Wednesday Watch

Late-Night Headlines
Bloomberg:

- Dendreon Corp.’s(DNDN) prostate cancer therapy Provenge, the first malignancy-fighting immune booster, extended men’s lives by four months in a study. Shares fell as much as 65 percent as investors waited for the data. Dendreon plunged $9.74, or 45 percent, to $11.81 before trading was halted at 1:27 p.m. New York time, and fell as much as $14.05. The Nasdaq Stock Market said it is investigating 2 minutes worth of transactions in Dendreon because they may have resulted from a brokerage error. Men with advanced tumors had median survival of 25.8 months with Provenge, compared with 21.7 months with a placebo in a 512-patient trial the company presented today at a meeting of the American Urological Association in Chicago. The company won’t present safety information for the drug until later today.

- Hedge-Fund Bubble Bursts in Time for Swine Flu.

- The investment chief of the California Public Employees’ Retirement System, the biggest U.S. pension fund, is pushing for lower hedge fund fees and a closer link between manager compensation and performance. “We’re happy to pay fees when managers succeed on our behalf, but we don’t like to pay for failure,” Joseph Dear, Calpers’s recently appointed chief investment officer, said today in a Bloomberg Television interview. “We’re a large hedge fund investor and we’ve been extremely distressed at the misalignment of interest,” Dear said. “Compensation schemes that pay off for the managers but not for the investor, lack of transparency, lack of control -- we want to change all those things.”

- The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan fell 5 basis points to 305 as of 9:45 am in Hong Kong, ICAP Plc prices show. The Markit iTraxx Australia index was quoted 5 basis points lower at 326 as of 10:15 am in Sydney, according to RBS Group.

- China, the world’s largest consumer of iron ore, may cut imports of the steelmaking ingredient by about 21% this year as demand from mills slumped, an industry group said. Imports may fall to 350 million metric tons, Zou Jian, chairman of the China Metallurgical Mining Enterprise Assoc., said today at a Metal Bulletin conference. Prices may fall more than expected as suppliers seek to maintain sales levels, Zou said.

- Oliver Stone will rejoin Michael Douglas to direct a sequel to “Wall Street,” the Oscar-winning film that made famous the phrase, “Greed is good.” Douglas, 64, will return as the unscrupulous Gordon Gekko for the film in development at News Corp.’s Twentieth Century Fox, studio spokesman Gregg Brilliant said today. Hollywood is looking to Wall Street for villains to tap the public’s anger over the recession.

Wall Street Journal:

- Citigroup Inc.(C), soon to be one-third owned by the U.S. government, is asking the Treasury for permission to pay special bonuses to many employees, according to people familiar with the matter.

- More evidence of the global spread of a deadly flu emerged Tuesday, with new cases reported on four continents and a growing number of people in the U.S. requiring hospital treatment. Health authorities said they have found possible cases of the new strain of A/H1N1 swine flu in the Middle East and Asia. In the U.S., the number of confirmed cases rose to 64, including five people in California and Texas being treated at hospitals, according to the Centers for Disease Control and Prevention. Another case was reported in Indiana.

- Thousands of indecency complaints have been on hold at the Federal Communications Commission over the past three years, waiting for the courts to decide on the "fleeting expletives" case and a complaint about Janet Jackson's 2004 Super Bowl "wardrobe malfunction." The Supreme Court's decision to send the "fleeting expletives" case back to a lower court to address First Amendment issues --which the court will also likely do with the Janet Jackson case if it takes it -- means it could be months before the FCC begins tackling its growing backlog of cases. There have been about 820,000 indecency complaints filed with the agency since 2006, FCC records show. The number of unique complaints is likely far lower because the agency routinely double-counts complaints. It only takes one email to launch an FCC investigation. Most of the complaints involve instances of unbleeped four-letter words on TV and radio broadcasts, as well as partial nudity or other sexually suggestive scenes on network TV shows.

- The restructuring of Chrysler LLC may look like an unprecedented, unruly negotiation between labor, government and the ailing car maker. But in many ways it's following a three-part strategy devised by Ron Bloom, a 53-year-old investment banker turned labor activist, over the past 20 years. Officially, Mr. Bloom is second in command on the president's auto task force. But, according to many people directly involved in the talks with Chrysler and General Motors Corp., his strategy so far has been key. Step one in Mr. Bloom's playbook, say bankers and lawyers who have worked with him over the years: Squeeze commercial creditors, namely banks or bondholders, and wring concessions from them.

