How long can the S&P 500 keep 2,000?
How long can the S&P keep 2,000?

The Federal Reserve and Congressional politics threaten to rain on the market party.

VIDEO ON MSN MONEY

Top funds disclose their moves for the past three months.

By Motley Fool Pick of the Day May 18, 2011 1:45PM

By Dan Caplinger

 

Many investors pay mutual fund managers thousands of dollars each year to make the right moves with their money. But thanks to Securities and Exchange Commission disclosure rules, you get a free look every three months at the investments that mutual funds buy. Although they come with a time lag, that information can give you some great insight into the way that professional investors think about strategy.

 

Every quarter, institutional investors and mutual funds that meet certain size requirements must disclose their holdings to the SEC on what's called Form 13F. These 13F reports provide most of the information that market trackers follow in seeing what top investors like Warren Buffett and George Soros are doing with their money.

 

Following the manager of the decade
Bruce Berkowitz is no stranger to the limelight. Thanks to his Fairholme Fund success, Berkowitz earned Fund Manager of the Decade recognition from Morningstar.

 

Travel, dining and high-end retail companies should benefit.

By TheStreet Staff May 18, 2011 1:41PM

By Scott Rothbort, Stockpickr

 

I have said for some time that the synchronous and meteoric rise in the prices of commodities is unsustainable. These markets were not being driven by the interaction of supply-and-demand dynamics. Rather, we had a situation in which speculative fervor was juiced up by the excessive leverage available through commodity futures and, to a lesser extent, leveraged commodity exchange-traded funds.

 

While in traditional economics the market's equilibrium is set by buyers and sellers agreeing on a price and quantity, in commodity markets the price of the commodity is a function mostly of the futures markets rather than the spot or cash markets.

 

Further, from where we sit in the U.S., commodities are priced in U.S. dollars. But in other nations, those commodities are priced in their local currency. While the prices of crude oil and gold were surging in U.S. dollar terms, they were relatively unchanged when priced in euros. In essence, the recent commodity speculation was a dual trade on the price of commodities in U.S. dollars and the exchange rate of U.S. dollars vs. euros.

 

Higher food and gasoline costs are pushing consumers to lower-margin necessities at retailers this year.

By Kim Peterson May 18, 2011 1:17PM
Wal-Mart (WMT) isn't the only one having problems in the U.S. One of its top rivals, Target (TGT), also reported lackluster sales as shoppers face higher food and gasoline costs.

Shoppers at both stores are showing similar characteristics so far this year. They're buying more necessities, such as food and toilet paper, and shying away from clothing, furniture and other pricier items.

That's cutting into profits at both stores because groceries and household items generally have lower margins. Target said its gross margin fell to 30.4% from 31.3% in its first quarter, which ended April 30. Target's margin is also hurt by the 5% discount it gives shoppers who use its credit and debit cards.

Post continues after this video analyzing Target's quarterly performance: 

United, Delta and Alaska could buck the usual trend of a seasonal slump.

By TheStreet Staff May 18, 2011 12:34PM

Image: Airline (© Christie & Cole/Corbis)By Ted Reed, TheStreet

 

After a better-than-expected first quarter for the airline industry, a veteran analyst is recommending that investors buy airline shares now, despite their historical tendency to perform their best between fall and spring.

 

Deutsche Bank analyst Mike Linenberg, in a report issued Wednesday, said the outlook is good for "a contra-seasonal trade" after carriers largely managed to overcome a variety of first-quarter headwinds.

 

"History would suggest that the time to own airline shares is from the fall to the spring and to lighten up during the early summer," Linenberg wrote. "However, every once in a while airline shares are some of the summer's best performing stocks."

 

These 2 funds provide yields in a shaky market. Includes video.

By TheStreet Staff May 18, 2011 10:47AM

By Don Dion, TheStreet

 

In recent weeks, a variety of factors have helped to muddy many investors' market outlooks.

 

The ongoing commodities shakeup, concerns about the U.S. debt limit, and the ongoing political and economic turmoil facing regions including Europe, the Middle East and Northern Africa are reigniting fears and causing skittish investors to second-guess the strength and longevity of the market recovery.

 

Given these looming concerns, the relief that comes with sticking to the sidelines may be attractive. However, heading for the exits is not the ideal option. The recovery may be rocky, but investors who bail out now could miss out later.

