Stocks are hot again, but as in 2000, not all of them are reaping the benefits.
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The airline moved on its own to ground flights after a 5-foot-hole appeared in one plane. Could this be a model for other airlines? With video.
The airline moved quickly to ground dozens of planes, irritating customers and making the fiasco even bigger. Was that a little much? No, experts say. Southwest is now getting praised for the way it handled the incident, and some observers say the airline's actions could set a new standard for the way the industry responds.
Usually when something like this happens, airlines wait to hear from regulators and airplane makers before grounding flights, The Wall Street Journal reports. But Southwest didn't wait for advice from Boeing (BA) -- a good move, since Boeing wasn't sure what was going on -- or the government.
Post continues after this video discussing the way Southwest handled the crisis:
Home loan processing could be affected.
By Maria Woehr, TheStreet
A government shutdown would curb mortgage processing at some large banks, especially if Uncle Sam went dark for an extended period.
A spokesman for the Federal Housing Administration told TheStreet that if the government does shut down, it "will not be able to endorse any single-family loans, and staff will not be available to underwrite and approve new loans."
The FHA backs a large swath of the single-family and multifamily mortgages in the U.S. that are eventually underwritten by private banks.
Recession aftershocks send vacancies to their highest level in more than a decade.
This spring has seen mall vacancies hit their highest level in 11 years, The Wall Street Journal reports. The vacancy rate is a surprisingly high 9.1%. The situation is really miserable at strip malls, where the vacancy is forecast to surpass 11% later this year -- the highest level in 21 years.
Luckily, major mall operators like Simon Property Group (SPG) and Taubman Centers (TCO) have managed to escape this downward spiral. The real problem, the Journal reports, lies in those strip malls that were built in the suburbs during the housing boom. Builders thought houses were coming, so they got out first with sprawling retail sites in developing neighborhoods.
A fine idea, but then the financial crisis hit and all those housing plans ground to a halt. That left a lot of empty storefronts in neighborhoods that never lived up to their potential.
It's tough out there for the greenback as slower growth, Fed abuse, budget fights and rising inflationary pressure send the currency tumbling to new lows.
The U.S. dollar sliced below its recent trading range Friday as a big batch of negative catalysts weighed on the currency. Some of this is due to the malignant neglect of the currency at the hands of the Federal Reserve. And some of it is due to Thursday's interest-rate hike by the European Central Bank, the first rich world central bank to tighten policy since 2008.
With the Europeans joining monetary authorities in places like China and Brazil by embarking on an anti-inflation rate-hiking campaign, only the Fed and the Bank of Japan are left sitting still. That weakens the dollar as investors move into currencies that offer higher interest rates. Plus, it looks like U.S. economic growth is set to slow because of the ravages of food and fuel inflation and the damage it's causing to consumer sentiment.
As a result, the team at Standard Chartered, who market themselves as experts on currencies, believe the dollar will continue to move lower through the summer before finding support in the second half of the year once the Fed's $600 billion bond-buying program ends in June. As for a more sustained rebound for the greenback, don't look for a strong dollar until 2013 or 2014 at the earliest. Here's why.
The European Central Bank raises its benchmark interest rate ahead of the Fed for the first time in 4 decades.
See why this household name is worth a look.
By Jason Moser
It seems like everywhere I look in my house, I find some type of Clorox (CLX) product. From the kitchen to the bathroom and everywhere in between, life needs to be cleaned, and trash taken out. So like Peter Lynch, I'm buying what I know, and adding some earnings (and cleaning) power to my portfolio.
Not long ago, I took a cursory glance at Clorox as a potential dividend play; it has a well-known catalog of products and brands. Ironically, though, I think its ubiquity causes many to simply overlook it. The company has been in business for close to 100 years, generates copious cash flow, and pays a 3.1% dividend to boot.
