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Despite a blowout quarter from the equipment maker, in this market, it's futile to pick up shares until they fall -- like it or not.

By Jim Cramer Jun 2, 2011 9:15AM

jim cramerthe streetJoy Global (JOYG) blows it out. Second-quarter earnings up 34%. Futility, right?

 

Probably.

 

But it's amusing to think of it like this: When you go through the earnings release, there is nothing but net. Raised outlooks; positive items about coal, iron, copper and oil; demand soaring from China and India. All the right touchstones.

 

All of the things that would ordinarily have sent it up 10% today and then kept it up in subsequent days.

 

In this market, though, it doesn't matter, because we are staring at sub-3% bond yields on the 10-year Treasury, which confirms that the recession is back -- except this time neither the Fed nor Congress can come to the rescue. That is the mindset of this market, like it or not.

 

A package that some people thought would save the country won't fix its real economic issues.

By Jim J. Jubak Jun 1, 2011 5:00PM

Jim JubakThe much-hoped-for June deal between Greece and its "saviors" -- the European Union, the International Monetary Fund (IMF), and the European Central Bank (ECB) -- looks more and more like an effort to kick the can down the road as far as possible -- and pray that things get better. 


The European Central Bank is taking the lead in putting together this deal -- and it's only logical, therefore, that its concerns are driving its structure.  


The bank's big worry is the extreme vulnerability of the European banking system to a Greek default. Too many banks in France and Germany hold too much Greek debt, and any restructuring would require government rescues of the most troubled of these institutions.  


A Greek default, the bank worries, would also destabilize the rescues of Ireland and Portugal, requiring the bank to open new fronts in its fight to keep the euro from imploding. 

 

The sell-off I've been warning of for months has reached new depths, but a few points of light are beginning to shine.

By Anthony Mirhaydari Jun 1, 2011 4:44PM

Stocks dropped hard Wednesday on another batch of bad economic news and a sovereign credit downgrade for Greece. The Citigroup Economic Surprise Index, which measures how growth is faring against Wall Street expectations, is in the midst of its most violent decline since the 2008 financial crisis. And with the end of the Federal Reserve's $600 billion money-printing initiative just a few weeks away, investors are running scared.

 

There's good reason for this. A rise in inflationary pressures has been the main reason economic data have been so terrible lately -- a situation I've covered at length in my columns and blog posts going back to February. Additional Fed stimulus would only make the problem worse, effectively shelving hopes for a third round of direct asset purchases by the central bank. A QE3 would make the problem worse.

 

After months of banging on the table that all was not well with the economy and the markets, I'm slowly beginning to see glimmers of hope that suggest that the broad market sell-off, which entered its third month Wednesday, could give way to a relief rebound rally. Remember that the time to get cautiously bullish is when there's blood in the streets. Right now, there's a sea of red.

 

A listing in China would help the beverage giant fund expansion and promote its brand.

By Kim Peterson Jun 1, 2011 2:16PM
Coca-Cola's (KO) Sprite is the best-selling soft drink in China. The beverage maker is doing so well there, in fact, that it's talking to the government about listing shares in Shanghai.

This would be a big deal. China doesn't allow foreign companies to list in its stock market, but it wants Shanghai to become more of a financial hub. So the government has opened the door for a foreign board of international companies to list on the Shanghai stock exchange, and Coke wants in.

The plans seem fairly murky at this point. There's no official time line for when this foreign board will get started, but some people expect to see approval this summer. We don't know which companies will be allowed on the board.

Check out this interview with Coke's chief executive about China. Post continues after video

Declining prices and a still-gloomy market outlook haven't stopped several of the sector's top stocks from rallying.

By MoneyShow.com Jun 1, 2011 12:35PM

By Tom Aspray, MoneyShow.com

 

Tuesday’s release of the March S&P/Case-Shiller price index showed a drop of 3.6%, which was the largest year-to-year decline since November 2009. The decline in national home prices back to 2002 levels has many people discussing a double-dip recession in housing. Sentiment on housing has also gotten worse, as 54% of Americans do not think housing will bottom until 2014.

 

The gloomy outlook has not affected homebuilders' stocks, however, as many have surged over the past few days on strong volume. The Dow Jones Homebuilding Index completed a weekly head-and-shoulders (H&S) top formation in April 2006 when the neckline in the 800 area was broken.

 

This industry group eventually made a low at 162 in November 2008. Since those lows, the group has traded in a wide range, but it now appears that the correction from the early 2011 highs is over.

 

Some of the largest homebuilders are already near resistance, while others are much closer to good support and may provide low-risk buying opportunities.

