Sorry...Been out all day at a conference....

Maybe I should go back out....

Nice rally...Dow up 350 and gaining into the close. Look for a follow thru rally tomorrow and then it might be time to put more money to work.

Monday's Trading Summary...

U.S. Markets

Dow -153.54 (-1.29%)
Nasdaq -43.15 (-1.95%)
S&P 500 -20.00 (-1.55%)

News That Moved the Market

Financials Push Markets Down Further. Stocks finished sharply lower Monday, with more bad news coming out of the financial sector. Bear Stearns (BSC, -11.1%) fell the most in 10 years after rumors spread that the company has liquidity issues. "There's an insolvency rumor and concerns on liquidity, that they just have no cash," said Michael Mainwald, head of equity trading at Lek Securities Corp. A spokesman for Bear said that there is "no truth" to the rumors, but the trust in the banks has disappeared in the last couple months and investors were noticeably rattled. Citigroup (C, -5.8%) fell under $20, to its lowest levels since 1998.

Lehman Brothers (LEH, -7.3%) announced plans to cut another 5% of its work force, citing weak credit markets and a slowing economy. Markets finished near their lows, with the financial sector ending down 2.0%.

Blackstone's Profits Plunge. Blackstone (BX, +2.9%) reported an 89% decrease in profits this morning. The company was hurt by its holdings in FGIC, the troubled bond insurer. The company's stock hit an all-time low, before finding bidders late in the session, and said it sees difficult market conditions continuing in 2008.

FBI Targets Countrywide, Subprime Lenders. Countrywide (CFC, -14.0%) lost more ground after The Wall Street Journal reported the company, along with 15 other subprime lenders, is under an FBI investigation. The FBI is taking a broad look at the subprime industry as a whole for fraud and other unlawful practices. The investigation is still in its early stages.

Goldman Sees FOMC Cutting Rates By 1.0% In Two Meetings. Goldman Sachs (GS, -2.8%) sees the FOMC dropping interest rates a full point by late April. There were talks of an intermeeting cut before next week's official FOMC meeting, but few really believe the Fed would think the situation is so dire, that it could not wait one week.

Quick Tics:

McDonalds (MCD, +2.9%) reported strong same store sales growth

NY Governor Eliot Spitzer has been linked to a prostitution ring

Oil closed up nearly 3% to $107.90/barrel.

TomorrowNotable Earnings

Boston Beer Company (SAM) Time Not Supplied
J. Crew Group, Inc. (JCG) After Close
Take-Two Interactive Software (TTWO) After Close
The Kroger Co. (KR) Before Open

Economic Events:

8:30 AM: Trade Balance

FBI Probes Countrywide...

The FBI has opened a criminal inquiry to probe whether Countrywide Financial (CFC) intentionally misrepresented its financial condition in SEC filings. The FBI is investigating more than a dozen subprime lenders' origination and securitization processes, and probing possible conflicts of interest between lenders and investors.

If Countrywide is found guilty of fraud, it could scuttle a planned $4B acquisition of the company by Bank of America (BAC).

Earnings Due Today....

COMPANIES REPORTING EARNINGS

• Foot Locker Inc. (FL). Expected to report Q4 earnings of $0.44 a share, according to analysts polled by Thomson Financial. This is a decrease of 36.71% from the same quarter last year when the company earned $0.70.

• Inter Parfums Inc. (IPAR). Expected to post Q4 earnings of $0.34 a share, up 25.93% from the same quarter last year when the company earned $0.27.

• The Blackstone Group (BX). Expected to post Q4 earnings of $0.29 a share.

• Vail Resorts (MTN). Expected to report Q2 earnings of $1.35 a share.

This Morning's Top Stories...

• Morgan Stanley cuts 2008 earnings estimates on raft of large-cap banks

• Chevron to develop LNG facility in Australia

• Siemens eager to settle with SEC before presidential election - report

• Nationwide Financial Services gets buyout offer from parent

• Wyeth to invest $280 million in Chinese nutritional manufacturing plant

Ciena Net Income Nearly Triples...

Ciena posts net income to $28.8 million, or 28¢ a share, amid increasing demand for gear allowing network operators to handle more traffic at lower costs. Excluding items, EPS jumps to 47¢; analysts expected 40¢. Shares rise 4% pre-market.

C'mon Ciena...we're not supposed to have good news...only the bad stuff...

