8 reasons the market isn't worse
8 reasons the market isn't worse

Stocks should be crushed by global turmoil, Jim Cramer says. Instead, they're doing fine.


Exxon has held that title since 2005, but Apple surged ahead for much of the day Tuesday.

By Kim Peterson Aug 9, 2011 3:18PM
Updated 4:20 p.m. ET

Which is the world's most valuable company: Apple (AAPL) or Exxon Mobil (XOM)?

Until Tuesday, the answer had been Exxon. We're talking about a company that set a record in 2008 for the highest quarterly earnings of any company ever. But Apple shares have been on an unbelievable march since 2009, and Apple passed Exxon to become the most valuable company.

For much of the afternoon, anyway. But Exxon came back at the last minute.

Apple shares closed up nearly 6% Tuesday to $374.01, giving the company a market cap of $346.74 billion. Exxon shares rose a little more than 2% to close at $71.64, making its market cap $348.32 billion. 

The world's biggest ETF could soon be SPDR Gold Shares, which took in $1.3 billion on Monday alone. Some analysts see the metal hitting $2,500 by year's end.

By Kim Peterson Aug 9, 2011 2:13PM
Updated 5 p.m. ET

Investors can't get enough of gold this week.

Gold (-GC) futures hit a record Tuesday at $1,778 as the chaos continued in global markets, and analysts said the precious metal may be headed even higher. But gold settled back to close at $1,740.50 as investors showed renewed interest in the stock market.

The new push for gold means that the world's biggest exchange-traded fund could soon be the SPDR Gold Shares (GLD), which took in $1.3 billion in new assets in just one day Monday.
Tags: etfgold

7 quick tips to keep you sane and solvent.

By Motley Fool Pick of the Day Aug 9, 2011 1:47PM

By Joe Magyer


Investing through recessions is nerve-wracking. Here are seven quick tips:

  1. Write down your strategy: Take 10 minutes to write down your investing strategy and why you hold each of your stocks, bonds, CD's and mutual funds. Use that document as your pillar of strength if markets go bonkers.
  2. Diversify: There's a reason financial advisers pound the table on diversification: It works. Lower your downside and sleep easier by investing across a range of asset classes, styles (value, growth, etc.), industries (consumer staples, energy, etc.) and countries (U.S., Freedonia, etc.). If you're new to stocks, here's a quick primer on how to get diversified.

Funds tracking gold, the Swiss franc and some of the world’s largest, most stable companies can offer shelter.

By TheStreet Staff Aug 9, 2011 11:51AM

By Don Dion, TheStreet


Individuals from the blogosphere and mainstream financial media spent last weekend obsessing over Standard & Poor's decision to downgrade the U.S. credit rating to AA+ from AAA. Because the event was the first of its kind, it's understandable that fears are widespread as investors, market commentators and analysts scramble to find meaning and prepare for the road ahead.


While it may be tempting to flee the markets, taking brash actions is not a route I would suggest. On the contrary, long-term-minded ETF investors will need to be patient. Those looking to ease their nerves should keep their eyes on defensive asset classes. In the event of a prolonged shakeup, these corners of the market will provide a welcome buffer against upheaval.


If you're panicked, your portfolio might have been wrong to begin with. You need a plan for bad times as well as good. Here's what to do -- and when to worry.

By TheStreet Staff Aug 9, 2011 11:04AM

By Seth Fiegerman, MainStreet


The U.S. had its credit rating downgraded from AAA to AA+ late Friday by Standard & Poor's for the first time in history, but despite the concern among consumers and investors, financial planners argue the downgrade isn't reason enough to make any drastic changes to one's portfolio.


"If the portfolio you own is properly diversified and if your long-term goals haven't changed, then you should not be making any changes because of this," says Ric Edelman, a prominent financial adviser and the founder of Edelman Financial Services. "Our concern is that a great many consumers don't have a diversified portfolio."


History proves that the current meltdown is not a first. Investors who resist panic selling now should be rewarded later.

By MoneyShow.com Aug 9, 2011 10:35AM
By Tom Aspray, MoneyShow.com

The relentless nature of the stock market decline over the past 12 days has been astounding. The Dow has dropped 15%. Given the expansion of the derivatives market, the volatility is clearly higher now than it has been in past market declines.

A great example of this is seen in the action since Monday's close in the S&P 500 futures. The September S&P futures closed Monday at 1,111.25, with a low for the day of 1109.50. Overnight, the futures dropped as low as 1,077 -- more than 40 points below Monday's close -- and then reached a high of 1,148, which was 37 points above Monday's close.