MarketWatch.com:
- With Henry Paulson at Treasury earlier, Goldman Sachs(GS) had absolute power, with the absolute backing of the party then in control of Washington. Flash forward: Now, with all their people, programs, lobbyists and connections left behind like landmines inside Washington's new administration, the power of the "Goldman Conspiracy" may now be absolute, as in Lord Acton's historic warning that "power corrupts and absolute power corrupts absolutely." No wonder many investors, citizens and taxpayers feel helpless, worried that nobody, not even, as we wrote last week, "Jack Bauer can stop the 'Goldman Conspiracy.'" Still, Americans want blood. You can feel the public's pulse. Sense a rebellion, beyond teabags, beyond a torture debate -- a revolution's brewing, and not a weak-tea-bag one. How would you vote? A RICO indictment? Or a Medal of Freedom for service to country? True, Goldman Sachs played a major role in creating the credit meltdown that's destroying the portfolios of an entire generation. And yet, many of those in the "Goldman Conspiracy" have served honorably in government, in spite of (or because of) their money, biases, errors in judgment and political ideologies. So before "voting," read on, learn more about who's in the global "Goldman Conspiracy:"

CNBC.com:
- After 5 years at underweight, a widely followed analyst upgraded the entire US banking space. We're talking Foxx–Pitt Kelton analyst David Trone who rather suddenly changed his outlook on the sector. Clearly he could have waited until after May 4th, when the stress test results came out, but he didn't. Should you be reading into that?

- Acknowledging that government has gotten bigger since the financial crisis began, White House Chief of Staff Rahm Emanuel told CNBC Tuesday that it isn't the desire of President Obama to make that larger role permanent.

Washington Post:

- A national flight attendants union wants the Federal Aviation Administration to require U.S. airlines to develop and implement passenger-screening standards because of the swine flu scare. The request, if granted, could be costly to an industry already reeling from a drop-off in demand due to the weak economy.

- Google(GOOG) today launched a new search tool designed to help Web users more easily find public data that is often buried in hard-to-navigate government Web sites. The tool, called Google Public Data, is the latest in the company's efforts to make information from federal, state and local governments accessible to citizens.

CNNMoney:

- 20 most profitable tech companies.

AllThingsDigital:

- Remember all the way back when, a couple weeks ago, when everyone was talking about Twitter and Oprah and Ashton Kutcher and the millions of people who were joining Twitter every week? Turns out the majority of those new Twitterers won’t be back in May. So says Nielsen Online, which estimates that 60% of Twitter’s users leave after a month.

Politico:

- April's cable ratings are out, and it looks like Fox News isn't slowing down in the Obama era. TVNewser notes that Murdoch's network has just beaten CNN and MSNBC combined in every hour from 6pm to midnight -- that's in both total viewers and the key demo (age 25-54). Glenn Beck's ratings continues to soar, too, now up 212 percent in the demo.

Rasmussen:

- For just the second time in more than five years of daily or weekly tracking, Republicans now lead Democrats in the latest edition of the Generic Congressional Ballot. A new Rasmussen Reports national telephone survey found that 41% would vote for their district’s Republican candidate while 38% would choose the Democrat. Thirty-one percent (31%) of conservative Democrats said they would vote for their district’s Republican candidate.

Forbes.com:

- Apple’s(AAPL) New Era. Apple is working on something big. But it's too soon to know what, exactly, Steve Jobs & Co. are doing. But it is not too early to know who is doing it. And that, ultimately, may be more important. That's because it was the software people Jobs brought with him to Apple from his start-up, Next, who have helped make Apple's turnaround into a lasting renaissance.

