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Analysis: Limits on conventional energy development and excessive optimism about alternative energy technologies are making the US more dependent on imported oil.
By Peter Morici, guest contributor to TheStreet
Turmoil in the Middle East and elsewhere has pushed oil prices up more than $20 a barrel and average gasoline prices from less than $3 a gallon to about $3.60.
All the additional cash spent on imported oil that does not return to buy exports translates into lost demand for U.S. goods and services, lost growth and fewer jobs. Higher gas prices simply mean fewer cell phones, restaurant meals and other goods purchased that create jobs.
Most economists built some increase into 2011 GDP forecasts, but the recent surge, if it sticks through spring, will reduce U.S. growth from 3.5 to 4% to 3 to 3.5%, perhaps less. Overall, that translates into at least 600,000 fewer jobs, or nearly 50,000 a month. Moreover, lost taxes exacerbate federal and state budget problems.
As investors rebuild confidence in the emerging world, Chile, Peru and Colombia look attractive.
By Don Dion, TheStreet
Latin American and other emerging markets have run into headwinds in recent weeks. As rising commodity prices and inflation fears weigh heavily on volatile regions, many investors have redirected their attention toward more stable, developed nations, such as the U.S. and Canada.
Although its popularity has waned, the region south of the United States remains attractive. Aside from its proximity to the healing U.S. economy, Central American and South American countries continue to offer a welcome source of relative political and economic stability.
In 2010, I turned to nations such as Mexico in response to Europe's looming debt crisis and doubts regarding China's long-term growth. Today, the international picture has witnessed little change; the European Union remains embattled with its debt problem, while political unrest across the Middle East and Northern Africa is making headlines and raising concerns about the future stability there and the price of oil.
The coffee giant is celebrating its birthday with a new logo and new menu items. Later this week, it will give out free petites samples to customers.
Four decades later, I'm willing to bet Starbucks' coffee isn't as good now. But that doesn't matter much, as the company is doing just fine with more than 15,000 stores in 50 countries. Its stock price has soared 45% in the past year to $34.28.
To celebrate its 40th birthday, Starbucks is rolling out a few changes. First, a new look in its stores and on its cups focused on its siren logo. The company removed its name from the logo, choosing instead to feature only the image of a siren, or sea nymph. Four stores in Beijing, Paris, London and New York City will unveil the new logo in their signage this week.
Investors panic as one Hollywood studio unveils a plan to rent and sell movies via social networking.
Starting today, Facebook users can watch "The Dark Knight" on this page after paying 30 Facebook credits (10 credits cost $1). You get 48 hours to watch the movie after renting it. The new offering is part of a Warner Bros. plan to make films available for rental or purchase directly from Facebook.
It's a fascinating move for Facebook, a company that hasn't focused that much, at least not publicly, on becoming an entertainment hub. And the "Dark Knight" page seems more experimental than anything else at this point. While watching the movie, Facebook users can post comments, chat with friends and update their status, The Hollywood Reporter notes.
Diversify to protect against volatility.
By Don Dion, TheStreet
Silver and gold have taken center stage as demand for defensive assets drives both resources to breathtakingly high levels. Though staggering at the start of this week, they have shown no signs of slowing.
Thanks to exchange-traded funds, precious metals have become as easily accessible to retail investors as stocks and bonds. Investors can gain access to a physical stockpile of these shiny metals through funds such as the iShares Gold Trust (IAU) and the iShares Silver Trust (SLV).
In response to the upward action from gold and silver, both IAU and SLV have become attractive investments. Though they are enticing, it is important to avoid blindly diving into either of these funds.
It's tempting to make some purchases, but no market can be trusted without a tangible resolution in Libya.
No rally can be trusted right now. To distrust a rally doesn't mean you bet against it; it means you don't buy it. It doesn't mean you can't sell something into it; it does mean you better have ironclad proof, beyond a decline in oil futures, that there is some sort of tangible resolution in Libya.
It means you have to know that the "Days of Rage" in Saudi Arabia will be tame or that the president is going to really stand by the Saudi/Bahrain monarchies.
It means, I think, that there is too much on the line to say, "Oil down, futures up, party on."
The mining industry is still in a spending mood, and this equipment-maker is seeing increased demand.
The chills and thrills of small-cap investing.
By Rex Moore, Motley Fool Top Stocks Editor
Last Tuesday: ZAGG (ZAGG) is a high-flying $200 million story stock, hopeful of gobbling up market share for the screen protectors and cases it provides for all manner of electronic devices.
Wednesday: Apple (AAPL) introduces the iPad 2 and, along with it, a nifty, gee-wiz "Smart Cover" that not only doubles as a stand but also self-cleans the screen. Immediately after, ZAGG loses a quarter of its value and its story is over as the market realizes it has no hope of competing against the giants of the industry -- giants who can accidentally step on this tiny company without even knowing it.
Thursday: Investors awake and are struck with the realization that, hey, even with the Smart Cover, iPad users may still want a screen protector, right? And did we forget this has absolutely no effect on smartphones and iPods and all the other devices ZAGG covers? Suddenly, ZAGG is up 20% and has its story back.
As downside risks grow, the Nasdaq falls through technical support while traders rush to buy protection.
It's been a historic run higher for stocks -- on a scale that hasn't been seen since the late 1990s. And it's one that was driven by expectations for more robust economic growth and a surge of easy money from the Federal Reserve's $600 billion money-printing operation.
Just look at this: Through Friday, the Nasdaq Composite has closed above its 50-day moving average for 126 consecutive trading sessions. That kind of consistency has been seen only a few times in the past 40 years. On average, excursions above the 50-day average last just 24 days. The longest consistent rally was back in 1983 at 227 days -- a feat that coincided with the triumphant defeat of inflation and the recovery from the double-dip recessions of the early '80s.
But now, as I've discussed in a string of recent columns and blog posts, these catalysts are coming to an end. During intraday trading Monday, the Nasdaq has fallen through its 50-day moving average, setting the stage for its first close beneath the important technical level since Sept. 2. Wall Street traders, for their part, are frantically preparing for more losses. Here's why.
The sandwich empire has used creative locations and a healthy image to expand internationally.
Subway had 33,749 shops by the end of last year, The Wall Street Journal reports, while McDonald's had 32,737. That makes Subway the largest restaurant chain in the world. The sandwich giant has 600 locations in the Los Angeles area alone.
And so McDonald's loses a title it has held since the early 1970s, when extensive advertising and a massive growth spurt helped it become the largest fast-food chain. But McDonald's appears to be a gracious loser in this case. We "are committed to being better, not just bigger," a spokeswoman told the Journal.
How did Subway do it? By adopting the same strategy that propelled McDonald's decades ago. It spends heavily on advertising to stay in the American diner's consciousness. And it has expanded rapidly through the same franchisee model that McDonald's favors.
DirecTV is working on a new video-on-demand service that would offer movies about a month before their DVD release.
DirecTV (DTV) thinks you will. The company wants to partner with Hollywood on a super-premium video-on-demand service that will offer movies before just about anyone else, The Los Angeles Times reports.
The service would get movies 60 days after they opened in theaters -- and at least a month before they are released on DVD. DirecTV would have the exclusive window, and for that reason the company thinks it can get away with charging $30 for a movie rental.
DirecTV is working with 20th Century Fox, Sony Pictures and Warner Bros. on the service, and it may get participation from Walt Disney Pictures as well. The only major studios that aren't jumping in, it sounds like, are Paramount Pictures and Universal Pictures.
These companies have rebounded the most since the market hit its bottom in March 2009.
By Jake Lynch, TheStreet
Small-cap stocks have outperformed their larger rivals since the market hit its bottom in March 2009. The following small-cap stocks, members of the S&P 600 Small-Cap Index, have soared the most since then:
* Shares of restaurant owner Ruby Tuesday (RT) have risen 1,289% since the March low.
Ruby Tuesday's fiscal second-quarter profit grew from $430,000, or 1 cent per share, to $4.6 million, or 7 cents. Revenue grew 6.2% to $290 million. Ruby Tuesday held $8.1 million of cash and $291 million of debt at quarter's end. Its stock trades at a forward earnings multiple of 12, a 47% discount to rival stocks. Half of analysts who follow Ruby Tuesday rate it "buy."
Traders react to intense fighting between Libyan government forces and rebels that raised the prospect of a prolonged cut in crude exports.
Oil prices climbed to near $106 a barrel today as intense fighting between Libyan government forces and rebels appeared to be turning into a civil war and raised the prospect of a prolonged cut in crude exports from the OPEC nation.
By early afternoon in Europe, benchmark crude for April delivery was up $2.25 to $106.67 a barrel, the highest since September 2008, in electronic trading on the New York Mercantile Exchange. The contract had gained $2.51 to settle at $104.42 a barrel on Friday.
In London, Brent crude for April delivery was up $1.80 to $117.77 a barrel on the ICE Futures exchange.
Keep an eye on funds tracking oil, retail, gold, China's emerging middle class and Sweden's stable economy.
By Don Dion, TheStreet
Here are five exchange-traded funds to keep an eye on this week.
Oil has been on the minds of investors around the globe as political turmoil pushes the price of crude north of $100 a barrel. As we head into the week, the protests sweeping the Middle East and North Africa show little signs of waning, and once again market confidence will likely be tested.
USO has seen a steep run-up over the past few weeks and is currently testing $42. This will be interesting to watch. Since late 2009, it has proved to be a point of resistance on a number of occasions.
We're in a sideways market with plenty of headwinds, so it's no time to be a hero.
The sustainability of economic recovery is in question with oil holding steady above $100 a barrel. Fortunately for the market, stocks received a jolt late last week with a jobs report that kept spirits high.
Without that boost, stocks would have been down 1% to 2% last week. Thanks to late gains Friday, the market closed the week with a fractional gain. Where will we trade this week?
That is hard to say. Certainly the momentum from a stronger economy will help. That said, many publicly traded stocks are fully valued at the moment. Only significantly stronger operating results will move stocks higher.
I'm still playing it safe with my ETF picks. My choice to highlight this week goes back to the ProShares Credit Suisse 130/30 (CSM).
The long-short approach is the right pick for a market with downside risk. With this fund, the emphasis is on the long side, with its 130% exposure to stocks, but what I really like is the 30% short exposure.
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The struggling electronics retailer is looking like a bad buy to some investors
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[BRIEFING.COM] The S&P 500 has spent the past 30 minutes near the 1672 level as quiet afternoon action continues.
There was no economic data reported yesterday or today, but that will change during the second half of the week. Tomorrow, Federal Reserve Chairman Ben Bernanke will testify before Congress in a highly-anticipated event, which is likely to receive added attention as investors look for changes to the Fed's policy course.
In addition, April existing home sales will ... More
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