Late-Night Headlines
Bloomberg:
- Companies with the most hedge-fund ownership slid for the fifth time in six days, defying the rally spurred by the government's takeover of Fannie Mae(FNM) and Freddie Mac(FRE), as money managers sold shares to cover client redemptions, analysts said. Goldman Sachs Group Inc.'s(GS) index of the 49 most-common holdings of hedge funds lost 0.1 percent, led by Google Inc.(GOOG) and Potash Corporation of Saskatchewan Inc.(POT), extending its drop since Aug. 28 to 8 percent. ``Smart money is selling on the rallies, and that's happening because of an expectation for a heavy redemption flow,'' said Peter Kenny, a managing director for institutional sales at Knight Equity Markets in Jersey City, New Jersey. ``It's amazing the lemming effect that develops in the top companies,'' said Peter Rup, chief investment officer at New York-based Orion Capital Management LLC, which invests in hedge funds. ``There's clearly a network of information flow among friends and families.'' All but seven stocks in Goldman's index have dropped in the last three months. Freeport-McMoRan Copper & Gold Inc.(FCX), the world's largest publicly traded copper producer, and Petroleo Brasileiro SA(PBR), Brazil's state-controlled oil company, have both lost about 37 percent in U.S. trading during that period. The time of year also may contribute to the decline for stocks favored by hedge funds. ``Investors have annual redemption rights and you have to give 90 days notice, which means September is typically when that's done,'' Rup said.
- Google’s(GOOG) planned partnership with Yahoo! Inc.(YHOO) probably will survive government scrutiny, a Sanford C. Bernstein analyst said.
- The Australian dollar held losses after a government report showed home loans fell for a sixth month in July. The New Zealand currency declined as the nation may not recover from a recession this year. Both currencies dropped as the U.S. dollar gained to the highest level since October against the euro after a government takeover of Fannie Mae and Freddie Mac boosted confidence in global financial markets.
- Stephen Schork, president of the Schork Report, Says Crude Oil May Fall to $70 a Barrel. (video)
- Crude oil fell in New York as the dollar rose against the euro, limiting investors' appetite for commodities. The U.S. currency strengthened to the highest since October 2007 as the government's takeover of Fannie Mae and Freddie Mac encouraged investors to move funds into the stock market. ``You're starting to see some money going into the securities market and coming out of commodities,'' said Tetsu Emori, a fund manager with Astmax Ltd. in Tokyo.
- Orange juice fell by the exchange limit, dropping the most in nine years, after Hurricane Ike was forecast to miss Florida, cutting the risk to groves recovering from past storms.
- Al-Qaeda's second-in-command, Ayman al-Zawahiri, attacked Iran in a video posted on the Internet, accusing the country of letting the U.S. invade Afghanistan and Iraq. In the 90-minute Arabic-language video called ``Seven Years of Crusades,'' which was shown today on the Al-Jazeera television channel, al-Zawahiri said there was an ``Iranian-Crusade alliance that's targeting the Muslim world'' and that leaders in Tehran are ``collaborating with the Americans in their occupation of Iraq and Afghanistan.'' The recording comes three days before the seventh anniversary of the Sept. 11 attacks on the U.S.
- Wells Fargo & Co.(WFC), the California lender that skirted the subprime collapse, topped Citigroup Inc. by market value to become the third-most valuable U.S. bank.
- U.K. house prices dropped in August as the squeeze on mortgage lending pushed down sales to a record low, the Royal Institution of Chartered Surveyors said. The number of real-estate agents and surveyors saying prices fell exceeded those reporting gains by 81 percentage points, compared 83 percentage points in July, the group said today in London. Average sales per respondent in the past three months fell to 12.7, the least since the survey began in 1978.
- President George W. Bush said he'll withdraw as many as 8,000 troops from Iraq by February and simultaneously send additional forces to Afghanistan. Bush will announce his plan tomorrow in a speech at the National Defense University in Washington. The White House released the prepared text of his remarks today. ``While the enemy in Iraq is still dangerous, we have seized the offensive, and Iraqi forces are becoming increasingly capable of leading and winning the fight,'' Bush will say, according to the text. ``As a result, we have been able to carry out a policy of `return on success' -- reducing American combat forces in Iraq as conditions on the ground continue to improve.'' ``Afghanistan's success is critical to the security of America and our partners in the free world,'' Bush will say, according to the text. ``As we learned in Iraq, the best way to restore the confidence of the people is to restore basic security -- and that requires more troops.'' Bush's decision reflects recommendations of Army General David Petraeus, the top commander in Iraq, that were refined by Defense Secretary Robert Gates and Admiral Michael Mullen, chairman of the Joint Chiefs of Staff.
