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Even as QE2 ends, this sector is outperforming.
By Jake Lynch, TheStreet
The risk-off trade, which has pummeled the stock market, has led to the outperformance of defensive sectors, including telecom, utility and health care stocks. Still, energy, the most profitable sector so far in 2011, is holding up well.
S&P 500 ($INX) oil and gas stocks have delivered a median gain of 9.3% in 2011. Crude oil is hovering around $100 a barrel, a sweet spot for producers -- expensive enough to generate lofty margins but not costly enough to cannibalize demand for energy.
On Tuesday, addressing vocal concerns about elevated commodity prices, Federal Reserve Chairman Ben Bernanke reiterated his stance that the recent price rise will be transitory. He also dismissed the notion that speculators are driving up the cost of fossil fuels, noting that emerging-markets demand has long outstripped supply, a trend expected to continue, or perhaps grow, in coming years.
With OPEC's surprise decision not to increase oil production, the Senate's vote on debit card fee limits, and Ciena's disastrous earnings, Wednesday's events could cloud the market for a while.
It's terrific that we regard each day as a new day around here, as in "New day, futures are fine, come on out and play." But we often forget that there was damage done the other day, damage that isn't repaired by the sun going down, the moon coming up and then the sun returning to the horizon.
Wednesday the damage was horrific. I don't know a soul who even thought that OPEC would do anything but try to figure out how to make sure alternative energies like solar or oil sands or biofuel would be priced out by $80-$90 oil, long thought to be the price point at which alternatives get dicey.
OPEC always seemed to have an economic imperative: How to make the producers richer and keep consumers addicted. It used a drug dealer motif to do so.
But Wednesday we saw that some OPEC members don't care about stifling alternatives. They care about stifling "the West." They care about showing the developed nations that they are in charge. They care about hegemony!
His advice at a personal finance summit offers simple but powerful lessons.
I had the honor and privilege of attending the White House's first Personal Finance Online Summit on Wednesday afternoon. The event gave me and two dozen other financial journalists access to top administration officials, including a brief Q&A with President Barack Obama.
Much of the talk focused on the debt ceiling, the housing crisis and the job market. But during the give-and-take, there were a few nuggets of wisdom from the commander in chief that apply to everyday household budgets and regular folks planning their retirement.
Here are three tips from the president:
Two prominent research firms recently lowered their forecasts for PC growth this year.
The research firm Gartner just lowered its forecast for the industry to 9.3% global growth, down from its prior projection of 10.5%, Dow Jones reports. Another research firm, IDC, also dropped its growth forecast this week to 4.2% growth from 7.1%.
There are two main reasons for the cuts. In this economy, consumers aren't about to blow a hole in their budgets with a new computer purchase. And those who do want to spend money will be looking more closely at cheaper tablets like the iPad.
Investors are upset as Ben Bernanke pours cold water on the idea of another round of quantitative easing. They shouldn't be.
Stocks suffered Tuesday and again Wednesday after Federal Reserve Chairman Ben Bernanke made a closely followed speech in Atlanta. The speech wasn't notable for what it contained -- a review of the current situation and the Fed's belief that inflationary pressure will be "transitory" as gas prices ease.
Instead, it was notable for what it didn't contain -- namely, any mention of a third round of quantitative easing to take the reins from the current $600 billion program set to expire in a few weeks. Bernanke stressed that although growth is slowing, more easy money isn't the solution.
Wall Street, acting like a child who was just refused another cookie, wasn't pleased with the dose of honesty. Traders viewed this as Bernanke acknowledging the current slowdown without a way out. But this misses a number of important points.
The SEC steps in, squashes a plan to raise $300 million in pledge commitments to buy Pabst Brewing Co.
Two advertising executives tried to raise the money by appealing to potential investors on Facebook and Twitter. Pledge some money to the effort, and if enough is raised you'll get part ownership in the company. You'll also get your pledge amount worth of Pabst beer.
Sounds like a frat house stunt, but Michael Migliozzi II and Brian William Flatow received more than $200 million in pledge commitments from 5 million people. That was enough to take the idea from a joke to something real, and the partners began looking for a firm to help with the purchase.
With nearly 70% of trades being done by machines, do individual investors stand a chance?
Supercomputers control nearly 70% of the trades on Wall Street these days, Steve Kroft reports. They monitor all the data they can about the market and get in and out of a stock within seconds.
The computers don't care about companies or their quarterly earnings. They don't care what analysts say or how strong the dollar or the economy might be. They're completely focused on one thing: buying low and selling high.
Computers can see the buy and sell orders coming into the exchanges before anyone else. And they respond based on what those orders tell them: Jump in before a stock starts to rally. Sell before a stock heads into a decline. The fastest computers get the best results.
This fund's 4 largest holders support the metal's price by buying the physical commodity when prices fall.
By Dan Dicker, TheStreet
Silver and BlackRock's silver ETF, iShares Silver Trust ETF (SLV), have been the target of some wild rumors in the past several months.
The crazy stories have run the gamut around the financial blogosphere. One has JPMorgan (JPM) as a puppet of the Federal Reserve, establishing a huge proprietary bet against silver designed to pressure the dollar and reduce costs of monetary easing. Others have BlackRock (BLK) unable to satisfy its share demand with real silver stockpiles. Many observers claim that legitimate storage for the metal doesn't come anywhere near the almost 11,400 tons of physical silver that the trust reported holding at its extremes in late April of this year.
I don't need to go anywhere near those rumors. The facts about SLV alone are enough to make a great case for the manipulating effects of the ETF on the price of silver and the strong positives those manipulations can deliver to an investor who doesn't mind being part of a grand plan -- as long as it's a profitable one.
The nation's stock market has been among the world's top performers. If you're looking for strong technicals, good value and high yield, consider these 4 plays.
Can we do better than the S&P 500?
By Morgan Housel
Investors own index funds for a simple reason: They don't want to pick individual stocks. They'd rather hold a broad basket that doesn't give preference to any one company.
For those who don't have the time or inclination to dive into individual stocks, index funds are the way to go. Warren Buffett even said as much many years ago: "Most investors . . . will find that the best way to own common stocks is through an index fund that charges minimal fees. Those following this path are sure to beat the net results . . . delivered by the great majority of investment professionals."
Some might be surprised to learn, however, that most index funds aren't as passive as they might think.
The most popular index, the S&P 500, consists of (redundantly) 500 large- and mid-cap stocks from dozens of different industries.
The automakers' prospects are brightening, but one stock is a better pick. With video.
By Jake Lynch, TheStreet
Prospects for GM (GM) and Ford (F) are improving almost daily. Wednesday, Ford chief executive officer Alan Mulally made the bold prediction that sales will rise 50% in four years as Africa and Asia demand strengthens. Ford, which sold 5.3 million vehicles in fiscal 2010, will shoot for "nearly 8 million" by 2015. Is that reasonable?
While Ford's China sales jumped 15% in May, GM has a stronger foothold in the region, recently debuting a China-exclusive brand, Baojun. Although both GM's and Ford's shares are attractive, GM is looking cheaper in light of the recent sell-off in equities.
As QE2, the Fed's record bond-buying program, ends, many investors are predicting a down-leg in stocks. If that projection proves prescient, GM's stock will deserve consideration from long-term investors. Although down 22% this year, GM's outstanding assets and growth prospects are undervalued by the market.
These funds might benefit from what's being called a golden age for the fuel.
By Don Dion, TheStreet
Though wildly popular, the natural-gas industry has been notoriously tricky to target from an investment perspective. Fans of the fuel, however, were given a welcome vote of confidence this week when the Energy Information Administration released a shining forecast for the industry.
On Monday, the agency reported that a combination of factors, including abundant supplies, soured sentiment toward nuclear energy, and rising demand from emerging markets, have set the stage for what could prove to be a golden age for natural gas.
Looking to the next quarter century, the EIA forecasts that natural gas use could jump by as much as 50%. By 2030, the group notes that demand for natural gas could surpass that of coal.
Unlike Tuesday's sucker punch, a real rally must be based on lower stock prices and positive changes.
From the beginning of the day, stocks looked downright terrific. The euro was strong, and oil was moderating while copper hung in. Translation: The U.S. got the benefit of a weaker currency for export, while oil bucked the rally because OPEC was going to supply more crude. And copper showed us that the weakness in crude wasn't economically related but more about oversupply.
The trinity that has mattered kicked in.
But by the end of the day, while the dollar stayed weak and copper hung in, oil reversed, not budging, and $3.50 gasoline -- what we need to get this economy on a slightly better keel -- remained elusive. The dollar-euro relationship that had been good for stocks for most of the year failed to spur hedge fund buying, and traders who came in during the morning were left holding the bag.
The price-to-earnings ratio could be cheap or just right. It all depends on your time frame.
In other countries, courts are becoming more accepting about using Facebook to send notices to people who can't otherwise be found.
Legal cases grind to a halt when people can't be found to get served with court notices, Bloomberg reports. But sometimes when they can't be found in person, they can be tracked down on Facebook.
Courts in New Zealand, Canada and other countries are becoming increasingly comfortable with serving papers over Facebook. In Australia, one lawyer used the website to serve a foreclosure notice to one couple who defaulted on their loan. So far, we haven't seen Facebook used to serve papers in the U.S.
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Try as the bears might, they couldn't break US stocks. But investors still face frothy prices and considerable headwinds.
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[BRIEFING.COM] Stocks entered the weekend on a mixed note as the S&P 500 shed 0.1% while the Dow ended with a gain of 0.1%.
The major averages began the day on a lower note as nine of ten sectors saw losses of more than 0.5%.
The consumer staples sector was the lone exception as the group spent the entire day in positive territory thanks to the relative strength of Dow component Procter & Gamble (PG 81.89, +3.19). The second-largest staple stock advanced ... More
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