• Global stocks are mostly lower with the European DJ Stoxx 50 Index down -0.09% and March S&Ps down -1.60 points. The dollar and Treasuries are weaker and commodities are stronger. European stocks and the euro are trying to recover from last week's rout after European finance ministers expressed confidence in Greece's plans to cut its deficit. French Finance Minister Lagarde told reporters following Saturday's G-7 meeting in Canada that "the European members of the G-7 will make sure it is managed" as she tries to bolster international confidence in Greece's ability to cut its deficit with promises to ensure that the government delivers on it. G-7 finance ministers also pledged to continue with economic stimulus measures even as markets intensify their focus on mounting budget deficits. Despite the show of support for Greece, Greek bank stocks fell with National Bank of Greece SA and EFG Eurobank Ergasia SA, the country's biggest banks, both down over 3%. Also undercutting European stocks was the decline in European investor confidence for the first time in seven months in February when the Feb Euro-Zone Sentix investor confidence unexpectedly fell -4.5 to -8.2, a four month low.

• The Asian markets today closed mixed with Japan down -1.05%, Hong Kong -0.58%, China -0.07%, Taiwan +0.04%, Australia +0.16%, Singapore +0.37%, South Korea -0.82%, India +0.13%. Japan's Nikkei stock index fell to a 1-3/4 month low and was led lower by a 5.3% drop in Panasonic, the world's largest maker of plasma televisions, when it reported a net loss for the nine months ended Dec 31 and by the 4.5% decline in Yamaha after the motorcycle maker widened its 2009 loss forecast. Also hurting Japanese stocks was the -1.7% y/y fall in Jan Japan bank lending, the largest decline since Sep 2005, as some companies deferred capital investments and others turned to bond markets to raise funds. Taiwan stocks were boosted after the government there reported that Jan Taiwan exports surged +75.8% y/y, their biggest jump in more than 30 years, as holiday spending in China before the Lunar New Year fueled demand for its computers and mobile phones.

• March S&Ps this morning are trading down -1.60 points. The US stock market last Friday traded in negative territory most of the day but then rallied sharply late in the day to finish with modest gains (Dow Jones +0.10%, S&P 500 +0.29%, Nasdaq Composite +0.74%). The S&P 500 Index, Dow Jones and Nasdaq Composite all slid to 3-month lows before recovering. Bullish factors for stocks included (1) massive short-covering in the final hour of trade on speculation that the EU may come up with a solution over the weekend for the budget deficits of Greece and Spain, (2) the unexpected decline in the Jan US unemployment rate to a 5-month low (-0.3 to 9.7% versus expectations of unchanged at 10.0%), (3) the unexpected increase in Jan US manufacturing payrolls which posted their first increase in 3 years (+11,000 versus expectations of -20,000), (4) the prediction from Goldman Sachs that stock markets will recover from the recent correction because of improving economic indicators and company earnings, and (5) the smaller-than-expected decline in Dec consumer credit (-$1.7 billion versus expectations of -$10.0 billion).

• Bearish factors for stocks included (1) carry-over weakness from the continued slide in European stocks on concern that the budget deficits of Greece and other European countries will slow their economies and drag down the global economy as well, (2) the unexpected loss of jobs in the Jan US nonfarm payroll report along with the downward revision to Dec payrolls (Jan payrolls -20,000 versus expectations of +15,000 and Dec payrolls revised down to -150,000 from -85,000), and (3) weakness in energy producers after crude oil slumped to a 1-3/4 month low.

• Home Depot (HD) rose 1.4% in pre-market trading after Morgan Stanley raised its recommnedation on the stock to "overweight" from "equal-weight."

• Motorola (MOT) climbed 2.8% in pre-market trading after a Barron'a article said the mobile-phone maker may rise as much as 40% during the next year if it spins off its mobile-pnone unit and revenue from its radio and data-communications equipment division increases.

