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.

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4 analysts downgrade the stock the day after a disappointing quarterly report.

By MSN Money Partner 8 hours ago
Caption: A sign stands outside of a McDonald's restaurant in San Francisco
Credit: © Justin Sullivan/Getty ImagesBy Andria Cheng, MarketWatch

Consumers have been abandoning McDonald's (MCD) by not eating out as much or instead patronizing rivals like Chipotle Mexican Grill (CMG). Now, analysts, too, have soured on the company's stock.


Four analysts downgraded the company's stock on Wednesday, a day after the Oak Brook, Ill.-based company posted a disappointing second-quarter profit and full-year outlook amid a continued sales slowdown in the key markets of the U.S., Germany, Japan and Australia.


"The deteriorating fundamentals increase the likelihood of activist involvement," said Rachael Rothman, an analyst at Susquehanna Financial. She said the company's turnaround is taking longer than she expected and downgraded the stock to neutral from positive.


While McDonald’s Chief Executive Don Thompson evoked a sense of urgency on a conference call Tuesday, Wall Street said substantial improvement in sales and customer visits likely won't come any time soon. Meanwhile, the company is facing cost pressures, including higher prices for meat and other items.

 
Tags: CMGMCD

In the context of recent history, the precious metal is at a low point as the market for equities has soared.

By MSN Money Partner 9 hours ago
Hundred dollar bills surrounded by gold © Anthony Bradshaw, PhotographerBy Elizabeth MacBride, CNBC

Gold prices rose again last week on news of the downing of Malaysia Air Flight MH17, the latest in a series of geopolitical shocks that have sent the price of the precious metal up this year.


The price of gold rose 4 percent in the year preceding July 17. On news that the airliner had been shot down over Ukraine, it rose 1.2 percent to $1,315 per ounce, according to Morningstar data based on the London Fix. (It's since fallen a little as investors have started taking profits.)


The volatility is a sign of the most fundamental fact about gold. It is possibly the most emotionally driven asset class -- the refuge of apocalyptic worriers, as well as of serious traders who look at it as a portfolio diversifier and alternative to paper currency.


"You cannot discount the psychosis that exists around gold," said Ben Johnson, Morningstar's director of manager research for passive strategies. "We call it the oldest continuous 2,000-year-old investment bubble around here."

 
Tags: DUSTGLD

The social media company has seen strong revenue bumps lately, but it's also managed to cut costs in a unique way.

By TheStreet.com Staff 9 hours ago

A magnifying glass is posed over a monitor displaying a Facebook © Joerg Koch/APBy Chris Ciaccia, TheStreet


Though Facebook's (FB) advertising business is growing like weeds in an untended garden, the social media company's lower profile Open Compute Project is proving to be a genuine windfall for shareholders, having saved more than $1.2 billion over the past three years, according to sources close to the situation.


Facebook's Open Compute Project, which the company first implemented in April 2011, has focused not only on the tremendous amount of data it consumes and analyzes, but has helped increased overall energy efficiency while cutting costs. Facebook operates data centers in Prineville, OR., Forest City, N.C., Lulea, Sweden and is currently in the process of building one in Altoona, Iowa. 

 

Sheldon Lavin's company is the parent of the Chinese entity under investigation by Shanghai authorities for using expired meat.

By MSN Money Partner 10 hours ago
Credit: © STF/AFP/Getty Images
Caption: This picture taken on July 20, 2014 shows workers producing food at the Shanghai Husi Food Co., a factory of US food provider OSI Group, in ShanghaiBy Abram Brown, Forbes

The ruckus over expired meat in fast-food restaurants in China has placed a little-known Illinois company in the spotlight -- along with its wealthy chairman and chief executive Sheldon Lavin.


Chains like McDonald's (MCD), Yum Brands' (YUM) KFC, Burger King (BKW) and Starbucks (SBUX) have admitted to using expired meat from Shanghai Husi Food following an investigation by Shanghai authorities. Husi Food managers said they were "appalled."


"Our company management believes this to be an isolated event, but takes full responsibility for the situation and will take appropriate actions swiftly and comprehensively," the company said a press release.

 

DR Horton, Meritage Homes and PulteGroup are expected to post results Thursday morning.

By Benzinga 11 hours ago

Image: Home under construction © CorbisBy Nelson Hem


The earnings crunch is well underway, and leading homebuilders D.R. Horton (DHI), Meritage Homes (MTH) and PulteGroup (PHM) will be taking their turns in the earnings spotlight Thursday before the markets open.


KB Home (KBH) and Lennar (LEN) posted better-than-expected results in late June on higher home prices and strong demand. Investors will be looking for rising homebuilder confidence, as measured by the National Association of Home Builders, to portend good news on earnings and sales.


D.R. Horton

Analysts on average predict that this builder will report that revenue for the fiscal third quarter rose almost 28 percent year-over-year to $2.08 billion. Earnings of $0.49 per share are also in the consensus forecast. That would be up from a reported profit of just $0.42 per share in the comparable period of last year. 

The federal government is pushing sweeping new rules to upgrade safety for trains carrying flammable liquids.

By MSN Money Partner 11 hours ago
Credit: © Jim West/Alamy

Caption: Rail tank cars transport oil produced in the Bakken shale fieldBy Russell Gold, The Wall Street Journal

The U.S. government wants to phase out thousands of railroad tank cars that carry crude oil and ethanol within two years, as part of proposed rules to upgrade safety for trains carrying flammable fuels.

Tens of thousands of these older DOT-111 tank cars will have to be replaced or retrofitted under the proposed rules, expected to be announced Wednesday. That is a faster deadline than Canada's three-year timeline to upgrade or phase out the railcars used to carry oil, ethanol and other hazardous liquids.


The federal government's proposals are sweeping and will change how flammable liquids are transported by rail in North America, but they aren't as stringent as some in the rail and energy industry feared. The Wall Street Journal has reviewed a description of the new requirements, which the U.S. Transportation Department is expected to detail on Wednesday.

 

A good quarter is a good quarter. Don't hide it under a blanket of worry, and don't accentuate the negative.

By TheStreet.com Staff 11 hours ago

Woman Singing for Fame and Fortune © Alberto Ruggieri/Illustration Works/CorbisDoes tone matter? Should we care about inflection and word choice on conference calls?


You bet we should. Here's why.


When Honeywell (HON) and Domino's (DPZ) reported their quarters Friday and today, both stocks flew higher on their better-than-expected numbers and good commentary. Both CEOs, Dave Cote and Pat Doyle, played it straight, giving the highlights and then telling their stories. In each case, the confidence they had about the future ran throughout the calls. Most important, they gave very little reason to sell because, alas, there weren't really any reasons to sell.


TheStreet.com logoBut go back a previous quarter. In each case both men spent an inordinate amount of time talking about the negatives -- or at least, as I would describe it, telling you things they might be worried about or weren't happy with.

 

The economy and the market may have 99 problems, but a social media bubble isn't one.

By MSN Money Partner 11 hours ago
Caption: The 'Facebook' logo is seen on a tablet screen
Credit: © LIONEL BONAVENTURE/AFP/Getty ImagesBy Tim Mullaney, MarketWatch

Janet Yellen made a fuss by slipping a line into her semi-annual Congressional testimony on the economy that social-networking stocks were in a bit of a bubble.


Beginning with Facebook's (FB) second-quarter earnings report Wednesday, we'll see if she was way more wrong than right.


Yellen's wrong about this bubble three different ways. First, social-media stocks as a group aren't very expensive, and the best of breed, like Facebook and YouTube owner Google (GOOG), are actually pretty cheap. 


Second, the flaws of less-premium social-media stocks, like Groupon (GRPN) and Zynga (ZNGA), are well-appreciated and realistically appraised, which is one reason why you've routinely seen initial public offerings by social-media firms struggle and even flop, in a way barely seen among 1998-1999 Web companies.

 

Puma Biotechnology shares soar after it says it wants to file for marketing approval of an experimental breast cancer drug.

By MSN Money Partner 12 hours ago
Credit: © Rafe Swan/Corbis

Caption: A graduated pipette being inserted into test tubeBy Reuters with CNBC.com

Puma Biotechnology (PBYI) said its experimental breast cancer drug met its main goal in a late-stage trial, but the options market is smelling something fishy.


Shares of the company, which doesn't have any drug in the market, spiked nearly 300 percent on Wednesday. 


Puma said on Tuesday it plans to file for marketing approval of neratinib, codenamed PB272, in the first half of 2015.


Adjuvant treatment with the drug showed a statistically significant improvement in disease-free survival of 33 percent versus patients on placebo, according to trial data. Adjuvant treatment, or additional treatment, is given after the primary treatment.

 
Tags: PFE

The company plans to close stores and lay off employees, and says it needs to make some deeper changes.

By MSN Money Partner Tue 4:38 PM
© Ed Andrieski/AP
Crocs shoes on displayBy Hayley Peterson, Business Insider

Crocs' (CROX) comeback plan is a bust.

The company is cutting jobs and closing stores amid plummeting net income. 


The company said Tuesday that it plans to close 75 to 100 of its 624 stores globally and lay off 183 employees out of more than 5,000. Its stock price rose more than 12 percent to $16.68 as investors applauded the move.


Net income fell a whopping 44 percent for the second quarter to $19.7 million, though revenues rose 3.6 percent to $376 million. 


Crocs President Andrew Rees said in a statement that the performance shows "the need for dynamic change in our strategy, organization and approach to the market."


Crocs was hoping that a new, sleeker line of shoes that was released this year -- including ballet flats, pumps, and open-toe wedges -- would revitalize the brand. But the company's new shoe styles failed to offset falling demand for its signature plastic clogs.

 
Tags: CROX

The category is seeing less enthusiasm from investors than any other.

By MSN Money Partner Tue 2:47 PM
Image: Stock market report © ULTRA.F/Digital Vision/Getty ImagesBy Dan Strumpf, The Wall Street Journal

Small-company shares' summer swoon deepened Monday, underscoring investor concern about valuations.


The Russell 2000 ($TOMX) index of smaller companies, typically those with market values below $1 billion, dropped 0.4 percent Monday, outpacing a 0.3 percent decline in the Dow Jones Industrial Average ($INDU) and a 0.2 percent slide in the  Standard & Poor's 500 Index ($INX).


Monday's drop comes as smaller shares are enduring a second downdraft this year. So far, the Russell is alone among major U.S. stock indexes in losing ground in 2014, falling 1.5 percent compared with the S&P's 6.9 percent advance.


The retreat hasn't quieted the calls by bearish analysts that the Russell index, comprising companies ranging from drug developer Idenix Pharmaceuticals (IDIX) to media company A.H. Belo (AHC) and wireless-technology company ParkerVision (PRKR) appear overvalued, judging by prices as a multiple of earnings for the latest year.

 

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

By MSN Money Partner Tue 1:06 PM
Credit: © Richard Drew/AP
Caption: Specialist Jay Woods is reflected in one of the screens at his post on the floor of the New York Stock Exchange, Wednesday, June 18, 2014By Lee Brodie, CNBC

Although stocks closed lower on Monday, the declines were modest with the Dow Jones Industrial Average ($INDU) and Standard & Poor's 500 Index ($INX) falling a fraction of a percent.


Many investors, including CNBC host Jim Cramer, found the relative strength somewhat curious, given the widespread geopolitical unrest.


Israeli jets, tanks and artillery pounded Gaza again as the death toll from a two-week conflict topped 500. Also, fighting flared in the Ukrainian city of Donetsk as investigators began to inspect the bodies of the victims of the Malaysia Airlines crash. In addition, the United States and the European Union announced further economic sanctions against Russia.


"You'd think the market would get absolutely crushed," noted Cramer. But it didn't. 


Here are Cramer's reasons why:

 

Biotech deals still dominate the pipeline for initial offerings, however.

By InvestorPlace Tue 12:39 PM

Credit: © John Crowe/Alamy

Caption: An El Pollo Loco Restaurant in Upland Calif.By Tom Taulli


Last week was a hot one for initial public offerings, which saw deals such as TubeMogul (TUBE) and Sage Therapeutics (SAGE) each jump more than 60 percent on their first days.


There was some underlying weakness in the IPO market -- many of last week's deals saw pricing reductions to gin up demand -- but we've still seen a flood of IPOs lately, which will continue this week with 14 new stocks on deck. (Including three holdovers from last week -- Medical Transcription Billing, Microlin Bio and Pfenex).


Let's take a look at some of the highlights:

 

Reaction to the streaming media company's latest quarterly results has been mixed. Here are a few key things to note.

By TheStreet.com Staff Tue 12:34 PM

The Netflix company logo is seen at Netflix headquarters in Los Gatos, Calif. © Ryan Anson/AFP/Getty ImagesBy Keris Alison Lahiff, TheStreet


Netflix (NFLX) reported its second quarter and judging by trading volatility, with moves within a tight range, investors aren't quite sure what to make of it.


On the one hand, the online streaming giants boasted a total membership base 33 percent larger than a year earlier, far exceeding its own estimates.


On the other, earnings missed estimates. Earnings of $1.15 a share fell shy of forecasts by a penny, according to Thomson Reuters estimates, while revenue of $1.34 billion was in-line with expectations.

 

New transactions with the Kalashnikov company were banned after July 16 as US sanctions kick in. But current gun owners are fine.

By MSN Money Partner Tue 12:32 PM
Credit: © PhotoXpress/ZUMA Press/Corbis
Caption: Mikhail Kalashnikov, soviet-Russian arms designer with his Kalashnikov machine gun at the exhibition in Kremlin museumBy Dan Goldstein, MarketWatch

If you like your AK-47, you can keep your AK-47. That’s the message from the U.S. Treasury Department to U.S. gun owners.

Despite slapping sanctions on the famed assault-rifle maker Kalashnikov last week, along with other Russian defense companies, in response to suspected Russian involvement in the shoot-down of the Malaysian jetliner over the Ukraine, the Treasury's Office of Foreign Assets Control (OFAC) says U.S. owners of the weapons can still own them and resell them at gun shows so long as they don't owe the parent company any money.


"If a U.S. person is in possession of a Kalashnikov Concern product that was bought and fully paid for prior to the date of designation (i.e., no payment remains due to Kalashnikov Concern), then that product is not blocked and OFAC sanctions would not prohibit the U.S. person from keeping or selling the product in the secondary market, so long as Kalashnikov Concern has no interest in the transaction," the Treasury Department states on its website in a frequently asked questions section.

 
Tags: RGRSWHC

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[BRIEFING.COM] The stock market ended the Wednesday session on a mixed note. The tech-heavy Nasdaq displayed relative strength, climbing 0.4%, while the S&P 500 added 0.2% with five sectors settling in the green. For its part, the Dow Jones Industrial Average (-0.2%) spent the entire session below its flat line.

Equities started the midweek affair on a rather unassuming note in the absence of market-moving news or economic releases. With those pieces missing from the equation, ... More


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