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Indexes might not be in correction territory, but they're getting closer. Now's the time to consider what moves to make.


American Superconductor gets hammered. Silvio Berlusconi blames speculators for the implosion of Italian banks. Deutsche Bank hires Janet Jackson at $17,700 a minute.

By TheStreet Staff Jul 15, 2011 1:50PM

By Gregg Greenberg, TheStreet


Here is this week's roundup of the dumbest actions on Wall Street.


5. American not-so-Superconductor


Shares of American Superconductor (AMSC), which makes electrical systems for wind farms, fell 5% this past Monday and another 5% on Tuesday. The stock is down nearly 40% since mid-April and more than 70% year-to-date.


The media empire's CEO will answer questions about accusations of phone hacking. The CEO of the company's UK newspaper unit resigns.

By TheStreet Staff Jul 15, 2011 1:20PM

the streetBy TheStreet Staff


News Corp. (NWSA) CEO Rupert Murdoch, whose British newspapers have been battling accusations of phone hacking for the past week, will appear before members of the British Parliament next week to answer questions about the scandal, according to The Wall Street Journal.


Earlier on Friday, Rebekah Brooks resigned as CEO of News International, News Corp.'s U.K. newspaper unit. She will be replaced by Tom Mockridge, the CEO of News Corp.'s Sky Italia operations. Brooks and James Murdoch, who heads international operations for the giant media group, will also testify before the parliamentary committee, according to the Journal, which News Corp. owns.


James Murdoch said Friday that the newspaper group will apologize to Britain for the phone hacking. The company also plans to set up an independent committee to investigate claims of improper conduct. While News Corp.'s stock has dropped 11% during the past week, its shares were up 0.9% at $15.57 Friday.


The easiest way to invest in this country is also the riskiest.

By Motley Fool Pick of the Day Jul 15, 2011 11:59AM

Image: (Shanghai, China © Yang Liu/Corbis)By Tim Hanson


It's undoubtedly painful to have been an investor in any of the Chinese-listed companies that have been alleged to be or exposed as frauds over the past year. That's a feeling that's been shared by individual investors as well as by revered professionals such as John Paulson (Sino-Forest), Hank Greenberg (China MediaExpress), and Lee Ainslie (Longtop Financial).


We've shared in that pain at Motley Fool Global Gains as well, with two of our China picks, Yongye International (YONG) and China Green Agriculture (CGA), having had serious questions raised about them at one time or another. We believe our research of these companies has addressed these questions, but it is also true that our once-significant gains in these stocks have been largely erased.


A better way?
It's in the face of those losses that many Fools have asked me why we bother investing in individual Chinese companies at all. Even if China's economy continues to grow, wouldn't it be easier and safer just to buy an exchange-traded fund such as the China 25 Index (FXI) and remove some of the company-specific risks that have recently crushed so many investors?


These funds provide exposure to companies the Oracle has shown interest in.

By TheStreet Staff Jul 15, 2011 11:25AM

(© ULTRA.F/Digital Vision/Getty Images)By Don Dion, TheStreet


Given his legendary knack for picking winners, it's no wonder market professionals and do-it-yourself retail investors tend to keep a close watch on Warren Buffett to see what new companies he has his eyes on.


Buffett's acquisition preferences have received particularly heavy focus throughout 2011 in light of his massive cash reserves as well as his words and actions.


In his annual letter to Berkshire Hathaway (BRK.A) shareholders, Buffett used his recognizable folksy charm in an attempt to portray his desire to find acquisition targets. In the document, he said he and partner Charlie Munger have their elephant gun reloaded and are prepared and eager to pull the trigger when an attractive opportunity presents itself.


Proven technical measures show that it's a high-risk time to buy these market leaders.

By Jul 15, 2011 10:50AM
By Tom Aspray,

It has been a tough week so far for the major stock market averages, as ratings cuts and the increasingly hostile environment in Washington have cut several rallies short. The major averages have retraced up to 50% of their rallies from the June lows.

The bottoming formations in the Advance/Decline (A/D) lines are still intact, but that could change with another day or two of negative A/D numbers. The McClellan Oscillator has dropped from a high last week of +247 to Thursday’s close at -70. Stocks need to turn higher by early next week to keep the market in rally mode.

Despite the overall market weakness, there are some stocks that have bucked the trend and are trading nearer to recent highs than recent lows. Even the strongest stocks undergo corrections, so it is important to know when a stock is overbought because that is clearly not the time to buy. It can also be helpful to those who want to take some profits on existing long positions.

My favorite way to measure whether a market is overbought or oversold are Starc bands, as they can often alert us to price extremes. Last week, in discussing NetFlix Inc. (NFLX), I noted that it was “getting closer to the weekly Starc+ band at $305.” This week, the company announced a controversial new pricing plan and the stock rallied to a high of $304.79 before reversing to close Thursday at $286.62.

The action in NFLX illustrates why these four stocks—Microsoft Corp. (MSFT), International Business Machines (IBM), McDonald’s Corp (MCD), and Coca-Cola Co. (KO)—could be vulnerable in the week ahead.
Tags: ibm

Check out the tech sector's best cheap investments, which have aggressive upside potential.

By InvestorPlace Jul 15, 2011 10:01AM

Image: Pennies (© Corbis)By Louis Navellier, Editor, Blue Chip Growth

There is no better place to find explosive growth than with low-priced penny stocks. I'm not talking about pink-sheet stocks that are potentially nonexistent, or fraudulent names set to crash. I’m talking about real companies with real earnings -- companies listed for more than one year on a major exchange like the AMEX, NYSE or Nasdaq that have a market cap in the ballpark of $100 million.

The returns can be even more powerful when you combine the power of technology stocks and penny stocks. Specifically, the software space is seeing lots of action thanks to the mass acceptance of smart phones and personal computing devices.

These devices are quite powerful, but they still need programs to make them run. The best software companies are those that make users more productive. In this tough economy, those companies that help workers do more with less are poised to be the penny stocks that really move higher.


Like the trusted brands of Clorox or the natural resources of Petrohawk, there are assets in this country worth far more to bigger companies than they are in the stock market.

By Jim Cramer Jul 15, 2011 9:18AM

jim cramer
the streetWhile Washington burns, the corporate world isn't fiddling -- it's taking action, with companies taking advantage of depressed pricing, unusual valuations and unique properties to do some buying.


This morning's ridiculously lowball bid for Clorox (CLX) by Carl Icahn is an example of what's about to happen in this country. I have little doubt that now that Clorox is in play, a company like Unilever (UN) will easily spend $12 billion or $13 billion to snap it up. You could see this one go to $100 a share once it is in play -- wildly overvalued on depressed earnings, but incredibly cheap as an asset play with great brands.


The stock's been lower than it should be because management overpaid for Burt's Bees and has undermanaged its core brands. It lacks scale. But it will be perfect for a Unilever counter to Procter & Gamble (PG), which once owned Clorox but was forced to divest it by an aggressive FTC in the 1960s.


The loan business at JPMorgan Chase wasn't great in the second quarter, but earnings still beat analyst estimates.

By Jim J. Jubak Jul 14, 2011 7:55PM
Jim JubakReally good news from the JPMorgan Chase (JPM) earnings report this morning -- if you’re a global investment bank.

It's disappointing news, however, if you’re a U.S. bank looking for loan growth.

Overall second-quarter earnings rose 13% from the second quarter of 2010. Earnings per share of $1.27 were 7 cents a share above the Wall Street estimate.

Revenue climbed 6.3% from a year earlier, to $27.41 billion. That was above the analyst consensus of $25.26 billion.

As in recent quarters, JPMorgan Chase’s bottom line got a boost from a reduction in reserves against potential losses. For example, the bank saw a reduction of $1 billion in credit-card reserves in the quarter, as fewer credit-card holders were delinquent on their accounts.

This earnings trade worked well. Here's why.

By Jamie Dlugosch Jul 14, 2011 5:57PM

The market is in disarray. One week we go up, the next week we go down. Buy and hold investing has become beyond aggravating.


No wonder individual investors are sitting on the sidelines. The perception is that if they commit capital today it will most likely be gone tomorrow.


What if there was a way to make money irrespective of the daily fluctuations in stocks?


Over the last year I have taken lessons learned from 20 years in this business to develop a stock trading system predicated on exploiting market inefficiencies caused by companies releasing earnings reports.


I’ve had great success putting this system to work identifying big winners during the 8-10 weeks of earnings season. I kicked off 2nd quarter earnings with a trade last week: Helen of Troy (HELE)


Investors are nervously watching Congress for signs that the debt ceiling will be raised. But the budget problem won't be solved unless runaway health care costs are addressed.

By Anthony Mirhaydari Jul 14, 2011 3:07PM

All that seems to matter to the stock market these days is what's happening with the U.S. Treasury's debt ceiling. Will it be raised? Will America default on its debt? Can President Barack Obama and the Republicans actually come to an agreement?


So far, despite all the political posturing, a short-term solution still seems to be in the cards. Failure to act simply isn't an option. Obama knows that. The Republicans know that. The corporate lobbyists have done their job. And Wall Street has already sounded the alarm, with credit analysts at Moody's and Standard & Poor's casting doubt on the nation's creditworthiness.


For all the talk of spending cuts, tax hikes and short-term solutions versus big fixes, there is one fundamental truth that isn't getting a lot of play: Runaway health care costs are bankrupting the country. And while that's been great news for investors in the health care sector in recent months, with the Health Care SPDR (XLV) outperforming the broad market by more than 11% since February, it jeopardizes the debt ceiling debate, the fate of the economy and the very future of the country.


Who knew it could be so easy?

By Motley Fool Pick of the Day Jul 14, 2011 2:22PM

By Morgan Housel


No one in Washington can agree on how to narrow the budget deficit. Not even balance. Just narrow.


The debate over next year's budget alone has been ongoing for months. Progress is obnoxiously difficult. One person wants this, another calls it "sacred" and says "cut that," any number of thinktanks say both are wrong, and Paul Krugman thinks everyone's a moron.


Tough problems, these. But as Berkshire Hathaway quote machine Charlie Munger said recently, "It's amusing to see someone spend 1 million man-hours on something I can solve with my left hand."


With only partial seriousness, I'm going to do just that, balancing next year's $1.1 trillion budget deficit in three easy steps.


The retailer is expected to start selling a device that is cheaper and has fewer bells and whistles than the dominant iPad.

By Kim Peterson Jul 14, 2011 1:45PM
The worst-kept secret in technology this year is Amazon's (AMZN) new tablet computer. The company won't confirm it, but everyone already seems to know about it.

The tablet gets an unofficial coming-out party this week in The Wall Street Journal, which says Amazon will sell the device by October. It will have a 9-inch screen and no camera, unnamed sources tell the newspaper. Instead of developing its own software, Amazon will use the Android platform developed by Google (GOOG).

With its tablet, Amazon essentially wants to take its Kindle experience and kick that up a notch. The company has had great success with the Kindle e-reader, which has become its best-selling device. It sells more Kindle books than hardcover and paperback books combined.

But why stay in the realm of books?  

CEO Jamie Dimon signaled Thursday that investors should expect more dividends and share buybacks from the nation's second-largest bank.

By TheStreet Staff Jul 14, 2011 12:55PM

By Shanthi Bharatwaj, TheStreet


U.S. banks are going to have so much extra capital over the 12 months, they are not going to know what to do with it, JPMorgan Chase (JPM) CEO Jamie Dimon said Thursday, signaling investors should expect more dividends and share buybacks from the nation's second-largest bank.


"We are going to have a lot of extra capital," Dimon said during the analyst conference call, adding that the bank will apply to the regulator to allow it to increase dividend "when appropriate".


While the CEO wasn't explicit about dividend plans, he emphasized that the board was in favor of returning excess capital to shareholders. "The board is still the primary driver of capital decisions,"said Dimon. "It is still America. Capitalism is still alive," he said.


Technical indicators suggest that the commodities correction may be over, and now is a good time to establish positions in broad-based or more specialized commodity ETFs.

By Jul 14, 2011 12:12PM
By Tom Aspray,

Silver’s sharp reversal in May caused selling in many of the commodity markets, so it was not surprising that Barclay’s Capital estimated that $6.5 billion came out of the commodity markets in May. Further outflows in June means the rate of outflows is almost as much as what moved out of the commodity funds in late 2008.

Of course, this was at the height of the financial crisis. The open interest in many of the individual commodities has also dropped sharply, as fewer are willing to hold long positions. For example, the open interest in coffee and copper were both down over 70%.

On May 5, I suggested that “The Commodity Bull Market Isn’t Over.” At the time, my analysis suggested that “A deeper correction and a significant retracement of the recent gains should be an opportunity to establish either 1) long positions in a broad-based commodity vehicle, or 2) targeted positions in a specific commodity market.”

The commodity markets have firmed over the past two weeks, suggesting that the correction may be over. The added pressure on the US dollar over the widening concern over the debt ceiling is also a positive for the commodity markets, and so too are China’s recent growth numbers.
Tags: goldoil

These funds offer different ways to capitalize on the nation's rebound from its tragic earthquake and tsunami.

By TheStreet Staff Jul 14, 2011 11:29AM

Image: Japan (© Stockbyte/SuperStock)By Don Dion, TheStreet


Although the devastating earthquake and tsunami that tore through Japan during the opening half of 2011 cast a thick fog of uncertainty over the nation's markets, some of the doubts circling this nation have been lifted in recent weeks.


As we move into the second half of the year, Japan is showing signs that it is gathering steam, and investors with a tolerance for risk may find this recovering corner of the globe to be an attractive option to keep on the radar.


Evidence of Japan's increasing strength can be seen in the recent performance of the iShares MSCI Japan Index Fund (EWJ) compared with that of broader global products such as the iShares MSCI EAFE Index Fund (EFA) and the Vanguard Total World Stock ETF (VT).



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  • June gold traded in positive territory for most of today's pit session. Prices advanced as high as $1307.10 per ounce and dipped to a session low of $1297.90 per ounce in mid-morning action. The yellow metal eventually settled with a 0.3% gain at $1303.40 per ounce. 
  • May silver rose to a session high of $19.81 per ounce shortly after floor trade opened. It then chopped around near the $19.60 per ounce level and settled with a 0.8% gain at $19.64 per ... More


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