- Investors should use currency options to guard against losses as India's rupee heads for the steepest slide since 1991, when a balance of payments crisis forced the nation to pawn its gold, JPMorgan Chase & Co. said. Investors should buy rupee put options granting the right to sell the currency against the dollar, said Vikas Agarwal, a strategist at the third-biggest U.S. bank. The rupee will fall to a two-year low by Dec. 31 as funds pull money out of emerging markets, he said.
Wall Street Journal:
- The last refuge for investment bankers is under siege. Fees in Asia are falling as stock and debt offerings evaporate and companies hold back on deals.
- Google Inc.(GOOG) will begin brokering some television ads on cable networks owned by General Electric Co.'s(GE) NBC Universal, according to people familiar with the matter, as the Web giant seeks to expand the reach of its nascent TV ad-selling business.
Forbes.com:
- Tech Trends For Growing Businesses.
CNNMoney.com:
- At least Michael Dell sees value in Dell (DELL). The company founder and CEO spent $100 million late last week to acquire 4.7 million shares, according to a Federal filing Monday.
- Gasoline prices continued to decline, easing for the eighth straight day, as Tropical Storm Hanna dumped heavy rain on the entire eastern coast of the United States, according to a nationwide survey of gas station credit card swipes.
Reuters:
- Aerospace groups braced for global disruption from a potentially lengthy strike at Boeing(BA) on Monday as one of the planemaker's biggest suppliers lost no time in cutting production and working hours.Three days after 27,000 machinists halted assembly at the world's top-selling planemaker, Boeing supplier Spirit AeroSystems suspended its 2008 financial guidance and said it was cutting volumes on certain Boeing products.
- The U.S. Justice Department has hired Sandy Litvack, who was its former antitrust chief and Walt Disney Co's (DIS) former vice chairman, to consult on its probe of Google Inc's (GOOG) search advertising deal with Yahoo (YHOO), a source close to the investigation said.
- Mexico cut its forecast for economic growth this year to 2.4 percent from 2.8 percent.
Financial Times:
- Royal Dutch Shell is to become the first western oil company to sign a deal with the Iraqi government since the US-led liberation of 2003, agreeing a plan to capture and use gas in the Basra region that could be worth up to $4bn.
- Barack Obama is set to meet Bill Clinton at the former president's foundation headquarters in Harlem on Thursday in their first face-to-face meeting since Mr Obama defeated Hillary Clinton in the primary elections in June. The meeting comes as John McCain, the Republican candidate, moved into the lead in the polls for the first time in the campaign. Mr Clinton, the former two-term president, will offer advice to the Democratic nominee about how to deal with the coming 57 days before the election, amid Democratic worries about Mr Obama's shaky numbers in the polls. On Monday a Gallup-USA Today poll gave Mr McCain a double-digit lead at 54 per cent to Mr Obama's 44 per cent among "likely voters". Most analysts attributed Mr McCain's improving numbers to his selection of Sarah Palin, which has proved popular with voters well beyond the Republican Party's social conservative base.
TimesOnline:
- Alistair Darling is preparing to intervene to stimulate Britain's dormant housing finance market, according to senior government officials.
- Google(GOOG) has teamed up with John Malone, the media billionaire, and HSBC on a venture that will offer internet access to three billion people in Africa and other emerging markets as the US search engine continues to expand its presence across the Web.
Tuoi Tre:
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Late Buy/Sell Recommendations
Piper Jaffray:
- Rated (SBAC) Buy, target $40.
- Rated (AMT) Buy, target $50.
- Rated (CCI) Buy, target $42.
- Rated (EQIX) Buy, target $100.
- Rated (NIHD) Buy, target $70.
- Rated (USM) Sell, target $42.
Night Trading
Asian Indices are -2.25% to -.50% on average.
S&P 500 futures -.28%.
NASDAQ 100 futures -.35%.
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Economic Releases
10:00 am EST
- Pending Home Sales for July are estimated to fall 1.5% versus a 5.3% gain in June.
- Wholesale Inventories for July are estimated to rise .7% versus a 1.1% gain in June.
Upcoming Splits
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Other Potential Market Movers
- The weekly retail sales reports, (OC) Investor Day, (CRA) analyst meeting, (NFX) analyst meeting, (MMM) investor day, (BBND) analyst meeting, (SRX) analyst meeting, (TXN) Mid-quarter Update, Wachovia Transport Conference, Deutsche Bank Tech Conference, Morgan Stanley Global Healthcare Conference and Lehman Financial Services Conference could also impact trading today.
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