whether he will have to go it alone with only Democrats, a politically risky path. Senate Finance Committee Chairman Max Baucus (D-Mont.) gave the bipartisan Gang of Six until 10 a.m. Wednesday to submit ideas on his compromise health reform bill. At that point, he will decide whether to continue the talks or possibly abandon hopes of a broadly bipartisan bill. The goal is to have a decision ahead of Obama’s speech to a joint session of Congress — and whatever Baucus decides could chart the course of health care reform in the Congress.

Rasmussen:

- Little has changed this week on the Generic Ballot as Republican Congressional candidates continue to hold a seven-point lead over Democrats. The latest Rasmussen Reports national telephone survey shows that 44% would vote for their district’s Republican congressional candidate while 37% would opt for his or her Democratic opponent. Support for both parties rose one point over the past week, giving Republicans their highest level of support of the past several years.

EE Times:

- Microchip Technology Inc.(MCHP) has raised its forecast for its second quarter fiscal 2010, ending Sept. 30. Microchip now expects its net sales for its second fiscal quarter to be up 12-to-14 percent sequentially. Microchip expects GAAP diluted earnings per share to be approximately 20-to-22 cents and non-GAAP diluted earnings per share to be approximately 26-to-27 cents. On Aug. 6, Microchip had provided guidance of net sales increasing 7-to-11 percent sequentially, GAAP diluted earnings per share of approximately 18-to-20 cents, and non-GAAP diluted earnings per share of approximately 23-to-26 cents. "We are experiencing strong demand for all of our microcontroller and analog product families in the quarter with out 16-bit microcontrollers providing the highest sequential growth,'' said Steve Sanghi, Microchip's President and CEO, in a statement. ''Geographically, we are seeing strong demand in Asia and the Americas. Europe is unseasonably strong with revenue in the summer quarter being sequentially up for the first time in several years,'' he said. ''We also experienced the strongest August bookings in our company's history, and consequently we are seeing strong backlog starting to build for our fiscal third quarter. We now expect inventory on our balance sheet to drop by an additional 5 days, to approximately 103 days in the second fiscal quarter ending September 30, 2009. Therefore, we are accelerating the capacity ramps in all our manufacturing facilities."

- Altera Corp.(ALTR) Tuesday (Sept. 8) increased its revenue guidance for the third quarter, saying it now expects to report sales of between $279.2 million and $287.6 million. The new range means Altera (San Jose, Calif.) expects revenue to be flat to up 3 percent compared with the second quarter. Previously Altera said it expected sales to decline 1 to 5 percent compared with the second quarter. Altera said it expects revenue from all market segments except for the telecom and wireless segment to improve sequentially. The decline in telecom and wireless revenue is expected to be more moderate than previously anticipated as a result of better than forecast demand from OEMs supplying Asian wireless networks, the company said. Third quarter sales of 40-nm products are expected to be worth around $10 million, more than double second quarter levels, Altera said.

Reuters:

- The credit-rating agency Moody's does not expect to downgrade the sovereign debt of leading triple A-rated nations despite the explosive growth of government debt, the Financial Times reported on Wednesday.

Late Buy/Sell Recommendations
Citigroup:

- Reiterated Buy on (ALTR), raised estimates, boosted target to $25.

- Upgraded (COF) to Buy, target $45.

Oppenheimer:

- Rated (DISCA) Outperform, target $31.

Night Trading
Asian Indices are -.50% to +.25% on average.

Asia Ex-Japan Inv Grade CDS Index 129.50 -3.50 basis points.
S&P 500 futures -.12%.
NASDAQ 100 futures -.15%.

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Earnings of Note
Company/EPS Estimate
- (TLB)/-.52

- (LRN)/-.02

- (HITK)/.27

- (UNFI)/.35

- (ZLC)/-.78

- (MW)/.61

- (SHFL)/.-07

- (TITN)/.18

- (KFY)/-.05

- (JW/A)/.37

Economic Releases

2:00 pm EST:

- Fed’s Beige Book.

