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Get your defensive plan ready

Indexes might not be in correction territory, but they're getting closer. Now's the time to consider what moves to make.


Hurricane Irene looks tough enough, but the barrage of economic news next week could be even more of a problem for the market, given the trend of recent reports.

By Aug 26, 2011 9:04PM
By Tom Aspray,

The equity markets were again buffeted by cross-currents last week, but did manage to close higher overall. Even though there was plenty of volatility, the ranges have actually narrowed since the crazy days in early August.

The markets' strength early in the week was in spite of more Eurozone concerns, as spreads widened on the Spanish and Italian credit-default swaps, and Greek bonds hit a new high in yield.

Even the US financial sector was under pressure, as rumors swirled about Bank of America (BAC). Even though it hit a low of $6.01 on Tuesday, the S&P 500 managed a 3.3% gain for the day.

The short-term technical picture improved further Wednesday, suggesting the S&P 500 could again move to the upper boundaries of its trading range. The rally was quashed Thursday in spite of Warren Buffett's $5 billion vote of confidence in Bank of America.


Bears have crushed several retail stocks - here is a trading story of a diamond in the rough

By Jamie Dlugosch Aug 26, 2011 5:45PM

The market is clearly at a tipping point. With stocks in correction mode, investors are clearly concerned about a double dip recession.  Wall Street economists have been cutting estimates for GDP growth over the last two months.


At the same time Wall Street analysts, those responsible for making forecasts of corporate profits have not yet adjusted downward. That disconnect creates plenty of opportunity to trade companies that are releasing earnings results. The real numbers will be given greater weight than Wall Street expectations.


In the last two weeks I have noticed a change in tone from those companies releasing result. While most companies are still beating analyst estimates the number of misses is on the rise. More importantly guidance for the future is noticeably weaker. There are stocks Warren Buffett will buy and stocks Buffett would not touch.


The price of oil has dropped already this summer, and could go even lower if Libya can restore significant production.

By Jim J. Jubak Aug 26, 2011 4:16PM
Jim JubakThe timing of the collapse of Moammar Gadhafi's rule in Libya couldn’t be much better -- for the global economy.

Projections that the rebels, whenever they can get a government together, will be able to restore at least some of Libya’s pre-civil war oil production have helped push oil prices lower. And that will cut costs for consumers and companies, and give economies a boost just when they need it.

In the U.S., for example, every dollar not spent on gasoline or other oil products is one more dollar that families have
to spend on necessities such as groceries and clothing, as well as discretionary items such as eating out or going on
vacation, and that companies have to invest in employees or machinery -- or to simply send to the bottom line.
Tags: oil

Wal-Mart, Home Depot and other big-box retailers go to great lengths to prepare for natural disasters.

By Kim Peterson Aug 26, 2011 2:30PM
Who prepares for hurricanes better than just about anyone? Wal-Mart (WMT) and Home Depot (HD).

Those big-box retailers have been in hurricane-anticipation mode for nearly a week, NPR reports. They're an important stop for worried residents seeking plywood, duct tape, bottled water and batteries.

And the last thing they want is empty shelves. 

The company's newest intern is a Brown University student who told the world how to dismantle the smartphone's security restrictions.

By Kim Peterson Aug 26, 2011 2:14PM
How do you land a coveted internship at Apple (AAPL)? Tell the world how to hack the iPhone.

Nicholas Allegra, 19, says he will start an internship at Apple in September. That's a bit of a surprise, considering that the Brown University student created the JailbreakMe code that lets people pull off the security restrictions Apple built into the iPhone.

And Allegra made it very easy to do. In fact, iPhone users just had to visit to automatically hack the device, opening up the phone to apps that were not authorized by Apple. Allegra was bold and brash and probably created some large headaches for a company that likes to keep tight control on all aspects of its products. 

Thursday’s news-driven rally fizzled out, and with ominous bear flag patterns forming on the charts for several major stock indices, the short-term market action will be critical.

By Aug 26, 2011 12:09PM

By Tom Aspray,

The close on Tuesday (August 23) suggested a short-term bottom was in place, which indicated that the major averages and ETFs should challenge or exceed last week’s highs.  Wednesday’s higher close supported this view.

