Saturday, January 14, 2012

Obama's Second Term Is in Peril as Stocks Sink

Mitt Romney, Newt Gingrich and Ron Paul may be happy, at least in one respect, that the stock market has fallen this year.

That's because if the S&P 500 Index doesn't surge more than 10% by the end of next week, it might not rise at all in 2012, according to the record books. And that would make it difficult for President Barack Obama to be re-elected.

The benchmark index is down 1.1% in 2011, even after a second day of gains Wednesday. What's befuddling is that equities haven't declined in the third year of a president's term since World War II.

Sam Stovall, chief equity strategist at Standard & Poor's, says the third-year rally is anticipated on the belief that the president will do all he can to remain in office -- most frequently, pushing through stimulative economic legislation to entice voters.

As Stovall puts it: "Since investors are no better than hyperactive first-graders playing musical chairs, they won't wait until year four to see if the stimulus has worked. They buy into equities in the third year in anticipation of the benefits to profits and share prices in the fourth year."

According to Stovall's research, there were six years that the index increased less than 10% in the third year of a presidential term and, in most of those instances, the market dropped in the following year.

High unemployment, a debt downgrade, the failure to pass a deficit-cutting agreement and, most recently, the payroll tax cut debacle haven't given voters much to be confident about during the past year. The lame-duck Congress hasn't helped either.

In only two of the six years that the S&P 500 failed to increase at least 10% in the third year of a term, the incumbent president was re-elected. Of note, one of those incumbents was the highly popular Franklin D. Roosevelt in the race for his third term (1940). While Obama's approval rating has improved recently to 49%, it's close to the lower end of his approval rating range.

The election we are currently facing is most similar to t! he 1948 election when Harry Truman was running for office and was widely expected to lose. He was the incumbent president with a low approval rating, the stock market growth was anemic and it was a tough economic environment. Truman ended up winning the election, but the market declined almost 1% in the election year.

With nothing particularly compelling to look forward to in 2012, investors should brace for a decline in the S&P 500, and voters will need to determine if Obama is worthy of a second term.

-- New York.

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German Stocks Decline as Economy Contracts; Metro, Douglas Shares Retreat

German stocks dropped, afteryesterday��s biggest rally in a week, as a report showed thatEurope��s largest economy contracted in the final quarter of2011, indicating it may be headed for a recession.

Metro AG (MEO), the nation��s largest retailer, slid after UBS AGadvised selling the shares. Douglas Holding AG (DOU) tumbled 9.8percent after the retailer said earnings this year will decline.Deutsche Bank AG and Commerzbank AG advanced.

The benchmark DAX Index (DAX) dropped 0.2 percent to 6,152.34 atthe close in Frankfurt. The gauge earlier gained as much as 0.3percent as Germany received bids for more than twice the debt ithad planned to sell at an auction. The DAX retreated 15 percentlast year as euro-area leaders struggled to contain the region��sdebt crisis. The broader HDAX Index was little changed today.

��Certainly from a clients�� perspective, European marketsare a bit overbought, especially from the point of thefundamentals of the debt crisis,�� said Will Hedden, a salestrader at IG Index in London. ��We were expecting overallEuropean Union growth figures not to be great, but if Germanyitself will struggle, what��s left for the others?��

Stocks slipped after a report showed that the debt crisiscaused the economy to contract 0.25 percent in the fourthquarter from the third. Growth slowed to 3 percent in 2011, theFederal Statistics Office in Wiesbaden said in an unofficialestimate.

Economists including Christian Schulz at Berenberg Bankpredict that gross domestic product will contract again in thecurrent quarter. A recession is defined as two consecutivequarters of declining GDP.

German Debt Sale

Germany received bids for 8.97 billion euros ($11.4billion) of five-year notes at an auction today, more thandouble its sale target of 4 billion euros, the Bundesbank said.It sold the 0.75 percent notes maturing in February 2017 at anaverage yield of 0.90 percent.

David Riley, head of the sovereign-debt unit at FitchRatings, today said the Europea! n Centra l Bank should increaseits purchases of government bonds to ease pressure on yields.

��We need to have a credible buyer put in place and wedon��t have that at the moment,�� which is ��why we have a numberof sovereigns under review,�� Riley said at an event inFrankfurt today. ��The ECB needs to be more actively engaged,but it can��t save the euro on its own.��

Metro, Douglas Fall

Metro (MEO) retreated 3.3 percent to 28.36 euros. The stock wascut to ��sell�� from ��neutral�� at UBS. Analysts Benjamin Peters and Mike Tattersall wrote in a report that the shareswill probably ��come under increasing pressure from earningsdowngrades.��

Douglas Holding tumbled 9.8 percent to 25.39 euros, itsbiggest decline since June 2001. Europe��s largest retailer ofmakeup and perfumes said earnings this year will drop as itsThalia book shop division struggles with consumers�� shift tobuying literature online.

Deutsche Bank, the nation��s biggest lender, rose 1.7percent to 27.94 euros. Commerzbank, Germany��s second largest,surged 5.1 percent to 1.3 euros. UniCredit SpA, Italy��s biggestbank, gained 5.5 percent as its shares were upgraded by SanfordC. Bernstein & Co. and WestLB AG. The bank plans to raise 7.5billion euros in a rights issue.

Hochtief AG (HOT) advanced 3.4 percent to 46.88 euros, gainingfor a second day. The construction company will form a venturewith its owner, Actividades de Construccion & Servicios SA, tobuild power lines, allowing it to benefit from the change inenergy policy in Germany, the Financial Times Deutschland said,citing a Hochtief spokesman it didn��t name.

Singh Caps ¡®Annus Horribilis¡¯ With Anti-Graft Law Stymied by Upper House

Prime Minister Manmohan Singh failedto win passage of his anti-corruption bill as an uproar brokeout in India��s upper house of parliament, capping a year ofsetbacks that stirred concern over a wrecked economic agenda.

Proceedings were adjourned late yesterday after a lawmakersnatched papers from a minister and flung them across thechamber. The leader of the main opposition Bharatiya JanataParty in the upper house, Arun Jaitley, accused the governmentof scripting the disturbance as it realized it was unable to wina vote on the measure that would create a graft-fighting agency.

The rebuff is the latest disappointment for Singh, 79,whose championing of free-market policies two decades ago helpedIndia become the second-fastest growing major economy.Allegations of corruption in his cabinet triggered mass proteststhis year, while a failure to contain inflation and a reversalon foreign investment in the retail industry sapped confidencein his administration.

��This is an annus horribilis for the government and theworst thing about it is that the problems are of their ownmaking,�� said Samir Arora, founder of Singapore-based hedgefund Helios Capital Management Pte, referring to the rulingCongress party��s failure to bring along its allies. ��Thegovernment is in complete disarray,�� Arora, who focuses oninvestments in India, said.

Parliamentary Affairs Minister Pawan Kumar Bansal said moretime was needed to consider 187 amendments to the bill that wereproposed by both opposition parties and allies of thegovernment. The bill passed in the lower house on Dec. 27.

��Running Away��

��The government is running away from the house because itis in a hopeless minority,�� Jaitley said. ��A government whichdid not have the numbers in the house has consciouslychoreographed�� events so as to avoid a vote, he said.

A spokesman for Singh��s Congress party, Janardan Dwivedi,denied Jaitley��s accusations and said the government��s rivalshadn��t been serious about wanting to ! pass a b ill to countergraft. ��There was a problem of a time limit,�� he said. ��Hadthe opposition cooperated, the bill could have been passed.��The winter session of parliament had been extended by three daysuntil Dec. 29 to allow for debates on the so-called Lokpal bill.

The setback may reinvigorate demonstrations led by anti-corruption campaigner Anna Hazare, who called off his latestfast to demand tough anti-corruption laws a day early on Dec. 28after finding fewer supporters than he attracted for an earliereffort this year.

Ally Anger

Hazare, 73, grabbed headlines in August with a 13-dayhunger strike that prompted Singh��s government to agree toconsider many of the demands presented by activists.

Proposals for a corruption ombudsman have been introducedto parliament nine times since 1968 without being passed. Thegovernment, which is 28 seats short of a majority in the upperhouse, failed to win the support of one of its largestparliamentary allies, the Trinamool Congress.

��This is a shameful day for India��s democracy,�� saidDerek O��Brien, a Trinamool upper house lawmaker, adding hisparty couldn��t back the bill because it infringed on states��autonomy. ��The government handled this situation very badly.��

The failure to pass the Lokpal bill is symbolic of a yearduring which Singh��s administration has been unable to clinchparliamentary support for promised policies to overhaul ajustice system clogged with millions of cases, change rules onhow farmland is acquired for factories and protect officials whoexpose fraud.

