Bear Radar

Style Underperformer:

• Small-Cap Growth -.10%

Sector Underperformers:

• 1) Education -1.93% 2) Homebuilders -1.11% 3) Biotech -.71%

Stocks Falling on Unusual Volume:

• ENZY, CGEN, ELGX, PSO, UIHC, DECK, AVD, PRO, APEI, MDVN, UTIW, KBR, PIR, WWE, NOG, PEIX, ROC, CEMP, WDAY, CHUY, ZU, ENDP, BID, QCOR, PTLA, HTGC, MNTA, CRM, TASR, BSFT, ENDP, ISIS, ACAD, SWN, ECYT, NTLS, ANIK, HALO, PMC, TESO and CEMP

Stocks With Unusual Put Option Activity:

• 1) JNPR 2) DECK 3) MBI 4) AMAT 5) XLB
  

Stocks With Most Negative News Mentions:

• 1) GM 2) RL 3) KBR 4) UAL 5) BYD
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Value +.42%

Sector Outperformers:

• 1) HMOs +1.34% 2) Oil Service +.84% 3) Insurance +.79%
  

Stocks Rising on Unusual Volume:

• OVTI, DANG, MELI, TUMI, CLVS, MXWL, WUBA, YOKU, MTZ, CARA, DRQ, BCEI, MNST, SPNC, BBY, MW, SLXP, DDD, AMCX and GPOR

Stocks With Unusual Call Option Activity:

• 1) OVTI 2) MDVN 3) JOSB 4) GDP 5) DECK

Stocks With Most Positive News Mentions:

• 1) CRM 2) AAPL 3) TRIP 4) FRO 5) MRK
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Friday Watch

Evening Headlines 
Bloomberg:

• Ukraine Premier Starts ‘Kamikaze’ Mission as Crimea Anger Flares. With deposed ex-President Viktor Yanukovych claiming he’s still the country’s rightful leader, Yatsenyuk must seal a financial lifeline as investors pull out of Ukraine. Yatsenyuk in an interview before his confirmation yesterday said he was prepared to be “the most unpopular prime minister in the history” of the nation. “The fate of all the members of this cabinet is the fate of a political kamikaze,” Yatsenyuk said on his website after getting the support of protesters on Feb. 26. “The treasury is empty, pensions haven’t been paid in full for more than a month, gold and foreign currency reserves have been robbed. 

• Japan’s Output Climbs Most Since ’11 as Tax Rise Looms: Economy. Japan’s industrial production grew the most since 2011, indicating the economy is strengthening as a looming sales-tax bump stimulates demand, while inflation matched the highest level in more than five years. Output rose 4 percent in January from the previous month, the trade ministry said today in Tokyo, more than a 2.8 percent median estimate in a Bloomberg News survey of 33 economists. Consumer prices excluding fresh food climbed 1.3 percent from a year earlier, the statistics bureau said.

• China Must End Its GDP Worship. For China to get off the growth treadmill would be a giant reform all its own. Why? Well, there are at least three major challenges China will never be able to address if leaders feel obliged to keep growth above a specified level: local government finances, pollution and the shadow-banking system.

• China Yuan Set for Worst Month in 20 Years on Band-Widening Bets. China’s yuan headed for the worst month in two decades on speculation the government will broaden the currency’s trading band after allowing more volatility in the exchange rate. The yuan in Shanghai slid 1.5 percent in February, according to China Foreign Exchange Trade System prices. That’s the biggest monthly loss in CFETS figures since 2007 and in Bloomberg data before that.

• Soho China Sells Shanghai Buildings Amid Deepening Office Glut. Soho China Ltd. (410), the biggest developer in Beijing’s central business district, will sell two office buildings in Shanghai as an office glut deepens in the country’s financial center. The company signed an agreement with Financial Street Holdings Co., a developer of Beijing’s central business area, to sell its entire equity stake in Soho Hailun Plaza and related loans, and Soho Jing’an Plaza for about 5.23 billion yuan ($853 million), it said in a statement to the Hong Kong stock exchange today.

