A stock market graph trending down © jmiks/Getty Images
Be wary of dire market forecasts

The most likely scenario is that the markets will begin to rise from here -- and that bounce is just beginning to take hold.


Even if Congress reaches a budget deal, S&P might still cut the nation's credit rating. Suggestion: Increase your positions in cash and precious metals.

By TheStreet Staff Jul 28, 2011 1:43PM

By Robert Holmes, TheStreet


On March 28, after a week that saw the Dow Jones Industrial Average ($INDU) jump 3%, money manager Jeffrey Sica predicted that the borrowing and spending by the U.S. would prompt a downgrade of U.S. debt. Four months later, it appears that gloomy prediction will come true.


Even if a short-term compromise on the debt ceiling is reached, Sica is bracing for a downgrade of U.S. debt by credit ratings agencies by making what some observers have called unpatriotic bets: short positions against U.S. Treasurys and the U.S. dollar, moving to higher levels of cash and buying commodities like oil, silver and gold. Sica is the president and chief investment officer of Sica Wealth Management, a Morristown, N.J., company with about $1 billion in assets under management.


Standard & Poor's warned last month that it would downgrade the triple-A rating of U.S. debt if significant progress were not made in dealing with a ballooning deficit. The credit ratings agency said the U.S. would need to cobble together a plan that would lead to $4 trillion in savings, a task that appears impossible amid the partisanship in Congress.


The maker of Keurig coffee brewers sees shares soar after posting blowout earnings.

By Kim Peterson Jul 28, 2011 1:04PM

Updated: 4:48 p.m. ET


Green Mountain Coffee Roasters (GMCR) surprised nearly everyone this week, blowing past analysts' expectations for sales and profit and wowing them with its fiscal 2012 profit forecast.

The beat was so strong that investors rushed into the stock Thursday, sending shares up 20% in early midday trading. The stock closed at $102.57, up 16.4%. It was the first time the stock had surpassed $100. It was only in November 2008 that this stock was trading for a mere $8.

Analysts continued to shake their heads in disbelief. The stock that no one paid much attention to in the past has more than tripled in the past year, and that momentum will likely continue.


Risk-averse investors might like this fund's size, safety and stability.

By TheStreet Staff Jul 28, 2011 11:55AM

By Don Dion, TheStreet


The developed world's debt issues have commanded headlines and weighed heavily on investor sentiment in recent weeks.


As Congress and world leaders continue to seek the best way to solve their respective issues, it may be tempting for some investors to head for the exits.


This, however, should not be a prime course of action. On the contrary, as we have seen throughout the current earnings season, many domestic companies continue to exhibit strength despite the ongoing threat of economic turbulence. Instead of fleeing for the exits, long-term investors should consider doing some portfolio maintenance. By constructing a well-rounded portfolio, you can weather the effects of negative headlines and prepare for when global markets recover.


Ensuing actions by the Fed, such as another round of stimulus, could jolt commodity markets, analysts say.

By TheStreet Staff Jul 28, 2011 11:31AM

Image: Oil drums (© Kevin Phillips/Digital Vision/age fotostock)By Andrea Tse, TheStreet


If the U.S. defaults on its debt or suffers a credit rating downgrade, oil prices could rally on ensuing Federal Reserve and investment diversification actions, analysts agree.


In either of those cases, "you're going to see the Fed react to that very swiftly and aggressively," says PFGBest senior energy analyst Phil Flynn.


"Initially everyone will freak out and say, 'Oh, my gosh, demand destruction'" in the world's No. 1 oil-consuming nation, then reverse their views upon another round of government stimulus or quantitative easing, which would bring an influx of hot, speculative money into the commodity markets, Flynn explains.


Summit Energy analyst Matt Smith agrees with Flynn to a lesser degree, saying that another round of quantitative easing would cause investors to immediately consider commodities as an inflation hedge, given that it would support dollar weakness and heighten inflation expectations. But "I think the view is tempered by the negative realities of quantitative easing."

Tags: oil

Will Wednesday's market mauling be enough to push politicians toward compromise on a debt deal?

By Jim Cramer Jul 28, 2011 9:13AM

jim cramerthe streetMaybe the president and the Democrats got their way Wednesday. Maybe they got what they wanted: a lower stock market. That's the only thing that has changed since Wednesday's debate, but it might have the desired effect among some fence-sitters.


I articulated that view to Sen. Kent Conrad from North Dakota, a man I have often thought of as the conscience of the Senate, one of the Gang of Six.


He's not for lower stock markets, believe me. He's one of the best capitalists around, from a state that embraces capitalism, and he is a member of the Gang of Six that's been trying to get a big deal done.