 

Here are your choices for saving intelligently.

By Motley Fool Pick of the Day Jun 1, 2011 11:18AM

By Alex Dumortier, CFA

 

This month, the rate of inflation exceeded the yield on the 10-year Treasury bond for the first time since 2008. That's a negative real yield. Your assets will lose purchasing power with that return. Bill Gross, who manages the world's biggest bond fund, told Bloomberg Television last week: "Savers are being disadvantaged. . . . We call (what policymakers are trying to do) pocket picking." Don't let central bankers pick your pocket. Here are a few asset allocation guidelines to avoid just that.

 

Saving is healthy -- even necessary. Indeed, during the housing bubble, there was spending on a massive scale, with people borrowing against the value of their home to fund their spending habits. Now that the party is over, U.S. consumers are left licking their wounds -- or balance sheets, as it were.

 

Avoid cash and government bonds
However, by setting interest rates at zero, the Federal Reserve isn't making it easy for people to save -- that's the idea.

 

Catastrophic claims are pummeling profits, though shares of some insurers still carry 'buy' ratings.

By TheStreet Staff Jun 1, 2011 11:03AM

By Frank Byrt, TheStreet

 

There's no shelter for those in the property-casualty insurance industry this year, as they face a tidal wave of underwriting losses stemming from a string of catastrophes of Biblical proportions, including earthquakes, Tsunamis, nuclear plant meltdowns, and tornados.

 

SNL Financial, which tracks insurance industry data, reported that the industry had its worst first quarter since 2001, with an estimated underwriting loss of $3.3 billion, as insurers spent nearly $1.03 on claims and expenses for every dollar they collected in premiums.

 

And disaster-claims payouts worldwide this year are on record pace, on order of $50 billion to $60 billion so far, said Jose Miranda, director of client advocacy at Eqecat, which provides disaster and risk modeling for insurance companies.

 

So you'd think insurance-industry analysts would have a bunch of screaming "sell" ratings on companies in this sector, particularly on reinsurers, who take on risk that the front line property/casualty insurers don't want.

 

These funds track travel, food, entertainment and social networking.

By TheStreet Staff Jun 1, 2011 10:44AM

By Don Dion, TheStreet

 

The temperature is rising up here in the Berkshires, and for many people here and across the U.S., this means it's time to escape the day-to-day office life and enjoy some rest and relaxation.

 

While many folks are counting down to the time when they can replace their desk chairs with beach chairs, for others, the arrival of summer presents a number of attractive investing opportunities.

 

There are a number of exchange-traded funds that may prove exciting to watch over the next few months.

 

No longer hostage to raw costs and consumer whims, consolidated clothing companies like Phillips-Van Heusen are premier growth vehicles.

By Jim Cramer Jun 1, 2011 8:59AM

jim cramerthe streetWhen will the big apparel companies get their due? On Tuesday, we heard from Phillips-Van Heusen (PVH), the maker of a plurality of shirts in this country and a majority of ties.

 

The results were spectacular, led by international -- chiefly Calvin Klein and Tommy Hilfiger. Of course, going into the quarter the betting was heavy that we would have another disappointment, like Polo Ralph Lauren (RL) after its quarter, or like VF Corp. (VFC) after a recent conference.

 

But the bearish reasoning was all backward. We heard that PVH would have a hard time with cotton costs for Calvin Klein. But PVH licenses the Calvin Klein name and doesn't have to eat those cotton costs. We heard that Tommy can't maintain its strength in Europe. But prices are actually rising for Tommy clothes (they already sell for more than double their cost here for pretty much the same product) in Europe and Russia.

 

The Brazilian government is trying to attract customers to Vale. What does that involvement mean for the company?

By Jim J. Jubak May 31, 2011 5:04PM
Jim JubakYou'd think news that the Brazilian government is so eager for Vale (VALE) to get into the rare-earth business that it was busy lining up potential customers would be nothing but good news for Vale. (Vale is a member of my Jubak Picks 50 long-term portfolio.)

You’d be wrong, however.

The move by the Brazilian government has added to fears that it wants to regain control of the company it privatized in 1997. Government pressure was key to pushing out Vale chief executive Roger Agnelli in April.

Financial markets have generally reacted favorably to new chief executive Murilo Ferreira, a Vale veteran who left the company in 2008, seeing him as an experienced mining executive rather than a political appointee.
 

It spends more than it brings in, and it's on track to hit its debt limit. Why can't it pull itself out of this mess?

