5 reasons the market is seeing red
5 reasons the market is seeing red

Geopolitical crises are taking a toll on stocks as we head into the seasonally weak month of August.

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Unfortunately, the duo's alliance to fight the iPhone is dead in the water, as Apple and Android already hold dominant positions in the smart-phone market.

By InvestorPlace Feb 11, 2011 10:24AM

Image: Damaged cell phone (© Nick Koudis/Getty Images)By Jeff Reeves, Editor, InvestorPlace.com


Nokia (NOK) was once the king of cell phones, garnering as much as half the market. But as the devices have gotten smarter, Nokia has found itself left behind. Nowadays, every gain for the iPhone and Android-powered gadgets is one more body blow to the Finnish electronics company, which has slowly and steadily been losing global market share.

 

The company hopes to change its fate, however, by teaming up with another tech powerhouse left out in the cold when it comes to the mobile market: Microsoft (MSFT). The companies today announced a partnership to create compelling devices with great apps that run on a mobile Windows OS and thus strike back against iPhones and Droids everywhere. (Microsoft owns and publishes MSN Money.)

 

Will the strategy work? In a phrase, "fat chance."

 

I criticize executives who blow it, and I applaud those who deliver. Meet 4 of my heroes.

By Jim Cramer Feb 11, 2011 10:23AM

TheStreetjim cramerI come to you now in praise of famous companies. These companies and the terrific CEOs behind them are heroes of mine. They are delivering remarkable results in the toughest of economies, and too many people just yawn at best -- and carp far more often -- despite their best efforts.

 

Let's start with Bob Iger and Disney(DIS). Excuse me for being in awe of a plain-spoken, nonpromotional man who took an undermanaged company with just a good brand and turned it into a veritable powerhouse of consistent strength.

 

Think about it. In the worst recession since the Great Depression, Disney was able to put up very good numbers for its most economically sensitive theme parks. Now that things are better, the company is just on fire.


Its movie business? So many are franchises: "Pirates," "Toy Story," "Cars" -- these are multiple revenue streams of regular business as strong as brands like Tide or Gillette but with more growth. Needless to say, if you watch ESPN as much as I do -- and many of you do -- you regard it as indispensable and as totally unable to be time-shifted, especially if you are watching the same games as your friends, as is often the case.

 

The video-rental chain could not get the money it needed to survive bankruptcy, reports say.

By Kim Peterson Feb 10, 2011 5:26PM
Credit: Ron Heflin/AP
Caption: Blockbuster storeJust when it seemed Blockbuster's situation could not get any worse.

The struggling video-rental chain is preparing to put itself up for sale after failing to get the cash needed to emerge from bankruptcy, The Wall Street Journal reported. And even Blockbuster's bondholders -- the ones waiting to get paid back what the company owes them -- seem to be OK with rolling the dice on a sale.

Why? Because even after months in bankruptcy, it sounds like Blockbuster just couldn't put together any good plans -- plans for reorganization, plans for debt reduction and especially a good strategy to compete with rivals.

Netflix (NFLX), Apple (AAPL), Amazon (AMZN) and other video giants are charging full speed ahead. And Blockbuster is simply stuck. It could take years to get out of bankruptcy and rebuild -- and then what would the company have left of value?

Blockbuster needs "to get on with it," one source told the Journal. 

The government proposes spending cuts, but getting lawmakers to sign off on them is another story.

By Jim J. Jubak Feb 10, 2011 3:51PM
Jim JubakThe Brazilian government announced $30 billion in proposed spending cuts Wednesday.

That was the minimum the government could pledge and not disappoint financial markets looking for budget cuts that would help the central bank fight inflation that hit 5.99% in January.

But there's nothing in the announcement -- no bold move -- that will change the current belief that interest rates will go up to 11.75% next month (from 11.25% now) or that they're headed to 13% by the end of 2011. Banco Central do Brasil raised its benchmark Selic rate to 11.25% from 10.75% in January.

The central bank was hoping for cuts that would raise the primary budget surplus to 3% of GDP. (The primary surplus is the budget surplus, if any, before government interest payments.) The proposed cuts would result in a primary surplus of 2.9% and would remove all the stimulus added in 2009 and 2010 to increase economic growth during the financial crisis, finance minister Guido Mantega said.
 

Is the social-networking site truly that valuable? Or are we seeing another tech bubble?

By Kim Peterson Feb 10, 2011 3:36PM
Credit: (© Nicholas Kamm/AFP/Getty Images)
Caption: Twitter homepageSocial-media companies are smoking hot right now. Groupon turned up its nose at a $6 billion offer from Google (GOOG). LinkedIn is after $175 million in its initial public offering. And Facebook, well, everybody and his brother wants a piece of that.

So it's no surprise that Twitter is watching its value notch up as well. Facebook, Google and others have held "low-level" acquisition talks with Twitter, and those discussions place the company's value at $8 billion to $10 billion, The Wall Street Journal reports. It was only in December that Twitter was valued at $4 billion.

Twitter allows people to post messages capped at 140 characters. Is the service truly worth $10 billion? At any rate, for all the big numbers being tossed about, the acquisition talks have gone nowhere, sources tell the Journal. 

EBay expects its payment division to outperform its core e-commerce business as it becomes 'the wallet of the cloud.' Shares soar 7%.

By TheStreet Staff Feb 10, 2011 2:57PM

thestreetBy Jeanine Poggi, TheStreet

 

EBay's (EBAY) PayPal business is poised to surpass the core business in the next three to five years, CEO of the e-commerce giant said at Thursday's analyst meeting.

 

Overall, revenue at PayPal is expected to grow from $3.4 billion in 2010 to between $6 billion and $7 billion in 2013, president of the division, Scott Thompson said on eBay's campus. PayPal is also expected to meet its goal of $4.2 billion in revenue in 2011.

 

Thompson's biggest message is turning PayPal into "the wallet of the cloud."

 

Keep up with these powerful forces pushing a 1 billion-strong population toward economic maturity.

By Motley Fool Pick of the Day Feb 10, 2011 12:37PM

My friend and Foolish colleague Nick Kapur has packed up his bags and moved to India. The reason? To evaluate that country's long-term economic opportunities on an extended, first-hand basis. Here is his first on-the-ground dispatch from Mumbai.

 

Rex Moore, Motley Fool Top Stocks editor

 

The Motley Fool's unofficial India bureau is now officially up and running (essentially, this guy and a laptop). Today, I have three big-picture themes for you to consider regarding India's explosive marketplace.

 

Take these themes with a grain of salt. India's growth thesis is one that will manifest over the next few decades, not the next few months. But don't let that deter you from researching and investing now. These are powerful subcurrents pushing a 1 billion-strong population toward economic maturity.

 

Feb. 14 is a critical sales day for a handful of industries, and a strong performance could be enough to send their shares higher.

By TheStreet Staff Feb 10, 2011 12:22PM

more stock picks and investing ideas from stockpickr.comBy Jonas Elmerraji, Stockpickr

 

Valentine's Day is less than a week away, but before you scramble to make last-minute plans with your significant other, don't forget about the market impact that Feb. 14 could have on a handful of stocks.

 

It might seem strange to think that Valentine's Day could have an impact on anything other than your romantic life. But Valentine's Day is a critical sales day for a handful of industries, and strong performance in 2011 could be a nice upside catalyst.


To be sure, event-driven-buying hypotheses rarely hold up to scrutiny -- most traders believe the implications of key sales days are already priced into shares -- but under certain conditions, there are exceptions to the rule.

 

That's especially true with holidays like Valentine's Day, when the affected companies are generally beholden to discretionary spending trends. With spending on an uptick, those companies are likely to see a disproportionate benefit from any incremental consumer dollars.

 

Lines weren't huge for the debut, and BlackBerry trade-ins seemed to be a leading trend.

By TheStreet Staff Feb 10, 2011 11:57AM

By Scott Moritz, TheStreet

 

Verizon's (VZ) iPhone debut drew small crowds, and if the sampling is accurate, it pulled in a lot of Research In Motion (RIMM) customers.

 

The national retail launch of Apple's iPhone 4 for Verizon started Thursday, and the early lines in a few New York locations were far from long.

 

At the Verizon store in Fishkill, N.Y., there were 12 customers lined up at 6:45 a.m. ET, where nearly twice as many Verizon employees were on hand to accommodate sales. One employee carried a bullhorn but didn't have much of an opportunity to use it. Other employees handed out cold-weather kits that included ski hats and hand warmers.

 

Manufacturer Activision Blizzard gives up on the fad of music-focused games as sales tank

By InvestorPlace Feb 10, 2011 11:35AM
Rock fans are fickle. And video game fans are even more so.

Unlike an aging rock star on an endless farewell tour, the iconic video game Guitar Hero has packed up its plastic Gibson guitar and called it quits just six years after the game's initial debut.

Maker Activision Blizzard (ATVI) announced today that it will no longer produce titles for the series. It will lay off 500 staff members as a result.

The quick departure of the title after a big moment in the spotlight a few years ago says a lot about the state of gaming right now -- and the state of ATVI stock as a whole. 

Cisco and others are in denial about slowing growth and cooling margins, laying the blame elsewhere.

By Jim Cramer Feb 10, 2011 10:21AM

jim cramerthestreetFlattening. Seasonality. Product transition.

 

And the question is: Can you name me three alibis for downbeat projections and missed numbers this reporting season?

 

We've heard these three terms from Motricity (MOTR), Akamai (AKAM) and Cisco (CSCO) in the past 24 hours, and they pretty much took our breaths -- and their market caps -- away. Billions got obliterated, and in each case they left us wondering what the heck is really going on.

 

Motricity, a $1.2 billion company a couple of months ago that is now worth $658 million, offers some really cool solutions for feature phones -- so-called stupid phones -- that help make more money for Verizon (VZ), AT&T (T) and dozens of other telco providers. Domestically, the money for Motricity is in feature phones, and the company said it saw a flattening out of Verizon and AT&T business this quarter as the market transitioned more quickly to smart phones.

 

Another industry panel says the cable company really shouldn't boast about an advanced fiber network.

By Kim Peterson Feb 9, 2011 4:37PM
Image: Network cable (© Epoxydude/Getty Images/Getty Images)Oooh, Time Warner Cable (TWC) just got a talking to. Again.

The cable company has been bragging that its Internet was dramatically faster due to its "advanced fiber optic network." But Time Warner only takes fiber to a central point in its customers' neighborhoods, and uses copper wire in to the actual homes. That setup is known as "fiber to the node," Reuters reports.

Verizon Communications (VZ) has in its FiOS a true fiber network, called "fiber to the home," and complained about Time Warner's claims to the National Advertising Review Board. After investigating the issue, the review board is urging Time Warner to pull its ads.

The review board has little official sway, however, as part of the self-regulatory arm of the advertising industry. And so Time Warner is simply going to respectfully disagree with the decision, Reuters reports. 

In the drilling business, state-of-the-art technology has become a top priority.

By Jim J. Jubak Feb 9, 2011 2:39PM
Jim JubakHere are my two conclusions from the Ensco (ESV) bid to buy Pride International (PDE).

First, the Deepwater Horizon disaster in the Gulf of Mexico has put a big premium on owning the newest deep-water drilling rigs. The theory is that with regulatory scrutiny getting tighter and international standards increasingly demanding state-of-the-art technology, companies with newly built rigs will have an edge in getting business and in what they can charge for that business.

After buying Pride, Ensco will own 74 rigs, second only to Transocean's (RIG) fleet of 138. Of those 74, 21 will be ultra-deep-water and deep-water rigs. But just as important -- and maybe more important post-Deepwater Horizon -- the combined company will have the second-youngest fleet in the drilling industry. The youngest fleet belongs to Norway's SeaDrill (SDRL), which, by the way, owned 9.4% of Pride International before the Ensco bid. 
 
Tags: oil

The taller, thinner Diet Pepsi is aimed at women.

By Kim Peterson Feb 9, 2011 1:46PM
redit: (© PepsiCo)
Caption: New Diet Pepsi canPepsico (PEP) is debuting a can of Diet Pepsi that it says is a "celebration of beautiful, confident women." The so-called skinny can is taller and thinner -- just what we expect in a beautiful, confident woman, I guess.

The can debuts at Fashion Week, which starts Thursday in New York, and will be available nationwide starting next month.

"Our slim, attractive new can is the perfect complement to today's most stylish looks," said the chief marketing officer of PepsiCo. I don't know about you, but aluminum can falls even below small Chihuahua on my list of important fashion accessories -- and that's pretty low.

The short, fat Diet Pepsi can will still be around. But if you stand any chance at being fabulous, you will not buy it. And for the following week, Pepsi will refuse to acknowledge that it owns Frito-Lay.  

As innovation evolves, so must businesses. Here's one showing promise.

By Motley Fool Pick of the Day Feb 9, 2011 1:05PM

Fool analyst Sean Sun understands that everything in the universe is forever in flux and that as the universe changes, so must the individual. And so must businesses, if they are to last. The printing industry is a great example.

 

Rex Moore, Motley Fool Top Stocks editor

 

While it's become fairly standard business practice to outsource a company's payroll management to ADP or website hosting to Rackspace, a lot of companies still haven't recognized the efficiency of outsourcing their printing needs. On the surface, it seems simply arcane: Why keep such a specialized operation in-house? That's anachronism No. 1: The universe has changed, but outdated printing practices have stubbornly remained.

 

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[BRIEFING.COM] The stock market punctuated July with a broad-based retreat that sent the S&P 500 lower by 2.0% with all ten sectors ending in the red. The benchmark index posted a monthly decline of 1.5%, while the Russell 2000 (-2.3%) underperformed to end the month lower by 6.1%.

To get a better feel for what led to today's retreat, we'd like to look back to Wednesday, when the market had ample reason to rally, but did not. Instead, it ended basically flat after a sloppy day of ... More


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