But he confirmed that red ink in the market does force the politicians to rethink intransigence and that only the most intransigent of extremes won't care about this market's decline.


I think he's hoping that the intransigents become at least flexible, and that could matter Thursday.


They don't have the best track record, and critics wonder whether they are too influential.

By Kim Peterson Jul 27, 2011 2:57PM
Credit-rating agencies are about as popular as used Kleenexes this week. Critics from all sides are claiming the agencies are unnecessary -- and may even be responsible for the current debt-limit deadlock.

Let's start with Holman Jenkins at The Wall Street Journal, who says the ratings agencies, especially Standard & Poor's, helped turn an artificial crisis into a real one. Standard & Poor's is signaling plans for a U.S. debt downgrade unless the government figures out how to cut deficits by $4 trillion over the next decade.

But the U.S. is not in danger of default, Jenkins writes. It still has enough cash to avoid a partial government shutdown until at least mid-August. America's IOUs are still completely acceptable to the markets. 

Precious metals are under pressure as the US dollar surges.

By Anthony Mirhaydari Jul 27, 2011 2:51PM

Stocks moved lower Wednesday as the debt ceiling stalemate in Congress continued. Adding to the pressure have been renewed eurozone worries, with Greece and Cyprus both suffering downgrades, as well as a weak durable-goods report here at home.


The big winner in all this has been the U.S. dollar, which is sort of ironic. Despite all its faults and political brinkmanship, the United States is still seen as the haven of choice when things are looking dicey, as they are now.


As a result, the big losers are dollar-sensitive precious metals, which got a boost on U.S. default fears. I think these guys are prime short candidates now, since they are in trouble either way: If the U.S. defaults, haven flows are likely to boost the dollar and hurt precious metals. If a default is avoided, the "fear trade" will come out of precious metals and they'll fall. I wondered in my last blog post whether gold and silver were vulnerable to a pullback. Wednesday, we got the answer.


Here's how to take advantage.


Sharp declines in a pair of big steel stocks caught many investors by surprise, but analysis could have revealed weakness in advance.

By MoneyShow.com Jul 27, 2011 2:06PM
By Tom Aspray, MoneyShow.com

Every day, it is often helpful to analyze the stocks that are the biggest gainers, and those that are the biggest losers. From Tuesday’s trading, the 17.46% drop in AKS Steel Holding Corp. (AKS) stood out, and a bit further down the loser list was US Steel Corp. (X), which lost more than 8%.

When two stocks in the same industry group get hit that hard, I want to find out whether it is the start of a more serious decline. I also want to find out how the industry group looks from a technical standpoint.

In the majority of cases, when you see such a sharp drop, I have found that the relative performance, or RS analysis, for the stocks is already negative and has been warning of the weakness in advance.

Earlier in the year, the RS analysis on some of the big financial companies, as well as the Select Sector SPDR Financial (XLF) indicated that the financials were a sector to avoid.

Hopefully a closer examination of Tuesday’s big winners and losers will show the importance of avoiding stocks with weak relative performance, or RS analysis.

Even state governments are preparing in response to the budget drama.

By Kim Peterson Jul 27, 2011 1:59PM
The possibility of a debt-limit disaster is finally settling in, and state governments and big corporations are getting ready.

For many of them, this means hoarding cash or getting hold of as much cash as possible -- just when we were finally starting to see companies loosening up with cash in the form of higher dividends or share buybacks.

Now companies are not only holding on to cash, but they're delaying hiring and investments, The Wall Street Journal reports. They're also laying off employees.

General Electric
(GE), for example, ended the second quarter with $91 billion in the bank. "Our main protection against something like that not going well, or having a rocky outcome, is to have a lot of liquidity," the company's chief financial officer told the newspaper. 

The latter plans to compete with Big Oil for a place in your fuel tank.

By Motley Fool Pick of the Day Jul 27, 2011 12:06PM

Image: Natural gas plant (© Kevin Burke/Corbis)By Adam J. Crawford


Americans might be addicted to oil, but the world's largest integrated oil company is addicted to natural gas. ExxonMobil (XOM) has gone on a natural-gas shopping spree, with no end in sight -- and Chesapeake Energy (CHK) should top its list. 


Exxon execs recently revealed the company is looking for some "liquid plays." Chesapeake would be a good place to start that search.   


Chesapeake is heavily committed to the natural-gas liquids market. The company plans to allocate 75% of its 2012 capital expenditures to NGLs, up from 30% in 2010. The extreme shift to natural gas liquids could seriously boost revenue, considering that NGLs historically follow the price of crude.


Among this week's crowded field of stock market debuts, the premium tea retailer ranks as a favorite because of its growth story.

