5 reasons the market is seeing red
5 reasons the market is seeing red

Geopolitical crises are taking a toll on stocks as we head into the seasonally weak month of August.

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Europe is still the big problem, but plunging commodities prices will help lots of companies.

By Jim Cramer Oct 5, 2011 9:21AM

the streetIt's tough to be bullish when Europe is the albatross around our necks. Who knows what will happen overnight? Somehow, it tends not to be good. And they are in huge bear markets over there.

 

But I can't resist talking about a silver lining that no one seems to care about. A little less than three months ago, we heard company after company talk about skyrocketing raw costs. We heard about how oil keeps going higher or is stubbornly high. We heard that paper board wasn't going down, that plastics aren't coming in and that grains are just way too elevated. Steel costs were too much for car companies, and copper was too much for homebuilders.

 

Companies as diverse as Ford (F) and Clorox (CLX) and Procter & Gamble (PG) and Kimberly-Clark (KMB) continually sounded alarms about inflation. Their conference calls were filled with downbeat input cost caveats that were going to hurt earnings, going to hurt costs for a very long time to come.

 

Even though the company still must test the quality of its new deposit, the discovery is important.

By Jim J. Jubak Oct 4, 2011 6:02PM
I know I just finished a big post on rare earths, but this news from Molycorp (MCP) arrived too late to get into that post.

Molycorp has filed a form 8-K with the Securities and Exchange Commission announcing that the company has discovered a heavy rare-earth deposit near its Mountain Pass, Calif., mine.

This is a big deal -- even with the company’s disclosure that it still has to do lots of test drilling to determine the quantity and quality of the deposit.
 

The bank isn't charging a new fee to rip you off or to goose its profits. It's merely responding to new regulations.

By Motley Fool Pick of the Day Oct 4, 2011 4:39PM

By Morgan Housel

 

Social-networking sites are said to be the best way to gauge how the world feels about something. So when Bank of America (BAC) announced last week that it was going to begin charging $5 a month for most customers who use a debit card, I checked to see what Twitter had to say. No surprises:

 

"Bank of America is like a man who's been saved from a burning building and then kicks the fireman, . . . " said one customer.

 

"It's illegal to rob a Bank of America, but legal for Bank of America to rob you of 5 dollars every month for spending your own money," wrote another.

 

The company unveils a faster, smarter phone and brings Sprint into the fold. And you can get the iPhone 3GS free.

By Kim Peterson Oct 4, 2011 3:16PM

You can't blame Apple (AAPL) fans for being a little disappointed Tuesday.

Everyone expected the company to announce the iPhone 5. It was practically a given. But, as the stock's afternoon price drop might indicate, that was not the case.

Instead, Apple announced the souped-up iPhone 4S.

 

It looks just like the old iPhone 4 on the outside, but an internal overhaul has made the phone faster and smarter. Apple added some shiny new games and apps and priced the phone at $199, $299 and $399, depending on storage capacity.

 

A growing number of critics say exchange-traded funds are contributing to rockiness in the broader markets.

By TheStreet Staff Oct 4, 2011 12:03PM

By Stan Luxenberg, TheStreetTheStreet

 

John Bogle, the founder of Vanguard Group, has been a longtime critic of exchange-traded funds.

 

Because ETFs are easy to buy and sell, they can encourage investors to trade rapidly, Bogle wrote in his book "Common Sense on Mutual Funds." Constant trading can be a recipe for poor returns.

 

When he began attacking ETFs a decade ago, Bogle was a lone voice. But lately more critics have appeared.

 

After stocks plunged in the flash crash of May 2010, some observers argued that high-frequency trading of ETFs had added to the turmoil.

 

These 3 stocks could see irrational slides.

By InvestorPlace Oct 4, 2011 11:52AM
By James Brumley, InvestorPlace

When it comes right down to it, there are only two basic approaches to being an investor. The first one traditionally has been the more common one — trade stocks based on what they should be worth in the future. The second approach historically has been less-adopted — trade stocks based on what they are doing. About 80% of the time, those two approaches will end up in agreement on a stock-by-stock basis. It’s the other 20% of the time, however, that can kill your portfolio.


The past two months has been that “other 20%” of the time.


It’s been a bit of a problem all year long, but as of early August we saw a complete disconnect between the fundamentals and stock prices. Stocks of bad companies got crushed. Stocks of good companies got crushed. Valuations, present or future, were irrelevant.

 

Selling pressure is likely to subside for these leaders.

By MoneyShow.com Oct 4, 2011 11:26AM

By Tom Aspray, MoneyShow.com


The selling was heavy on Monday, and early Tuesday, overseas markets were also sharply lower. Clearly, there are no signs yet that the market has bottomed, though as I have noted recently, the sentiment measures are reaching levels that are more consistent with a market bottom than a market top.


Not all stocks bottom or top out together, so for those investing or trading individual stocks, a different approach is needed than if you are trading a market-tracking ETF like the Spyder Trust (SPY).

 

Banks and their stocks just can't be trusted right now.

By InvestorPlace Oct 4, 2011 11:11AM

By Louis Navellier, Blue Chip Growth


It’s chaos out there. Market volatility has investors rushing in and out of stocks frantically trying to scoop up profits any way they can. It’s a dangerous Wild West, and the mob is running the show.


I have to say, I understand investors’ frustrations and reason for panic. The economic picture is hazy at best, jobs aren’t picking up, we’ve lost faith that our elected officials can come to the table with real solutions (not to mention pass them into law) and there’s the ongoing saga in Europe.

