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Using Put Options: How to Grab Discounts and Instant Money Everyday

Investment U — Wed, 25 Nov 2009 16:20:23 +0000

Using Put Options: How to Grab Discounts and Instant Money Everyday by Lee Lowell, Stock and Commodity Option Specialist Wednesday, November 25, 2009: Issue #1145 Forget Black Friday. The stock market has 3,000 items on sale – and ready to give you cash back… instantly. Over the past few weeks, I’ve discussed how you could have sold [...]

Using Put Options: How to Grab Discounts and Instant Money Everyday

Investment U — Wed, 25 Nov 2009 16:20:23 +0000

Fed Gives Clear Message – Analyst Blog

Dirk Van Dijk — Wed, 25 Nov 2009 13:44:59 +0000

The minutes of the Federal Reserve meeting of November 3rd and 4th were released yesterday. The clear message of the minutes is that short-term rates are going to stay very low for a long time to come. Below is the summary of the participants' view of the economy, and my translation/commentary/analysis of it interspersed.

"In the meeting participants’ discussion of the economic situation and outlook, they agreed that the incoming data and information received from business contacts suggested that economic activity was picking up as anticipated, with output continuing to expand in the fourth quarter."

I agree that we will see positive economic growth in the fourth quarter -- perhaps not very robust growth, but it will be comfortably on the right side of zero.

"A number of factors were expected to support near-term growth: Business inventories were being brought into better alignment with sales, and the pace of inventory runoff was slowing; activity in the housing sector appeared to be turning up, and house prices seemed to be leveling out or beginning to rise by some measures; consumer spending appeared to be rising even apart from the effects of fiscal incentives to purchase autos; the outlook for growth abroad had improved since earlier in the year, auguring well for U.S. exports; and U.S. and global financial market conditions, while roughly unchanged over the intermeeting period, were substantially better than earlier in the year."

Changes in inventories were a substantial drag on growth in the fourth quarter of last year through the second quarter, but that started to turn around in the third quarter. In fact, except for the drawdown in inventories, economic growth would have been a positive 0.7% in the second quarter, rather than the negative 0.7% we saw. In the third quarter, rebuilding of inventories added 0.87 points of the 2.80 total growth. In other words, if inventories had remained unchanged, growth would have been less than 2.0%.

As for consumer spending, the rebound has been muted outside of autos, although it is up rather than down. Over the long term I’m not sure that's such a good thing, but for the time being we need the consumer to wake up.

The U.S. is not going to be leading the world out of this downturn, China is. However, economic growth is not a zero-sum game, and if places like China are growing, that is good for the U.S. economy. Even though the dollar has not changed relative to the Yuan, the falling dollar will still help our exports, since we are often competing against the Europeans and the Japanese when we sell into places like China. A week dollar makes Boeing (BA) more competitive versus Airbus, and General Electric (GE) well positioned relative to Siemens (SI).

"Above-trend output growth in the third quarter was a welcome development. Moreover, the upturn in real GDP appeared to reflect stronger final demand and not just a slower pace of inventory decumulation.

"While these developments were positive, participants noted that it was not clear how much of the recent firming in final demand reflected the effects of temporary fiscal programs to support the auto and housing sectors, and some participants expressed concerns about the ability of the economy to generate a self-sustaining recovery without government support."

Well, we learned yesterday that the output growth in the third quarter was closer to trend than above trend, but the Fed did not have that data at the time of the meeting. I share the concern about the ability of the economy to generate a self-sustaining recovery. We still need the training wheels. Without the stimulus, the economy would probably still be headed south.

"Nonetheless, participants expected the recovery to continue in subsequent quarters, although at a pace that would be rather slow relative to historical experience, particularly the robust recoveries that followed previous steep downturns. Such a modest pace of expansion would imply only slow improvement in the labor market next year, with unemployment remaining high. Indeed, participants noted that business contacts continued to report plans to be cautious in hiring and capital spending even as demand for their products increased."

The Fed members are masters of understatement. Normally when you have a sharp and deep recession, you have a big snap back. It is not unusual to see at least one quarter where growth exceeds 6% coming out of a recession. I see very little chance of that happening this time around. If we can sustain growth rates like we saw in the second quarter of 2.8% for all of 2010, I would count that as a major victory.

Coming out of previous recessions, the consumer was a much smaller part of the economy, and had room to expand. I don’t see that as the case this time, with the consumer at a record 71% of the economy. The savings rate was also much higher coming out of previous recessions,and had room to fall -- not true this time around. Business investment actually continued to fall in the third quarter, even as the rest of the economy was growing, mostly due to a 15.1% plunge in spending on non-residential structures. That alone shaved 0.55 points from economic growth.

Spending on Equipment and Software did pick up a little bit (up 2.3% in 3Q, adding 0.15 points to growth), and the software side of that could be helped by the new Windows operating system from Microsoft (MSFT).

"Nonetheless, economic growth was expected to strengthen during the next two years as housing construction continued to rise and financial conditions improved further, leading to more-substantial increases in resource utilization in product and labor markets."

Yes, housing will probably see some rebound, since it is near a record low share of the economy (set in the second quarter). However, we have too many housing units in the country, so it does not make a lot of sense to be building more of them. We need to see more household formation.

That means we need more jobs -- jobs that will get recent college graduates out of their parents' basements and into houses or apartments of their own. Jobs that will allow people who are now living on their friends' couches to get their own places. That presents a bit of a chicken-and-the-egg problem, since historically housing is one of the key areas lifting us out of recessions.

"Most participants now viewed the risks to their growth forecasts as being roughly balanced rather than tilted to the downside, but uncertainty surrounding these forecasts was still viewed as quite elevated. Downside risks to growth included the continued weakness in the labor market and its implications for income growth and consumer confidence, as well as the potential for credit availability to remain relatively tight for consumers and some businesses."

I still see the risks as being tilted to the downside, mostly for the factors that the Fed cites here.

"In this regard, some participants noted the difficulty that smaller, bank-dependent firms were having in securing financing. The CRE sector was also considered a downside risk to the forecast and a possible source of increased pressure on banks.

"On the other hand, consumer spending on items other than autos had been stronger than expected, which might be signaling more underlying momentum in the recovery and some chance that the step-up in spending would be sustained going forward. In addition, growth abroad had exceeded expectations for some time, potentially providing more support to U.S. exports and domestic growth than anticipated."

I suspect that with banks pulling in credit card lines, that the strength in consumer spending outside of autos (and autos was artificially helped by Cash for Clunkers) will prove to be ephemeral. I would also note that after the Fed meeting we got a downward revision to September retail sales and the October retail sales were decidedly mediocre.

I fully agree that the growth abroad is a major positive force for the U.S. economy. The weaker dollar will also be beneficial in that regard. However, the economy that seems to be leading the world out of this slump, China, seems most interested in importing basic materials. While there are many U.S. based firms that produce those materials, such as Freeport McMoRan (FCX), their actual operations are located mostly abroad, so the effect on the U.S. economy will be muted.

If, on the other hand, Chinese demand for steel leads to an increase in demand for iron ore from Vale (VALE) in Brazil, that might end up stimulating Brazilian demand for U.S. goods. So then, Chinese growth would have an effect on U.S. growth, even if some of it is indirect.

