Today's Headlines

Bloomberg:

- The Financial Accounting Standards Board, pressured by U.S. lawmakers and financial companies, voted to relax fair-value rules that Citigroup Inc. and Wells Fargo & Co. say don’t work when markets are inactive. The changes to so-called mark-to-market accounting allow companies to use “significant” judgment when gauging the price of some investments on their books, including mortgage-backed securities. Analysts say the measure may reduce banks’ writedowns and boost their first-quarter net income by 20 percent or more. William Isaac, chairman of the Federal Deposit Insurance Corp. from 1981 to 1985, has called fair value “extremely and needlessly destructive” and “a major cause” of the credit crisis.

- World leaders agreed on a regulatory blueprint for reining in the excesses that fed the worst financial crisis in six decades and pledged more than $1 trillion in emergency aid to cushion the economic fallout. The Group of 20 policy makers, meeting in London, called for stricter limits on hedge funds, executive pay, credit-rating companies and risk-taking by banks. They also boosted the resources of the International Monetary Fund and offered cash to revive trade to help governments weather the economic and social turmoil. They sidestepped the question of whether to deliver more fiscal stimulus in their own economies.

- Fixed mortgage rates in the U.S. fell to a record low for the second consecutive week, signaling that Federal Reserve Chairman Ben Bernanke’s effort to spur the housing market is gaining traction. The 30-year rate dropped to 4.78 percent from 4.85 percent a week earlier, the lowest since records began in 1971, Freddie Mac said today in a statement. Rates are falling to historic lows as the Federal Reserve ramps up purchases of mortgage-backed bonds to support home lending. Mortgage applications in the U.S. rose for a fourth consecutive week as a decline in borrowing costs prompted more refinancing. “Lower rates will help increase demand for homes,” said Celia Chen, senior director at Moody’s Economy.com in West Chester, Pennsylvania. “We need to see stronger demand for homes to help end the housing correction.”

- The cost to protect against a default by banks including Citigroup Inc.(C) and Bank of America(BAC) fell as accounting regulators approved a rule change that may limit writedowns and boost profits. Credit-default swaps on NY-based Citigroup dropped 55 basis points to 610 basis points as of 11:57 am in NY, according to broker Phoenix Partners Group. Contracts on Bank of America fell 55 basis points to 345 basis points. Credit-default swaps on the Markit CDX North America Investment-Grade Index Series 12, linked to the bonds of 125 companies in the US and Canada, fell 9 basis points to 193 basis points. The Markit iTraxx Financial Index of 25 European banks and insurers declined 16 basis points to 169, JPMorgan prices show.

- Gold fell the most in more than a week on speculation the world economy will improve, eroding the appeal of the precious metal as a haven. Silver also declined. Global equity indexes rallied as Group of 20 leaders met to discuss economic stimulus plans amid mounting evidence the worst of the recession may be over. Manufacturing in China increased last month and home prices in the U.K. rose. “The fear is coming down, and so is gold,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois. “If gold is an indicator of fear and trepidation, as fear diminishes, people will sell gold.” “The mere mention of the possibility of IMF gold sales making the rounds at the G-20 today is pressuring gold prices,” said Ralph Preston, a commodity analyst at Heritage West Futures Inc. in San Diego. A drop below $890 may trigger more selling, he said. The IMF is the third largest holder of gold reserves after the U.S. and Germany, according to the producer-funded World Gold Council. “You’ve got the IMF selling gold -- maybe it’s not a lot, but psychologically it would weigh on the market,” Prospector’s Kaplan said.

- Crude oil rose the most in three weeks as leaders of the Group of 20 nations meeting in London agreed on measures to fight the global recession.

- The European Central Bank cut interest rates less than economists forecast and deferred a decision on what other tools it can use to rescue its ailing economy, suggesting a split on the bank’s Governing Council. The Frankfurt-based ECB lowered its benchmark rate by a quarter-point to 1.25 percent, less than the half-point reduction expected by 49 of 55 economists in a Bloomberg survey. President Jean-Claude Trichet indicated the bank may lower the rate further next month, when he said it will also decide on any new “non-standard measures.” “There was almost certainly a split,” said Nick Kounis, chief European economist at Fortis Bank in Amsterdam and a former U.K. Treasury official. “They can’t decide on what to do next so they’re buying time.” The ECB is lagging counterparts such as the U.S. Federal Reserve, the Bank of England and the Bank of Japan, which have cut their key rates to almost zero and are pumping money into their economies by buying government and company securities.