Monday's drop was the largest since Dec. 1, 2008, when the Dow dropped 680 points, although the market regained that loss just five days later. Clearly, this decline must be looked at in a different light.

The selling in some of the individual stocks has been even more severe, as Bank of America (BAC) was down 20% on Monday alone. The relative performance, or RS analysis, for the big banks has been negative for most of the year, and in early July (see 3 Big Banks That Aren't Cheap Enough), this analysis suggested they were still vulnerable.

So is this market decline the worst, and if not, can past market declines help prepare us for what may happen next? Let's take a look at some interesting historical examples.

Unless we have a severe recession, many of the stocks you see in free fall will be higher a year from now.

By Jim Cramer Aug 9, 2011 8:03AM

the streetthe streetIn the past 24 hours in stock futures we have had a 2% rally and a 2% decline all within the time it takes to drink a can of Coca-Cola.


The speed is breathtaking. No human can keep up.


While we were able to rally, the rally seemed like a terrific opportunity to sell if only because you can buy it back at the conclusion of the last gulp -- if you would like to, that is.


Markets all seem to want to be down 20% for the year, and anything less seems, at this time, to be a gift.

As our Dow is down only 6% and is about the best-performing market in the world, you can figure that if it keeps pace with the others, it is a straight shot to 9,200. That's no support for anything, but it is a reasonable target if you think we are part of this wave flowing over the world.


My disaster target has been about 8,500, so 9,200 could be reasonable if we just keep pace -- and there is no particular reason that should not happen. So many are pinning their hopes on the Fed that it is a little unsettling. Last I looked, the Fed doesn't set stock prices.


Don't follow the herd, because nothing has fundamentally changed about our economy or the market.

By InvestorPlace Aug 9, 2011 7:16AM

By Charles Lewis Sizemore, InvestorPlace.com

After the stock market tanked Monday, thanks in part to Standard & Poor's historic downgrade of the United States' credit rating, investors are left with one enormous question on their lips: What do we do now?

Well, I have three tips for you, and they may not be popular. That's because I advise running against the herd by selling gold, avoiding Treasurys and hiding out in blue-chip stocks.


After one of the worst sell-offs in history, a look at what's next.

By Anthony Mirhaydari Aug 8, 2011 5:06PM

Wall Street traders returned to work Monday in the mood to sell after mulling the consequences of America's first-ever credit downgrade last week. Main Street investors, with a mix of fear, anger and uncertainty, piled on, too.


The result was one of the deepest sell-offs in market history and a continuation of a now 3-week-old wipe-out for stocks. Out of the 3,085 issues that trade on the New York Stock Exchange, just 42 managed to move higher. That's less than 1.4%. And that's the worst result in more than 70 years.


Over the past 11 trading days, the Dow Jones Industrial Average has lost nearly 1,900 points, falling to levels not seen since September 2010. That's a drop of nearly 15% -- enough to nearly wipe out the gains from the Federal Reserve's most recent $600 billion stimulus. This is a drop on par with the 2008 financial crisis, the 1987 Black Monday crash and the various Great Depression meltdowns. 


For beleaguered investors, the question is: When does this nightmare end?


Even a key announcement from the European Central Bank doesn't calm global stock markets.

By Jim J. Jubak Aug 8, 2011 4:51PM
Jim JubakThe announcement that the European Central Bank will buy Italian and Spanish bonds has done wonders for that debt, but it hasn’t done much to stem the global financial meltdown.

The yield on Italy’s 10-year bond fell to 5.28%, and the yield on the Spanish ten-year bond fell to 5.16% Monday after the central bank announced over the weekend that it would start buying debt from the two countries to calm the bond market.

But global stock markets continued the sell-off that began Sunday night in Asia.

In Hong Kong, the Hang Seng finished down 2.17%, which was the best level of the day.

The Shanghai Composite tumbled 3.8%. The index is now down 21% from its peak.

Brazil’s Bovespa continued its recent record as the world’s worst performing stock market, falling another 5% as of 11 a.m. ET.

We've seen 3 straight trading days of stunning jumps.

By Kim Peterson Aug 8, 2011 4:02PM
The VIX ($VIX), commonly called the "fear index" because its reflection of investor sentiment, was up more than 45% to 46.68 at market close.

