Why stocks are in for a rough ride this week
Stocks in for a rough ride this week

Longtime market bull Jeremy Siegel says investors could realize the market is behind the curve on interest rates.


If fears continue to build, investors will want to unload these shares.

By TheStreet Staff Jun 22, 2011 4:08PM

more stock picks and investing ideas from stockpickrImage: Arrow Down (© Image Source/SuperStock)By Jamie Dlugosch, Stockpickr


Pastor Harold Camping predicted the world would end this year on May 21. The much-publicized end of days failed to materialize. I can't say I was surprised, but it was nonetheless a relief.


It is human nature to be fearful. For some reason, we are all wired with some degree of skepticism about the future. Perhaps it's due to our awareness of the ultimate inevitability of our demise. Over the past six weeks, the amount of skepticism and fear in the stock market has risen.


The CBOE Volatility Index (VIX), also known as the "fear index," is up 23% since the end of April. Typically such spikes are accompanied by sharp declines in the stock market. Indeed, the S&P 500 ($INX) is down about 5% over the same period. As painful as it is to lose 5%, the losses could be a lot worse.


With the VIX currently at 18.21, there is a lot more fear to be had in the market. When stocks bottomed in March 2009, the VIX peaked at 53.25, more than double where we are today. But should fear in the current market continue to build, here are five names I would consider liquidating.


Still in a fragile recovery, the doughnut chain looks to yogurt, juices and specialty coffees to sustain momentum.

By Kim Peterson Jun 22, 2011 3:21PM
Krispy Kreme (KKD), a name you can hardly speak without salivating, is having a great year. Shares are at $9 -- double what they were a year ago. Profit and sales are on fire.

So in order to keep momentum going, the company is ... getting healthier?

Chief executive James Morgan wants to add oatmeal, yogurt and fruit juice to the menu, Bloomberg Businessweek reports. He's also looking at specialty coffee, starting with custom blends in September and espressos and lattes over 18 months.

Homer Simpson would be disappointed, and I admit I am as well. 

The tech giant could partner with a television maker to 'blow Netflix and all those other guys away.'

By Kim Peterson Jun 22, 2011 1:55PM
A new report says Apple (AAPL) may enter the television business later this year. And no, this isn't another version of the Apple TV accessory the company has struggled with.

We're talking full-on TV sets. The DailyTech site says it has interviewed a former company executive about Apple's plans to bundle Apple TV and iTunes inside television sets. The idea, the executive said, is to "blow Netflix (NFLX) and all those other guys away."

Apple would get the TVs from a major supplier, the source said, but put its own brand on them. "You'll go into an Apple retail store and be able to walk out with a TV," the source said. "It's perfect." The TVs could come out this year or next. 

Nearly 15,000 readers rate the carriers they love and hate.

By Kim Peterson Jun 22, 2011 1:24PM
Airline fees are really starting to get on passengers' nerves.

That's the takeaway from the latest airline survey from Consumer Reports. Nearly 15,000 readers rated the top airlines, and the one that charged significantly fewer fees was the strong winner.

Southwest (LUV) topped the list, with a rating of 87, getting top marks for easy check-in, good service, clean cabins and baggage handling. Southwest might have nailed that last category because it's the only airline that lets you check two bags with no extra charges, Consumer Reports says. Additional bags cost $50 each.

You can hear more about Consumer Reports' survey in the following video.

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Many don’t trust the market’s latest rally, but technical indicators suggest that even when this rally stalls, the market may be well supported for a new run to the prior highs.

By MoneyShow.com Jun 22, 2011 12:58PM
By Tom Aspray, MoneyShow.com

There were some signs after last Friday’s close that the market was close to a short-term low (see “Is the Worst of the Selling Over?”). 

Several of the major averages formed weekly dojis last week, which is a technical formation that indicates indecision. That makes this week’s close even more important.

The strong action early this week is being treated with distrust, which is not surprising considering bearish sentiment has reached rather high levels. 

The put/call ratio reached its highest reading since November 2008. The high level of put purchases is frequently used as a contrary indicator.

