Will Early Strength Last?

Morning News of Note:

• Autos vs. Oil Co's: As the Price of Gasoline Takes Off, Oil and Auto Firms Trade Barbs With consumers again facing rising gasoline prices, the two industries most often blamed for the energy crunch -- oil and auto companies -- are trading potshots over who is at fault. In an unusually public exchange, a senior official at DaimlerChrysler AG's U.S. unit has publicly slapped Exxon Mobil Corp., the world's most profitable company. (Full Story) WSJ
• EBAY: U.S. Seeks PayPal Customer Data In Attempt to Find Tax Evaders The Justice Department has asked PayPal Inc., the online-payment-processing unit of Internet auctioneer eBay Inc., to turn over some customer records as part of a tax-evasion probe, a top tax official said. U.S. District Judge James Ware in the U.S. District Court for the Northern District of California in February issued a "John Doe" summons to PayPal, of San Jose, Calif., for the records. (Full Story) WSJ
• IGT: From the Back Office, a Casino Can Change the Slot Machine in Seconds By law, Nevada casinos must on average return at least 75 percent of slot machine wagers. The reality is they return more than 90 percent, casino operators say, though they do not publicize the figures. Also under the law, they cannot modify the payback percentages while someone is playing. State law allows them to change the odds after a machine has been idle for four minutes, and then they must not allow anyone to play the machine for four more minutes. During that time, the screen must indicate a change is being made to the game's configuration, said Travis Foley, laboratory manager for the technology division of the Nevada State Gaming Control Board, who is overseeing the Treasure Island test. (Full Story) NY Times
• GOOG: Google-GOOG expects revenue growth in China to be large-Reuters: CEO Eric Schmidt said that Google would have 100 software engineers in China by the end of 2006 and that the company plans to eventually have thousands
• OPWV: In the "Feature Round," Cramer began by evaluating the concept of digital convergence, i.e. how your cell phone can do more than make calls. It can receive data, streaming video, so many uses that the device is now known as an multi-purpose handset. Cramer: I expect this digital convergence to continue, and the play is: Openwave (OPWV). Cramer: OPWV has the software that acts as a gateway to data and messaging. As cell phones become more complex, demand for OPWV's products will increase. OPWV has contractors with some of the largest wireless communications providers in the U.S. Further, handset sales should grow at double-digit rates, further supporting OPWV's position. And the company has a new program that allows them to deliver video on demand, quickly to handsets. Bottom Line - don't read endlessly about convergence. Cramer: Buy OPWV

Market Comments: The market is trading higher in the first hour of trading. Semis and biotechs, which were hit the hardest yesterday, are getting the largest boost so far. Genentech (NYSE:DNA) reported a solid quarter, and the stock is up slightly after dipping at the open.

Sentiment is getting more bearish. The CBOE put/call ratio closed above 1.0 yesterday, and opened at 1.08 this morning. This could help keep a bid under stocks today. Of course, I am always skeptical of markets that rally early in the day.

Circuit City (NYSE:CC) also reported strong earnings, with some comments about strength in flat panel TVs. My shorts are going against me right now, but I expect some interim pain to keep the bears on their toes.

long GOOG