Monday's Trading Summary...

U.S. Markets:

Dow -7.49 (-0.06%)
Nasdaq -12.88 (-0.57%)
S&P 500 +0.71 (+0.05%)

News That Moved the Market:

Flat Day With Less Than Stellar Data. A late day rally left the markets mostly flat, but the S&P was able to eek out a gain for the first time in a week. The biggest piece of data released was the Institute for Supply Management's factory index, which fell to 48.3. The number represented a contraction, but was slightly better than expected. The Commerce Department also released data showing construction spending dropped by 1.7%, more than estimated by economists. Both numbers served as reminders that a recession may be coming if we are already not in one.

Diebold Rejects Takeover Bid. Diebold (DBD, +61.0%) announced that it has rejected United Technology's (UTX, -1.6%) $2.64 billion bid, saying the $40/share offer undervalued the company. Diebold has seen its stock price drop recently because the SEC is investigating its revenue recognition policies.

Fannie and Freddie Overhaul Appraisal Process. Fannie Mae (FNM, -4.4%) and Freddie Mac (FRE, -5.8%) agreed to only buy mortgages from lenders that used independent home appraisers. The deal was pushed by New York Attorney General Andrew Cuomo, and a new oversight group will be created to make sure the new standards are upheld. The rules should prevent inflated appraisals, which distort the value of mortgage-backed securities whose values are based on the homes.

Quick Tics:

GM (GM, -0.3%), Ford (F, -5.4%), and Toyota (TM, +0.5%) all reported declines in U.S. auto sales...

Warren Buffet announced he has withdrawn his offer to reinsure municipal bonds guaranteed by MBIA (MBI, -2.7%), Ambac (ABK, -10.8%) and FGIC.

Once again, gold and crude hit new highs in trading today.

Tomorrow Notable Earnings:

Staples, Inc. (STPL) Before Open

Economic Events:

9:00 AM: FOMC President Ben Bernanke Speaks (Oh, no...Not Again!!!)

Thornburg Getting Crushed...

Thornburg Mortgage (TMA) getting slammed, after company reported it's been hit with another wave of margin calls, worth about $270M, and is having trouble meeting them, seeing as it just met $300M worth of calls in February. "To date, we have not met the substantial majority of the most recent margins calls," company says in SEC filing.

TMA says it's working to meet the calls by either selling portfolio securities or raising debt or equity capital. Margin calls have been triggered by declines in the value of securities backed by Alt-A mortgage loans, company says. TMA down 54% at $4.12 on heavy volume.

This Morning's Upgrades...

Here is a list of stocks Upgraded this morning...

Methanex (MEOH) by CIBC Wrld Mkts
BioMed Realty (BMR) by Stifel Nicolaus
Pier 1 Imports (PIR) by Wachovia
Deutsche Telekom (DT) by JP Morgan
Lululemon Athletica (LULU) by BMO Capital Markets
OSI Pharm (OSIP) by Wachovia
Exelon (EXC) by Jefferies & Co
Northrop Grumman (NOC) by Oppenheimer
Seagate Tech (STX) by JP Morgan
Kohl's (KSS) by JP Morgan
Expeditors Intl (EXPD) by UBS
DeVRY (DV) by Lehman Brothers

This Morning's Downgrades....

Here is a list of companies Downgraded this morning...

Supertex (SUPX) by Piper Jaffray
Alnylam Pharmaceuticals (ALNY) by Needham & Co
Cablevision (CVC) by Pali Research
Apollo Group (APOL) by Banc of America Sec
Isle of Capri (ISLE) by Brean Murray
SW Energy (SWN) by Sun Trust Rbsn Humphrey
Western Digital (WDC) by JP Morgan
Ford Motor (F) by Citigroup
Omnicare (OCR) by Oppenheimer
DealerTrack (TRAK) by Lehman Brothers

Stock Splits Today....

STOCK-SPLITS TODAY:

New Jersey Resources (NJR). 3-for-2 split

OXBOW RES CORP (OXWR.PK). 3-for-1 split

Parexel (PRXL). 2-for-1 split.

End of an Era for Televisions....

Sony Corp. (SNE). The Japanese electronics giant today said it will end production of cathode ray tube (CRT) televisions by the end of the month, four decades after they were launched, as consumers switch to flat-screen TVs.

Sony ended production of CRTs in Japan in 2004, but continued to produce CRT TVs under the Trinitron brand at plants in Singapore and Malaysia to meet limited demand in Latin America and parts of Asia.

Chip Sales Top Targets...

January global chip sales gained 0.03% Y/Y, beating expectations. Excluding highly-competitive memory chips, semi sales were up 8.1% Y/Y. PC and mobile handset shipments were in-line with expectations, which forecast 12% and 12--15% sales growth in 2008 respectively. "

The U.S. economy has entered a period of slower growth that may impact consumer purchases of electronic products," SIA president George Scalise said. "However the emergence and growth of large consumer markets outside the U.S. has created new opportunities for chipmakers."

Northrup Wins $35B Contract...

Shares of Northrop Grumman (NOC) surged 7% in Frankfurt after it and partner EADS won a $35B+ Pentagon contract for 179 air tankers, beating out favorite Boeing (BA). Boeing shares were down 5%. Boeing can still appeal the decision.

Intel Goes Atomic...

Intel (INTC) is launching one of its trademark "branding campaigns" to market two new microchips. Now co-named Atom, the Silverthorne is targeted at MIDs (pocket-sized internet-enabled devices), while the Diamondville is for low-end laptops.

Intel's branding moves are closely watched, because the company uses its brands together with lucrative marketing incentives to dominate the market.

Will Commercial Real Estate be Next??

The impending fall of commercial real estate will take a heavy toll on firms with exposure to commercial property loans and mortgage-backed securities, such as Bear Stearns (BSC), Citigroup (C), JPMorgan (JPM), Lehman Brothers (LEH), Merrill Lynch (MER) and Morgan Stanley (MS). Goldman Sachs analyst William Tanona thin ks the above firms will write down $7.2B in Q1, and projects commercial real estate values will slide 21-26% over the next two years.

Microsoft Increasing Online Software Offerings...

Microsoft (MSFT) will announce plans to offer online software services that will handle email, calendars, contacts and video conferencing for small-to-medium-size companies for a per-user fee. MSFT will start testing its offerings today for free with select businesses, after which it will begin charging fees. How much? Only time will tell.

No doubt this was spurred by the success around the Netsuite (N) IPO late last year. That stock ran from IPO price at $22 up to $45 and back down to $21. Not good news for Netsuite, UNLESS Microsoft decides to buy them out....

United Technologies Bids for Diebold...

United Technologies (UTX) made an unsolicited $2.63B cash bid for developer Diebold (DBD). The $40/share offer is well below Diebold's 52-week high of $54.50, but a 66% premium to its Friday close of $24.12/share, UTC says the bid is "compelling." Besides ATM machines, Diebold develops security systems and computer hardware that would help UTC's fledgling fire-and-security business grow revenue from a current $5.8B to $10B+.

The move is the latest in a string of unsolicited bids as buyers look to capitalize on deflated share prices.

Notable Earnings Due This Week...

Monday

Finisar Corp. (FNSR) 3Q .02 AMC
LeapFrog Enterp Inc. (LF) 4Q (.40) 5:00PM
Midway Games Inc. (MWY) 4Q (.22) AMC
SuperGen Inc. (SUPG) 4Q .06 AMC
VeriFone Hldgs Inc. (PAY) 1Q .35

Tuesday

Chico's FAS Inc. (CHS) 4Q (.12) AMC
Clearwire Corp. (CLWR) 4Q (1.04) BMO
Heelys Inc. (HLYS) 4Q .01 AMC
Jackson Hewitt Tax Svc Inc. (JTX) 3Q .97 BMO
Semtech Corp. (SMTC) 4Q .21 AMC
Staples Inc. (SPLS) 4Q .48
Take-Two Interactive Software Inc. (TTWO) 1Q (.50)
Tech Data Corp. (TECD) 4Q .87 BMO
Wellcare Health Plans Inc. (WCG) 4Q 1.610000

Wednesday

Big Lots Inc. (BIG) 4Q .84
BJ's Wholesale Club Inc. (BJ) 4Q .73 7:00AM
Brown Shoe Co. Inc. (BWS) 4Q .42 BMO
Coldwater Creek Inc. (CWTR) 4Q .00
Costco Wholesale Corp. (COST) 2Q .74
Encysive Pharms Inc. (ENCY) 4Q (.16)
FuelCell Energy Inc. (FCEL) 1Q (.24) AMC
H&R Block Inc. (HRB) 3Q .07 AMC
Men's Wearhouse Inc. (MW) 4Q .21
PETsMART Inc. (PETM) 4Q .60
Saks Inc. (SKS) 4Q .22 8:00AM
Solarfun Power Hldgs Co. Ltd. (SOLF) 4Q .22
Tivo Inc. (TIVO) 4Q (-.12) AMC
Trump Entertain Resorts Inc. (TRMP) 4Q (.36)

Thursday

Anthracite Capital Inc. (AHR) 4Q .27
Blockbuster Inc. (BBI) 4Q .19 BMO
Dynamic Materials Corp. (BOOM) 4Q .57 AMC
Gerber Scientific Inc. (GRB) 3Q .12 BMO
Jones Soda Co. (JSDA) 4Q (.02) 4:00PM
Joy Global Inc. (JOYG) 1Q .62 BMO
Marvell Tech Grp Ltd. (MRVL) 4Q .07
Orbitz Worldwide Inc. (OWW) 4Q .11
Progressive Corp. (PGR) 1Q .33
Urban Outfitters Inc. (URBN) 4Q .29 BMO
Wind River Syss Inc. (WIND) 4Q (.07) AMC

Friday

Ciena Corp. (CIEN) 1Q .36 BMO
Goldcorp Inc. (GG) 1Q .17
Volkswagen AG (VLKAY) 4Q .83

Asian Markets Tumble...

The Nikkei fell 4.49% to its lowest since Jan. 23, the Hang Seng was off 3.07%, and the U.S. dollar fell to 102.72 yen -- its lowest since January 2005. Investors continue to fret a potential U.S. recession, and are gearing up for yet another Fed rate cut.