8 reasons the market isn't worse
8 reasons the market isn't worse

Stocks should be crushed by global turmoil, Jim Cramer says. Instead, they're doing fine.

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Management plots an uncertain future

By Motley Fool Pick of the Day Apr 18, 2011 11:28AM

Credit: (© Gary Malerba/AP)
Caption: Best Buy storeBy Rick Aristotle Munarriz

 

Best Buy (BBY) laid out its road map during last week's analyst day. It knows where it wants to be, and that place is somewhere else.

 

The meandering consumer electronics giant is looking to scale back its big-box presence in the coming years, realizing that consumers have moved on. Back-to-back quarters of cascading revenue, comps and earnings can be as sobering as a cup of coffee rimmed with smelling salts.

 

In an effort to regain relevance before it becomes the second coming -- and going -- of Circuit City, Best Buy is spelling out four paths for growth. 

 

Funds tracking industrials, financials and techs should see an active week as key holdings report first-quarter earnings. With video.

By TheStreet Staff Apr 18, 2011 10:47AM

By Don Dion, TheStreet

 

Here are five ETFs to watch this week.

 

1.    Industrial Select Sector SPDR (XLI)

 

XLI will be in the spotlight as six of the fund's top 15 holdings release their earnings performance reports over the course of the next week. Companies scheduled include General Electric (GE), Honeywell (HON), United Technologies (UTX), Union Pacific (UNP), Danaher (DHR) and CSX.

 

Although XLI witnessed an impressive run during the opening months of 2011, the fund has seen some choppy action in March and April. It will be interesting to see if earnings numbers from top holdings will be able to push the fund higher in the near term.

 
Tags: etf

The German carmaker's ambitious goal to triple domestic sales relies on the stylish new Bug, a redesigned Passat and a new Tennesee auto plant. Includes video.

By InvestorPlace Apr 18, 2011 10:25AM

By Jeff Reeves, editor of InvestorPlace.com

 

investorplace logoWith more than 21 million cars manufactured under the Beetle nameplate in the past 60-plus years, it's a bit shocking to consider the iconic Volkswagen car has seen only two major design schemes. Such big numbers on so few changes are proof of the compact car's resonance with motorists worldwide.

 

But with only 300,000 vehicles sold in the U.S. last year -- a mere 2.5% of the 11.6 million automobiles Americans purchased in 2010 -- Volkswagen has a long way to go before it is a serious player in the domestic auto market.

 

Stocks could rally as earnings season goes full swing during this holiday-shortened week.

By Jamie Dlugosch Apr 18, 2011 9:52AM

Earnings season began last week with a thud as Alcoa started things off with an earnings report that was less than stellar. Investors sold shares hard and took the market down with Alcoa.

 

Only a late-week rally minimized the damage. Given that there were only a few data points offered during the week investors will have to wait for this week’s numbers before coming to any conclusions about the health of U.S. corporations.

 

I’m still expecting strong numbers for this earnings season and I would trade long accordingly. This week we get a larger volume of reports. How the market reacts to the news will go a long way to telling us if stocks have more room to run or will pull back from current levels.

 

My ETF to trade given my expectations for the market is the iShares Russell 2,000 Index (IWM).

 
Tags: etf

The central bank has a tall order in the wake of the financial crisis, and its track record is far from perfect.

By InvestorPlace Apr 18, 2011 6:15AM

By Jeff Reeves, editor of InvestorPlace.com


investorplace logoWashington’s biggest problem right now isn’t the barely civil debate over the deficit or the looming deadline over the nation’s debt ceiling. Spending issues are surely a headache, but they probably don’t even make the top three behind the interrelated economic issues of the day – inflation, unemployment and general distrust of the Fed.

 

Many believe the Federal Reserve has failed in its dual responsibilities of controlling inflation and maximizing employment, and the institution is starting to feel the heat. And if the conversation in Washington doesn’t change back to economic issues like inflating gas prices and a stubbornly high unemployment rate, both Barack Obama and Ben Bernanke will be in deep trouble.

 

But is it fair to blame the Fed chairman for the mess we’re in, or the president for appointing Bernanke to a second term?

 

Even though the major averages closed lower for the week, they were also well off their lows. This should set the stage for a resumption of the rally next week.

