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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With biotech rallying, investors who really want some bang for their buck should consider 3 smaller but riskier stocks. All have strong charts and low prices.

By MoneyShow.com Apr 27, 2011 11:22AM
By Tom Aspray, MoneyShow.com

The S&P Biotechnology Index bottomed at 929 on February 24, just three days after the S&P 500 peaked at 1,344.03. Biotech then continued to move higher over the next few weeks as the overall market was declining.

Since the close on Feb. 24, the biotech group is up 13.2% while the S&P 500 is just 3.1% higher.

Big biotech companies like $52 billion Amgen (AMGN) get the lion’s share of the attention from the press and investors when biotech sector moves. Though AMGN looks positive technically after Tuesday’s 2.8% gain, it is up just 10.3% from its March lows.

Much smaller Dendreon (DNDN), a stock I recommended on March 25, is still a $5.2 billion company, and from its March lows, it is up a robust 29.2%.

But the real bang for your buck—which is accompanied by much higher risk—is in the smaller biotechnology companies. For example, Spectrum Pharmaceuticals, Inc (SPPI) is just a $500 million company, one tenth the size of DNDN, and one hundredth the size of AMGN. From its March lows, SPPI is up 46.3%.

The three biotech companies under $7 I will look at today all have compelling technical patterns, but they are appropriate only for the most speculative part of your portfolio. In addition, one biotech giant I earlier recommended avoiding now looks attractive for new positions.
 

While Android presents a near-term threat to Apple, Google's attractive and powerful Chrome operating system could eventually wipe out much of the computing industry as we know it.

By TheStreet Staff Apr 27, 2011 11:00AM

By Anton Wahlman, TheStreet

 

We Apple (AAPL) investors typically view Steve Jobs' health as the biggest risk to the stock, but there's a potentially greater threat: Google's (GOOG) new operating system.

 

No, I'm not talking about Android.

 

I'm talking about Chrome OS.

 

While much of the world is embroiled in economic uncertainty, funds that expose investors to Chile, Canada, Sweden and Thailand hold potential growth.

By TheStreet Staff Apr 27, 2011 10:47AM

By Don Dion, TheStreet

 

It's been a trying period for internationally-minded investors in 2011.

 

With political turmoil sweeping through the Middle East and Northern Africa, debt issues gripping the European Union and Japan still struggling to recover after its devastating earthquake, finding investing solace outside the U.S. borders requires a careful eye and plenty of patience.

 

Although at this time the options appear slim, there are nations out there that have exhibited strength. By using ETFs, investors can keep these countries on the radar.

 

People across the country are worried and financially exhausted, and while many have no idea what the Fed chief does, they trust him more than either political party.

By Jim Cramer Apr 27, 2011 9:31AM

jim cramerthe streetWhich Ben Bernanke will we get today in this first-ever press conference?

 

Will we get the precise, certain-but-dry professor-of-economics Bernanke, the one we often see in front of Capitol Hill panels? Will we get the impenetrable game-playing Fed chief, the one who wants to cross swords and match wits with the world's hedge funds that are desperate for the next basis point to plunder on their clients' behalf?

 

Or will we get the one I am hoping for, the Ben Bernanke who came on "60 Minutes" more than two years ago, the plain-spoken son of hard-working people who knows that something is very wrong in the country, who will try to give us context and will be as avuncular as one can be in trying to explain how we could feel so worried and financially exhausted as a nation.

 

Remember, it is just a press conference; he will be answering questions as foils. He will have to fit his answers to those confines and still make them relevant to the masses.

 

Expensive beef prompts creative cooking from the fast-food giant, which is experimenting with less-expensive meats.

By InvestorPlace Apr 27, 2011 9:03AM

investorplace logoImage: Fastfood working (© Creatas/PictureQuest)With rising beef and dairy prices prompting McDonalds Corp. (MCD) to raise menu prices on Big Macs and other offerings, the world's largest fast-food chain is trying to find tasty alternatives for frugal shoppers. 


The latest creation is Chicken McBites, a fried snack that is being billed as crispier than conventional chicken nuggets. The so-called popcorn chicken has been rolled out in Detroit, comes with a variety of dipping sauces and starts at just $1.99.


But will consumers eat them up, or will they see it as a way for McDonald's to cut out meat to beef up margins?

 

Despite all the turmoil in the auto industry following the Japanese earthquake, Johnson is still keeping it together.

By Jim J. Jubak Apr 26, 2011 5:53PM
Jim JubakJohnson Controls (JCI) fell 2.8% Monday because I don’t think investors immediately understood the company’s results.

The shares closed up 2.8% today, because I think they get it now.

Fiscal second-quarter earnings, Johnson Controls announced, were 56 cents a share -- a penny better than Wall Street had expected -- on revenue of $10.14 billion. That was a 22% increase in revenue from the second quarter of 2010, and well above the $9.37 billion analysts had projected. (Johnson Controls’ second quarter ends in March.)

No problems there.

But for the next quarter, the company expects earnings of only 51 to 53 cents, instead of the 67 cents Wall Street was projecting.
 

After saying goodbye to comedian Gilbert Gottfried, Aflac selects a sales manager from Minnesota to voice its mascot.

By Kim Peterson Apr 26, 2011 2:05PM
It didn't take Aflac (AFL) long to find a new voice for its duck.

After ousting comedian Gilbert Gottfried from the job, the insurance company has picked Daniel McKeague, a 36-year-old television advertising sales manager and father of three from Hugo, Minn., The Associated Press reports.

McKeague was one of 12,500 contestants who sent Aflac voice samples. He had the luxury of recording his 30-second clip at KQRS, the Minneapolis station where he works. He uploaded it to Aflac's website and later did a formal audition. 

When is a massive earnings beat "bad news?"

By Motley Fool Pick of the Day Apr 26, 2011 1:32PM

By Rich Smith

 

Under Armour (UA) reported first-quarter earnings this morning, and the crowd went mild. As of this writing, the shares are already down 8% -- and falling. Clearly, the company must have reported bad news, right?

 

Nope. All the numbers that investors usually watch at Under Armour were right on target:

  • Revenues for the fiscal first quarter leapt 36% in comparison to last year's Q1
  • Profit margins expanded, too, with the result that earnings per share increased 64% to $0.23
  • Better still, management promised more of the same going forward, upping revenue guidance and earnings alike, and predicting low-to-mid 30s growth in 2011
 

Upcoming earnings from Potash of Saskatchewan could be the next critical driver of price action in fertilizer stocks. Here are key levels to watch in three sector leaders.

By MoneyShow.com Apr 26, 2011 12:10PM
By Tom Aspray, MoneyShow.com

The agricultural commodity markets are still catching the world’s attention, with corn and wheat futures prices having doubled from the lows last summer. Soybeans are still lagging, but also up 50% in the past year.

Though there are no signs that the world’s demand for food is slowing, the S&P Fertilizer and Agricultural Chemicals Index is still 2% below the February highs. The early-2011 highs tested the resistance going back to 2009 and 2010, with the industry group roughly 50% below the all-time highs from 2008.

All of the key potash fertilizer companies, including Potash of Saskatchewan (POT), The Mosaic Company (MOS), and CF Industries Holdings (CF) are still trading well below the highs for the year. Even the surprising 144% increase in earnings from Mosaic, which beat analyst estimates, failed to push the stock higher.

With earnings from Potash due out Thursday, this industry group appears to be reaching a critical juncture.
 

While shares of General Motors look attractive near their post-IPO low, Ford is even more compelling. With video.

By TheStreet Staff Apr 26, 2011 12:00PM

By Jake Lynch, TheStreet

 

The case was made last week to consider GM (GM) at its new post-IPO low. Even more compelling is Ford (F), the only U.S. automaker that didn't require a government bailout to survive the Great Recession.

 

Under the laudable leadership of Chief Executive Officer Alan Mulally, Ford has refocused on fuel-efficient vehicles, streamlined its operations and fortified its balance sheet. Its stock has surged from a 2009 low of $1.58.

 

Ford beat Wall Street expectations when it reported first-quarter earnings Tuesday morning. The automaker said new products, higher volume and strong pricing produced profits in every region, including Europe, and said it overcame the impact of higher commodity prices.

 

The social network is getting into the couponing game, which could squash startup darling Groupon.

By InvestorPlace Apr 26, 2011 11:49AM

Image: Coupon (© Tom Grill/Corbis)By Tom Taulli, InvestorPlace.com

investorplaceWhile the tech world has always been fast and furious, it seems that the pace of change has been accelerating lately. Just consider that five years ago Facebook was a small operator. Now the company measures its impact as a percentage of the world's population.

But the challenge for Facebook is to turn its massive platform into gushing revenue and high margins. After all, the company's market value is about $80 billion, and an IPO is likely next year. In other words, Facebook needs to find ways to justify the extreme expectations.

So it's no surprise that it's jumping into the daily-deal business with the launch of Facebook Deals. But will the effort be the cash cow Facebook hopes? If so, will it severely damage the prospects of current coupon king Groupon?

 

Stereotypes portraying PC users as stodgy and Mac users as cool are not completely without merit, according to one survey.

By TheStreet Staff Apr 26, 2011 11:29AM

Image: Couple with computer (© Don Mason / Blend Images/Getty Images)By Matt Brownell, MainStreet

 

Remember those annoying old Mac vs. PC ads, which used stodgy old John Hodgman and hip young Justin Long to reduce the respective computers (and, by extension, their users) to cultural stereotypes?

 

Well, it turns out those stereotypes aren’t completely without merit.

 

Hunch, a website that makes a variety of personalized recommendations on everything from restaurants to books based on a user’s stated tastes and preferences, issued a report last week in which it assessed some of the traits of the Mac and PC users active on its site.

 

Investors looking for exposure to the energy sector as earnings heat up can choose from a variety of exchange-traded funds.

By TheStreet Staff Apr 26, 2011 11:18AM

Oil pump jack, low angle view, dusk © Seth Joel/PhotographerBy Don Dion, TheStreet

 

Hundreds of companies will report their earnings this quarter, allowing investors to get a feel for the state of industries ranging from tech to health care.

 

Energy, in particular, will be placed under the microscope this week as Exxon Mobil (XOM), Chevron (CVX) and ConocoPhillips (COP) release their reports.

 

Already, analysts are forecasting that rising oil prices will fuel strong earnings in this sector. As the Wall Street Journal points out, two factors are lending to crude's dramatic ascension: unrest in the Arab world and the global economic recovery.

 

ConocoPhillips will officially kick things off on Wednesday. In the meantime, investors can prepare themselves for this week of excitement by arming themselves with ETFs.

 

With last week's downgrade of the outlook for US debt, it's time the Fed came clean about interest rates and Treasury bond buying.

By InvestorPlace Apr 26, 2011 11:14AM
investorplace logoBy Richard Band, InvestorPlace.com

The clock is ticking on "Bubbles" Bernanke. Come June 30, his latest quantitative easing program (QE2) is scheduled to end. The big question on everyone’s mind is: what happens next?

Surely such big-picture ideas will be discussed tomorrow at the central bank's first-ever press conference. But the bottom line is that the reckless behavior of the Federal Reserve demands closer scrutiny -- and harder questions.

Here is one I want a straight answer to: "Chairman Bernanke, what would you do if, one of these days, the Chinese placed a $100 billion order to sell their U.S. Treasury bonds?" 

The yellow metal needs to be part of any portfolio. But if you already own some, stand pat for now.

By Jim Cramer Apr 26, 2011 9:10AM

the streetjim cramerIf you don't own gold, buy some. If you do own gold, I would wait. That's not contradictory, despite how it may sound.

 

I think gold has to be an integral part of every portfolio. I have been saying that for about five years now, and I mean it. You have to have it. It has to be part of your diversification, because it is both a currency and a commodity.

 

Here's the problem, and it is a real high-quality problem: If you have been listening to me, you are struggling right now with the size of your gold position. I think it should be up to 20% of your portfolio. But for some of us -- like in my retirement plan -- gold is now 30%. It has just moved up and up. It is too big. It is now the swing factor.

 

Now, I don't mind that it is so big. There are plenty of places to put your money that are worse than gold.

 

However, to buy more here if you have that kind of exposure is just averaging up in the worst way. No thanks.

 

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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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