There is much more in the minutes, if you want to read them in their entirety, you can read them here.

Dirk van Dijk, CFA is the Chief Equity Strategist for Zacks.com. With more than 25 years investment experience, he has become a popular commentator appearing in the Wall Street Journal and on CNBC. Dirk is also the Editor in charge of the market-beating Zacks Strategic Investor service.
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Company News for November 24, 2009 – Corporate Summary

Zacks Market Commentaries — Tue, 24 Nov 2009 14:36:26 +0000

• Hewlett Packard (NYSE:HPQ) reported strong results after Monday's close, helped by robust sales in China and improved margins on its service operations. The firm also increased share repurchases to $12 billion and projected fiscal 2010 earnings of $4.25 to $4.35 a share on revenues of $118 billion to $119 billion, inline with its earnings' preannouncement two weeks earlier

• Analog Devices (NYSE:ADI) reported better-than-expected fiscal fourth quarter earnings of 36 cents a share, 10 cents above Zacks estimates, on revenues of $572 million, which beat projections of $523 million, but fell short of last year's $660.7 million. The firm expects fiscal first quarter results of 36 cents to 37 cents a share

• Heinz (NYSE:HNZ) reported fiscal second quarter earnings of 76 cents a share, beating estimates of 69 cents, on revenues of $2.67 billion, above estimates of $2.63 billion. Full-year guidance was raised to $2.72-$2.82 from earlier expectations of $2.60 to $2.70 a share

• Medtronic (NYSE:MDT) reported better-than-expected third quarter results of 77 cents ex-items, 3 cents above estimates, on revenues of $3.84 billion, which topped estimates of $3.75 billion. The company expects fiscal 2010 adjusted earnings of $3.17-$3.22, above Street projections of $3.15

• Reports said Citigroup (NYSE:C) is selling its Diners Club credit card enterprise to Bank of Montreal for about $1 billion

• UBS (NYSE:UBS) downgraded Union Pacific (NYSE:UNP) to "neutral" but maintained a $67 price target

• National Semiconductor (NYSE:NSM) was added to Citigroup's (NYSE:C) Top Picks Live List, with a $20 price target

• JP Morgan (NYSE:JPM) reiterated its "overweight" rating on General Electric (NYSE:GE) on improvements in fundamentals

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Stock Market News for November 24, 2009 – Market News

Zacks Market Commentaries — Tue, 24 Nov 2009 14:32:41 +0000

U.S. stocks closed broadly higher Monday, ending a three-day losing run, as a strong housing report reassured investors’ faith in the economy. A weak dollar helped lift gold to another record high and sent shares of commodity-related companies higher. Calls for central banks around the world to continue stimulus measures also hurt the dollar even as speculation grew that the Federal Reserve will keep interest rates at a record low.

On Monday, the 30-stock Dow Jones industrial average surged 132.79 points, or 1.29%, to 10,450.95. The broad Standard & Poor's 500-stock index rose 14.86 points, or 1.36%, at 1,106.24 and the tech-heavy Nasdaq composite index jumped 29.97 points, or 1.40%, to 2,176.01. Trading volume was light, with NYSE volume less than 1 billion shares, as advancing shares outran decliners by a four-to-one margin. Wall Street’s fear gauge, the CBOE Vix, plummeted 4.6% to 21.16.

Treasuries lost ground as investors’ risk appetite grew. A number of analyst upgrades also helped shares yesterday and after the close Hewlett-Packard (NYSE:HPQ) came out with strong numbers and also announced plans to triple its repurchase plan.

Among the DJIA components, all but two gained, led by Verizon (NYSE:VZ), up 3.0%, AT&T (NYSE:T), up 2.9%, General Electric (NYSE:GE), up 2.9%, and Chevron (NYSE:CVX), up 2.6%. A Barron's article suggested AT&T (NYSE:T) shares undervalued due to concerns its exclusive iPhone contract with Apple (NASDAQ:AAPL) might not be extended next year; Verizon (NYSE:VZ) shares jumped shot up on hopes the exclusivity agreement might not be extended. And Chevron (NYSE:CVX) shares gained from the dollar’s retreat.

All ten S&P 500 industry groups advanced, led by consumer services and telecommunications, both up 2.7%, oil and gas, up 1.6%, and industrial and tech shares, both up 1.5%.

Gold prices jumped to fresh highs yesterday, before giving up some ground to settle at $1164.70, up $17.90. Meanwhile, the greenback dropped 0.7% to 75.13 against a basket of currencies. This afternoon's FOMC meeting minutes will be scrutinised by investors for any evidence of a timing change for its asset purchase programs. Such considerations are also key to the trajectory for gold pricing, viewed as an inflation hedge.

Earnings reports are due from Barnes and Noble (NYSE:BKS), Borders (NYSE:BGP), Dollar Tree (NASDAQ:DLTR), Heinz (NYSE:HNZ) and Hormel (NYSE:HRL).

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Boeing Delivers First 777 Aircraft – Analyst Blog

Zacks Market Commentaries — Thu, 19 Nov 2009 14:40:00 +0000

Boeing Co. (BA) delivered its first 777-300ER (Extended Range) airplane to GE Capital Aviation Services and its lease customer Philippine Airlines. It is the first 777 in the fleet of Philippine Airlines. The aircraft was packed with relief supplies for victims of Typhoon Ketsana.

The airline has four more of this aircraft on order with Boeing. In the recently reported third quarter of fiscal 2009, the company booked 96 gross orders. The company finished the quarter with segmental backlog of $254 billion.

The Boeing 777-300ER is among the most efficient airplanes in the 300-to-400 seat segment, which would provide the airlines the flexibility to serve key markets worldwide while offering its passengers the highest levels of comfort and reliability. Additionally, the aircraft brings new twin-engine efficiency to the airline's long-haul fleet.

The aircraft is powered by General Electric GE90-115BLs, the world's largest and most powerful commercial jet engine. It has a cargo capacity of up to 7,120 cubic feet (201.6 cubic meters). The aircraft that was flown to Manila was packed with nearly 18,000 pounds of medical supplies and packaged meals that were obtained by three non-profit agencies, including AmeriCares, Humanitarian International Services Group and Kids Against Hunger.

Headquartered in Chicago, Boeing is the world’s largest manufacturer of commercial jet liners and military aerospace products (based on total sales). Boeing designs and produces commercial airplanes, defense systems, and civil and defense space systems. It is also the largest NASA contractor.

Non-airplane products include helicopters, electronic and defense systems, missiles, satellites, rocket engines, launch vehicles and advanced information and communication systems. We maintain our market Neutral recommendation on the shares.
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Producer Price Index Tame – Analyst Blog

Dirk Van Dijk — Tue, 17 Nov 2009 15:44:31 +0000

In September, the Producer Price Index rose by 0.3%. While this is an acceleration from the 0.6% decline in September, it is well below consensus expectations of a 0.5% increase.

All of the price pressures were coming from food and energy. If they are stripped out to get the Core Producer Price Index, prices fell by 0.6% for the month -- a much faster decline than the 0.1% decline last month, and even farther below the consensus expectations of a 0.1% increase for the month. Both food and energy rose by 1.6% at the finished level in September.

