8 reasons the market isn't worse
8 reasons the market isn't worse

Stocks should be crushed by global turmoil, Jim Cramer says. Instead, they're doing fine.


You have nearly an equal chance of being hit by lightning as finding a fund that is a top performer for 5 straight years.

By MSN Money Partner Thu 12:21 PM
Image: Mutual funds © ThinkStock/SuperStockBy Mitchell Tuchman, MarketWatch

Do you know someone who has been hit by lightning? Do you know anyone who knows anyone who has been hit by lightning?

Exceedingly unlikely, right? But it turns out to be roughly the same chance as knowing someone -- anyone -- whose mutual fund consistently stays ahead of the pack.

Put another way, your chances of buying a hot fund and watching it immediately lag are pretty darned high. Close to guaranteed.

This fact shouldn't surprise anyone. A study by S&P Dow Jones Indices, reported in The New York Times, showed that just two funds out of 2,862 managed to be in the top quartile of performers for five consecutive years.

The two funds in question -- the Hodges Small Cap (HDPSX) and the AMG SouthernSun Small Cap (SSSFX) were small-cap funds (also not surprising), but SouthernSun is closed to new investors. So you're down to one choice out of 2,862. Your chances of being hit by lightning in your lifetime, meanwhile, comes in at 1 in 3,000.


The sector has been on a tear, but selling pressure is mounting.

By InvestorPlace Thu 12:06 PM

Image: Circuit Board © Datacraft Co Ltd, imagenavi, Getty ImagesBy Anthony Mirhaydari

One of the leading sector groups over the last few months has been semiconductor stocks.

Excitement over the "Internet of things" as well as indications that moribund PC sales seem to be stabilizing thanks to Microsoft's (MSFT) dropping of Windows XP support -- resulting in a forced upgrade cycle for many users -- have pushed the sector into a near-vertical trajectory since breaking out three months ago. (Microsoft owns and publishes Top Stocks, an MSN Money site.)

Since the beginning of May, the Market Vectors Semiconductors (SMH) is up more than 14 percent versus a 5.5 percent gain for the Standard & Poor's 500 Index ($INX).

But the sector has lost some momentum so far this month, with selling pressure intensifying as a surge of negative volume undercuts the sector's upward momentum. After such an exciting rise, there is evidence that a pullback looms.


4 analysts downgrade the stock the day after a disappointing quarterly report.

By MSN Money Partner Wed 3:48 PM
Caption: A sign stands outside of a McDonald's restaurant in San Francisco
Credit: © Justin Sullivan/Getty ImagesBy Andria Cheng, MarketWatch

Consumers have been abandoning McDonald's (MCD) by not eating out as much or instead patronizing rivals like Chipotle Mexican Grill (CMG). Now, analysts, too, have soured on the company's stock.

Four analysts downgraded the company's stock on Wednesday, a day after the Oak Brook, Ill.-based company posted a disappointing second-quarter profit and full-year outlook amid a continued sales slowdown in the key markets of the U.S., Germany, Japan and Australia.

"The deteriorating fundamentals increase the likelihood of activist involvement," said Rachael Rothman, an analyst at Susquehanna Financial. She said the company's turnaround is taking longer than she expected and downgraded the stock to neutral from positive.

While McDonald’s Chief Executive Don Thompson evoked a sense of urgency on a conference call Tuesday, Wall Street said substantial improvement in sales and customer visits likely won't come any time soon. Meanwhile, the company is facing cost pressures, including higher prices for meat and other items.


In the context of recent history, the precious metal is at a low point as the market for equities has soared.

By MSN Money Partner Wed 2:46 PM
Hundred dollar bills surrounded by gold © Anthony Bradshaw, PhotographerBy Elizabeth MacBride, CNBC

Gold prices rose again last week on news of the downing of Malaysia Air Flight MH17, the latest in a series of geopolitical shocks that have sent the price of the precious metal up this year.

