Encouraging economic data and Federal Reserve Chairman Ben Bernanke’s view that the recession was “very likely over" sent stocks higher for a second straight day.  A better-than-expected rise in retail sales, helped in part by the government’s cash-for-clunkers program and higher gasoline prices, eased concerns that consumers were spending with restraint. 

Speaking at a Brookings Institution conference, Bernanke, however, added a note of caution, saying, “Even though from a technical perspective the recession is very likely over at this point, it’s still going to feel like a very weak economy for some time."

This morning’s stock futures indicate Wall Street would open with gains, helped by increased M&A activity, optimistic guidance from companies, and words from Warren Buffett that Berkshire Hathaway (NYSE:BRK.A) is "buying stocks right as we speak."

Yesterday, the 30-stock Dow Jones industrial average gained 57 points, or 0.6%, to 9,683.41, its highest point since October 6. 

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Deere & Company (DE) announced its plans to lay off 367 employees at the John Deere Harvester Works in Illinois. The layoff is effective September 21. Also, most of the plant's remaining employees will face a four-week inventory adjustment shutdown and a two-week vacation shutdown starting September 21. The John Deere Harvester Works manufactures combines and front-end equipment for harvesting. The company said the decision was taken in response to the declining market demand for the factory’s products. Deere has been witnessing weak demand levels for the last couple of quarters as farmers and other customers cut their spending under recessionary conditions. The company expects a 21% drop in equipment sales for fiscal 2009. We expect continued weakness in both the segments for the next couple of quarters, as we do not see any drivers for growth in farm spending and U.S. construction activity over ...

A sharp rebound in Chinese shares helped erase yesterday’s slump and sent Asian stocks sharply higher Thursday, a day after Shanghai’s big fall ignited fears of a Chinese stock collapse and triggered a selling spree around the world.  Asian markets also drew comfort from an overnight recovery on Wall Street after a surprise drop in U.S. crude stockpiles lifted hopes for an economic recovery and sent investors back on the buying table.

Shanghai's main index jumped 126 points, or 4.5%, to 2,911.58, while Japan's Nikkei 225 stock average climbed 179.41 points, or 1.8%, to 10,383.41.  Hong Kong's Hang Seng rose 374.63, or 2%, to 20,336.36.  South Korea’s Kospi advanced 2% to 1,576.39.

Stock futures pointed to a higher open on Wall Street Thursday.  Dow Jones industrial average futures rose 24, or 0.3%, to 9,300. Standard & Poor's 500 index futures edged up 3.70, or 0.4%, to 1,000.80, while Nasdaq

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Early today, Deere & Company (DE) reported fiscal third quarter earnings of 99 cents per share, well above the Zacks Consensus Estimate of 57 cents per share. However, quarterly earnings were down 27% year over year, primarily due to a double-digit decline in sales. Quarterly revenue of $5.9 billion was down 24% from the prior-year period. Net sales from the company’s worldwide equipment operations were down 25% year over year at $5.3 billion as farmers and other customers cut their spending under recessionary conditions. Equipment net sales in the U.S. and Canada dropped 16%, while the net sales outside the U.S. and Canada were down 37%. Agriculture & Turf segment sales fell 21% due to lower shipment volumes and unfavorable currency translation impact, partially offset by improved price realization. The Segment’s operating profit was $480 million, compared to $725 million last year. Lower operating profit was ...

• General Motors (NYSE:GM) announced plans to hike production levels in the second half, adding it is also looking to rehire 1,350 employees as the successful "cash-for-clunkers" program heightens demand

• Sony (NYSE:SNE) unveiled its slimmer, lighter and less expensive Playstation 3 console for September launch

• Hewlett-Packard (NYSE:HPQ) reported third quarter earnings one cent above Zacks estimates at 91 cents, as revenues dropped 2.1% from a year earlier to $27.45 billion, inline with Zacks estimates.  The firm reiterated mid-point guidance of its previous fiscal 2009 range of $3.76 to $3.88 a share, with revenues expected to decline 4-5%

• Analog Devices (NYSE:ADI) reported third quarter earnings of 22 cents ex-items, 2 cents above Zacks estimates, on revenues of $492 million, off 25.3% YoY.  The company said it expects fourth quarter earnings of 24-26 cents a share

• Deere (NYSE:DE) reported third quarter earnings of 99 cents a share, sharply ahead of Zacks estimates

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Better-than-expected earnings from retailers and an upbeat housing report helped indexes recover some ground Tuesday after previous session’s big market sell-off pushed equities sharply lower.  A rise in German investor confidence also helped sentiments on the Street as investors chose to brush aside a greater-than-expected plunge in wholesale prices.