For energy, though, it was just a partial reversal of the 2.4% decline in September. In September, finished food prices fell only 0.1%. On a year-over-year basis, the total Producer Price Index is down 1.9%. However, last month the year-over-year decline was 4.8%. Thus on a year-over-year basis, the deflationary pressures are abating -- but just think about where we were a year ago!

The finished goods producer price index is the one that gets all the headlines. The core producer price index at the finished level also gets a fair amount of attention. However, the Bureau of Labor Statistics also provides data on what is happening further up the food chain, with data on intermediate and crude goods. To keep the three levels straight in your mind, think Wheat (crude), Flour (intermediate) and Bread (finished).

At those levels, there is some evidence of minor inflationary pressures, but again it is all driven by food and energy costs. At the intermediate level, prices rose 0.3% following a 0.2% increase in September. On a year-over-year basis, prices are down 7.5% at the intermediate level. The huge price declines of a year ago are rolling off.

In September, the year-over-year decline in the intermediate producer price index was 11.7%. Intermediate food prices were down 0.2%, following a 0.5% decline in September. Energy prices rose by 2.3% at the intermediate level -- more than reversing a 2.1% decline in September. Core prices at the intermediate level dropped by 0.2%, following a 0.9% increase in September. Keep in mind price swings tend to be more extreme at the intermediate level than they are at the finished goods level.

Far more extreme, though, are the swings in the crude level producer price index. After all, there is another name for crude goods -- commodities. Overall crude goods rose by 5.4% in October, more than making up for the 2.1% decline in September. Over the last year, prices for crude goods have dropped by 14.1%.

The bulk of that decline, however, came last year as the price of all commodities absolutely collapsed. In October of last year, the crude goods index plunged 16.1% and it was followed by a further 13.1% decline in November. Those will roll off soon, so the year-over-year numbers are going to show much smaller declines. Core crude prices rose by 0.5% in October, on top of a 0.5% rise in September. Crude energy prices rose by 8.3% -- more than offsetting a 5.4% decline in September. Similarly, crude food prices were up 5.2% for the month after having fallen by 1.9% in September.

This report shows that aside from food, and especially energy, there is no real inflation pressure in the economic system. Even looking far up the production chain, price pressures for core goods are very moderate. Thus the Fed should continue to hold down interest rates and be as accommodative as possible. After all, the Fed has two mandates -- price stability and full employment.

With core producer prices falling for two months in a row, and in four of the last six months, price stability would argue for MORE inflation, since we are facing deflation. Yes, the deflationary pressures are less than a year old, but year-over-year declines -- even throwing in food and energy prices of 1.9% -- are a far cry from Weimar Germany, or even the U.S. experience of the 1970’s.

The enemy right now is unemployment, not inflation. It also means that people should just shut the heck up about the decline of the dollar and stop treating it like it's some type of disaster. Yeah, it is sort of bad that a ski trip vacation to Davos, Switzerland will cost a lot more, but hey, maybe it will cause some folks to decide to ski Aspen, instead. Perhaps a few Europeans or Japanese will decide to come vacation in the U.S. since with the low dollar, vacations here are very cheap for them. That would actually create a few jobs in restaurants and hotels here.

More importantly, perhaps companies will decide to buy products made by General Electric (GE) instead of the competing products made by Siemens (SI). We might just start to shrink the yawning trade deficit that is an absolute cancer on the economy.

Talk of the Fed tightening is probably premature by at least a year. Yes, a weaker dollar will mean higher prices for internationally traded goods, most importantly for oil. That, however, would help stimulate more drilling activity, greatly helping the bottom lines for companies like Pride International (PDE) and making the existing reserves of companies like Anadarko (APC) much more valuable. It might just help keep demand for oil down, and accelerate the shift to alternative energy sources, such as wind and solar.

Don’t overlook natural gas as a potential alternative energy source, since we have vast supplies of it here in North America. That would be good news for firms like EnCana (ECA). Yeah, nobody really wants to pay more at the pump, but with other price pressures being kept well at bay, we can afford it -- especially if it leads to more jobs.

Look for the gap between headline and core producer prices to continue to widen, but overall, price pressures are very well contained. This gives the Fed free reign to keep interest rates at extraordinarily low levels for a very extended period of time. And not doing so would be extremely irresponsible.
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QuoteMedia Reports Third Quarter Results

Stuart T. Smith — Fri, 13 Nov 2009 15:06:44 +0000

Nov. 13, 2009 (Business Wire) — QuoteMedia, Inc. (OTCBB: QMCI), a leading provider of market data and financial applications, announced financial results for the three and nine months ended September 30, 2009. These results reflect a 1% increase in third quarter revenue, to $1,910,884 from $1,888,279 in the comparative period in 2008. Revenue for the [...]

The best sector for your money right now

Andrew Snyder — Wed, 11 Nov 2009 15:54:04 +0000

pBaltimore (a href="http://www.todaysfinancialnews.com" target="_blank"TFN/a): I cannot say with total certainty that duct tape has ever saved my life. But I can say it has saved the day on more than one occasion, like the time I fell feet first into a frigid river, roaring with the power of Alaska’s springtime snowmelt./p pIn the woods, you have to dry off fast or risk any number of calamities. Living in temperate rainforest, an emergency fire was a challenge. But thanks to duct tape’s inherent desire to burn, I was re-warmed in no time. /p pBut my mundane story has got nothing on the bush pilot that returned to his Piper Cub (the plane, not one of Palin’s kids) to find a pissed off grizzly had utterly#8230;/p

Company News for November 11, 2009 – Corporate Summary

Zacks Market Commentaries — Wed, 11 Nov 2009 13:50:13 +0000

• Goldman Sachs (NYSE:GS) added Cytec Industries (NYSE:CYT) to its Conviction Sell List, with a target of $31. The analyst warned of the bleak outlook for the late-cycle aerospace industry, and economic uncertainties in Europe, which represents 40% of sales

• JP Morgan (NYSE:JPM) plans to reinstate 401K matching programs starting with 2009 as well as plans to hire 1,200 mortgage officers

• Yahoo (NASDAQ:YHOO) CEO Bartz said the company is hiring again as the firm expects to increase its operating profit margin to the 15-20% range on cost cutting and sales growth

• Adobe Systems (NASDAQ:ADBE) said it plans to cut 680 jobs, or about 9% of its workforce, as part of a restructuring plan. The company said the move would result in pre-tax charges of $65 million to $71 million, with $18 million to $20 million to be taken in the fourth quarter

• Monsanto (NYSE:MON) confirmed its full-year 2010 earnings outlook and said it still sees a 2012 gross profit of at least $8.6 billion, claiming an accelerated launch of new corn and soybean products

• Bond insurer, Ambac Financial Group (NYSE:ABK) warned of a possible bankruptcy protection filing in its 10-Q

• Reports said General Electric (NYSE:GE) is in talks with United Technologies (NYSE:UTX) to sell its security systems unit for over $1.5 billion

• Wells Fargo (NYSE:WFC) upgraded Toll Brothers (NYSE:TOL) with a price target range of $24-$26

• Deutsche Bank (NYSE:DB) upgraded Smithfield Foods (NYSE:SFD) raising the price target from $12 to $20 due to an improving pork market

• Flowers Foods (NYSE:FLO) reported inline earnings of 34 cents a share on revenues of $603 million, off Zacks estimates of $617 million

Zacks Investment Research

Stock Market News for November 10, 2009 – Market News

Zacks Market Commentaries — Tue, 10 Nov 2009 14:27:11 +0000

U.S. stocks surged Monday, with the Dow Jones industrial average storming to its highest level in more than 13 months as finance ministers from the Group of 20 industrialized nations pledged to continue economic stimulus measures to help the global economy.