The price of gold rose 4 percent in the year preceding July 17. On news that the airliner had been shot down over Ukraine, it rose 1.2 percent to $1,315 per ounce, according to Morningstar data based on the London Fix. (It's since fallen a little as investors have started taking profits.)

The volatility is a sign of the most fundamental fact about gold. It is possibly the most emotionally driven asset class -- the refuge of apocalyptic worriers, as well as of serious traders who look at it as a portfolio diversifier and alternative to paper currency.

"You cannot discount the psychosis that exists around gold," said Ben Johnson, Morningstar's director of manager research for passive strategies. "We call it the oldest continuous 2,000-year-old investment bubble around here."


The social media company has seen strong revenue bumps lately, but it's also managed to cut costs in a unique way.

By TheStreet.com Staff Wed 2:39 PM

A magnifying glass is posed over a monitor displaying a Facebook © Joerg Koch/APBy Chris Ciaccia, TheStreet

Though Facebook's (FB) advertising business is growing like weeds in an untended garden, the social media company's lower profile Open Compute Project is proving to be a genuine windfall for shareholders, having saved more than $1.2 billion over the past three years, according to sources close to the situation.

Facebook's Open Compute Project, which the company first implemented in April 2011, has focused not only on the tremendous amount of data it consumes and analyzes, but has helped increased overall energy efficiency while cutting costs. Facebook operates data centers in Prineville, OR., Forest City, N.C., Lulea, Sweden and is currently in the process of building one in Altoona, Iowa. 


Sheldon Lavin's company is the parent of the Chinese entity under investigation by Shanghai authorities for using expired meat.

By MSN Money Partner Wed 1:48 PM
Credit: © STF/AFP/Getty Images
Caption: This picture taken on July 20, 2014 shows workers producing food at the Shanghai Husi Food Co., a factory of US food provider OSI Group, in ShanghaiBy Abram Brown, Forbes

The ruckus over expired meat in fast-food restaurants in China has placed a little-known Illinois company in the spotlight -- along with its wealthy chairman and chief executive Sheldon Lavin.

Chains like McDonald's (MCD), Yum Brands' (YUM) KFC, Burger King (BKW) and Starbucks (SBUX) have admitted to using expired meat from Shanghai Husi Food following an investigation by Shanghai authorities. Husi Food managers said they were "appalled."

"Our company management believes this to be an isolated event, but takes full responsibility for the situation and will take appropriate actions swiftly and comprehensively," the company said a press release.


DR Horton, Meritage Homes and PulteGroup are expected to post results Thursday morning.

By Benzinga Wed 1:18 PM

Image: Home under construction © CorbisBy Nelson Hem

The earnings crunch is well underway, and leading homebuilders D.R. Horton (DHI), Meritage Homes (MTH) and PulteGroup (PHM) will be taking their turns in the earnings spotlight Thursday before the markets open.

KB Home (KBH) and Lennar (LEN) posted better-than-expected results in late June on higher home prices and strong demand. Investors will be looking for rising homebuilder confidence, as measured by the National Association of Home Builders, to portend good news on earnings and sales.

D.R. Horton

Analysts on average predict that this builder will report that revenue for the fiscal third quarter rose almost 28 percent year-over-year to $2.08 billion. Earnings of $0.49 per share are also in the consensus forecast. That would be up from a reported profit of just $0.42 per share in the comparable period of last year. 

The federal government is pushing sweeping new rules to upgrade safety for trains carrying flammable liquids.

By MSN Money Partner Wed 12:40 PM
Credit: © Jim West/Alamy

Caption: Rail tank cars transport oil produced in the Bakken shale fieldBy Russell Gold, The Wall Street Journal

The U.S. government wants to phase out thousands of railroad tank cars that carry crude oil and ethanol within two years, as part of proposed rules to upgrade safety for trains carrying flammable fuels.