The benchmark S&P 500 index closed up 1% at 989.67. The Dow Jones Industrial Average added 0.9% to 9,217.94 and the Nasdaq Composite index gained 1.3% to 1,955.92.  About four stocks advanced for every one that declined.  Volume was light with only 991 million shares exchanging hands.  With investors back among equities, Treasuries declined, as the 2-year fell 1/32 and its yield rose to 1.028%, and the price of the 10-year eased 12/32 in price and its yield increased to 3.517%. The measure of market volatility, the CBOE Vix, reversed Tuesday's near-15% jump, retreating 6.1% to 26.18.

With no clear

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Companies featured in this edition of the newsletter: ACTC, CVM, CUR, DKAM, FMTI, ICLK, IMUC, IWEB, OMCM, ONEZ, SIHI, TAGS

Markets took pause from their four week run this week, as some less than encouraging economic reports coupled with profit taking led to slight declines in all of the major indices. All told, the Dow ended the week down 0.5%, surrendering 48 points to close at 9321, bringing its YTD gains to 6.2%. The Nasdaq was off 0.7%, closing at 1985, up a healthy 25.9% on the year, while the S&P 500 and Russell 2000 were down 0.6% and 1.5% respectively, paring their yearly gains to 11.2% and 12.9%.

Disappointing economic data relating to inventories and consumer sentiment soured the mood for much of the week, as worse than expected declines in retail sales, consumer sentiment, and business and wholesale inventories gave investors cause for concern. Retail sales

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Smart Money Betting on Heavy Machinery Stocks Gaining in 2009

Joe Kunkle, The Investment U Research Team

One of the greatest assets you can have as a trader or investor is having the ability to spot trends, and use that information to draw conclusions about what will occur in the future.

I have long used the options market as a way of watching where the “smart money” is making bets. It has allowed me to foresee the collapse of financial stocks and the re-emergence of oil and commodity related stocks.

And from the signals I’m seeing, we may be on the verge of another big move.

Over the past few weeks, large volume bullish option trades have been indicating the expectation for a major recovery in heavy machinery stocks for the third quarter of 2009.

But we can’t really understand the significance of these

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Every time the United States goes through a recession, the pundits all race to be the first to proclaim that “Buy and Hold” is dead.  I can’t watch a financial news channel or read a financial website without some mention of this proclamation.  Well I’m growing tired of it, and if it were up to me, I’d prohibit anyone else from making this point for the rest of 2009.

Buy and Hold is not dead, and I’m on a mission to prove it.  Buy and Hold has worked brilliantly for decades, and it will continue to do so in the future.  The stock you bought in 2007 is worth less now than what you bought it for?  Oh boohoo, go cry me a river…somewhere else.  The economy has peaks and troughs, and we’re in the middle of one of the more serious

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U.S. stocks registered sharp declines Thursday, adding to a global downturn, as a weaker-than-expected employment data and Standard & Poor's warning that it may downgrade U.K.'s credit rating hurt sentiments.  The Street had witnessed a selloff in the final hours of trading Wednesday as Federal Reserve cut its 2009 economic outlook and raised its unemployment forecast.  On Thursday, the Dow Jones Industrial Average registered its third straight decline, closing the day 130 points, or 1.5%, lower.  The S&P 500 index declined 15 points or 1.7%; tech-heavy Nasdaq lost 1.9% to 1,695.25.  Thursday's selloff gained momentum in the absence of concrete signs of an economic recovery and Federal Reserve's prediction of a deeper recession.    

In the absence of major economic posts or corporate earnings, Friday is expected to be a quiet trading day.  Stock futures, nevertheless, are pointing to a higher open with Dow Jones industrial average futures up

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