Fed Moves to Bolster Liquidity...

To address heightened liquidity pressures in term funding markets, the Fed will increase the amounts outstanding in the Term Auction Facility to $100 billion. It also will initiate a series of term repurchase transactions that are expected to amount to $100 billion.

US Payrolls Fall, Raising Odds for Recession...

U.S. recession fears mount as employment falls by 63,000 in February, its fastest rate in five years, suggesting that the housing and credit crunch is gripping the broader economy. Unemployment rate surprisingly ticks down to 4.8%, triggered by a 450,000 decline in the size of the labor force, not a rise in employment. Data support expectations for additional Fed rate cuts.

Marvell Beats, but Conference Call Spooks...

Marvell (MRVL) blasted past expectations with Q4 EPS of $0.20 vs. consensus of $0.11 and revenue of $845M vs. consensus of $783M. After gaining 6% in AH trading, things got ugly during the conference call after MRVL said 2008 costs would be higher than expected, and declined to offer a full-year forecast due to broad economic uncertainty.

Shares ended -5.4% in extended trading.

National Semi Soars on Margin Surprise...

National Semiconductor (NSM) posted FQ3 EPS of $0.28, better than consensus estimates of $0.24. Revenue was just short at $453.4M. NSM sees Q4 revenue of $440M-$460M, short of consensus estimates of $470.3M. NSM said Q3 bookings declined sequentially by approximately 14%, due primarily to weak orders for wireless handsets and personal mobile devices. But gross margins "held up well," it said, at 64.3%, up from 59.8% Y/Y.

Shares jumped 9.5% in AH trading.

Retail Sales Encourage....

Retail sales in February largely beat expectations. Same-store sales were up 1.9%, led by a 2.6% increase at Wal-Mart (WMT). Still, stores continue to expect a rough spring, and a number of retailers have stopped reporting monthly comps in order to focus on long-term strategy. "These month-to-month blips don't change the trend," economist Frank Badillo said. "

Shoppers are intent on slowing their spending, and that will continue in the months ahead." Analysts noted sales at discounters (WMT, FDO) were stronger than at middle-end retailers (TGT, JCP, KSS).

iPhone SDK Wows...

Apple's iPhone SDK impressed developers, who said the tool addresses all three core groups: Developers, IT departments, and end-users. Developers liked the functionality of iPhone APIs, and the ability to store data using popular SQL Lite. Apple is licensing technology from Microsoft (MSFT) that will enable it to interact with Microsoft Exchange, and will enable "wipe and lock" and "on-device data encryption" along with other IT tools.

Consumers get push email that turns the iPhone into an instant BlackBerry (RIMM) rival. What's still missing? Multiple carriers, and corporate management tools.

Sony, Microsoft Talk Blu-Ray....

Sony (SNE) is in talks with Microsoft (MSFT) about a Xbox 360 Blu-ray drive. On the one hand, Sony has touted the now de-facto standard Blu-ray as one of its PS3's advantages over the Xbox; on the other, the revenue from a Microsoft deal might be irresistible. Sony also said it has had discussions with Apple (AAPL), which has yet to offer Blu-ray drives on its computers.

Thursday's Market Summary....

U.S. Markets

Dow -214.60 (-1.75%)
Nasdaq -52.31 (-2.30%)
S&P 500 -29.36 (-2.20%)

News That Moved the Market

More Financial Woes Hit Stocks. The markets opened down and never were able to recover after numerous companies in the financial sector came out with bad news. Thornburg Mortgage (TMA, -51.5%) plummeted after its ratings were downgraded by the main ratings agencies. The company disclosed it was not able to meet a margin call of $28 million, triggering defaults in other lending agreements. Washington Mutual (WM, -8.1%) fell following S&P's downgrade of the company, citing a "severe residential mortgage credit cycle" as the catalyst for decision. WaMu was placed on CreditWatch with negative implications. Major indices finished near their lows, w ith the Dow closing just above 12,000. Whether it holds it tomorrow will be an important mental threshold for investors.

Foreclosures Spike. U.S. mortgage foreclosures hit all-time high at the end of last year, according to the Mortgage Bankers Association. New foreclosures increased to 0.83% of all home loans last quarter, with late payment jumping to a 23-year high.

Citi To Cut Mortgage Holdings by 20%. Citigroup (C, -4.4%) announced it will decrease its mortgage assets by $45 billion over the next year. The company will make fewer loans that it cannot sell.

Retail Sales Better Than Expected. Wal-Mart (WMT, +0.86%) reported higher than expected February sales, as more consumers turned to the low cost retailer. U.S. retailers' same store sales increased by 1.9%, beating estimates. About 60% of retailers reported higher than anticipated sales.

Quick Tics:

Merrill Lynch (MER, -7.0%) will exit the subprime lending industry

Crude increased to $105.47, up $0.95.

Tomorrow Notable Earnings

NONE

Economic Events:

8:30 AM: Jobs Report
3:00 PM: Consumer Credit

A Commodity Linked CD....

Now I've seen it all. Take a look at this CD that just came out. It is tied to the performance of Commodities.

Silverton Bank Commodity Linked CD

Maturity 9/30/2013

If held to maturity, purchasers get their original investment back plus a return of 125% of a basket tied to the performance of the following commodities:

Crude Oil, Coal, Copper, and the Live Cattle Index.

Smells like a top in Commodities to me.....

More Doom and Gloom...

The percentage of mortgages that were in foreclosure hit a record high in the fourth quarter, while mortgage delinquencies rose to a 23-year high, the Mortgage Bankers Association said Thursday. A record 2.04% of U.S. mortgages were somewhere in the foreclosure process at the end of the year, while a record-high 0.83% of loans entered foreclosure in the fourth quarter, the trade group's quarterly survey found. More homeowners fell behind on payments as well, with 5.82% of loans past due in the quarter. That was the highest delinquency rate since 1983. MBA Chief Economist Doug Duncan said declining home prices were the driving force behind the foreclosure record.

Really??? This is surprising....I would have thought it was more like 60% of the mortgages out there are in the foreclosure process....:-)

Will there be ANY Banks or Mortgage Companies This Time Next Year???

Maybe all of them will go out of business.... People will no longer be able to buy a home and we will have to keep our money in our mattresses.

That's the mentality now!!!

This is about the worst sentiment I've ever seen on a sector. I would say we are VERY close to a complete washout...which means we are VERY close to a bottom.

Technical Alert: Akamai Breaking Out...

Akamai (AKAM) is breaking out of a nice cup and handle formation this morning.

The stock is up .91 to $35.72 on decent volume. While the stock looks good here, a break above longer term resistance at $38 would be a more significant BUY signal.

Joy Global In-Line, But Raises Guidance...

Joy Global Corp.'s (JOYG) fiscal first-quarter net income rose 19% as sales climbed amid demand sparked by the continuing commodities boom abroad and "improving conditions" in the U.S. coal market.

The company boosted its fiscal-year earnings outlook, saying due to high coal prices the outlook for mining equipment looks "robust." Joy said global capacity constraints leave the U.S. the only country with the potential to substantially boost coal output - just as markets around the world are begging for more. "The U.S. has gone from being a regional market to being the swing supplier to the international coal market," the company said. U.S. coal exports rose 10 million tons in 2007, and Joy expects that rise to continue.

The heavy-mining equipment manufacturer reported net income for the quarter ended Feb. 1 of $71.1 million, or 65 cents a share, compared with $59.7 million, or 51 cents a share a year earlier. The latest quarter's results included 1 cent in earnings from discontinued operations. Revenue rose 14% to $640.3 million.

The mean per-share earnings estimate of analysts polled by Thomson Financial was 65 cents on revenue of $639 million.

Blockbuster Reports In-Line Earnings...

Blockbuster Inc.'s (BBI) fourth-quarter net income more than tripled as operating expenses fell and rental revenue jumped 11%. The company said its 2007 was a year of "transition" and that it expects to return to profitability in 2008 - forecasting net income where analysts had seen a loss. Blockbuster's shares rose in premarket trading.

The movie rental company reported net income of $41 million, or 18 cents a share, compared with $11.2 million, or 4 cents a share, a year earlier. Excluding charges, per-share earnings rose to 26 cents from 11 cents. Revenue grew 3.6% to $1.57 billion.

The mean per-share earnings estimate of analysts polled by Thomson Financial was 18 cents on revenue of $1.44 billion.

Makes sense....People aren't going to stop watching movies....they'll just stay at home and rent...NetFlix beat estimates recently and raised their guidance....looks like a trend to me.