Upcoming Splits
- None of note

Other Potential Market Movers
- The Fed’s Evans speaking, Fed’s Fisher speaking, OPEC’s September Conference, Apple Computer’s Event, (TXN)’s mid-quarter update, weekly retail sales reports, TAF results, Treasury’s 10-year auction, API Energy Inventories Report, President Obama’s healthcare reform address details, Barclay’s Energy Conference, Citi’s Global Tech Conference, CSFB’s Auto & Transport Conference, Thomas Weisel’s Healthcare Conference and the weekly MBA mortgage applications report could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and technology shares in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the day.

Stocks Finish Higher, Boosted by REIT, Construction, Disk Drive, Coal, Alt Energy and Oil Service Shares

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Stocks Higher into Final Hour on Diminishing Economic Fear, Short-Covering

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Technology longs and Medical longs. I haven’t traded today, thus leaving the Portfolio 100% net long. The tone of the market is positive as the advance/decline line is higher, most sectors are positive and volume is about average. Investor anxiety is very high. Today’s overall market action is bullish. The VIX is rising 1.90% and is very high at 25.74. The ISE Sentiment Index is below average at 110.0 and the total put/call is around average at .81. Finally, the NYSE Arms has been running very high most of the day, hitting 1.83 at its intraday peak, and is currently 1.68. The Euro Financial Sector Credit Default Swap Index is falling 2.86% today to 82.83 basis points. This index is down from its record March 10th high of 208.75. The North American Investment Grade Credit Default Swap Index is falling 3.56% to 117.17 basis points. This index is also well below its Dec. 5^th record high of 285.99. The TED spread is falling .99% to 18 basis points. The TED spread is now down 448 basis points since its all-time high of 463 basis points on October 10th. The 2-year swap spread is down 3.55% to 34.0 basis points. The Libor-OIS spread is falling 4.62% to 13 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is rising 6 basis points to 1.83%, which is down 83 basis points since July 7th. The 3-month T-Bill is yielding .12%, which is unch. today. Cyclicals are outperforming again today, despite a very negative July consumer credit number, which is a big positive. Stocks had been weakening recently on positive news and now they are back to rising again, notwithstanding some negative news. REIT, Construction, Disk Drive, Steel, Oil Service, Coal and Alt Energy shares are especially strong, rising 3%+ for the day. It is also a big positive to see the N.A. IG CDS Index rolling over again. On the negative side, healthcare-related names are substantially underpforming on renewed healthcare reform worries. Besides healthcare, banking and road & rail shares are displaying relative weakness. Nikkei futures indicate an +22 open in Japan and DAX futures indicate an unch. open in Germany tomorrow. I expect US stocks to trade mixed-to-higher into the close from current levels on diminishing economic fear, short-covering and investment manager performance anxiety.

Today's Headlines

Bloomberg:

- U.S. discount, grocery and restaurant chains are hiring a larger percentage of job applicants than seven months ago, signaling confidence the economy may be improving, software maker Kronos Inc. said. Kronos analyzed the 8.9 million job applications received by 68 retailers in the first seven months of the year. In July, 2.99 of every 100 applications resulted in a hire, compared with 2.75 in January, a three-year low, the Chelmsford, Massachusetts-based company said today in a statement.

- Goldman Sachs Group Inc. raised its forecasts for most industrial metals prices as a recovery in the world economy reduces spare capacity and boosts output costs. Copper for delivery in three months will climb to $7,650 a metric ton by end-2010, from a prior forecast of $5,800, analysts Jeffrey Currie, Janet Kong and Allison Nathan wrote in a report e-mailed today.

- Crude oil rose the most in more than a month after the dollar declined, spurring demand for commodities, and as OPEC ministers gathered in Vienna to decide on production levels.