 

These leaders can give important signals about the broader market. With one of their charts showing a bottom, investors should take notice.

By MoneyShow.com May 18, 2011 10:30AM
By Tom Aspray, MoneyShow.com

Sharply higher earnings from Dell (DELL) boosted its stock sharply in after-hours trading, which could help the market continue the rebound from late Tuesday. 

The market’s ability to reverse to the upside—with the Nasdaq-100 actually closing higher— may signal that the worst of the correction is over. A strong close on Wednesday would support this view.

If the market is ready to resume its intermediate-term uptrend, the relative performance (RS) analysis suggests that the technology sector may be able to take over leadership. As I noted last week (see 2 Key Sectors Top Out), the industrials and materials sectors are acting weaker than the overall market. 

Therefore, without a strong technology sector, it will be tough for the market to challenge or exceed the recent highs.

Of course, market leaders like Amazon.com (AMZN), Netflix (NFLX) and Apple (AAPL) will be watched closely, as the market tries to stabilize and move higher. The chart for one of these bellwether stocks looks as though it has indeed bottomed out.
 
Tags: internet

Don't buy or sell a stock by mimicking the moves of major fund managers without knowing the rationale behind their decisions.

By Jim Cramer May 18, 2011 9:15AM

jim cramerthe streetI don't know about you, but I am beginning to tire of the cottage industry that is seeing what funds own and what they are selling and buying, particularly if they are hedge funds. Let's see, Paulson still likes gold. Hmm, hold on to Novagold (NG). But wait a second, Soros sold his Novagold. In fact, he sold every gold. Maybe sell Novagold? Maybe short the SPDR Gold (GLD)?

 

Steve Cohen still likes cyclicals. But I see lots of mutual funds dumping cyclicals and buying health care. Meanwhile Buffett isn't doing much at all. Stay put with cyclicals, dump them? Who knows?

 

But there's one thing I know I don't know: the rationale behind the move. Will Steve Cohen be gone tomorrow? Is Paulson just a believer in gold no matter the price? Is Soros just taking profits?

 

After a rough 2010, Precision Castparts has a good future riding on the launch of Boeing's 787 Dreamliner.

By Jim J. Jubak May 17, 2011 6:06PM
Jim JubakOnly one question: Does Precision Castparts (PCP) have enough upside potential to make its shares worth buying? Or holding -- since I own them in my Jubak’s Picks portfolio?

The company’s business has clearly turned the corner after a tough calendar 2010. In 2011, Precision Castparts should profit from the recovery in aerospace, and in particular the launch of Boeing’s 787 Dreamliner.

If this were a typical cyclical stock, I know how I’d go about accounting for that recovery and valuing the shares. But Precision Castparts isn’t your typical cyclical, and that makes putting a target price on the shares quite a bit tougher.

Let me explain why.

With the typical cyclical, revenue and earnings plunge when the economy or the company’s industry goes into a downturn.
 

The recent spate of high-profile security breaches has focused attention on tech stocks such as Symantec, Fortinet and Websense.

By TheStreet Staff May 17, 2011 3:28PM

the streetBy James Rogers, TheStreet

 

The recent data breaches at Sony (SNE), Epsilon and EMC's (EMC) RSA security division provide ample evidence -- if any was needed -- that hackers are on a tear.

 

"For hackers, the RSA breach was akin to attacking Fort Knox," Laura DiDio, principal analyst at ITIC, told TheStreet. "The hackers are now more organized and the attacks themselves are becoming more sophisticated and more pernicious."

 

Corporate America's pain, however, could be a gain for investors, as recent events focus attention squarely on security firms capable of locking down data and networks. Cue Symantec (SYMC), Fortinet (FTNT) and Websense (WBSN), which tout their wares as a way for businesses to avoid embarassing data breaches.

 

Sales crews working overnight shifts. Black curtains in store windows. Early-morning staff meetings. Is Apple cooking up a new product?

By Kim Peterson May 17, 2011 3:21PM
Apple (AAPL) celebrates 10 years of retail Thursday, and rumors are swirling that the company has something big planned for its stores.

The technology site Boy Genius Report says it has heard that about 10 to 15 employees are signed up to work overnight shifts at each Apple store Saturday night. During those shifts, the employees must lock their cellphones away and will have to sign a nondisclosure agreement about their activities.

Apple will put up black curtains in its store windows during that time, the site reports, and install specialized hardware inside the store that night. Employees are getting special training, and all stores will have mandatory meetings Sunday.

