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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The 2011 flop was overdone, so buy CAT for the New Year.

By InvestorPlace Dec 20, 2011 12:05PM

Photodisc Green/Getty ImagesBy Dan Burrows, CBS MoneyWatch columnist


After nearly quintupling from the bear-market bottom of 2009, shares in Caterpillar (CAT) have had a lousy run in 2011. That's great news for investors looking to build a position in this high-quality stock on the cheap.

 

Caterpillar is the world's largest maker of construction and mining equipment, and it's trading at bargain-basement levels with fears of a global economic slowdown more than baked into its share price.

 

Eli Lilly is initiated with a 'sell,' while Cablevision is downgraded to 'neutral.'

By MSN Money Partner Dec 20, 2011 12:00PM
Information provided by Theflyonthewall.com

Tuesday's noteworthy upgrades include:
  • F5 Networks (FFIV) upgraded to Outperform from Perform at Oppenheimer
  • KLA-Tencor (KLAC) upgraded to Overweight from Neutral at JP Morgan
  • Edwards Lifesciences (EW) upgraded to Top Pick from Outperform at RBC Capital
  • OGE Energy (OGE) upgraded to Buy from Hold at Jefferies
  • Life Technologies (LIFE) upgraded to Buy from Hold at Maxim
 

This low-priced telecom stock could be set to outperform Wall Street's expectations.

By TheStockAdvisors Dec 20, 2011 10:50AM
Maciej Frolow/Brand X/Getty ImagesBy Paul McWilliams, Next Inning

While I wouldn't yet call Alcatel-Lucent (ALU) a "value" play, my outlook for the company has improved and I think in the mid one dollar range it merits consideration as a speculative investment.

The price of ALU has declined for several reasons. While ALU has reported earnings above the consensus of the covering analysts during the first three quarters of 2011, it has done so while reporting revenues below the consensus estimates. 
Tags: ALU

We need some real signs that the Europe situation is under control.

By Jim Cramer Dec 20, 2011 10:20AM

TheStreetAh, so it's German business confidence that holds the key. That's how we can rally so convincingly. It took only one good confidence number, as well as a Spanish bond auction that wasn't a disaster, and all is well again with the CurrencyShares Euro Trust (FXE) above 130 and the European stock markets rallying with alacrity. 


Oh, if only it were that simple. If only it were like the old days, with a garden-variety recession and a chance that we could come out of it with a couple of good indicators. Unfortunately, it isn't. 

 

With the youngest fleet of offshore supply vessels, this firm is seeing growing demand for its services.

By TheStockAdvisors Dec 19, 2011 5:30PM
 (© Scott Gibson/Corbis)By Brendan Coffey, Cabot Global Energy Investor

By the middle of this decade, oil drawn from the seabed more than 2,000 feet beneath the ocean’s surface will double in volume compared to 2010 levels.

Hornbeck Offshore Services (HOS) provides technologically sophisticated offshore supply vessels (OSVs) and transport vessels for the oil and gas industry. It has the youngest fleet of OSVs in the industry, and its ships are designed from scratch. 
Tags: HOSoil

Investors are hoping for a smooth transition of power for Kim Jong Un, but questions abound.

By Jim J. Jubak Dec 19, 2011 5:16PM
I don’t remember asking for this in my Christmas stocking: More uncertainty -- this time from North Korea.

The death of North Korea’s Kim Jong Il Saturday has thrown Asian markets into a tizzy. That’s what happens when a totally opaque country with a collapsing economy just happens to own nuclear weapons. The fear is that Kim Jong Un, the designated successor to the "Dear Leader," doesn’t have a very secure grip on power and will feel compelled to solidify his control with a bit of military adventurism such as a new nuclear test or a new shelling attack on South Korean territory. 
 

The aluminum producer is profitable, streamlined and ready to roll.

By InvestorPlace Dec 19, 2011 5:15PM

By Jeff Reeves


When Alcoa (AA) reported earnings in October, CEO Klaus Kleinfeld told investors, "Alcoa is a confident company in a nervous world. We are well prepared for whatever lies ahead, with more cash on hand, lower debt and continued focus on profitable growth."


It would be natural to write off those comments as mere platitudes for Wall Street's grumpy traders. But taking a closer look at Alcoa across the past several weeks has made me agree with Klaus -- and consider AA stock as a bargain buy to hang on to across 2012.

 

The outlook may be dimming for this fast-growing chain.

By Trefis Dec 19, 2011 4:45PM
(© Tara Moore/cultura/Corbis)Chipotle (CMG) has performed exceptionally well this year. The stock is up more than 50% year-to-date, significantly outperforming the market indices. In the last six months the stock climbed 25%, while the Dow Jones remained flat.

Investors are increasingly bullish about this restaurant chain. However, the current rally might have just pushed the envelope, and we expect this optimism will fade. Chipotle competes mostly with the quick service and casual dining companies such as Chili's, McDonald's (MCD), Burger King, Yum! Brands (YUM) and Papa John's, among others. 
Tags: CMGMCDYUM

Better growth in the US should help the Russell 2000 catch up to the larger-cap indices in the weeks ahead.

By MoneyShow.com Dec 19, 2011 4:11PM

By Igor Greenwald, MoneyShow.com


If the US economy falls into recession sometime next year as a result of the financial crisis in Europe and the slowdown in China, it won’t be for lack of effort.


Right now, the US is looking like the main global growth engine and, frankly, the only reason the remaining stock investors have to stay in the markets and not bury their money under a mattress.


Initial unemployment claims haven't been this low in three years, fueling hopes that the job market has finally turned the corner. 

 
Tags: EBIX

While bellwethers like Apple and Amazon look poised to underperform, one stock is worthy of consideration.

By MoneyShow.com Dec 19, 2011 3:38PM

 (© Comstock)By Tom Aspray, MoneyShow.com


The relative performance, or RS analysis, of the tech-heavy PowerShares QQQ Trust (QQQ) broke out last July, and while the broader markets were dropping in August and September, technology stocks held up much better.


This outperformance of QQQ versus the S&P, however, ended in early November, and QQQ has been lagging since. Sentiment on many of the tech giants has also been quite negative, as both Apple (AAPL) and Amazon.com (AMZN) have disappointed investors.

 

The investment may help alleviate investors' anxiety about the large exodus of top executives from the company.

By Jonathan Berr Dec 19, 2011 1:53PM
Saudi investor Prince Alwaleed bin Talal is investing $300 million in Twitter, adding the microblogging site to his stable of high-profile investments, including Citigroup (C) and Apple (AAPL). 

Hard times may be coming, and chocolate makes people feel better.

By InvestorPlace Dec 19, 2011 1:15PM
 (© image100/Corbis)By Jon Markman, Editor, Trader's Advantage


The past three presidential election years have been very hard on risky assets, and two of them were completely brutal.


The most recent was 2008, and if you don't remember the global financial crisis that occurred that year, you were either too young, drunk or in jail. The one before that, 2004, ended with a 9% gain but was flat or down for three-quarters of the span. And the one before that, 2000, featured the bursting of the technology bubble, with the Nasdaq 100 collapsing by 40%.


So it's no wonder that I am looking at the upcoming election year, 2012, with a jaundiced eye.

 

Efforts to draw traffic by lowering prices hammered Best Buy's margins. But the selling has been overdone.

By Trefis Dec 19, 2011 12:23PM

Best Buy (BBY) reported a sharp decline of roughly 30% in its net profits this quarter compared to the same period last year. It missed consensus analysts' EPS estimate by approximately 8%, according to Thomson Reuters.

 

 More importantly, investors reacted negatively to the fall in gross margins sending the shares down 15% earlier last week. Best Buy competes with general retailers like Wal-Mart (WMT) and Costco (COST) as well as other specialty retailers like Radio Shack (RSH) and GameStop (GME).

 
Tags: BBYWMT

Oil majors operating in Iraq are looking to beef up security and ramp up production.

By Trefis Dec 19, 2011 12:08PM
Comstock/CorbisExxon Mobil (XOM) is readying for new challenges in Iraq as the U.S. troops complete their withdrawal from Iraq. Oil majors operating in Iraq are looking to beef up security by hiring additional personnel in case the security situation worsens. The companies are central to the local government's plans of ramping up production over the next few years. Exxon is also venturing into Kurdistan, in part driven by better security situation in the northern part of Iraq. British company British Petroleum (BP) had to temporarily halt production in southern Rumaila fields after the pipeline network in the area was hit by an explosion.

We have a $93 price estimate for Exxon Mobil, a 15% premium over its current market price.

 
Tags: bpXOM

Vertex was upgraded to 'top pick,' while Children's Place was downgraded to 'neutral.'

By MSN Money Partner Dec 19, 2011 11:55AM
Information provided by Theflyonthewall.com

Monday's noteworthy upgrades include:
  • BMC Software (BMC) upgraded to Neutral from Underweight at JP Morgan
  • Vertex Pharmaceuticals (VRTX) upgraded to Top Pick from Sector Perform at RBC Capital
  • Lazard (LAZ) upgraded to Outperform from Neutral at Credit Suisse
  • DTE Energy (DTE) upgraded to Outperform from Neutral at Credit Suisse
  • Torchmark (TMK) upgraded to Neutral from Underperform at Credit Suisse
 
Tags: CTRPGRPN

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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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