By Kim Peterson May 31, 2011 4:53PM
The U.S. Postal Service is a disaster in the making. A recent BusinessWeek cover story showed just how big the Postal Service's problems are, and they are huge.

How is it that UPS (UPS) and FedEx (FDX) can run profitable, successful delivery services while the U.S. Postal Service blunders its way into insolvency? That's an easy question to answer after you read the BusinessWeek article.

The USPS brought in $67 billion in revenue last year, not nearly enough to cover its costs. It's nearly $15 billion in debt and will hit its debt limit this year. If this continues, the Postal Service will collapse.

Post continues after this video interview with BusinessWeek's editor about the article: 
Tags: ups

The stocks have soared over the past year, and they stand to benefit from low interest rates and more conservative investors.

By Kim Peterson May 31, 2011 3:42PM
The tobacco industry is smokin' hot right now. Just look at the recent performances of some of the biggest stocks. In the last year, Altria (MO) has soared 40%, Reynolds American (RAI) 53% and Lorillard (LO) 60%.

There is no stopping this sector. The top stock in the group? Analysts from UBS say menthol leader Lorillard is the top pick, and they're raising their price target on the stock to $124. Lorillard is trading at about $115 today.

Lorillard has a strong growth trajectory, and is expanding its Newport line to include non-menthol cigarettes such as its recently introduced Newport Red. In the first quarter of this year, Lorillard's sales rose nearly 13%, profit rose 7% and the company raised its dividend 16%. 

The chief executive, currently on medical leave, is on board to announce the company's new software offerings. With video.

By Kim Peterson May 31, 2011 11:49AM
Apple (AAPL) made an unusual move Tuesday in spelling out exactly what will be covered next Monday at the keynote address to kick off the company's annual developers conference.

Normally the company keeps its set list top secret. But on Tuesday, Apple was very clear that the event is all about software, including its new operating system, Lion. Apple will also talk about its next mobile operating system for devices like the iPad and iPhone, and finally its upcoming cloud services product, called iCloud.

And to top it all off, chief executive Steve Jobs will deliver the keynote. That wasn't expected, as Jobs went on medical leave in January. One large Apple shareholder talks about what he sees in the news in the following video.

Post continues after video: 

Traders playing the short side must be sure to avoid some common pitfalls. See what they are and discover several heavily shorted stocks that seem poised to move higher.

By MoneyShow.com May 31, 2011 11:48AM
By Tom Aspray, MoneyShow.com

The explosion in options volume over the past few years has made buying put options the favored trading method for those who think a stock is going to move lower. Historically, selling a stock short was the more common approach, and it is still a force in the market.

One readily available piece of information that put buyers and short sellers often ignore is the short interest data, which is published on a regular schedule and provided for free by Nasdaq.

Ignoring this information is a common put-buying mistake, and I have also found that most sell a stock short or buy a put based on fundamentals, as opposed to technical analysis. They either read something negative about a stock that convinces them that it “must” go down, or they form an opinion that the company’s business has no future.

One good example from several years ago was Pfizer Inc. (PFE), as the loss of the company’s patent on Lipitor was expected to doom the stock, yet it rose from a 2009 low under $12 to over $20 recently.
 

With low multiples and good products, the stock is compelling.

By Motley Fool Pick of the Day May 31, 2011 11:44AM

By Cindy Johnson, The Motley Fool

 

Dell (DELL) lost its No. 1 place in PC market share to Hewlett-Packard (HPQ)in 2006 and has been unsuccessfully struggling to regain its former glory ever since. Now, after years of looking like a turnaround that wouldn't ever turn, the company's recent earnings report suggests that Dell could be in the early stages of a turnaround. The company's new XPS 15z notebook, announced on May 24, provides more evidence that Dell's stock could be poised to take off.

 

The XPS 15z is Dell's answer to Apple's (AAPL) ultra-cool MacBook Air. Its predecessor, the Dell Adamo, was a series of mistakes that was put out of its misery in February.  

 

This time it looks as though Dell got it right. CNET describes the XPS 15z as "much more in line with what people have come to expect from Dell nowadays: some thoughtful style, decent quality, but still very accessible to mainstream consumers."

 

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[BRIEFING.COM] The stock market finished an upbeat week on a mixed note. The S&P 500 shed less than a point, ending the week higher by 1.3%, while the Dow Jones Industrial Average (+0.1%) cemented a 1.7% advance for the week. High-beta names underperformed, which weighed on the Nasdaq Composite (-0.3%) and the Russell 2000 (-1.3%).

Equity indices displayed strength in the early going with the S&P 500 tagging the 2,019 level during the opening 30 minutes of the action. However, ... More


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