Finance professor Jeremy Siegel still expects the Dow to hit 18,000. But he's concerned about the labor force and commodity prices.
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The billionaire investor recoups the loan he gave the investment bank during the financial crisis. With video on Goldman Sachs' earnings.
Eric Rosenbaum, TheStreet
The $5.5 billion payment made by Goldman Sachs to Buffett's Berkshire Hathaway covered $5 billion in preferred shares and a $500 million dividend payment.
There have been signs for months that Goldman Sachs was preparing to repay Buffett. In March, Goldman Sachs received approval from the Federal Reserve to buy back the preferred stock bought by Buffett in September 2008. Goldman paid an additional 10% penalty to redeem the shares and had previously indicated that April 18 would be the repurchase date.
Russell 2000 shares have soared, prompting predictions of a pullback that favors large stocks.
So are large-caps are making a comeback? That could be the case, if history is a decent guide.
Small-cap stocks have run so high that the Russell 2000 Index, which includes 2,000 of the smallest ones, is nearing 2% of a record close, The Wall Street Journal reports. By contrast, the Dow Jones Industrial Average is 13% from a record close, and the S&P 500 index is 16% away.
Some of the hottest small-cap stocks include Dollar Thrifty Auto (DTG), up about 44% year to date. Other stars include Pier 1 Imports (PIR), Jazz Pharmaceuticals (JAZZ) and Select Comfort (SCSS).
Post continues after this video interview about top small-cap picks:
Investment managers offer their best stock ideas in response to Standard & Poor's decision to lower its rating outlook for US debt to 'negative.'
By Robert Holmes, TheStreet
Standard & Poor's decision to lower its outlook on the long-term rating of US sovereign debt to "negative" may have caught investors by surprise, but Michael Pento, senior economist with Euro Pacific Capital, has been making this case for years.
"It's not a surprise to me," Pento says of Standard & Poor's revision. "It's clearly late. But at least S&P is now waking up to the fact that the American sovereign debt picture is unsustainable and eventually we have to default on our debt in some form."
Just how late is S&P's revision to its outlook of U.S. debt? "I heard that the ratings agencies just downgraded the Titanic's chances of crossing the Atlantic," Pento jokes.
Investors have plowed more than $1 trillion into exchange-traded funds, which are getting increasingly complex.
ETFs are mutual funds that track an index, but unlike most mutual funds, they can be traded like stocks throughout the day. They're cheaper to trade than mutual funds, and they get traded a lot, creating a volatility that some experts are uncomfortable with.
ETFs started out simply, with the first one, SPDR S&P 500 (SPY), launching in 1993 to track the S&P 500-stock index, the Journal reports. But they've become increasingly complicated as Wall Street creates more complex schemes to make a buck. Some of the crazier ETFs can implode in an up-and-down market. In last May's Flash Crash, 70% of the securities that fell the most were ETFs, the Journal reports.
It's hard to ignore these funds, given their popularity. Investors have loaded more than $1 trillion into ETFs. But how can you control these potentially wild horses?
Post continues after this video about whether ETFs have gone too far:
Though the bank's stock is stuck below $5 and its first-quarter earnings fell, investors have been piling into the company. With video analysis on Citigroup's financial results.
By Frank Byrt, TheStreet
If you're an individual investor looking for a rifle-shot buy, Citigroup (C) may not be it, given the compelling alternatives in energy, metals and industrial stocks. But if you follow the wizened heads who run some of the biggest U.S. mutual funds, pay attention.
Mutual fund managers are piling into financial services, which badly lagged other sectors last year after rebounding strongly in 2009.
That's because Citigroup has been beaten down and may be at a generational low that's worth a look, since it's the world's largest and most diverse financial-services company. Big institutional investors are starting to load up on the stock.
Improving prospects for the industry, attractive yields and a positive technical picture make these plays worthy of consideration.
Management plots an uncertain future
By Rick Aristotle Munarriz
The meandering consumer electronics giant is looking to scale back its big-box presence in the coming years, realizing that consumers have moved on. Back-to-back quarters of cascading revenue, comps and earnings can be as sobering as a cup of coffee rimmed with smelling salts.
In an effort to regain relevance before it becomes the second coming -- and going -- of Circuit City, Best Buy is spelling out four paths for growth.
Funds tracking industrials, financials and techs should see an active week as key holdings report first-quarter earnings. With video.
By Don Dion, TheStreet
Here are five ETFs to watch this week.
XLI will be in the spotlight as six of the fund's top 15 holdings release their earnings performance reports over the course of the next week. Companies scheduled include General Electric (GE), Honeywell (HON), United Technologies (UTX), Union Pacific (UNP), Danaher (DHR) and CSX.