Monday saw the highest level for the Chicago Board Options Exchange Volatility index since May of last year. And this is after two days of major increases Thursday and Friday.

Investors look at the VIX as an indicator of volatility expectations for the next month. It's a good way to gauge investor sentiment, and right now the lights are flashing red.

In fact, the entire VIX futures curve shows inversion, the Financial Times reports. One investment manager told the newspaper that negative convexity across the entire curve usually occurs only "during systematically important shock events such as the 2008 financial crash, Bear Stearns bankruptcy, 2010 flash crash, and the 2007 credit market meltdown." 

Women's skirts, which some people say are a stock market indicator, were trending long heading into summer.

By Kim Peterson Aug 8, 2011 3:20PM
Image: Shopping (© imagewerks/Getty Images/Getty Images)If you paid attention to this summer's trendy women's skirts, you might have foreseen the stock market crash.

The skirts at stores this season are all trending long, Jezebel points out. And the "hemline index," popularized by an economist in 1926, says that when skirt hemlines drop, so do the markets.

The HowStuffWorks site explains the correlation a little more. When the micro miniskirt became popular in the 1960s, the market was up. But long skirts were in vogue around the time of the Arab oil embargo in 1972. There are other examples throughout the decades.

Check out the popular skirts at some of the major retail chains right now. At Anthropologie, they range from below the knee to ankle-length. Macy's (M) skirts are also conservative.  

The president says the nation can pay its debts. What needs to change is the lack of political will in Congress.

By Kim Peterson Aug 8, 2011 2:20PM
President Barack Obama just took to the podium to defend the U.S. economy after Standard & Poor's downgraded the federal credit rating to AA-plus from AAA.

S&P doesn't doubt the nation's ability to pay its debt, Obama said. But after witnessing a month of drama over raising the debt ceiling, the agency doubts the nation's political system's ability to act.

Obama quoted investor Warren Buffett, who recently said that he would give the United States a quadruple-A rating if there were one (AAA is the highest). Obama said he and most of the world's investors agree. 

Jittery ETF investors will be looking to the markets to see if there will be a repeat of Thursday's plunge.

By TheStreet Staff Aug 8, 2011 1:54PM

By Don Dion, TheStreet


Here are five exchange-traded funds to watch this week.


1.    SPDR S&P 500 ETF (SPY)


To say that the past week's market action was rocky would be an understatement. Although investors were greeted to a strong employment report late in the week, it is likely that the broad market's steep plunge on Thursday is the event that is lingering on the minds of most.


Over the past few weeks, gains have been few and far between for SPY, SPDR Dow Jones Industrial Average Index ETF (DIA) and PowerShares QQQ (QQQ) as analysts, market commentators and investors continue to question the strength of the global economic recovery.


Here are three names that should glitter brightly over the long term.

By Motley Fool Pick of the Day Aug 8, 2011 1:09PM
By Tim Hanson


Ready for a remarkable statistic? According to data from IndexUniverse.com, Gold exchange-traded funds collected some $3.5 billion worth of new assets during the month of July, with SPDR GLD Shares (GLD) getting $2.8 billion of it. That made SPDR GLD the second-most popular ETF last month, behind only the wildly popular SPDR S&P 500 (SPY).


This, however, makes sense. With the world uncertain about whether the United States would or would not raise its debt ceiling, many undoubtedly gave up on U.S. bonds and equities and instead sought out the protection that gold offers.


Having said that, one might expect that with a debt ceiling deal reached, money might start flowing back out of gold and into bonds and equities. In fact, just the opposite is happening. Gold ETFs collected another near $1 billion worth of assets on Aug. 2, the day after President Barack Obama signed the debt ceiling deal into law, while SPDR S&P 500 gave back more than $2 billion to investors. This action is not only an indictment of the process and result of the debt ceiling compromise, but also evidence of just how pessimistic the market is about the U.S. economy.



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Market index data delayed by 15 minutes

[BRIEFING.COM] S&P futures vs fair value: +3.40. Nasdaq futures vs fair value: +7.20. The S&P 500 futures trade three points above fair value.

Markets in Asia ended on a mostly higher note. The Reserve Bank of New Zealand hiked its key rate 25 basis points to 3.50%, as expected.

  • In economic data: 
    • China's HSBC Manufacturing PMI jumped to 52.0 from 50.7 (consensus 51.0) 
    • Japan's trade deficit narrowed to JPY822 billion from JPY909 billion ... More


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