• Aussie to End Gains on Signs of Limited Growth: Market Reversal. Australia’s dollar will reverse its biggest monthly gain since September, trading patterns suggest, as decade-high unemployment and a slump in business investment spur speculation interest rates will decline.

• North Korea Fires Missiles After Recent Easing of Tensions. North Korea fired four short-range missiles, the first confirmed launch in more than nine months, disrupting a period of easing tensions with the South. The missiles were fired into the sea from North Korea’s east coast shortly before 6 p.m. local time yesterday, and had a range of at least 200 kilometers (124 miles), South Korea’s Defense Ministry said. 

• Asian Stocks Erase Advance as Yuan Drops Most on Record. Asian stocks fell, with the benchmark gauge erasing gains, after China’s yuan posted its steepest one-day loss against the dollar. China’s Shanghai Composite Index lost 1 percent, set for a third monthly slide amid speculation a weaker currency will curb earnings. Hong Kong’s Hang Seng China Enterprises Index slid 1 percent, erasing gains of as much as 0.8 percent, while the benchmark Hang Seng Index fell 0.4 percent. The MSCI Asia Pacific Index declined 0.4 percent to 137.45 as of 11:44 a.m. in Hong Kong after rising as much as 0.2 percent, and is little changed on the week.

• Yen Gains Versus Euro Amid Crimea Tensions; Oil Falls. Japan’s yen headed for its longest streak of gains versus the euro in 15 months as reports that armed men seized an airport in Ukraine’s Crimea region stoked haven demand. Crude oil fell, trimming its February advance, while South Korea’s won and New Zealand’s dollar climbed. The yen rose 0.2 versus Europe’s currency at 11:01 a.m. in Tokyo, a fifth straight advance.

• Gold Heads for Second Monthly Advance as Haven Demand Increases. Gold headed for the first back-to-back monthly gain since August as concern that the U.S. recovery may be losing momentum and turmoil in emerging markets boosted haven demand. Assets in bullion-backed exchange-traded products were set for the first monthly increase in 14 months. Bullion for immediate delivery was at $1,332.61 an ounce at 9:26 a.m. in Singapore from $1,331.33 yesterday. Prices are up 7 percent this month and reached a 17-week high of $1,345.46 on Feb. 26. Holdings in ETPs are up 0.3 percent in February after declining last year for the first time since the first product was introduced in 2003, data compiled by Bloomberg show.

• Gold Fix Study Shows Signs of Decade of Bank Manipulation. The London gold fix, the benchmark used by miners, jewelers and central banks to value the metal, may have been manipulated for a decade by the banks setting it, researchers say. Unusual trading patterns around 3 p.m. in London, when the so-called afternoon fix is set on a private conference call between five of the biggest gold dealers, are a sign of collusive behavior and should be investigated, New York University’s Stern School of Business Professor Rosa Abrantes-Metz and Albert Metz, a managing director at Moody’s Investors Service, wrote in a draft research paper. 

• Natural Gas Heads for Biggest Weekly Drop in New York Since 1996. Natural gas futures fell for a fifth day in New York and headed for the biggest weekly drop in 17 years after a government report showed a U.S. stockpile decline that was smaller than forecasts. Natural gas for April delivery fell as much as 1.3 percent in today’s electronic trading on the New York Mercantile Exchange and was at $4.486 per million British thermal units at 10:08 a.m. in Singapore. Volume for all futures traded was 86 percent below the 100-day average. Gas is down 27 percent this week, approaching the biggest slump since December 1996, and down 9.2 percent for February.

• Deckers Outdoor(DECK) Falls After Forecasting Surprise Quarterly Loss. Deckers Outdoor Corp. (DECK), the maker of Ugg boots and Teva sandals, dropped as much as 20 percent in late trading after the company forecast an unexpected first-quarter loss. The company, based in Goleta, California, projected a loss of 16 cents a share for the current quarter. Analysts had estimated a profit of 10 cents on average, according to data compiled by Bloomberg.