By MoneyShow.com Apr 16, 2011 10:37AM
By Tom Aspray, MoneyShow.com

All of the concerns that hung over the market going into last week were exacerbated by earnings disappointments in many of the key sectors (Google (GOOG), Infosys (INFY) and Bank of America (BAC), to name three).

Even though the major averages closed lower for the week, they were also well off their lows. This should set the stage for a resumption of the rally next week.

Globally, the focus was on inflation last week. It was higher than expected in China, India, and in the Eurozone. This increases the move towards higher global interest rates.

The downgrade of Ireland's debt and restructuring in Greece also hung over the markets, though Europe held up surprisingly well.

Emerging markets overall declined less than those in the United States -- and while the iShares MSCI Emerging Market Index (EEM) pulled back 3.7% from its recent highs, some of the emerging-market country ETFs held up much better. This is clearly a positive sign, and they will continue to be helped by a weaker dollar. 
 

Bank of America missed estimates for first quarter earnings partly due to mortgage settlements and lower mortgage income.

By TheStreet Staff Apr 15, 2011 4:23PM

By Maria Woehr, TheStreet

 

Bank of America's (BAC) lackluster first quarter earnings performance can be summed up in two words: mortgages fallout.

 

The bank reported first quarter earnings of $2 billion, or 17 cents a share, missing Thompson Reuters analysts estimates of 27 cents a share.

 

Results were weighed down by a $38.5 billion settlement the bank reached with monoline insurer Assured Guaranty (AGO) that resolves its outstanding and potential repurchase claims against BofA. The agreement includes a cash payment of $1.1 billion to Assured Guaranty, and a loss-sharing reinsurance arrangement that has an expected value of approximately $470 million.

 

A better-than-expected report from Spanish retail bank Banesto reaffirms optimism in Banco Santander.

By Jim J. Jubak Apr 15, 2011 4:12PM
Jim JubakI own Banco Santander (STD) for its growth potential in South America—and for its healthy dividend. (That’s why the stock has been a member of my dividend income portfolio since May 2010.)

But I worry about the risk of something unexpected going wrong in the bank’s home market, Spain.

And that’s why the April 12 earnings report from Banesto, the Spanish retail bank controlled by Banco Santander, was reassuring.

Not that the news was all that great. But there weren’t any significant negative surprises, and the news was, in fact, better than expected.
 
First-quarter profit did fall to 169.5 million euros ($244.8 million) in the quarter, from 211.5 million euros in the first quarter of 2010 -- a 20% drop. But that still beat the analyst forecast of 149 million euros.
 

The chemicals giant builds on momentum from several quarters of strong earnings and hikes its dividend by 67%.

By Kim Peterson Apr 15, 2011 3:37PM
Image: House of bills (© Tetra images /Tetra images/Getty Images)Dow Chemical (DOW) has paid 399 consecutive cash dividends, starting in 1912. And it's not ready to stop anytime soon.

The company is raising its second-quarter dividend to 25 cents a share from 15 cents -- and the stock is responding with a rise of more than 2% Friday to $37.88.

The move was welcomed by investors who watched Dow cut its dividend for the first time in its history in early 2009. Dow slashed its dividend from 42 cents to 15 cents -- a move that helped the company pay for its $15.7 billion purchase of Rohm & Haas.

But Dow has surged on several quarters of strong earnings, building on other smart financial moves. The company has been serious about paying down its debt and growing earnings -- it repaid $2.5 billion, yes, billion, in the first quarter -- and analysts said it has gained more financial confidence. 

As apple juice grows in popularity, one exchange thinks companies will trade futures as a hedge against volatility.

By Kim Peterson Apr 15, 2011 2:26PM
Apple juice has come into fashion in a big way, making up for Americans' dwindling interest in orange juice.

Apple juice is so hot, in fact, that commodities traders may soon be able to place bets on it. The Minneapolis Grain Exchange is preparing to list apple-juice futures, The Wall Street Journal reports.

Prices for raw materials are rising across the board, and companies want to be able to hedge against volatility, according to the Journal. Apple juice futures are one way of doing that. The idea might sound ludicrous, but it's being championed by PepsiCo (PEP), which sells apple juice in its Tropicana and Ocean Spray lines.