The Dow Jones industrial average, which was well supported by strength in its all but one component, rose 203 points, or 2.0%, to a 13-month high of 10,227. The S&P500 climbed 2.2% for its sixth straight session gain to 1093 and the tech-heavy NASDAQ gained 2.0% to close at 2154. The market’s measure of volatility, the CBOE Vix, plunged 4.3% to 23.15.

All ten S&P500 industry groups ended in the green, led by gains in basic material shares (+3.5%) and financials (+3.5%). Crude prices added $2.00 to close at $79.43 even as Hurricane Ida was downgraded to a tropical storm. Gold prices went past the $1100 level, up $5.70 to $1101.40, as the metal shined brightly on its inflation hedge appeal. At the same time, greenback took a beating on such concerns, declining 1.0% against a basket of currencies, to a 15-month intraday low of 75.04. Shares of Freeport-McMoRan (NYSE:FCX) advanced 4.6%; Rio Tinto (NYSE:RTP) surged 5.9%.

A weak dollar helped shares of companies with large exposure to overseas markets. Caterpillar (NYSE:CAT) jumped 4.2%, DuPont (NYSE:DD) gained 3.7%, Boeing (NYSE:BA) rose 3.4%, and General Electric (NYSE:GE) added 3.4%.

Financials rose 3.5% with American Express (NYSE:AXP) jumping 4.9%, Bank of America (NYSE:BAC) up 4.8%, Discover Financial Services (NYSE:DFS) up 5.9% and Capital One Financial (NYSE:COF) up 5.6%. The Fed noted that of the ten bank holding companies that underwent US government’s stress tests only GMAC has raised its capital reserves sufficiently to meet the economic risks of higher unemployment and slowing growth. On Thursday, the FDIC meets to address the negative implications of an accounting rule change requiring credit-card firms to bring back on to their books card loans that are bundled into securities and sold to investors.

While the economic calendar remains light and corporate earnings schedule slim, Fed speak schedule is heavy, with Atlanta Fed President Lockhart slated to take the stage at 9:15 ET; San Francisco President Yellen at 10:15. Boston Fed President Rosengren is due to speak at 4:15, Dallas Fed President Fisher at 7:30 and Fed Governor Tarullo at 8:30. Senate Banking Committee Chairman Christopher Dodd is expected to release a draft of the bill on financial regulatory reform.

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Company News for November 9, 2009 – Corporate Summary

Zacks Market Commentaries — Mon, 09 Nov 2009 14:10:58 +0000

• Kraft (NYSE:KFT) is due to formalize its Cadbury (NYSE:CBY) bid for about $16.7 billion as the deadline for an offer hits

• Northrop Grumman (NYSE:NOC) announced it is selling its TASC consulting operations to two private equity firms for $1.65 billion

• About $30 billion was the agreed-to valuation which General Electric (NYSE:GE) and Comcast (NASDAQ:CMCSA) placed on the joint venture between NBC Universal and Comcast

• Goldman Sachs (NYSE:GS) upgraded Adobe Systems (NASDAQ:ADBE) to "buy," and lifted its price target to $42

• Goldman Sachs (NYSE:GS) added Lexmark (NYSE:LXK) to its Conviction Sell list

• KBW upgraded Blackstone Group (NYSE:BX) shares to "outperform" with a price target of $18.50

• Windstream (NYSE:WIN) reported third-quarter earnings of 24 cents a share, two cents over Zacks estimates, on revenues of $734 million, below Zacks estimates of $747 million

• DISH Network (NASDAQ:DISH) reported third-quarter earnings of 18 cents, 25 cents under Zacks estimates, on revenues of $2.89 billion, which missed Zacks estimates of $2.93 billion

Zacks Investment Research

Stock Market News for November 9, 2009 – Market News

Zacks Market Commentaries — Mon, 09 Nov 2009 14:07:48 +0000

U.S. stocks posted modest gains Friday even as a surprisingly weak jobs report failed to deter investors from taking a broader view that the economy is improving. Analysts’ upgrade of General Electric and Amazon.com helped the market keep its head above water as many on the Street averred the worst for the labor market was over. Although the unemployment rate – at its highest level in 26 years – aggravated concerns about consumer spending, it nevertheless reassured some investors that the Federal Reserve will keep interest rates near historically low levels in the near future.

On Friday, the Dow Jones industrial average rose 17.46 points, or 0.2%, to 10,023.42 and the Standard & Poor's 500 index added 2.67 points, or 0.3%, to 1,069.30. The Nasdaq composite index advanced 7.12 points, or 0.3%, to 2,112.44. For the week, the Dow and the S&P 500 index advanced 3.2%, while the Nasdaq rose 3.3%.

On the New York Stock Exchange, 1.1 billion shares exchanged hands Friday as advancing shares narrowly edged ahead of those that declined in price. Surprisingly, as investors' apprehension in front of the key economic and earnings data grew, the CBOE volatility index declined over 20%, closing at 24.19 on Friday.

Analyst upgrades helped a number of stocks Friday. Analysts at Bernstein raised their ratings on both General Electric (NYSE:GE) and Amazon.com Inc. (NASDAQ:AMZN) to “outperform," sending shares in those companies up 6.2% and 4.6%, respectively, and helping give major averages a lift. General Electric, which also received a rating upgrade from Oppenheimer, was the leading gainer in the Dow average as analysts saw reduced risks to its finance unit. Lowe’s Cos (NYSE:LOW) jumped 4.3% and Home Depot (NYSE:HD) added 1.8% after analysts at Bank of America Corp. (NYSE:BAC) raised the two companies to “buy" from “underperform."

The coming week, though devoid of any substantial economic event, does contain a number of corporate posts that are likely to give an indication about the health of the consumer as markets enter the key holiday season. Disney (NYSE:DIS) and Wal-Mart (NYSE:WMT) report their numbers on Thursday. Wal-Mart (NYSE:WMT), which has not been posting monthly comparable sales reports, will be watched closely for how the retailer fared during the third quarter. Kohl's (NYSE:KSS) also reports on Thursday, with Macy's (NYSE:M) numbers expected on Wednesday and JC Penney's (NYSE:JCP) on Friday. Most analysts expect favorable results, as shoppers remain on a bargain hunting spree. Setting the fire to the latest advance in stocks was the estimate-topping numbers from 80% of the S&P500 firms that have so far reported their numbers.

This morning’s futures suggest stocks are likely to open with gains of at least 1%. The healthcare package passed the House by the narrowest of margins, with much wrangling still expected before any decision is reached within the Senate. The G-20 meeting of Finance Ministers promised extended government stimulus measures. Meanwhile, the Moody's Investor Services (NYSE:MCO) upgraded its rating on China and Hong Kong to positive from stable.