Wall Street Journal: 

• Russia Fosters Ukraine Discord.

• Crisis in Ukraine. Streaming Coverage:

• Facebook(FB) and Parenting: What Worries You Most? 

• People’s Daily Arms Netizens to ‘Kill the Devils’. An online platform for China’s Communist Party is encouraging citizens to take out their hostility toward the Japanese in the virtual world. While Beijing flexes its muscles in a very real way in the East China Sea, ordinary Chinese can now play a game called “Kill the Devils” on the website of the People’s Daily newspaper, the official mouthpiece of the party here.

• Health Plans Rush to Size Up New Clients. Gathering Data on Medical Conditions, Prescriptions Is Crucial Step in Projecting Costs.

• Yellen Sticks to Plan Amid Weather Doubts. Fed Chairwoman Adds Winter's Impact on U.S. Economy Remains Unknown.

Zero Hedge:

• Rome Is On The Verge Of Detroit-Style Bankruptcy.

• The "Institutional Investor" Housing Bubble Just Burst. (graph)

• Supreme Court Rules Police May Search A Home Without Obtaining A Warrant.

• Yes, The Government is Spying on You Through Your Webcam – Another “Conspiracy Theory” Proven True.

• The Stock Market's Shaky Foundation.

• President Of China's Marine Institute For Security: "Glory Drenched In Blood Will Pave China’s Road To Revitalization".

• China Currency Plunges Most In Over 5 Years, Biggest Weekly Loss Ever: Yuan Carry Traders Crushed. (graph)

Business Insider: 

• ADMIRAL: The Al Qaeda Threat Is 'Metastasizing'.

NY Times: 

• Mortgage Servicer’s Ties Raise Regulatory Concern. Mortgage servicers collect money from homeowners and distribute those payments to lenders. It’s a fairly boring business, but not to William C. Erbey.

Reuters:

• Sovereigns to increase borrowing in 2014 to $7.1 trillion -S&P. Sovereign debt borrowing is expected to rise by 2.7 percent to $7.1 trillion this year, with the biggest relative increase coming in sub-Saharan Africa, a new study by Standard & Poor's showed on Thursday. The increase in long-term debt borrowing, equivalent to $185 billion, will be led mainly by the United States and Japan, which will account for 57 percent of the total in 2014. The next biggest sovereign borrowers this year are projected to be Italy, China and Brazil.

• Foreign exchange dents Gap(GPS) profit forecast for new fiscal year. Gap Inc on Thursday reported a higher-than-expected holiday quarter profit, helped by January sales gains, but the fashion company said it expected unfavorable currency exchange rates will hit its full-year profit. 

• Noonan: America and the Aggressive Left. Half the country feels—and is—beset by government. That's not progress.

• Strassel: All the President's IRS Agents. The targeting of groups opposed to the Democratic agenda has not ended—it's gotten worse. 

Shanghai Securities News:

• China Should Set Up Shadow Banking Regulatory Indicators. China should set up a "regulatory indicator system" for shadow banking risks, according to a commentary by Lei Wei, a researcher with the Development Research Center of the State Council. China should strengthen regulations on shadow banking risks for liquidity, maturities mismatches, leverage ratios and counterparties, Lei wrote.

Xinhua:

• China's Property Industry Can't Maintain High Growth. China's property industry can't maintain the high growth of recent years because the nation's economy has entered a period of medium-high growth, citing Li Wei, head of the Development Research Center of the State Council. The supply-demand situation in the property market will see major changes after more than 10 years of high growth, the report cites Li as saying.

Evening Recommendations
 BNP Paribas:

• Cut (BIDU) to Reduce, target $130.

• Rated .

Night Trading

• Asian equity indices are -.50% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 133.0 -4.0 basis points.

• Asia Pacific Sovereign CDS Index 102.25 -.75 basis point.

• FTSE-100 futures -.03%.

• S&P 500 futures -.18%.

• NASDAQ 100 futures  -.11%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (DDD)/.20 

• (BSFT)/.41

• (IRM)/.22

• (NRG)/.17

• (PMC)/.38

• (SUP)/.23
  

Economic Releases
8:30 am EST

• 4Q GDP is estimated to rise +2.5% versus a prior estimate of a +3.2% gain.

• 4Q Personal Consumption is estimated to rise +2.9% versus a prior estimate of a +3.3% gain.

• 4Q GDP Price Index is estimated top rise +1.3% versus a prior estimate of a +1.3% gain. 

• 4Q Core PCE is estimated to rise +1.1% versus a prior estimate of a +1.1% gain.
  

9:45 am EST

• Chicago Purchasing Manager for February is estimated to fall to 56.4 versus 59.6 in January.

9:55 am EST

• Final Univ. of Mich. Consumer Confidence for February is estimated at 81.2 versus a prior estimate of 81.2.

10:00 am EST

• Pending Home Sales for January are estimated to rise +1.8% versus a -8.7% decline in December.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Kocherlakota speaking, Fed's Evans speaking, Fed's Plosser speaking, China Manufacturing PMI, Eurozone Flash CPI, German retail sales report and the (ETN) analyst conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and financial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

Stocks Rising into Final Hour on Less Emerging Markets Debt Angst, Central Bank Hopes, Short-Covering, Telecom/Gaming Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Slightly Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 14.43 +.56%

• Euro/Yen Carry Return Index 145.99 -.11%

• Emerging Markets Currency Volatility(VXY) 8.89 -1.11%

• S&P 500 Implied Correlation 53.81 -.43%

• ISE Sentiment Index 156.0 +59.18%

• Total Put/Call .91 +7.06%

• NYSE Arms .80 -29.96% 

Credit Investor Angst:

• North American Investment Grade CDS Index 63.88 -1.0%

• European Financial Sector CDS Index 88.97 +.49%

• Western Europe Sovereign Debt CDS Index 53.0 unch.

• Asia Pacific Sovereign Debt CDS Index 102.44 -.59%

• Emerging Market CDS Index 305.45 -1.85%

• China Blended Corporate Spread Index 361.05 -.38%

• 2-Year Swap Spread 12.25 +1.0 basis point

• TED Spread 20.0 +.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -6.0 -.25 basis point

Economic Gauges:

• 3-Month T-Bill Yield .04% unch.

• Yield Curve 232.0 -2.0 basis points

• China Import Iron Ore Spot $118.0/Metric Tonne +.17%

• Citi US Economic Surprise Index -13.20 -1.8 points

• Citi Emerging Markets Economic Surprise Index 14.70 +1.4 points

• 10-Year TIPS Spread 2.17 unch.

Overseas Futures:

• Nikkei Futures: Indicating -35 open in Japan

• DAX Futures: Indicating +4 open in Germany

Portfolio: 

• Slightly Higher: On gains in my biotech/tech/mdedical sector longs

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my (EEM) short

• Market Exposure: Moved to 50% Net Long

Today's Headlines

Bloomberg:

• Hagel Warns Russia on Ukraine Miscalculation Amid Crimea Unrest. U.S. Defense Secretary Chuck Hagel cautioned the Kremlin against making a “miscalculation” in maneuvering ground and air forces near the border with Ukraine, which is still without a full-time government after the toppling of its pro-Russian president. Joined by NATO allies, Hagel issued the warning after Interfax reported that Russia put fighter jets on alert, stepping up a military drill announced yesterday. Adding to tensions, the parliament of the southern Ukrainian region of Crimea was seized by armed backers of union with Russia. 

• Yanukovych to Appear in Russia Tomorrow as Swiss Freeze Assets. Deposed Ukrainian President Viktor Yanukovych will hold a press conference in neighboring Russia tomorrow, one day after an interim government took charge in Kiev and the Swiss government told banks to freeze his assets. Yanukovych will brief reporters in Rostov-on-Don in southern Russia at 5 p.m. Moscow time, state-run RIA Novosti reported, citing a person close to Yanukovych. The location of the briefing will be announced separately, according to RIA. 

• Emerging Outflows Top $11 Billion as Cash Sent to Europe. Investors are stepping up withdrawals from emerging-market exchange-traded funds and shifting into Europe as concern mounts that growth is faltering in developing nations while advanced economies strengthen. Withdrawals from U.S.-based ETFs investing in emerging-market equities and bonds totaled $11.3 billion this year, already surpassing the redemption of $8.8 billion for the whole 2013, according to data compiled by Bloomberg. Funds investing in European assets added $5 billion in the first two months of 2014, compared with $18 billion full-year inflows in 2013.

• RBS Posts Biggest Loss Since 2008 as McEwan Begins Overhaul. Royal Bank of Scotland Group Plc posted the biggest full-year loss since its bailout in 2008 as Chief Executive Officer Ross McEwan outlined plans to return what he called the industry’s least-trusted lender to profit. 

• Allianz Names El-Erian as Chief Economic Adviser. Allianz SE (ALV) named Mohamed El-Erian to the new role of chief economic adviser following his surprise resignation at the insurer’s Pacific Investment Management Co. unit last month. El-Erian, the former chief executive officer and co-chief investment officer at Newport Beach, California-based Pimco, will spend 50 percent of his time working for Allianz, CEO Michael Diekmann said at a press conference in Munich today. He will dedicate the rest of his time to his family and book projects, Diekmann said.

• European Stocks Retreat as Tension Escalates in Crimea. European stocks declined for a second day as tension escalated in Crimea, following Ukraine’s change of government. WPP Plc (WPP) slid 3.5 percent and Allianz SE dropped 2.3 percent after posting profit that missed estimates. Royal Bank of Scotland Group Plc (RBS) slumped 7.7 percent after the state-owned lender reported its biggest full-year loss since receiving a bailout in 2008. Man Group Plc rallied 14 percent after the world’s largest publicly traded hedge-fund firm announced a $115-million stock buyback. The Stoxx Europe 600 Index slipped 0.2 percent to 337.21 at the close of trading. 

• Yen Climbs as Ukraine Tension Boosts Safety Bid; Ruble Declines. “Putin is conducting military exercises and putting Russian forces on high alert,” said Richard Franulovich, the chief currency strategist for the northern hemisphere at Westpac Banking Corp. “That’s risk-negative.” The yen strengthened 0.2 percent to 102.19 per dollar at 1:59 p.m. New York time, rising the most on a closing basis since Feb. 3. The Japanese currency was little changed at 140.07 per euro, having rallied as much as 0.9 percent earlier. The euro climbed 0.2 percent to $1.3707, after falling as much as 0.3 percent.

• Copper Declines to Three-Week Low on China, U.S. Demand Concerns. Copper futures fell to a three-week low in New York on concern that the U.S. recovery may falter as China’s economy slows, hurting demand from the two largest users of the metal. Jobless claims in the U.S. increased by 14,000 to 348,000 in the week ended Feb. 22, the highest in a month and above all forecasts in a survey, a Labor Department report showed today. Chinese manufacturing probably slowed this month, economists surveyed by Bloomberg said before an official gauge due March 1. Copper prices are down 5.8 percent this year. “We need to see some real strong economic data before the market starts trading higher,” Tom Power, a senior commodities broker at RJO Futures in Chicago, said in a telephone interview. Copper futures for delivery in May slid 0.5 percent to close at $3.201 a pound at 1:18 p.m. on the Comex in New York, after touching $318.35, the lowest since Feb. 4. Prices dropped for seven straight sessions.

• Syria’s ‘Calamity’ Leads U.S. Report on Human Rights. The U.S. described the Syrian war as a “human rights calamity,” while citing Russia, China, Egypt, Turkey and other nations for abuses against their citizens in an annual State Department report.

• Yellen Repeats Fed Likely to Keep Trimming Asset Purchases. Federal Reserve Chair Janet Yellen said the central bank is likely to keep trimming asset purchases, even as policy makers monitor data to determine if recent weakness in the economy is temporary. “Unseasonably cold weather has played some role,” she said in response to a question today from the Senate Banking Committee. “What we need to do, and will be doing in the weeks ahead, is to try to get a firmer handle on exactly how much of that set of soft data can be explained by weather and what portion, if any, is due to softer outlook.”  

• U.S. Retail Chains See First Profit Decline Since Recession. U.S. retailers last quarter suffered their darkest days since the recession. With results in from 62 of 122 retail chains, the industry has posted its first profit quarterly drop since the economic contraction that ended in 2009, according to Retail Metrics Inc. Revenue also rose at the lowest rate since that year, the research firm found. The results paint a grim picture of an industry hit hard by the sluggish job recovery and slow wage growth, which have turned U.S. consumers into a nation of penny pinchers. Earnings are expected to drop 6.1 percent on average during the holiday quarter, according to Retail Metrics data. The broader pool of Standard & Poor’s 500 Index companies, meanwhile, are estimated to see profit rise 8.5 percent.

• Study Finds SEC Staff Sold Shares Before Cases Made Public. People working for the U.S. Securities and Exchange Commission who owned stock in companies under investigation were more likely to sell shares than other investors in the months before the agency announced it was taking enforcement actions, according to a new academic paper.

• IBM(IBM) Begins Cutting U.S. Jobs in $1 Billion Restructuring. International Business Machines Corp. (IBM) began dismissing U.S. workers today, part of a $1 billion restructuring to help the company meet profit goals as it adapts to shifts in the technology industry.

Wall Street Journal:

• Crisis in Ukraine. Streaming Coverage.

• Tensions in Asia Stoke Rising Nationalism in Japan. Young Conservatives, Japan's Version of U.S.Tea Party, Are Fast Gaining Clout. 

Fox News:

• Law prof: Obama power grab threatens to make president 'government unto himself'.

MarketWatch: 

• Charts point to more downside for emerging markets.

CNBC:

• US-China ties could end badly: Scholar. (video) The United States needs to break out of its co-dependent relationship with China before it's too late, the former chairman of Morgan Stanley Asia told CNBC on Thursday. China is already taking steps to reduce its "unhealthy reliance" on the U.S., which has been slower to make reciprocal strides, said Stephen Roach, senior fellow at the Yale School of Management.

ZeroHedge:

• Obamacare: Now Appearing On Your Restaurant Bill.

• Goldman's(GS) Post-Mortem Of Yellen's Second Day Of Congressional Testimony.

• Ukraine Central Bank Promises Liquidity To Local Banks, With One Condition.

• The Reality Behind The New Home Sales Number.

• Bank of America: "No Evidence Of A Strong Rebound In Spending As The Weather Improved". (graph)

• Meanwhile, More Russian Military Vehicles Amass In The Crimean. (pics)

• Initial Weekly Claims Surge To Highest Of The Year. (graph)

• Another Recessionary Print: Core CapEx Posts First Annual Decline Since 2012. (graph)

Business Insider:

• Australia Had An Ugly Day. Dylan Grice summed up the concerns when he wrote that Australia is "a credit bubble built on a commodity market built on an even bigger Chinese credit bubble." 

• Everyone Is Talking About The Recent Disconnect Between Stocks And Bonds. (graph)

• Neither US Nor NATO Has Plans For What To Do If Russia Intervenes In Ukraine.

• Defiant Yanukovych Finds Protection In Moscow.

CNN:

• Gunmen seize government buildings in Ukraine's Crimea, raise Russian flag. Dozens of armed men seized the regional government administration building and parliament in Ukraine's southern Crimean region Thursday and raised the Russian flag in a challenge to the Eastern European country's new leaders. Crimea, a Black Sea peninsula with an ethnic Russian majority, is the last big bastion of opposition to the new political leadership in the capital, Kiev, after Ukrainian President Viktor Yanukovych's ouster Saturday.

