How long can the S&P 500 keep 2,000?
How long can the S&P keep 2,000?

The Federal Reserve and Congressional politics threaten to rain on the market party.

VIDEO ON MSN MONEY

Renewed debt problems in the Eurozone have shaken world markets this week, and if the crisis spreads to other nations, there are two in particular that look most vulnerable.

By MoneyShow.com May 24, 2011 11:15AM
By Tom Aspray, MoneyShow.com

Rising concerns that Greece would default on its debt obligations spurred selling around the globe on Monday with some of the worst losses sustained in Asian markets. 

It has been over a year since these debt concerns first surfaced, so many market participants are likely wondering whether Greece’s problems will spread or if they will have any long-lasting effects.

Over the past year, the euro debt crisis has only had a short-term impact on the US markets, as the major averages have soon resumed their overall uptrends. 

Clearly, Monday’s drop in the US market has done some technical damage, as the short-term bottoming formations discussed last week (see “Market Timing 101”) have now been broken.

The intermediate-term analysis for the stock market is positive, though a test of the April lows at 1294-1302 in the S&P 500 and 12,100-12,200 in the Dow Industrials is a now a greater possibility. Of the major averages, the Dow Jones Transportation Average is still holding above its recent lows.

A technical look at the STOXX 50 average, which is made up of the 50 largest companies in Europe based on market capitalization, can give us some key levels to watch over the next week. There are two European nations that seem to be the most vulnerable if the debt contagion spreads.
 
Tags: etf

ValueAct's Jeff Ubben sees a good company at a good price.

By Motley Fool Pick of the Day May 24, 2011 10:45AM

By Michael Olsen, CFA

 

It's 8:15 on a glorious Southern California morning, and I'm waiting to hear Jeff Ubben, managing director and founder of ValueAct, speak.

 

ValueAct is one of my favorite activist investors. They've built a reputation as gentlemen activists, but their annual returns precede them, 13.5% since inception. Ubben fits the profile: He's well-coiffed and articulate, sprinkles his opening remarks with well-read mentions, and shows a tendency toward polite contrarianism.

 

He moved from New York to San Francisco to get away from Wall Street. Where value constructionists favor valuation over business quality, he's rigorously focused on good businesses at good prices. He references his friendship with Jonah Lehrer, avid commentator on neuroscience and behavioral economics, and likens ValueAct's vetting process to flight school.

 

His investment idea, the product of a recent company split, doesn't disappoint.

 

With shares down double digits this year, the stock is a bust, not a bargain.

By InvestorPlace May 24, 2011 8:56AM

By Jon Markman, InvestorPlace.com


Google Inc. (GOOG) is down about 13% since the start of the year, and some investors may be eyeing this as a buying opportunity to get into one of the hottest companies out there, but I don’t think Google stock is hot at all.


GOOG creates a lot of buzz for itself, but as far as making money for shareholders -- which is the job of a company - it has failed recently. What’s worse, it hasn't been investing very well in its future.

 

Commodities aren't moving based on supply and demand. They're moving on trader and political demand.

By Jim Cramer May 24, 2011 8:47AM

jim cramerthe streetWhich comes first, the chicken or the dollar? That's what I am trying to figure out about the Goldman Sachs (GS) call this morning that talks about actual commodity demand and not just some sort of dollar-commodity trade.

 

Goldman's call is that there is innate demand here and commodities should stop going down, that commodities are needed by actual users, not traders.

 

That's enough to get things going, at least this morning. But it prompts a question: When people see commodities higher, do they then sell the dollar because commodities are supposed to be up only because the dollar's down?

 

Yeah, it has become that stupid.

 

It's great if you want to offer Lady Gaga's newest album for 99 cents. Just make sure people can play it.

By Kim Peterson May 23, 2011 6:07PM
Amazon (AMZN) had to know this was coming. Offering Lady Gaga's newest album for 99 cents was sure to light the Internet on fire -- and now Amazon is in meltdown.

The downloads aren't coming through, users report. People quickly made the purchase, but then found that all 14 tracks weren't there. Even now, several hours later after my purchase, I'm only able to play one song from the list.

Amazon admitted that it is "experiencing high volume" and that the downloads are delayed. "If you order today, you will get the full @ladygaga album for $.99," the company said on Twitter. "Thanks for your patience."

Well, users are having none of it. 

Big events in Italy and Spain adds to investor worries about the euro crisis.

By Jim J. Jubak May 23, 2011 4:26PM
Jim JubakJust when you think the euro debt crisis can't get any worse, it does. Or at least that's how stock markets see it today.