- Russia is surpassing Saudi Arabia in oil exports for the first time since the Soviet Union’s collapse as Prime Minister Vladimir Putin exploits OPEC production cuts to gain market share. Exports of crude and refined products from Russia rose to about 7.4 million barrels a day in the second quarter, according to Energy Ministry data. Saudi shipments fell to about 7 million barrels a day, International Energy Agency estimates of output and domestic demand showed. Investors had expected Russian supplies to decline this year after Putin’s deputy, Igor Sechin, told the Organization of Petroleum Exporting Countries in December that his government was ready to limit production to support prices. Instead, the country is providing tax breaks for new fields in Siberia. OAO Rosneft, OAO Lukoil and BP Plc’s Russian venture TNK-BP pumped more as prices rose 54 percent to near $69 a barrel. “In no uncertain terms, Russia has been the biggest beneficiary of OPEC’s sacrifice,” said Chris Weafer, chief strategist at UralSib Financial Corp., in an interview in Moscow. “Higher prices have equaled a $20 billion tax windfall.”

- The U.S. may find its success in a trade dispute over European subsidies to Airbus SAS difficult to repeat after the Bush and Obama administrations gave billions of dollars to banks and automakers during the financial crisis.

- The U.S. was displaced by Switzerland as the world’s most-competitive economy after its financial markets were roiled by the worst crises since the Great Depression, the World Economic Forum said today. The U.S. fell to second position for the first time since the Geneva-based organization began its current index in 2004 as it lost marks for the sophistication of its markets and rising budget deficits.

- A money manager from Brooklyn, New York, was arrested and charged with operating a 30-year Ponzi scheme that claimed more than $45 million in assets. Philip Barry, 52, a resident of the Bay Ridge section of Brooklyn, began accepting money in the late 1970s from investors, guaranteeing fictional annual profits, according to a statement today by the U.S. Attorney in Brooklyn.

- European Central Bank council member Axel Weber said price pressures will remain subdued as the euro- region economy struggles to recover from recession. There is little risk that the ECB’s policy of flooding banks with cash will stoke inflation and it will take some time before the economy is growing fast enough to push up prices, Weber said in a speech in Frankfurt today. “All in all, inflation fears, understandable as they may be, are unfounded.”

- Treasuries rose after a record $38 billion offering of three-year notes drew the strongest demand in almost a year in the first of this week’s three debt auctions totaling $70 billion.

- President Barack Obama said he is willing to consider taxing soda and other sugary drinks as Congress debates overhauling the U.S. health-care system. “I actually think it’s an idea that we should be exploring,” Obama said in an interview with Men’s Health magazine that goes on sale next week. “There’s no doubt that our kids drink way too much soda.”

Wall Street Journal:

- Scottish Justice Secretary Kenny MacAskill, who recently released the Lockerbie bomber, has a brother who is an energy-industry executive and who has worked at firms that have pitched for oil business in Libya. The Scottish government, which has said that it made full disclosure of facts relevant to the decision, didn't disclose this relationship, and opposition politicians on Monday criticized this.

- The abrupt resignation of White House aide Van Jones, deep in the news hiatus of Labor Day weekend, will probably be forgotten in a few days. But it's a story that still deserves elaboration for what it says about the political coalition that helped to elect President Obama and whose demands are leading him into a cul-de-sac.

- While the deficits caused by the fiscal stimulus package will end in 2011 and will help to sustain a fragile recovery in 2010, the deficits projected for the longer term are a threat to our economic future. The starting point for controlling those future deficits is for Congress to abandon the administration's health-care plan—a plan that will cost more than $1 trillion. The deficits projected for the next decade and beyond are unprecedented. According to an assessment released in March by the Congressional Budget Office (CBO), the president's budget implies that deficits will average 5.2% of GDP over the next decade and will be 5.5% of GDP in 2019. Without the president's proposals, the budget office forecasts a 2019 deficit of only 2% of GDP.

- The next generation of nuclear reactors is on its way, and supporters say they will be safer, cheaper and more efficient than current plants. Here's a look at what's coming -- and when.

- There wasn’t a whole lot of legal news that broke over the weekend, but we do want to get you up to speed on an interesting and provocative ruling out of the Ninth Circuit. A three-judge panel last Friday ruled that a a Muslim man who was detained for weeks as a material witness in a terrorism case can sue former attorney general John Ashcroft. In so ruling, the panel rejected a bid for absolute legal immunity by Ashcroft.