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Company News for November 6, 2009 – Corporate Summary

Zacks Market Commentaries — Fri, 06 Nov 2009 14:26:14 +0000

• Starbucks (NASDAQ:SBUX) reported fourth quarter earnings of 24 cents a share, up from last year's 10 cents, above Zacks estimates of 21 cents, as revenues dropped 3.7% to $2.42 billion. The firm raised its 2010 guidance to 15-20% earnings growth from prior guidance of 13-18% growth

• Hyatt Hotels (NYSE:H) shares gained 12% on their NYSE debut. The company sold 38 million shares at $25 per share

• JP Morgan (NYSE:JPM) lifted its price target on Ford (NYSE:F)

• The smartphone marketplace will watch today's launch of Verizon's (NYSE:VZ) much-heralded new "Droid" launch, using Google's (NASDAQ:GOOG) Android operating system

• AIG (NYSE:AIG) reported third quarter earnings of $2.85 ex-items

• Bernstein upgraded General Electric (NYSE:GE) and Amazon.com (NASDAQ:AMZN) shares

• JP Morgan (NYSE:JPM) upgraded Macy's (NYSE:M) shares

• Deutsche Bank (NYSE:DB) upgraded Blue Nile (NASDAQ:NILE) shares, lifting the price target from $30 to $50

Zacks Investment Research

VIASPACE, Inc. (VSPC.OB) – The Fuel Cell Comes Down To Earth

QualityStocks — Wed, 04 Nov 2009 13:36:53 +0000

There was a time when the term “fuel cell” was linked almost exclusively with America’s space program. The fuel cells in space used hydrogen and oxygen to generate electricity for manned spacecraft, with the side benefit of producing drinking water. Few people will forget the near loss of Apollo 13 when a short circuit ignited [...]

Newport Digital Technologies, Inc. (NPDT.OB) – The New Age of Partnerships

QualityStocks — Thu, 29 Oct 2009 14:07:34 +0000

The driving philosophy of corporate America used to be based on the principle of in-house development. If it wasn’t made in-house, companies simply weren’t interested. Companies wanted things over which they had full control, and from which they could enjoy 100% of the profits. Total independence. Total control. If a good idea came along that [...]

QuoteMedia, Inc. Ranked Amongst Fastest Growing Companies in North America on Deloitte’s 2009 Technology Fast 500TM

Stuart T. Smith — Tue, 20 Oct 2009 23:33:44 +0000

Attributes Focus on Product Excellence for 620 Percent Revenue Growth Oct. 20, 2009 (Business Wire) — QuoteMedia, Inc. (OTCBB: QMCI), a leading provider of market data, corporate research information and financial applications, announced today that it ranked 219th on Technology Fast 500(TM), Deloitte LLP’s ranking of 500 of the fastest growing technology, media, telecommunications, life sciences [...]

Stock Market News for October 20, 2009 – Market News

Zacks Market Commentaries — Tue, 20 Oct 2009 14:25:52 +0000

With buyers back in action, US stocks rose to their fresh one-year highs and remained near their high points as optimism grew that an economic recovery, helped by solid third-quarter earnings reports and increased M&A activity, is on cards.

The Dow Jones industrial average rose 96.28 points, or 0.96%, to close at 10,092.19. The broader S&P 500 index jumped 10.23 points, or 0.94%, to 1,097.91 and the tech-heavy Nasdaq climbed 19.52 points, or 0.91%, to 2,176.32, its highest point since September 26, 2008. Market breadth was positive, with advancing shares ahead of decliners by a margin of three-to-one. Only five of the DJIA thirty declined in price.

After the close, iPhone maker Apple Inc. (NASDAQ:AAPL) and Texas Instruments (NYSE:TXN) reported better-than-estimated numbers, fuelling hopes for the technology industry. Last week Google Inc. (NASDAQ:GOOG) and Intel Corp’s (NASDAQ:INTC) numbers had come in above expectations.

Although there were some jitters last week after some major banks reported higher loan losses during the quarter, expectations that companies across a broad range of industries would report numbers above projections kept the momentum going. Nevertheless, companies could find it relatively easy to beat analyst’s lowered bars of expectations and then turn in splendid performance in the future quarters as the economy moves into a recovery mode.

This week is likely to be decisive with 13 of the Dow 30 and more than 130 of the S&P 500 slated to report their results. The numbers could well be the fodder for the next rally – or a downward spiral – even as a call for a 10-15% correction has gone unmet. This morning's lengthy list of key corporate results, however, continues to surprise on the upside, adding fuel to the rally's fire.

On Monday, the S&P 500 broke above the 1100 mark before retreating a little to settle at 1097, its highest close since October 2, 2008. All ten industry sectors rose, led by gains in basic materials (+1.7%), utilities (+1.4%), oil and gas (+1.2%) and consumer services (+1.2%).

Caterpillar (NYSE:CAT), due to report its earnings today, led the gainers with a 6% jump as analysts upgraded shares of Bank of America (NYSE:BAC) and RBC Capital that took price targets on the stock to $65 per share. American Express (NYSE:AXP), due to report after the close Thursday, climbed 2.3% after FBR lifted its price target on the firm to $37 from $25. On the downside, General Electric (NYSE:GE) shares fell 1.5% as questions continued regarding the price of the 20% stake Vivendi owns in NBC Universal.

Today's market action will be interesting to watch to find how the better-than-expected results from Apple (NASDAQ:AAPL) and Texas Instruments (NYSE:TXN) are seen by the broader indices. Both companies posted strong results, beating top and bottom line expectations. Apple (NASDAQ:AAPL) said results were helped by record quarterly sales of Macintosh computers and iPhones, permitting earnings of $1.82 on strong sales of $9.87 billion. The shares hit an all-time high of $204. TI (NYSE:TXN) also bettered projections, reporting strong demand across all business segments. The company reported earnings of 42 cents a share, ahead of estimates of 39 cents, as revenues of $2.88 billion beat estimates of $2.82 billion, and presented a sequential quarterly gain of 17%.

Today’s list includes Coca-Cola (NYSE:KO), SanDisk (NASDAQ:SNDK), Caterpillar (NYSE:CAT), DuPont (NYSE:DD), Pfizer (NYSE:PFE), Untied Technologies (NYSE:UTX), Yahoo (NASDAQ:YHOO), State Street (NYSE:STT), and Bank of New York Mellon (NYSE:BK).

Zacks Investment Research

Stock Market News for October 19, 2009 – Market News

Zacks Market Commentaries — Mon, 19 Oct 2009 14:15:35 +0000

A bit of selling pressure sent major averages lower at the end of an otherwise upbeat week on Wall Street as Bank of America and General Electric’s numbers disappointed investors. The Dow Jones industrial average, after closing above the 10,000 mark for two successive sessions, finished just below that level. Despite the drop, stocks managed to post impressive gains on the week even as investors grew jittery about credit losses in the financial sector.

Bank of America (NYSE:BAC) said it lost $2.2 billion during the quarter after it wrote down almost $10 billion in bad loans and General Electric’s (NYSE:GE) revenue numbers were below Street projections. Higher loan losses aggravated investors’ concerns as Citigroup (NYSE:C) and JP Morgan (NYSE:JPM) had also reported higher loan losses during the quarter. General Electric’s (NYSE:GE) results were impacted by lower earnings at its GE Capital unit.