Stocks started off Thursday in a bullish mood following Warren Buffett’s investment in Bank of America (BAC), but the rally fizzled, which makes Friday’s action quite important.

If the financial media is correct in concluding that the market’s strength was based on today’s speech by Fed Chairman Ben Bernanke, it suggests that the market is really in weak hands. Though it is possible Bernanke will say something supportive for the markets, basing a trading or investing strategy on this hope is not really a strategy at all.

The primary concern now is that many of the key global markets show chart formations that are commonly referred to as “bear flags.” These are continuation patterns which are an interruption or pause in the overall trend. These will be confirmed by a break below Monday’s lows, which would signal another sharp market decline.

If the NY markets were forced to close because of hurricane Irene, and with overseas markets also weak, it could make any decline even worse.


HP shares tumble after a catastrophic conference call and Verizon's union strikes out in this week's round-up of business-world blunders.

By TheStreet Staff Aug 26, 2011 11:44AM

By Greg Greenberg, TheStreet


Here is this week's round-up of the dumbest actions on Wall Street.


5. HP's catastrophic conference call


We can only believe that Bill Hewlett and Dave Packard would be rolling over in their garage if they had heard HP (HPQ) CEO Leo Apotheker on last week's catastrophic conference call.


Shares of the once-proud technology giant took their biggest intraday shellacking in three decades last Friday, tumbling 20% after Apotheker issued forecasts that missed analysts' estimates and unveiled strategic changes that had Wall Street analysts scratching their heads. In a bid to boost margins, Apotheker laid out a series of major maneuvers, including jettisoning the company's personal computer business, closing its tablet and smartphone hardware unit and acquiring the enterprise software provider Autonomy Corp. for about $10.3 billion.


Despite high expectations, the Fed chief's speech was no repeat of last year's confidence-boosting performance. That's a shame.

By Anthony Mirhaydari Aug 26, 2011 10:58AM

The cliffhanger ended in disappointment. All eyes were on Federal Reserve Chairman Ben Bernanke's speech at the Jackson Hole symposium this morning for clues, hints and winks -- anything that might suggest the central bank was willing and able to support a newly weakened economy.


Many investors were hoping for another round of money printing like the $600 billion bond-buying program that was teased at Jackson Hole last year. But as I discussed in my column this week, something less was more likely.


Yet I still expected something to sooth raw nerves. Investors, executives and consumers are all feeling like something is not right. And their caution threatens to pull a still-growing economy into outright recession. Instead, we got nothing -- aside from a promise that the Fed will reconsider additional policy options at the end of September. So the question is: Now what?


His deal with Bank of America helps us avert bigger catastrophe.

By Jim Cramer Aug 26, 2011 9:12AM

jim cramerthe streetDid Bank of America (BAC) give away the store to Warren Buffett? Does it not matter? Is Doug Kass within the realm when he says, "Say it ain't so, Brian?"


Here’s my take. I heard this same sort of criticism when Prince Alaweed took the historic plunge and bought a huge chunk of Citigroup (C) the first time it imploded, in 1990-1991. People thought that the store had been given away. That the dilution was ridiculous.


The critics were ridiculous. He saved Citigroup.


Now, Bank of America wasn’t in as bad shape as Citigroup back then. But you have to understand that the pressure on this institution’s stock was eventually going to show up on the ratings agencies’ screens. We know that they downgrade when they see stocks plummet endlessly. We saw that time and again. Even when they shouldn’t.


Sell aggressive stocks and insurers now -- and jump into Home Depot.

By InvestorPlace Aug 26, 2011 8:48AM

By Jeff Reeves, Editor,

investorplaceHurricane Irene is dominating the headlines this weekend, with the entire East Coast on high alert. The storm will strike North Carolina early Saturday morning and sweep all the way up to Maine if its current path holds, most likely roaring through New York, Boston, D.C. and Philadelphia.

Big storms like this create a big fear factor because residents in affected areas don't know what to expect. Will there be flooding? Lost power? Will it all blow over? It seems prudent to prepare for the worst and hope for the best.