- China's sovereign-wealth fund is looking to invest in U.S. real estate, including potentially snapping up distressed mortgage securities through a U.S.-government program, according to people familiar with the matter.

MarketWatch.com:
- Morgan Stanley changed its tech-sector view, upgrading systems and PC hardware to attractive from in-line but downgrading software to in-line from attractive.

- Employers' hiring plans for the upcoming fourth quarter dropped to their lowest level in the history of Manpower's Employment Outlook Survey, which started in 1962.

CNBC:

- Presient Barack Obama’s health-care reforms may push interest rates higher if the costs aren’t passed on to consumers or the industry, David Kelly, chief market strategist at JPMorgan Funds, told CNBC. “The problem is we’re trying in this debate, as in the energy debate and other debates, to pretend that nobody pays for this,” Kelly said. “And ultimately somebody will pay for it, or if they don’t, we’re going to pay for it through higher interest rates.”

- U.S. small business sentiment improved last month on hopes that the worst of the country's recession was over, an industry group said on Tuesday, but conditions remain very weak.

NY Times:

- When the Internal Revenue Service announced a deal last month that would force Switzerland to reveal the names of thousands of Americans suspected of offshore tax evasion, the agency called it a major step forward. But tax lawyers and former government officials have begun to question whether the deal might allow some large tax cheats to remain in hiding.

- Few people on or off Wall Street have capitalized on this crisis as deftly as Mr. Buffett. After counseling Washington to rescue the nation’s financial industry and publicly urging Americans to buy stocks as the markets reeled, in he swooped. Mr. Buffett positioned himself to profit from the market mayhem — as well as all those taxpayer-financed bailouts — and thus secure his legacy as one of the greatest investors of all time. When so many others were running scared last autumn, Mr. Buffett invested billions in Goldman Sachs — and got a far better deal than Washington. He then staked billions more on General Electric. While taxpayers never bailed out Mr. Buffett, they did bail out some of his stock picks. Goldman, American Express, Bank of America, Wells Fargo, U.S. Bancorp — all of them got public bailouts that ultimately benefited private shareholders like Mr. Buffett. Among the stocks Mr. Buffett has been selling lately is Moody’s, the granddaddy of the much-maligned credit ratings industry. Berkshire, Moody’s largest shareholder, said last week that it had reduced its stake by 2 percent.

- Merger mania may not be quite in full swing. But the pace of deal-making is showing signs of rousing back to life after nearly a year.

Washington Post:

- By Sept. 17, Obama must decide whether to slap a 55 percent tariff on tires imported from China, as recommended by a federal trade panel, or leave the matter alone, as a phalanx of lobbyists representing manufacturers in China and U.S. companies that import from them are urging.

- In an op-ed on Sunday ["The Elders' View of the Middle East"], former president Jimmy Carter, speaking on behalf of a self-appointed group of "Elders," described a rapacious Israel facing long-suffering, blameless Palestinians, who are contemplating a "nonviolent civil rights struggle" in which "their examples would be Mahatma Gandhi, Martin Luther King Jr. and Nelson Mandela." As with most of Carter's recent statements about Israel and the Palestinians, instead of facts we get vignettes from recent Carter travels. And while he finds "a growing sense of concern and despair" among "increasingly desperate" Palestinians, polls do not sustain this view.

- If projections bear out that the federal government will hire up to 120,000 people for jobs in the region over the next few years, the Washington area economy could be on its way to a rebound faster than most of the nation.

Boston Globe:

- Fifteen big banks that dominate worldwide trading of derivatives have committed to greater transparency in a $600 trillion market that regulators say needs stricter oversight to protect the global financial system.

Rassmussen:

- Fifty-three percent (53%) of U.S. voters say restricting jury awards in medical malpractice lawsuits would significantly reduce the cost of health care in the United States. A new Rasmussen Reports national telephone survey shows that only 21% disagree and 25% are not sure.

Politico:

- One of President Barack Obama’s former top campaign advisers is “losing patience” with the White House, he told POLITICO Tuesday morning, as frustrations among the president’s liberal allies crest over issues from health care legislation to gay rights. “I am one of the millions of frustrated Americans who want to see Washington do more than it's doing right now,” said Steve Hildebrand, the deputy campaign manager who oversaw the Obama campaign’s field organization and was an architect of his early, crucial victories over Sen. Hillary Clinton in Iowa and South Carolina.

Washington Times:

- When the "tea party" movement kicked off in April to protest record federal spending bills, trillion-dollar deficits and higher tax burdens, its members were fiercely independent and opposed any suggestion that they bond with a larger umbrella group, preferring to work within their local communities. But that go-it-alone approach is changing as a result of the war over health care, and the Tea Party Express tour is leading the way. The Tea Party Express - a caravan of buses, speakers and entertainers who have been holding protest rallies in cities and towns across the country - is heading to Washington, where on Saturday, up to 50,000 demonstrators are expected to march on the Capitol in a full-scale political offensive to persuade lawmakers to reject the health care overhaul bills that are pending in the House and Senate. "What we are seeing across the country is not only increasingly larger crowds but a greater determination to hold members of Congress to their opposition to the health care plan. They are angry and feel they've been ignored, and they don't like what Congress has done," Joe Wierzbicki, national coordinator of the Tea Party Express, said in a telephone interview as his 45-foot bus cruised through Texas last week on a 17-day, 34-rally tour that will end in Washington on Saturday.

USA Today:

- In a step that should help make the Internet safer for consumers, anti-virus giant Symantec(SYMC) on Wednesday will introduce a protection system designed to anticipate new malicious programs that try to sneak onto your computer. For decades, anti-virus protection has worked by reacting to new malicious programs. Researchers scramble to identify bad code, then create and distribute filters for it. But cybercriminals have gotten so fast at evading the latest filters that protection often comes too late. Symantec's new system, called Quorum, continuously predicts whether any new program that attempts to run on your PC is good or bad. It then takes steps to quarantine the bad code.

Reuters:
- India's physical gold prices were higher on Tuesday tracking international prices but sluggish domestic demand limited the upside, dealers said. "Demand will fall more," Suresh Hundia, president of the Bombay Bullion Association, said. "Only those who are short will buy at these prices." He estimated gold imports to fall to 350 tons in 2009 from 523 tons last year. "Besides higher prices gold buying will also be lower due to Shradh period," said a dealer with a private bank in Mumbai. Traders expect demand to remain sluggish during Shradh, a period to pay homage to ancestors, between Sept. 5 to Sept. 19, when purchasing gold is considered inauspicious.

Financial Times:
- The financial crisis has triggered a “huge surge” of investors looking to buy private equity positions from distressed owners, as three-quarters of them look for bargains in the so-called secondary market, according to research published on Tuesday.

BBC News:

- China's health minister says the nation is facing a grim situation as it tries to contain a rapid surge in swine flu.

Bear Radar

Style Underperformer:
Large-Cap Growth (+.38%)

Sector Underperformers:
HMOs (-1.40%), Medical Equipment (-.98%) and Education (-.57%)

Stocks Falling on Unusual Volume:
PENN, ATHR, CSTR, ASCA, STEC, BCRX, JOSB, KFT, TGP, TTC, MHP, WLP and IOC

Stocks With Unusual Put Option Activity:
1) KFT 2) MCO 3) GOLD 4) OSIR 5) BCRX

Bull Radar

Style Outperformer:
Mid-Cap Growth (+1.20%)

Sector Outperformers:
Oil Service (+3.24%), Steel (+2.48%) and Construction (+2.42%)

Stocks Rising on Unusual Volume:
GMXR, NIHD, ROSE, RTP, TKS, SU, BBL, GE, HES, ORH, OMTR, AVAV, PETS, DDS, FACT, JAZZ, TSPT, KONG, LIHR, SSRI, PAAS, ININ, GOLD, QLGC, VRUS, ERIC, ENER, EBIX, AMED, AIXG, SLAB, ATPG, APWR, SWSI, IHG, CUK, HMY, BVN, CDE, AU, AUY and DOM

Stocks With Unusual Call Option Activity:
1) WYE 2) SU 3) EGO 4) HL 5) RTN