Reuters:

- U.S.-hosted climate talks with the world's biggest greenhouse gas polluters concluded on Tuesday with signs of progress but sizable differences as nations work toward a deal this year to fight global warming. U.S. President Barack Obama called the Major Economies Forum to relaunch a process that began under his predecessor, George W. Bush, whose initiative drew skepticism from countries who feared it would circumvent wider U.N. negotiations. German Environment Minister Sigmar Gabriel said a lot had changed since the Bush process but he said greater commitments from industrialized nations, including the United States, would be necessary to seal a global deal. "It was very clear that the Americans are moving a lot," he told reporters during a break from the meeting. "Measured by what Europeans believe needs to be done to fight climate change, we're still very far apart from each other."

- The chief executives of Bank of America Corp and Citigroup Inc may be shown the door if the U.S. government decides the $90 billion of capital it has already injected isn't enough to restore the banks' health.

- Mexico's economy nosedived in February at its fastest pace in at least 15 years, slammed by a collapse in demand for exports and a severe fall in the service sector, the national statistics agency said on Tuesday. The country's economy shrank 10.8 percent in February -- the worst year-on-year performance in a monthly data series that goes back to 1994. The data supports the argument that Mexico's current recession is even worse than the mid-1990s financial meltdown known as the Tequila Crisis.

Financial Times:
- Citigroup(C)has told US regulators it wants to fill the capital shortfall identified in the government’s “stress test” by selling large businesses, asking more investors to convert their preferred shares into common stock and shrinking its balance sheet. With a few days to go before the results of the tests are announced, the troubled financial group, which has been bailed out three times by the authorities, is scrambling to find ways to raise capital without relying on more government funds. Bank of America(BAC), another lender whose test has highlighted the need for funds, is also in talks with regulators over its capital needs and the possibility of converting government’s preferred shares into common stock, bankers said.

- Higher taxes to push the price of petrol up by more than 70 per cent are needed to change Americans’ car-buying habits and usher in a new generation of fuel-efficient vehicles, according to Bill Ford, chairman of Ford Motor(F). His comments, made during an interview with the Financial Times, come as the Obama administration faces mounting political and business-group resistance to its own, less radical plan to tackle greenhouse gas emissions using a cap-and-trade system. While backing the White House’s aims, Mr Ford said a more effective approach would be to raise petrol prices directly, a move that could dent purchases of the SUVs and light trucks that have been Ford’s most profitable vehicles. “We clearly need – whether it’s a gasoline tax or cap and trade, it’s something we do need because with gasoline at $2 [a gallon], customer behavior is not driving in the direction that the government would like,” he said.

United Daily News:

- Taiwan Semiconductor Manufacturing Co. Vice Chairman Fan-chen Tseng said global semiconductor revenue will probably fall less than previously expected. Industry sales will drop about 20 this year compared with a previous estimate for a 30% decline, according to the latest information from Taiwan Semi’s customers.

Late Buy/Sell Recommendations
Citigroup:

- Reiterated Buy on (VFC), target $73.

- Reiterated Buy on (CVH), target $20.

Wachovia:

- Upgraded (DNDN) to Outperform.

Fox-Pitt:

- Raised US banking sector to ‘Marketweight’ from ‘Underweight.’ Stress results to be ‘more benign than expected.’ Had rated Banks ‘Underweight’ since April 2004.

Night Trading
Asian Indices are +.25% to +1.25% on average.
S&P 500 futures +.32%.
NASDAQ 100 futures +.26%.

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Economic Releases

8:30 am EST

- Advance 1Q GDP is estimated to fall 4.7% versus a 6.3% decline in 4Q.

- Advance 1Q Personal Consumption is estimated to rise .9% versus a 4.3% decline in 4Q.

- Advance 1Q GDP Price Index is estimated to rise 1.8% versus a .5% gain in 4Q.

- Advance 1Q Core PCE is estimated to rise 1.0% versus a .9% increase in 4Q.

10:30 am EST

- Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,800,000 barrels versus a +3,857,000 barrel increase the prior week. Gasoline supplies are expected to rise by +200,000 barrels versus a +802,000 barrel increase the prior week. Distillate inventories are expected to rise by +1,000,000 barrels versus a +2,682,000 barrel increase the prior week. Finally, Refinery Utilization is estimated to rise by +.15% versus a gain of +3.07% the prior week.

Upcoming Splits
- None of note

Other Potential Market Movers
- The weekly MBA mortgage applications report, Barclays Retail/Restaurant Conference, (MRO) shareholders meeting and the (EBAY) shareholders meeting could also impact trading today.

