A stock market graph trending down © jmiks/Getty Images
Be wary of dire market forecasts

The most likely scenario is that the markets will begin to rise from here -- and that bounce is just beginning to take hold.

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American shares succumb to selling pressure as it becomes clear the U.S. economy isn't immune to rising food and fuel prices.

By Anthony Mirhaydari Mar 1, 2011 5:03PM

So, this is how it ends. The powerful market uptrend that has seen the S&P 500 gain nearly 30% since September is collapsing under the weight of inflation concerns, a slowdown in Chinese economic growth, and political turmoil in North Africa and the Middle East.

 

There are new concerns that rising food and fuel prices -- both here at home and overseas -- will translate into reduced earnings growth and smaller profit margins. And of course, there is the risk that sticker shock will damage still-fragile consumer confidence. I've written frequently about these topics over the last two months -- which you can check out on my article index here.


Everywhere I look, there is evidence that Wall Street traders don't consider this a temporary blip; instead, they are preparing for the worst.

 

At the rate things are going, the middle of 2011 could be the real crunch point for the year.

By Jim J. Jubak Mar 1, 2011 5:00PM
Jim JubakIt's a mixed bag on manufacturing growth from the world’s economies this morning.

In China, manufacturing grew at the slowest rate in six months. The China Purchasing Managers' Index fell to 52.2 in February from 52.9 in January, according to the China Federation of Logistics and Purchasing -- the third straight monthly decline.

In the United States, the Institute for Supply Management’s national factor index climbed to 61.4 in February, from 60.8 in January.

In Europe, manufacturing expanded at the fastest rate in 10 years.

The easy conclusion here is to connect manufacturing growth rates with inflation and interest-rate policies. China is fighting inflation by raising interest rates in order to slow growth; the United States and the European Union are still letting inflation run in order to accelerate economic growth before raising interest rates later in 2011.
 

The magazine criticizes General Motors' flagship car for its inefficiency, its short range and its 'annoying' charge time.

By Kim Peterson Mar 1, 2011 4:11PM
Chevrolet Volt (© ROBYN BECK/AFP/Getty Images)Consumer Reports magazine just dropped a bomb on General Motors' (GM) flagship car.

The Chevrolet Volt, which GM has put its heart and soul into since emerging from bankruptcy, isn't that great of an electric or gas vehicle, said David Champion, senior director of Consumer Reports' auto testing center, according to The Detroit News.

"When you are looking at purely dollars and cents, it doesn't really make a lot of sense," Champion added. "This is going to be a tough sell to the average consumer."

Ouch. And so ends the Volt's honeymoon. The plug-in car had a great coming-out party, winning the coveted "car of the year" award in January at the North American International Auto Show. It was also named car of the year by Motor Trend Magazine. 
Tags: gm

Grupo Prisa is an undiscovered gem.

By Motley Fool Pick of the Day Mar 1, 2011 2:03PM

Image: Watching television (© Maria Teijeiro/Getty Images/Getty Images)Jim Royal's Special Situations portfolio looks for instances where spinoffs, reorganizations, etc. create mispriced stocks. Today he tells us about Grupo Prisa -- a small Spanish media firm with a huge international reach. 

 

Rex Moore, Motley Fool Top Stocks Editor

 

Today, I have a doozy of a special situation, and it involves Grupo Prisa (PRIS) (PRIS.B), a Spanish media company based in Madrid. The company owns attractive assets, but a buying binge ballooned its debt. Now, a recapitalization and subsequent deleveraging make the stock a cheap buy.

 

The company, and why I'm buying
Grupo Prisa has a diverse range of media assets, focused primarily in the Spanish language.

 

Momentum continues as discounts and an improving economy lure buyers to car dealerships, but high oil prices threaten future growth.

By Kim Peterson Mar 1, 2011 1:38PM
Image: Car shopping (© Ron Chapple/Jupiterimages)U.S. automakers posted blowout sales for February, boosted by deep discounts and a slowly improving economy. Companies saw double-digit gains across the board.

But this party may not last long. Spiking oil prices could hurt sales of larger vehicles, a scenario we saw in 2008 as gas climbed to $4 a gallon. The nationwide average is $3.38 a gallon -- up 9% in the last month. The average gas price for all of 2010 was $2.79.

And March could see automakers finally pull the deep discounts that lured many buyers to car dealerships.

For now, at least, U.S. automakers are enjoying a February that blew away analyst expectations. General Motors (GM) saw its sales soar 46% last month, beating the 36% increase analysts were looking for. 
Tags: gm

Company officials acknowledge the role of incentives in the automaker's recent bankruptcy and vow to adopt a 'disciplined approach' to doing business.

By MSN Money Partner Mar 1, 2011 1:22PM

By Reuters

 

General Motors (GM) said sales in its home market surged 46% in February as sales incentives, including lease deals and cash offers for existing GM owners, drove shoppers to dealerships.

 

The sales gain was higher than analysts had projected for the automaker and cemented a market share gain for GM in the first two months of the year.

 

In a measure of the popularity of its incentive programs in February, GM said retail sales, which exclude bulk purchases by rental agencies and other fleet operators, were up 70% from a year earlier, a record increase.

 

Analysts and GM's rivals have questioned whether the automaker was at risk of returning to the reliance on heavy discounting to drive sales at the expense of profits which had marked its slide into bankruptcy in the last decade.

 
Tags: gm

Star Scientific is developing CigRx, a nicotene-based compound that could help reduce brain inflamation and fight the disease

By InvestorPlace Mar 1, 2011 11:27AM

Image: Businesswoman (© Roy McMahon/Corbis)By Jeff Reeves, Editor, InvestorPlace.com


When you think about the tobacco industry, most folks probably don’t get a very good taste in their mouth. Investors think of massive lawsuits, steadily increasing taxes on cigarettes and dwindling smoker statistics choking off profits. And the general public thinks of lung cancer and that stale smell of Uncle Mickey’s jacket that infects the entire closet every time he visits for Thanksgiving.


But if tobacco stock Star Scientific (CIGX) has its way, the public could have a very different perception of tobacco in the future.


Namely, as the plant that cured Alzheimer’s.

 

When a company in a growing industry is still getting hurt, it's a management issue.

By Jim Cramer Mar 1, 2011 10:23AM

jim cramerthestreetThere were so many bullish charts this weekend: stocks that had dropped to their 200-day moving averages and held, stocks that were barely glanced by last week’s selloff.

 

And then there were five that were no good, no good whatsoever:Cisco Systems(CSCO), Avon Products (AVP), Johnson & Johnson(JNJ), CVS(CVS) andLiz Claiborne(LIZ). All are showing breakdowns, and they all seem like the last stocks you want to be in.

 

It's surprising. Is there a more explosive business right now than Internet traffic? Cisco has long been considered the backbone of Internet traffic. But it has done a hasty foray into consumer products and is now offering telecom companies some of the most expensive routers needed to process wireless voice, data and video. Consequently, it is losing to Hewlett-Packard(HPQ) on the low end and Juniper(JNPR) on the high end. The latter has a higher-end and cheaper solution for carriers, and it is taking share and names. Juniper remains one of my favorite stocks and an Action Alerts PLUS name. I can do without Hewlett-Packard.

 

Miners invest billions of dollars to expand output in the next few years. Time to let these stocks run.

By Jim J. Jubak Feb 28, 2011 4:31PM
Jim JubakWhen will billions -- OK, tens of billions -- in new investment put an end to the current boom in iron ore prices (and in the price of related stocks)?

While announcing its fourth-quarter earnings last Friday, Brazil’s Vale (VALE) reported that the market will experience supply constraints for three to four years.

In response, Vale will invest $24 billion in 2011 to expand its output to 522 million metric tons of iron ore -- a total roughly equal to ten months of China’s current demand -- by 2015. That’s roughly the same timeframe that BHP Billiton (BHP) talked about in its latest capital-spending plan. (For my latest update on BHP Billiton, see my post.) 

If you want to invest conservatively -- and it’s not a bad idea given that iron ore prices at their highest levels since the mining boom ended in 2008 -- I’d say it’s safe to let your iron ore stocks run for the next two years before looking for signs that supply might be catching up with demand. (Vale and BHP Billiton are both members of my Jubak Picks 50 Portfolio.)
 

The stock drops slightly as an analyst from UBS cuts his rating and frets about margins.

By Kim Peterson Feb 28, 2011 4:24PM
Credit: EMMANUEL DUNAND/AFP/Getty Images
Caption: Online retail giant Amazon.com CEO Jeff Bezos unveils the Kindle DXShares of Amazon (AMZN) are down more than 2% in afternoon trading after the company got a ratings downgrade from UBS Securities. Analyst Brian Pitz cut his rating to neutral from buy, and dropped his price target to $180 from $195, Barron's reports.

The stock is at $172.88 in afternoon trading.

Why is Pitz so down on Amazon? He's worried about margins, now that the company is offering free streaming video to its "Prime" members. Amazon was already hurting on margins, after having to invest more to build up its online video network and other parts of its infrastructure.

Analysts like Pitz were hopeful that Amazon's margins would improve sometime this year, but now the worry is that Amazon will sacrifice that margin improvement in order to build out its streaming and expand its Prime membership. 

These bricks and mortar electronics stores are cheap.

By Motley Fool Pick of the Day Feb 28, 2011 2:35PM

Credit: (© Gary Malerba/AP)
Caption: Best Buy storeIn the classic Onion parody Even CEO Can't Figure Out How RadioShack Still In Business, there's conjecture the retailer "is still coasting on an enormous fortune made from remote-control toy cars in the mid-1970s." It's true the long-term future of both The Shack and Best Buy may not be overly bright, but Fool analyst Anand Chokkavelu believes there's money to be made in the short term. 

 

Rex Moore, Motley Fool Top Stocks Editor

 

RadioShack (RSH) and Best Buy (BBY) aren't popular these days. Over the past year, the S&P 500 is up 18%. RadioShack? Down 24%. Best Buy? Down 13%. They are specialty retailers in an increasingly competitive space: electronics.

 

We know Amazon.com (AMZN) and its Internet retailer brethren are coming strong. So are the bricks-and-mortar competition like Wal-Mart (WMT). And so is the wireless industry -- with companies like Verizon and Apple competing with their own stand-alone stores.

 

The search company is going after ad-heavy websites with nothing to offer viewers.

By Kim Peterson Feb 28, 2011 2:08PM
Image: Man with laptop (© Comstock Images/Jupiterimages)It happens all the time: Search for something on Google (GOOG), click on a promising result and get a page full of spam and advertising.

People had figured out how to work the system so that their phony websites climbed higher in the results -- and that was hurting Google's credibility. The problem was spiraling out of control at Google, and so the company recently began cracking down on the cheaters.

The result? In less than a week, some junk websites are dropping to the bottom of results. And that's opened up room for legitimate sites from Wal-Mart (WMT), Amazon (AMZN) and Time Warner (TWX) to rise to the top, a study has found.

This change was a big deal; nearly 12% of U.S. search queries will now see substantially different results, Time reports. And that can make or break a company whose success depends quite heavily on how well it places in Google's results. 

The next iteration of the iPad is expected to come with a camera and twice the RAM, but the most important new feature may be a lower price tag.

By TheStreet Staff Feb 28, 2011 12:34PM

Credit: (© Justin Sullivan/Getty Images)
Caption: Apple iPadBy Anton Wahlman, TheStreet

 

Apple (AAPL) has invited the press to an event on Wednesday that will include the introduction of the iPad 2. What will be the most talked-about feature of this new device?

 

First, let's stipulate that most of the hardware specifications of the iPad 2 are known, more or less, thanks to endless blogger speculation: one or two cameras, a faster processor, twice the RAM, some tinkering with battery, screen, thickness and bezel. In other words, in the big scheme of things, nothing too exciting. Do you know many people who have held off buying the iPad because it lacks a camera, dual-core CPU or 512 megs of RAM? No, me neither.

 

If this was all Apple had in mind for the iPad 2, it would be a snoozer event. One would think that Apple isn't knowingly going to leave it like that.

 

Exchange-traded funds tracking oil, alternative energy stocks and energy-producing countries like Canada and Russia will be in the spotlight as global unrest continues.

By TheStreet Staff Feb 28, 2011 11:03AM

Image: Oil drums (© Kevin Phillips/Digital Vision/age fotostock)By Don Dion, TheStreet

 

Here are five exchange-traded funds worth watching this week.

 

1. United States Oil Fund (USO)

 

Political tensions sweeping the Middle East and North Africa stoked fears last week, causing the market to perform in a shaky manner. As protestors took to the streets across this region, investors directed their attention to the oil industry

 

Looking to the coming week, unrest appears set to continue and the futures-based USO will be an interesting fund to keep an eye on as the markets debate how these demonstrations will impact production. Investors looking for a more conservative way to target the crude oil industry may find an equity-backed position such as the SPDR S&P Oil & Gas Equipment & Services ETF (XES) an attractive option.

 

The market finally took a step back. Up or down ETF traders best be defensive in this environment

By Jamie Dlugosch Feb 28, 2011 10:41AM

Image: Stock charts in crystal ball © Fredrik Skold/Getty ImagesSometimes the market needs an excuse to find efficiency. Last week we got that excuse in spades. Stocks lost ground thanks to unrest in Libya that resulted in oil prices crossing $100 per barrel.

 

Take away the noise and the selling was perfectly normal. Nonstop gains over the last few months have taken the market a bit ahead of corporate and economic performance.

 

Investors only need to look at last week’s reduction in GDP for evidence that economic conditions may not be as strong as the market is assuming at the moment. The best way to protect some really solid gains in the early part of the year is to get defensive with your portfolio.

 

Exchange-traded funds make it easy to play defense. My pick to click for this week is the PowerShares Dividend Achievers (PFM).

 
Tags: etf

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[BRIEFING.COM] The stock market ended the holiday-shortened week on a mixed note as the Dow Jones Industrial Average shed 0.1%, while the S&P 500 added 0.1% with seven sectors posting gains.

Equity indices faced an uphill climb from the opening bell after disappointing quarterly results from Google (GOOG 536.10, -20.44) and IBM (IBM 190.04, -6.36) weighed on the early sentiment. Google reported earnings $0.15 below the Capital IQ consensus estimate on revenue of $15.42 ... More


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