GDP report in-line

"You must have long-range goals to keep you from being frustrated by short-range failures." - Charles C. Noble

Morning News of Note:

• FNM FRE: New Fannie Mae Violations Surface Accounting Flaws Include Possible Overvalued Assets, Insurance to Hide Losses Investigators combing through Fannie Mae's finances have found new accounting violations, including evidence that the company may have overvalued assets, underreported credit losses and misused tax credits, according to people close to or previously involved in the inquiries. Some people familiar with the examination said evidence also indicates the company may have bought so-called finite insurance policies to hide losses after they were incurred. (Full Story) WSJ
• GE AEP: GE, Bechtel and AEP Plan 'Clean Coal' Plant General Electric Co., Bechtel Corp. and American Electric Power Co. are expected to announce today that they will move ahead with engineering and design of what would be the nation's first big coal-fired power plant to use cleaner-burning technology. Construction of the billion-dollar, 629-megawatt plant in Meigs County, Ohio, along the Ohio River, could start as early as next year. The plant, which would provide electricity for more than 600,000 homes, could be producing power by 2010. (Full Story) WSJ
• F: Ford to Cut Half of Suppliers to Improve Technology Ford Motor Co. will cut half of its suppliers and sign long-term contracts with the rest to reduce costs and improve technology as the world's third-largest carmaker struggles to reverse declining profit and shrinking sales. Ford will announce agreements today with Sweden's Autoliv Inc., Delphi Corp., Johnson Controls Inc., Lear Corp., Canada's Magna International Inc., Visteon Corp. and Japan's Yazaki Corp., said Gabriele Gutscher, a spokeswoman for Ford in Cologne, Germany. (Full Story) Bloomberg
• PMTI ELOS: Aesthetic Lasers Look Good to Investors AS AMERICANS DEMAND MORE WEAPONS for the war on wrinkles, lasers that zap away unwanted body hair, acne scars, and spider veins are becoming big business. How big? Aesthetic laser procedures accounted for 2.2 million of the 11.8 million cosmetic procedures performed last year in the U.S. That was nearly a threefold jump since 2000, according to the American Society for Aesthetic Plastic Surgery (ASAPS). (Full Story) BARRONS

Market Comments: Final Q2 GDP growth came in at +3.3%, as expected. The question will be how much growth gets taken of Q3 from the twin hurricanes. Initial jobless claims also fell considerably, but again, the data may reflect pre-Katrina conditions.

PEP reported a great quarter this morning, and the stock is nearing a new high. Broker stocks area also strong again, and have been surprisingly resilient during this selloff. Energy mark-ups are still going on (think: energy), and it will be interesting to see if any quarter-end buying pressure will surface. Otherwise, the near-term trend looks down.

long ELOS, GE, PEP