- Treasuries dropped as accounting regulators approved a rule change that may boost bank profits and world leaders at the Group of 20 nations summit agreed on measures to fight the recession. Ten-year notes dropped for the first time in four days as the Financial Accounting Standards Board voted to relax the “mark-to-market” rule. The Dow Jones Industrial Average exceeded 8,000 for the first time since February. The difference between what banks and the Treasury pay to borrow money for three months, the so-called TED spread, narrowed to 95 basis points from 2008’s high of 4.64 percentage points in October. The average gap for the past decade is 55 basis points.

- Global-warming policies being considered by the U.S. and Japan risk provoking trade barriers, Chinese and Indian officials said in interviews. Protectionism, rejected yesterday by world leaders meeting in London, has been discussed in the U.S. Congress and in France as a response to the competitive advantage of developing nations like China that refuse to regulate greenhouse gases. Potential import fees could prompt trade retaliation, said Su Wei, China’s lead negotiator for a new global climate-protection treaty. “If there’s going to be a border tax imposed, that would very much have the danger of triggering a trade war,” Su said in a telephone interview from Beijing. “That’s not something that we would be happy to see,” he said before the start of United Nations-led treaty talks in Bonn running to April 8. China and the U.S., the biggest greenhouse-gas producers, are negotiating a new agreement to stem greenhouse gases with 190 countries. India and China reject emissions limits for developing nations, saying rich nations must act first.

- The Federal Deposit Insurance Corp. is considering giving banks the chance to share in future profits on loans sold into a U.S. government-financed program to remove distressed assets. The FDIC may allow the sellers of a loan to get an equity interest in the vehicle that buys it, meaning they would gain from any future increase in the asset’s value. The aim is to give healthier banks an incentive to sell loans at a cheaper price, encouraging more investors to make bids.

- The Fed’s commitment to buy $1.25 trillion of bonds backed by US home loans is succeeding where $11.6 trillion of government lending, spending, and guarantees so far have failed. “This has been the most successful effort, at least so far in this crisis, to shore up the economy,” said Mark Zandi, chief economist at Moody’s Economy.com. “It’s reasonable to expect refinancings will reduce mortgage payments by about $25 billion, and most of that cash will go into spending.”

- Investors favored mutual funds over hedge funds for commodity investments in the first quarter, seeking the protection of regulated money managers, data from EPFR Global and Gardner Finance AG show. Mutual funds investing in commodities attracted a net $3.2 billion through March 25, swelling combined assets by 10 percent from the end of last year, Cambridge, Massachusetts-based researcher EPFR said. Commodity hedge funds’ assets were flat, said Michael Laznicka, chief executive officer of Gardner. Commodity mutual funds now manage about $34.4 billion, according to Ian Wilson, a managing director at EPFR. Last quarter’s growth in new money was the fastest since 2006, he said. Assets peaked at $68.8 billion in May 2008. Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by gold, are at a record 1,127.44 metric tons, more than the amount of bullion held by Switzerland’s central bank. The Reuters/Jefferies CRB Index of 19 commodities fell 4 percent in the first quarter, for the longest losing streak on a quarterly basis since 2001. Exchange-traded commodity products attracted $21 billion in the first quarter, the most since Barclays started collecting the data in 2005. The figure includes medium-term notes, which track commodities over a specific time period. Including index-linked investments, commodities attracted $24 billion of new money, taking total assets under management to $176 billion, according to Sen. Commodity hedge funds’ assets under management were $190 billion to $210 billion at the end of March, according to Gardner Finance.

- Mexico’s economy will shrink 2.8 percent this year as the global financial crisis deepens, the Finance Ministry said in a report. Investment may fall 8.4 percent and consumption may drop 2.2 percent, the ministry said. Mexico will miss out on 145.5 billion pesos ($10.5 billion) of oil revenue this year because of falling crude prices, the report said.

- Fannie Mae and Freddie Mac, the mortgage-finance companies that have taken $60 billion in taxpayer-funded capital, will have less need for additional aid under new accounting rules for losses, their regulator said.

- Boeing Co.(BA) said airplane deliveries rose 5.2 percent from a year earlier to 121 in the first quarter as the world’s second-largest commercial-plane builder benefited from airlines seeking more fuel-efficient jets.

