Bear Radar

Style Underperformer:

• Small-Cap Value -1.10%

Sector Underperformers:

• 1) Homebuilders -3.0% 2) I-Banking -2.21% 3) Banks -1.67%

Stocks Falling on Unusual Volume:

• BBY, SABA, FMCN, PATK, MAPP, GSVC, WPRT, WFM, UBNT, ANGI, VRA, ARUN, MPEL, AFFY, NTES, JCOM, STO, AIZ, LNCR, GMCR, PEET, HELE, DXPE, PVR, EWH, WWW, GME, UNG, MOS, BIG, TXI and AH
  

Stocks With Unusual Put Option Activity:

• 1) PHM 2) XHB 3) OIH 4) BBY 5) F
  

Stocks With Most Negative News Mentions:

• 1) WFM 2) AXP 3) NTES 4) JPM 5) UPS
  

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume
  

Bull Radar

Style Outperformer:

• Large-Cap Growth -.48%

Sector Outperformers:

• 1) HMOs +.88% 2) Computer Services +.15% 3) Software -.12%

Stocks Rising on Unusual Volume:

• MOV, AET, CI, YPF, ILMN, RHT, PSS, MCP, CVH and FUL
  

Stocks With Unusual Call Option Activity:

• 1) WLP 2) AET 3) RHT 4) BBY 5) TEX
  

Stocks With Most Positive News Mentions:

• 1) EBAY 2) SSI 3) DTV 4) T 5) DHI
  

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume
  

Thursday Watch

Evening Headlines
Bloomberg:

• Spanish General Strike Looms as Rajoy Corned by Deficit Crisis. Spanish Prime Minister Mariano Rajoy will today face down the first general strike against his three-month old government as pressure from investors and European peers trumps demands from unions. The People’s Party government “will not cede” as the economic situation is at the “limit,” Budget Minister Cristobal Montoro said yesterday. Spain’s two biggest unions are predicting broad support for the strike against changes to labor laws and austerity, even as a poll by El Pais showed just 30 percent of workers would join the walkout. While Rajoy’s measures have angered unions and undermined support for the party in a regional election on March 25, the government is still struggling to convince investors its policies are enough to restore the public finances and reduce a 23 percent jobless rate. Spanish 10-year borrowing costs have surged almost 50 basis points since the start of March. “He has no choice,” said Antonio Barroso, a political analyst at Eurasia Group in London and a former government pollster. “If he gives in the markets will punish Spain. Rajoy has his back against the wall.” Unions have organized a demonstration in central Madrid at 6:30 p.m. In the El Pais poll, published on March 25, 51 percent of those surveyed said the strike was justified. Comisiones Obreras and Union General de Trabajadores have agreed with the government to run 35 percent of rush-hour suburban train services and 20 percent of high-speed trains today.
• Espirito Santo Among Five Portugal Lenders Downgraded by Moody’s. Banco Espirito Santo SA (BES) was among five banks in Portugal to have credit ratings cut by Moody’s Investors Service, which cited asset risks and a “poor economic outlook” in a nation whose own grade was reduced last month. Espirito Santo, Portugal’s largest publicly traded bank by market value, had its debt rating lowered one level to Ba3, Moody’s said yesterday in a statement. It took the same action for Caixa Geral de Depositos SA and Banco BPI SA. (BPI) Banco Internacional do Funchal was downgraded to B1 from Ba3.
• China's Stocks Poised to Extend Drop on Profit, Says Julius Baer. Chinese stocks are poised to extend their slump as the slowing economy hurts earnings, according to Bank Julius Baer & Co., which has about $286 billion in client assets worldwide. Chinese equities will probably retreat unless there is “significant” easing of monetary policy, Alan Lam, a Hong Kong-based analyst at Julius Baer, said by phone yesterday. His comments came after the Shanghai Composite Index (SHCOMP) fell 2.7 percent, the most in four months, as Societe Generale SA said Chinese corporate profits won’t grow at all this year. “In the coming three months, the rally has ended,” Lam said. “The economic slowdown will continue for a while and there are overexpectations on policy. It’s a fact that the economic slowdown in China is negative on profitability.” The Shanghai Composite has slumped 7.2 percent from this year’s high on March 2 on concern the world’s second-biggest economy is stalling as government property curbs and tight monetary policies reduce profits. The Hang Seng China Enterprises Index (HSCEI) of Hong Kong-listed Chinese stocks has tumbled 9.5 percent this month, the second-biggest slump among 93 primary indexes tracked by Bloomberg.
• Californians Love Taxes, Not Government Reform. A funny thing happened after California officials announced the shutdown of 70 state parks in the face of an estimated $33 million in budget cutbacks: Private companies, wealthy donors, nonprofit organizations and local governments came up with ways to keep many parks open. Eleven parks have already been dropped from the closing list, and the parks agency is holding workshops to teach community groups how to run a state park. Unfortunately, such creative solutions -- where government officials privatize services or find other ways to stretch the taxpayer’s dollar -- appear less likely as Californians express support for tax increases.
• 4 Numbers Add Up To An American Debt Disaster. 1) 2.2 percent is the average interest rate on the U.S. Treasury’s marketable and non-marketable debt (February data). 2) 62.8 months is the average maturity of the Treasury’s marketable debt (fourth quarter 2011). 3) $454 billion is the interest expense on publicly held debt in fiscal 2011, which ended Sept. 30. 4) $5.9 trillion is the amount of debt coming due in the next five years.
• BofA(BAC) Says Monynihan Received $7 Million in Compensation Package. Bank of America Corp., the second- biggest U.S. lender, said Chief Executive Officer Brian T. Moynihan's 2011 compensation package was $7 million for 2011, a 30 percent cut, as the company's stock slumped. The CEO's salary was unchanged at $950,000, with the rest of his package consisting of $1.82 million in "cash-settled restricted stock units" and $4.24 million of restricted stock units tied to performance, according to a regulatory filing yesterday. A separate calculation conforming to U.S. Securities and Exchange Commission standards showed Moynihan's compensation quadrupled to $8.09 million. Moynihan, 52, spent his second year as CEO selling more than $33 billion in assets and targeting $8 billion of cost savings as revenue stagnated. Profit rebounded to $1.4 billion in 2011 from a $2.2 billion loss a year earlier, and capital levels rose in the fourth quarter. The stock plunged 58 percent last year, the worst in the Dow Jones Industrial Average.
• MF Global Treasurer Provides No Answers on Missing Funds. A U.S. House investigations subcommittee ended a third hearing into the collapse of MF Global Holdings Ltd. with the same problem they had four months ago: No answers from the woman said to have the most information about what happened to $1.6 billion in missing client money. Edith O’Brien, assistant treasurer at the firm’s brokerage, invoked her constitutional right against self-incrimination yesterday at a congressional hearing, disappointing lawmakers seeking answers to questions about frantic money transfers during the company’s final days in October.

