The most likely scenario is that the markets will begin to rise from here -- and that bounce is just beginning to take hold.
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Investors hope to see a third round of quantitative easing, but the economy is growing strongly enough without it.
Berkshire Hathaway will invest $5 billion in Bank of America, and could become a major stakeholder if all warrants are exercised.
Berkshire Hathaway (BRK.A) has agreed to invest $5 billion in Bank of America (BAC), reviving the stock price and giving investors more faith in the financial sector's future. Shares of the bank rose 15% early Thursday, but by the close had settled to a 9% gain at $7.61.
Another round of mortgage purchases is on the menu of possible stimulus options to be unveiled during Bernanke's Jackson Hole speech.
Like children waiting impatiently for Christmas morning, Wall Street is being held in suspense. But instead of Santa Claus bearing gifts, it's all about Federal Reserve Chairman Bernanke's speech at the Jackson Hole, Wyo., summit of central bankers Friday.
Will Bernanke manage a repeat performance and unleash another stock market rally by teasing additional policy tools? That's what happened last year as he tipped what eventually became the $600 billion money printing operation that was dubbed QE2 by the press.
Unfortunately, and as I discussed in my column this week, lingering inflationary pressures will likely keep a QE3 off the table. Instead, a number of other options are available, with the most probable being an increased focus on pushing down long-term interest rates by lengthening the average maturity of the Fed's bond holdings. What I didn't discuss in my column, and what is generating increased chatter across Manhattan trading desks, is that this strategy could have a pleasant side effect: support for the beleaguered housing market.
Irene is already turning into a rare and extraordinary storm that will batter the region all the way to New England.
Updated Friday, 12:30 p.m. ET
The East Coast has begun seeing rains from Hurricane Irene, one of the most extraordinary storms to hit the country in recent history.
The storm's core is expected to hit the North Carolina coast Friday night, and by Sunday morning, it could be within miles of the New York. New York City has already evacuated nursing homes and hospitals in areas likely to be hit with storm surges.
But the region caught a small break Friday morning.
The soft-spoken, slightly reserved Southerner is ready for the biggest job in Silicon Valley.
By James Rogers, TheStreet
Tim Cook has an unenviable task filling Steve Jobs' New Balance sneakers, although Apple (AAPL) investors have little to fear from the soft-spoken, slightly reserved Southerner who now has the highest-profile job in Silicon Valley.
Inevitably, Apple will miss Jobs' genius for innovation and predicting the next big thing in consumer technology, but Cook's talents should not be underestimated.
While Jobs is widely regarded as a visionary, Cook has developed impressive skills working behind the scenes at Apple. As an IT operations maven, Cook has expertise that will prove crucial in helping Apple roll out its ambitious cloud strategy.
To benefit from the metal's volatility, investors need a clear plan they can stick to.
By Roger Nusbaum, TheStreet
Gold (-GC) has been on a wild ride the past couple of weeks. It went up $100 in a few days and then went down $100 in about 24 hours.
Early Tuesday, we sold one-third of our clients' position in the SPDR Gold Trust (GLD) based on sentiment indicators like the number of analysts calling for $3,000 as the actual price was approaching $2,000 and the fact that GLD surpassed the SPDR S&P 500 ETF (SPY) as the largest ETF.
On a more fundamental level, a partial sale was warranted as our position grew well beyond our target after this most recent move to $1,900. Since then, the price has obviously gone down quickly. But the fear of U.S. dollar debasement still exists, which underpins the fundamental case for gold even if the next $150 is down and not up.
The charts flashed a clear warning sign before the metal's recent decline. While the mid- to long-term trend remains positive, it's time to hedge existing long positions.
By Tom Aspray, MoneyShow.com
Longtime readers know that Starc bands are among my favorite technical tools. Still, last Thursday's column on gold, in which I pointed out that risk on the long side was uncomfortably high, was treated with a fair amount of skepticism, as some were looking for the $2000 or $2500 level to be reached before a correction began.
In that article, I pointed out that as gold was accelerating to the upside, the bearish analysts had disappeared. More importantly, the SPDR Gold Trust (GLD) was trading above both the monthly and weekly Starc+ bands. Historically, this was a very rare occurrence.
As I noted at the time, “When a market reaches a historically high-risk buying area using both the weekly and the monthly analysis, the odds of some consolidation or a more significant pullback are very high. From a money management point of view, this can allow even long-term investors to protect profits by hedging their positions.”
Given the parabolic nature of the recent rally, the correction could last for some time, but it is important to remember that the intermediate and long-term trends are still positive for gold. For those who are not accustomed to gold’s volatility, you may want to take a look at past gold corrections, as detailed in “Are You Ready for Gold’s Volatility?”
Gold futures are down another $35 in early trading on Thursday, so GLD could lose another 2.2% on the opening. The key Fibonacci retracement and chart support levels can help identify the key levels investors and traders should be watching.
Regardless of the volatility, there are still some great long-term income plays you can get into now.
It’s important for income investors to have a small and select collection of companies like the ones below, that are in differing industries but have substantial real assets behind them that generate the cash to pay bigger dividends.
The telecom has a very sticky customer base for its broadband high-speed Internet data services, wireless communications networks, cable, and other data-fed television and on-demand entertainment, along with its traditional land lines.
Revenues keep coming. And while peers around the nation have faced plenty of pain from lost customers, Otelco focuses on making the most of its customer base by focusing on their wants and needs.
Moreover, it also knows that its capital is a crucial part of the business—so management has continued to keep a firm eye on attracting and keeping individual shareholders. To do so, it continues to pay its rock-steady dividend—currently over 10%—while also watching the revenues and the balance-sheet risk so that it can keep paying up.
One look at the company's numbers tells us the Steve Jobs news was largely baked into the stock price.
Right now people are using $6.80 as their earnings-per-share (EPS) estimate for Apple's coming quarter, which is the fourth quarter of the company's fiscal year. I think that's low. Way low. To me, $9 is more like it. People are chattering about $27 for fiscal 2012. Me? I am thinking $40 if everything goes right.
If you look at the way cash is accumulating, it is reasonable to think that Apple could have $110 per share in the bank.
Now, armed with those numbers, let's say Apple is at $350. Big hit, right?
There are enough uncertainties in this mixed-up market without questioning the impact of Apple's retiring CEO. With video analysis of the transition at Apple.
By Charles Lewis Sizemore, InvestorPlace.com
Steve Jobs announced his retirement on Wednesday, as his declining health has made it impossible for him to continue as Apple's CEO. We certainly wish the best for Jobs and his family and hope he makes a full recovery. Still, Jobs' departure raises a very uncomfortable question for Apple (AAPL).
How does a company that owes so much of its success to the vision of one man cope with his absence?
Apple's stock was down 5% in midday trading Thursday, indicating traders are wondering the same thing.
The chief executive of Apple steps down, leaving investors and the tech world reeling.
The news was not unexpected, given Jobs' longstanding health issues, but it's still a shock.
The Apple chief sent an email to the world Wednesday afternoon saying he "can no longer meet his duties and expectations" as head of the world's largest company. He plans to serve as chairman, as long as the board gives its all but guaranteed approval.
Jobs didn't mention his health problems, but many people assume them to be the reason behind the resignation.
Toy store's pre-IPO expansion strategy is puzzling
By Tom Taulli, InvestorPlace.com
Since its start in 1948, Toys “R” Us has always found ways to evolve and grow. But its luck might be running out as the retail landscape is undergoing cosmic shifts. In other words, can an operator like Toys “R” Us survive the onslaught from rivals like Wal-Mart (NYSE:WMT) and Amazon (NASDAQ:AMZN)? And will the stagnant U.S. economy make things even worse?
OK, it’s unlikely that Toys “R” Us will become obsolete. This seems a bit extreme. But it’s likely the problems will grow and grow.
Faced with patent-infringement charges from Apple, Samsung claims that the iPad's design dates back to '2001: A Space Odyssey.'
The company says it couldn't possibly have stolen Apple's (AAPL) designs for the iPad because Stanley Kubrick was there first. His 1968 movie "2001: A Space Odyssey" showed the design long before Apple was founded, Samsung says.
In a federal court filing this week, Samsung even references a YouTube clip from the movie that shows two astronauts eating and using tablet computers. You can watch the clip here.
Nabbing the iPhone 5 would be a huge boost for Sprint, but the struggling carrier still needs help.
The Wall Street Journal reports that Sprint will sell the iPhone 5 in mid-October, at the same time Verizon (VZ) and AT&T (T) will also sell the phone. Just getting parity with those rivals is a big boost for Sprint, whose 52 million subscribers far lag the 106 million at Verizon and the 99 million at AT&T.
While it appears to be dropping, it's still more than $30 higher than it was a year ago.
By Dan Dicker, TheStreet
There has been lots of talk about the "big drop" in oil prices over the past several weeks, and talking heads have been quick to see a silver lining in the reduced input costs for manufacturers and for prices that you and I pay at the pump.
Well, I hate to rain on the parade, but the real-world physical price of oil hasn't dropped much at all and is still more than $30 a barrel higher than it was at this time last year.
That's because the "price" of oil that is universally referenced on cable television and in newspapers is the U.S. and NYMEX-traded West Texas Intermediate (WTI) futures contract, a contract with enormous physical problems which has morphed into little more than a financial tool for hedge funds and algorithmic traders, and has become irrelevant to the real world prices that are being paid.
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[BRIEFING.COM] The stock market finished the Wednesday session on an upbeat note with the Nasdaq (+1.3%) ending in the lead. The S&P 500 settled higher by 1.1% with all ten sectors posting gains.
The benchmark index spent the entire trading day in the green, rallying to new highs during the last hour of action. The tech-heavy Nasdaq, meanwhile, briefly dipped into the red during morning action, but was able to recover swiftly.
Stocks began the trading day with modest gains ... More
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