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Information provided by Theflyonthewall.com

Thursday's noteworthy upgrades include:

• Diamond Offshore (DO) upgraded to Neutral from Sell at Goldman
• FactSet (FDS) upgraded to Overweight from Neutral at Piper Jaffray
• Hewlett-Packard (HPQ) upgraded to Hold from Underperform at Jefferies
• Pacific Sunwear (PSUN) upgraded to Buy from Hold at Topeka
• Seagate (STX) upgraded to Buy from Hold at Deutsche Bank

 

By Tim Parker

If you were hoping to see the often reported, heavily rumored, and overhyped Apple (AAPL) iWatch this year, the chances of you getting your wish don't look good. KGI Securities analyst Ming-Chi Kuo believes that the device won't arrive until late 2014. This is particularly notable because numerous, otherwise reputable sources, like Bloomberg, have reported that the device will hit the street at the end of 2013.

It's true that this is one more analyst adding to the glut of rumors already published, but he has a stronger track record than most.

He points out that because iOS will require a series of large changes in order to accommodate the device, those changes will take time to implement. With Apple firmly focused on iOS7, it may have worked these changes into the upcoming update but Kuo doesn't see that as likely.

 

Last week, gurus finished reporting their portfolio updates for the first quarter, and buying activity was more concentrated among certain stocks than others. GuruFocus' S&P 500 Screener demonstrates that the companies the most money managers GuruFocus follows bought or increased their shareholdings of are: Apple (AAPL), Microsoft (MSFT), Citigroup (C), JPMorgan (JPM) and Oracle (ORCL).

Oracle (ORCL)

Oracle was purchased by two money managers GuruFocus follows in the first quarter, making it the fifth-most purchased of the S&P 500 ($INX). The stock in the first quarter traded between $31.25 and $36.34. On Monday, it traded at $34.90 after gaining 4.7% year to date.

 

By Zacks Equity Research

On May 21, we downgraded our long-term recommendation on Safeway (SWY) to "neutral" from "outperform" as this North American food and drug retail giant is showing signs of sluggish growth. The stock carries a Zacks Rank #3 (Hold).

Why the downgrade?

On Apr 25, Safeway reported a weak first quarter that lagged our expectations. Despite earnings growth of 16.7%, adjusted earnings of 35 cents missed the Zacks Consensus Estimate by a penny. Revenues stood at about $10 billion, flat year over year, trailing the Zacks Consensus Estimate of $10.2 billion.

Margins were under pressure in the first quarter. Despite the benefit of New Year sales, identical store (ID) sales (excluding fuel) inched up 1.5% from the year-ago quarter. ID sales growth was negated by the disposition of Genuardi's stores in 2012 and soft fuel sales.

 

When you see almost any market down 7%, it's pretty shocking -- except, perhaps, in the case of Japan. For the Japanese market, which has been walked higher for months, a 7% decline may not be all that much. This was a market that had been up about 50% year to date, so you are talking about a correction that still takes it down only to a 39% gain for 2013. An artificial market with a real correction should not play havoc with the rest of the world. But when it's in conjunction with still one more disappointing -- not horrendous, but disappointing -- manufacturing number from China, the heated U.S. market can't shake it off.

 

It's funny -- if the Federal Reserve minutes hadn't been so questioning of Ben Bernanke's bond-buying program, we might actually have had a situation that could have been shrugged off with a 4% correction -- 1.5% from top to bottom Wednesday and then 2.5% if we are lockstep with Europe Thursday. Instead, though, that dreaded fear of Fed tapering is occurring as Europe remains in a recession and as China seems to be headed into a relatively severe slowdown. As a result, this may mean that a 5%-to-7% correction over several days makes more sense.

 

By Tim Parker

Investors went from euphoric to worrisome on Wednesday as the Dow Jones Industrial Average ($INDU) saw a 200 point swing, ending 0.5% lower. Technicians note that the charts show an outside reversal. In other words -- cause for concern.

There is a global selloff taking place this morning with the Dow poised to print a triple digit point loss at the open. Will it hold through the day or will we see another big reversal like we saw Wednesday?

Morning news

• S&P 500 futures are down 19.50 points to 1636

• The EUR/USD was up at 0.23% to 1.2886

 

By David Banister

I used to half joke with some of my investing friends that the best time to buy stocks is during or right after a crash. Think 1987, 2000-2002, 2008-2009, and now -- perhaps gold miners? 

Well, before we get too far ahead of ourselves, let's examine evidence of a "crash." I like to use crowd behavioral, empirical, and technical evidence in combination.

1.  In a recent money managers' poll, virtually nobody was bullish on gold or gold stocks, and more than 80% of those polled were bullish on the S&P 500 ($INX) and U.S. stocks.

 

 

By Louis Bedigian

Electronic Arts (EA) CFO Blake Jorgensen has confirmed that, contrary to previous comments from company spokesperson Jeff Brown (and a barrage of negative tweets from an EA engineer), the company is developing games for Nintendo's (NTDOY) Wii U console after all.

According to IGN, Jorgensen made the announcement at the Stifel Nicolaus 2013 Internet, Media and Communications Conference.

"You know, I think Nintendo's business was more [an] extension of their last console," said Jorgensen, as quoted by IGN. "I think what the consumer will find is a lot more powerful gameplay with the new boxes that are coming out, and a lot of excitement, but it'll remain to be seen as to the services associated with those as to how consumers decide which direction they might want to go."

 

The ridiculousness of this market was on display Wednesday as turmoil followed the Congressional testimony of Federal Reserve chairman Ben Bernanke, as well as the release of the minutes of the last Fed policy meeting.

 

The overall theme: The market, full of overconfident and increasingly complacent investors, is fully addicted to the cheap money coming from the Fed and other global central banks.

 

By David Fabian

The search for income continues to be one of the most sought after investment themes of 2013, as investors pour billions of dollars into both fixed and equity-income ETFs.  

A quick look at year-to-date asset flows from Index Universe shows that investors are actively pursuing dividend-oriented funds such as the PowerShares Senior Loan Portfolio (BKLN) and the Vanguard Dividend Appreciation ETF (VIG).  Both of these ETFs have garnered over $2 billion in new money over the last five months alone. 

However, as the market continues to hit new all-time highs nearly every day, the yields on these securities are starting to get compressed to rock-bottom levels. 

 

By Matt Egan

 

Shares of Saks (SKS) spiked 18% to five-year highs Wednesday morning following a report that the retailer has hired Goldman Sachs (GS) to explore a possible sale to a deep-pocketed private-equity or sovereign-wealth fund.

 

The knee-jerk rally indicates Wall Street is betting the owner of Saks Fifth Avenue is primed to fetch a healthy premium in a potential auction after years of cutting costs.

 

According to the New York Post, Saks has hired Goldman to explore strategic options, including a possible sale of the entire company.

 

Information provided by Theflyonthewall.com 

By David Sobek

 

The market loves mergers and acquisition rumors and recently, investors have been chattering a lot about Cubist Pharmaceuticals (CBST) and Optimer Pharmaceuticals (OPTR).

 

Even before Optimer put itself up for sale earlier this year, Cubist reportedly made an unsolicited $1 billion bid for the company, according to media reports. 

The rationale for Cubist buying Optimer is fairly easy to understand. The companies are already partners in the co-promotion of Optimer's antibiotic Dificid. Buying Optimer would also help Cubist achieve its five-year strategic goals, one of which is to grow revenue to $2 billion annually.

 

By Michael Vodicka

Steve Jobs once famously commented that simplicity is genius.

That attitude helped Apple Inc. (AAPL) redefine the personal electronics space and create an entire new ecosystem surrounding its products and services.

But now, a few years after Jobs passing, it looks like the financial services industry is taking a few pointers from the late and great founder of Apple.

One of the mutual fund industry's simplest product offerings is gaining popularity with investors. The growing trend has been fueled by the Pension Protection Act of 2006, which approved their use as a default option for 401(k) plan sponsors, who are allowed to automatically select them for participants who have not selected on their own.