5 reasons the market is seeing red
5 reasons the market is seeing red

Geopolitical crises are taking a toll on stocks as we head into the seasonally weak month of August.

VIDEO ON MSN MONEY

Investors are anxious to see if hiring can maintain its strong pace in the second half of the year.

By MSN Money Partner 8 hours ago
By Ben Leubsdorf, The Wall Street Journal

The first half of 2014 saw the U.S. economy's strongest stretch of hiring since early 2006

The jobless rate fell to 6.1 percent in June from 7.5 percent a year earlier, its fastest one-year decline since October 1984, and nonfarm employers added a seasonally adjusted 288,000 jobs.

Can hiring keep up its strong pace in the second half of the year? We'll get our first clue Friday at 8:30 a.m. EDT, when the Labor Department releases its jobs report for July


Economists surveyed by The Wall Street Journal expect payrolls to rise by 230,000 and the unemployment rate to remain at 6.1 percent.


Here are a few things to watch:

 

Andrew Mason's new Detour could be one of the most-watched comeback attempts in recent Silicon Valley history.

By MSN Money Partner 9 hours ago
Credit: Johannes Simon/Getty Images
Caption: Andrew Mason, CEO of GrouponBy Brad Stone, Businessweek

Andrew Mason (pictured) is walking with a reporter amid the seagulls on San Francisco's Fisherman's Wharf, using his iPhone to play an audio walking tour. 


As he approaches the giant hoists with which local anglers move their daily catch to shore, the voice of a local fisherman named Candy pipes up on the recording to describe the scene ahead: "If you see any boats unloading, look for sea lions hanging nearby, waiting for the fish receivers to throw them scraps." 


The recording is one of the offerings from Mason's latest startup, Detour, which he is trying to build into a central repository for a new kind of GPS-based neighborhood walking tour. 

 

The high-definition camera maker gives its first earnings report as a public company Thursday afternoon.

By MSN Money Partner 12 hours ago
Credit: © Jeffrey Blackler/Alamy
Caption: GoPro Hero 3 & wearable camera on headbandBy Angela Johnson, MarketWatch

High-definition camera maker GoPro (GPRO) is scheduled to report second-quarter earnings after the bell on Thursday, its first such report since it went public in June.


This is what investors can expect:


Earnings: GoPro is expected to report second-quarter earnings of 7 cents per share, according to analysts surveyed by FactSet.


Revenue: Revenue is expected to come in at $238 million.


GoPro had first-quarter revenue of $235.7 million, according to a June 26 filing with the Securities and Exchange Commission. Revenue for all of 2013 came to $986 million, the filing showed. Net income for the first quarter came to 11.0 million, after $60.6 million for all of 2013.

 

Geopolitical crises are taking a toll on stocks as we head into the seasonally weak month of August.

By MSN Money Partner 12 hours ago
A trader works on the floor of the New York Stock Exchange minutes after a Federal Reserve announcement on January 29, 2014 in New York City
© Spencer Platt/Getty ImagesBy Bob Pisani, CNBC

Stocks are sharply lower, with European stocks trading ugly right from the start. Germany is down more than 1 percent, and is lodged at the lowest levels in nearly three months.

Several factors are moving our markets, including:


1) The rhetoric in Ukraine is getting downright vitriolic. The Ukraine Prime Minister, Arseniy Yatsenyuk, said Russia was seeking to "revise the outcomes" of World War II by seizing the Crimean peninsula and fomenting war.


We are also seeing some global companies like BP (BP) talking about long-term impact from the Ukraine crisis.

 
Tags: COFWMT

What does the country have to do with the price-to-earnings ratio of the S&P industrials? From here on in, everything.

By Jim Cramer 13 hours ago

A armored vehicle manned by pro Russian rebels leaves Donetsk, Ukraine © Hollandse Hoogte/CorbisIt must have just dawned on people after work last night that Russia is bad news for the market.


I guess investors needed to hear it from companies as diverse as SiemensAdidas, and Shell (RDS.A) all at once to drive the point home. Yes, Russia, Ukraine, Russian impact on Europe, strong dollar -- it's all coming together in one ugly morning.


There's a grudging recognition that not only are the sanctions not working but they are making Putin dig in his heels. Digging in his heels means he's going to cut the natural gas spigot to Europe when it gets cold. I think that's how a company like Siemens could withhold an outlook for 2015. I think it's how Shell last night said it could be a game changer. Adidas didn't even have to wait until winter to lower the boom. It did so now.

 

3 stocks will be in the spotlight Thursday as investors try to make sense of the numbers from the sector.

By Benzinga Wed 7:33 PM

Image: Aerial view of Houston neighborhood © Ocean/Corbis/CorbisBy Nelson Hem


Leading homebuilders Beazer Homes USA (BZH), Ryland Group (RYL) and Standard Pacific (SPF) will be taking their turns in the earnings spotlight Thursday.