Investors hope to see a third round of quantitative easing, but the economy is growing strongly enough without it.

By Jim J. Jubak Aug 25, 2011 4:42PM
Jim JubakThe odds are climbing against any Federal Reserve announcement from Friday's Jackson Hole conference big enough to make global stock markets happy.

Stocks have rallied strongly this week, on hopes that Fed chief Ben Bernanke will announce a third program of quantitative easing and set off another rally in the stock market.

That would echo Bernanke's hints at a second program of quantitative easing at last year's Jackson Hole event. Those hints eventually turned into a 28% rally in stocks that peaked on April 29.

But recent data have turned against those hopes by delivering better-than-expected news. The U.S. economy isn't growing very strongly, the numbers say, but it is growing strongly enough so that dramatic action from the Fed would seem like overkill.

Berkshire Hathaway will invest $5 billion in Bank of America, and could become a major stakeholder if all warrants are exercised.

By Kim Peterson Aug 25, 2011 4:20PM
Warren Buffett to the rescue -- again.

Berkshire Hathaway (BRK.A) has agreed to invest $5 billion in Bank of America (BAC), reviving the stock price and giving investors more faith in the financial sector's future. Shares of the bank rose 15% early Thursday, but by the close had settled to a 9% gain at $7.61. 

Another round of mortgage purchases is on the menu of possible stimulus options to be unveiled during Bernanke's Jackson Hole speech.

By Anthony Mirhaydari Aug 25, 2011 2:25PM

Like children waiting impatiently for Christmas morning, Wall Street is being held in suspense. But instead of Santa Claus bearing gifts, it's all about Federal Reserve Chairman Bernanke's speech at the Jackson Hole, Wyo., summit of central bankers Friday.


Will Bernanke manage a repeat performance and unleash another stock market rally by teasing additional policy tools? That's what happened last year as he tipped what eventually became the $600 billion money printing operation that was dubbed QE2 by the press.


Unfortunately, and as I discussed in my column this week, lingering inflationary pressures will likely keep a QE3 off the table. Instead, a number of other options are available, with the most probable being an increased focus on pushing down long-term interest rates by lengthening the average maturity of the Fed's bond holdings. What I didn't discuss in my column, and what is generating increased chatter across Manhattan trading desks, is that this strategy could have a pleasant side effect: support for the beleaguered housing market.


Irene is already turning into a rare and extraordinary storm that will batter the region all the way to New England.

By Kim Peterson Aug 25, 2011 1:52PM

Updated Friday, 12:30 p.m. ET

The East Coast has begun seeing rains from Hurricane Irene, one of the most extraordinary storms to hit the country in recent history.

The storm's core is expected to hit the North Carolina coast Friday night, and by Sunday morning, it could be within miles of the New York. New York City has already evacuated nursing homes and hospitals in areas likely to be hit with storm surges.


But the region caught a small break Friday morning.


The soft-spoken, slightly reserved Southerner is ready for the biggest job in Silicon Valley.

By TheStreet Staff Aug 25, 2011 11:59AM

By James Rogers, TheStreet


Tim Cook has an unenviable task filling Steve Jobs' New Balance sneakers, although Apple (AAPL) investors have little to fear from the soft-spoken, slightly reserved Southerner who now has the highest-profile job in Silicon Valley.


Inevitably, Apple will miss Jobs' genius for innovation and predicting the next big thing in consumer technology, but Cook's talents should not be underestimated.


While Jobs is widely regarded as a visionary, Cook has developed impressive skills working behind the scenes at Apple. As an IT operations maven, Cook has expertise that will prove crucial in helping Apple roll out its ambitious cloud strategy.



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[BRIEFING.COM] Range-bound action continues with the S&P 500 trading inside of an eight-point range that has held since the open.

All ten sectors continue holding gains with most cyclical groups trading ahead of their defensively-oriented counterparts. The materials sector (+1.2%) sports the largest gain, while industrials (+1.0%) and energy (+1.0%) follow not far behind.

Interestingly, the strength of mid-tier sectors has overshadowed the modest underperformance in the ... More


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