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

Stocks Finish Slightly Lower, Weighed Down by Airline, Construction, Bank and Commodity Shares

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In Play

Stocks Mixed into Final Hour as Less Economic Fear, Short-Covering, Diminishing Credit Market Angst Offsets Swin Flu Worries, Bank Stock Weakness

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Biotech longs, Medical longs, Retail longs and Financial longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is positive as the advance/decline line is higher, most sectors are rising and volume is about average. Investor anxiety is high. Today’s overall market action is mildly bullish. The VIX is falling 1.91% and is very high at 37.65. The ISE Sentiment Index is about average at 149.0 and the total put/call is about average at .84. Finally, the NYSE Arms has been running very high most of the day, hitting 2.39 at its intraday peak, and is currently 1.42. The Euro Financial Sector Credit Default Swap Index is rising 3.14% today to 156.67 basis points. This index is down from its record March 10th high of 208.75. The North American Investment Grade Credit Default Swap Index is rising 1.12% to 177.99 basis points. This index is also well below its Dec. 5^th record high of 285.99. The TED spread is falling 4.83% to 92 basis points. The TED spread is now down 371 basis points since its all-time high of 463 basis points on October 10th. The 2-year swap spread is falling 5.46% to 56.25 basis points. The Libor-OIS spread is falling 2.75% to 84 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is up 4 basis points to 1.51%, which is down 113 basis points since July 7th. The 10-year TIPS spread bottomed at .65% in October 1998 during the Asian financial crisis and at 1.24% in October 2001 during the technology bubble-bursting meltdown. The 3-month T-Bill is yielding .12%, which is up 3 basis points today. Weekly retails sales rose for the 3^rd consecutive week, gaining .6%. April weekly retail sales averaged a +1.2% gain versus a -1.25% loss in March. Small-caps are outperforming today. Given the weak close in Asia last night, Europe’s losses this morning, Bank sector weakness and swine flu fears, today’s mixed performance in the major averages is a big positive. Nikkei futures indicate an +212 open in Japan and DAX futures indicate an +30 open in Germany tomorrow. I expect US stocks to trade mixed-to-higher into the close from current levels on less economic fear, short-covering and diminishing credit market angst.

Today's Headlines

Bloomberg:

- Consumer confidence jumped more than forecast in April as stocks rallied, mortgage rates dropped and Americans thought more jobs will become available, adding to signs the recession may be easing. The Conference Board’s sentiment index climbed to 39.2, the highest level since November, from 26.9 in March, the New York- based research group said today. The gain was the biggest since November 2005. The improvement raises the odds that recent gains in consumer spending, which accounts for 70 percent of the economy, will be sustained. The report indicates efforts by Federal Reserve policy makers, meeting today and tomorrow, to lower borrowing costs and unclog lending may be starting to pay off. A report from S&P/Case-Shiller today showed that the slide in home prices in 20 U.S. cities slowed in February for the first time since January 2007. The Conference Board’s measure of present conditions rose to 23.7 from 21.9 the prior month. The gauge of expectations for the next six months surged to 49.5, the highest level since the collapse of Lehman Brothers Holdings Inc. in September. The share of consumers who said more jobs will be available in the next six months gained to 13.9, the most since June 2007.

- Bill Gross, who helps run the world’s biggest bond fund at Pacific Investment Management Co., said the Federal Reserve may boost its Treasury purchases if yields on 10-year notes top a range of 3 percent to 3.1 percent. While the central bank announced ahead of tomorrow’s policy meeting it may buy as much as $300 billion in U.S. government securities, “that may increase,” Gross said in a Bloomberg Radio interview today. “It’ll be interesting tomorrow to hear their statement and to see what they suggest is the amount the Fed is willing to buy.”

