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Deere increased full-year guidance on a solid second-quarter report. So why is Wall Street disappointed?

By Jim J. Jubak May 19, 2011 3:56PM
Jim JubakThe market apparently decided to be disappointed with Deere's (DE) quarterly financial report, issued before the market open yesterday. The stock closed down less than 1% yesterday, and was down slightly again today.

I think I understand why (and I care, because Deere is a member of my long-term Jubak Picks 50 portfolio), but you sure have to dig below a lot of good news to find anything to be negative about.

But let's get the shovels ready, shall we, and see if we can uncover the grounds for disappointment.

For the second quarter of its 2011 fiscal year (the quarter that ended in April), Deere reported earnings of $2.12 a share. That beat Wall Street earnings estimates by 6 cents a share -- or a penny a share, if you take account of the company’s lower tax rate for the quarter (which wasn’t figured into analyst estimates.)

Revamping women's clothing is the top priority for the retailer, which has watched North American sales slide.

By Kim Peterson May 19, 2011 3:32PM

Gap (GPS) is in a crisis, having tried unsuccessfully for years to turn business around. The company has booted its top designer and its president, and is desperate to get back on track by the holidays. Gap cut its full-year profit forecast this afternoon, and the stock has dropped nearly 13% in after-hours trading.

"I have a much higher sense of urgency," chief executive Glenn Murphy said in a rare interview. "This brand is just too damn important to not see that kind of effort being put forward," he told The Wall Street Journal.

The biggest priority for Gap is women's shirts. Gap can't get them right, and sales have been a mess for years, writes Elizabeth Homes. Sales at the Gap's 1,000 U.S. stores have fallen 32% since 2004. Now, Gap's North American stores contribute just a quarter of overall revenue, which isn't helping fund overseas expansion enough.

Post continues after this video about Gap's issues:


Rubber-stamping excessive executive compensation ruins things for the rest of us.

By Motley Fool Pick of the Day May 19, 2011 2:01PM

By Alyce Lomax


Last year, CEOs at the biggest American companies made better money than they did in 2007, despite the intervening economic havoc. Why did executives enjoy such a cushy payday? Because their biggest shareholders did nothing to stop it.


According to executive compensation research firm Equilar, the typical CEO made $9 million in 2010, a 24% increase over last year. In 2007, before the housing bubble burst and the financial crisis hit, the median pay for CEOs was $8.4 million. Although CEO pay did clock two years of declines, major CEOs have apparently quickly regained lost ground in pay levels.


Sadly, they seem to be among the few groups of individuals who have regained much at all in the last couple of years. While some of these CEOs undoubtedly deserve pay hikes for great performance, many don't.


We’ve been following three technically sound stocks whose strong overseas operations will also benefit if the US dollar stays weak. One is still a good buy, and a fourth stock has just emerged.

By May 19, 2011 11:42AM
By Tom Aspray,

Tuesday’s stock market decline was well supported, and Wednesday’s action suggests that the correction is likely over. Additional gains on Thursday will further stabilize that outlook and set the stage for the S&P 500 and Dow Industrials to challenge the early-May highs.

For an in-depth technical outlook on the stock market, read today’s Trading Lessons article, which will be available here this afternoon. (Sign up to receive the free eLetter.)

Crude oil and other commodity markets rebounded yesterday, and The New York Times’ somewhat bullish article on the dollar likely marks a short-term dollar top.

On April 14, I recommended three stocks that receive more than half of their revenue from overseas markets, all of which also looked positive technically.

All of the companies—United Technologies (UTX), McDonald’s (MCD), and Danaher Corporation (DHR)—did reach the recommended buying zones before turning higher.

One still looks like a good buy, as the recent correction has provided a good risk/reward entry point. I have also discovered another stock that fits the previous criteria and looks ready to move higher.

Funds that tap a mix of gold, silver, platinum and palladium can be useful in a variety of investing scenarios.

By TheStreet Staff May 19, 2011 10:51AM

By Don Dion, TheStreet


Precious metals have become a major region of interest for ETF sponsors. Since its introduction in late 2004, the physically based SPDR Gold Shares (GLD) fund has taken off in popularity, gathering over $60 billion in assets, making it the second-largest ETF in the world.


Over the ensuing years, the success of this fund has been noticed by large and small providers. Many, attempting to profit from interest in this corner of the market, have launched their own funds designed to offer investors access to these shiny resources.


While some firms, like Global X and Market Vectors, have opted to take the equity-based route with miner funds like the Global X Silver Miners ETF (SIL) and Market Vectors Gold Miners ETF (GDX) respectively, others have chosen to use futures contracts or physical stockpiles to provide investors with direct access to their desired metals.


By pricing the stock more than 80% below its opening price, the social-media giant is left out while initial investors make big profits.