Tens of thousands of these older DOT-111 tank cars will have to be replaced or retrofitted under the proposed rules, expected to be announced Wednesday. That is a faster deadline than Canada's three-year timeline to upgrade or phase out the railcars used to carry oil, ethanol and other hazardous liquids.

The federal government's proposals are sweeping and will change how flammable liquids are transported by rail in North America, but they aren't as stringent as some in the rail and energy industry feared. The Wall Street Journal has reviewed a description of the new requirements, which the U.S. Transportation Department is expected to detail on Wednesday.


A good quarter is a good quarter. Don't hide it under a blanket of worry, and don't accentuate the negative.

By TheStreet.com Staff Wed 12:38 PM

Woman Singing for Fame and Fortune © Alberto Ruggieri/Illustration Works/CorbisDoes tone matter? Should we care about inflection and word choice on conference calls?

You bet we should. Here's why.

When Honeywell (HON) and Domino's (DPZ) reported their quarters Friday and today, both stocks flew higher on their better-than-expected numbers and good commentary. Both CEOs, Dave Cote and Pat Doyle, played it straight, giving the highlights and then telling their stories. In each case, the confidence they had about the future ran throughout the calls. Most important, they gave very little reason to sell because, alas, there weren't really any reasons to sell.

TheStreet.com logoBut go back a previous quarter. In each case both men spent an inordinate amount of time talking about the negatives -- or at least, as I would describe it, telling you things they might be worried about or weren't happy with.


The economy and the market may have 99 problems, but a social media bubble isn't one.

By MSN Money Partner Wed 12:36 PM
Caption: The 'Facebook' logo is seen on a tablet screen
Credit: © LIONEL BONAVENTURE/AFP/Getty ImagesBy Tim Mullaney, MarketWatch

Janet Yellen made a fuss by slipping a line into her semi-annual Congressional testimony on the economy that social-networking stocks were in a bit of a bubble.

Beginning with Facebook's (FB) second-quarter earnings report Wednesday, we'll see if she was way more wrong than right.

Yellen's wrong about this bubble three different ways. First, social-media stocks as a group aren't very expensive, and the best of breed, like Facebook and YouTube owner Google (GOOG), are actually pretty cheap. 

Second, the flaws of less-premium social-media stocks, like Groupon (GRPN) and Zynga (ZNGA), are well-appreciated and realistically appraised, which is one reason why you've routinely seen initial public offerings by social-media firms struggle and even flop, in a way barely seen among 1998-1999 Web companies.


Puma Biotechnology shares soar after it says it wants to file for marketing approval of an experimental breast cancer drug.

By MSN Money Partner Wed 12:07 PM
Credit: © Rafe Swan/Corbis

Caption: A graduated pipette being inserted into test tubeBy Reuters with CNBC.com

Puma Biotechnology (PBYI) said its experimental breast cancer drug met its main goal in a late-stage trial, but the options market is smelling something fishy.

Shares of the company, which doesn't have any drug in the market, spiked nearly 300 percent on Wednesday. 

Puma said on Tuesday it plans to file for marketing approval of neratinib, codenamed PB272, in the first half of 2015.

Adjuvant treatment with the drug showed a statistically significant improvement in disease-free survival of 33 percent versus patients on placebo, according to trial data. Adjuvant treatment, or additional treatment, is given after the primary treatment.

Tags: PFE

The company plans to close stores and lay off employees, and says it needs to make some deeper changes.

By MSN Money Partner Tue 4:38 PM
© Ed Andrieski/AP
Crocs shoes on displayBy Hayley Peterson, Business Insider

Crocs' (CROX) comeback plan is a bust.

The company is cutting jobs and closing stores amid plummeting net income. 

The company said Tuesday that it plans to close 75 to 100 of its 624 stores globally and lay off 183 employees out of more than 5,000. Its stock price rose more than 12 percent to $16.68 as investors applauded the move.