Singh Silent

All are backed up in a legislature that this year passedjust 22 laws, the second-fewest since 1952, according to the NewDelhi-based PRS Legislative Research.

Singh, who was in the chamber, made no statement and therewas no indication whether parliament will meet before its nextsession scheduled to begin in February. The prime minister��sefforts were undone in part by opposition from his party��sallies, an echo of wh! at happe ned to his proposal to let foreigncompanies buy majority stakes in Indian retailers.

That move, suspended Dec. 7, would have let in companiesincluding Wal-Mart Stores Inc., with the aim of helping overhaula national distribution system whose inefficiencies see 40percent of fruit and vegetables rot before they can be sold.Singh said in an interview this month that he plans to revivethe measure after regional elections early next year.

Bureaucracy Slashed

The prime minister��s record of attempts to unshackle theeconomy from regulation, bureaucracy and corruption date back tohis tenure as finance minister in the early 1990s, when hedismantled government monopolies, cut import tariffs andwelcomed foreign investment.

Corruption is an emotional issue in India, where at least12 whistle-blowers were killed and 40 assaulted after seekinginformation under a new Right to Information Act aimed atexposing local graft, according to data compiled by Bloombergfrom January 2010 through mid-October 2011. Enacted by Singh sixyears ago, the legislation became the most powerful tool forfighting wrongdoing in politics and business, with 529,000requests filed in the year through March.

With the legislation to set up the federal anti-graftagency, Singh failed to overcome resistance from his allies,opposition parties and social activists. The debate became themost divisive political issue since his government came closebeing toppled in 2008 over a civil nuclear accord with the U.S.

State Polls

The ruling Congress party faces state elections fromJanuary, including one in Uttar Pradesh, home to a sixth of allIndians. The polls will offer an indication of the government��ssupport two years before national elections are due.

Economic growth is slowing after the central bank raisedinterest rates by a record pace in its effort to tame thefastest inflation among BRIC nations, which include Brazil,Russia and China. India��s economy grew 6.9 percent in the threemonths through Se! ptember, the weakest since the second quarterof 2009.

The central bank��s campaign has had little impact, with thebenchmark wholesale price index climbing 9.1 percent in Novemberfrom a year before, compared with the 9.5 percent pace at thestart of this year. By comparison, China��s inflation rate was4.2 percent in November.

The rupee has weakened about 16 percent against the dollarthis year, Asia��s worst performer, as an exodus by investorssent the Sensex index of stocks down 23 percent, more than the18 percent drop in the MSCI Asia Pacific Index.

Telecoms Sale

Opposition to the Lokpal bill centered on two maincriticisms: the lack of direct control over the country��sleading criminal investigation agency that parties said robbedthe legislation of powers to punish the corrupt; and that itinfringed on the rights of states by forcing them to mold localgraft-fighting agencies to the federal law.

The ombudsman that Singh��s government wanted to createwould have been able to scrutinize the prime minister exceptover issues of national security. It wouldn��t have had directoversight of junior bureaucrats responsible for everyday acts ofpetty corruption that blight business and governance.

Former telecommunications minister Andimuthu Raja,bureaucrats and business executives are on trial accused ofconspiring to award cellphone permits to ineligible companies ina 2008 sale that India��s chief auditor says might have cost thegovernment $31 billion in foregone revenue. Other charges havebeen brought over contracts for the hosting of last year��sCommonwealth Games.

Are These Blue-Chip Oil Services Names Cheap?

High oil prices may again be front page news in 2012. The price of crude oil has been persistently high despite an uncertain economic outlook. In particular, tensions in the Middle East are causing crude oil to trade at a premium, and continued unrest in the region could put a high floor on prices going forward.

With crude trading just below $100 on Wednesday, however, a substantial divergence has developed between the performance of the commodity and oil service stocks. Spot crude is up roughly $9 on the year, whereas the Market Vectors Oil Services ETF (NYSE: OIH) has lost almost 19% in 2011.

While the correlation is hardly perfect, the price of oil and the performance of the OIH have historically been positively correlated. Examining a chart of the United States Oil Fund ETF (NYSE: USO), which tracks NYMEX crude, and the Market Vectors Oil Services ETF (OIH) shows that divergences between the performance of the two securities have had a tendency to revert in 2011.

This phenomenon is also apparent on a longer term basis. Over the last 6 months, a fairly wide spread has developed between the OIH and the USO. During this time period, the USO is up 5.37%, while the OIH has lost nearly 23%. Also, in the last three months, the USO has risen 23% versus a gain of just 5.75% for the OIH.

This spread between oil service stocks and the price of crude could be suggesting that the stocks are cheap compared to the underlying commodity. Let's examine some blue-chip services names to see if there are in fact some opportunities in the space.

Schlumberger (NYSE: SLB) - This is the King Kong of the oil services industry. SLB currently has a market cap of just over $90 billion and has been a fairly strong long term performer. Year-to-date, however, the stock is down more than 19%, including more than 20% over the last 6 months. The stock has fallen from a 52-week high of $95.64 in July to $67.00 today. SLB currently trades at a trailing P/E of 19.91, a forward P/E of! 13.74 a nd a PEG ratio of 0.80. As risk appetite has contracted in recent months, it has caused valuations in the oil services industry to become much more compelling and SLB looks like it could be a bargain - if the market cooperates in 2012. Wall Street analysts remain bullish on the name, with a mean price target of $91.03 and a high target of $112.00. SLB also offers a 1.49% dividend yield at current levels.

Baker Hughes (NYSE: BHI) - This company is one of the better known names in the oil services sector. Baker Hughes currently has a market cap of $21 billion and has been rather volatile in 2011. The stock is trading well off of its 52-week high of $81.00 at $48.32. Year-to-date, BHI shares are down 15.55%, including 31.75% in the last 6 months. The stock trades at a trailing P/E of 12, a forward P/E of 8.72 and a PEG ratio of 0.37. On a valuation basis, BHI looks very cheap, and Wall Street analysts agree. The Street has a mean price target on the stock of $75.56 and a high target of $100. BHI also yields 1.24% at current levels. This is a name that investors looking to add energy exposure may want to research further.

Halliburton (NYSE: HAL) - This stock is another example of a name that has fallen precipitously as a result of investors' shrinking appetites for risk. For much of 2011, HAL was a very strong performing stock, hitting a 52-week high of $57.77 in July. When the market pulled back, however, HAL was hit hard and has now notched a better than 18% loss in 2011 and trades at $33.26. If risk appetite returns in 2012, HAL is a name that should reward investors. The company has a market cap of $30.65 billion and is currently yielding 1.08%. Like the other names on this list, the company's valuation appears compelling. The stock trades at a trailing P/E of 12.11, a forward P/E of just 8.08 and a PEG ratio of 0.39. Analysts also remain bullish on Halliburton. The Street has a median price target on the name of $53.83 and a high target of $75.00.

W! hen look ing at some of the blue-chip oil service names, it becomes apparent that there is still a lot of fear and pessimism in the broader market. The valuations of these stocks appear to be dirt cheap, particularly in light of persistently high spot crude prices. Investors are steeply discounting a number of factors relating to the industry and the market as a whole.

Fears over the regulatory environment, potentially volatile revenues depending on oil prices and the economy, and worries over international profitability have been weighing on the sector since the summer. If, however, some of these concerns prove to be overblown and 2012 is a good year for risk assets, investors should pocket some very nice returns in oil service stocks if they buy at current levels.

Two Protective Currency Plays to Make Ahead of the Looming Recession

There's a hurricane headed for the U.S. economy, one that'll send stocks tumbling and rip gains out of your portfolios - especially if you aren't ready with some protective currency plays.

The "hurricane" I speak of is the looming recession.

You see, the U.S. gross domestic product (GDP) annual growth rate has fallen for the past four quarters. The last time that happened, in 2008, growth fell to a negative rate for the following six quarters.

So when the rate of growth starts to slope downward, and then stays in place for a couple of quarters, you can bet a recession is on the way.

Much like no one can prevent a hurricane, you as an individual investor can't prevent a recession. But you can calmly prepare for it well in advance, so you're ready for the worst - and that's exactly what we're going to do.

How to Defend Your Portfolio

There are four easy moves to make now to protect your investments from the looming recession:

  • Get off of margin; make sure you own all of your investments outright without any margin loans paying for some of your stocks.
  • Take some profits and raise the level of cash in your portfolio.
  • Hold some defensive stocks that weather the storm better, like dividend stocks and big-name multinationals.
  • And, most importantly, add currencies to your portfolio that will prosper when the recession hits.
To find the best protective currency plays to prepare your portfolio for the inevitable economic mayhem , let's look at what worked during the last dip in economic growth.