Wall Street Journal:

- Leaders of the Group of 20 nations Thursday announced a host of measures they said would help to reignite world growth but left themselves a long list of follow-up steps to turn their words into action. The summit of many of the world's leading economies in London announced a tripling of the lending power of the International Monetary Fund to around $750 billion. They also unveiled a $250 billion expansion in the IMF's reserve currency -- the special drawing right -- to boost liquidity in the global financial system by expanding member countries' foreign exchange reserves. They committed to selling IMF gold to help poor countries.

- A federal judge ruled on Thursday that prisoners in the war on terror can use U.S. civilian courts to challenge their detention at a military air base in Afghanistan. U.S. District Judge John Bates turned down a U.S. motion to deny the right to three foreign detainees at Bagram Airfield in Afghanistan.

CNBC:

- The S&P 500, which closed yesterday at 811.08 after falling as low as 666 this year, is a “safe zone” for buying stocks, Bob Doll of BlackRock Inc.(BLK) said.

- New orders received by U.S. factories rose in February, government data showed on Thursday, breaking a six-month streak of declines and bolstering hopes the economy may be beginning to crawl out of the depths of a recession. The Commerce Department said factory orders rose 1.8 percent in February after a revised 3.5 percent drop in January, initially reported as a 1.9 percent decline. Economists polled by Reuters had expected a February increase of 1.5 percent.

- Schork Oil Outlook: We’re In Bear Country.

NY Times:

- Secretary of Education Arne Duncan told the nation’s governors on Wednesday that in exchange for billions of dollars in federal education aid provided under the economic stimulus law, he wants new information about the performance of their public schools, much of which could be embarrassing. In a “Dear Governor” letter to the 50 states, Mr. Duncan said $44 billion in stimulus money was being made available to states immediately. To qualify for a second phase of financing later this year, however, governors will need to provide reams of detailed educational information.The data is likely to reveal that in many states, tests have been dumbed down so that students score far higher than on tests administered by the federal Department of Education. It will also probably show that many local teacher-evaluation systems are so perfunctory that they rate 99 of every 100 teachers as excellent and that diplomas often mean so little that millions of high school graduates each year must enroll in remediation classes upon entering college.

MarketWatch:
- International Business Machines Corp.(IBM) reportedly has cut its bid price for Sun Microsystems Inc. to the $9 to $10 range, in return for assurances that the buyout would go through, according to a media report Thursday.

- While he's seeing "mixed signals," Bank of America Corp.'s(BAC) chief executive says he expects the U.S. economy to bottom in the second half of this year, and he doesn't anticipate the government to ask the company to raise more capital.

- Viacom Inc. Chief Executive Philippe Dauman said Thursday that there's unlikely to be significantly negative consumer backlash against "TV Everywhere," a plan to tie online TV show viewing to a subscription to a cable, satellite or telecommunications service.

NY Post:

- Billionaire Steve Schwarzman's Blackstone Group is trying to roll out a new fund geared toward providing funds to companies on death's door. Sources tell The Post that Schwarzman is hoping to raise as much as $3 billion for a rescue fund that would provide financing to cash-strapped entities in or on the verge of bankruptcy.

Detroit Free Press:

- Three days into his new job, GM(GM) chief executive Fritz Henderson on Wednesday said he wouldn't rule out asking the UAW to restart labor contract talks -- again -- but emphasized that the automaker had not taken that step. "I don't think it's a real good idea at this point for us to take anything off the table," Henderson said in his first interview with the Free Press since taking the top job following Rick Wagoner's ouster by the White House. Henderson also said General Motors Corp. expects to keep its new focus on four core brands: Chevrolet, Cadillac, Buick and GMC. "Why on Earth would we rid ourselves of the Buick brand?" he said in response to speculation about the brand's future. Buick, he noted, is a top seller in the crucial Chinese market.

OrlandoSentinel.com:

- With a federal corruption indictment expected against him as early as Thursday, former Illinois Gov. Rod Blagojevich apparently was taking refuge in Fantasyland -- the Disney World resort in Florida. U.S. Attorney Patrick J. Fitzgerald has until Tuesday to get an indictment that would replace a complaint charging Blagojevich with plotting to trade or sell President Barack Obama's former U.S. Senate seat and a host of other crimes.

HedgeFundBlogger:

- The 25 Highest Paid Hedge Fund Managers.

Politico:

- Here’s the poll shocker of the day. Embattled Sen. Chris Dodd (D-Conn.) is in severe political danger, trailing former GOP congressman Rob Simmons by 16 points, 50 to 34 percent, according to a new Quinnipiac poll. Among independent voters, Simmons leads Dodd by 31 points -- 56 to 25 percent. Dodd also trails little-known state senator Sam Caligiuri by four points, 41 to 37 percent. Dodd’s approval ratings are in the tank, with 58 percent of Connecticut voters disapproving of his job performance and only 33 percent viewing him favorably. He doesn’t even have support within his own party – only 51 percent of Democrats approve of him. “A 33 percent job approval is unheard of for a 30-year incumbent, especially a Democrat in a blue state. Sen. Christopher Dodd's numbers among Democrats are especially devastating,” said Quinnipiac pollster Douglas Schwartz. Voters are taking their anger out on Dodd for his involvement in legislation that allowed AIG executives to receive millions in bonuses. A whopping 74 percent of voters said they blamed Dodd for the bonuses. Meanwhile, 54 percent said they don’t believe Dodd is honest and trustworthy.

GlobeNewswire:

- Intuitive Surgical, Inc. (ISRG), the global leader in robotic-assisted minimally invasive surgery, today announced a new addition to its da Vinci(r) product line -- the da Vinci(r) Si(tm) Surgical System. The da Vinci Si System introduces several new features designed to provide additional clinical benefits and operational efficiencies: Enhanced 3D HD resolution offers superior visual clarity of target tissue and anatomy, potentially allowing for greater surgical precision; an updated and simplified user interface enhances operating room efficiency; newly upgradeable architecture and compatibility with existing OR suite technology facilitates the seamless integration of the da Vinci Si System into the OR of the 21st century; an optional dual console allows a second surgeon to provide a da Vinci-enabled assist and may also facilitate teaching da Vinci Surgery; and finally, the addition of new ergonomic settings to the surgeon console allows greater surgeon comfort during procedures.

Reuters:
- General Electric Co (GE) and Intel Corp (INTC) have joined forces to develop devices to help doctors monitor patients' health remotely, an area they believe could become a multibillion-dollar business. The U.S. conglomerate and the world's largest chip maker will develop devices that they expect to save money by allowing healthcare workers to monitor the sick and the elderly outside of hospitals or medical offices. They plan to invest $250 million in the field over the next five years.

- The start of the new quarter and growing signs that the global economy might have hit a trough are bringing a rally in stocks and other risky assets which many believe has stronger legs than before. World equities, measured by MSCI, have risen more than 6 percent in the past two days, having made their best monthly gains in March since December 1999. They are also up around 24 percent after hitting a 5-1/2 year low in mid-March. A combination of factors is behind the latest rally.

- Saudi Arabia did not contribute to the $500 billion of extra funds pledged to the International Monetary Fund at a G20 summit of world leaders, its finance minister said on Thursday.

RBC Daily:

- Moscow shopping mall vacancies are now at 10%.

Hong Kong Govt:

- The Hong Kong Land Registry today (April 2) released the land registration statistics for March 2009. The total number of sale and purchase agreements for all types of building units received for registration in the Land Registry in March 2009 was 8,062. This was 59.9% higher than in February 2009 but a decrease of 26.7% compared with March 2008. Using a 12-month moving average, the figure for March 2009 represented a decrease of 3.2% from February 2009 and 44.1% compared with March 2008. The total consideration of these agreements in the month was $28.6 billion, 80.1% higher than that in February 2009 but a decrease of 35% compared with the amount for March 2008.

CCTV:
- A strong US dollar is in the US’s interest, US Treasury Secretary Tim Geithner said. “I’ll make it crystal clear that a strong dollar is in America’s interest,” Geithner said. “We’re going to do what’s necessary to make sure that our markets remain the deepest, most liquid, safest markets in the world,” he said.

Haaretz.com:

- As early as this month, Prime Minister Benjamin Netanyahu and Foreign Minister Avigdor Lieberman could face international pressure to clarify their position on the creation of a Palestinian state. At a closed-door dinner of European Union diplomats held Friday in the Czech Republic, several senior officials said Israel must be required to present an explicit commitment accepting the principle of "two states for two peoples," and if it fails, the process of upgrading Israel-EU relations should be frozen.

Bear Radar

Style Underperformer:
Large-cap Value (+2.52%)

Sector Underperformers:
Gold (-4.27%), Drugs (+.01%) and Banks (+.65%)

Stocks Falling on Unusual Volume:
AU, KGC, MANH, AIPC, AMLN, GOLD, NTRS and CAVM

Stocks With Unusual Put Option Activity:
1) BIIB 2) CHRW 3) CSX 4) ITU 5) WDC

Bull Radar

Style Outperformer:
Small-cap Value (+5.47%)

Sector Outperformers:
Road & Rail (+9.62%), Airlines (+7.15%) and Steel (+7.13%)

Stocks Rising on Unusual Volume:
DB, HBC, CRZO, ARD, MBT, CCI, BBL, CLF, SNP, PCZ, CALM, SOHU, DWSN, KAMN, WYNN, CELG, ASIA, PWRD, APOL, ATLS, CMED, CREE, SCHN, CEDC, OMGI, FOSL, SCHL, SNDA, QSII, ADSK, IXG, UNF, KUB, IIT, PXQ, KMX, SWM, ALV and RZG

Stocks With Unusual Call Option Activity:
1) SYNA 2) STP 3) ICE 4) BEC 5) OI

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Thursday Watch

Late-Night Headlines
Bloomberg:

- Leaders of the most powerful nations meet today amid signs that the world economy is stabilizing after months of freefall. The Group of 20 summit convenes in London as some reports suggest the pace of decline is easing. U.S. durable-goods orders and home sales rose in February, Chinese urban investment surged 26.5 percent in the first two months of the year, and German investor confidence in March reached its highest level since July 2007. The Standard & Poor’s 500 Index last month rallied the most in seven years.

- News media comparisons of the current recession to the Great Depression may stoke fear among consumers while misleading them about the depth of the downturn, according to a study by Charles Gascon, research associate with the St. Louis Federal Reserve Bank. “Fortunately,” there is a “vast” difference between saying the current downturn is the worst since the 1930s and saying it’s as bad as the Depression, Gascon wrote in the St. Louis Fed’s “Regional Economist” publication. Indicators such as declines in employment, income, spending and stock prices match or exceed those reached in the last six recessions, although they are nowhere near the lows of the 43- month Depression that began in 1929, he wrote.

- Leaders of the Group of 20 nations may agree to regulate large hedge funds and ``avoid competitive devaluations,'' Reuters reported, citing a draft communique. Leaders also may set up a supervisory body to oversee the global financial system and work together to revive economic growth, the news service reported yesterday from London.

- K+S AG, Europe’s largest salt producer, confirmed a report by the Financial Times Deutschland that it is bidding for Dow Chemical Co.’s Morton Salt unit. “We definitely have an interest in the deal, but at this time we have no more information we can provide,” Oliver Morgenthal, spokesman for K+S, said in a telephone interview. “But we can confirm that what Financial Times Deutschland said earlier is correct and that we have come to a certain agreement with Rohm & Haas.”

- Borrowers who were minorities didn’t pay higher interest rates for subprime mortgages and often paid lower ones, according to a New York Federal Reserve Bank study of more than 75,000 adjustable-rate subprime loans. The findings published today appear to contradict earlier private and government research showing minority borrowers and neighborhoods might have been targeted for expensive credit from 2004 to 2006, the peak period for subprime lending. The study merges data on the race, ethnicity and gender of borrowers as reported by lenders under the Home Mortgage Disclosure Act with data on mortgage pricing and risk variables such as credit scores as reported by the mortgage research firm First American LoanPerformance. The results “provide no evidence of adverse pricing by race, ethnicity or sex of the borrower” for either the initial interest rate or the rate to which the loan subsequently adjusted, the study said. “If any pricing differential exists, minority borrowers appear to pay slightly lower rates.” The study was conducted by Joseph Tracy, director of research at the New York Fed, Andrew Haughwout, head of microeconomics and regional studies at the New York Fed, and Christopher Mayer, a professor of real estate finance and economics and vice dean of the Columbia University Business School.

- Steel prices this year will be 19 percent lower than its prior estimate because of falling demand from construction companies and carmakers, Morgan Stanley said. Global steel prices will average $502 a metric ton, down from a previous forecast of $619 and below last year’s $854 a ton, the bank said today in a report. Morgan Stanley lowered its forecast for next year by 32 percent to $485 a ton and cut the 2011 prediction by 30 percent to $526 a ton. “Steel markets are starting to look oversupplied as inventories in China, the largest consumer of steel globally, have reached record highs,” the bank said. Prices of hot-rolled coil, an industry benchmark, have more than halved since June to $490 a ton, according to industry publication Metal Bulletin. Global steel demand will shrink by 11 percent this year, double its previous estimate for a 5.5 percent contraction, Morgan Stanley said. Demand in China will decline 5.5 percent, the “first contraction in a decade,” returning usage of the metal to 2005 levels, the bank said.

- Bristol-Myers Squibb Co. and AstraZeneca Plc’s proposed new diabetes pill is safe enough for the heart to be allowed on the market, a U.S. panel recommended.

- Junk bonds offered the biggest returns since 2003 as investors bet that yields on the debt will offset defaults amid the deepest global slowdown since the Great Depression. High-yield, high-risk, or junk, bonds returned 5.02 percent in the first quarter, the best performance since the fourth quarter of 2003, according to Merrill Lynch’s U.S. High Yield Master II index.

- Victims of Bernard Madoff’s $65 billion Ponzi scheme filed a petition to put the fraudster in personal bankruptcy to ensure that all his assets are used to pay them, the victims’ lawyer said. “It’s an important step to ensure that all Madoff assets are brought before the bankruptcy court to be used for victims of this massive fraud,” said Jonathan Landers, a lawyer with Milberg LLP, which represents more than 70 victims, in a phone interview.

- The U.S. Treasury injected $46 billion in emergency funds into government-controlled mortgage-finance companies Fannie Mae and Freddie Mac. The Treasury payout yesterday included a $15.2 billion investment in Fannie’s preferred stock and a $30.8 billion purchase of Freddie’s preferred shares, the companies said in separate filings to the Securities and Exchange Commission today. The companies must pay a minimum dividend of 10 percent.

- The European Central Bank may cut its key interest rate to a record low of 1 percent today, increasing pressure on policy makers to use new tools to fight the worst recession in more than 60 years. ECB officials meeting in Frankfurt will lower the benchmark rate by half a percentage point, according to 49 of 55 economists in a Bloomberg News survey. Such a reduction would probably mark the end of the ECB’s current round of rate reductions, a separate survey shows.

- French authorities rarely investigate or punish cases of police brutality, leading to “de facto impunity” for security forces in the country, Amnesty International said in a report. While victims of alleged police brutality in France come from all ages and groups, the majority are from ethnic minorities or are foreigners, the human rights group said.

- Patients who start antiviral drugs before their immune systems are damaged by the AIDS virus substantially cut their risk of death, according to a study published today in the New England Journal of Medicine.

- The yen fell against the euro as Asian stocks gained on optimism the worst of the global recession is ending, spurring investors to increase purchases of higher-yielding assets. The euro rose versus the dollar on speculation European Central Bank President Jean-Claude Trichet will signal the bank will refrain from cutting interest rates further after lowering them later today. New Zealand’s dollar may decline against the greenback after Finance Minister Bill English said a stronger currency would make it difficult for the nation to snap out of its worst slump in more than three decades. “Asian and Japanese stocks are rising, reflecting an improvement in risk appetite,” said Hideki Amikura, deputy general manager of foreign exchange in Tokyo at Nomura Trust and Banking Co., a unit of Japan’s largest brokerage. “This is leading to selling of the yen.”

Wall Street Journal:

- "Don't think we're not keeping score, brother." That's what President Barack Obama said to Rep. Peter DeFazio in a closed-door meeting of the House Democratic Caucus last week, according to the Associated Press. A few weeks ago, Mr. DeFazio voted against the administration's stimulus bill. The comment from Mr. Obama was a presidential rebuke and part of a new, hard-nosed push by the White House to pressure Congress to adopt the president's budget. He has mobilized outside groups and enlisted forces still in place from the Obama campaign.

- Navigation systems provider TomTom NV has signed a deal with TrafficCast International Inc. to provide real-time information about traffic, weather patterns and the cheapest nearby gasoline to TomTom's first wireless navigation device. TomTom, which is based in Amsterdam and already offers wireless devices in the European market, is seeking to expand its U.S. presence with the Go 740 Live device, its first traffic device connected to U.S. wireless networks. Because it has a two-way wireless connection, the device will also send anonymous information about the subscriber's location and speed to supplement other sources of road and weather information.

- Network Hard Disk by Western Digital(WDC) Offers Easy Backup.

- Here's the match-up. In the right corner we have Omar al-Bashir, for 20 years the Islamist dictator of Sudan and the man most responsible for the death of hundreds of thousands of Darfuris. In the left corner we have six former Bush Administration officials who were given the task after September 11 of formulating America's response to the atrocities. Who do you think is in the greatest legal jeopardy?

MarketWatch.com:
- The U.S. markets reversed sharply last month, spiking 25% from the March trough to peak. And following a run of this magnitude, a consolidation phase is in order. Yet as long as the pullbacks aren't too aggressive, the sector rotation underlying the March recovery was constructive, and very well may lay the groundwork for further gains.

