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Be wary of dire market forecasts

The most likely scenario is that the markets will begin to rise from here -- and that bounce is just beginning to take hold.

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BofA technical analyst doesn't put much hope in a Santa Claus rally.

By The Fiscal Times Dec 20, 2011 1:48PM
Bank of America StockBy Suzanne McGee, The Fiscal Times

Mary Ann Bartels, head of technical analysis at Bank of America Merrill Lynch, warned investors Monday that the Standard & Poor’s 500 index fell below its 50-day moving average last week and is now about to start testing the lows last seen in October, around 1,074 to 1,100.

Bertels gives even odds that those levels might not hold either, and that the S&P 500 might fall further, potentially dipping as low as 935 to 985. The index lost 1.2% on Monday to close at 1,205.35, but Bartels' forecast lows would mean a drop of another 22.5%. 

Higher commodity costs are only part of the problem.

By Jonathan Berr Dec 20, 2011 1:27PM
 (© David Arky/Corbis)Shares of General Mills (GIS) slid 2.5% in midday trading Tuesday after the maker of Cheerios reported disappointing quarterly earnings with costs rising faster than sales.

Though higher commodity prices are being blamed, there is another less well-known reason: People are eating less cereal.

Though nutritionists have said for years that breakfast is the most important meal of the day, it is also the most rushed. Research from the NPD Group shows that the average American spends about 13 minutes each day preparing and consuming breakfast.  
Tags: GISKMCD

Nevada attorney general accuses the company of document fraud and illegal fee-splitting. Shares are likely to continue to decline.

By MSN Money Partner Dec 20, 2011 12:11PM

PhotoAlto/Eric Audras/PhotoAlto Agency RF/Getty ImagesBy: Abigail Field


The shares of Lender Processing Services (LPS) came under fire Friday, dropping nearly 20% on unusually high volume after Nevada Attorney General Catherine Cortez Masto filed fraud charges against the company.


Although LPS, a billion dollar company by market capitalization, has several business lines, the fraud charges relate to its largest (by revenue) default services division. Given the nature of the charges and the mound of evidence AG Masto cites in the complaint, Friday’s fall in share price is likely only the beginning.

 

The 2011 flop was overdone, so buy CAT for the New Year.

By InvestorPlace Dec 20, 2011 12:05PM

Photodisc Green/Getty ImagesBy Dan Burrows, CBS MoneyWatch columnist


After nearly quintupling from the bear-market bottom of 2009, shares in Caterpillar (CAT) have had a lousy run in 2011. That's great news for investors looking to build a position in this high-quality stock on the cheap.

 

Caterpillar is the world's largest maker of construction and mining equipment, and it's trading at bargain-basement levels with fears of a global economic slowdown more than baked into its share price.

 

Eli Lilly is initiated with a 'sell,' while Cablevision is downgraded to 'neutral.'

By MSN Money Partner Dec 20, 2011 12:00PM
Information provided by Theflyonthewall.com

Tuesday's noteworthy upgrades include:
  • F5 Networks (FFIV) upgraded to Outperform from Perform at Oppenheimer
  • KLA-Tencor (KLAC) upgraded to Overweight from Neutral at JP Morgan
  • Edwards Lifesciences (EW) upgraded to Top Pick from Outperform at RBC Capital
  • OGE Energy (OGE) upgraded to Buy from Hold at Jefferies
  • Life Technologies (LIFE) upgraded to Buy from Hold at Maxim
 

This low-priced telecom stock could be set to outperform Wall Street's expectations.

By TheStockAdvisors Dec 20, 2011 10:50AM
Maciej Frolow/Brand X/Getty ImagesBy Paul McWilliams, Next Inning

While I wouldn't yet call Alcatel-Lucent (ALU) a "value" play, my outlook for the company has improved and I think in the mid one dollar range it merits consideration as a speculative investment.

The price of ALU has declined for several reasons. While ALU has reported earnings above the consensus of the covering analysts during the first three quarters of 2011, it has done so while reporting revenues below the consensus estimates. 
Tags: ALU

We need some real signs that the Europe situation is under control.

By Jim Cramer Dec 20, 2011 10:20AM

TheStreetAh, so it's German business confidence that holds the key. That's how we can rally so convincingly. It took only one good confidence number, as well as a Spanish bond auction that wasn't a disaster, and all is well again with the CurrencyShares Euro Trust (FXE) above 130 and the European stock markets rallying with alacrity. 


Oh, if only it were that simple. If only it were like the old days, with a garden-variety recession and a chance that we could come out of it with a couple of good indicators. Unfortunately, it isn't. 

 

With the youngest fleet of offshore supply vessels, this firm is seeing growing demand for its services.

By TheStockAdvisors Dec 19, 2011 5:30PM
 (© Scott Gibson/Corbis)By Brendan Coffey, Cabot Global Energy Investor

By the middle of this decade, oil drawn from the seabed more than 2,000 feet beneath the ocean’s surface will double in volume compared to 2010 levels.

Hornbeck Offshore Services (HOS) provides technologically sophisticated offshore supply vessels (OSVs) and transport vessels for the oil and gas industry. It has the youngest fleet of OSVs in the industry, and its ships are designed from scratch. 
Tags: HOSoil

Investors are hoping for a smooth transition of power for Kim Jong Un, but questions abound.

By Jim J. Jubak Dec 19, 2011 5:16PM
I don’t remember asking for this in my Christmas stocking: More uncertainty -- this time from North Korea.

The death of North Korea’s Kim Jong Il Saturday has thrown Asian markets into a tizzy. That’s what happens when a totally opaque country with a collapsing economy just happens to own nuclear weapons. The fear is that Kim Jong Un, the designated successor to the "Dear Leader," doesn’t have a very secure grip on power and will feel compelled to solidify his control with a bit of military adventurism such as a new nuclear test or a new shelling attack on South Korean territory. 
 

The aluminum producer is profitable, streamlined and ready to roll.

By InvestorPlace Dec 19, 2011 5:15PM

By Jeff Reeves


When Alcoa (AA) reported earnings in October, CEO Klaus Kleinfeld told investors, "Alcoa is a confident company in a nervous world. We are well prepared for whatever lies ahead, with more cash on hand, lower debt and continued focus on profitable growth."


It would be natural to write off those comments as mere platitudes for Wall Street's grumpy traders. But taking a closer look at Alcoa across the past several weeks has made me agree with Klaus -- and consider AA stock as a bargain buy to hang on to across 2012.

 

The outlook may be dimming for this fast-growing chain.

By Trefis Dec 19, 2011 4:45PM
(© Tara Moore/cultura/Corbis)Chipotle (CMG) has performed exceptionally well this year. The stock is up more than 50% year-to-date, significantly outperforming the market indices. In the last six months the stock climbed 25%, while the Dow Jones remained flat.

Investors are increasingly bullish about this restaurant chain. However, the current rally might have just pushed the envelope, and we expect this optimism will fade. Chipotle competes mostly with the quick service and casual dining companies such as Chili's, McDonald's (MCD), Burger King, Yum! Brands (YUM) and Papa John's, among others. 
Tags: CMGMCDYUM

Better growth in the US should help the Russell 2000 catch up to the larger-cap indices in the weeks ahead.

By MoneyShow.com Dec 19, 2011 4:11PM

By Igor Greenwald, MoneyShow.com


If the US economy falls into recession sometime next year as a result of the financial crisis in Europe and the slowdown in China, it won’t be for lack of effort.


Right now, the US is looking like the main global growth engine and, frankly, the only reason the remaining stock investors have to stay in the markets and not bury their money under a mattress.


Initial unemployment claims haven't been this low in three years, fueling hopes that the job market has finally turned the corner. 

 
Tags: EBIX

While bellwethers like Apple and Amazon look poised to underperform, one stock is worthy of consideration.

By MoneyShow.com Dec 19, 2011 3:38PM

 (© Comstock)By Tom Aspray, MoneyShow.com


The relative performance, or RS analysis, of the tech-heavy PowerShares QQQ Trust (QQQ) broke out last July, and while the broader markets were dropping in August and September, technology stocks held up much better.


This outperformance of QQQ versus the S&P, however, ended in early November, and QQQ has been lagging since. Sentiment on many of the tech giants has also been quite negative, as both Apple (AAPL) and Amazon.com (AMZN) have disappointed investors.

 

The investment may help alleviate investors' anxiety about the large exodus of top executives from the company.

By Jonathan Berr Dec 19, 2011 1:53PM
Saudi investor Prince Alwaleed bin Talal is investing $300 million in Twitter, adding the microblogging site to his stable of high-profile investments, including Citigroup (C) and Apple (AAPL). 

Hard times may be coming, and chocolate makes people feel better.

By InvestorPlace Dec 19, 2011 1:15PM
 (© image100/Corbis)By Jon Markman, Editor, Trader's Advantage


The past three presidential election years have been very hard on risky assets, and two of them were completely brutal.


The most recent was 2008, and if you don't remember the global financial crisis that occurred that year, you were either too young, drunk or in jail. The one before that, 2004, ended with a 9% gain but was flat or down for three-quarters of the span. And the one before that, 2000, featured the bursting of the technology bubble, with the Nasdaq 100 collapsing by 40%.


So it's no wonder that I am looking at the upcoming election year, 2012, with a jaundiced eye.

 

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[BRIEFING.COM] S&P futures vs fair value: -0.40. Nasdaq futures vs fair value: -11.30. The S&P 500 futures trade within a point of fair value.

Asian markets ended the quiet session on a mixed note. The overnight news flow was light, but the chief of Japan's pension fund GPIF said the fund is adjusting its portfolio towards greater exposure to equities.

Economic data was limited. Japan's Household Confidence slipped to 37.5 from 38.3 (previous 40.2), while the weekly ... More


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