Two Protective Currency Plays for the Recession

When the U.S. GDP growth rate dipped into negative territory in the final quarter of 2008, it remained negative for all of 2009.

This hit Canada's oil profits and did some damage to the Ca! nadian d ollar when it was paired with the U.S. dollar, as seen in the accompanying chart. When the USD/CAD rises, it means the dollar is rallying, while the Canadian dollar is falling by comparison.

By buying the USD/CAD pair, you can breath e life back into your recession-stricken portfolio . While everyone else is suffering, you're sitting pretty with a nice hedge for the rest of your portfolio .

Along with buying the USD/CAD pair, you can also short a "currency cross" like the Canadian dollar vs. the Japanese yen (CAD/JPY).

Remember, the Canadian dollar dropped during the last recession. However, when recessions are in full swing, defensive currencies tend to "rule and reign."

Above we paired the Canadian dollar against the defensive buck. In this second chart, I've shown what happens when the Canadian dollar is paired with the defensive Japanese yen.

In fact, CAD/JPY is already starting to break down yet again. This month it started falling below a support line that it's held for two and a half years.

Why is it doing that? It's because the U.S. GDP has been slowing down for three quarters .

Remember, GDP trends are hard to reverse. Once an economic decline starts, it doesn't quickly reverse. So the chances that the next GDP reading gets closer to zero are very high.

Savvy investors realize this and start shorting the CAD.

So whether you're buying USD/CAD or short-selling CAD/JPY, make sure you're preparing your portfolio for what's to come. As economies shrink and stocks come crashing down, you'll find that protective currency plays like the USD/CAD will help take the sting out of your portfolio.

[Bio Note: With the global economic outlook growing increasing bleak, many readers have asked us about currency trading. So we decided to respond by bringing on a new currency expert - Sean Hyman.

Hyman ! is a ve teran currency trader with more than 20 years of experience. He also currently serves as Investment Director for World Currency Watch, and editor of Currency Cross Trader. Watch for his columns on currency trading in Money Morning.]

CNBC Dismisses Talk of Outside Investor Stepping in at Troubled Bear Stearns

Taylor Devices Inc. (NASDAQ: TAYD) reported a dip in its profits for the second quarter as compared to the comparable period last year; net earnings for the second quarter were $122,975, a dip from last year’s second quarter earnings of $501,891.

The company reported second quarter sales of $4,525,002, an increase from last year’s second quarter sales of $3,488,797.

The company reported six-months sales of $8,801,825, an increase from last year’s sales of $8,502,470. The net earnings for the first six months were $307,613, a drop from last year’s earnings of $822,688.

“Pundits continue to declare that our recession ended months ago, however, the U.S. construction markets remain very constricted,” Douglas P. Taylor, president of Taylor Devices stated in the press release. “While profit levels are lower due to a shift in products shipped away from aerospace towards seismic, we remain committed to maintaining profitability throughout the year.”? Taylor concluded, “Our firm order backlog is now at $13 million, up significantly from the $11.4 million level that we reported this time last year.”

Taylor Devices is currently trading at $5.75. The stock is up 18.29% from its previous close. Taylor Devices stock touched the high of $6.46 and lowest price in today's session is $5.61. The company stock's beta is 1.47.

The company stock has traded in the range of $4.50 and $6.85 during the past 52 weeks. The company's market cap is $18.63 million.

Taylor Devices engages in the design, development, manufacture and marketing of shock absorption, rate control and energy storage devices for use in various types of vehicles, machinery, equipment and structures.? The company continues to achieve growth in the developing seismic protection field and in the isolation of wind-induced vibrations.

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Friday, January 13, 2012

Netlist, Inc recently Stroke its 52 Week High Price - NASDAQ:NLST

Netlist, Inc. (NASDAQ:NLST) achieved its new 52 week high price of $3.37 where it was opened at $2.65 UP +0.38 points or +13.33% by closing at $3.23. NLST transacted shares during the day were over 4.28 million shares however it has an average volume of 368,291.00 shares.

NLST has a market capitalization $81.86 million and an enterprise value at $64.62 million. Trailing twelve months price to sales ratio of the stock was 1.48 while price to book ratio in most recent quarter was 3.94. In profitability ratios, net profit margin in past twelve months appeared at -25.71% whereas operating profit margin for the same period at -25.31%.

The company made a return on asset of -20.19% in past twelve months and return on equity of -52.42% for similar period. In the period of trailing 12 months it generated revenue amounted to $48.66 million gaining $1.96 revenue per share. Its year over year, quarterly growth of revenue was 72.00%.

According to preceding quarter balance sheet results, the company had $11.69 million cash in hand making cash per share at 0.46. The total of $4.08 million debt was there putting a total debt to equity ratio 22.27. Moreover its current ratio according to same quarter results was 2.03 and book value per share was 0.72.

Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 3.36% where the stock current price exhibited up beat from its 50 day moving average price of $1.54 and remained above from its 200 Day Moving Average price of $1.80.

NLST holds 25.34 million outstanding shares with 19.51 million floating shares where insider possessed 33.02% and institutions kept 14.00%.

Ultimate Market Recap: Future Looks Bright for Crocs, Sears Sees an 8% Bump

Wednesday Morning��s Top Stories

Shares of?Citigroup Inc.?(NYSE:C) declined more than 1 percent early Wednesday. The bank received regulatory approval to engage in investment banking in the Chinese market with Shanghai-based Orient Securities Co.? Other large banks such as?Goldman Sachs?(NYSE:GS) and?Bank of America?(NYSE:BAC) are also trading lower.

Urban Outfitters Inc.?(NASDAQ:URBN) shares were torn apart on Wednesday, falling more than 16 percent. Citi analyst Jeff Black cut his rating from buy to sell, and reduced his price target from $34 to $20. Shares of?Aeropostale Inc.?(NYSE:ARO) and?Gap Inc.?(NYSE:GPS) are trading slightly lower.

Don��t Miss:?Urban Outfitters CEO Resigns, Shares Plummet.?

Commercial Metals Co.?(NYSE:CMC) is down almost 4 percent after the opening bell. It has been announced that Carl Icahn dropped his attempted hostile takeover of the company. Icahn launched a $1.73 billion tender offer for Commercial Metals last month.

Supervalu Inc.?(NYSE:SVU) shares fell 9.8 percent after it said its fiscal third quarter loss increased to $750 million ($3.54 per share), compared to a loss of $202 million (95 cents per share) last year.

Microsoft?(NASDAQ:MSFT) shares continue to fall after saying PC sales will be worse-than-expected, due to last year��s Thailand flooding. Shares of?Apple Inc.?(NASDAQ:AAPL) and?Hewlett Packard Co.?(NYSE:HPQ) are also trading lower.

On Tuesday,?Walgreen Co.?(NYSE:WAG) opened a new store in Chicago that will sell a variety of new items, including: fresh hand-rolled sushi, made-to-order smoothies and fine wine. The company looks to change its perception among the public. Shares are down .71 percent Wednesday morning.

Don��t Miss:?HP and Dell Deliver Ultrabooks t! o Rival Apple��s MacBook Air.

Wednesday Morning Hot Stocks

Markets are mixed today as the Nasdaq (NASDAQ:QQQ) is the only index in the green. Tech is benefitting from the CES hype and news cycle. Here are companies reacting to hot stories.

SUPERVALU��s?(NYSE:SVU)?loss?expanded to $750 million ($3.54 per diluted share) from $202 million (loss of 95 cents per share) in the same quarter a year before. Revenue?slipped 4 percent?to $8.33 billion from the year earlier quarter.?Same-store sales growth was -2.5-3 percent.

Crocs, Inc.?(NASDAQ:CROX)?foresees a bright future, with the company��s announcement that it expects annual revenue for fiscal 2011 to exceed $1 billion for the first time when?year-end results?are reported. Revenue is?believed to be at the?top end of the earlier guidance of $200-205 million for the fourth quarter of 2011. I/B/E/S Estimates report that analysts?predict Crocs?will announce?revenue of $1 billion for fiscal 2011, with $204 million in Q4.

Citing ��not enough merchandise traction�� and ��too much management flux,�� Citi?lowers?Urban Outfitters, Inc.?(NASDAQ:URBN) to “sell” from “buy” and?cuts its price target to $20 from $34. Urban is?down 16.35 percent?to $24.60 following yesterday��s?announcement that it��s?swapping out?its CEO.

Lennar Corporation?(NYSE:LEN):?The residential construction company��s net income?dipped to $30.3 million (16 cents per share) versus $32 million (17 cents per share) a year earlier �C?a 5.5 percent fall?from the year earlier quarter. Revenue?climbed 10.8 percent?to $952.7 million from the year earlier quarter, but the?company still?missed Wall Street��s mark by $0.01.

