The chain still has quality management and strong retention rates.
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The 3-day relief rebound hits a wall as the S&P 500 bonks its head on the 50-day moving average.
After last week's dramatic sell-off -- with the S&P 500 losing 3.6%, culminating with a washout on Wednesday -- the bulls have managed to string together a nice relief rebound rally. Monday marked the third straight up day. So that's it, right? With Japan's nuclear disaster coming under control and Libya's airspace filled with Western fighter jets, are stocks ready for another big uptrend?
Not quite. There are issues with the recent rebound. It came on light volume and disappointing breadth -- a sign that investors still aren't excited about stocks at these levels. And on all three days most of the gains came in the opening minutes of trading. The lack of intra-day follow through points to a lack of enthusiasm. Most importantly, key sector groups that have led the decline -- technology and semiconductors -- continue to lag badly.
Various technical and momentum indicators suggest this was a temporary reprieve within a medium-term downtrend -- a downtrend that's being powered by indications economic growth is set to slow.
Stocks are allegedly cheap now, at 15.7 times 2010 earnings. And they are cheap by historical standards.
Profit margins are a tick away from all-time highs and are creating the impression of cheap equity valuations. But that impression is a mirage, because today’s generous margins are destined to shrink.
I first wrote about this in January 2008, and here is an update to that article. All I had to do was to update a chart and the numbers in the article and add a few comments – all of them are underlined.
Stocks are allegedly cheap now, at 15.7 times 2010 earnings. And they are cheap by historical standards. Only 10 years ago, their price/earnings ratios were double today’s; they are even cheaper if you compare their forward (2011) earnings yield of 7.3% to the 10-year Treasury yield of 3.40%. They are cheap, cheap, cheap!
Or so we’ve been told.
Only if Amazon is, too.
By Tim Beyers
Some days, watching the tech news cycle is like watching a soap opera. The Web is abuzz today with news that, on Friday, Apple (AAPL) sued Amazon.com (AMZN) for violating its trademark on the term "app store." Amazon's using the term to describe the digital market for Android apps that it's launching today.
On the surface, the suit seems loony. Don't we all use "app" and "app store" as generic terms? With each, we're describing broad concepts. Sure, iPhones have apps -- but so does every other smartphone out there. And where do we get these apps? App stores, of course. Even Steve Jobs says so. Microsoft (MSFT) has filed a petition to invalidate Apple's app store patent precisely because of our propensity to use these terms in common speech.
But don't be too quick to burn your mock turtleneck in protest. Amazon.com may have opened this particular can of worms when it patented "one-click checkout" more than a decade ago. Apple has since licensed the term for use in its own digital stores.
Investors love JPMorgan's role in the AT&T acquisition of T-Mobile, and one prominent analyst says the bank could eventually net $500 million on the deal.
By Philip van Doorn, TheStreet
As Wall Street digests AT&T's (T) agreement to acquire T-Mobile from Deutsche Telekom AG (DTE), excitement is brewing for the potential fee and interest income JPMorgan Chase (JPM) and other players can earn from the merger and from subsequent deals.
AT&T agreed to pay $39 billion -- including $25 billion in cash - with reports indicating that JPMorgan had provided AT&T a $30 billion line of credit. Richard Bove of Rochdale Research said that the reports suggested that JPMorgan didn't "syndicate this credit because AT&T did not want any word of its potential bid to leak out."
If this is indeed what has taken place, Bove estimates that JPMorgan's fee for the credit line could be as high as $150 million.
The social-networking site plans a $175 million initial public offering this year. With video updates.
The site adds about 1 million members every week, the company said in a blog post. More than half of its members are outside the U.S., with the fastest growth coming from Brazil, Mexico, India and France.
Of all the major social-networking sites, LinkedIn is the one I use the least. But other people seem to like it. The company says nearly 1 million of its members are teachers, 1,030 are chocolatiers and 74 are "Elvis tribute artists."
Post continues after this video about LinkedIn and other networking sites:
The company hopes its PlayBook will make a splash in a market dominated by Apple's iPad. With video updates.
The PlayBook will be available April 19 in North America. The Wall Street Journal calls the device the "most important launch in years" for RIM, which also makes the BlackBerry line of smartphones. It will cost between $499 and $699, depending on the bells and whistles.
Why is the PlayBook so important? Because after years of trying to court consumers, Research In Motion is losing significant market share in North America. The competition has simply been too fierce, with Apple's iPhone and a host of new phones based on the Android platform from Google (GOOG) stealing customers from the BlackBerry.
Post continues after this video discussing the tablet wars:
The airline has raised ticket prices 6 times this year, but that seems not to have dented business much. With video updates.
Higher airfares are a bummer, unless you're the chief executive of Southwest Airlines (LUV). Gary Kelly said he's had "delightful success" bumping up ticket prices to pay for higher fuel costs.
I doubt any of Southwest's passengers would describe the higher fares as delightful, but the price hikes didn't keep them away. In fact, Southwest's passengers flew 13% more in February than a year earlier. That's why Southwest isn't ruling out future fare increases, The Associated Press reports.
"We've had six fare increases so far this year. That's a lot in 90 days," Kelly said at an investor conference, the AP reports. "On the other hand, our traffic has held up more than well -- it's been very, very strong."
Post continues after this video analysis of Southwest's recent earnings:
A lot has changed in the past 3 months. Here are the best stock opportunities for the second quarter.
When we zoomed into the first quarter, we had a multi-cylinder market.
Smart devices were powering a tech boom. Big exporters were taking advantage of robust economies in East Asia and a renewed Europe that seemed to put its troubled finances behind it. Banks, having paid back TARP, were ready to return capital. Health care, freed from the cloud of regulation, seemed ready to take off.
What a difference three months can make. European debt concerns resurfaced, and interest rates have climbed ever higher in Portugal, Greece and Spain. North Africa and the Middle East played dominoes, started by political uprisings in Tunisia that dropped into Egypt and then headed for Bahrain and Saudi Arabia before landing in Libya, driving oil up to $100 a barrel in their wake.
T-Mobile users are up in arms about the proposed acquisition. With video updates.
"It's hard to find winners, apart from AT&T and T-Mobile shareholders," Om Malik writes on the GigaOM technology blog. The biggest losers in the deal, he says, would be consumers. That's because T-Mobile has offered cheaper voice and data plans and because the market would have only three main national players: AT&T, Verizon (VZ) and Sprint (S).
Phone handset makers would also lose, Malik writes, because there would be one less carrier that would buy GSM-based phones from shops like HTC and Motorola (MSI).
T-Mobile customers are up in arms. Having your carrier acquired by the worst cellphone company in the U.S. wouldn't make anyone happy.
Post continues after this video of the head honchos at both companies defending the deal:
Be more bullish about the broker if it can seal the deal.
By Rick Aristotle Munarriz
The leading discount broker is offering 1.02 shares for every share of the options trading specialist. The value will fluctuate as Schwab's stock goes up and down, but it was a 17% premium based on Friday's close of both equities.
It's a great deal for Schwab. It's nabbing a rising star in options trading at the right time and at a small premium. The same can't necessarily be said for optionsXpress. Its shares traded as high as $21.07 just three months ago. Why is it cashing out for less than $18 based on the initial deal?
The nation's largest retailer has been in a nerve-wracking US slump. Can it revive its sluggish business? With video updates.
The nation's largest retailer has stalled, unable to climb out of the worst U.S. sales spiral in its history. For seven straight quarters, U.S. sales have dropped -- an alarming trend that the company is scrambling to break.
The company made some bad calculations, particularly as the economy was heading downhill. The stock has been a nonperformer, dropping nearly 6% in the past year to $51.89. Its three-year stock performance isn't pretty.
What went wrong at Wal-Mart? Here are four huge problems that the company needs to address:
Sprint's stock sinks after AT&T says it will acquire T-Mobile. Shares of Leap, MetroPCS and US Cellular rise. Plus, video analysis of the deal's regulatory hurdles.
By Scott Moritz, TheStreet
AT&T's (T) plan to buy Deutsche Telekom's (DT)T-Mobile, the fourth-largest telecommunications company, would create the nation's biggest phone service provider and leave a pile of winners and losers in its wake.
While the $39 billion cash-and-stock deal, if approved after a long review, won't close for another year, investors are staking their positions now. And early moves indicate that Wall Street is gearing up for deal time in telecom.
Industry giants like Caterpillar aren't the only players that will benefit from post-quake reconstruction.
By Jake Lynch, TheStreet
But two smaller companies, whose shares have recently climbed, are Chicago Bridge & Iron (CBI) and Clean Harbors (CLH). With market values of $3.8 billion and $2.5 billion, respectively, they are Japan-rebuild plays that demand consideration. They have clean balance sheets and competent stewardship. Below is a closer look. Still, investors ought to do further research.
The goal is to preserve last week's gains.
As expected the market took a tumble last week. The S&P 500 lost nearly 2% during the five days of trading, but the results could have been much worse. Late in the week buying kept the damages to a minimum.
Disaster in Japan, worries about inflation, geopolitical risks were the excuses for the pull-back. Remove the headlines though and stocks on pure valuation alone were due for a correction.
The best way to make money with a correction is to trade exchange traded funds with a long/short approach. Last week’s pick of the ProShares Ultra Short Technology ETF (REW) worked perfectly gaining 5.5%.
I would lock in those gains and replace this fund with the ProShares Short S&P 500 (SH) for this week.
If the $39 billion deal is approved, there will be big changes in store for consumers.
By Jeff Reeves, Editor of InvestorPlace.com
For T-Mobile customers who thought they would never see an iPhone on their network, your day has come. Kind of.
AT&T Inc. (T) has announced plans to buy T-Mobile USA from parent Deutsche Telekom in a $39 billion deal, creating the largest cellphone company in the U.S. With nearly 130 million subscribers, the move, if approved by regulators, would put AT&T handily above rival Verizon (VZ) and its 102 million customers.
The red tape will take a full year to unwind, according to estimates, but when it's over, the buyout will mean big things for all cellphone customers, not just T-Mobile users. Here are five ways the buyout changes the game for everyone:
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Home Depot's CEO says home improvement sales are directly tied to the value of homes.
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[BRIEFING.COM] The S&P 500 (-0.5%) has cracked fresh lows as the downtrend persists. Heavily-weighted technology (-0.6%) and health care (-0.8%) continue setting the general direction while the notable underperformance of consumer staples (-1.4%) adds to the downward pressure.
Meanwhile, the consumer discretionary sector (-0.5%) is nearing its session low after displaying some relative strength in the early going. Apparel manufacturers are contributing to the retreat after ... More
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