With brands such as Glad, Hidden Valley, and Kingsford charcoal -- not to mention its namesake bleach, and cleaning products including Formula 409, Liquid-Plumr, Pine-Sol, and Green Works -- Clorox has a tremendous reach.
If things close down temporarily, it might show we can do the same with less, a fund manager says. Plus: Video on the budget stalemate.
By Robert Holmes, TheStreet
During the very public battle between then-President Bill Clinton and Speaker of the House Newt Gingrich, expectations were that the stock market would be crushed as Americans lost confidence in the ability of the government. In addition, after threats Gingrich made about refusing to raise the debt ceiling for the Treasury Department, there were fears interest rates would head higher.
Singer says the major networks began scrambling to find video footage of a tangible change in function of the government to show U.S. viewers. The results, Singer says, were unintentionally hilarious.
The controversy over David Sokol's resignation from Berkshire Hathaway has overshadowed the Oracle's recent remarks on other topics.
By Don Dion, TheStreet
The controversy swirling around David Sokol's questionable actions leading up to his resignation from Berkshire Hathaway (BRK.A) has continued to rage, making it easy to forget that the Oracle of Omaha had been making headlines with his comments regarding a number of hot-button topics.
In recent weeks, investors have been given strong insight into Buffett's mind as he has expressed his opinions on the future of the euro and the long-term prospects of online social networking. While controversial at times, his comments further aid investors, market commentators and Buffett fans as they work to better understand how the world's most famous investor thinks.
As nations such as Spain, Portugal, Greece and Ireland have struggled to rein in their looming debt crises, debate among many market commentators and analysts has focused on the long-term outlook for the euro.
As demand for coal, autos and lumber increases, this well-run rail company can add cars to each train without increasing labor or fuel costs.
There's lots of dispute out there about whether margins have peaked. I know our own Doug Kass has argued mightily that the great margin expansion is over.
CSX is one of the best-run companies in America. The margins went from 25% to 29% last year. That's an incredible acceleration from previous years.
Yet there's Ward again talking about how margins have nowhere to go but up. He ticked off a bunch of factors: newer hubs that cure bottlenecks, including a brand-new operation in Northwest Ohio; more coal exports, which means many more train cars moving coal to the ports than the year before; and further efficiencies when it comes to intermodal traffic.
The magnifying glass of the media is focused on David Sokol, but should be directed at Buffett as well. Unfortunately, reputation is often destroyed by appearances.
I was quoted in the Financial Times recently about David Sokol, chief executive of a Berkshire Hathaway (BRK.A) subsidiary who bought shares in a chemical company a few months before Berkshire acquired it at a significant premium. Sokol made $3 million on his $10 million purchase of Lubrizol stock.
"Any time you buy stock in a company which your employer then buys just does not smell right," I told the FT.
This quote slightly misstates my view, as the issue here is more complex. Sokol was the chief executive of Berkshire subsidiaries MidAmerica and NetJets. It's not his job to look for companies for Berkshire to buy; Buffett and Munger are in charge of Berkshire’s capital allocation decisions. Sokol bought Lubrizol for his own account because he liked the business and thought it was attractively priced.
If Sokol had never mentioned Lubrizol to Buffett, there would be no controversy today. But he did, while disclosing that he owned the stock. Buffett reportedly expressed little interest in Lubrizol at the time.
Two, six, eight, who do we appreciate? A company that does complex things extremely well.
By Rex Moore
II-VI (IIVI) (pronounced "two-six") is really in the business of expertise -- expertise in dealing with incredibly complex materials and high-precision components. That right there should perk up your investing ears, because it suggests a core competence that competitors can't easily duplicate. I'm impressed enough to be adding shares to my real-money Rising Stars portfolio.
The company's products serve variety of industries, from medicine to the military. Many of them are laser-related, used for cutting, drilling, welding, and even detecting shoulder-launched missiles aimed at low-flying aircraft. II-VI also produces the compound semiconductor materials required for these components to operate, including selenium, tellurium, and silicon carbide. (In fact, the company took its name from columns II and VI of the Periodic Table of Elements, which combine for compounds such as cadmium telluride and zinc selenide.)