I have been noting the negative sentiment of the American Association of Individual Investors (AAII) members for a few weeks, and the second chart shows that the percentage of bulls minus bears peaked in early 2011. It is now down to levels last seen during the summer of 2010. Also, a recent survey by Merrill Lynch reflects very high cash levels, suggesting a high level of bearishness.

So with the public either distrustful or afraid of the stock market, and market professionals generally looking for a rally failure, what can we expect now?
Tags: etf

Fears of government spending cutbacks have kept many aerospace and defense stocks trading at bargain prices.

By John Reese Jun 22, 2011 12:39PM

Image: Guided Missile Destroyer (© The Stocktrek )With talk of deficits, debt ceilings and potential budget cuts dominating the U.S. political landscape in recent weeks, a good deal of fear and uncertainty have been swirling around stocks of companies that could be impacted if the government starts slashing its budget.


One such area is aerospace and defense firms. The defense budget has come under great scrutiny lately as Congress tries to claw away at the $1.4 trillion U.S. budget deficit. That -- along with investors' increased appetite for riskier stocks amid the Federal Reserve's money-printing binge -- has helped keep the shares of many A&D companies trading on the cheap.

Last week, however, the House Appropriations Committee passed a defense budget that cut President Obama's spending request less than some had feared, good news for defense-related companies.


Mortgage woes weigh on the company, but the stock may be too cheap to resist.

By TheStreet Staff Jun 22, 2011 11:59AM

By Dan Freed, TheStreet


Bank of America (BAC) looks ugly, yes, but when do its shares become too cheap to pass up?


That's the question analysts and investors have been asking since October, when it finally sank in that housing-related legal challenges were likely to cost tens of billions of dollars and that Bank of America appeared to be on the hook for most of it as a result of its acquisition of Countrywide Financial in 2008.


Countrywide was one of the most aggressive actors out there when it came to making home loans that were unlikely to be repaid. The lender appears to have ramped up its mortgage operation just as the housing market was at its frothiest.


Streaming apps just don't work on Android.

By Motley Fool Pick of the Day Jun 22, 2011 11:17AM

By Tim Beyers


Android's versioning problems are far from over. In tests this weekend, I found that none of the major streaming apps aside from YouTube work on the Samsung Galaxy Tab 10.1 I received during Google's (GOOG) I/O developer conference last month.


And that's after upgrading the underlying OS to the latest edition of Honeycomb, version 3.1. Knowing this, I wonder how any of us can be surprised that Apple's (AAPL) iPad still dominates the conversation when it comes to tablets.


To be fair, Apple users have their own issues with version 1.3 of the iPad edition of Netflix (NFLX). "I LOVED this app until the update prior to this last one," reviewer dailyink wrote of the app at Apple's website. "Now the app constantly crashes when searching titles.


This fund provides relief from the troubled eurozone.

By TheStreet Staff Jun 22, 2011 11:09AM

Image: Europe (© Corbis)By Don Dion, TheStreet


In light of Greece's debt woes, Europe has been under a cloud of uncertainty. While I urge investors to steer clear of the European Union at this time, risk-tolerant ETF investors looking to expand their portfolios' geographic reach into the region may want to put a fund like the iShares MSCI Switzerland Index Fund (EWL) on the radar.


Switzerland is outside of the troubled eurozone, and in the near term EWL will likely be more stable than products designed to track its euro-based neighbors.


Already the fund has shown promise as a haven for Europe-hungry investors. During the past 90 days, EWL has outperformed the EU-tracking iShares MSCI EMU Index Fund (EZU). Over that period, shares of EWL gained 8%, while EZU has dropped more than 1%.


Apple is later than usual with the update of its flagship smartphone, but the features may make it worth the wait for investors and consumers alike.

By InvestorPlace Jun 22, 2011 10:48AM

By Jeff Reeves, Editor of InvestorPlace.com

investorplaceIt's summer, and that typically means legions of Apple Inc. (AAPL) fans are worked into a lather about the latest iPhone launch. Since 2007, there has been a snazzy new model of the iconic smartphone released between mid-June and mid-July, just like clockwork.

Not this year. Turns out iPhone fans won't get their paws on a new gadget until September.


A market bounce after a long decline always looks fantastic. But it's worth buying only if the core data have actually improved.

By Jim Cramer Jun 22, 2011 8:59AM

jim cramerthe streetShocker. The same way that stocks don't go straight up, they don't go straight down either. It is entirely possible that we should have been down Tuesday. Given the litany of ailments, why not?


But that's not how the market works. Time and again I have seen big streaks of declines break, even if they shouldn't have. Only when the Western world was imploding in late 2008 have I ever seen crushing declines that could not be reversed in a heartbeat.


In fact, the amazing Nasdaq ($COMPX) rollover of 2000 to 2003 (the most breathtaking decline I have ever seen -- relentless, punishing, inexorable) was punctuated pretty constantly by rallies that sucked people in. The rallies actually looked a lot like Tuesday's Nasdaq rally, in which it was hard to imagine a more beautiful tape.


At a time when bank capital requirements are under intense scrutiny, PNC Financial makes a big buy.

By Jim J. Jubak Jun 21, 2011 4:14PM
Jim JubakThe global asset shuffle continues among the world’s banks.

Yesterday’s deal has PNC Financial (PNC), the sixth-largest U.S. bank by deposits, buying the U.S. retail banking and credit-card assets of Royal Bank of Canada (RY) for $3.6 billion in cash and stock.

This industry-wide reshuffling is a reaction to new capital requirements from global regulations in Basel III and moves by national regulators to require stronger balance sheets at banks under their jurisdiction.

Banks know that they will have to hold more capital against their assets -- even though as of yet they don’t know how much more. And they’re examining their balance sheets to see if it's better to sell off some assets (thus lowering the amount of capital they’ll have to have), or keep them and raise the extra capital that regulators will require.

The end of QE2, an economic rebound and more powerful inflationary pressures are set to hit one of the market's favorite havens.

By Anthony Mirhaydari Jun 21, 2011 3:11PM

We're on the cusp of some major changes for the economy and the stock market, changes I've covered in recent posts and columns.


The recovery looks ready to re-accelerate. Inflation is rising. The Federal Reserve, which started its two-day policy meeting Tuesday, is set to end its $600 billion money-printing stimulus but keep interest rates pegged near zero. And risk appetites have returned as the situation in Europe moves toward a new solution.


All of this is a perfect recipe for big losses on the one asset class considered to be "risk free": U.S. Treasury bonds. Here's why.


Cable companies hope better service keeps customers from ditching cable for Internet video.

By Kim Peterson Jun 21, 2011 2:49PM
Image: Watching television (© Digital Vision Ltd./SuperStock)The cable repair guy said he'd show up between noon and 4 p.m. So you took the afternoon off from work, only to watch the hours tick by. Now it's 3:58 p.m. Where in the world is he?

Situations like these hurt Comcast (CMCSA). The cable company won the "worst company in America" crown from the Consumerist website last year, and slow customer service was likely a big factor there.

So Comcast is trying to clean itself up, starting with that nasty four-hour cable guy window. By next year, the cable giant wants to shorten its repair window to two hours or less, Bloomberg reports.

This isn't as easy as it sounds. The company is adding new dispatch technology and giving all of its technicians laptops and handheld devices, Bloomberg reports. It's part of the broader overhaul of the cable system, which Comcast is renaming "Xfinity." 

The stock ran hot right out of the box but overheated and plunged, tempting many investors.

By Motley Fool Pick of the Day Jun 21, 2011 2:35PM

By Anders Bylund


Pandora Media (P) took the plunge and hit the public market. Now you, too, can own a piece of your favorite streaming music service. But Mr. Market has hated this stock so far -- if you were first in line to buy shares on Wednesday, you've lost 44% of your investment already.


Fellow Fool Rick Munarriz called it: Amid Pandora's scorching hot IPO, he told you to stay away from the launch. Though revenue is growing like gangbusters, costs are tagging along as well and the company hasn't figured out how to turn a profit. And the share offering price more than doubled from the initial plan as fellow online darling LinkedIn (LNKD) and others threw chum in the IPO waters. LinkedIn hasn't done much better, by the way. Just short of a month into its public life, the stock has taken a 25% haircut from where it opened on its first day.


I have publicly stated that I want to own Pandora shares, going so far as calling it a serious threat to Apple (AAPL) iTunes and Sirius XM Radio (SIRI).



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