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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Consumer spending, corporate spending and the game-changing iPad are making life difficult for the veteran PC maker these days.

By InvestorPlace Aug 17, 2011 10:26AM

By Jeff Reeves, Editor, InvestorPlace.com


Dude, who's getting a Dell (DELL) these days? From recent financial reports, it looks like only a precious few consumers.


Founder and CEO Michael Dell announced Tuesday a meager growth projection of just 1% to 5% on the year, and Dell shares took a tumble. Shares were off about 8% Wednesday morning.

 

We'll see lower stock prices until large companies say the downturn is only temporary.

By Jim Cramer Aug 17, 2011 8:28AM

jim cramerthe streetSo far, Urban Outfitters (URBN) is in a class by itself in saying that the last 10 days leading up to its conference call were disastrous in at least one of its divisions, Anthropologie. I am still reeling from that startling statement and have tried to back it up with others to be sure that URBN isn't something unto itself.

 

I didn't get it from Home Depot (HD), which didn't have anything negative to say at all. Last night, when talking to Steven Sadove, the CEO of Saks (SKS), I heard that the days leading up to the quarter have been business as usual, consistent with excellent metrics. I didn't hear it from Howard Schultz on Tuesday either, with Starbucks (SBUX) seeing no slowdown.

 

But last night on the Dell (DELL) call we got lots of evidence that consumer demand is "weaker and a bit more uncertain," which translated into a hideous outlook: revenue growth going from a 5%-9% increase, totally respectable, to 1%-5%, completely unacceptable, hence why we are seeing so much selling.

 

Their Urban Outfitters moment, reiterated several times like on the URBN call, specifically identifies "the last few weeks" as the time frame.

 

The projections from South America's largest McDonald's franchiser sound great -- until you look at the inflation battles ahead.

By Jim J. Jubak Aug 16, 2011 5:13PM
Jim JubakJust looking at growth rates, if you want to load up your portfolio with Big Macs, you should buy Arcos Dorados (ARCO) instead of McDonald's (MCD).

On Aug. 1, the largest McDonald's franchiser in South America reported second-quarter earnings of 7 cents a share, 4 cents above estimates. Revenue climbed by 28.7% from the second quarter of 2010. (The company went public in April.)

For all of 2011, the company told investors to expect revenue growth of 22% to 24% -- up from prior guidance of 15% to 17% growth -- and net income growth of 35% to 45%.

Sure beats the 11.3% earnings growth Wall Street projects for McDonald's in 2011.
 

There's a lot riding on the rest of the year.

By Motley Fool Pick of the Day Aug 16, 2011 4:46PM

By Rick Aristotle Munarriz

 

It' going to be an eventful next few months for Sirius XM Radio (SIRI), and most of it should be good. Let's go over a few days that shareholders should already be looking forward to in the coming months.

 

Sept. 23
Sirius XM investors may not take Clear Channel (CCMO) seriously, but the terrestrial giant is investing a lot of might and star power into promoting an upgrade of its iHeartRadio app.

 

Next month, Clear Channel is hosting a two-day music festival in Las Vegas to promote the streaming application's update. Not so humbly self-billed as "the biggest live music event in radio history," magnetic recording stars including Lady Gaga, Coldplay, and Jay-Z are scheduled to take the stage to show the terrestrial radio operator some promotional love. According to Clear Channel, the music festival sold out 10 minutes after tickets were put on sale to the general public in July.

 

Standard & Poor's analysts cut their rating and price target on Google after looking more closely at the Motorola Mobility deal.

By Kim Peterson Aug 16, 2011 4:08PM
Google's (GOOG) plan to buy Motorola Mobility (MMI) for $12.5 billion is not sitting well with analysts.

That $12.5 billion price was a surprising 63% premium over Friday's close. And while there are certainly some pros to the deal -- boosting Android's momentum and cutting out the middle man -- analysts are taking a closer look here.

There is greater risk to the company and the stock now, wrote Scott Kessler, equity analyst from Standard & Poor's. "Despite MMI's extensive and valuable patent portfolio, we are not sure it will protect Android from IP issues," he added in his note, reported by The Wall Street Journal

The soccer team is reportedly considering a public offering in Singapore, perhaps to help its heavy debt load.

By Kim Peterson Aug 16, 2011 3:38PM
You may soon be able to own a piece of Manchester United.

The U.K. soccer team is reportedly looking to raise as much as $1 billion through an initial public offering in Singapore by year's end. Two-thirds of the team's fan base is in Asia, so it's no surprise that its American owners are looking at Singapore, The Wall Street Journal reports.

But before you go jumping into some shares, look at the team's financials in the same way you would any other major company. It has nearly $1 billion of net debt, The Journal reports. It earned $47 million last year before interest and tax, but its interest expense was $119 million. 

Lower volatility and stronger economic data set the stage for additional gains. But there are likely to be bumps along the way.

By Anthony Mirhaydari Aug 16, 2011 3:06PM

The crazy crisis environment of the past few weeks has calmed somewhat. A sense of normalcy is returning. Stocks are up more than 8% off their lows. Volatility continues to be drawn out of the system like snake venom from a wound. Emotions like fear and panic are fading, giving way to a more reasoned approach.

 

Even the economic data are beginning to surprise investors to the upside again. Industrial production in July jumped 0.9% vs. the consensus estimate of 0.5%. June's result was also revised upward. Manufacturing is coming on strong, thanks to a rebound in auto production. Other positive data points include a drop in jobless claims, a rise in labor income and an increase in loan growth as credit standards are eased.

 

Nerves are still raw, however. Witness Tuesday's market drop, driven by renewed concerns over the eurozone. For investors, the question is: Now what?

 

Saying that politicians from both parties have failed to lead, Howard Schultz urges a boycott where it counts.

By Kim Peterson Aug 16, 2011 2:01PM
Even chief executive officers are sick of politicians.

Howard Schultz, the CEO of Starbucks (SBUX), says top bosses across the country should stop donating to political campaigns. Taking away that money might pressure lawmakers to fix the growing budget deficit.

"I am asking that all of us (forgo) political contributions until the Congress and the President return to Washington and deliver a fiscally disciplined long-term debt and deficit plan to the American people," he wrote in an email Monday night to business leaders. 

The presidential candidate says the Federal Reserve would be playing politics if it printed more money before the election.

By Kim Peterson Aug 16, 2011 1:07PM
Ben Bernanke, you might think twice before heading to Texas anytime soon.

Texas Gov. Rick Perry, campaigning for president this week, said the Federal Reserve's printing more money between now and November 2012 would be like an act of treason.

"If this guy (Bernanke) prints more money between now and the election," Perry said, "I don't know what y'all would do to him in Iowa, but we -- we would treat him pretty ugly down in Texas. Printing more money to play politics at this particular time in American history is almost treacherous -- or treasonous in my opinion." 

Greenlight Capital, in trying to reverse losses, short-circuits its strategy by buying dud stocks.

By TheStreet Staff Aug 16, 2011 12:41PM

TheStreet

By Robert Holmes, TheStreet

 

David Einhorn, trying to make up for losses in his Greenlight Capital hedge fund, is turning to unloved stocks such as Huntington Ingalls (HII) and Aeropostale (ARO) for a second-half rebound.

 

It's hard to tell who's having a tougher year, Einhorn or the New York Mets, the baseball team in which he's seeking to buy a $200 million stake. Einhorn's hedge fund fell 5% through the second quarter, prompting him to shake up his investments. The Mets are 20 games back in the standings in the National League East division.

 

Unfortunately, Greenlight Capital's four new positions have likely been unprofitable for Einhorn, who was brutalized by Yahoo (YHOO). In a letter to shareholders last month, Einhorn disclosed that Greenlight Capital sold out of its stake in Yahoo at a loss after the Internet search giant's dispute over the ownership transfer of Alibaba's online-payments business Alipay.

 

Only 4 sectors are higher for the year, but analysis indicates that a few are likely to outperform in the months ahead.

By MoneyShow.com Aug 16, 2011 12:19PM
By Tom Aspray, MoneyShow.com

It has been a wild year for most market sectors, and the sharp recent plunge in the stock market has not helped to clarify the picture. 

The first quarter’s star performer was the Select Sector SPDR Energy (XLE), which gained 16.8%, leading the second-best performer, the Select Sector SPDR Industrial (XLI), by over 8%.

For the year, only four sectors are in positive territory, but all have also been hit hard over the past three weeks, as they are all well below the 2011 highs and have broken several levels of support.
 

Billionaire investor Warren Buffett starts a stake in Dollar General, while hedge fund manager William Ackman boosts his company's position in Family Dollar.

By TheStreet Staff Aug 16, 2011 11:44AM

TheStreetBy Jeanine Poggi, TheStreet

 

Hedge fund managers are getting bullish on dollar stores. Should you?

William Ackman's Pershing Square Capital increased its stake in Family Dollar Stores (FDO) as of June 30, according to a regulatory filing.

Ackman now holds about 11.1 million shares of Family Dollar, valued at $6.4 billion, from about 10.9 billion shares prior to June.

In May, Ackman became the largest shareholder of the dollar store, saying the company was poised for gains due to the potential of a buyout.

 

The famed investor turned his portfolio inside out in the second quarter, with big buys and even bigger sells.

By TheStreet Staff Aug 16, 2011 10:51AM

By Frank Byrt, TheStreet

 

Legendary investor George Soros, 81, had a wild second quarter as his $5.6 billion hedge fund added 198 stocks and sold 348 in what turned out to be a wholesale reshuffling of his portfolio.

 

A few of the largest acquisitions for Soros Fund Management were Golar LNG Partners (GLNG), which operates a fleet of liquid-natural-gas carriers; computer giant International Business Machines (IBM); Semiconductor HOLDRs (SMH), an exchange-traded fund that invests in semiconductor makers; VMware (VMW), a provider of virtualization software for cloud-computing systems; and SandRidge Energy (SD), an oil and natural-gas company.

 

The fund closed out of its positions in Internet search engine Google (GOOG), at $68 million; luxury-goods maker Coach (COH), a $46 million position; gold miner Novagold Resources (NG), which was a $45 million stake; Power-One (PWER), a maker of power-conversion and power-management products, in what had been a $25 million stake; and a $25 million position in Tenet Healthcare (THC), an owner and operator of health care facilities. Those are just a few of the largest sell-offs.

 

It hurts even at the top, with some bosses taking a 50% pay cut. But don't cry for the guys still making eight figures.

By InvestorPlace Aug 16, 2011 9:38AM

By Jeff Reeves, InvestorPlace.com editor


As prices of gas and food have crept up while wages have remained largely stagnant, many Americans are feeling the squeeze. Even if you haven't been laid off, you may face a furlough. Even if you don't face days off without pay, you may still be suffering under a wage freeze. And even if you get a 1% or 2% raise, that may not keep pace with inflation, the way things are going.


Throw in the stock market antics messing with your 401k or IRA, and it can be depressing to look at your bank account.


Since misery loves company, perhaps it's worth pointing out big-name companies where CEO compensation has also been falling, with some executives taking as much as a 50% cut. You may find it comforting to know that even the guys at the top are feeling the squeeze.

 

With Europe's biggest economy growing at just 0.1%, we must remain on recession watch.

By Jim Cramer Aug 16, 2011 8:47AM

the streetthe streetDid anyone actually believe that all of these crises in government would be good for the economy?

 

Did anyone think Germany was in as good shape after the past month as it was before?

 

Yet when a weak German GDP number came out this morning -- 0.1% growth, down substantially from 1.3% growth in the previous quarter -- markets nosedived as if people had been thinking that the little engine that could runs no matter what it's fed, including the thin gruel of total lack of confidence, fiscal austerity, and worldwide tightening and indecision.

 

I've been on recession watch ever since we started the horrendous budget process that led to a nearly disastrous deal, and I have been waiting for data like this to shock people into realizing how much damage was really done. The answer is: a whole lot of damage.

 

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[BRIEFING.COM] The stock market maintained a narrow trading range on Thursday before ending the session essentially where it began. The S&P 500 added less than a point, while the small-cap Russell 2000 (-0.2%) underperformed.

Equity indices displayed early strength thanks in part to an overnight boost from better than expected economic data in China and Europe. Specifically, China's HSBC Manufacturing PMI surged to an 18-month high (52.0 from 50.7), while Eurozone Manufacturing PMI ... More


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