The bad news from Europe today includes a cut to Italy's credit rating outlook by Standard and Poor's, and a smashing defeat by Spain's ruling Socialist party in local elections, as voters voiced their opposition to budget cuts.

As of 1 p.m. EST today, the Dow Jones Industrial Average was down 151 points, or 1.2%. The S&P 500 was down 1.3%, Germany’s DAX was down 2%, London’s FTSE 100 was down 1.9%, Hong Kong’s Hang Seng index was down 2.1%, and the Shanghai Composite index was down 2.9%.

Slovakia’s Slovak Share Index was up 0.93%. (The index isn’t especially important, but it is the only index I can find that’s in the green today.)
 

The company has repeatedly tried to light a fire with consumers, but with no real success. Will a new laptop change that?

By Kim Peterson May 23, 2011 3:11PM
After losing the consumer dollar to Apple (AAPL) over and over again, Dell (DELL) is back for another try.

The company is releasing a $999 laptop this week that looks an awful lot like another attempt to take down the MacBook Air. And with the new device, Dell is hoping one more time that it can finally make inroads with shoppers who have repeatedly rebuffed and ignored it.

Dell has missed the mark in just about every consumer-electronics category: smartphones, tablets, digital music players and sharp-looking laptops. It can't out-Apple Apple, and so now it's trying a different strategy: Going after the "prosumer."

By the way, which is a better buy, Dell or Hewlett-Packard (HPQ)? Jim Cramer makes the call in the following video. Post continues after video

The hottest IPO in recent history falls more than 7% as investors reconsider the stock. With video.

By Kim Peterson May 23, 2011 2:01PM
The weekend was full of back-and-forth arguments about whether investors were suckered by LinkedIn's (LNKD) sky-high valuation.

And Monday, the market seemed to agree that LinkedIn is too expensive. Shares of the social-networking stock fell more than 7% in midday trading to $86.29. That's still way ahead of the stock's $45-a-share IPO price, but it's a steep drop from the $122.69 peak it hit Thursday when investors were at their frothiest.

Now brokers are telling their clients to short LinkedIn, The Wall Street Journal reports. "Even if you think it's a great business model, the feeling is that the valuation is way beyond what even the most bullish guys were hoping for," one brokerage trading expert told the newspaper.

Watch Jim Cramer's take on LinkedIn. Post continues after video

Investors scramble as economic concerns mount and selling pressure builds.

By Anthony Mirhaydari May 23, 2011 2:01PM

The correction I've been warning about entered a new, more dangerous phase Monday as reality began to set in among even the most ardent bulls. With just five weeks left in the Fed's $600 billion QE2 initiative, seen by many as a panacea for all the world's ailments, investors are beginning to worry. And they're beginning to sell.

 

As a result, the sell-off that was relegated to commodities, energy stocks and foreign shares has started to pull the major U.S. averages through major technical support levels and down out of multi-month trading ranges. Even defensive stocks in areas like health care and consumer staples, which have been market leaders recently as savvy traders looked for protection, are plunging along with the overall market.

 

There are many catalysts. For one, there is no doubt that the eurozone debt contagion is mutating into something so virulent that it now threatens not only Greece and Ireland but also Spain, Italy and Belgium. Japan, the world's third-largest economy, has plunged back into recession. And here at home, the economy is stalling badly just as rising inflation and unsustainable debt levels force the Federal Reserve and Washington to back off on stimulus measures.  

 

Here's a look at the situation, along with two new trade recommendations discovered with the help of Fidelity's ETF screener.

 

Conditions are shaping up that could spur a renewed rally in precious metals, and traders should be alert for buying opportunities.

By MoneyShow.com May 23, 2011 12:20PM
By Tom Aspray, MoneyShow.com

Gold's strong close Friday was impressive, and volume for the SPDR Gold Trust (GLD) was the highest we've seen in almost two weeks. Weekend developments in global markets may cause some near-term confusion in the gold market, but the short-term technical outlook has definitely improved.

Monday was rough for US stocks, in reaction to continued euro debt problems. The downgrade late Friday for Greece's debt was followed by a lowering of the outlook for Italy's debt. Spain is also on the radar, and the nation's election results may hamper austerity plans.

The stock selling started in Asia, with Shanghai down almost 3%, and then spread to Europe, as the euro dropped below 1.40.

The US dollar's strength has pushed crude oil lower, but gold is so far holding up well in early trading. If gold does pull back in reaction to a stronger dollar, it should represent a buying opportunity.
 