By TheStreet Staff Jul 27, 2011 11:27AM

By Debra Borchardt, TheStreet


Teavana Holdings (TEA) is the top pick from among this week's crowded slate of IPOs, according to Francis Gaskins, the president of IPO Desktop.


Teavana is a specialty retailer that sells loose-leaf tea and tea-making accessories. Predominantly located in malls, the retailer is known for courting shoppers to try the tea, which is premium priced.


The Atlanta company is looking to raise roughly $100 million through the sale of 7.1 million shares at $13-$15 per share. It plans to use the proceeds to redeem preferred stock and pay off its debt. The company's shares will trade on the New York Stock Exchange under the symbol TEA.


The corporate parent of the coffee and breakfast giant goes public at a steep premium, fueled by aggressive growth plans. The stock jumps more than 40%.

By InvestorPlace Jul 27, 2011 10:54AM

Updated: 4:37 p.m. ET


By Jeff Reeves, Editor, InvestorPlace.com

According to the slogan, America already "runs on Dunkin'." But after a nearly $424 million IPO Wednesday morning and aggressive expansion plans to satisfy shareholder appetite, Dunkin' Brands Group (DNKN) hopes the world will run on its doughnuts and coffee soon.

Dunkin' plans on doubling its U.S. store count and making an ambitious move into emerging markets -- adding 500 stores a year.

On its first day of trading Wednesday, the stock was up 46.6%, closing at $27.85 from an opening price of $19.


Consumer spending has been noticeably strong despite the impasse on Capitol Hill.

By TheStreet Staff Jul 27, 2011 10:45AM

By Don Dion, TheStreet


The gloomy debt situations facing the United States and the EU have led many people to question the strength, stability and longevity of the global economic recovery. While the current economic climate is certainly challenging, there are still a number of places investors can turn to in order to find stability and strength.


Earlier this week, I highlighted gold miners as a pocket of strength, given the market's uncertainty and the continued appeal of gold. Funds like the Market Vectors Gold Miners ETF (GDX) have managed to power higher, outpacing not only the broader markets but also physically backed gold offerings like iShares Gold Trust (IAU).


While gold and gold miners have surged and will continue to stay in favor as investors second-guess the strength of the market's recovery, other corners have become attractive because of their surprising resilience in the face of market turmoil.


Consumers, for instance, have held strong throughout this bout of market rockiness. As Washington, D.C., lawmakers have continued to butt heads over a debt ceiling agreement and EU leaders struggle to sort out their own debt crisis, domestic consumers have remained willing to open their wallets and spend.


Pfizer, Johnson & Johnson, Bristol-Myers, Elan and other companies are following a strategy that suffered a big blow recently.

By InvestorPlace Jul 27, 2011 10:00AM

By Barry Cohen, Health Care Writer

It's true that a rising tide can lift all boats.

At the same time, a sinking ship can suck the innocent down in its vortex. That's exactly what might happen to a number of pharmaceutical companies that had high hopes for their Alzheimer's treatments.

Pfizer (PFE), Johnson & Johnson (JNJ), Bristol-Myers Squibb (BMY), Elan (ELN) and a host of other companies are following a strategy that suffered a big blow recently. The death knell for drugs based upon the assumption that the buildup of amyloid in the brain causes Alzheimer's might have been sounded when Eli Lilly (LLY) released results of a follow-up study at the recent Alzheimer’s Association International Conference in Paris.


Before you bet against it, consider the impeccable track record of CEO Reed Hastings.

By Jim Cramer Jul 27, 2011 8:28AM

jim cramerthe streetTo sell or not to sell Netflix (NFLX)?


You know what? In a curious twist on Shakespeare, that is not the question.


To me, the question is: Do you take advantage of the decline in Netflix and have faith that management did the right thing in raising subscription rates?


It's very rare that there is such a hot-button battleground stock like Netflix. The world seems to be divided between people who think Netflix is always one quarter away from being revealed as a colossal joke and those who believe Netflix is going to take over the world.


To me it is not that simple. To hold on to Netflix or even to buy it, you have to take a leap of faith about management, about CEO Reed Hastings and about his ability to navigate the waters of price increases and payments to creators of entertainment. You have to believe that he has loyal customers in America and that he will have loyal customers in the future, particularly overseas, where the company has just started to expand.



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[BRIEFING.COM] The stock market ended the holiday-shortened week on a mixed note as the Dow Jones Industrial Average shed 0.1%, while the S&P 500 added 0.1% with seven sectors posting gains.

Equity indices faced an uphill climb from the opening bell after disappointing quarterly results from Google (GOOG 536.10, -20.44) and IBM (IBM 190.04, -6.36) weighed on the early sentiment. Google reported earnings $0.15 below the Capital IQ consensus estimate on revenue of $15.42 ... More


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