With Washington gridlocked over the budget and with a shutdown looming Friday, here's a look at the likely impact on stocks and the economy.
The politicos seem hellbent on repeating the 1995 experience and shutting down the federal government starting Friday. A series of frantic powwows at the White House between President Barack Obama and congressional leaders have failed to secure a deal. And with the budget debate shifting from fiscal 2011 to the 2012 budget -- where the discussion has shifted from billions to trillions in spending cuts -- the two parties are headed straight for a brutal, drawn-out fight.
With the economy and corporate profits looking increasingly fragile as inflationary pressures build and consumer confidence plummeting, now is just not a good time to furlough nonessential government workers and shutter national parks.
The good news is that history shows a government shutdown doesn't really have an impact on the stock market. The bad news is that it could have a meaningful effect on Q2 GDP growth (Q1 growth is already looking pretty weak). And, of course, the acrimony sets the stage for an epic fight over the Treasury's $14.3 trillion debt ceiling, which will be reached "no later than May 16" unless Congress acts to extend it. Here's what to expect.
A trend that began last year looks set to continue, according to the World Silver Survey.
By Alix Steel, TheStreet
World investment demand drove silver prices higher in 2010 and the trend is on track to continue in 2011, according to the World Silver Survey by GFMS Research Group.
Silver investment jumped 40% to 279.3 million troy ounces in 2010, or $5.6 billion, while silver prices surged 80%. Net investment demand was led by a 24% increase in ETF holdings to 582.6 million ounces, followed by coin and metal demand, which rose 28% to 101.3 million ounces, and rounded out by 55.6 million ounces worth of bullion bars.
"The biggest news was the significant growth in investment demand," says Philip Klapwijk, the executive chairman of GFMS, "something that has continued, of course, in the first quarter of 2011."
Strategists share their views on where to invest when the Federal Reserve ends its $600 billion bond-purchase program.
By Shanthi Bharatwaj, TheStreet
But market analysts say investors should continue to bet on stocks and commodities even after the Federal Reserve ends its $600 billion bond-buying program -- known as QE2 -- as bonds will prove to be an unsafe alternative.
A combination of recovery expectations, inflation risks and worries about the massive federal deficit have been pressuring bonds and lifting yields -- bond prices and yields share an inverse relationship. But with the Fed stepping in to buy up Treasury notes, analysts say the rise in yields has been relatively modest. The intention of the Fed's purchases is to dampen interest rates so as not to threaten an economic rebound.
Enjoy the move into financial and tech stocks, but don't overstay your welcome.
Can I just say that this is one of the wackiest markets I have ever seen? Look, I get tech. Texas Instruments (TXN) tore the heart out of those who are betting against it. Oclaro's (OCLR) rally for some investors meant that the most punishing tech sell-off has to be over. Maybe someone actually does want to take a run at Finisar (FNSR).
Oh, and speaking of flicking a switch, we now are all happy with Cisco's (CSCO) John Chambers because he has realized what we all knew: The company's strategy was failing. The conviction the market has in this guy is amazing. They even took arch-rival Juniper Networks (JNPR) down on it!
I still respect the seasonality, the supply chain and the personal computer and potential tablet gluts as real issues. But the Texas Instruments-National Semiconductor (NSM) issue shows that these companies are loaded with cash and are doing something about it.
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[BRIEFING.COM] The S&P 500 shed 0.1%, registering its fourth consecutive decline. Today's session proved to be a bit of a roller coaster ride for stocks as the S&P 500 opened in the red, rallied into positive territory, fell to fresh lows, and regained the bulk of its losses into the close.
For the second day in a row, the early weakness coincided with heavy selling in Europe. In addition, bonds and risk assets were pressured by a better-than-expected ADP Employment report, which ... More
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