 

It was a dismal third quarter for funds, and the short-term outlook isn't getting better.

By TheStreet Staff Oct 4, 2011 10:46AM

By Frank Byrt, TheStreetTheStreet

 

There's nowhere for investors to hide.

 

The fourth-quarter kickoff Monday saw the S&P 500 ($INX) slip below 1,100 to a one-year low, while oil and commodities extended their declines in a sign global economies may be headed toward a recession.

 

And in the third quarter, which ended Friday, 45 of 46 countries' stock indexes posted declines, and U.S. stocks had their worst quarter in three years. More importantly, many of the issues that prompted those miserable performances remain unresolved, which bodes poorly for the stock market for the rest of the year.

 

Shareholders hope the latest model will help the tech giant shine through the economic gloom.

By TheStreet Staff Oct 4, 2011 10:15AM

the streetBy James Rogers, TheStreet

 

Apple (AAPL) investors are confident that the iPhone 5 will help the gadget maker and new CEO Tim Cook shine through the gloom enveloping much of the tech sector.

 

"I think that it will push the share price forward," Michael Yoshikami, the CEO of YCMNET Advisors, told TheStreet. "I think that people will get that Apple is becoming a wireless company and that computers will be ancillary to the iPhone."

 

"Apple still has some growth ahead of it in the phone game, and this release, like previous ones, should open even more doors for the company," added Chad Brand, the president of Peridot Capital Management.

 

With endless lawsuits, it's tough to forecast anything, let alone earnings.

By Jim Cramer Oct 4, 2011 9:47AM

the streetI had to laugh this morning when the "shocking" news came out that Deutsche Bank withdrew its profit forecast because of the uncertain times we are in.

 

Profit forecast? How quaint. How sweet that they even had one.

 

In truth, isn't that what really ails the banks right now, both in the U.S. and in Europe? Over there, the sovereign debt holdings are humongous. And why shouldn't they be? What was the safest paper to be in?

 

Over here, we know the holdings are better. But where is the earnings power? What is the earnings power, for example, of Bank of America (BAC)? What is it? Does it have any? Does the government or governments want them to be in business? And what the heck is with that Countrywide preferred stock that is blowing out? Will they Chapter 11 it? Can they?

 

The economic downturn is taking a toll on these mainstays.

By InvestorPlace Oct 4, 2011 9:20AM
By Jeff Reeves, InvestorPlace.com

It has been ugly on Wall Street lately. Investors are spooked, consumers have prepared for the worst and businesses remain defensive. The Greek debt debacle is stealing recent headlines, but don’t fool yourself — persistent problems of high joblessness, a battered housing market and huge losses at financial firms continue to take a toll on the entire global economy.


While the big picture still is unfolding, there are a few stories for particular players that are rapidly approaching an unfortunate end. Victims of both the general downturn and of specific troubles related to their businesses, these iconic American brands are about to disappear.

 

Unlike in years past, there are multiple product rumors and stories swirling around the cult tech stock. Here are the top 5 to watch.

By InvestorPlace Oct 3, 2011 8:41PM
By Jeff Reeves, InvestorPlace.com

The world is on the edge of its seat again as we approach yet another landmark Apple (AAPL) launch. It's a little later than the previous summer splashes reserved for the latest iPhone -- the iPhone 5 -- but has just as much fanfare.

And for several reasons, the unveiling could be the most important event in the history of the iPhone since the first big reveal in 2007. One easily could argue that Apple has a lot more riding on this launch.


Here's what's at stake:

 

Are we headed into recession? A few nuggets of positive news could signal stronger-than-expected growth.

By Jim J. Jubak Oct 3, 2011 5:10PM
The Economic Cycle Research Institute, which has a good record in predicting the ups and downs of the business cycle, told its clients Friday that the U.S. economy is headed into recession. (For more on that call and a little horn tooting by the ECRI, see this.)

Even if the institute is right, though, that doesn’t mean the road to recession won’t be paved with some bumps and potholes. (Don’t confuse the Economic Cycle Research Institute, which is in the business of predicting the business cycle for clients, with the National Bureau of Economic Research, which calls the cycles after they’ve happened.)

Monday, just days after the institute’s recession call, the Institute for Supply Management reported that its manufacturing index had climbed to 51.6 in September from 50.6 in August. (Remember, anything above 50 shows that the manufacturing sector is expanding.) 
 

AMR Corp. leads a wide sector slump on concerns about the economy and corporate travel budgets.

By Kim Peterson Oct 3, 2011 4:18PM
Investors are always ready to push the panic button on American Airlines, which is thought to be the weakest airline financially.

The panic button got a workout Monday. Shares of American's parent company, AMR Corp. (AMR), plunged 33% to close below $2. Investors are worried that the airline sector will suffer even more as the economy sputters and companies cut travel budgets.

Analysts at Citi cut ratings Monday for two other airline stocks: United Continental (UAL) and US Airways (LCC). Those stocks plummeted as well, by 12% and 16%, respectively. But it was AMR that took the most damage. 
Tags: amrtravel

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[BRIEFING.COM] The stock market punctuated July with a broad-based retreat that sent the S&P 500 lower by 2.0% with all ten sectors ending in the red. The benchmark index posted a monthly decline of 1.5%, while the Russell 2000 (-2.3%) underperformed to end the month lower by 6.1%.

To get a better feel for what led to today's retreat, we'd like to look back to Wednesday, when the market had ample reason to rally, but did not. Instead, it ended basically flat after a sloppy day of ... More


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