Top Stocks

By Laurie Kulikowski, TheStreet

 

Citigroup (C) shares have slumped as weakness in the stock market has conspired with the government's decision to begin selling part of its stake in the bank to knock the shares down as much as 20% from recent highs.

 

The shares have sunk 14% since April 23, the last trading day before the US Treasury said it would begin selling 20% of the 7.7 billion Citigroup shares it owns in relation to the company's $45 billion bailout. On an intraday basis, using Wednesday's session low of $4.04 and a near-term peak of $5.07 on April 15, the stock was down 20%.

 

The KBW Bank index (BKX) is down just 5% over the same period. Citigroup's weighting in the index is 7.6%.

 

By Alix Steel, TheStreet

 

Gold was rising today as investors seek safety from the sinking euro, Greece riots and Portugal debt fears.

 

Gold for June delivery was rising $10.30 to $1,185.30 an ounce at the Comex division of the New York Mercantile Exchange. Gold traded as high as $1,187.30 and as low as $1,173. The U.S. dollar index was rising 0.3% to $84.40 while the euro hit a one-year low, falling 0.5% to $1.27 against the dollar. The spot gold price Thursday was rising over $11, according to Kitco's gold index.

 

A falling euro is boosting gold prices as investors look for a hard asset that keeps its value. As the debt of European Union nations balloons, investors are speculating that the European Central Bank might have to print money to address the situation.

 

Stocks gapped lower in the opening minutes of trading Wednesday as concerns over the future of the eurozone and the solvency of the southern states lingered.

 

It was the first two-day drop since early February. The dollar jumped at the expense of the euro, and commodities were clipped.

 

But then suddenly, when the Dow Industrial Average seemed fated for another triple-digit down day, buyers regrouped and charged. Bears were caught off guard. Large-cap stocks briefly pushed back into positive territory before shares swiveled and moved back into the red. In today's trading, stocks continue to stabilize.

 

High-yield dividend stocks were hard to come by in the recession, as some big blue chips slashed their payouts. But now, dividend growth appears to be back. 

According to Standard and Poor's, only 48 companies in the S&P 500 decreased their dividend payments during the first quarter of 2010 -- a vast improvement over the record 367 companies that slashed dividends during the same period in 2009 -- adding $6.4 billion in total dividends.

And not all stocks boosting payouts are the blue chips. Some small caps are offering mammoth yields right now -- including one tiny stock with a 12% dividend yield.

 

If the market weren't up so much, I have to tell you, we wouldn't care so much about the contagion. If the quarters hadn't been so good, if the stocks hadn't flown when they reported, we would be sitting here feeling smug. Instead, we have to watch the futures get hammered, and we are afraid to bid for anything but Coca-Cola (KO) and PepsiCo (PEP).

 

I don't blame us. Wednesday was totally discouraging in that the only real buying was short-covering, hence the swift 130-point reversal. We have entered one of those zones where a whisper can take stocks lower, except for those that didn't go up before.

 

Here is a company I really have mixed feelings about. Just after a bad customer support experience with my HP computers and printers, I read a posting on Marketocracy that asked: "What's behind this dinosaur? Not much!.....To me HPQ looks like a great short opportunity."

First let me tell you about my bad experience. I decided to upgrade my computer so I went to Best Buy and purchased a new HP Pavilion Entertainment PC. When I got home I tried to connect it to my old and trusty HP LaserJet III but there was no place to plug in the printer's 25 pin cable so back to Best Buy to get a converter cable to connect to the USB port. I log on and try to print but nothing happens. I call HP customer support to get assistance connecting my HP computer to my HP printer. To me that sounds like a logical step but boy was I wrong. 

You'd never know it by looking at plunging U.S. stock prices, but the economic data this week have been solid. 

The numbers point to a US economic recovery that is at worst chugging along and that at best might even be picking up speed.

So, for example, factory orders for March showed a big 1.3% increase. The consensus among economists called for a 0.2% decline. The government also revised February's numbers to show a 1.3% increase instead of the earlier 0.6% gain.

 

Is now a good time to buy stocks? Are any out there worth the effort?

The pickings are getting slimmer. Jim Jubak says investors are looking to get out of a market beset with woes. He suggests looking for bargains among growth stocks, but adds that stocks aren't going higher on good news these days.

Mark Hulbert at MarketWatch says "there are precious few stocks that qualify as genuinely very high quality."

 

Would you rather by an established company with little risk but a relatively high price; a small-cap newcomer with more risk but potentially more reward, or even an early stage privately held company that may soar or sink?

 

One of the hottest stocks over the past two years has been Green Mountain Coffee Roasters (GMCR). Shares have appreciated nearly fivefold since the start of 2009.

• Is Coffee Holding Company the next coffee buyout?

But that was then. Last week’s sell-off in Green Mountain demonstrates the challenges of buying into a story late instead of early. Shares of Green Mountain dropped some 11% after providing guidance for the third quarter that was weaker than expected.

 

Back on April 20, I said that I'd like to add shares of Cummins (CMI) to Jubak's Picks. Well, the stock ran away from me -- I mean, really ran, before I could get in a buy.

Now, thanks to the European debt crisis, the shares have given up all that gain and a little bit more. And I'm adding Cummins to Jubak's Picks Wednesday.

As I wrote in my post, the U.S. economic recovery is on track for decent, if not spectacular, growth. In that environment, I want to own growth stories where the basic underlying positives of the U.S. economy get a rocket booster blast from pent-up demand that has built up during the Great Recession. (For more on that kind of growth stock, see this post.)

 

In a war over fast food promotions, The King and Ronald McDonald continue to duke it out.

First it was the $1 double cheeseburger war, which irked some BK franchisees. Then, the fight over breakfast. Now it appears McDonald’s (MCD) and Burger King (BKC)have come to blows over summer drinks.

• Related: 5 Reasons to Buy McDonald’s MCD stock

Many Mickey D’s locations are planning a summer drink promotion where customers can get any sized soft drinks or a 32-ounce sweet tea for just $1. Now the King has counter-punched, with a plan to sell medium-sized Icees in Coke flavor or Fanta Cherry flavor for just $1. The promotion starts May 24 and runs until June 20.

 

Nothing worse than a leak of a Justice Department investigation. It can't be countered. It can't be softened. It can't be commented on. It's just out and out "there," to be had as a football for the media to play with.

Not only that, there is no way the Justice Department will ever come out and deny it, or even indicate when it started looking, or what it is looking at, if at all.

 

The simple truth from the beginning of this Goldman Sachs (GS) leak is that the government is rationally approaching the case. Does anyone believe that Justice wouldn't be looking into the situation? Does anyone believe Justice is ignoring the probe?

 

Do you feel the psychology of this market changing? 

A few weeks ago, I think you could have accurately said that investors on the sidelines were waiting to get into what they saw as a continuing stock market rally. I think that was true as late as April 15 (when the Standard & Poor's 500 index was at 1212) or even April 23 (when the S&P 500 was at 1217).

But now, I think it's fair to say that many investors in the market are looking for a day to get out.

 

Some members of Congress bet against the U.S. economy in recent years, placing money down in hopes that stocks and bonds would fall.

It's entirely within their right to make those bets, and smart investors were doing the same thing all around. Still, there's just something unsettling about a lawmaker shorting the economy.

The Wall Street Journal analyzed congressional disclosures and found that 13 members of Congress (or their spouses) made bearish bets in investment accounts in 2008 through exchange-traded funds, or ETFs. 

The only way Vanguard could make its 46 exchange-traded funds more attractive is to cover them in chocolate syrup and whipped cream.

The company's ETFs are already super cheap. Now, it's offering commission-free transactions on those funds. For all other ETFs and stocks, commissions will be between $2 and $7, reports ETF Trends.

Low fees have served Vanguard well. The company is now the third-largest ETF provider in the world, with an average ETF expense ratio of 0.52%, reports ETF Trends.