Keep an eye on funds that track health care, Internet companies, retail, Canada's financial sector and cars.

By TheStreet Staff May 23, 2011 11:50AM

By Don Dion, TheStreet

 

Here are five ETFs to watch this week.

 

1.    Shares Dow Jones U.S. Medical Devices Index Fund (IHI)

 

The most active period for company earnings ended last week following WalMart's (WMT) report on Tuesday. Looking ahead to this week, however, there are still firms scheduled to release quarterly results.

 

Medtronic (MDT) will report Tuesday. The firm's performance numbers and outlook will weigh heavily on IHI, which lists MDT as its largest holding. MDT shares account for over 11% of its total portfolio.

 

The old company was bloated with debt and overexpansion. Now it's posting record profits near those of its 2004 boom times.

By InvestorPlace May 23, 2011 11:10AM

By Jeff Reeves, Editor, InvestorPlace.com


investorplaceA few years ago, some folks figured Krispy Kreme (KKD) was destined for the garbage heap. After overly aggressive growth and the bankruptcy of key franchisees, the company was bleeding more red than a freshly bitten jelly doughnut.

 

But the company has been on a diet for the past few years, cutting costs and restructuring debt. Finally the doughnut shop appears trim and healthy once more, with its stock up almost 18% Monday on record profits. It's the best quarterly performance since fiscal 2004, during its heyday.

 

You're better off not owning them.

By Motley Fool Pick of the Day May 23, 2011 10:52AM

By Alex Dumortier, CFA

 

This week's highly anticipated initial public offering was heavily oversubscribed. I'm referring to commodities producer/trader Glencore, which listed on the London Stock Exchange yesterday. Meanwhile, on this side of the pond, the shares of social networking website LinkedIn (LNKD), which also began trading yesterday, flew out of the gates, gaining more than 100% over the $45 offer price. In the face of such enthusiasm, I suggest investors remain placid and steer clear of these shares -- particularly LinkedIn.

 

Bubble 2.0
LinkedIn was smart to cash in first by becoming the first social networking company to go public. The structure of the offering all but guaranteed an overvaluation of the shares. Not only did its first-to-market status create scarcity value, but its offering amounts to a small percentage of the shares outstanding -- fewer than 10%. Scarcity value squared, in sum. A massively oversubscribed IPO may be good for bankers and the companies they take to market, but it is the enemy of value-conscious investors.

 

Russia's version of Google is slated to make its Nasdaq debut this week.

By TheStreet Staff May 23, 2011 10:22AM

By Debra Borchardt, TheStreet

 

If investors missed out on buying Google (GOOG) when it went public at $85 -- it's now trading above $500 -- they have another chance to get in early with Yandex, the Russian version of the Internet search giant.

 

Yandex is scheduled to go public on Tuesday in a $1.1 billion deal. The company's stock will be listed on the Nasdaq exchange under the ticker symbol "YNKD," and the offering price is expected to be roughly $21 per share. There's a precedent for excitement. China's Baidu.com (BIDU) priced its initial public offering at $27 per share back in 2005, and the stock closed Friday's regular session at $134.69.

 

Of course, Baidu.com was helped when the Chinese government essentially kicked Google out of the country and gave the company a monopoly. The Russians aren't impeding access to Google.

 

A long-short approach has beaten the market in recent weeks, and it continues this week.

By Jamie Dlugosch May 23, 2011 9:19AM

The market drifted lower last week. With earnings season winding down, investors are left to speculate on the economy. Earnings reports that were released failed to inspire the market.

 

On Friday, two large clothing retailers, Aeropostale and Gap reported results that disappointed investors. Shares of both companies lost more than 14% of their value. That is a big loss irrespective of the results.

 

The big move down in those individual names tells us much about where the market may be heading. Certainly the number of bears emerging from the woodwork is on the upswing. In some ways, the contrarian play here is to be bullish as the market often moves opposite the consensus view.

 

Whatever the direction from here one thing is certain: predicting the exact direction is difficult at best. As such I’m staying conservative with my picks here. On the long side I would consider the SPDR Dow Jones Industrial Average (DIA).

 

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[BRIEFING.COM] The major averages ended the midweek session on a flat note after spending the day inside narrow ranges. The S&P 500 hovered near the 2,000 mark for the majority of the trading day, but slumped to new lows during the last hour of action. The index then returned to its flat line, where it settled for the day. For the third day in a row, participation left a lot to be desired with just 487 million shares changing hands at the NYSE.

Equity indices opened with slim gains, ... More


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