Although XLI witnessed an impressive run during the opening months of 2011, the fund has seen some choppy action in March and April. It will be interesting to see if earnings numbers from top holdings will be able to push the fund higher in the near term.
The German carmaker's ambitious goal to triple domestic sales relies on the stylish new Bug, a redesigned Passat and a new Tennesee auto plant. Includes video.
By Jeff Reeves, editor of InvestorPlace.com
With more than 21 million cars manufactured under the Beetle nameplate in the past 60-plus years, it's a bit shocking to consider the iconic Volkswagen car has seen only two major design schemes. Such big numbers on so few changes are proof of the compact car's resonance with motorists worldwide.
But with only 300,000 vehicles sold in the U.S. last year -- a mere 2.5% of the 11.6 million automobiles Americans purchased in 2010 -- Volkswagen has a long way to go before it is a serious player in the domestic auto market.
Stocks could rally as earnings season goes full swing during this holiday-shortened week.
Earnings season began last week with a thud as Alcoa started things off with an earnings report that was less than stellar. Investors sold shares hard and took the market down with Alcoa.
Only a late-week rally minimized the damage. Given that there were only a few data points offered during the week investors will have to wait for this week’s numbers before coming to any conclusions about the health of U.S. corporations.
I’m still expecting strong numbers for this earnings season and I would trade long accordingly. This week we get a larger volume of reports. How the market reacts to the news will go a long way to telling us if stocks have more room to run or will pull back from current levels.
My ETF to trade given my expectations for the market is the iShares Russell 2,000 Index (IWM).
The central bank has a tall order in the wake of the financial crisis, and its track record is far from perfect.
By Jeff Reeves, editor of InvestorPlace.com
Washington’s biggest problem right now isn’t the barely civil debate over the deficit or the looming deadline over the nation’s debt ceiling. Spending issues are surely a headache, but they probably don’t even make the top three behind the interrelated economic issues of the day – inflation, unemployment and general distrust of the Fed.
Many believe the Federal Reserve has failed in its dual responsibilities of controlling inflation and maximizing employment, and the institution is starting to feel the heat. And if the conversation in Washington doesn’t change back to economic issues like inflating gas prices and a stubbornly high unemployment rate, both Barack Obama and Ben Bernanke will be in deep trouble.
But is it fair to blame the Fed chairman for the mess we’re in, or the president for appointing Bernanke to a second term?
Even though the major averages closed lower for the week, they were also well off their lows. This should set the stage for a resumption of the rally next week.
Bank of America missed estimates for first quarter earnings partly due to mortgage settlements and lower mortgage income.
By Maria Woehr, TheStreet
The bank reported first quarter earnings of $2 billion, or 17 cents a share, missing Thompson Reuters analysts estimates of 27 cents a share.
Results were weighed down by a $38.5 billion settlement the bank reached with monoline insurer Assured Guaranty (AGO) that resolves its outstanding and potential repurchase claims against BofA. The agreement includes a cash payment of $1.1 billion to Assured Guaranty, and a loss-sharing reinsurance arrangement that has an expected value of approximately $470 million.
A better-than-expected report from Spanish retail bank Banesto reaffirms optimism in Banco Santander.
The chemicals giant builds on momentum from several quarters of strong earnings and hikes its dividend by 67%.
The company is raising its second-quarter dividend to 25 cents a share from 15 cents -- and the stock is responding with a rise of more than 2% Friday to $37.88.
The move was welcomed by investors who watched Dow cut its dividend for the first time in its history in early 2009. Dow slashed its dividend from 42 cents to 15 cents -- a move that helped the company pay for its $15.7 billion purchase of Rohm & Haas.
But Dow has surged on several quarters of strong earnings, building on other smart financial moves. The company has been serious about paying down its debt and growing earnings -- it repaid $2.5 billion, yes, billion, in the first quarter -- and analysts said it has gained more financial confidence.
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Intel's shareholders are excited that Intel will ship four times more tablet microprocessors than last year because it may mean a higher dividend is coming.
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[BRIEFING.COM] The S&P 500 has returned to its flat line while the Russell 2000 (-0.2%) and Nasdaq (-0.5%) remain in the red. For its part, the Dow (+0.2%) continues to hold a slim gain.
Within the Dow, there are 18 names trading higher with Nike (NKE 79.42, +1.20) trading up 1.5%. Nike is the only stock showing an increase of more than 1.0% while the second best performer, ExxonMobil (XOM 94.53, +0.77), trades up 0.9%.
On the downside, Caterpillar (CAT 96.80, ... More
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