D.R. Horton (DHI), Meritage Homes (MTH) and PulteGroup (PHM) posted mixed results last week, just as the U.S. Department of Commerce announced that new-home sales plunged in June. That made investors nervous about the housing recovery.


Beazer Homes USA

Analysts on average predict that this Atlanta-based builder will report that its revenue for the fiscal third quarter rose more than 14 percent year-over-year to $360.13 million. Earnings of $0.22 per share are also in the consensus forecast. That would compare to a reported net loss of $0.23 per share in the comparable period of last year.

 

Why are stronger numbers considered bad news? Investors are worried about the impact on inflation and interest rates.

By InvestorPlace Wed 3:54 PM

Credit: © Image Source/Corbis
Caption: Bull and Bear MarketsBy Anthony Mirhaydari


Stocks were chopping around the unchanged line on Wednesday in response to some stronger-than-expected economic reports, including the government's first estimate of second-quarter GDP growth.


The Dow Jones Industrial Average ($INDU) tested below its 50-day moving average for the first time since May -- a bout of volatility investors haven't seen for a long time.


Normally, good news would be considered good news. But these days, with the market so dependent upon cheap-money stimulus from the Federal Reserve, any indication of a strengthening economy (and rising inflationary threats) is considered bad news since it brings forward the likely timing of the first short-term interest rate hike.


Indeed, the policy hawks are already making their reservations known with Dallas Fed president Richard Fisher letting loose with a Wall Street Journal op-ed on Tuesday titled "The danger of too loose, too long."

 
Tags: UUP

The glory days are over for big-box retailers as consumers search for more convenience, Goldman Sachs analysts say.

By MSN Money Partner Wed 3:12 PM
Walmart plastic shopping bags in shopping cart
© ParryGrab/AlamyBy Ashley Lutz, Business Insider

The heyday of big-box discount retailers is over. 

Consumers are becoming less interested in retailers like Wal-Mart (WMT) and Target (TGT), according to a recent note by Goldman Sachs. 


Instead, "consumers appear more focused on some combination of value and convenience," the analysts write. 


The advent of online retailers like Amazon.com (AMZN) has also contributed to the problems at Wal-Mart and Target, according to the note. Consumers are less likely to make a trip to the stores when they could get free delivery online. 


Wal-Mart's sales have declined for five straight quarters, leading to shakeups at the executive level.

 

The stakes are high heading into the company's earnings report Thursday.

By InvestorPlace Wed 2:41 PM

LinkedIn Corp. headquarters in Mountain View, Calif. on April 25, 2013 (© David Paul Morris/Bloomberg via Getty Images)By Jeff Reeves


LinkedIn (LNKD) has had a rough 12 months or so. The stock is down roughly 25 percent from summer 2013 highs, and is deeply in the red so far in 2014.


This would be bad enough for the stock, but the fact the market itself is rallying nicely at the same time only adds insult to injury.


It's also worth noting that LinkedIn is just one of many momentum plays in the Internet space that have run out of gas in 2014, such as Yelp (YELP) and Pandora (P).


That means stakes are high for LinkedIn earnings, due out Thursday after the bell, as investors look either to validate the downtrend or see a turnaround in the stock.


Here's what to look for in LinkedIn earnings:

 

The global risk level is high and the markets are at full valuation, one investor says. 'I think it is a very good time to be cautious.'

By MSN Money Partner Wed 2:26 PM
Image: Money © MedioImages/JupiterimagesBy Ben Eisen, MarketWatch

Dan Fuss hasn't been shy about playing in the riskier corners of the bond market during his 50-plus years in finance. But he's becoming increasingly cautious this year, reflecting growing concerns about the state of the credit markets.


Fuss' flagship Loomis Sayles Bond Fund (LSBDX) has put 27 percent of its $24.4 billion in assets under management in cash and reserves, such as short-term Treasurys, he said in an interview with MarketWatch this week. He joins a number of other big bond managers who have been prioritizing liquid holdings.


That decision reflects a mix of caution about geopolitical conflicts around the world that have so far gently pushed investors away from riskier debt securities. In the past month, Russia’s conflict with Ukraine has intensified, leading to harsher sanctions from Western nations. Violence has also erupted between Gaza and Israel.

 

A number of US mutual funds hold government bonds from the country, which is perilously close to default.

By MSN Money Partner Wed 2:00 PM
Credit: © Daniel Garcia/AFP/Getty Images

Caption: Members of the Granaderos presidential guard carry out the daily flag hoisting ceremony in front of the government house at Plaza de Mayo square in Buenos Aires, Argentina on July 30, 2014. Last-ditch talks aimed at averting Argentina's second default in 13 years were to resume Wednesday in New York, after Tuesday's marathon session failed to reach a deal.By Ben Eisen, MarketWatch

Hedge funds aren't the only investors with money on the line as Argentina scrambles to avoid a bond default.


A number of mutual funds, including funds run by Goldman Sachs (GS) and Fidelity Investments, have exposure to Argentina, which must reach a deal with a group of bond creditors by Wednesday, or face default for the second time in 13 years.


Argentina's Merval stock Index dropped 1 percent Monday as the deadline for a deal drew closer.


The sovereign bonds sold by Argentina are a high-risk, high-reward bet. If the South American nation irons out a solution with its creditors, the debt could increase rapidly in price, leading to a handsome payout. If a default occurs, these funds could get back just a fraction of their investments, if anything at all.

 

The company is lowering its soda machine projections for the second half of the year, however.

By MSN Money Partner Wed 1:20 PM
SodaStream soda mixes (© Todd Oren/Getty Images for SodaStream)By Myles Udland, Business Insider

Shares of SodaStream (SODA) were up more than 12 percent Wednesday after the company reported earnings and revenue that beat estimates.

In the second quarter, the maker of beverage carbonation machines earned 43 cents per share, better than the 31 cents expected by analysts, on revenue of $141.2 million, topping the $140.6 million Wall Street expected. 


"The second quarter was highlighted by record gas refills including unit growth in all regions underscoring the global appeal and stickiness of our home carbonation system," said CEO Daniel Birnbaum in a statement. "Our total business in our Western Europe, Asia Pacific, and CEMEA regions all posted solid increases in the second quarter as our product and marketing strategies are leading to increased household penetration and user activity." 

 
Tags: SODA

Should the fast-food chain act as the boss of all workers in franchised stores? The company says no, but organized labor says yes.

By MSN Money Partner Wed 12:56 PM

A McDonald's employee prepares an order at a McDonald's restaurant on April 19, 2011 in San Francisco, Calif. (© Justin Sullivan/Getty Images)By Josh Eidelson, Businessweek


The fast-food business model just suffered a blow. 


The top prosecutor for the federal labor board has rejected McDonald's (MCD) claim that it's not the boss of the workers in its franchised stores.


Within the past 21 months -- the period in which strikes by fast-food workers went from unheard-of to increasingly common -- union-backed McDonald's workers have brought 181 charges before the National Labor Relations Board. On Tuesday the NLRB general counsel's office announced it had found dozens of allegations with enough merit to pursue. 


And, more important, the general counsel directed NLRB officials to treat McDonald's as a defendant alongside the franchisees running the stores. Giving McDonald's shared responsibility for how franchisees treat workers could force corporate headquarters to get involved more closely with everything from potential unionization to wages.

 
Tags: BKWMCDWEN

We have seen a huge correction, and we now need to look for signs that it is ending.

By Jim Cramer Wed 12:27 PM

A trader analyzes stock data on the floor of the New York Stock Exchange © Scott Eells/Bloomberg via Getty ImagesThe rolling correction continues as we've seen some really powerful downward moves in some of the major industrials. They remind me of something Byron Wien -- a senior adviser at Blackstone and by far my favorite market commentator -- said at the beginning of the year. He remarked that the S&P 500 would initially drop 10 percent in a worst-of-times situation, and then in a best-of-times situation it could rally 20 percent, heading perhaps to 2,300 by the end of the year.


I point this out because Wien put out his monthly note Tuesday night, and it is very positive on the market -- but he does not directly address that he thought stocks would have that initial decline.


TheStreet.com logoYet as I look over so many of the big industrials and many of the technology stocks, I see the market did have a pretty large correction already. Stocks such as General Electric (GE) and Boeing (BA) and United Technologies (UTX) are down huge from their highs. The cloud-computing stocks, despite their nascent rallies, are down much more than 10 percent.

 

The company's earnings beat impressed Wall Street, but some observers say there are still long-term questions about its future.

By MSN Money Partner Wed 12:21 PM
Credit: © Richard Drew/AP Photo
Caption: The Twitter bird logo is on an updated phone post on the floor of the New York Stock Exchange.By Barbara Kollmeyer, MarketWatch

Twitter (TWTR) shares soared anew on Wednesday as analysts scrambled to lift price targets after quarterly results blew away Wall Street's forecasts.


The stock was up 20 percent in midday trading on heavy volume of about 80 million shares. It soared late Tuesday after the company's adjusted profit and revenue surpassed expectations, and its outlook on full-year revenue was also better than a previous estimate. 


Analysts had been holding their breath over the tally for monthly active users. Twitter edged past expectations for 267 million monthly active users with a count of 271 million.

 
Tags: SOCLTWTR

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[BRIEFING.COM] The stock market punctuated July with a broad-based retreat that sent the S&P 500 lower by 2.0% with all ten sectors ending in the red. The benchmark index posted a monthly decline of 1.5%, while the Russell 2000 (-2.3%) underperformed to end the month lower by 6.1%.

To get a better feel for what led to today's retreat, we'd like to look back to Wednesday, when the market had ample reason to rally, but did not. Instead, it ended basically flat after a sloppy day of ... More


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