The 30-share Dow Jones industrial average fell 67.03 points, or 0.67%, to close at 9,995.91. The broad Standard & Poor's 500-stock index retreated 8.88 points, or 0.81%, at 1,087.68. The tech-heavy Nasdaq composite index lost 16.49 points, or 0.76%, to 2,156.80.

Last week only 61 of the S&P500 released results, too early to signal trends, although the results were mainly above projections. This week hundreds of companies report their earnings, and that could signal where the economy is headed in the times to come. So far most earnings reports have beaten expectations.

Although nine of the ten S&P 500 industry sectors dropped Friday, on the week eight of the ten sectors managed gains. Financials dropped 2.4% Friday, and ended off 0.2% for the week. Oil and gas shares were the leading gainers during the week, up 5%, for a 20.2% year-to-date increase, as crude prices continued their advance, rising 95 cents Friday to $78.53 per barrel. Crude prices have been rising on promising economic signs as well as the dollar's decline. This morning China announced that its economy grew at a rate of more than 7% during the first nine months of the year and said it was comfortably placed to achieve its full-year target of an 8% GDP growth. The greenback rose slightly Friday from a 14-month low.

This week 75 S&P500 firms are due to report their earnings, including today's results from Apple (NASDAQ:AAPL) and Texas Instruments (NYSE:TXN) after the close. On Tuesday results are due from: Caterpillar (NYSE:CAT), Coca-Cola (NYSE:KO), DuPont (NYSE:DD), Pfizer (NYSE:PFE) and United Technologies (NYSE:UTX). On Wednesday: Boeing (NYSE:BA), Freeport-McMoRan (NYSE:FCX), Morgan Stanley (NYSE:MS) and Wells Fargo (NYSE:WFC). On Thursday: 3M (NYSE:MMM), AT&T (NYSE:T), Credit Suisse (NYSE:CS), Dow Chemical (NYSE:DOW), McDonald's (NYSE:MCD), Merck (NYSE:MRK), and Travelers Cos (NYSE:TRV). Microsoft (NASDAQ:MSFT) reports its numbers on Friday.

Zacks Investment Research

Company News for October 16, 2009 – Corporate Summary

Zacks Market Commentaries — Fri, 16 Oct 2009 14:08:28 +0000

• Bank of America (NYSE:BAC) reported a higher-than-estimated third-quarter loss, with a loss of 26 cents as revenue of $26.04 billion missed Zacks estimates of $27.61 billion. The firm added $2.1 billion to credit loss reserves

• General Electric (NYSE:GE) reported third-quarter earnings of 27 cents a share ex-items, 7 cents above Zacks estimates, on revenues of $37.8 billion, a 20% drop which missed
estimates of $39.78 billion. CEO Jeff Immelt noted, "While it remains a tough environment for GE Capital, we are seeing signs of stabilization. Every segment at GE Capital was profitable with the exception of Real Estate, which is experiencing a tough environment but where we believe the risks are well understood and manageable"

• First Horizon National (NYSE:FHN) reported a third-quarter loss of 24 cents a share, versus Zacks estimates of a 34 cent loss, on revenues of $495 million

• Halliburton (NYSE:HAL) reported a third-quarter profit of 31 cents a share, a nickel above Zacks estimates, versus 76 cents a year ago

• Mattel (NYSE:MAT) reported third quarter earnings of 63 cents a share, a cent below Zacks estimates, versus 66 cents a year earlier on revenues of $1.79 billion. According to the firm, "As expected, revenues continue to be challenging this year due to the overall economic environment, retailers tightly managing inventory, foreign exchange rates and the lack of entertainment-inspired toy lines"

Zacks Investment Research

Stock Market News for October 16, 2009 – Market News

Zacks Market Commentaries — Fri, 16 Oct 2009 14:06:13 +0000

U.S. stocks stayed above the threshold reached yesterday as a late-session buying helped offset weakness in banking and technology shares. Financials dragged on stocks through the early afternoon even as Goldman Sachs and Citigroup reported better-than-expected profit reports. However, the final fifteen minutes witnessed much of the activity as higher oil prices sent energy stocks higher and, in turn, helped the broader market.

The Dow Jones industrial average closed above the 10,000 level for the second-successive day, edging up 47 points, or 0.5%. The S&P 500 index edged up 4 points, or 0.4% and the tech-heavy Nasdaq composite ended the day virtually flat. The gains in the Dow average were led by Microsoft (NASDAQ:MSFT) whose shares jumped 2.9%. The Windows 7 is slated for release on October 22.

Among energy stocks, Chevron (NYSE:CVX) and ExxonMobil (NYSE:XOM) shares climbed 1.6% and 1.5%, respectively, as crude prices jumped to their highest levels of the year. Meanwhile, the US Department of Energy said gasoline stockpiles fell 5.2 million barrels per day last week, well below expectations of 700,000 decline.

Pfizer (NYSE:PFE) rose 1.7% after it completed its acquisition of Wyeth.

Nevertheless, weakness in financial sector shares, off 0.6%, hurt sentiment even as Goldman Sachs (NYSE:GS) reported estimate-topping numbers. Citigroup's (NYSE:C) strong trading returns were overcome by increasing consumer loan losses. Citi's (NYSE:C) CEO Vikram Pandit warned, "US consumer credit remains the number one issue affecting our near-term results." JP Morgan (NYSE:JPM) CEO Jamie Dimon warned that level of loan losses are likely to remain high.

Tech shares also failed to advance, even as IBM (NYSE:IBM) raised its earnings outlook and reported numbers that were above Street projections. Advanced Micro Devices' (NYSE:AMD) narrower-than-expected loss and the return of its core chip-making operations to profitability failed to lift sentiments either. However, Google's (NASDAQ:GOOG) better-than-expected results were helped by return to sequential quarterly growth, a 5% increase in average cost-per-clicks over the second quarter, and a positive impact from the declining dollar. Shares in Google (NASDAQ:GOOG) rose 3.6% in after-hours trading as CEO Eric Schmidt noted, "While there are a lot of uncertainties about the pace of [the] economic recovery, we believe the worst of the recession is behind us and now feel confident about investing heavily in our future."

Today's expected results include a number of significant results from companies such as Bank of America (NYSE:BAC), Genuine Parts (NYSE:GPC), General Electric (NYSE:GE), and Mattel (NYSE:MAT). Also reporting are: Halliburton (NYSE:HAL) and First Horizon National (NYSE:FHN).

Zacks Investment Research

Stock Market News for October 12, 2009 – Market News

Zacks Market Commentaries — Mon, 12 Oct 2009 13:57:05 +0000

U.S. stocks ended modestly higher Friday, wounding up a week of solid gains as investors braced for the third-quarter financial results. Sentiments also got a boost after Federal Reserve Chairman Ben Bernanke indicated that the central bank will be ready to tighten monetary policy once the economy improves. Bernanke’s tightening comments helped the dollar regain some lost ground. Bond prices fell sharply.

After a two-week selloff, fueled in part by concerns that the seven-month old rally had gotten ahead of any economic recovery, stocks got a boost last week following better-than-estimated economic numbers and Alcoa’s (NYSE:AA) surprise quarterly profit. That helped investors set aside worries and extend the rally. Meanwhile, White House economic adviser Lawrence Summers reiterated the Obama administration’s commitment to a strong dollar, citing recent comments by U.S. Treasury Secretary Timothy Geithner.

