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Large stocks are badly lagging smaller, riskier stocks in the rally out of February's low.
Small stocks, which have been leading the broad market out of February's low, have launched impressively to new highs. Over the last 21 days, the Russell 2000 small cap index has gained a whopping 13.1%, compared with a 5.5% gain in the Dow Jones Industrial Average. This has been the longest and largest string of gains for the small caps since the awesome July 2009 rally.
So this is great news, right? Well, it depends. In the early stages of an upswing, such a performance disparity between smaller, riskier stocks and larger stocks is normally a positive indication of rising risk appetites among investors, and thus presages further gains.
However, there's a catch. The fact that large stocks like the 30 name brand stocks in the Dow Jones Industrial Average including ExxonMobil (XOM) and General Electric (GE) are lagging so badly can be a cause for concern as the current rally matures.
Analysts say Dell and Hewlett-Packard should benefit as companies upgrade their computer systems.
By James Rogers, TheStreet
Based on recent figures from research firm NPD, Piper Jaffray analyst Gene Munster predicted Apple's Mac sales would rise in the coming months.
"We expect the strong year-over-year growth in NPD data that we saw in January to have continued in the month of February," he wrote in a note on Monday. "We believe this represents a buying opportunity ahead of NPD data for the month of February on March 15."
Marvell beats consensus and sees solid jumps in revenue and margins.
After the market closed March 4, Marvell Technology Group (MRVL) reported fiscal fourth-quarter earnings of 40 cents per share (excluding items). That was 3 cents per share above the official Wall Street consensus.
Revenue climbed 64% from the fourth quarter of the prior year to $843 million, just a tad above analyst consensus. Strength came in storage (sales up 5%) and networking (sales up 10%).
The best news in the current quarter, however, came on gross margins, which climbed 2.2 percentage points to hit 60%. That's an all-time high for the chip company and is significantly above the 58.6% gross margin expected by Wall Street.
Soft year-over-year comparisons could mean a February sales surge that powers AAPL shares in the weeks ahead.
In February of 2009, the Mac was looking like rotten apple for Apple (AAPL). Sales had slipped 16% year-over-year and the lack of revenue from the computer division of this gadget maker really weighed on shares.
Fast forward to this year, where consumer spending has firmed up and Mac sales growth helped AAPL post a nearly 80% earnings surprise in its latest quarterly report.
Together, these two trends could point to a blowout showing for Mac sales when February numbers are released in mid-March and power AAPL shares more than even the buzz created by its iPad launch.
One analyst puts it all on the line with one number for the S&P 500 index: 1120
Janjuah, who concedes in a note that he will "always be labeled a perma-bear," says he now sees the potential for a bullish call, according to Zero Hedge.
Here's how Janjuah lays it out: If the S&P 500 index closes above 1120 on Monday, Tuesday and Wednesday, we're going up. Next is 1150 and 1220. (Monday, the index has been hovering around 1139)
But if not,
Apple's market value has shot into the stratosphere, and it may soon be worth more than Wal-Mart.
Just a decade ago, Apple's (AAPL) market cap was several billion dollars. Now, the company's market value is nearly $200 billion, reports Tiernan Ray at Barron's.
Wal-Mart's (WMT) market cap is about $206.4 billion, which means Apple could soon overtake the No. 1 retailer in investors' eyes.
"It’s a rather stellar achievement in just a decade, without finding oil under the front porch," writes Ray.
The government's 'supertax' on banker bonuses producing large amounts of cash.
When the U.K.'s finance minister first announced a 50% tax on banker bonuses, he estimated it would raise about 550 million British pounds. Turns out it's going to raise three times that much.
In all, the supertax and other bonus taxes will bring in more than 2.5 billion British pounds, giving the government "an unexpectedly large windfall," according to the FT.com.
A budget shortfall for public schools bodes well for private education companies.
State and local governments, facing record budgetary shortfalls, are looking at tweaking the educational delivery system in search for savings. One option being explored is a four-day school week.
A shortened school week is controversial. Sure, teacher layoffs may be avoided due to dollars gained from such a shift, but surely there will be a negative impact on a child’s educational development as a result?
If so, one group possibly cheering the news is the private education business -- including online educators.
If Oscars were made of solid gold, each statuette would be worth $155,720 based on recent prices.
By Alix Steel, TheStreet
If Oscar awards were made of solid gold, Kathryn Bigelow and her movie, "The Hurt Locker," would have made nearly $1 million Sunday night.
Gold is trading for about $1,140 an ounce, almost $200 more than the same time a year ago. In March 2009, gold's monthly high was $955. This year's intraday March high touched $1,145.
Many analysts speculate that if prices can climb to $1,150 to $1,160 an ounce for several days, the precious metal could see another leg up.
More than 50 vintage Playboy issues can be browsed in Take Two's upcoming video game, Mafia II.
Playboy (PLA) has struggled to define its brand in the digital age, but may have hit the nail right on the head in its latest partnership with Take Two Interactive (TTWO) -- digitally reprinting classic Playboy issues that are integrated into the game play of the new release "Mafia II."
This is a great move for the Bunny brand, because it naturally opens the door to a slew of new prospective readers.
"Mafia II" is a mature video game title that attempts to recreate the gangland violence in the 1940s and 50s. That involves a period urban setting complete with rich details, from vintage cars to vintage firearms to even vintage Playboy magazines.
Retail sales numbers, consumer sentiment data and the Fed could all affect the market
We’ll soon get further information on how consumers are feeling with a couple of different reports. Next Friday, retail sales for February will be announced. For the previous month, retail sales were higher than expected, growing 0.5 percent…and strength was seen across virtually all sectors.
It will be interesting to see if that retail strength carried through to February. Recent jobless numbers have been higher than the market was expecting, which could translate into slower sales. And yet, the recently released Thomson-Reuters same-store sales index for February rose 4%, its best showing since November of 2007.
The health care bill, if it passes, is akin to a reverse stimulus.
By Jim Cramer, TheStreet
Could the charts be stronger? As I go through them, I am amazed that the only weak ones are the self-inflicted traders: Applied Materials (AMAT), Staples (SPLS), MasterCard (MA), H&R Block (HRB) and Western Union (WU), which either told a subpar story or literally took numbers down on the call.
Otherwise, it is all systems go with a lot of parabolic moves, especially in retail. You don't see charts like Ross Stores (ROST), F5 Networks (FFIV), Akamai (AKAM) and Macy's (M), straight up lately, unless we have a true, hard-hitting bull market going that's just zapping the shorts all over the place.
The diametrically opposed groups going up -- oil and airlines, coal and natural gas -- is just awesome bull-market behavior.
First a knock-off of Amazon's Kindle, and now a knock-off of Apple's iPad is in the works
While Apple has fans buzzing with anticipation, Sony (SNE) is quietly gearing up to unleash its own line of handheld devices to counter the iPad, the iPhone and anything else Apple has to offer, according to The Wall Street Journal.
Offerings include a touch-screen device that will directly compete with the iPad and a smartphone that can download PlayStation games -- a move intended to steal game-hungry iPhone customers.
Every weekend I analyze how the market really reacted to all the buzz with a by the numbers analysis
Value Line Index -- I use this Index because it contains 1700 stocks making it much broader than the S&P 500 or much narrower Dow 30 -- The Index was up for the week by 5.18%
- The Index plotted above its 20, 50 and 100 day moving averages -- positive trend
- Barchart's technical indicators rate the Index an 88% buy with 12 of 13 indicators on buy signals
A summary of this week's thoughts and insights from respected investors and market strategists
Warren Buffett wasn't the only top investment mind speaking out this past week. While Buffett's latest shareholder letter and appearance on CNBC dominated the investment news for a few days, a number of other strategists I keep an eye on offered their takes on where the economy and markets are headed. And, in general, their outlooks were positive -- cautious, but positive.
Some particularly interesting insight came from Liz Ann Sonders of Charles Schwab. In her latest market commentary, Sonders says two of the most-cited concerns about the recovery -- potential interest rate hikes and inflation -- are more hype than substance right now. While the Federal Reserve's increase of the Discount Rate is an example of how it has started winding down some of the short-term, emergency measures implemented during the financial crisis, the “paring back [of] broader-based support for the economy, a.k.a. rate hikes … is not imminent,” Sonders says. And while the monetary base has gone through the roof, the money multiplier has stayed on the floor, she says. Until it gets off the ground, inflation won't be an issue.
At some point, of course, the Fed will raise the key Federal Funds rate, and Sonders presents some interesting data showing how stocks and bonds fare leading up to and following rate hikes -- and it's a much better picture for stocks than it is for bonds. "This may be particularly relevant today given that individual investors are holding a near-record percentage of their assets in bonds or bond funds," she said.
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The auto parts giant beats Wall Street expectations, while continuing to expand its stores in the U.S. and Mexico.
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[BRIEFING.COM] Stocks ended modestly higher as the S&P 500 climbed 0.2%, and the Dow added 0.4% to register its 19th consecutive Tuesday of gains.
The major averages saw little change during morning action, but afternoon buying interest helped lift the indices to session highs. Most cyclical sectors (with the exception of materials and technology) finished among the leaders, but the defensively-geared health care sector settled atop the leaderboard as biotechnology outperformed. ... More
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