- Iron ore producers are betting on an “impossible” revival in demand from China, the largest consumer of the material, and holding out on price reductions, the China Iron & Steel Association said. The expectation for the second quarter is unrealistic given the state of China’s economy, Luo Bingsheng, vice chairman of the association said today at a press conference, in Beijing. Chinese steelmakers are asking for price cuts of as much as 50 percent for annual contracts of iron ore, and are locked in talks with producers Cia. Vale do Rio Doce, Rio Tinto Group and BHP Billiton Ltd. Larger Chinese mills incurred losses for five straight months from October, the government said last week. “Miners are pinning hope for a recovery in the second quarter,” Luo said. “Chinese steelmills will still be in a relatively difficult period this quarter.” China’s benchmark steel price dropped 9 percent in the first quarter. Prices of hot-rolled coil, the benchmark, may fall further in the second quarter because of overcapacity and a surge in imports, Qi Xiangdong, deputy secretary general of the association said at the same conference. Iron ore stockpiled at ports in China reached a higher- than-normal level of 70 million metric tons, Jia Yinsong, an official with the raw material division of the Ministry of Industry and Information Technology, said today at a Metal Bulletin conference in Beijing.

- Gold fell, heading for the sharpest drop in three weeks in New York, on concern that a swine-flu outbreak may delay a global economic recovery, cutting demand for the metal. Silver also declined and platinum tumbled. Platinum futures for July delivery plunged $62.30, or 5.4 percent, to $1,088 an ounce on Nymex. A close at that price would be the biggest drop for a most-active contract since Dec. 1. The price slid 2.8 percent yesterday. Palladium futures for June delivery fell $11.50 or 5 percent, to $217.45 an ounce in New York. A close at that price would be the biggest decline for a most-active contract since Feb. 23.

- Investors pulled $1.11 billion in the first quarter from U.S. stock funds that ranked in the top 1 percent of their categories prior to the 39 percent drop last year by the Standard & Poor’s 500 Index. The withdrawals came at mutual funds including Kenneth Heebner’s CGM Focus, which gave back the most, $219.2 million, Fidelity Leveraged Company Stock and Janus Contrarian, according to data compiled by Morningstar Inc. Each of those funds fell at least 48 percent in 2008. In the previous five years, their returns more than tripled, compared with a cumulative 83 percent gain by the S&P 500, a benchmark of the largest U.S. stocks. Investors often hurt themselves by moving into better- performing funds near the peak of rising markets and selling at the end of a decline. A March study of 20 years of investor behavior by Dalbar Inc., a Boston-based research firm, concluded that “investors panic and withdraw their assets at the worst possible times,” missing later recoveries. “There is no reason to bail out because a manager had one bad year,” said Daniel Wiener, the New York-based chief executive officer of Adviser Investments in Newton, Massachusetts, which oversees $900 million in mutual-fund assets. “If you do, it is almost a guarantee you will lose.”

- The U.S. Supreme Court revived a government attempt to fine broadcasters for isolated expletives on live television while hinting that the crackdown ultimately might be voided on free-speech grounds. Voting 5-4 in a case involving vulgar language used by entertainers Cher and Nicole Richie, the high court said the Federal Communications Commission gave a sufficient explanation to comply with a law governing administrative agencies. “The commission could reasonably conclude that the pervasiveness of foul language, and the coarsening of public entertainment in other media such as cable, justify more stringent regulation of broadcast programs” to protect children, Justice Antonin Scalia wrote for the majority.

Wall Street Journal:

- The government could be exposed to a host of conflicts and potential unintended consequences if it ends up -- as now appears likely -- with a controlling stake in General Motors Corp.(GM) Under GM's latest restructuring plan, the U.S. would get at least a 50% stake in the largest Detroit auto maker. Even without a majority stake, the government was able to use its muscle in March to oust GM Chief Executive Rick Wagoner. But such a major holding would turn GM into a sort of Government Motors, making the federal government the company's de facto boss and bank lender. direct stake could create other uncomfortable conflicts: The Obama administration would be setting emissions and mileage standards for cars in Washington while having to implement them in Detroit. It also would make the government a direct partner of the United Auto Workers, which would get a 39% stake in the company under GM's latest blueprint for survival.

- The number of confirmed cases of a deadly new flu strain continued to rise Tuesday, reaching to the Middle East and Asia-Pacific regions, as the World Health Organization moved one step closer to declaring a pandemic. In the U.S., the Centers for Disease Control and Prevention said the number of confirmed U.S. cases has risen to 64, including "a number of hospitalizations." CDC officials earlier had said there had been just one person hospitalized.

CNBC:

- Biotechnology firm Dendreon(DNDN) says its unique prostate cancer treatment, Provenge, extended the lives of men in a large clinical trial by more than four months. Researchers presented the highly anticipated test results Tuesday afternoon at the annual meeting of the American Urological Association in Chicago.

- Citigroup(C) is talking to the government about its capital levels after receiving the early results of its stress test, but if it needs more capital it does not expect the government to provide it, people familiar with the matter said.

IBD:

- Discovery Communications(DISCA) has emerged as a highly creative programming force that does not run with the network herd.

VentureBeat:

- New Enterprise Associates, Silicon Valley’s largest venture capital firm, has raised another $1 billion for its newest fund — its 13th — bumping the fund’s total size so far to $2.15 billion. That’s an impressive feat in today’s economic climate. The target for the fund is $2.5 billion, lowered from the $3 billion initially posed to the firm’s limited partners last year, reports VentureWire.

Detroit Free Press:

- With ranks of active UAW workers shrinking and the pool of retirees growing, the union's decision to accept half of what General Motors and Chrysler owe to the retiree health care trust is putting the fund on shaky ground. Called a Voluntary Employee Beneficiary Association, or VEBA, the trust fund was hailed as part of a transformational labor deal the UAW reached with Chrysler, Ford and General Motors in 2007. The union would take responsibility for managing health care benefits for retirees. The automakers, meanwhile, would get to take a crushing cost off their books. But to get it started, all three companies agreed to make huge initial payments -- GM had to pay $20 billion, while Chrysler's tab was $10.6 billion. Now, with the UAW's consent, each company will pay half those amounts. "I said a year ago it wasn't viable when the market was going up," said Lance Wallach, a consultant in New York. Now, he said the VEBA is even less feasible. "Instead of the VEBA failing in 15 years, now it will fail in 6," Wallach said.

ForexTV.com:

- Manufacturing activity in the U.S. Mid-Atlantic states continued to improve in April, according to a report from the Richmond Federal Reserve on Tuesday. The headline manufacturing index surged to a reading of -9 in April, beating expectations for a -17 reading. The index stood at -20 in March, and -51 in February. Shipments catapulted to a reading of -3 in April from -15, while the new orders component rose to -2 from a prior reading of -20. The employment index rose to -26 from -28. Capacity utilization ticked up to -13 in April from -14 in March, while the orders backlog rose to -15 from -37.

Politico:

- Republican Sen. Arlen Specter has decided to switch parties and become a Democrat, stunning his GOP colleagues in the Senate while pushing Democrats and President Barack Obama one step closer to unfettered power in Washington. Specter will be the 59th Democratic senator, and if Al Franken eventually pulls out his Senate race in Minnesota, Democrats will have a filibuster-proof 60 vote majority in the Senate, something the party could only have dreamed of at this time last year. Specter had been in secret talks with Senate Democratic leaders for months, according to Senate sources, but his final move to become a Democrat came after a recent poll showed him badly losing a Pennsylvania Republican primary next year.

Reuters:
- Hotel occupancy in the Middle East and Africa fell 11 percent in March and margins fell 16 percent from the same month in 2008, with regional tourism hubs Dubai and Egypt hardest hit by the downturn, a report said. "The pain continues for Egypt and Dubai, two of the biggest success stories in 2007 and 2008," James Chappell, managing director of STR Global, said in the report. "Dubai has lost over 30 percent in the first quarter of 2009." Hotel occupancy in Dubai, which lures Western tourists with its beaches and shopping, was down 15.8 percent in March while revenue per available room (revPAR) fell almost 41 percent, suggesting that hotels have been slashing prices. In Egypt, home of ancient monuments that have long attracted tourists, hotel occupancy rates fell almost 15 percent in March and revPAR was down over 18 percent compared to the same month of last year. That could have a severe economic affect in Egypt, where around 10 percent of the workforce is involved in tourism.

- U.S. Rep. Barney Frank, chairman of the House of Representatives Financial Services Committee, said on Tuesday he would introduce a bill next week to overturn a three-year-old U.S. ban on Internet gambling. The legislation, likely to be opposed by anti-gambling Republicans, would overturn a law imposed during the Bush administration that has hurt U.S. trade ties with the European Union.

- The U.S. banking system could be free of government money within a year, the powerful chairman of the U.S. House of Representatives Financial Services Committee said on Tuesday. Representative Barney Frank, a Democrat from Massachusetts, said it would be "good for public confidence" if large banks repay funds from the government's $700 billion Troubled Asset Relief Program, noting he had a difference of opinion with Treasury Secretary Timothy Geithner. "We're hoping there won't be any government funds in banks a year from now," Frank told the Reuters Global Financial Regulation Summit.

- IBM (IBM) said Tuesday it is raising its dividend and buying back more shares, underscoring its relative strength amid weakening business conditions. International Business Machines Corp said on Tuesday that it would begin paying a quarterly dividend of 55 cents per share, up 10 percent from the previous 50 cents. It is the 14th year in a row for the company to raise its dividend.

- Steve Wynn, chairman and chief executive at Wynn Resorts Ltd, (WYNN) sees "a little bit of stabilization" in Las Vegas, where the global recession has pushed revenue down about 20 percent. Speaking on Tuesday at the Milken Institute Global Conference, Wynn said visitors to Las Vegas were still spending less and room rates were lower, but the percentage of occupied hotel rooms was back up in the 90s.

- David Rubenstein, co-founder of the private equity firm Carlyle Group [CYL.UL], said the U.S. government program to buy toxic bank loans and securities should provide opportunities for good returns, but he needs to see the rules before committing to it. "We're always interested in looking for opportunities for good returns. I suspect this will be a good opportunity, but we need to know what the rules are. They haven't been formulated yet," Rubenstein said Tuesday on the sidelines of the Super Return private equity conference in Miami.

- Most Americans oppose a U.S. congressional investigation into harsh interrogation methods used on terrorism suspects during the Bush administration, a poll said on Tuesday. A CBS News/New York Times poll found that 62 percent of Americans do not think Congress should hold hearings to investigate the treatment of detainees, about the same proportion as in a similar poll in February. The poll found that 89 percent of Republicans opposed Congress holding hearings on interrogation policies, and 60 percent of independents also opposed such hearings. Democrats were more divided, with 46 percent saying Congress should hold hearings, and 51 percent saying they were not necessary. The poll found mixed views on Obama's decision to close the Guantanamo Bay U.S. prison for terrorism suspects by next January. The poll found that 47 percent think the prison should remain open, while 44 percent want it to be shut.

National Post:

- Canadian oil-and-gas explorer Nexen Inc. is one of 32 international oil companies competing to bid US$2.6-billion to work on some of Iraq's biggest oil and gas fields. Nexen, the only Canadian company in the group revealed by Reuters yesterday, has qualified to participate in the first bidding round for oil and gas contracts since the U. S.-led liberation in 2003. Iraq plans to award 20-year service contracts to boost output at the six oil fields on offer and to develop two gas fields in June.

Bear Radar

Style Underperformer:
Small-cap Value (-1.21%)

Sector Underperformers:
Gold (-2.72%), Oil Service (-1.84%) and Banks (-1.64%)

Stocks Falling on Unusual Volume:
OLN, DB, BMY, HSII, RCII, WMGI, CRDN, TRMB, STAR, SPWRA, RMBS, DFG, SMG, LAZ and FDP

Stocks With Unusual Put Option Activity:
1) PEP 2) HBC 3) SGR 4) GT 5) SWN

Bull Radar

Style Outperformer:
Small-cap Growth (+.50%)

Sector Outperformers:
HMOs (+3.49%), Hospitals (+2.33%) and REITs (+2.17%)

Stocks Rising on Unusual Volume:
DNDN, EW, CVS, DLTR, E, IBM, BP, IPCS, NVS, BIDU, NWPX, CNMD, VRTX, BWLD, TECH, AIRM, AMSC, SBUX, PCAR, LUFK, SYNT, CAKE, ENOC, CSTR, APEI, CTRN, PEZ, ASR, DSG, WAT, BCH, UHS, PAC, CUK and FPL

Stocks With Unusual Call Option Activity:
1) VRTX 2) ERTS 3) FST 4) SGR 5) GSK