Wall Street Journal:

• Health Case Ripples Outword. After three days of historic Supreme Court debate, the political world and health-care companies confronted the prospect of President Barack Obama's health law being wiped away, a decision that would upend years of planning by businesses and roil the November elections.
• Iran Oil Slows as Price Concerns Rise. Iran's oil exports appear to have dropped this month as buyers prepare for tough new sanctions, market observers say, and shipments are likely to shrink further if President Barack Obama determines by Friday, as expected, that markets can adjust to fewer barrels of Iranian oil.
• For Portugal, Moment of Truth Nears. Politicians in Lisbon and policy makers in Brussels insist that Portugal isn't like Greece. This spring, the country will have to prove it. The European Central Bank's injection of money into the Continent's banking system has, for now, pulled Italy and Spain away from the edge of the sovereign-debt crisis. But that medicine hasn't soothed Portugal. Though its government-bond yields have improved this week, they remain at elevated levels that suggest distress.
• AIG's Death-Bet Team Departs. A team who helped run American International Group Inc.'s $18 billion portfolio of "life-settlement" investments has left the company to launch a firm that advises investors on the controversial holdings. The departures signal that AIG, one of the largest financial conglomerates to fall victim to the financial crisis, remains committed to retreating from ancillary businesses to focus on its core property-casualty and life operations.
• Facebook(FB) Targeting May IPO. Facebook Inc. is preparing its initial public offering for May, according to people familiar with the matter, in what is shaping up to be the largest-ever U.S. Internet offering. The Menlo Park, Calif., social network halted trading of its shares on the secondary market this week, as it sets about nailing down its shareholder count, according to a person familiar with the matter.
• Survey Finds Americans Staying Put. A scant 10% of Americans plan to move to a new residence this year, while 70% plan some sort of home improvement, showing that consumers continue staying put as they wait for the housing crisis to finish playing out. Of those looking to move, some 44% expect to buy, while 42% are looking to rent, according to the latest American Express Spending & Saving Tracker survey released Wednesday. (The questions related to moving are new this year, so no previous comparison is available.) Not surprisingly, the survey found a lack of confidence in the housing market is hampering buying and selling activity. More than half of those surveyed are “not very/not at all confident” that they would get their asking price. Most respondents are also willing to make concessions to help sell their home — including paying for buyer’s closing costs (15%), offering to make requested repairs (29%), offering to include appliances (41%) and offering to include furniture (12%).
• Chaos Over a Plunging Note. Regulators are examining volatile trading in a complex exchange-traded note that caused it to lose 60% of its value in the past week. The Securities and Exchange Commission is looking into the VelocityShares 2x Long VIX Short Term Exchange note(TVIX), managed by Credit Suisse Group AG, which had about $700 million in assets before the decline, according to people familiar with the matter. The SEC review is preliminary, the people said.
• We're Not France, Yet. Maybe the United States dodged a bullet this week. Make that a deep-penetration bunker buster into the original idea of America. On Tuesday, the justices of the Supreme Court sounded, on balance, to be disposed against affirming the Obama health-care law's mandate.

