Why stocks are in for a rough ride this week
Stocks in for a rough ride this week

Longtime market bull Jeremy Siegel says investors could realize the market is behind the curve on interest rates.

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Bullish option plays are piling up for a pair of emerging market ETFs. Those who believe in a year-end rally can buy in on the next pullback.

By MoneyShow.com Oct 27, 2011 11:50AM

By Tom Aspray, MoneyShow.com


It has clearly been a rough year for emerging markets, and investor sentiment towards the emerging markets has dropped for most of the year. Inflationary pressures caused many countries including India and China to raise rates early in the year, while Brazil has lowered rates twice since August.


Fears surrounding another recession have outweighed inflation concerns in Brazil even though the current inflation rate is 7.3%. China has also been cutting rates, but the markets were encouraged by recent data showing the manufacturing sector in China was improving. The International Monetary Fund (IMF) is projecting a 6.1% growth rate for the emerging markets in 2012, as compared to only 1.9% in the developed world.


A bet on the emerging markets is consistent with my view that the US economy is really stronger than most expect. Option traders appear to agree, as option volume in two key emerging-markets ETFs has surged.

 

Worries over US defense budget cuts has created a buying opportunity for long-term investors.

By TheStockAdvisors Oct 27, 2011 10:21AM
By Benjamin Shepherd, Personal Finance

Northrop Grumman (NOC) trades at 1.3 times the company’s book value and 0.5 times sales -- a bargain for a company expected to grow  revenues at an average annual rate of 9% over the next few years.

The stock has pulled back by 15 percent this year because of a recently passed deficit-trimming measure that would cut $350 billion from planned national defense spending over the next 10 years. 
Tags: NOC

Some boozy investments can give your portfolio a buzz.

By InvestorPlace Oct 27, 2011 9:11AM
Image: Wineglass (© Stockbyte/Photolibrary)By Charles Sizemore, The Sizemore Investment Letter


Perhaps the stress of the 2011 "mini bear market" has my nerves a little frayed -- or perhaps it's the celebratory atmosphere here in Dallas on the potential eve of the Texas Rangers' first World Series championship getting the better of me -- but I find myself thinking a little too much about booze these days.


For an investor, this is not necessarily a bad thing. Alcoholic beverage stocks have had a good run, and most have handily beaten the S&P 500 this year.

 

Bearish investors positioned for complete failure of the EU summit blew it.

By Jim Cramer Oct 27, 2011 9:09AM

Image: Businessman reading newspaper © A. Chederros/ONOKY/Getty Imagesthe streetLet's use this higher opening off the Europe deal as a microcosm, an incident that explains much of what happens in the stock market Thursday.

 

First, a proposition. Let's say I was bearish going into the EU drama session last night, meaning that my book was net short, classically meaning that I would make money if the market went down and would expect to lose if it went higher.

 

Higher crude prices boost the oil producer's earnings, while Procter & Gamble's results meet estimates.

By TheStreet Staff Oct 27, 2011 8:45AM

By Andrea Tse, TheStreetTheStreet

 

Updated at 9:05 a.m. ET

 

Oil producer Exxon Mobil (XOM) reported third-quarter earnings of $2.13 a share, beating the average estimate by a penny. Profit rose 41% as higher prices for oil and natural gas compensated for lower production.


Procter & Gamble (PG) posted fiscal-first-quarter earnings of $1.03 a share, in line with estimates, as sales rose 9% to $21.92 billion. Full-year earnings from continuing operations are expected to rise as much as 10% to the range of $4.17 to $4.33 a share. Analysts expect fiscal-year earnings of $4.20 a share on revenue of $87.12 billion.

 

Despite a stellar quarter, the company saw its share price drop as investors await dividend news.

By Benzinga Oct 26, 2011 7:01PM
The old slogan for Ford (F) used to be, "Have you driven a Ford lately?"

For more drivers, the answer appears to be yes, judging by the automaker's third quarter report Wednesday.

Ford reported a profit of 46 cents per share on $33.1 billion in revenue, beating analyst expectations of 45 cents per share on $29.86 billion in revenue. The company also increased its estimate for fourth quarter production by about 22,000 units to 1.4 million.

 
Tags: F

Here are the real facts on foreign oil, the U.S. debt, and buying American.

By Motley Fool Pick of the Day Oct 26, 2011 4:37PM

By Morgan Housel

 

At a conference in Philadelphia earlier this month, a Wharton professor noted that one of the country's biggest economic problems is a tsunami of misinformation. You can't have a rational debate when facts are so easily supplanted by overreaching statements, broad generalizations, and misconceptions. And if you can't have a rational debate, how does anything important get done? As author William Feather once advised, "Beware of the person who can't be bothered by details." There seems to be no shortage of those people lately.

 

Here are three misconceptions that need to be put to rest.

 

Misconception: Most of what Americans spend their money on is made in China.

 

The fertilizer maker announced a slight miss, but rising prices are helping Yara ride a wave that investors like to see.

By Jim J. Jubak Oct 26, 2011 4:24PM
Companies such as Cummins (CMI) are reporting big positive earnings surprises for the third quarter -- 11 cents a share above consensus for Cummins, for example -- and then seeing shares get slaughtered after warning investors about weakness in the fourth quarter. (Cummins, a member of my Jubak’s Picks portfolio, fell 5.1% the day of its news.)

Norwegian fertilizer maker Yara International (YARIY) did just the opposite. The company announced a slight miss, with EBITDA (earnings before interest, taxes, depreciation, and amortization) coming in about 2% below consensus, warning investors about a weaker fourth quarter. But then it signaled a stronger fourth quarter.
 
Tags: CMIYARIY

Long-term performance is more about common sense. Hence the beauty of the Dogs of the Dow.

By MoneyShow.com Oct 26, 2011 3:11PM

By Jim Trippon, Global Profits Alert


There's a history of investor interest in the 30 stocks and their dividends that comprise the Dow Jones Industrial Average ($INDU).


There's even an approach called "Dogs of the Dow," which Michael O'Higgins featured in his book "Beating The Dow." Its relative simplicity struck a chord with many investors.

 

While the post-earnings fallout at Amazon rivaled that of Netflix, the two companies are nothing alike.

By TheStreet Staff Oct 26, 2011 3:01PM

the streetBy Jeanine Poggi, TheStreet

 

Amazon (AMZN) is nothing like Netflix (NFLX).

 

Despite a similar after-hours massacre following its third-quarter earnings report and a blurry fourth-quarter outlook that could turn out to be a loss, Amazon's business isn't broken like Netflix's is.

 

Ford CFO Louis Booth said the company may start paying shareholders a dividend before its credit reaches investment grade.

By TheStreet Staff Oct 26, 2011 2:54PM

By Ted Reed, TheStreetTheStreet

 

Ford (F) chief financial officer Lewis Booth says the automaker is moving toward paying a dividend.

 

Previously, Ford had said that it would like to reach investment grade before it paid a dividend. 

 

Apple's new iPhone 4S may have some owners of RIM's phone ready to jump ship, one company says.

By Kim Peterson Oct 26, 2011 2:53PM
The recent launch of the iPhone 4S appears to have triggered an unusually high number of BlackBerry trade-ins.

Gadget recycling service Gazelle says the number of BlackBerry users looking to ditch their phones has spiked 80% since last week, Cnet reports.

Apple's (AAPL) new phone contributed to the sudden urge to purge. But the recent outage of the BlackBerry email and messaging systems probably didn't help either. 

Other software companies have incorporated the slide-to-unlock system, potentially leaving themselves open to lawsuits.

By Kim Peterson Oct 26, 2011 2:07PM
If you have a smartphone, you've probably used the slide-to-unlock feature to make a call or check your mail. This week, Apple (AAPL) won the patent for that feature.

Apple first applied for the patent in 2005 (you can read the patent here), long before the first iPhone was unveiled. The idea is simple: A device with a touch-sensitive display may be unlocked via gestures performed on the touch-sensitive display. 

A Fidelity fund manager focuses on the higher-quality side of junk bonds.

By TheStockAdvisors Oct 26, 2011 1:15PM
By Jim Lowell, Fidelity Investor

Investors have been selling out of junk bonds and junk bond funds based on fears of potential outcomes rather than on known fundamentals.

I'm now recommending Fidelity High Income (SPHIX) to capitalize on this currently unloved and, I think, undervalued portion of the bond market. 

Bullish signals from the oil market suggest the economy and stocks may be healthier than thought.

By MoneyShow.com Oct 26, 2011 12:38PM

By Tom Aspray, MoneyShow.com


December crude oil futures hit a low of $75 per barrel in early October and closed Tuesday at $93.47. This is a gain of more than 24% through Tuesday's close, while the Spyder Trust (SPY) has gained just over 14% during that time.


More importantly, the December 2011 crude contract is trading above the January 2012 contract. This is the first time this has occurred since November 2008. With crude oil moving into "backwardation" (the nearby contracts are higher than the further-out contracts), it indicates that the market believes demand will be greater than supply going forward. The December contract for 2011 is trading $1.47 above the December 2012 contract.

 
Tags: oilSPY

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[BRIEFING.COM] The major averages ended the midweek session with slim gains after showing some intraday volatility in reaction to the release of the latest policy directive from the Federal Open Market Committee. The S&P 500 added 0.1%, while the relative strength among small caps sent the Russell 2000 higher by 0.3%.

Equities spent the first half of the session near their flat lines as participants stuck to the sidelines ahead of the FOMC statement, which conveyed no changes to the ... More


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