Some investment advisers are entertaining that possibility, especially in light of Monday's triple-digit loss in the Dow.
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CSCO is a recent addition that has underperformed, and the index should focus more on consumer tech than corporate tech.
By Jeff Reeves, Editor, InvestorPlace.com
Next 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.
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.
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.
LinkedIn 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 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.
Travel, dining and high-end retail companies should benefit.
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.
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 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 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.
Don't buy or sell a stock by mimicking the moves of major fund managers without knowing the rationale behind their decisions.
I 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)?
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.
The recent spate of high-profile security breaches has focused attention on tech stocks such as Symantec, Fortinet and Websense.
By James Rogers, TheStreet
"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?
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 Jeanine Poggi, TheStreet
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.
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[BRIEFING.COM] The stock market finished the Tuesday session on the defensive after spending the entire day in a steady retreat. The S&P 500 (-0.6%) posted its third consecutive decline, while the small-cap Russell 2000 (-0.9%) slipped behind the broader market during afternoon action.
Equity indices were pressured from the start following some overnight developments that weighed on sentiment. The market tried to overcome the early weakness, but could not stage a sustained rebound, ... More
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