Fox News:

• Lenders Opening Up To Borrowers With Shaky Credit. The amount of new credit extended last year to U.S. consumers grew more than 10% to $782 billion, spurred in part by more loans to "subprime" borrowers, according to new data from credit bureau Equifax. The total includes credit cards, auto loans, personal loans, home-equity lines of credit and student loans but excludes mortgages. Growth in subprime-loan originations was especially prevalent in the credit-card and auto-loan markets, a stark contrast from the recession, during which banks cut off lending to all but the most credit-worthy borrowers.
• Rubio endorses Romney, saying he's 'earned' it. (video) Sen. Marco Rubio, R-Fla., endorsed Mitt Romney for president Wednesday night on Fox News' "Hannity," saying Romney offers "a very clear alternative" to President Obama's vision for the future of the country. Rubio, a young, first-termer who has been discussed as a possible vice presidential candidate, criticized talk of a fight for the Republican nomination on the convention floor, a possibility that is keeping alive the campaigns of Rick Santorum and Newt Gingrich.

Dow Jones:

• S&P Says Greece May Need Another Restructuring. Greece will likely have to restructure its new bonds at some point in the future, said the head of sovereign ratings for Europe, Middle East and Africa at Standard & Poor's Corp. Earlier this month Greece pushed through the largest sovereign-debt restructuring in history in order to avoid defaulting on its bonds. Speaking on a panel at the London School of Economics, S&P head Moritz Kraemer said the CCC rating on Greece's new bonds is "extremely low," factoring in the large risk of another sovereign debt restructuring.

MarketWatch:

• The False Promise Of China Bank Profits. There is no longer any doubt over the profiteering model’s risks.

Business Insider:

• A Canadian Navy Officer Has Been Arrested For Telling The Russians All About America's Coastal Defenses.
• The 25 Hot Silicon Valley Startups You Need To Watch.

Zero Hedge:

• Is High Yield Credit Echoing 2011's Equity Nightmares? (graphs)
• US Debt Ceiling D-Day: September 14, 2012.
• Bianco & Biderman On Bonds And deBasement. (video)
  

CNBC:

• Plunge in Natural Gas Prices Is Reshaping Energy Industry. Natural gas prices are falling near levels last seen in the 1990s, which could help spur the US to develop more uses for the fuel, including transportation.

IBD:

• VeriFone(PAY) To Make Hay On Pay As EMV Chip Cards Arrive.

Forbes:

• China Luxury Warning? Ports Design Suspends Trade, Warns Of Results Delay. Fashion retailer Ports Design yesterday suspended trading in its shares at the Hong Kong Stock Exchange and warned of a possible delay in posting its annual results that would put the fashion retailer in non-compliance with listing rules.

Time:

• Inside the Supreme Court: Why Obamacare Supporters Are Getting So Nervous.

The Detroit News:

• Patterson Fears Detroit Is Headed For Bankruptcy, Unrest. Oakland County Executive L. Brooks Patterson said Wednesday he is concerned that harsh comments against a possible consent agreement to solve Detroit's financial crisis could foster economic chaos and even civil unrest. In an interview, Patterson expanded on remarks he made before a Chamber of Commerce breakfast Wednesday morning at Oakland University. During the event, he described Detroit as a "tinderbox" and criticized a minister's comments made at a Detroit town hall meeting. The outspoken Patterson also predicted Detroit couldn't survive without an emergency manager "yet continues to borrow money in an effort to get out of debt." "Detroit is in a desperate economic struggle and appears headed towards the cliff we call bankruptcy," said Patterson. "An emergency manager may be the only way out of it. We have seen that in Flint, Pontiac, other cities, struggling with money problems. In Pontiac, we went from hundreds of employees and eliminated police and fire departments, much of city hall, and will probably be down to about 20 before it is all done."