The move also comes as people have lost enthusiasm for orange juice, which has become more expensive over the years, the Journal reports. There are fewer orange crops now as orchards get bulldozed for housing developments -- and that has pushed prices up.

Post continues after this interview with Dole Food (DOLE) about orange juice: 

Thursday's debacle was a huge black eye for Google. The new CEO's lack of leadership raises more doubts about his competence. Includes video.

By MSNMoney partner Apr 15, 2011 12:38PM

By Eric Jackson, Forbes


Google's (GOOG) shares were lower in this morning's premarket than they were even in last night's after-hours when they showed a 5% drop on a 46% rise in operating expenses in the quarter. Despite a 29% increase in net revenues, the rise in expenses clearly spooked Wall Street.

 

Citi's (C) Mark Mahaney is out this morning with a cut target of $650 from $750. His language is coded to complain about Larry Page, Google's new CEO: "With limited management disclosure suggests lack of discipline in a growth/competitive environment that simply isn't as open-ended as it was for GOOG prior to the recession."

 

Translation: "A 38-year old's now in charge, and we're concerned with him running up wacky expenses like driverless cars and a new Google space program."

 

Taking advantage of patience and fear.

By Motley Fool Pick of the Day Apr 15, 2011 12:26PM

By Jim Mueller

 

A month ago, I lamented the fact that the share price of Power-One (PWER) , a maker of DC-to-AC inverters for the solar and wind industries, had dropped well below $8 and then rebounded before I had a chance to buy. Of the 10 different companies my Messed-Up Expectations portfolio owns, I believe this one has the most growth opportunity and I wanted a really good price for my last purchase.

 

Well, the opportunity has arisen again -- given the volatility of the stock, I figured it probably would -- thanks in part to reaction to an announcement the company made last week. First, some background.

 

Latest sector analysis shows consumer staples and health care could be the new star performers. Also keep an eye on energy and technology, and avoid lagging financials.

By MoneyShow.com Apr 15, 2011 11:55AM
By Tom Aspray, MoneyShow.com

The main market averages have declined steadily since early April, as the S&P 500 is down 1% for the month and is almost 2% below the highs. 

The selling has been selective, however, as some sectors have clearly bucked the trend and are outperforming the major averages.
 

The Oracle of Omaha has shown interest in a variety of energy trades.

By TheStreet Staff Apr 15, 2011 11:24AM

the streetBy Don Dion, TheStreet

 

During his illustrious career, Warren Buffett has ventured into a vast number of market sectors.

 

With generous exposure to companies including Wells Fargo (WFC), Coca Cola (KO), Johnson & Johnson (JNJ) and Wal-Mart (WMT), the Oracle of Omaha has built an investment portfolio that will allow him to not only profit during times of prosperity, but also weather economic storms down the road.

 

Energy is a major component of Buffett's empire. Two clear examples of Buffett's foray into the energy industry can be seen through his investments in Exxon Mobil (XOM) and ConocoPhillips (COP). The exposure to these two firms has given Buffett direct access to the global oil markets.

 

Cisco shutters the Flip video camera. A new government budget makes no bleep on the radar despite earlier hoopla. GE bounces back from fake press release.

By TheStreet Staff Apr 15, 2011 11:20AM

Here is this week's roundup of the dumbest actions on Wall Street.

 

5. Cisco flips out

 

Cisco (CSCO) finally faced up to the reality of its shortsighted $590 million bet on the Flip video camera this week.

 

The decision to shutter Flip was faintly praised by Wall Street, only because burning $590 million on Flip in the first place was such a headsmacker to anyone who has owned a cell phone. They've been around for quite a while, and cameras were certainly not a new feature to phones when Cisco thought buying Flip was a great idea less than two years ago.

 

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[BRIEFING.COM] The stock market capped the trading week with losses across the major averages. The S&P 500 fell 0.5% to surrender its weekly gain, while the Dow Jones Industrial Average (-0.7%) and Russell 2000 (-0.9%) underperformed. The two indices posted respective losses of 0.8% and 0.6% for the week.

Equity indices were pressured from the get-go after several heavyweights disappointed the market with their earnings and/or guidance, which led to some broader profit-taking. After ... More


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