By InvestorPlace May 19, 2011 10:22AM

By Jeff Reeves, Editor,

LinkedIn (LNKD) shares soared in their market debut Thursday, though the social-media giant made a nearly $300 million mistake with its IPO.


investorplaceThe company priced its long-awaited IPO at $45 a share Wednesday, but the stock opened at a stunning $83. By 11 a.m ET, shares were trading up a whopping 95% at $97.85. With 7.8 million shares up for grabs, LinkedIn made $351 million in its public offering. But had it priced the initial shares 84% higher, it would have raked in $647 million in capital instead.


In short, somebody made a fortune on this initial public offering, but it wasn't LinkedIn.


Analysts are all too eager to sound the alarm, but good stocks are good stocks -- period.

By Jim Cramer May 19, 2011 9:06AM

jim cramerthe street

Let's see, after you've had a good run in stocks, or after stocks have reported some good news, you are usually forced to chase them, courtesy the momentum people who want in and want up.


Occasionally, though, you get your entry points from the Street, which, since the 2000-03 and 2008-09 debacles, is always anxious to downgrade at a moment's notice, just when things are starting to look up.


Take Intel (INTC). Goldman, which had been saying that Intel was going to $21 and had a "hold" rating on it, went to an outright "sell" Thursday and changed its price target to $20. I have not been a fan of Intel, preferring ARM Holdings (ARMH), because Intel is not part of the vast Apple (AAPL) ecosystem. It does not have the proper smartphone entry. And it is still very much linked to a device in decline -- the personal computer. But it now has a new chip that has lots of power and uses a lot less energy, and that might be the perfect solution to its problems.


CSCO is a recent addition that has underperformed, and the index should focus more on consumer tech than corporate tech.

By InvestorPlace May 19, 2011 9:03AM

By Jeff Reeves, Editor,


jeff reevesNext Thursday marks 115th birthday of the much-followed -- and much maligned -- Dow Jones Industrial Average. Charles Dow created the benchmark on May 26, 1896, at a reading of 40 points, representing the dollar average of 12 stocks from leading U.S. industries.

There have been a host of changes to the index over the years, with the lineup of component stocks growing to 30 and involving 48 different formulations since its inception. Of course, some of the most recent changes include booting out victims of the financial crisis: General Motors (GM), American International Group (AIG) and Citigroup (C).

But why wait until a company goes bankrupt or gets bailed out to rejigger the index? If the Dow is so widely cited by the media and economic analysts, shouldn't it be a precise gauge of the stock market and the American economy as a whole and not just a nostalgic list of old giants that have seen better days?


The high-end grocer has seen its share price go through the roof in the last year.

By Kim Peterson May 18, 2011 3:37PM
Retailers and grocers are struggling in this era of high gas prices and growing costs. But you wouldn't know it from looking at Whole Foods Market (WFM).

The company's second-quarter earnings were the strongest in five years. Whole Foods is making so much money, in fact, that it repaid outstanding debt ahead of the August 2012 due date. How often does that happen?

Standard & Poor's raised its corporate credit rating on Whole Foods to BB+, which is the top notch before investment-grade levels. "The rating on Whole Foods reflects our expectation that the company will maintain its sales and profit growth and enhance credit metrics," S&P analyst Charles Pinson-Rose told Dow Jones. 

Fund managers surveyed by Merrill Lynch have cut exposure to risky sectors and assets as they become less confident about economic growth and profits.

By Anthony Mirhaydari May 18, 2011 2:46PM

Based on the findings of the latest Merrill Lynch fund manager survey, the "smart money" has become a lot less excited about the future. Growth expectations are being marked down, and earnings are expected to stagnate.


These are all consequences of the negative factors I've been discussing in my recent columns and blog posts. From fresh losses for the housing market to a peak in corporate earnings growth to the end of accommodative monetary and fiscal policy to surging inflation, disappointing economic data and renewed concerns over the health of the euro zone, investors have plenty to worry about.


And now, based on the survey findings, the big boys are starting to pull in their horns. The overall takeaway: Fund managers surveyed, who collectively control more than $800 billion in assets, are questioning whether global economic growth can continue to press ahead, given all the headwinds we face. As a result, they're starting to take action.


For the average investor, it might pay to wait until after shares go public.

By InvestorPlace May 18, 2011 1:49PM
By Tom Taulli,

investor placeLinkedIn is expected to price its initial public offering on Thursday. All in all, it looks like the investor demand is substantial, as the company boosted the per-share price range on the deal to $42-$45 from $32-$35.

LinkedIn doubled its revenue last year – reaching $243.1 million – and the company is even profitable. The IPO will also give investors a taste of the social-networking market — the LinkedIn website has more than 100 million registered members.

So how can you get shares in the IPO? Here’s a look at some of the options:


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."



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[BRIEFING.COM] Equity indices remain near their lows with the S&P 500 trading down 0.8%. The consumer discretionary sector (-1.5%) slumped to the bottom of the leaderboard at the start and the growth-sensitive sector remains behind the other nine groups at this juncture.

High-beta names like (AMZN 321.92, -9.40), Netflix (NFLX 439.80, -17.72), and (PCLN 1157.78, -28.34) have contributed to the underperformance with losses ranging from ... More


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