Reuters:

• Mosaic(MOS) Profit Misses Street On Potash(POT) Sales Drop. Mosaic Co posted a stark drop in quarterly profit as farmers bought less potash fertilizer and costs jumped in the phosphate fertilizer segment. High prices for potash kept many customers from buying ahead of the spring planting season, which begins shortly in North America. Chief Executive Jim Prokopanko blamed global economic concerns during the company's December to February fiscal quarter for the weak results, but said sales are already on the rebound.
• Red Hat(RHT) Profit Beats, To Buy Back Stock. Red Hat Inc's quarterly profit beat analysts' expectation for the fifth straight quarter on the back of higher subscription revenue, and the business software maker said it would buy back $300 million of its shares. The stock of the world's largest distributor of the Linux operating system rose more than 8 percent after the bell.

Telegraph:

• Obama's Disturbing Missile Defense Comments.

Sueddeutsche Zeitung:

• Greece still needs to implement several measures which may be "painful" for its population to restore the country's fiscal health and remain in the euro, citing the European Commission's Matthias Mors. European Union member states will probably insist on Greece not becoming accustomed to being a recipient of aid, the newspaper cited the member of the so-called troika of the commission, IMF and ECB as saying.

Fuji TV:

• North Korea fired two missiles toward the Yellow Sea around 4pm local time yesterday, citing a Japanese govt official.

Xinhua:

• China's "major" steelmakers incurred combined losses of 2.8b yuan in Jan.-Feb., citing the China Iron and Steel Association.

Shanghai Securities News:

• The National Energy Administration told local governments not to "arrange" new wind power projects in areas where more than 20% of wind farm output is lost because of limited grid capacity, citing a notice.

Evening Recommendations
ThinkEquity:

• Rated (GOOG) Buy, target $714.
• Rated (AMZN) Buy, target $230.
  
• Rated (EBAY) Buy, target $43.
• Rated (Z) Buy, target $40.
  

Night Trading

• Asian equity indices are -1.50% to unch. on average.
• Asia Ex-Japan Investment Grade CDS Index 155.0 +4.5 basis points.
  
• Asia Pacific Sovereign CDS Index 127.25 -.75 basis point.
• FTSE-100 futures -.32%.
  
• S&P 500 futures -.06%.
  
• NASDAQ 100 futures -.07%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (SHAW)/.45
• (BBY)/2.15
• (TIBX)/.19

Economic Releases
8:30 am EST

• 4Q GDP is estimated to rise 3.0% versus a prior estimate of a +3.0% gain.
• 4Q Personal Consumption is estimated to rise 2.1% versus a prior estimate of a +2.1% gain.
• 4Q GDP Price Index is estimated to rise +.9% versus a prior estimate of a +.9% gain.
• 4Q Core PCE is estimated to rise +1.3% versus a prior estimate of a +1.3% gain.
• Initial Jobless Claims are estimated to rise to 350K versus 348K the prior week.
• Continuing Claims are estimated to fall to 3350K versus 3352K prior.
  

Upcoming Splits

• (CPRT) 2-for-1
  

Other Potential Market Movers

• The Fed's Bernanke speaking, Fed's Plosser speaking, Fed's Lacker speaking, Fed's Lockhart speaking, Italian bond auction, 7Y Treasury Auction, weekly Bloomberg Consumer Comfort Index, Kansas City Fed Manufacturing Activity Index for March, weekly EIA natural gas inventory report, JPMorgan Insurance Conference and the (SRE) analyst conference could also impact trading today.
  

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

Stocks Falling into Final Hour on Global Growth Fears, Rising Eurozone Debt Angst, Commodity Sector Weakness, Profit-Taking

Broad Market Tone:

• Advance/Decline Line: Lower
  
• Sector Performance: Almost Every Sector Declining
  
• Volume: Below Average
  
• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• VIX 16.43 +5.39%
  
• ISE Sentiment Index 91.0 -19.47%
  
• Total Put/Call 1.04 +6.12%
  
• NYSE Arms 1.46 -12.32%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 91.22 +1.96%
  
• European Financial Sector CDS Index 206.39 +2.0%
  
• Western Europe Sovereign Debt CDS Index 268.12 +.58%
  
• Emerging Market CDS Index 246.20 +1.93%
  
• 2-Year Swap Spread 23.50 +.5 basis point
  
• TED Spread 39.50 +.5 basis point
  
• 3-Month EUR/USD Cross-Currency Basis Swap -50.0 -1.0 bp
  

Economic Gauges:

• 3-Month T-Bill Yield .08% -1 basis point
  
• Yield Curve 185.0 -2 basis points
  
• China Import Iron Ore Spot $147.70/Metric Tonne +.41%
  
• Citi US Economic Surprise Index 21.50 -2.1 points
  
• 10-Year TIPS Spread 2.33 -1 basis point
  

Overseas Futures:

• Nikkei Futures: Indicating a -63 open in Japan
• DAX Futures: Indicating a -11 open in Germany

Portfolio:

• Slightly Lower: On losses in my Retail, Biotech and Medical sector longs
  
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and added to my (EEM) short, then covered some of them
  
• Market Exposure: 75% Net Long

BOTTOM LINE: Today's overall market action is bearish, as the S&P 500 trades lower on more disappointing US economic data, commodity sector weakness, high energy prices, profit-taking and rising global growth fears. On the positive side, Oil Tanker, Bank, Homebuilding and Airline shares are higher on the day. Financial shares have held up relatively well throughout the day. Gold is falling -1.2%, Oil is down -1.5%, the UBS-Bloomberg Ag Spot Index is falling -.9% and Lumber is gaining +.5%. On the negative side, Coal, Alt Energy, Steel, Hospital, Construction, Education and Road/Rail shares are under substantial pressure, falling more than -2.0%. The Morgan Stanley Cyclical Index is underperforming substantially today, falling -1.85%, and is testing its 50-day moving average. Copper is falling -2.1%. Major Asian indices were mostly lower overnight, led down by a -2.65% decline in China. The Shanghai Composite broke down through its 50-day moving average and has declined -7.0% in about 2 weeks after getting turned away at its 200-day. China’s ChiNext Index of smaller growth companies plunged -5.1% last night. Major European Indices are falling around -1.0% today, led down by a -2.0% decline in Spain. Spanish equities are now down -5.6% ytd, which remains a large red flag for the region, as concerns over Spain’s sovereign debt intensify. The Italy sovereign cds is gaining +.71% to 372.67 bps, the China sovereign cds is gaining +2.77% to 108.17 bps, the Japan sovereign cds is jumping +3.6% to 93.13 bps, the UK sovereign cds is gaining +1.0% to 62.0 bps and the Brazil sovereign cds is gaining +1.6% to 120.83 bps. Moreover, the European Investment Grade CDS Index is climbing +3.1% to 120.94 bps. The Philly Fed ADS Real-Time Business Conditions Index continues to trend lower from its late-December peak despite investor perceptions that the US economy is accelerating. Moreover, the Citi US Economic Surprise Index has fallen back to early-Nov. levels. Lumber is -9.0% since its Dec. 29th high despite the better US economic data, dovish Fed commentary, improving sentiment towards homebuilders, equity rally and decline in eurozone debt angst. Moreover, the weekly MBA Home Purchase Applications Index has been around the same level since May 2010. The Baltic Dry Index has plunged around -60.0% from its Oct. 14th high and is now down around -45.0% ytd. China Iron Ore Spot has plunged -18.4% since Sept. 7th of last year. Shanghai Copper Inventories are right near a new record and have risen +741.0% ytd. I still think this is more of a red flag for falling demand rather than the intentional hoarding, which many suggest. Commodities are getting hit today on China growth worries, a Goldman downgrade of the group and less US economic optimism. The CRB RIND Index is breaking convincingly below its 50-day moving average, which is another global economic red flag. I still expect the most economically sensitive stocks to underperform over the intermediate-term. I would like to see the market prove itself after quarter-end before becoming more aggressive on the long-side. For the recent equity advance to regain traction, I would still expect to see further European credit gauge improvement, a further subsiding of hard-landing fears in key emerging markets, a rising 10-year yield, better volume, stable-to-lower energy prices and higher-quality stock market leadership. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, more financial optimism, falling energy prices, a bounce in the euro off the lows and investor performance angst.

Today's Headlines

Bloomberg:

• ECB's Weidmann Says Rescue Fund Expansion Won't Solve Crisis. European Central Bank Governing Council member Jens Weidmann said boosting Europe’s rescue funds will not solve its debt crisis, days before finance ministers meet to discuss expanding the limit on bailout lending. “Just like the ‘Tower of Babel,’ the ‘Wall of Money’ will never reach heaven,” Weidmann said in a speech at Chatham House in London today. “If we continue to make it higher and higher, we will, in fact, run into more worldly constraints,” which might include setting “incentives that lead to new problems in the future.” “All the money we put on the table will not buy us a lasting solution to the crisis,” Weidmann said, citing Bank of England Governor Mervyn King’s view on the matter that it merely buys time. He said the risks that fiscal austerity will prevent countries returning to growth are “being exaggerated,” and “in any case, there is little alternative.” Weidmann rejected any calls for the ECB to “temporarily ease the pressure” and do more to support the euro-area economy. Weidmann said the ECB had already “undertaken tremendous efforts” and said the reason the central bank’s founding treaty “explicitly prohibits monetizing public debt” is to avoid a situation where “governments have an incentive to accummulate debt.” “If central banks went down this route, they would be redistributing fiscal risks and costs among the taxpayers of the euro area,” he said. That would have “a highly corrosive effect on the credibility of central banks and on their independence,” Weidmann said.
• China’s Stocks Decline to 7-Week Low on Profit Concern. China’s stocks fell the most in four months after Societe Generale SA said Chinese corporate profits won’t grow at all this year and the nation’s largest copper producer reported slumping earnings. Jiangxi Copper Co. (600362) slid 5.5 percent after posting an 18 percent drop in net income and Societe Generale said industrial profit for the first two months signaled overly optimistic estimates for earnings. China Citic Bank Corp. led declines for lenders as Aberdeen Asset Management Plc said it is underweight on China on concern about the nation’s non-performing loans. Air China Ltd. (601111), the biggest international carrier, lost the most since December after saying passenger growth may slow. The Shanghai Composite Index (SHCOMP) fell 62.3 points, or 2.7 percent, to 2,284.88 at the close, its biggest drop since Nov. 30. The Shanghai Composite has dropped 7.1 percent from this year’s high on March 2 on concern the world’s second-biggest economy is stalling as the government’s property curbs and tight monetary policies reduce profits. Industrial companies posted their first January-February profit decline since 2009, as net income dropped 5.2 percent from a year earlier to 606 billion yuan ($96 billion), the National Bureau of Statistics said yesterday. That compared with a 34.3 percent gain in the first two months of 2011. The industrial profit figures suggest 2012 consensus earnings estimates for Hong Kong-listed Chinese companies are “far too optimistic,” Societe Generale strategists Guy Stear and Anthony Lee wrote in a note to clients dated yesterday. A gauge of material producers in the CSI 300 fell 4.3 percent, the most among 10 industry groups. “The economy is bad, demand is weak, and the upstream is particularly in trouble,” said Tao Dong, chief regional economist at Credit Suisse AG in Hong Kong. “Some companies’ earnings, especially those upstream, are probably going to feel a hard landing instead of a soft landing.” Measures of small- and medium-size companies and ChiNext startup firms slumped 4 percent and 5.1 percent respectively in Shenzhen on concern rising share supply will damp valuations.
• Bovespa Declines as Brazil Exports Seen Hurt by China Slowdown. The Bovespa index fell toward the lowest level in six weeks as a drop in commodities prices pushed raw-material producers down amid concern growth will falter in China, Brazil’s biggest trading partner. Mining company Vale SA (VALE5), whose top export market is China, slid as metals prices declined. BM&FBovespa SA (BVMF3), the operator of Latin America’s biggest securities exchange, sank after a court ordered it to pay 8.42 billion reais ($4.62 billion) in a civil case. The Bovespa fell 1.6 percent to 65,014.75 at 1:16 p.m. in Sao Paulo.
• Obama Power-Plant Rule Signals Demise of 'Old King Coal'. “This EPA is fully engaging in a war on coal,” West Virginia Democratic Senator Joe Manchin said in a statement. “This approach relies totally on cheap natural gas and we’ve seen that bubble burst before.” “It might sound good now, but what happens if those prices go up?” Manchin added.
• Oil Falls for First Time in Four Days After Supply Gain. Futures declined as much as 2.5 percent after the government said supplies gained 7.1 million barrels to 353.4 million last week, the largest increase since July 2010. Crude oil for May delivery fell $2.23, or 2.1 percent, to $105.10 a barrel at 12:50 p.m. on the New York Mercantile Exchange. Oil traded at $105.30 before release of the inventory report at 10:30 a.m. The price is up 6.3 percent this year. Brent oil for May settlement dropped $1.55, or 1.2 percent, to $123.99 a barrel on the London-based ICE Futures Europe exchange.
• Zinc Stockpiles Near 17-Year High on Increases in New Orleans. Zinc stockpiles monitored by the LME neared the highest level in 17 years on gains in New Orleans. Inventories rose 9,850 metric tons, or 1.1%, to 898,675 tons, daily LME figures showed today. The was the highest level since May 23, 1995, according to figures compiled by Bloomberg. Stocks in New Orleans warehouses gained 10,100 tons to 581,425 tons, the most metal on record at the location for data going back to December 1998. World supply of refined zinc will exceed demand by 144,000 tons this year, Natixis estimates. Inventories have climbed 14% this year in New Orleans, which holds 65% of global LME stocks of zinc.
• Britons See Disposable Incomes Plunge Most Since 1977: Economy. Britons suffered the biggest drop in disposable income in more than three decades last year in a squeeze that may continue this year as energy prices increase. Real household disposable income fell 1.2 percent, the Office for National Statistics said today in London. That’s the biggest drop since 1977 when the then Labour government sought to cap incomes growth in an attempt to bring down inflation. The report also showed that the economy shrank 0.3 percent in the fourth quarter, more than the 0.2 percent contraction previously estimated.
• Arab Spring Turns to Economic Winter as Unemployment Grows. Amir Mohammed has been sleeping outside the Libyan Embassy in Cairo awaiting a visa for a week, his bed a layer of cardboard on the sidewalk. He has given up on finding a job in Egypt and is looking for a way out. "I'm trying to just eke out an existence in my own country, but I can't," the 30-year-old hairdresser said. "There's no work. Why did we have a revolution? We wanted better living standards, social justice and freedom. Instead, we're suffering."
• Treasury Bull Market Death Knell Premature, Higgins Says. Treasury yields may pare their recent gains after the U.S. government bond market’s worst quarter in more than a year amid continued Federal Reserve market intervention and a slow economic recovery, according to Standish Mellon Asset Management Co.’s Tom Higgins. Talk of the 30-year-old bull market’s end is “premature” because benchmark 10-year note yields may head lower before they settle into a higher trading range of 2.25 percent to 3 percent by the end of 2012, Higgins, global macro strategist in Boston at the firm, said in a phone interview. “The continued weak backdrop in the economy, the deleveraging environment we are still in, regulation that favors less risky assets and the continued presence of the Fed will continue to anchor rates at lower levels,” said Higgins, whose firm oversees $85 billion in fixed-income assets.
• Cheddar-Bunny Maker Annie's(BNNY) Surges in Trading After IPO. Annie’s Inc. (BNNY), the maker of organic and natural foods such as bunny-shaped crackers, surged as much as 77 percent in its trading debut, after raising $95 million in an initial public offering that priced the shares above the range. The shares rose 74 percent to $33.03 at 11:48 a.m. New York time after climbing as high as $33.54. Annie’s and its investors sold 5 million shares for $19 each in the IPO, according to a statement. The company earlier offered them for $16 to $18 apiece.
• Justices Suggest Other Parts of Health Law May Be Thrown Out. U.S. Supreme Court justices indicated they may throw out other parts of President Barack Obama’s health-care law if they strike down its core requirement that Americans obtain insurance. A day after the justices cast doubt on the insurance mandate’s survival, they tangled today over the consequences such a ruling would have. The court is in its third and final day of arguments on Obama’s signature domestic achievement, a law that would extend health coverage to 32 million people. Justices across the ideological spectrum expressed interest in overturning at least provisions that require insurers to cover people with pre-existing conditions. The administration and the insurance industry say those rules are so closely linked to the mandate that they can’t be separated.

Wall Street Journal:

• Copper Slumps on Disappointing Economic Data. Copper futures fell on weaker-than-expected economic data from the U.K. and the U.S., as well as pressure from a stronger dollar. The most actively traded contract, for May delivery, was down 7.70 cents, or 2%, at $3.8030 a pound in morning trade on the Comex division of the New York Mercantile Exchange.
• Justices Spar Over Health Law. Justices in the Supreme Court's conservative majority said Wednesday that it would be difficult to figure out which parts of the Obama health-care law should survive if one part of it is judged unconstitutional. Wednesday morning's 90 minutes of argument involved a scenario in which the court decides to strike down the law's provision requiring Americans to carry health insurance or pay a penalty. Whether that scenario becomes reality is still uncertain—at Tuesday's arguments, swing vote Justice Anthony Kennedy seemed to waver—but if it does, the justices must decide what happens to the rest of the law. On Wednesday, the court's four liberals moved to protect the law, arguing that most of it should be kept even if the mandate falls. Justice Ruth Bader Ginsburg, the court's senior liberal, said that if the justices must choose between "a wrecking operation" or a "salvage job," the "more conservative approach would be salvage." But conservative justices repeatedly raised the difficulty of such an operation for a law that has hundreds of provisions. Justice Antonin Scalia said it would be "totally unrealistic" to expect the Supreme Court to "go through this enormous bill item by item and decide each one."
• Poll: Santorum's Pennsylvania Lead Vanishes.
  

MarketWatch:

• Apple(AAPL) Products Show Up In More Than Half of U.S. Homes: Study.

CNBC.com:

• Job Growth Expected From Cheap Natural Gas. The nation's fast-growing supply of cheap natural gas is setting off a manufacturing revival that's expected to create hundreds of thousands of jobs as companies build or expand plants to take advantage of the low prices.

Business Insider:

• Legal Analyst: Obamacare Goes From 'Train Wreck' to 'Plane Wreck'.
• A Democratic Congressman Was Just Tossed Out Of The House For Wearing A Hoodie.
• Analyst Visits China and Comes Back With Some Bad News. The slowdown is real.
• 78% of Americans Still Expect Their Home to Decline in Price Over Next Year.
• Jack Welch Makes Some Worrisome Comments On The State Of The Economy.
• Obama Has Hired An Army Of Debt Collectors To Go After Student Loan Deadbeats.
• There Are 2 Factions at War in the Chinese Communist Party.
  

Zero Hedge:

• Mark Grant Explains The Latest European Con.
• Goldman(GS) on Europe: "Risk Of 'Financial Fires' Is Spreading.
• MF Global Hearing Live.
• Europe Leaks It Will Fix Crushing Debt Problem With €940 Billion Of More EFSFESM Debt.

ForexLive:

• EuroView: Focus On Spain's Deficit Has Obscured Its Debt. The problem for Madrid is that the official figures are seen as increasingly less reliable. With the bill to clean up the country’s faltering banks expected to rise well above the E52 billion that Prime Minister Mariano Rajoy has planned, markets worry that Spain’s debt may suddenly explode the way Greece’s deficit seemed to in 2009. According to some analysts, the signs are already there.

NY Post:

• Bidding War For Book By Former Goldman Sachs(GS) Exec Greg Smith Could Hit $1 Million. Former Goldman Sachs executive Greg Smith, who resigned this month via a scathing op-ed in the New York Times, has triggered a media bidding war for his memoir of life inside the belly of the Wall Street beast. One top editor said he believed the auction was already nearing the magic $1 million mark.
  

Charleston Daily Mail:

• Coal Executive Predicts More Layoffs Due To Weak Market. The head of Alpha Natural Resources(ANR), the largest coal producer in West Virginia, said the mine closures and layoffs the company announced last month probably won't be the last this year. Kevin Crutchfield, Alpha's chief executive officer, also said he is concerned that the United States is following a regulatory path that will eventually turn the nation irrevocably away from coal and raise prices. Alpha is the nation's largest supplier of metallurgical coal, which is used in steel making, and the company is a major supplier of steam coal used by utilities to generate electricity. Coal markets have weakened in recent months. Metallurgical coal demand has softened because of slower growth in China and India and ongoing financial uncertainty in Europe. "It's an uphill battle," Crutchfield said of the coal business. "We have ample coal reserves. It's reliable, affordable and abundant. But for some, coal is viewed as a past fuel -- which is unfortunate because we're getting in a situation where decisions being made now will be irreversible and we may live to regret it." "Regulating carbon dioxide as part of the Clean Air Act, I think it has the potential of being devastating to coal," Crutchfield said. "It hasn't manifested itself yet but there's a clear intent there. It could be hugely problematic for our nation. There already have been announcements of coal plants being closed. "We're throwing our eggs in the natural gas basket and making decisions that will become irrevocable. If natural gas prices spike back to $10, $11 or $12, people will be raising Cain."

Emerging Money:

• Quantitative Easing Will Punish The Shipping Industry. The shipping industry has suffered greatly from the previous rounds of quantitative easing by the Federal Reserve. The stimulative measures devalued the U.S. dollar. As a result, commodity prices for oil, gold, and silver soared as investors and traders sought alternative assets. The increasing price of fuel was devastating for shippers, and it looks like it’s happening again.

Telegraph:

• ECB's LTRO Plan Flops as Banks Cut Lending. European banks cut lending lines to companies last month, defying the central bank's grand plan to stem the crisis with a flood of more than €1 trillion (£838bn) of cheap loans. The European Central Bank (ECB) said loans to the real economy fell in February, scotching claims that radical long-term refinancing operation (LTRO) would stem the crisis. Open Europe's Raoul Ruparel said: "The LTRO has succeeded in avoiding a severe funding crunch...[But] it does not tackle the underlying lending risks which the banks are still keen to avoid, particularly with the looming recession in Europe."

Bild:

• German real gross wages have dropped 2.9% since 2000, citing the Hans Boeckler Foundation.
  

Bear Radar

Style Underperformer:

• Mid-Cap Growth -1.60%

Sector Underperformers:

• 1) Coal -4.05% 2) Construction -2.83% 3) Alt Energy -2.76%

Stocks Falling on Unusual Volume:

• FCX, PUK, SNX, CRZO, GPOR, WIN, PTR, IVN, IMO, ELP, JOSB, AFFY, ALXN, CLNE, MDCA, MGAM, ALLT, FMCN, IACI, UBNT, EXPE, WPRT, ARUN, AIXG, PRGS, GTLS, BECN, FSLR, TEA, DRC, JOY, AIR, SDT, MWE, SABA, BTU, SWI, EPAM, CQP, INVN and JOSB
  

Stocks With Unusual Put Option Activity:

• 1) AMLN 2) LEAP 3) XLB 4) FXA 5) EWJ
  

Stocks With Most Negative News Mentions:

• 1) WFT 2) FFIV 3) GOOG 4) BAC 5) CAT
  

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume