Friday Watch

Late-Night Headlines
Bloomberg:
- Asian central banks have “limited” room to add more euros to their reserves, after increasing the amount in that currency in the second half of last year, according to a Goldman Sachs research report.
- Citigroup(C) led Forbes magazine’s annual Global 2000 company list for a third consecutive year.
- Japan’s consumer prices rose in February for a fourth month, adding to prospects that the Bank of Japan may raise interest rates from near zero this year.
- China “regrets” the decision by the European Union and US to file a joint complaint at the World Trade Organization against that country’s tariffs on imports of car parts.

Daily Telegraph:
- UK Prime Minister Tony Blair, who 18 months ago said he would not serve a fourth term in office, will step down by the end of this year.

Financial Times:
- General Motors(GM) should “show resolve” and make a decision on the development of a mass-market hydrogen-powered car within 18 months to ensure it remains competitive, citing an interview with Larry Burns, the carmaker’s vice president in charge of strategic planning.

Late Buy/Sell Recommendations
JPMorgan:
- Raised NOVL to Buy, target $11.

Night Trading
Asian Indices are unch. to +1.0% on average.
S&P 500 indicated -.02%.
NASDAQ 100 indicated +.03%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
- (GY)/-.15
- (GPN)/.34

Upcoming Splits
- (DBRN) 2-for-1
- (NX) 3-for-2

Economic Releases
8:30 am EST
- Personal Income for February is estimated to rise .4% versus a .7% increase in January.
- Personal Spending for February is estimated to remain unchanged versus a .9% increase in January.
- The PCE core for February is estimated to rise .1% versus a .2% increase in January.

9:45 am EST
- Final Univ. of Mich. Consumer Confidence for March is estimated to rise to 86.9 versus a prior estimate of 86.7.

10:00 am EST
- Chicago Purchasing Manager for March is estimated to rise to 57.0 versus a reading of 54.9 in February.
- Factory Orders for February are estimated to rise 1.3% versus a 4.5% decline in January.

BOTTOM LINE: Asian indices are mixed, as gains in commodity shares are offsetting losses in exporting stocks in the region. I expect US equities to open modestly lower and to trade modestly higher into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

Stocks Finish Mostly Lower on Oil and Rate Worries

Indices
S&P 500 1,300.25 -.20%
DJIA 11,150.70 -.58%
NASDAQ 2,340.82 +.13%
Russell 2000 762.59 -.21%
Wilshire 5000 13,153.76 -.17%
S&P Barra Growth 612.98 -.09%
S&P Barra Value 683.96 -.31%
Morgan Stanley Consumer 610.65 -.51%
Morgan Stanley Cyclical 816.31 -.31%
Morgan Stanley Technology 550.06 +.89%
Transports 4,547.81 -.45%
Utilities 392.66 -1.11%
Put/Call .83 +2.47%
NYSE Arms .81 +23.33%
Volatility(VIX) 11.57 +5.66%
ISE Sentiment 111.00 -18.98%
US Dollar 89.36 -.94%
CRB 337.31 +1.32%

Futures Spot Prices
Crude Oil 67.03 -.18%
Unleaded Gasoline 199.57 +2.12%
Natural Gas 7.46 -.29%
Heating Oil 188.43 +1.74%
Gold 588.60 +.32%
Base Metals 179.83 +1.42%
Copper 248.90 +.18%
10-year US Treasury Yield 4.85% +1.06%

Leading Sectors
Gold & Silver +3.13%
Gaming +1.68%
Broadcasting +1.01%

Lagging Sectors
REITs -1.58%
Oil Tankers -1.92%
Airlines -2.03%

Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
Deutsche Bank:
- Rated (NTAP) Buy, target $42.

Afternoon/Evening Headlines
Bloomberg:
- Legg Mason(LM) said it named Bill Miller chairman of its Legg Mason Capital Management mutual-fund unit and promoted four other executives.

Wall Street Journal:
- Colony Capital LLC offered $41 a share for Aztar Corp.(AZR), topping a bid from Pinnacle Entertainment.

Financial Times:
- Thirty-eight unsolicited takeover bids worth a total of $234 billion were made in the first quarter of 2006, citing Dealogic Holdings Plc.

BOTTOM LINE: The Portfolio finished slightly lower today on losses in my Semi longs and Internet longs. I did not trade in the final hour, thus leaving the Portfolio 75% net long. The tone of the market was mixed today as the advance/decline line finished about even, sector performance was mixed and volume was above-average. Measures of investor anxiety were higher into the close. Overall, today's market performance was neutral. However, the Nasdaq displayed exceptional resilience. The ISE Sentiment Index finished down 19% to a below-average 111, which is a positive. Even with the recent rise in commodities, the CRB is still 14 points below January highs. This was the type of healthy consolidation I am happy to see in the major average after yesterday’s sharp rise.

Stocks Mostly Lower into Final Hour on Continuing Worries Over Rates and Oil

BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Internet longs and Semi longs. I added (IWM) and (QQQQ) shorts today, thus leaving the Portfolio 75% net long. The tone of the market is mixed as the advance/decline line is slightly lower, sector performance is mixed and volume is above-average. The average 30-year mortgage rate rose to 6.35% this week from 6.32% the prior week. This is still lower than the 6.37% three weeks ago. Mortgage rates are now 114 basis points away from record lows set in June 2003. The yield on the 10-year Treasury note is still below levels seen in June 2004. I continue to expect mortgage rates to remain relatively low by historic standards this year as U.S. growth slows to average levels, demand for U.S. assets increases, inflation readings decelerate and the dollar remains stable. I expect US stocks to trade mixed into the close from current levels as short-covering offsets profit-taking.

Today's Headlines

Bloomberg:
- The cost of hiring tankers may fall 25% this year on excess ship supply, Clarkson Plc, the world’s largest shipbroker, said.
- Nokia(NOK), the world’s biggest maker of mobile phones, raised its forecast for growth in the global handset market to 15%.
- Emerging markets are becoming vulnerable to imbalances in the global economy and investors aren’t paying enough attention to the risks in some of those economies, a group of the world’s largest banks said.
- Apple Computer(AAPL) today denied its iTunes store breaches a trademark agreement with the Beatles’ company, saying that it doesn’t own the rights to music sold through the site.
- Crude oil is rising to an eight-week high and gasoline surged as US fuel supplies declined and the UN Security Council asked Iran to curb its nuclear program.
- US Treasuries fell, pushing 10-year yields to the highest since May 2004 on more signs the US economy remains strong.

Wall Street Journal:
- Some US small-cap mutual funds have been closing to new investors, making it difficult to tap into the strong growth shown by companies with market values of less than $500 million.
- The bankruptcy-court case of Foamex International, a maker of foam for mattresses, carpet cushions and car seats, shows how hedge funds are playing a larger role in financing troubled companies.
- Lottery commissions in several US states are turning to slot machines in efforts to boost revenue.
- General Electric(GE) and other companies are restricting employees’ use of the Internet because of concern with viruses, communications blockages and possible regulatory violations.
- A group of private-equity and hedge-fund managers seems to be leading the bidding for Enron’s international assets.
- General Motors(GM) is closer to an agreement to sell 51% of its finance arm, General Motors Acceptance Corp., to a group led by Cerberus Capital for $11 billion.
- The US House of Representatives is expected to pass a bill this week that would require financial reports from colleges and universities as a way to curb tuition increases.
- The US Environmental Protection Agency plans to impose new emissions standards for lawn equipment to reduce air pollution and gas consumption.

AP:
- TiVo Inc.(TIVO) shared technology know-how with EchoStar Communications’(DISH), which used the details in its own boxes for pausing and rewinding live television programs, TiVo’s co-founder, Michael Ramsey said in court yesterday.

NY Times:
- US House Speaker Dennis Hastert said that he and other House Republicans support a guest-worker program.

Interfax
- Oil and condensate production from Kazakhstan’s Karachaganak field could triple if $10 billion is invested during the next six to eight years, citing the CEO of BG Group.

4Q GDP Slows, Jobless Claims Still Low

- Final 4Q GDP rose 1.7% versus estimates of a 1.7% gain and a prior estimate of a 1.6% rise.
- Final 4Q GDP Price Index rose 3.5% versus estimates of a 3.3% increase and a prior estimate of a 3.3% increase.
- Final 4Q Personal Consumption rose .9% versus estimates of a 1.2% increase and a prior estimate of a 1.2% gain.
- Initial Jobless Claims for last week fell to 302K versus estimates of 305K and 312K the prior week.
- Continuing Claims rose to 2483K versus estimates of 2475K and 2463K prior.

BOTTOM LINE: The US economy grew at an annual rate of 1.7% last quarter, Bloomberg reported. Corporate earnings adjusted for the value of inventories and depreciation of capital expenditures rose 14.4% to an annual rate of $1.48 trillion. The core pce index, the Fed’s favorite inflation measure, rose 2.4% last quarter. Spending on commercial construction as well as equipment and software grew at an annual pace of 4.5% last quarter versus an 8.5% rise in the 3rd quarter. Inventory rebuilding added 1.89 percentage points to economic growth last quarter as companies gained confidence in the durability of the current expansion. Residential construction rose 2.8% last quarter versus a 7.3% gain the prior quarter. I expect GDP growth to come in a brisk 4-4.5% this quarter, which should be the peak for the year. Growth should slow to average levels through year-end. Long-term interest rates should also peak for the year around the time of the 1Q GDP release.

First-time claims for US jobless benefits unexpectedly fell last week as a buoyant labor market gave consumers the income to keep spending, Bloomberg said. The four-week moving-average fell to 310,750 from 312,250 the prior week. Solid job growth and rising incomes are boosting consumer confidence, which surged in March to the best level in almost 4 years. I continue to believe the labor market will remain relatively healthy over the intermediate-term without generating substantial unit labor costs increases.

Links of Interest

Market Snapshot
Detailed Market Summary
Market Internals
Economic Commentary
Movers & Shakers
Today in IBD
NYSE OrderTrac
I-Watch Sector Overview
NYSE Unusual Volume
NASDAQ Unusual Volume
Hot Spots
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Option Dragon
Real-time Intraday Chart/Quote