Morning Update

"It is not enough to be busy; so are the ants. The question is: What are we busy about?" - Henry David Thoreau

Morning News of Note:

• TM GM F DCX: Ranking the Most-Reliable Cars Lexus Tops J.D. Power Survey, But Mercedes, VW Struggle; A Strong Showing for GM Auto makers are getting better at building cars that last, according to the latest J.D. Power & Associates survey of vehicle reliability. That includes some major Detroit brands that have struggled to overcome consumer concerns rooted in past quality problems. As it has for 11 years, Toyota Motor Corp.'s Lexus brand ranked first in J.D. Power's Vehicle Dependability Study, which surveys consumers about problems with three-year-old vehicles. The top-ranked car in the survey was the 2002 Lexus LS 430, Lexus's top-of-the-line sedan. (Full Story) WSJ
• GOOG: For Soaring Google, Next Act Won't Be as Easy as the First Moves to Search Video, Books Raise Hackles as Owners Of Copyrights Complain An Angry Letter From NBC Google Inc. has prospered by letting people search the Internet. Its official ambition is much bigger: to search all of the world's information. But the farther Google ventures beyond the Web, the tougher the road gets -- as its dealings with some big TV companies show. Late last year, Google started recording TV programs aired in the San Francisco area without asking permission from program owners. In January Google released a test search service (video.google.com) that lets users search for a keyword -- say, "Michael Jackson" -- and view still images and partial transcripts from TV shows mentioning that keyword. (Full Story) WSJ
• BAC: Bank of America Agrees to Buy MBNA for $35 Billion Bank of America Corp., the second- largest U.S. bank by assets, agreed to buy MBNA Corp. for about $35 billion in stock and cash to challenge Citigroup Inc. and JPMorgan Chase & Co. in credit cards. The Charlotte, North Carolina-based bank plans to cut 6,000 jobs after the purchase, it said in a PR Newswire release today. Bank of America will swap 0.5009 share and $4.125 for each share of Wilmington, Delaware-based MBNA. That values MBNA at $27.50 a share, Bank of America said. (Full Story) Bloomberg
• MSFT: Microsoft Said to Be in Talks to Buy Adware Developer For the last two weeks, Microsoft has been in talks to buy a private Silicon Valley company, a move that underscores just how eager Microsoft is to catch up with Google, the search and advertising giant. The company that Microsoft has pursued is controversial: Claria, an adware marketer formerly called Gator, and best known for its pop-up ads and software that tracks people visiting Web sites. The Gator adware has frequently been denounced by privacy advocates for its intrusiveness. (Full Story) NY Times
• MWD: Morgan Stanley may divest asset mgmt unit - TheDeal.com (53.32 ): TheDeal.com is speculating that Morgan Stanley might be next to divest it's asset mgmt unit. Citigroup's swap of its asset mgmt business with Legg Mason has put a lot of pressure on rivals to separate their retail sales forces from their asset mgmt businesses. While recent deal speculation has focused on a sale of Morgan Stanley's Dean Witter unit, some analysts and bankers are promoting a less probable but equally compelling option: a sale of the firm's asset mgmt business.

Market Comments: The market opened slightly higher this am, but trading will likely be muted until after the Fed meeting. I expect another 25 bps hike and the same "measured" language in the wording-- no surprises.