I often say that money goes to where itrsquo;s treated best, and a Bloomberg News story this week shows that Irsquo;m not the only one who believes that. The CEO of Emerson Electric, which makes a wide range of industrial and technology products, says the U.S. governmentrsquo;s plans for greater regulation and higher taxation are pushing his company to move more of its business operations overseas. David Farr, who heads the $21 billion company, didnrsquo;t pull any punches: ldquo;Washington is doing everything in their manpower, capability, to destroy U.S. manufacturing.rdquo; And Farr predicts he will have plenty of company in the exodus to China, India and other places ldquo;where people want the products and where the governments welcome you to actually do somethinghellip; Im not going to hire anybody in the United States. Im moving.rdquo; Government policies for peace and prosperity are a key component in determining a countryrsquo;s growth prospects and attractiveness for investors. Worries ...

Emerson Electric Co. (EMR) posted third-quarter profit of $0.51 per share, below the Zacks Consensus Estimate, on net sales of $5.1 billion, which also missed our expectation. Quarterly net sales declined 22% year over year, including 4% unfavorable impact from currency exchange rates and 1% positive impact from acquisitions.

Restructuring charges of $83 million hurt earnings by $0.05 per share and were higher than the year-ago quarter. Operating margin fell 190 basis points from last year due to lower sales volume, liquidation of operational inventory and unfavorable mix, partially offset by cost reductions due to aggressive outsourcing. There was a 60 basis point increase in operating margin from the second quarter on flat revenue.

For the third quarter, operating cash flow increased 11% versus last year to $916 million and capital expenditures were $116 million resulting in free cash flow (which equals operating cash flow less capital expenditures)

...

• Toyota (NYSE:TM) reported a June quarter loss of $819 million, reflecting sluggish US sales and a stronger yen, which offset cost-cutting measures and inventory decreases; however, the firm cut its loss forecast on the year by about 18% to $4.7 billion

• Xstrata, the world's fifth largest diversified mining group, reported a 77% fall in six month results to 38 cents a share adjusted from $1.66, although above estimates of 33.6 cents

• UBS (NYSE:UBS) reported a higher-than-expected second quarter loss of $1.32 billion, which was less than the prior quarter loss. The bank's Tier 1 capital ratio rose to 13.2% at quarter's end from 10.5% at the beginning of the quarter

• Vulcan Metals (NYSE:VMC) reported a second quarter earnings of 14 cents, ex-items, versus estimates of 20 cents a share, as revenues fell 29.3% from a year earlier to $721.9 million, off estimates of $759.1 million. The firm said it

...

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

...

April 11, 2009 ndash; The markets managed to edge higher again this week as we headed into earnings season. middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; The DJIA closed up 67.22 on the week, or about 0.08%, but it is up 25.5% since hitting intraday lows back on March 6 (still down 7.8% year-to-date). middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; The Nasdaq closed up 50.3 on the week, or about 3.1%, and it is up 30% since hitting intraday lows back on March 9 (up 4.6% year-to-date). middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; The Samp;P 500 closed up 16.81 on the week, or about 2%, and it is up 28.4% since hitting intraday lows back on March 6 (still down about 5.1% year-to-date). Wells Fargorsquo;s better-than-expected preannouncement gave bulls reason to argue that the worst is behind us and that the financial sector may be ready to begin leading the markets onward in the second half of 2009 and into 2010 as the US economy recovers. ...

In theory, equity income investing creates a reasonably steady and growing income stream from stock investments — a good chance of maintaining real purchasing power of the stream.  That contrasts with bonds which create a more reliable, but constant income stream that has no chance of maintaining real purchasing power (inflation protected Treasuries and perhaps some variable rate bonds excepted).

In practice lately, however, the equity income theory isn’t working so well. Dividends are being cut at an historic rate, particularly among banks, but to some degree in other industries as well.

Dividend investing isn’t for everybody, but it is attractive and important to some, particularly those who rely on their portfolios to generate cash flow to support their lifestyle.

S&P Dividend Aristocrats:

Standard and Poor’s may even have to reduce the performance requirements for its Dividend Aristocrats (proxy SDY) to keep the index going.  Because the index rules require at least 40 issues,

...

Highlights include Ingersoll Rand (IR), Dover (DOV), Emerson Electric (EMR) and Textron (TXT).How does the decline of manufacturing this time compare to other downturns? Not very well.The chart below (from http://www.econbrowser.com/archives/2009/02/industrial_prod_1.html) is very interesting. It shows the change in manufacturing output (the manufacturing component of industrial production) for each of the last 6 economic downturns. The dates shown are the year the downturn started, thus the current downturn is labeled 2007 since that is the official start of this recession. The vertical line is the official start of each recession.This is done in log terms, so unless you are very much of a math lover, the Y axis will not mean much, but the relative size of the downturns is significant. The Chart shows that up until last summer, the decline was very mild. This was because ...

Highlights include Rockwell (ROK), Emerson Electric (EMR), General Electric (GE), Ingersoll Rand (IR) and Dover (DOV).Total industrial production fell 1.8% in January, following a decline of 2.4% in December and a 1.2% decline in November. It is now down 10.0% on a year-over-year basis. If one only looks at manufacturing output, the picture is even worse, with a 2.5% monthly decline following declines of 2.9% and 2.2% in December and November, respectively.On a year-over-year basis, manufacturing output is down 12.9%. Colder-than-normal weather has been propping up the output of Utilities, where production rose 2.7% in January, following a 0.2% decline in December and a 2.0% increase in November.Capacity Utilization also fell sharply in January, down to 72.0% from 73.3% in December for the overall index. A year ago, the country's factories, power plants and mines were working at ...

Highlights include Emerson Electric (EMR), General Electric (GE) and 3M (MMM).Two things were clear last night -- first is that Obama has a solid grasp of economics. The second is that he understands just how serious the problem is, even if he is erring a bit on the optimistic side. Hey, that is understandable given his position that he would not want to totally spook the markets.It's a fine line between being truthful about the situation we are in and inducing panic. The watered-down stimulus bill had already cleared the Senate; hopefully it can be improved in the conference committee and still retain enough Senate votes to overcome the opposition's obstructionism.There is clearly a tension between the need to get it done fast as the economy continues to swirl around the bowl, and the need to get the package right. ...

Nucor (NYSE: NUE) & The Golden Dividend Ratio

There has been a lot of talk about value traps recently. With dozens of companies slashing or halting their dividends, many income investors have seen a “double whammy” of lower portfolio values and lower revenues.

And while it’s real easy to find losers, the dividend winners are much harder to find.

Seven that Money Magazine looked at include 3M (NYSE: MMM), Johnson & Johnson (NYSE: JNJ), PepsiCo (NYSE: PEP), Emerson Electric (NYSE: EMR), Nucor (NYSE: NUE), Dover (NYSE: DOV) and Clorox (NYSE: CLX).

These dividend stocks all have something interesting in common - in addition to the fact they’re each raised dividends for at least 25 years. It’s their yield.

The yields on these companies range from 3.1% to 3.8%. Consider it the “golden ratio” of dividends.

...