Shares of?Textron Inc.?(NYSE:TXT) are up after word?gets out the firm is?thinking about?spinoff options. M&A buzz?says GE (NYSE:GE) is one?possible bidder.

Wednesday��s Trending Stocks

Markets have rec! overed m ost of their losses after hitting intra-day lows in morning trading. Here are five stocks hitting our trading screens with news.

The Goodyear Tire & Rubber Company?(NYSE:GT) is?down today?after the company reported volume softness across all regions.?KeyBanc said the?mood of Goodyear��s Detroit presentation was?guarded as management?suggested near-term trends have been soft, including slower winter tire sales in Europe, North American demand for both consumer and commercial replacement and softening in Asia and Latin America.

China New Borun Corp?(NYSE:BORN) skyrocketed following the announcement that it has already signed pre-sales?agreements worth a total of around 90 percent?of the company��s total edible alcohol production?volume in 2012.

Masco Corporation?(NYSE:MAS)?tops the S&P 500?winners today. The homebuilder is drafting on Lennar��s good fortune.

SYNNEX Corporation��s?(NYSE:SNX) price target?increased to $37 from $32 at Stifel Nicolaus after reports from SYNNEX?of?better than expected Q4 EPS. Stifel Nicolaus maintains a Buy rating on the stock.

WebMD Health Corp.?(NASDAQ:WBMD): Morgan Stanley?reduced the stock to underweight after WebMD lost about 25 percent?of its value in yesterday��s action.

Market Recap

Markets closed mixed on Wall Street today:?Dow?-0.11%,?S&P+0.03%,?Nasdaq?+0.31%,?Oil?-1.14%,?Gold?+0.67%.

On the commodities front,?Oil?(NYSE:USO) fell to $101.07 a barrel. Precious metals were up, with?Gold?(NYSE:GLD) climbing to $1,642.50 an ounce while?Silver?(NYSE:SLV) rose 0.47% to settle at $29.96.

Hot Feature:?Dow 30 Stocks: 2012 Quarterly Earnings Preview

Today��s markets were mixed because:

1) Germany.?Reports showing the German economy �� the big! gest in the European Union �� to have contracted 0.25 percent in the last quarter raised concern that the single shining beacon of stability left in the euro zone might be backsliding into the mild recession plaguing most of Europe. The euro slid as much as 0.8 percent during the day to a 16-month low of $1.26. Now investors eagerly await key auctions of Italian and Spanish bonds on Thursday and Friday.

2)?Companies.?Urban Outfitters (NASDAQ:URBN) shares plunged after the clothing retail announced late Tuesday that?CEO Glen Senk?had resigned, prompting Citigroup (NYSE:C) to downgrade the company��s stock from ��buy�� to ��sell�� and cut its price target from $34 to $20. Lennar (NYSE:LEN) shares rose even though the homebuilder announced earnings that fell short of estimates, as revenue was better than expected. Crocs (NASDAQ:CROX) popped 16 percent after the company said it expected fourth-quarter revenue to come in at the high end of its forecast and full-year sales to top $1 billion.

3) Financial.?Banks continued their climb today as positive economic data encouraged investors. Despite being targeted in an?insurance probe?by New York State��s Department of Financial Services, Bank of America (NYSE:BAC), Citigroup (NYSE:C), JPMorgan (NYSE:JPM), and Wells Fargo (NYSE:WFC) all continued Tuesday��s rally.

BONUS:?Beige Book: Weak Housing is Impeding Growth

After Hours Radar Stocks

Shares of?Sears Holdings Corp.?(NASDAQ:SHLD) closed more than 8 percent higher on Wednesday. Shares have been in a downward spiral since announcing 100 to 120 store closings in December.? Shares of?Target?(NYSE:TGT) and?Wal-Mart?(NYSE:WMT) also closed higher on Wednesday.

Despite raising its fourth quarter earnings forecast by 5 cents, shares of?PVH Corp.?(NYSE:PVH) are down more than 4 percent after the closing bell.? The clothing comp! any now sees adjusted earnings of $1.08 to $1.10 a share, compared with its previous forecast of $1.03 to $1.05 a share.??Gap Inc.?(NYSE:GPS) shares are edging slightly higher in late trading.

Investor Insight:?Eric Sprott and Endeavour Silver: A Match Made in Heaven?

Regions Financial Corp.?(NYSE:RF) is trading down 1 percent in extended trading.? The company announced it will sell Morgan Keegan & Co. to?Raymond James Financial Inc.?(NYSE:RJF) for $930 million.? Shares of Raymond James Financial are also trading lower on the news.

Tractor Supply Co.?(NASDAQ:TSCO) jumped almost 4 percent in late trading.? The company announced that revenue increased to $1.24 billion from $1.03 billion last year.? The company also increased its 2011 EPS range from $2.97 to $2.99, compared to prior estimates of $2.85 to $2.89.

Further Reading:?Intel and 4 Tech Super Stars Exciting CES>>

To contact the reporter on this story: Stella Mariz at

To contact the editor responsible for this story: Damien Hoffman at

Analysts' Actions: ICE, GS, GLW, AMTD, MON


Adobe (ADBE)upgraded to buy at TheStreet Ratings. (ACOM) downgraded at Morgan Keegan from Outperform to Market Perform. Valuation call, based on a $27 price target.

TD Ameritrade (AMTD) upgraded at Deutsche from Hold to Buy, Deutsche Bank said. $18 price target. Brokerage stocks can outperform the exchanges in the near term.

Acuity Brands (AYI) downgraded at Wedbush to Underperform from Neutral, Wedbush said. $30 price target. Unrealistic market expectations.

Cerner (CERN) upgraded at Deutsche from Hold to Buy, Deutsche Bank said. $71.50 price target. Company is showing strong bookings growth.

CME Group (CME) downgraded at J.P. Morgan to Neutral from Outperform, J.P. Morgan said. $270 price target. Risk of underperforming as estimates fall.

Encana (ECA) downgraded at BMO from Outperform to Market Perform, BMO Capital Markets said. $20 price target. Disappointing winter heating season and weaker outlook for natural gas prices.

General Dynamics (GD) rated new Buy at Sterne Agee. $82 price target. Gulfstream business is strong and the company is buying back stock.

Corning (GLW) rated new Hold at Keybanc. Company lacks near-term catalysts.

Goldman Sachs (GS) downgraded at Wells to Market Perform, Wells Fargo said. Capital market trends remain challenging.

The Intercontinental Exchange (ICE) downgraded at JP Morgan from Overweight to Neutral, JP Morgan said. $133 price target. Valuation call.

Intel (INTC)< /SPAN> downgraded at Sterne Agee from Buy to Neutral, Sterne Agee said. $26 price target. Company faces headwinds in the core PC business.

Illinois Tool Works (ITW) downgraded at Credit Suisse from Outperform to Neutral, Credit Suisse said. Company lacks near-term catalysts. $53 price target.

Invesco Mortgage Capital (IVR) downgraded at Jefferies to Hold from Buy, Jefferies said. $14 price target. Low rate environment remains problematic.

Legg Mason (LM) downgraded at Deutsche from Buy to Hold, Deutsche Bank said. $27 price target.

Lockheed Martin (LMT) rated new Neutral at Sterne Agee. Defense spending will likely continue to slow.

Macerich (MAC) upgraded at UBS from Neutral to Buy, UBS said. $55 price target. High quality mall REIT with attractive valuation.

Universal Display (PANL) rated new Buy at Keybanc. $45 price target. Company can post solid earnings growth over the next several years.

Children's Place (PLCE) downgraded at Goldman from Buy to Neutral, Goldman Sachs said. $51 price target. Company is realizing lower margins, because of higher costs and increased competition.

ProLogis (PLD) downgraded at UBS from Buy to Neutral, UBS said. $31 price target. Macroeconomic headwinds likely keep shares range bound near term.

Regeneron Pharmaceuticals (REGN) upgraded at Jefferies to Buy from Hold, Jefferies said. $75 price target. Stronger Eylea adoption.

RF Micro Devices (RFMD) downgraded at Oppenheimer to Perform from Outperform, Oppenheimer said. Estimates also lowered on guidance cut.

Raytheon (RTN) rated new Neutral at Sterne Agee. Domestic growth should remain soft.

Charles Schwab (SCHW) downgraded at Deutsche from Buy to Hold, Deutsche Bank said. $13 price target.

Sigma-Alrdich (SIAL) downgraded at Leerink from Outperform to Market Perform, Leerink Swann said. Consensus expectations appear optimistic.

Sandisk (SNDK) upgraded at Sterne Agee from Neutral to Buy, Sterne Agee said. $57 price target. Stock is pricing in lower demand from Europe.

Thermo Fisher (TMO) rated new Buy at Cantor. $57 price target. Company can continue to deliver solid organic growth.