NY Post:

• Russian warship in Cuban port while troops train near Ukraine border. In a pair of brazen moves that resembled 1960s Cold War tactics, a Russian warship cruised into a Cuban port Wednesday as President Vladimir Putin massed troops near his country’s border with Ukraine. The Viktor Leonov, an armed Vishnya-class intelligence-gathering ship, was mysteriously docked at the Port of Havana’s cruise-ship area. The warcraft, which has a crew of around 200, is reportedly armed with 30mm guns and anti-aircraft missiles.

Institutional Investor:

• Robert Shiller Says Markets Have Become More Prone to Bubbles. The Nobel laureate contends that investors need to study human nature and history, and void falling victim to groupthink.

Reuters:

• Fed's Fisher says happy with pace of QE withdrawal. Dallas Federal Reserve Bank President Richard Fisher said on Thursday he would like the U.S. central bank to continue scaling back its monthly bond-buying stimulus at the current pace of $10 billion at each policy meeting. If U.S. economic growth picked up significantly, Fisher said, he "of course might be in favour of further reduction", but even if he did support such a step, he said he knew he "wouldn't win the argument".

• Sears(SHLD) trims losses despite 'tough to terrible' holiday quarter. Sears Holdings Corp said on Thursday its sales fell in a "tough-to-terrible" holiday quarter but store closures helped narrow its losses and it made progress in generating more business via the loyalty program it is betting its future on.

Financial Times:

• Falling renminbi heightens derivatives risks. Chinese companies will face billions of dollars in losses from complex hedging products if the renminbi continues to weaken, analysts and investors have warned. Mainland companies and global investors have bought hundreds of billions of dollars worth of structured products that benefit from renminbi appreciation over the past year, and now face growing pressure after the Chinese currency fell to its lowest level since July.

TheGuardian:

• GCHQ intercepted webcam images of millions of Yahoo users worldwide. Britain's surveillance agency GCHQ, with aid from the US National Security Agency, intercepted and stored the webcam images of millions of internet users not suspected of wrongdoing, secret documents reveal. GCHQ files dating between 2008 and 2010 explicitly state that a surveillance program codenamed Optic Nerve collected still images of Yahoo webcam chats in bulk and saved them to agency databases, regardless of whether individual users were an intelligence target or not. In one six-month period in 2008 alone, the agency collected webcam imagery – including substantial quantities of sexually explicit communications – from more than 1.8 million Yahoo user accounts globally.

Xinhua:

• China to Mark Anti-Japanese War Victory Day on Sept. 3. Standing Committee of National People's Congress also approves China to set Dec. 13 as memorial day for victims of Nanjing Massacre.

Haaretz:

• UN nuclear agency drops sensitive Iran report, sources say. IAEA worries probing deeper into Iran's suspected atomic bomb plans could hinder talks. The UN nuclear watchdog planned a major report on Iran that might have revealed more of its suspected atomic bomb research, but held off as Tehran's relations with the outside world thawed, sources familiar with the matter said Thursday.

Bear Radar

Style Underperformer:

• Large-Cap Value -.05%

Sector Underperformers:

• 1) REITs -.77% 2) Energy -.65% 3) Restaurants -.63%

Stocks Falling on Unusual Volume:

• WAC, CTRX, SFY, CHS, QUAD, BKD, BWC, ANIK, ESC, NDLS, BBEP, CIR, EPL, LINE, DATA, QCOR, NTRI, ESI, EDU, LPI, RL, HTWR, EZCH, DPM, DWA, PZZA, AKRX, CQB, CLR, AMAG, LNCO, NKTR, LKQ and NDLS

Stocks With Unusual Put Option Activity:

• 1) ANV 2) IRM 3) HK 4) SLB 5) DECK
  

Stocks With Most Negative News Mentions:

• 1) GM 2) JNJ 3) KMP 4) GME 5) COP
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume