Businessman blowing bubbles (© GSO Images/Photographer's Choice/Getty Images)
Take bubble talk with a grain of salt

Jim Cramer asks, why pay any attention to letters from a manager who lost money in the first quarter?


Companies and the economy are healthy, and at least one fund manager says the market is way oversold.

By TheStreet Staff Jun 20, 2011 11:22AM

Image: Arrow Up (© Stockbyte/SuperStock)By Frank Byrt, TheStreet


It's easy for investors to think the sky is falling, given the drumbeat of dour economic news in recent weeks.


But those fears, which have resulted in a 7% tumble in the S&P 500 Index ($INX) over the past six weeks, may be overblown, several money managers say.


That's because much of the bad economic news has already been factored in to stock prices. Meanwhile, U.S. corporations' fundamentals remain solid after a 19.4% jump in S&P 500 earnings in the first quarter. Besides, investors have few places to go other than equities as fixed-income returns dwindle.


That sounds like a value-oriented, stock-pickers' paradise. So why the Chicken Little reactions?


These classes have badly lagged the broad market this year, and their relative performance predicts more underperformance may lie ahead.

By Jun 20, 2011 11:08AM
By Tom Aspray,

It has been a dismal month for stocks, and even with last Friday’s bounce, the S&P 500 is still down 5.5% for June. Last week, I looked at several of the industry groups, including utilities and restaurants, that were outperforming the S&P 500, but of course there are also those industry groups that have done worse.

Clearly, we would like to stay invested in the strongest sectors and stocks, but equally important is doing your best to avoid the weakest areas of the market. You can do this in a superficial manner by comparing your stock or ETF's performance to that of a major average like the S&P 500, or an ETF like the Spyder Trust (SPY), which tracks it. 

Don’t get too concerned about day-to-day divergences, but when your stock or ETF is weaker for a week or two, it should be more of a concern.

Over the past three months, there are four industry groups that are down 11.7%-17.6% when compared with the 5.8% decline in SPY, and the poor performance for several of these groups might come as a surprise.

By looking at these underperforming industry groups, we can determine whether any are ready to turn around and hopefully gain some insight on how to avoid the weakest areas of the market.

Why all the gloom and doom? US businesses are enjoying massive profit margins and robust sales.

By TheStreet Staff Jun 20, 2011 11:02AM

Image: Arrow Down (© Image Source/SuperStock)By Chris Stuart, TheStreet


The world is ending, so run for the hills, buy gold and stash your money under the mattress. We are headed for a financial apocalypse.


That's what headlines from the past couple of weeks are saying. For example:


 "Shiller Sees 'Substantial' Probability of Recession"


"Nearly Half in US Think New Recession Is Coming"


 "We're on the Verge of a Great, Great Depression"


What's everyone so worried about? Jobs, housing, consumer confidence, Greece -- the list goes on. But the pundits are ignoring one big fact: Corporate America is alive and well.


Keep an eye on funds tracking transportation, the Swiss franc, emerging markets and technology.

By TheStreet Staff Jun 20, 2011 10:36AM

By Don Dion, TheStreet


Here are five ETFs to watch this week.


1. iShares Dow Jones Transportation Average Index Fund (IYT)


Transportation will be in focus as FedEx (FDX) reports earnings Wednesday. FedEx is listed as IYT's second-largest holding, representing close to 10% of the fund's index.


Many investors turn to FedEx's reports for a read on the global economy. A strong report and outlook would indicate that consumers and businesses are becoming more confident.


Investors are way too skittish. Stay long this week

By Jamie Dlugosch Jun 20, 2011 9:57AM

It was not easy by any means, but the market managed to finish last week with a gain. The fractional increase in value ended a six-week losing streak.


The gains were a bit of a mirage.


The major indexes may have closed higher, but many stocks traded lower. Technology stocks in particular were hit hard. Losses in that very important industry suggest that investors are still skeptical about the economy and future corporate profits.


Much of the weakness can be attributed to worries about the debt crisis in Greece. There is very real fear that a default will create a chain-reaction collapse in global finances. Until that fear subsides, stocks will struggle.


I will never sell stocks based on fear. As such, the ETF to buy this week is the iShares S&P North America Technology and Multimedia Fund (IGN).


The charts are signaling that the only way to go from here may be down. Oil shares are the most vulnerable.

By Jim Cramer Jun 20, 2011 9:03AM

jim cramerthe street Sometimes you just have to own how really bad this market is. When I went through the S&P 500 ($INX) charts this morning with an eye toward the collapse of Greece and the new battleground of Italy that's developing, I couldn't help but notice two things:


1. Only McDonald's (MCD) and Johnson & Johnson (JNJ) had buyable charts of all the charts in the whole chart book.


2. The charts are screaming that we are headed into a second recession that's going to be a real doozy.


I want to write from the outset that I don't see things that way. I see many companies reiterating strength, and I see many companies that haven't seen strength about to get some, notably the companies that buy commodities.


But the stocks are signaling total calamity, and it is important to know that.


Sanford Bernstein downgrades Research In Motion. GE reaches a labor agreement. Boeing gets a 6-jet order from Qatar Airways.

By TheStreet Staff Jun 20, 2011 8:02AM

TheStreetBy Andrea Tse, TheStreet


Updated at 9:20 a.m. ET


Here are stocks that might be active in regular trading Monday.


BlackBerry maker Research In Motion (RIMM) has been cut to "underperform" from "market perform" by Sanford Bernstein. Shares were falling 1.8% to $27.25.


Conglomerate General Electric (GE) and its two largest unions have reached a tentative four-year labor deal that affects more than 15,000 GE workers. GE shares were down 0.7% to $18.37.

Qatar Airways said it will order six Boeing (BA) 777 jets, with a total value of $1.7 billion. Boeing heads into the Paris Air Show on Monday with more orders this year than rival Airbus.


Indicators are mixed, and events next week could tip the scales to the bears or bulls, but sideways trading in the short term seems likely to be followed by a solid rebound.

By Jun 17, 2011 7:44PM
By Tom Aspray,

The six-week decline in the US stock market is over, at least for now. Though Friday’s rally gave bulls some hope, on the back of better than expected LEI numbers, it was not enough to change the prevailing bearish outlook for the stock market.

With speculators and many pros still on the short side of the market, and the regular investor either out or very nervous, how much higher can stocks bounce?

Both US and European markets were encouraged by Friday’s press conference from German Chancellor Angela Merkel and French President Nicolas Sarkozy. Their apparent agreement to work with the ECB on a solution for Greece’s debt problem helped calm the markets.

Standard & Poor's downgrade of Greece’s debt early in the week, not to mention the widely televised riots in that nation, had made the markets even more nervous. The plunging euro at mid-week also did not help, as reports circulated that hedge funds were making big bets on a Euro collapse.

On the Asian front, the latest news on the Chinese economy was not encouraging, as its consumer price index for May rose 5.4% from a year ago. Industrial production was positive, suggesting the economy was still growing.

Boeing will increase production as it ups its expectations for aircraft orders.

By Jim J. Jubak Jun 17, 2011 5:25PM
Jim JubakBoeing (BA) has moved the yardsticks -- both long- and short-term -- in the last few days.

First, the company announced that it will increase the production rate for its newest 737 model, to 35 per month in early 2012 and 42 per month by early 2014. Current production is 31.5 planes a month.

Second, Boeing upped its estimates for total aircraft orders -- from all manufacturers -- over the next 20 years to $4 trillion. Boeing sees the global fleet doubling in size by 2030, on a 5.1% annual growth in global passenger traffic and a declining average age for aircraft.

Higher fuel prices and tighter environmental regulations are pushing airlines to retire their planes at an earlier age. For example, Boeing projects that 94% of the planes operated by European airlines in 2030 will have entered service after 2011.

The stock slips on worries that revenue growth is slowing. So is it time to buy?

By Kim Peterson Jun 17, 2011 3:44PM
Google (GOOG) shares closed at $485.02 today -- the stock's first close below $500 since September. What's going on here?

The stock has slid 24% since peaking at $642.97 intraday on Jan. 19, and now is pretty much where it was three years ago. Its forward price-to-earnings ratio is a mere 13.8, and most analysts think the stock is undervalued.

Google hasn't become a slow-growth company, but the stock market is treating it like one. So is it time to buy Google shares?

Let's go over some of the reasons investors are disappointed in the company: 

Donor pays $2.63 million to eat steak with Buffett. Dick Bove calls out Cohan for "hot air" comment. J.C. Penney shares take a wild ride.

By TheStreet Staff Jun 17, 2011 2:39PM

TheStreetBy Gregg Greenberg, TheStreet


Here is this week's roundup of the dumbest actions on Wall Street.


5. Lunch lunacy


What kind of value investor forks over $2.63 million for a steak lunch?


The anonymous bidder who ponied up this outlandish amount to charity will get to dine with the king of all value investors, Berkshire Hathaway's (BRK.B) Warren Buffett.


One of the company's largest stakeholders criticizes management and says he's dumping half of his holdings.

By Kim Peterson Jun 17, 2011 1:35PM
Research In Motion's (RIMM) shares dropped 21% Friday to $27.87. Who could have imagined that this stock would fall below $30?

Not long ago, it seemed the company could do no wrong. Its BlackBerry device was a must-have for business and a status symbol for executives. RIM had the business world in its palm.

But the company and its stock has been on a devastating downward spiral, punctuated by disappointing quarterly earnings like the report we saw Thursday (Charley Blaine has the gory details here).

And now, even some of RIM's top investors are publicly bashing the company. 

Bargain-hunters return after one of the worst sell-offs in decades.

By Anthony Mirhaydari Jun 17, 2011 1:11PM

Investors have suffered a crisis of confidence over the past few weeks as all the negative factors I started discussing in my columns and blogs months ago -- the eurozone crisis, inflationary pressure, high gas prices and Japan's supply-chain problems -- replaced an air of confidence and optimism with fear and  distrust.


As a result, by some measures, stocks fell to their most oversold levels since 1999, as I discussed in my most recent blog post. And then they continued falling.


But now it appears that the turn I've been writing about is finally at hand as the economic fundamentals improve and bargain-hunters enter the fray. You could see this in Friday's report on leading economic indicators, which jumped more than expected, thanks to an increase in the yield curve (the subject of my previous column), consumer expectations and permits for new housing. And you can see it in the way bullish investors have initiated new uptrends in solid companies like United Technologies (UTX) and Kraft (KFT) by bidding shares up and over their 18-day moving averages.


This is just the start.


The consumer-review website is reportedly getting ready to file in August.

By Kim Peterson Jun 17, 2011 1:08PM
Now I've heard everything. The website Angie's List is preparing to file in August for an initial public offering, Bloomberg reports.

The website publishes consumer reviews about plumbers, roofers, mechanics and other service providers and charges users a membership fee. In the Phoenix market, for example, the fee is $39 for one year. The company also gets revenue from advertising.

Perhaps I shouldn't dismiss Angie's List at first glance. Perhaps the company has huge plans that warrant an IPO. We'll know more when it files its paperwork to go public. The company has picked Bank of America (BAC) to lead the IPO, Bloomberg reports.  

What is Pottermore, and what does it mean? Rumors abound of a new venture.

By Kim Peterson Jun 17, 2011 12:27PM
Harry Potter fans are abuzz about a new website,, that hints at a new project from author J.K. Rowling. The website shows two owls on a pink background and links to a YouTube site counting down the days until the June 23 announcement.

What's next for Harry Potter? Rowling's people say it's definitely not a new book. An editor at the Harry Potter news site HPANA got a sneak preview of Pottermore and said it's "breathtaking in scope, detail and sheer beauty."

Check out this video report about the mysterious new site and what it means for Harry Potter fans.

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[BRIEFING.COM] The S&P 500 trades higher by 0.2% with one hour remaining in the session. Given its current standing, the benchmark index is on pace to improve its week-to-date gain to 0.7%, which would extend its year-to-date advance to 1.6%.

Following today's closing bell, participants will receive a full slate of quarterly earnings from several influential listings. Dow components Microsoft (MSFT 39.64, -0.05) and Visa (V 208.90, +0.08) are among the companies ... More


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