Thursday's Market Summary....

U.S. Markets

Dow +35.50 (+0.29%)
Nasdaq +19.74 (+0.88%)
S&P 500 +6.71 (+0.51%)

News That Moved the Market

Market Gets a Boost From Standard & Poor's. Stocks began the session lower after a couple pieces of negative news, but were able to recover nicely following S&P's report that the bulk of the writedowns from subprime securities may be behind us. The ratings agency did increase its estimate for the total amount of the writedowns by $20 billion to $285 billion, but investors focused on the news that the end of this subprime mess could be in sight.

Another Fund Goes Under. Late Wednesday Carlyle Capital, a bond fund affiliated with the private-equity firm Carlyle Group, announced it had failed to find new financing or strike new a deal with its lenders, and would have to give up all its current assets. The collapse of the fund weighed on stocks in Europe and pushed U.S. futures into negative territory before the open. The fund, which had received more than $400 million in margin calls since March 5th, was severely crippled by the declines in demand and price of mortgage-backed securities.

Retail Sales Tumble. Retail sales unexpectedly decreased by 0.6% last month, raising fears of a recession. Economists were anticipating an increase of 0.1%. The figure is a key indicator of the strength for the U.S. consumer, and this report showed that perhaps a weaker economy combined with record high commodity prices are taking their tole. U.S. consumer spending makes up 70% of the GDP.

Quick Tics:

Time Warner (TWX, -1.7%) agreed to buy social networking site Bebo for $850 million…

Gold traded above $1,000 for the first time, but ended the session up $13.30 at $933.80/ounce...

Visa's $16 billion IPO, set for March 20th, is oversubscribed.

Tomorrow Notable Earnings

AnnTaylor Stores (ANN) Before Open
Liz Claiborne (LIZ) Before Open

Economic Events:

8:30 AM: CPI
10:00 AM: Michigan Sentiment-Prel.

Updating our Beats and Raises Portfolio...

Here is an updated list of companies that have Beat Earnings Expectations AND have Raised Guidance for 2008. These are the kind of stocks that should lead the market higher in a recovery:

Potash (POT)
Terex (TEX)
Intuitive Surgical (ISRG)
Hewlett-Packard (HPQ)
Medco Health (MHS)
Buffalo Wild Wings (BWLD)
Gamestop (GME)
Mosanto (MON)
JC Penney (JCP)
Zimmer Holdings (ZMH)
Sohu (SOHU)
Dolby Labs (DLB)
Research in Motion (RIMM)
Express Scripts (ESRX)
Boeing (BA)
Chattem (CHTT)
Corning (GLW)
IBM (IBM)
Netflix (NFLX)
EOG Resources (EOG)
Joy Global (JOYG)
Ciena (CIEN)
Steel Dynamics (STLD)
JA Solar (JASO)
Mastercard (MA)

Key Reversal.....

The market is now trading higher after gapping down lower this morning. At one point the Down was down over 250 points. Currently, the Dow is up 33 points.

This is key as the market is now shaking off bad news...something we haven't seen since before Christmas... Maybe a bottom is in.

Today's Upgrades...

Stocks that have been Upgraded this morning:

UnionBanCal (UB) by Punk, Ziegel & Co
JA Solar (JASO) by Needham & Co
Unisource Energy (UNS) by Soleil
Leap Wireless (LEAP) by Wachovia
Millennium Pharm (MLNM) by Piper Jaffray
Humana (HUM) by UBS
JA Solar (JASO) by Lehman Brothers
NIDEC (NJ) by JP Morgan
GSI Commerce (GSIC) by Jefferies & Co
Wimm-Bill-Dann Foods (WBD) by Credit Suisse
Monsanto (MON) by Banc of America Sec
AstraZeneca (AZN) by UBS

Carlisle Capital on Verge of Collapse...

Carlyle Capital, managed by private-equity firm Carlyle Group LLC, says it expects its lenders will soon seize "substantially all" of its remaining assets after banks including Deutsche Bank (DB) and J.P. Morgan (JPM) refused to extend it new financing terms.

The firm's leveraged $22B portfolio consists entirely of securities issued by government-sponsored lenders Fannie Mae (FNM) and Freddie Mac (FRE), the value of which has plummeted in recent weeks.

Southwest Airlines Grounded...

Southwest Airlines (LUV) grounded 38 of its older planes amid government and internal probes over "ambiguity" in its inspection protocols. The groundings reduce its scheduled flights by 4%; the company said the aircraft would be reinspected Wednesday and return to service by this morning.

Last week the FAA confronted Southwest with a $10.2M fine for missing deadlines to inspect planes for fuselage cracks and continuing to fly them after acknowledging the oversight.

Paulson to Address Credit Crunch...

The Working Group on Financial Markets, led by Treasury Secretary Henry Paulson, will today release its recommendations to avoid a repetition of the liquidity freeze now threatening the U.S. economy. Highlights include "strong nationwide licensing standards" for mortgage brokers; a clearer differentiation in credit ratings between bonds and complex, riskier structures coupled with greater disclosure by rating agencies; and increased regulation of the dealings of issuers of mortgage-backed securities.

US Dollar Dives...

The dollar fell to 12-year lows against the yen, dropping to less than 100 yen, and hit record lows against the euro, as Asian/European markets and U.S. equity futures dived in overnight trading [see below], raising concerns of more turmoil in the financial markets. "Investors are getting out of dollar assets and this is going to lead to a dollar crash," a Tokyo currency manager said.

On four previous occasions since 1995, Japanese authorities have sold the yen when it approached the 100 mark to support its country's exports.

Earnings Due Today....

COMPANIES REPORTING EARNINGS

• Aeropostale Inc. (ARO). Expected to report Q4 earnings of $0.88 a share, according to analysts polled by Thomson Financial.

• Flanders Corp. (FLDR). Expected to post Q4 profit of $0.15 per share.

• TICC Capital Corp. (TICC). Expected to report Q4 profit of $0.34 per share, which is a decrease of 12.82% from the same quarter last year when the company earned $0.39 a share.

Today's Top Stories....

• Dollar tumbles below 100 yen for first time in 12 years

• Treasury secretary Henry Paulson to propose revamp of credit rules - report

• Treasury deputy secretary Robert Kimmitt says U.S. economy should pick up in Q2

• Home foreclosure filings rise 60% in Feb.

• Abbott's diabetes treatment gets FDA nod

• Electronic Arts makes $26-a-share hostile bid for Take-Two Interactive

• Monsanto upgraded to 'buy' at Banc of America

• AIG cut to equal-weight from overweight at Morgan Stanley; target cut to $50

• Tyco Electronics to buy back additional $500 million of stock