This morning’s stock futures show markets are headed for a higher opening as the busy week of earnings commences. Ahead of the market's open, Dow Jones industrial average futures are up 59 points, or 0.6%, to 9,866. Standard & Poor's 500 index futures gained 7.30 points, or 0.7%, to 1,075.40, while Nasdaq 100 index futures rose 11 points, or 0.6%, to 1,736.50.

On Friday, the Dow Jones industrial average rose 78 points, or 0.8%, to 9,864.94 -- its highest closing level in a year. The S&P 500 index gained 6 points, or 0.6%, to 1,071.49 and the Nasdaq climbed 15 points, or 0.7%, to 2,139.28. On the New York Stock Exchange, advancing issues beat those that declined in price by a three-to-two margin. For the week, the DJIA rose 4% and the S&P 500 index gained 4.5% - their best performance since July. The Nasdaq advanced 4.5% during the week.

Last week's rally saw all but one of the S&P500 industry sector recording gains. Only telecommunications shares failed to advance, and fell 5.9%, following AT&T's (NYSE:T) announcement that it plans to allow internet-based phone calls on phones including Apple's (NASDAQ:AAPL) iPhones. The gains last week were led by basic materials (+8.4%), oil and gas (+7.6%), financials (+6.3%), industrials (+5.0%), tech (+4.9%), consumer services (+4.5%), consumer goods as well as utilities (+2.9%), and health care (+2.7%). Financials rose after a Goldman Sachs (NYSE:GS) report recommended large-cap banks. Gains in industrial shares were helped by last week’s fall in dollar and Caterpillar's (NYSE:CAT) announcement that it plans to hike prices globally in 2010. Retail shares rose after firms reported better-than-expected comparable monthly sales numbers.

This week sees the release of the first big batch of third-quarter earnings. Companies reporting their numbers include Johnson & Johnson (NYSE:JNJ), Intel (NASDAQ:INTC), JP Morgan (NYSE:JPM), Citigroup (NYSE:C), Goldman Sachs (NYSE:GS), Nokia (NYSE:NOK), Google (NASDAQ:GOOG), IBM (NYSE:IBM), Bank of America (NYSE:BAC), and General Electric (NYSE:GE).

Zacks Investment Research

Company News for October 1, 2009 – Corporate Summary

Zacks Market Commentaries — Thu, 01 Oct 2009 14:39:49 +0000

• Alcoa (NYSE:AA) was upgraded to "buy" from "hold" by Deutsche Bank (NYSE:DB) due to a "more optimistic view of base, bulk and precious metals over the medium-term"

• After yesterday's close, Bank of America (NYSE:BAC) CEO, Ken Lewis, announced plans to retire. The bank also reported plans to sell its asset-management unit to Ameriprise (NYSE:AMP) for between $900 and $1.2 billion

• Goldman Sachs (NYSE:GS) received two brokerage upgrades

• Comcast (NASDAQ:CMCSA) denied reports of talks with General Electric (NYSE:GE) over the purchase of a stake in NBC Universal

• Cisco Systems (NASDAQ:CSCO) initiated a $3 billion cash offer for Norwegian video-conferencing firm Tandberg

• Microsoft (NASDAQ:MSFT) was removed from Goldman Sachs' (NYSE:GS) Conviction Buy List, with its "buy" rating maintained and a $30 price target

• Constellation Brands (NYSE:STZ) reported fiscal second quarter results of 45 cents up from estimates of 41 cents equaling last year's 45 cents

Zacks Investment Research

Company News for October 1, 2009 – Corporate Summary

Zacks Market Commentaries — Thu, 01 Oct 2009 14:39:49 +0000

• Alcoa (NYSE:AA) was upgraded to "buy" from "hold" by Deutsche Bank (NYSE:DB) due to a "more optimistic view of base, bulk and precious metals over the medium-term"

• Goldman Sachs (NYSE:GS) received two brokerage upgrades

• Comcast (NASDAQ:CMCSA) denied reports of talks with General Electric (NYSE:GE) over the purchase of a stake in NBC Universal

• Cisco Systems (NASDAQ:CSCO) initiated a $3 billion cash offer for Norwegian video-conferencing firm Tandberg

• Microsoft (NASDAQ:MSFT) was removed from Goldman Sachs' (NYSE:GS) Conviction Buy List, with its "buy" rating maintained and a $30 price target

• Constellation Brands (NYSE:STZ) reported fiscal second quarter results of 45 cents up from estimates of 41 cents equaling last year's 45 cents

Zacks Investment Research

QuoteMedia Wins Contract to Provide Streaming Portfolio Management Solutions to JitneyTrade

Stuart T. Smith — Mon, 28 Sep 2009 13:56:09 +0000

Sep. 28, 2009 (Business Wire) — QuoteMedia, Inc. (OTCBB: QMCI) announced today an agreement to provide streaming real-time portfolio management, and comprehensive financial market data and research information, to JitneyTrade, an online Canadian broker specializing in active traders. Under the terms of the contract, JitneyTrade is integrating a wide array of QuoteMedia’s offerings into the services [...]

Premier Power Renewable Energy (PPRW.OB) Signs New Contracts for 400 Kilowatts of Solar Rooftop Installations in Spain

QualityStocks — Wed, 23 Sep 2009 15:07:47 +0000

Premier Power Renewable Energy, a global provider of large and small-scale solar power systems, recently announced that the company has received contracts for more than 400 kilowatts of solar rooftop installations in Spain. Leading the solar power markets in the United States, Spain and Italy, these commercial rooftop projects will utilize crystalline modules provided by [...]

Stock Market News for September 22, 2009 – Market News

Zacks Market Commentaries — Tue, 22 Sep 2009 14:21:18 +0000

U.S. stocks ended the day mixed as concerns grew that a six-month old rally has gone ahead of any economic recovery. A drop in crude prices on global demand concerns sent energy shares lower. Also, investors appeared jittery ahead of the two-day policy meet and Friday's key post of August durable goods, and refrained from adding to their holdings. Defensive areas like healthcare rose. Technology shares also found some favor with investors after Dell announced plans to acquire Perot Systems in a $3.9 billion deal.

This morning’s stock futures indicate Wall Street is headed for a higher opening, helped by a rally in global stocks. Ahead of the market’s open, Dow Jones industrial average futures rose 48, or 0.5%, to 9,766. Standard & Poor's 500 index futures were up 6.20, or 0.6%, to 1,066.60, while Nasdaq 100 index futures rose 10.75, or 0.6%, to 1,738.50. Ahead of the FOMC policy statement, trading is expected to remain range bound as traders look for more data before taking the plunge.

Treasuries were mixed ahead of this week’s $112 billion note auction. The 2-year rose 1/32 and the 10-year was off 3/32. The dollar showed some strength, managing a 0.4% advance against a basket of currencies and sending the broad-based DJ-UBS commodity index down 1.8%, as crude prices went below the $70 level. On the NYSE, declining shares were ahead of those that rose in price by a two-to-one margin on volume of 1.20 billion shares.