Sounds intriguing. What could Apple be planning? 

The home improvement chains both report a surprise drop in first-quarter sales, but one stock is the clear winner.

By TheStreet Staff May 17, 2011 3:04PM

By Jeanine Poggi, TheStreet

 

In a head-to-head battle, Home Depot (HD) continues to reign supreme against Lowe's (LOW), according to analysts.

 

Here's a look at how the first-quarter earnings of the two companies stacked up:

 

Home Depot earned 50 cents a share on revenue of $16.82 billion, beating Wall Street profit estimates of 49 cents a share, but missing analysts' revenue projections of $17.06 billion. Lowe's posted earnings per share of 34 cents on revenue of $12.19 billion, falling short of forecasts of 36 cents on revenue of $12.54 billion.

 

Home Depot reported same-store sales decline of 0.6% versus Lowe's 3.3% decrease.

 

Is there finally enough evidence to go after Goldman Sachs?

By Motley Fool Pick of the Day May 17, 2011 12:45PM

By Matt Koppenheffer

 

In a piece earlier this year titled "Why Isn't Wall Street in Jail?" Rolling Stone fire-breather Matt Taibbi began with a quote from a former Senate investigator:

 

"Everything's [bleeped] up, and nobody goes to jail," he said. "That's your whole story right there. Hell, you don't even have to write the rest of it. Just write that." [Censoring via The Motley Fool.]

 

The teddy-bear regulators
Many Americans resent the profound dearth of Wall Streeters sent to jail after the horrific financial crisis. It seems to be a particularly sore spot for Taibbi, particularly when it comes to Goldman Sachs (GS), the company he infamously tagged the "great vampire squid."

 

As selling pressure intensifies, important technical milestones are lost, clearing the way for additional broad market losses.

By Anthony Mirhaydari May 17, 2011 12:43PM

With Monday's sell-off, the bulls couldn't hold their line of defense, seen most clearly at the Russell 2000's 50-day moving average and the 1,340 level on the S&P 500. The bears are on full attack.

 

A similar downside breakout was seen back in March during the fallout from the Japanese earthquake and meltdown at the Fukushima Daiichi nuclear plant. That decline proved to be short-lived and was followed by a quick and decisive rebound.

 

But things are different this time. We've seen a huge shift out of cyclical sectors into defensives. Sentiment indicators have risen to levels not seen since the end of the last bull market. And we've seen a huge deceleration in the economic growth trend. All suggest this new downturn will last longer than March's speed bump.  Here's why.

 

The lawsuit says that after 3 days of training, the company dismissed an employee who asked to use a step stool.

By Kim Peterson May 17, 2011 12:38PM
You're a Starbucks (SBUX) barista who can't reach all the tools needed to do the job. Should Starbucks allow you a step stool?

That's at the heart of a lawsuit filed against Starbucks on behalf of Elsa Sallard, a dwarf hired to work as a barista in El Paso, Tex.

In the lawsuit, Sallard claims she was only allowed to train for three days before she was fired. She wasn't tall enough to do the job, and she asked to use a stool or a small stepladder. The same day, the lawsuit says, she was fired for posing a potential danger to customers and employees. 

The company relied on overseas business for its first-quarter profit. With video.

By Kim Peterson May 17, 2011 12:05PM
Wal-Mart's (WMT) U.S. sales slump is one of the worst in its history. Nothing the company tries here seems to work.

The retail giant reported a solid first quarter Tuesday, beating analysts' expectations with a 3.8% gain in profit. But the store relied on strong overseas business to overcome a sales drop in the U.S. that has stretched for eight straight quarters.

Meanwhile, other retailers in the U.S., including dollar stores and Target (TGT), are eating away at Wal-Mart's market share here. Wal-Mart executives said American shoppers are running out of money faster than before.

Post continues after this video of one investor discussing Wal-Mart's flaws: 

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[BRIEFING.COM] Equity indices ended the Tuesday session on an upbeat note with small-cap stocks pacing the advance. The Russell 2000 jumped 0.9%, while the S&P 500 posted a slim gain of 0.1% with seven sectors ending higher.

In some ways, today's session resembled yesterday's affair as the key indices climbed out of the gate, reached their highs during the first half of action, and spent the remainder of the session in a slow retreat from their best levels of the day. Trading volume ... More


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