- Emerging Europe will suffer its biggest fall in real gross domestic product since the collapse of communism in the early 1990s, underlining the severity of the trade and financial shocks that have hit the region, Fitch Ratings said in a new report on Wednesday. GDP growth is likely to contract by 3.1% this year in Emerging Europe, according to the ratings agency. That would be a severe recession after growth of 4% in 2008 and an average of 6.8% in the five years to 2007. Fitch expects only a modest recovery of 1.4% in 2010, which would be "insufficient to prevent further rises in unemployment and pressure on public finances."

- Following on the furor over multimillion-dollar bonuses paid to traders at American International Group, the House approved legislation Wednesday that would limit compensation for executives and employees at financial institutions receiving money from the government's $700 billion financial bailout package.

CNBC.com:
- Gartman thinks that we’re building so few houses right now (400,000 new units in a year) that “we’re going to have a shortage of housing in the not too distance future and I want to own the things that go into building.” You read it here. Dennis Gartman foresees a housing shortage!

- U.S. Marshals on Wednesday seized a $9.4 million mansion in Florida belonging to disgraced Wall Street financier Bernard Madoff and his wife after earlier confiscating two of the couple's leisure boats.

NY Times:

- Chinese leaders have adopted a plan aimed at turning the country into one of the leading producers of hybrid and all-electric vehicles within three years, and making it the world leader in electric cars and buses after that.

Politico:

- For the second time in less than a week, a Democratic leader is calling on liberal groups to back off in their efforts to target moderate Democrats who have been skeptical of President Barack Obama's ambitious budget. Democratic Congressional Campaign Committee Chairman Chris Van Hollen, in a Wednesday afternoon news conference, said that a wide range of attack ads by groups like MoveOn.org could hurt potentially vulnerable Democrats in their 2010 races. “What I’ve been warning people very clearly is, beware of forming a circular firing squad,” Van Hollen said. “We believe people should be focusing their efforts on expanding the Democratic majority, and that should be their singular focus." In recent weeks, MoveOn.org and labor-backed Americans United for Change have launched ad campaigns targeting moderate Democrats like Sen. Evan Bayh of Indiana to back Obama’s budget.

Chicago Tribune:

- Sending text messages, downloading ring tones and surfing the Web while driving would be banned under legislation the House approved today as lawmakers decried what they said was a growing epidemic of fatal accidents caused by distracted driving. "I don't want to go to another funeral and have a mother, a brother, a father, a sister, a grandmother or a child look at me and tell about one of their loved ones has died because they thought they could get away with texting a message," said Rep. Tom Holbrook (D-Belleville).

Forbes.com:

- 10 Most Heavily Taxed Stares.

Reuters:

- U.S. Treasury Secretary Timothy Geithner said on Wednesday he would consider forcing out chief executives of banks that receive government bailouts if they were not managing their businesses properly. In an interview with CBS, Geithner said economic recovery depends on a financial system that effectively provides credit, and the government would hold companies receiving public aid accountable. When asked whether he left open the option to pressure a bank CEO to resign, Geithner responded, "Of course. Of course."

- AT&T Inc (T) is looking into offering a new range of more flexible data service fees to encourage more consumers to use its wireless network to connect electronics devices to the Internet, according to a top executive for the service provider.

- The U.S. audit watchdog will evaluate final mark-to-market rule changes to determine if it also needs to issue new guidance to auditors, a Public Company Accounting Oversight Board spokeswoman said Wednesday. The Financial Accounting Standards Board, which sets U.S. accounting rules, is meeting on Thursday to fine tune proposals that will give banks more flexibility in valuing toxic assets in the current illiquid markets.

- The U.S. economy is showing the first signs in months that it could be getting ready to crawl out of a long recession, the top economist at Goldman Sachs GS.N said on Wednesday. Jim O'Neill, Goldman's head of global economic research, said among key leading indicators, the measure of "new orders less inventories," derived from the Institute for Supply Management March factory report was a bright light. That data point is included in Goldman's monthly "Global Leading Indicators" index. At +9 in March, against -0.7 in February, it was "the best sign for a few months that the severity of the U.S. recession might be easing," O'Neill said while giving a presentation to the Chicago Council on Global Affairs. China last month proposed a sweeping overhaul in the global monetary system, suggesting the U.S. dollar could eventually be replaced as the world's main reserve currency by the IMF's Special Drawing Right. O'Neill, acknowledged as one of the world's top currency analysts, said such a "radical shift in the role of the dollar" was not "close." China's idea will be most interesting if it is paired with more flexibility in the rate of its currency, the renminbi, O'Neill said. "If it isn't, it's not of much use at all."

Financial Times:
- The number of hedge funds managing more than $1bn fell by more than 40 per cent globally last year, according to a survey that reveals the extent of the damage inflicted on the world's largest funds by volatile markets and tight funding conditions. The annual hedge fund database survey from PerTrac Financial Solutions, to be published today, says about 200 funds held assets in excess of $1bn, down from 350 in the previous year's survey. The survey shows a 1.3 per cent drop since last year in the number of hedge funds and funds of hedge funds in the 11 databases that make up the survey's sample. It found a total of about 22,350 distinct investment vehicles among those databases at the end of last year. Total assets stood at $1,330bn, down more than a third from the year before. Approximately 15,150 single-manager hedge funds and 7,200 funds of hedge funds were identified. This compares with 15,250 single-manager hedge funds and 7,400 funds of hedge funds in the previous study. "While the total number of funds showed a perhaps surprisingly small decrease, reported assets among single-manager hedge funds declined a marked 36.1 per cent between year-end 2007 and 2008, down to $1,330bn."

- Foreign investors in Chinese banks will in future be forced to accept a lock-up period of at least five years, China’s top banking regulator said, after a series of share sales by US and European financial institutions. In recent months, companies such as Bank of America, UBS and Royal Bank of Scotland have sold down all or part of their stakes in China’s largest state-owned banks immediately after lock-up periods of three years expired. BofA, RBS, Goldman Sachs, Germany’s Allianz, Singapore’s Temasek and others bought shares in China Construction Bank, Bank of China and Industrial and Commercial Bank of China with promises they would help to improve the Chinese banks’ risk management and managerial capabilities. But apart from a few minor initiatives, the partnerships largely failed to produce tangible results and when three-year lock-up periods started to expire in recent months most of these “strategic” investors sold all or part of their holdings at a profit at a time when most global banking institutions were in dire need of fresh capital.

- Europe’s leaders are not doing enough to convince voters of the need to win the war in Afghanistan, Robert Gates, US defence secretary, has warned on the eve of Friday’s Nato summit. “I have not seen the kind of effort that I would have hoped for in terms of European governments trying to persuade their people that attacks such as those that took place in Madrid and London . . . emanated from the Afghan-Pakistani border area,” Mr Gates said in an interview with the Financial Times. “The British do a good job of making that case to their people, but on the Continent I have not seen that kind of effort,” he said. “This problem out there is as big a threat to the Europeans as it is to us.”

DNA:

- Rating downgrades, defaults soar in India as slowdown pinches.

Livemint.com:

- Bangalore: In a telling indicator of slowing international trade, goods handled at India’s busiest container port fell as much as 11% in the fiscal year ended 31 March, compared with the preceding fiscal. The state-owned Jawaharlal Nehru Port at Nava Sheva near Mumbai, which accounts for almost 60% of the container cargo traffic in India, handled 3.95 million standard containers in fiscal 2009, a port official said on condition of anonymity because he is not authorized to speak to the media. The port handled 4.06 million standard containers in the year ended March 2008.

Late Buy/Sell Recommendations

CSFB:

- Rated (GS) and (BX) Outperform.

Night Trading
Asian Indices are +1.0% to +3.50% on average.
S&P 500 futures +1.46%.
NASDAQ 100 futures +1.26%.

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Earnings of Note
Company/EPS Estimate
- (SCHN)/.16

- (KMX)/.02

- (MON)/2.07

- (MU)/-.62

- (MDRX)/.13

- (GPN)/.42

- (AYI)/.54

Economic Releases

8:30 am EST

- Initial Jobless Claims for last week are estimated to fall to 650K versus 652K the prior week.

- Continuing Claims are estimated to rise to 5590K versus 5560K prior.

10:00 am EST

- Factory Orders for February are estimated to rise 1.5% versus a 1.9% decline in January.

Upcoming Splits
- None of note

Other Potential Market Movers
- The Fed’s Hoenig speaking, weekly EIA natural gas inventory report, (NYX) shareholders meeting, (ADSK) investor day and the (KBH) shareholders meeting could also impact trading today.

BOTTOM LINE: Asian indices are sharply higher, boosted by financial and technology stocks in the region. I expect US equities to open modestly higher and to build on gains into the afternoon, finishing higher. The Portfolio is 100% net long heading into the day.

Stocks Finish Higher, Boosted by Technology, Airline and Commodity Shares

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In Play