• March 10-year T-notes this morning are trading down -7.5 ticks. T-note prices last Friday dropped down to the session low following the release of the Jan payroll report and then crept higher the remainder of the day to finally settle up +19.5 ticks at a 2-month high of 118-275. The 10-year T-note yield fell to a 1-1/2 month low of 3.54%. Bullish factors for T-note prices last Friday included (1) the unexpected loss of jobs in the Jan US nonfarm payrolls along with the downward revision to Dec payrolls, and (2) continued strong safe-haven demand for Treasuries after US stocks followed European bourses lower on concern that the budget deficits of Greece and other European countries will damage the European and global economies. Bearish factors last Friday included (1) the unexpected decline in the Jan US unemployment rate (-0.3 to 9.7% versus expectations of unchanged at 10.0%), (2) the unexpected increase in Jan US manufacturing payrolls, which posted their first increase in 3 years (+11,000 versus expectations of -20,000), and (3) the smaller-than-expected decline in Dec US consumer credit (-$1.7 billion versus expectations of -$10.0 billion).

• The dollar index this morning is slightly weaker with the dollar/yen unchanged and the euro/dollar -0.20 cents. The dollar index last Friday rallied to a 6-3/4 month high and settled sharply higher for a second session. Bullish factors included (1) the plunge in the euro to an 8-1/2 month low against the dollar on concern that widening budget deficits in Greece and other European countries will drag down the European economy, (2) Morgan Stanley's cut in its year-end euro forecast to $1.24 from an earlier forecast of $1.32, saying "internal strains in the Euro-Zone have increased the downside risks" for the currency, and (3) comments from ECB Council member Nowotny who said that the current euro-dollar exchange rate in not a cause of concern, which signals the ECB may welcome further weakness in the euro to aid European exporters. Bearish factors included (1) the unexpected loss of jobs in the Jan US payrolls, which may prompt the Fed to keep US interest rates at record lows longer-than-expected, and (2) position-squaring ahead of the start of the 2-day G-7 meeting of finance ministers and central bankers in Canada on Feb 5-6.

• March crude oil prices this morning are trading up +16 cents and Mar gasoline is +0.36 of a cent. Mar crude oil last Friday sold off sharply for the second straight session and closed down -$1.95 per barrel. Mar gasoline closed down -6.44 cents per gallon. Mar crude and Mar gasoline both fell to 1-3/4 month nearest-futures lows. Bearish factors included (1) continued strength in the dollar after the dollar index rose to a 6-3/4 month high, (2) the unexpected loss of jobs in the Jan US nonfarm payrolls, which indicates continued weakness in the labor market that could derail the economy and energy demand, (3) the slump in global equity markets on concerns that the budget deficit problems of Greece are spreading to other European nations as well, which may slow the global economy and energy demand, and (4) the unexpected decrease in Dec German industrial production, which signals reduced energy consumption in Europe's largest economy. Bullish factors for crude prices last Friday included (1) the recommendation by Goldman Sachs to buy Dec 2010 crude oil contracts on anticipation that "the supply/demand balance will continue to tighten in 2010 as the global economic recovery continues to strengthen demand, draw down inventories and draw OPEC spare capacity back into the market," and (2) comments from OPEC President Pinto who said oil prices will remain between about $70 and $80 a barrel this year amid a slight increase in global consumption.

Earnings reports (confirmed releases, sorted by mkt cap) CVS-CVS Caremark (BEST earnings consensus ($0.78), L-Loews (0.97), LO-Lorillard (1.51), LVS-Las Vegas Sands (0.02), HIG-Hartford Financial Services Group (1.34), PFG-Principal Financial Group (0.66), LNC-Lincoln National (0.83), CNA-CNA Financial Corp. (0.72), BWP-Boardwalk Pipeline Partners LP (0.30), ERTS-Electronic Arts (0.33), VMC-Vulcan Materials (0.00), HAS-Hasbro (0.82), NUAN-Nuance Comuunications (0.27), AXS-AXIS Capital Holdings Limited (1.28), WRB-WR Berkley (0.67), NDAQ-NASDAQ OMX Group (0.44).

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