Net income fell a whopping 44 percent for the second quarter to $19.7 million, though revenues rose 3.6 percent to $376 million. 

Crocs President Andrew Rees said in a statement that the performance shows "the need for dynamic change in our strategy, organization and approach to the market."

Crocs was hoping that a new, sleeker line of shoes that was released this year -- including ballet flats, pumps, and open-toe wedges -- would revitalize the brand. But the company's new shoe styles failed to offset falling demand for its signature plastic clogs.

Tags: CROX

The category is seeing less enthusiasm from investors than any other.

By MSN Money Partner Tue 2:47 PM
Image: Stock market report © ULTRA.F/Digital Vision/Getty ImagesBy Dan Strumpf, The Wall Street Journal

Small-company shares' summer swoon deepened Monday, underscoring investor concern about valuations.

The Russell 2000 ($TOMX) index of smaller companies, typically those with market values below $1 billion, dropped 0.4 percent Monday, outpacing a 0.3 percent decline in the Dow Jones Industrial Average ($INDU) and a 0.2 percent slide in the  Standard & Poor's 500 Index ($INX).

Monday's drop comes as smaller shares are enduring a second downdraft this year. So far, the Russell is alone among major U.S. stock indexes in losing ground in 2014, falling 1.5 percent compared with the S&P's 6.9 percent advance.

The retreat hasn't quieted the calls by bearish analysts that the Russell index, comprising companies ranging from drug developer Idenix Pharmaceuticals (IDIX) to media company A.H. Belo (AHC) and wireless-technology company ParkerVision (PRKR) appear overvalued, judging by prices as a multiple of earnings for the latest year.


CNBC host Jim Cramer says stocks should be crushed by global turmoil. Instead, they're doing fine.

By MSN Money Partner Tue 1:06 PM
Credit: © Richard Drew/AP
Caption: Specialist Jay Woods is reflected in one of the screens at his post on the floor of the New York Stock Exchange, Wednesday, June 18, 2014By Lee Brodie, CNBC

Although stocks closed lower on Monday, the declines were modest with the Dow Jones Industrial Average ($INDU) and Standard & Poor's 500 Index ($INX) falling a fraction of a percent.

Many investors, including CNBC host Jim Cramer, found the relative strength somewhat curious, given the widespread geopolitical unrest.

Israeli jets, tanks and artillery pounded Gaza again as the death toll from a two-week conflict topped 500. Also, fighting flared in the Ukrainian city of Donetsk as investigators began to inspect the bodies of the victims of the Malaysia Airlines crash. In addition, the United States and the European Union announced further economic sanctions against Russia.

"You'd think the market would get absolutely crushed," noted Cramer. But it didn't. 

Here are Cramer's reasons why:


Biotech deals still dominate the pipeline for initial offerings, however.

By InvestorPlace Tue 12:39 PM

Credit: © John Crowe/Alamy

Caption: An El Pollo Loco Restaurant in Upland Calif.By Tom Taulli

Last week was a hot one for initial public offerings, which saw deals such as TubeMogul (TUBE) and Sage Therapeutics (SAGE) each jump more than 60 percent on their first days.

There was some underlying weakness in the IPO market -- many of last week's deals saw pricing reductions to gin up demand -- but we've still seen a flood of IPOs lately, which will continue this week with 14 new stocks on deck. (Including three holdovers from last week -- Medical Transcription Billing, Microlin Bio and Pfenex).

Let's take a look at some of the highlights:



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Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


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Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

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Market index data delayed by 15 minutes

[BRIEFING.COM] Equity indices remain on the defensive with the S&P 500 trading lower by 0.5%.

Market participants received just a handful of economic reports this week and none of them have caused a noteworthy reaction in the market. However, things are shaping up to be a bit different next week with a full dose of economic data on the schedule.

The week will start on a relatively quiet note with Monday's data limited to the June Pending Home Sales report. On Tuesday, ... More


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