Ubiquiti (UBNT) rated new Buy at Wunderlich. $25 price target. Company is highly profitable and should continue to deliver solid growth.

Waters (WAT) rated new Buy at Cantor. $86 price target. Company can continue to expand market share and margins.

Webster Financial (WBS) downgraded at Jefferies to Hold from Buy, Jefferies said. Runup in price brings valuation in-line.


Advanced Micro (AMD) numbers cut at Sterne Agee. Shares of AMD now seen reaching $8. Estimates also reduced, given recent manufacturing issues. Buy rating.

Apache (APA) target lowered at Oppenheimer. Shares of APA now seen reaching $120, Oppenheimer said. Share declines greater than group. Outperfrom rating.

Apollo (APOL) estimates, target raised at Morgan Stanley. Shares of APOL now seen reaching $61, according to Morgan Stanley. Estimates also increased, given higher new starts growth. Overweight rating.

Bank of America (BAC) numbers cut at Citigroup. Shares ! of BAC n ow seen reaching $8, according to Citigroup. Estimates also lowered related to legacy mortgage risk exposure.

Blackrock (BLK) numbers raised at Jefferies. Shares of BLK now seen reaching $175. Estimates also raised on market performance. Hold rating.

Choice Hotels (CHH) downgraded at J.P. Morgan to Underweight from Neutral, J.P. Morgan said. $31 price target. Valuation is rich with EBITDA growth below peers.

Walt Disney (DIS) estimates increased at BMO through 2013, BMO Capital said. Cable networks can drive growth and the company is cutting costs. Outperform rating and $48 price target.

Kohl's Corporation (KSS) numbers lowered at Jefferies. Shares of KSS now seen reaching $47, Jefferies said. Estimates also lowered on January is expected to also be soft. Hold rating.

Eli Lilly (LLY) estimates cut at UBS through 2012, UBS said. Guidance below consensus due to faster Zyprexa sales erosion and higher SG&A. Maintain Neutral rating and $38 price target.

LinkedIn (LNKD) estimates, target adjusted at UBS. Shares of LNKD now seen reaching $90, according to UBS. Estimates increased after republishing model. Buy rating.

Monsanto (MON) estimates, target boosted at Goldman. Shares of MON now seen reaching $90, according to Goldman Sachs. Estimates also upped, given the company's strong order book. Buy rating.

Monsanto numbers raised at Jefferies.Shares of MON now seen reaching $78, Jefferies said. Estimates also raised on quarter beat. Hold rating.

Monsanto estimates, target increased at Citigroup.Shares of MON now seen reaching $89, according to Citigroup. Estimates also increased on improving performance in Latin America. Buy rating.MS C Industrial (MSM) numbers raised at UBS. Shares of MSM now seen reaching $81, according to UBS. Estimates also increased as fundamental performance should expand multiple. Buy rating.

MSC Industrial numbers raised at Credit Suisse.Shares of MSM now seen reaching $80, according to Credit Suisse. Estimates also increased, as the company has strong pricing power and can gain market share. Neutral rating.

Och-Ziff (OZM) added to Analyst Focus List at JP Morgan. OZM was added to the Analyst Focus List, JP Morgan said. $13 price target. Cheap option on future performance fee earnings/distributions.

RF Micro Devices (RFMD) estimates lowered at UBS through 2013, UBS said. December quarter massively short. Neutral rating.

RenaissanceRe Holdings (RNR) added to Top Picks Live at Citigroup. $85 price target. Best positioned insurer to take advantage of firming rates.

Target (TGT) numbers lowered at Jefferies. Shares of TGT now seen reaching $48, Jefferies said. Estimates also lowered on muted promotional efforts. Hold rating.

T. Rowe Price Group (TROW) numbers raised at Jefferies. Shares of TROW now seen reaching $66, Jefferies said. Estimates also raised on improving flow trends. Buy rating.

Texas Instruments (TXI) numbers raised at Jefferies. Shares of TXI now seen reaching $42. Estimates also raised on increased cost savings. Buy rating.

Visa (V) estimates, target upped at Guggenheim. V estimates were boosted through 2013, Guggenheim said. New escrow deposit account will add to earnings. Neutral rating and new $108 price target.

ViroPharma Incorporated (VPHM) estima tes raised at Oppenheimer through 2012, Oppenheimer said. Positive 2012 guidance. Outperform rating.

Worthington (WOR) estimates, target increased at Goldman. WOR estimates were increased through 2014, Goldman Sachs said. Company is realizing higher prices for processed steel. Sell rating and new $14.50 price target.

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>>CES 2012: What's Hot and What's Not

>>16 Stocks Picked by Prize-Winning Fund Managers

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Thursday, January 12, 2012

Banks Killing Jobs?: Poll

Bank of America(BAC) has grabbed headlines lately for a host of reasons, but one of the most attention-grabbing announcements the bank has made of late was a decision to eliminate 30,000 jobs over the next few years.

The bank's struggles and those of the country at large seemed to come together very neatly in that bit of news, and it was not surprising to me to hear it mentioned by at least one of about four Wall Street protesters I spoke to recently outside our offices. None of them seemed to know much about the banking industry, but they were surely aware of the lack of jobs out there and that number got their attention.

Many more layoffs are coming in the banking industry, according to Richard Bove, analyst with Rochdale Securities.

In a report published Thursday, he argued revenues will be curtailed due to "a major change in the secular outlook for the industry," adding that, "the next big news coming out of Wall Street will be layoffs and bonus cuts." Bove cited "conversations with a number of New York based brokerage firms," as his source.

Bove does not see banks as job destroyers, however. Instead, he blames politicians and regulators in New York State.

"The politicians who run the state have been advocating suing the industry and forcing cutbacks in incomes and now they will get their wish. It is likely that when the industry does recover it will not be in New York State but rather in other states and countries that have policies more oriented to assisting the industry's future growth," Bove writes, adding that "the impact is likely to be beyond the brokerage industry. Incomes and wealth will decline. This is likely to impact housing prices and the sale of a wide range of products. It is expected to hit the state's tax base."

Sherry Jarrell, professor of finance and economics at Wake Forest University Schools of Business, argues the cuts are necessary so that struggling banks like Bank of America can avoid the fate of Kodak(EK), which is fighting to stave off a bankruptcy filing.

"I believe the Bank of America's strategic moves today are designed to prevent what Kodak is going through now, teetering on collapse and a complete redeployment of its assets to higher valued uses. Kodak responded slowly to the shift in demand away from 35 mm film. Bank of America is in the process of trying to pre-empt a loss in market share, by shifting away from businesses that look less promising to focus on more profitable lines of business. The natural evolution of business is to create value, encourage competition, and enable the movement of ideas and labor to their highest valued use. If Bank of America did not take these steps, it could end up like Kodak," Jarrell wrote via email.

Whether cutting jobs now is the right or wrong thing for the labor market in the long run, critics of the banks have pointed to their lack of lending to small businesses as a signal that the banks are not creating jobs they way they might. An analysis of Treasury Department data by The Wall Street Journal found that over half of $4 billion doled out to banks by the Treasury to spur small business lending was instead used to pay back TARP.

Meanwhile, banks have been lobbying against legislation that would increase small business lending by credit unions, according to Ryan Donovan, a lobbyist with Credit Union National Association (CUNA). The trade group argues the Small Business Enhancement Act, which would lift caps on the amount of business lending permitted by credit unions, would create 140,000 new jobs.

What do you think? Are banks job creators or job killers?

-- .

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Greed is not good -- for you, your family or the global economy

Click to EnlargeCharles Sizemore recently shared this image with me. It��s a great snapshot of the euro zone debt crisis, and how out of control things are. However, keen-eyed editor that I am, I had to ask for more:

��There’s no scale for the Y axis.�� I wrote. “I assume that’s millions, meaning we are currently 2.6 billion?��

His response: ��No way man, try trillions.? This is central bank money we’re talking about!?��

I didn��t know whether to laugh or to throw my laptop in rage.

Consider this:

  • The average four-year U.S. state college costs $21,447 a year. That $2.6 trillion in European Central Bank cash could send 121.2 million teens to college. There are about 73 million Americans under age 18 as of this writing — meaning every single one of them could get at least a year of college for free.
  • Some of the most impoverished people in African and Asia live on less than $1 a day — meaning if you grant a generous $1,000 per family, you could pay for the subsistence of 2.6 billion households. There are only about 6 billion folks in the entire world.
  • $2.6 trillion is roughly the cost of all health care in America in 2008.

I could continue to list figures and facts. But the bottom line is that $2.6 trillion could do an enormous amount of good in this world.

Instead, it��s bailing out spendthrift and irresponsible governments in Europe.

That��s an oversimplification, sure. But it needs to be said. This holiday season, when we’re supposed to be thinking about things bigger than ourselves, oversimplifications like that are needed more than ever.

It��s time to think about what really matters.

This is not an evangelical plea at Christmas for you to repent and save your soul. I simply want to point out that, for those of us who work in the world of finance, a little perspective goes a long way. The current economic dumpster fire we’r! e suffer ing through has no easy solutions, but as bad as things are for investors. . .they’re a hell of a lot worse for many folks who don��t even have money for rent — or food — let alone a 401(k).

So take some time before the new year to be thankful for what you have, and to empathize with those millions of people who have much less. Alone, that’s not enough to fix the mess we’re in. But it��s a good place to start.

Happy holidays to all.

Jeff Reeves is the editor of Write him at editor@investorplace??.com, follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook.

Understanding The Sales Appointment Setting Scenario.

Although many people believe that their sales appointment is more or less done when they are finally through and speaking to the prospect thus they be supposed to primarily focus upon the a�?passing through the gatekeepera�? process, my absolute conviction is in the utter necessity to make up a thorough script that should be used while speaking to the prospect. Here are some of the major things that I say on the phone to convince my prospect to take a meeting:

Name- I always call potential clients by their first names. It doesn’t matter if it’s Oprah Winfrey or Bill Gates. My greeting would nevertheless be “Hi Oprah” or “Hi Bill.” I do this because I want to at least sound like I’m of equal position with the prospect instead of someone who should be pushed down to an employee with a less-important title. Tell prospects your first name and company name- I usually say, “My name is Emanuel, and I’m with XYZ Company.” The phrase “my name is” allows the prospect know that I am introducing myself. If I was to say “Hey, it’s Emanuel from XYZ Company,” the prospect may feel uncomfortable because it sounds like I know him but he can’t remember me. There is no problem telling prospects your last name. I usually don’t because I’m always the only Victor at a company and my full name can be found using any of the major known search engines, which results in prospects discovering my sales appointment suggestions writing. Revealing a commonality warms the cold call, helps to establish a common bond, and can show that you have something of value to offer members of his association. State your value: In one or two short sentences, tell your prospect what you can do for him or what you’ve done for similar companies. Value propositions can sound something like this: “We help CEOs reduce IT expenses by up to 50% annually.” “We work with MacDonalds HR Managers to reduce attrition rates! .” Keep in mind, a value proposition is not a speech about features. It’s all about what’s in it for the prospect.

Qualify: After you’ve convinced the prospect that a meeting makes sense, you then have to make sure the prospect is a good fit for you. I extremely suggest that you do not overload the potential customer with a barrage of questions because he will grow doubtful and uncomfortable. If you ask one or two of your most significant, need-to-know questions, that should suffice. My strategy is to just ask the prospect something that can’t be answered yes or no. Examples include: “Tell me ways you deal with attrition today.” “What is your claims process?” You will find that most of your qualifying questions will be answered when you let the prospect open up instead of asking rapid-fire questions.

Today it is quite easy to find a good business 2 business connection – this is where a professional appointment setting can help you a lot.

And a final piece of advice – today the online technologies give you a truly unique chance to choose exactly what you need for the best price on the market. For example, search for appointment setting. You will be surprised how fast you can receive set of products and prices for them. Funny, but most of the people don’t use this chance. The Web offers many other ways to earn money, for example managed forex accounts. In real practice it means that you must use all the tools of today to get the info that you need.

Search Google or other search engines. Visit social networks and check the accounts that are relevant to your topic. Go to the niche forums and join the discussion. All this will help you to build up a true vision of this market. Thus, giving you a real chance to make a smart and nicely balanced decision.

P.S. And also sign up to the RSS feed on this blog, because we will everything possible to keep updating this blog with new publications about industry.

U.K. Solar-Capacity Surge Defies Huhne¡¯s Plan to Curb Subsidies

Britain��s solar capacity shot up10-fold last year, defying Energy Secretary Chris Huhne��s effort to roll back subsidies for the industry and prevent the sort of booms experienced in Germany and Italy.

Solar panels with at least 761.9 megawatts in capacity wereinstalled in 2011 compared with 76.8 megawatts the prior year,according to figures on the website of U.K.��s energy regulatorOfgem. About two-thirds of the capacity and 95 percent of theprojects were installed on homes.

Huhne twice last year moved to rein in support granted inApril 2010 in the form of feed-in tariffs, which guaranteepremium rates for electricity from solar power. Companiesincluding EON AG (EOAN), Tesco Plc (TSCO) and Carillion Plc (CLLN)��s Eaga rushed totap the market, supported by fund managers such as ForesightGroup LLP and Octopus Investments Ltd.

��It��s been a very busy and successful year for the solarindustry,�� Howard Johns, chairman of the Solar TradeAssociation and managing director of installer Southern SolarLtd., said by e-mail today. ��But now most of the industry is ata standstill with the uncertainty caused by the government.��

The price of panels today is less than half of where it waswhen the subsidy program began, making more installationseconomical and sustaining 25,000 jobs.

Subsidy Restraint

Huhne��s ministry responded in March 2011 with an emergencyreview of its support measures that cut rates as much as 71percent for commercial-scale plants. Developers then turnedtheir attention to smaller rooftop projects, prompting thegovernment in October to propose cuts for those facilities aswell. Industry groups sued the government last month to slow thelatest round of cuts.

The boom outpaced the government��s forecast. More than230,000 solar plants have registered to qualify for tariffssince the program started, according to Ofgem. Half of the 761.9megawatts in capacity installed last year was registered inNovember and December alone, the latest weekly data show. !

T hese figures compare with the Department of Energy andClimate Change��s projections for 284 megawatts by April 2013 and832 megawatts by April 2015.

Only 32 megawatts of solar installations were operating atthe end of 2009 before the tariff came into effect. Today, thenumber may top 1.1 gigawatts, according to Bloomberg New EnergyFinance figures, which take into account installations not yetregistered with Ofgem.

Those facilities may cost about 373 million pounds ($572million) a year in subsidies, exceeding the government��s cap forthe subsidy, the London-based researcher estimates. Support forthe industry is paid for by consumers though higher bills.


��It is somewhat embarrassing for an austerity-focusedgovernment,�� said Jenny Chase, lead solar analyst at New EnergyFinance.

The program, which also includes other low-carbontechnologies for projects with 5 megawatts or less, has aspending limit of 867 million pounds by April 2015. In December,DECC said that a further 197 million pounds from the renewableobligation system that supports renewable projects of all sizeswas also available for the tariffs.

��The current high tariffs for solar PV are notsustainable, and changes need to be made in order to protect thebudget, which is funded by consumers through their energybills,�� Climate Change Minister Greg Barker said in a statementon Dec. 22.

Germany and Italy

European countries such as Italy and France reduced tariffslast year before schedule to adapt incentives to crashing panelprices. Meanwhile, Germany marched ahead without any spendingcap to install a record 7,500 megawatts last year, or about 10times British levels. Italy has a spending cap of 6 billioneuros to 7 billion euros ($7.6 billion to $8.9 billion) a year.

The surge in installations, coupled with continued declinesin panel prices, led the government in October to proposecutting in half rates paid for small projects starting Dec. 12,four months before scheduled.!

A court deemed the decision to cut rates before aconsultation on the matter was completed ��unlawful�� andordered a judicial review. A government appeal is likely to beheard tomorrow, so it��s unclear when the subsidy reductions willtake effect.

The U.K. solar industry is waiting to learn the new tarifflevels and the date when they will come into force.

��The situation is still far from clear, and industryplayers would be wise to sit tight until a new reference date isset,�� said Clare King, a London-based renewable energy lawyerat the law firm Osborne Clarke. ��The lack of certainty is goingto make it difficult for solar companies, homeowners andinvestors to plan for the future.��

Analyst Upgrades on These Services Stocks: WYNN, AH, CBRL

Wall St. Watchdog reveals information about companies for which stock analysts upgraded shares in the Services sector for the week ending December 2nd, 2011.

  • Wynn Resorts (NASDAQ:WYNN): KeyBanc Capital Mkts upgraded its rating on this company from Hold to Buy and changed its price target to $145 on Nov 28th. The shares recently traded at $117.63, up $3.03, or 2.64% since the analyst��s rating. About the company: Wynn Resorts Limited owns and operates luxury hotels and destination casino resorts in Las Vegas, Nevada and in Macau, China. The resorts features guest rooms and suits, restaurants, golf courses, and on-site luxury automotive dealerships. Get the most recent company news and stock data here >>
  • Accretive Health (NYSE:AH): Oppenheimer upgraded its rating on this company from Perform to Outperform and changed its price target to $31 on Nov 30th. The shares recently traded at $22.96, down $0.12, or 0.52% since the analyst��s rating. About the company: Accretive Health, Inc. offers health care revenue cycle consulting services. The Company helps its customers avoid bad debt write-offs, uncompensated care, payor denials and corresponding administrative write-offs, and lost revenue for missed charges. Get the most recent company news and stock data here >>
  • Cracker Barrel (NASDAQ:CBRL): Morgan Keegan upgraded its rating on this company from Mkt Perform to Outperform and changed its price target from $45 to $58 on Dec 2nd. The shares recently traded at $48.95, up $0.25, or 0.51% since the analyst��s rating. About the company: Cracker Barrel Old Country Store, Inc. operates restaurants and gift shops in the United States. Get the most recent company news and stock data here >>

USD Advances Ahead Of BoE, ECB- Index Poised For Further Gains

By Michael Boutros, Currency Strategist

The greenback snapped a two-day losing streak in North American trade with the Dow Jones FXCM Dollar Index advancing 0.39% on the session. Equity markets were sharply off at the open, spending the majority of the day paring early losses with the major indices mixed at the close of trade in New York. The NASDAQ managed to eke out a gain of just 0.31% with the S&P closing virtually flat on the session. The Dow was not able to stay afloat, closing off by a mere 0.10%. The release of the Fed’s Beige Book today offered an upbeat assessment of the twelve Federal Reserve Districts with the report citing that growth was, “modest to moderate” across most of the nation with price pressures remaining “quite limited” as manufacturing maintained its expansion. The statement went on to note that while farming and mining showed “general robust conditions,” wage increases were “modest overall” while permanent hiring remained “limited.” The remarks were more or less in line with recent relevant data and continue to suggest the domestic recovery remains on proper footing. As data continues to improve, look for the dollar to start reacting favorably on positive US headlines as the greenback slowly decouples from its inverse relationship with equities, a phenomena that is likely to become more prominent later this year.

The dollar reboundedoff key Fibonacci support at the 61.8% extension taken from theAugust 1st and October 27th troughs at 9950 ascited in yesterday’s report. The daily relativestrength index has reversed course and is now testing RSIresistance taken from the December 14th high. A breach of thislevel eyes subsequent targets at the secondary RSI resistance level(dashed line) with the index eyeing the 76.4% extension at10,070.

An hourly chart showsthe index closing back above the psychological 10,000 level afterrebounding off soft resistance at 10,020. A breach here eyestrendline resistance dating back to the December 14th high currently at10,040, and the 76.4% extension at 10,070. This level remainsparamount for the dollar after failing four breach attempts latelast year. A break below interim support eyes subsequent floors at9980, the 61.8% extension at 9950, and 9912. Our bullish bias onthe dollar remains intact so long as the index holds above the9950.

The greenback advancedagainst all four component currencies highlighted by a 1.05%advance against the British pound. Weaker than expected tradebalance data out of the UK slammed the sterling today with thepound falling against all its major counterparts ahead of the BoEinterest rate decision tomorrow. Although the central bank iswidely expected to hold rates at 0.50%, investors will be lookingto see if the MPC cites any increase in the £275B assetpurchase program as conditions in Europe deteriorate and domesticgrowth remains stubbornly sluggish. The top performer of the lotwas the Australian dollar which fell just 0.06% on the session. Aswe have seen over the past couple of days, the close of Europeantrade has triggered a rally in risk with equities advancing intothe close. Accordingly the aussie pared much of the decline seenearlier in the session with the AUD/USD pair cl! osing ju st above the1.03-figure. For detailed scalp levels on the aussie referto yesterday’s scalp report.

Tomorrow economic docket is highlighted by the advanced retail sales report with consensus estimates calling for the pace of sales growth to hold at 0.20% for the month of December. November Business inventories are out soon after with expectations calling for a print of 0.40%, down from a previous read of 0.80%. Despite the nature of the data, the ECB and BoE rate decisions present the highest level of event risk for the day as all eyes turn back on Europe. Traders will be lending keen ear to remarks made by central bank president Mario Draghi with speculation that the ECB will look to adopt the Feds zero interest rate policy continuing to take root after the ECB revealed a balance sheet of over €2 trillion. Look for the dollar to benefit should president Draghi cite an increasingly dovish tone, with the euro risking substantial losses if officials unanimously agree to move more aggressively on rates in an attempt to ease conditions and skirt a so called “mild recession” in the region.

Upcoming Events










Advance Retail Sales






Retail Sales Less Autos






Retail Sales Ex Auto & Gas






Retail Sales "Control Group"


! 0.20%




Initial Jobless Claims






Continuing Claims






Business Inventories



! 1/12



Monthly Budget Statement



--- Writtenby Michael Boutros, Currency Analyst with

Tocontact Michael email mboutros@dailyfx.comor followhim on Twitter @MBForex.

Tobe addedto Michael’s email distribution list, send an email withsubject line “Distribution List” to

DailyFX is the forex news and research arm of FXCM, Inc (NYSE: F! XCM), wh ich provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

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Wednesday, January 11, 2012

Is Your “Safe” Portfolio Risky?

(photo: iStockphoto)?

When is it time to dump an investment?

My friend Robert (not his real name) is retired. Since he��s a risk-averse investor, I was surprised when I got an email from him last week with some bad news.

Back in 2007, when he was still employed and the economy was still awesome, Robert called his broker. ��I was looking for extremely safe, conservative investments with good rates,�� said Robert. ��And he said, here are some extremely safe, conservative investments with good rates.��

The investments were with Lehman Brothers, GMAC, and Royal Bank of Scotland (RBS).

Lehman went bankrupt, GMAC was bailed out three times, and RBS was taken over by the government of the UK.

But it��s not as bad as it sounds: the Lehman investment was an FDIC-insured CD. The GMAC bond is still paying 5.85%.

But RBS? Big trouble. Robert bought $35,000 worth of RBS preferred stock paying a 7.25% dividend. RBS is the world��s second-largest bank and was founded in 1727. What could go wrong? Preferred stock sounds great. And 7.25%? Wow! To use an arcane financial term, that is one bitchin�� yield.

Robert and his broker were far from the only people who thought this RBS stock looked like a great deal. One blogger argued in 2009:

��I don��t believe that Royal Bank of Scotland would ever stop paying its preferred dividends because to do so would tarnish the name of that company forever��royalty sits on their board of directors and the company was incorporated before George Washington was born.��

Well, guess what? Preferred stock is risky. As Larry Swedroe put it in this book The Only Guide to Alternative Investments You��ll Ever Need: ��Investors should be aware that in times of financial distress, the payment of preferred dividends could be deferred.��

You don��t say. As of April, Robert��s RBS preferred stock stopped paying dividends by order of the Queen. (Actually, it was the European Commission, but ��by order o! f the Qu een�� has such a ring to it.) A chunk of Robert��s income went up in smoke.

Furthermore, the stock��s market value has collapsed, too��it��s currently down 31% from what Robert paid for it (although that��s an improvement from when it was down 50%).

Now Robert��s in a quandary. The Financial Times says RBS is expected to resume paying dividends in fall of 2010. Should Robert hold onto his investment in hopes that the dividends will come back and so will the price of the stock?

Stretching for yield

Robert got into trouble the moment he asked his broker for high yields. Higher yield and higher risk go hand-in-hand, and many people buy corporate bonds, preferred stock, dividend stocks, and brokered CDs without understanding that these instruments pay higher dividends because they are risky. Let��s take a quick look at each:

Corporate bonds: Buying an individual corporate bond, no matter how highly rated, still exposes you to the risk that the company will go bankrupt and default on its debt. You could lose everything.

Preferred stock: ��A lot more is wrong with preferreds than right,�� writes Jane Bryant Quinn in Making the Most of Your Money Now. Preferred stock offers less growth potential than common stock and more risk than bonds.

Common, dividend-paying stock: That��s even riskier than preferred stock: both bondholders and preferred stockholders get first dibs on dividends. Common stockholders are way down the list. As with preferred stock, you��re likely to lose your dividends and your principal at the same time, because when a company stops paying dividends, the stock usually collapses. I often see people advising retirees to buy AT&T (T) stock for the dividend income, as if nothing could possibly go wrong with AT&T.

Brokered CDs: Brokered CDs are generally FDIC-insured (although you should always check). There��s no chance of losing principal if you hold them! to matu rity, which makes them the safest of this cagey bunch. But they��re less safe than bank CDs for two reasons. First, brokered CDs are callable. That means that the issuer can, on a whim, give you back your principal and yank back its CD. This is likely going to happen at a time when you have to reinvest the money at a much lower interest rate, and that means the high rate on a brokered CD is essentially fictional. Second, say you want to get out of a brokered CD: you can��t just pay a small penalty and be on your way, as with a bank CD. You have to sell the CD��possibly at a loss.

I��m not saying no one should ever buy any of these things. But Robert bought them without realizing he was taking any risk at all.

��I was ignorant,�� said Robert. ��I listened to this broker, and you know what? He was ignorant, too. If there hadn��t been a financial crisis, there��d be no problem.��

Hold or sell?

I asked Robert whether he was going to sell his RBS stock. ��I haven��t made a firm decision,�� he said. ��It��s very difficult to sell. I��m down $11,000. I look at this money I��d be losing, and it��s like a year of earning on my portfolio. It��s so much money.��

��Then you must think the stock is underpriced and it��s going to start paying dividends again,�� I said. ��Does that mean you��re going to buy more of it?��

��I��m not going to buy more of it! It��s obviously risky.��

��Then let me ask you this,�� I said, reaching for the heavy artillery. ��Let��s say I took away your RBS stock and gave you the market value in cash. Would you buy it back from me?��

Pause. ��I have to think about that.��

He called me back about ten minutes later. He��d decided to sell the RBS and buy a 7-year credit union CD paying 3.49%. It��s insured, non-callable, and (because it��s in an IRA) has no withdrawal penalty. In other words, it��s safe. Just what he was looking for in the first place.

Housing Markets That Rose and Fell the Most This Year

It is no secret that the national housing market has gotten even worse this year. With each passing month, it seems that most measures pointed to further weakening. Although there are a few exceptions at the state and local level, the wave of foreclosures is still so large that most markets cannot stage price recoveries. And the portion of underwater home mortgages is now over a fifth of the entire home market. 24/7 Wall St. examined the nation's metropolitan areas that had the biggest gains in home prices from January to October of this year and those that had the worst.

Home markets that continued to see steep price drops are generally those with higher-than-average foreclosure rates and, usually, higher-than-normal unemployment. Markets with price appreciation, on the other hand, are generally marked by below average unemployment rates and by home values that never fell a great deal during the recession. The reason prices held up relatively well during the recession is because housing prices peaked much later in those areas than the national peak in 2006, keeping demand relatively level.

Bloomington, Ind., is a prime example. Home values in the metropolitan statistical area did not peak until the second quarter of 2010, nearly three years after the national average. That means demand remained good through the recession. Since that peak, values have dropped only 3.7%. Compared to a national market where prices have dropped by nearly a third since 2006, this decline is nominal. Bloomington shares another characteristic with home markets that have done well. Its unemployment rate is only 7.3%, nearly two full points below the national average as of October.

A prime example at the other end of the market is the Reno-Sparks metro area. Home prices peaked early, in the first quarter of 2006. This is probably because of the Nevada building boom, which also hit neighboring Las Vegas-Paradise metro area. Home inventory was so large that the numbers of vacant homes grew rapidly, even before! the rec ession officially began. Since their peak, home prices in Reno-Sparks have plummeted more than 51% by October, and they continue to fall to this day. There is not a strong employment base to support home prices and sales. Unemployment in the Reno area is 12.1%.

24/7 Wall St. relied on?CoreLogic’s?Home Price Index?to identify the metropolitan statistical areas that increased and decreased the most from January to October of this year. CoreLogic also provided Foreclosure data for the 384 MSAs the company tracks. Data reflecting the amount each housing market is down from its peak value is from Fiserv-Case Shiller. Unemployment data for October of this year is from the Bureau of Labor Statistics.

24/7 Wall St. found, as it reviewed the housing markets in 384 U.S. metropolitan statistical areas, that those regions that survived the recession the best economically have begun to see a rebound in home prices. Markets marred by high unemployment and sharp drops in home prices have usually not recovered at all.

CarMax, Inc Traded Above From Target Price with Positive Distance from SMA20 - NYSE:KMX

CarMax, Inc (NYSE:KMX) recently hit 52 week peak price $36.86, opened at $35.73 scored +2.64% closed $36.60. KMX traded on over 2.14 million shares in comparison to average volume of 1.80 million shares.

KMX has earnings of $364.87 million and made $8.56 billion sales for the last 12 months. Its quarter to quarter sales remained 22.78%. The company has 225.55 million of outstanding shares and 224.36 million shares were floated in the market.

KMX has an insider ownership at 0.53% and institutional ownership remained 99.38%. Its return on investment (ROI) for the last 12 month was 8.94% as compare to its return on equity (ROE) of 18.11% for the last 12 months.
The price moved ahead +9.45% from the mean of 20 days, +10.00% from 50 and went up 37.00% from 200 days average price. Company��s performance for the week was 5.63%, +14.23% for month and yearly performance remained 73.26%.

Its price volatility for a month remained 2.18% whereas volatility for a week noted as 2.35% having beta of 1.31. Company��s price to sales ratio for last 12 months was 0.96 while its price to book ratio for the most recent quarter was 3.78 and its earnings before interest, tax, depreciation and amortization (EBITDA) remained 654.76 million for the past twelve months.

Samsung, LG Spooked By Apple Television? Asks Brigantine

Kevin Dede of Brigantine Advisors, this morning reflecting on the news flow yesterday from the Consumer Electronics Show going on in Las Vegas, wonders if TV makers such as Samsung Electronics (SSNLF) and LG Electronics (06657011KS)?are perhaps spooked by the prospect of a television from Apple (AAPL) at some point.

“High end sets” being shown off this week, he writes, “have alternative interface technology aside from the standard remote control.”

“Taking a page from Apple’s success with Siri, in our opinion, and perhaps in fear of what Apple might try next, major TV manufacturers we saw yesterday are including voice recognition and gesture recognition as interactive measures in controlling TV.”

Dede thinks the “writing is certainly on the wall,” namely that “people and machines are destined to talk to each other, and machines should be able to read human movement as both function control and signals (for sensors) that we are seeing in greater prevalence already.”

Tuesday, January 10, 2012

HP's Apotheker; Weak PlayBook Sales

Hewlett Packard(HPQ) CEO Leo Apotheker is expected to be ousted after less than a year on the job, according to Bloomberg. Meg Whitman, the former eBay(EBAY) CEO, is rumored to be considered for Apotheker's position.

Shares of HP dropped 2.9% to $23.28 in premarket trading on Thursday.

Research In Motion(RIMM) is cutting back production of its PlayBook tablet abroad due to sluggish sales, according to DigiTimes. The BlackBerry-maker shipped 200,000 PlayBooks in its most recent quarter, while analysts had been hoping for 560,000.

Shares of RIM fell 2.9% to $20.91.

Pandora(P) on Wednesday announced it was removing its 40-hour listening cap so that its users can stream an unlimited amount of music for free. The move comes soon after the debut of Clear Channel's iHeartRadio app, in which users can also stream music for an unlimited period of time.

Shares of Pandora dropped 3.6% to $9.65 in premarket trading on Thursday.


Facebook on Wednesday unveiled a series of changes to its site, including a redesigned news feed, new privacy settings and the ability to track others' updates without actually being friends with them. The changes, which make the site more like Twitter, set off a series of complaints from Facebook users.

AOL(AOL) has lost the sales executive for Patch, its local blog network, according to Business Insider. The move comes as AOL is trying to make Patch's sites profitable after sinking $160 million into the division this year. >To submit a news tip, send an email to:

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Miller Petroleum Inc. Non Normal Trade in last session - NYSE:MILL

Miller Petroleum Inc (NYSE:MILL) witnessed volume of 1.50 million shares during last trade however it holds an average trading capacity of 406,188.00 shares. MILL last trade opened at $7.31 reached intraday low of $7.31 and went +6.21% up to close at $7.87.

MILL has a market capitalization $312.18 million and an enterprise value at $295.63 million. Trailing twelve months price to sales ratio of the stock was 13.26 while price to book ratio in most recent quarter was 1.08. In profitability ratios, net profit margin in past twelve months appeared at -117.11% whereas operating profit margin for the same period at -40.10%.

The company made a return on asset of -1.18% in past twelve months and return on equity of -9.55% for similar period. In the period of trailing 12 months it generated revenue amounted to $23.53 million gaining $0.71 revenue per share. Its year over year, quarterly growth of revenue was 572.50% holding -99.70% quarterly earnings growth.

According to preceding quarter balance sheet results, the company had $3.16 million cash in hand making cash per share at 0.08. The total of $4.85 billion debt was there putting a total debt to equity ratio 1.69. Moreover its current ratio according to same quarter results was 1.02 and book value per share was 7.28.

Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 20.32% where the stock current price exhibited up beat from its 50 day moving average price of $6.11 and remained above from its 200 Day Moving Average price of $5.48.

MILL holds 39.67 million outstanding shares with 25.27 million floating shares where insider possessed 32.53% and institutions kept 10.30%.