Seven of the ten S&P500 industry sectors declined, with health care (+0.6%), tech shares (+0.1%), and consumer services (+0.1%) ending the day in the positive territory. The tech-heavy NASDAQ was the only outperformer among the major bourses, managing a 0.2% gain to 2138, helped by a Dell (NASDAQ:DELL) announcement to buy Perot Systems (NYSE:PER) in a $3.9 billion all-cash deal. Wal-Mart (NYSE:WMT) rose 1.6% as HSBC Holdings (NYSE:HBC) initiated coverage on the stock with an "overweight" rating and a price target of $61. Baird upgraded Celgene (NASDAQ:CELG) shares to "outperform," citing upside from strength of its Revlimid drug. Celgene shares closed up more than 5%. General Electric (NYSE:GE) shares also rose, bucking the trend of both its financial and industrial counterparts, as Morgan Stanley (NYSE:MS) raised its price target on the stock $19, noting the company's improved risk profile.

Leading the indices lower yesterday were financials (-1.0%), oil and gas (-0.9%), commodities (-0.7%), as well as industrials (-0.6%) and consumer goods (-0.6%). The Dow Jones industrial average, which was down 94 points in the morning session, closed down 41 points, hurt by its financial components, with American Express (NYSE:AXP) down 2.9% and Bank of America (NYSE:BAC) retreating 2.2%. Bank of America (NYSE:BAC) said it agreed to pay $425 million to terminate a tentative loss-sharing agreement with the government that had been established to facilitate its purchase of Merrill Lynch. However, the firm skipped a deadline to provide documents regarding that merger to a House panel. Shares in AIG (NYSE:AIG) spiked 22% after a report from the Government Accountability Office noted the company is seeing stabilization following the government's bailout measures. However, the report said it remains unclear when AIG would be able to repay those funds.

A $2.33 decline in crude prices also hurt share of commodity-related companies even as the greenback showed some resistance against a basket of currencies. Alcoa (NYSE:AA) shares lost almost 1% after Macquarie warned of an unfavorable aluminum demand/supply outlook over the next six to twelve months. Caterpillar (NYSE:CAT) declined 1.8% after reporting its global machinery sales plunged 48% in the three months to August.

Zacks Investment Research

Premier Power Signs New Contracts for More Than 400 Kilowatts of Solar Rooftop Installations in Spain

Stuart T. Smith — Tue, 22 Sep 2009 13:46:11 +0000

Sep. 22, 2009 (Business Wire) — Premier Power Renewable Energy (OTCBB:PPRW), a global leader in the development, design, engineering and construction of solar power systems for commercial, government and utility markets in the U.S., Spain and Italy, today announced that it received signed contracts for more than 400 kilowatts (kW) of solar rooftop installations in [...]

Hawaii’s Renewable Energy Revolution

Contrarian Profits — Wed, 16 Sep 2009 21:32:26 +0000

pHawaii: Pristine black sand beaches… surfing… spectacular volcanic eruptions… and miles of pineapple plantations. If you are like me, this is what comes to mind when you imagine Hawaii./p pWhat may not come to mind, though, when you think of America’s 50th state are its energy resources – and specifically, the fact that it gets 77% of its power from oil-fired power plants. That’s a unique statistic within the United States. Coal-fired plants provide 14% of power, and the remaining 9% comes from renewable sources like wind and solar energy./p pSuffice it to say, tourism is Hawaii’s largest industry, with agriculture playing a major role, too. And not unlike the rest of the country, the one thing needed to keep it all#8230;/p

Millipore & Roka to Collaborate – Analyst Blog

Zacks Market Commentaries — Wed, 16 Sep 2009 16:45:57 +0000

On Monday, Millipore Corp. (MIL) announced its collaboration with Roka Bioscience Inc. to develop molecular assays and portable instruments for biopharmaceutical production.

Roka Bioscience is a new, independent company created following the spin-off of the industrial testing business of Gen-Probe Inc. (GPRO). After the spin-off, Gen-Probe transferred its partnership agreements with Millipore and GE Water (a business unit of CT-based General Electric (GE). Roka Bioscience is now engaged in developing real-time molecular tests for biopharmaceutical, food, and water safety testing.

Gen-Probe initially plans to own 19.9% of the new company. Affiliates of three private equity firms, OrbiMed Advisors, TPG Biotechnology and New Enterprise Associates have agreed to provide $37.2 million to complete the development of several industrial-scale molecular assays. Gen-Probe contributed industrial assets that include its closed unit dose assay (CUDA) system, a portable testing instrument that can deliver highly accurate molecular results in roughly an hour.

Millipore and Gen-Probe formed an exclusive partnership in 2005 to develop faster, more reliable and sensitive tests for contaminants commonly found in pharmaceutical and biotechnology manufacturing processes. In 2008, they introduced the MilliPROBE® system, which is the first solution of its kind and combines Millipore’s leading industry-accepted sample prep methodologies with Gen-Probe’s advanced proven nucleic acid technologies to deliver both speed and sensitivity in one microbial screening tool.

The companies currently have one assay on the market for Pseudomonas aeruginosa and are developing a second assay for Mycoplasma that remains on track to be introduced early in 2010.

Roka Bioscience’s investment into a fully integrated, portable testing instrument will help Millipore accelerate further development of MilliPROBE assays.
Read the full analyst report on "MIL"
Read the full analyst report on "GPRO"
Read the full analyst report on "GE"
Zacks Investment Research

Stock Market News for September 16, 2009 – Market News

Zacks Market Commentaries — Wed, 16 Sep 2009 14:05:05 +0000

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. The broad Standard & Poor’s 500 index edged up 0.3% to close at 1,052.63, its highest level in almost a year. The tech-heavy NASDAQ advanced 10.86 points, or 0.52%, to 2,102.64. NYSE volume picked up to 1.5 billion shares yesterday from 1.2 billion on Monday, with advancing shares outpacing decliners by a seven-to-three margin. Treasury prices declined, with the 10-year off 6/32 as its yield rose to 3.447% on increased risk demands.

Best Buy (NYSE:BBY), the country’s largest home-electronic chain, and Kroger (NYSE:KR) painted a mixed picture. Best Buy reported a 22% plunge in quarterly earnings and its shares shed more than 5% to $38.32. However, the company lifted its FY10 earnings outlook to a range of $2.70 to $3.00 per share and said it sees full-year revenue of $48 billion to $49 billion. Kroger shares dived 7.5% after the company reported weaker-than-expected earnings and cut its outlook. Health care shares declined 0.8% as President Obama reiterated his commitment to medical care reform, sending shares of Coventry Health Care (NYSE:CVH) down 7.1%, and United Health Group (NYSE:UNH) down 3.7%.

Eight of the ten S&P500 industry groups moved higher on the day. Basic material (+2.5%) and industrial (+1.1%) sector shares led the advance on improved recovery prospects and higher commodity prices. The gains in the Dow Average were led by materials and industrial companies like Alcoa (NYSE:AA) and Caterpillar (NYSE:CAT) as the index gained for the seventh time in eight days. Alcoa (NYSE:AA) shares jumped 8.1% and were the leading gainers on the DJIA; AK Steel (NYSE:AKS) shares advanced 5.7%, and US Steel (NYSE:X) shares gained 4.8%. Among industrial recovery stocks, Textron (NYSE:TXT) shares gained 6.6%, Caterpillar (NYSE:CAT) rose 6%, Deere (NYSE:DE) advanced 4.4% and General Electric (NYSE:GE) added 4.2%. Oil and gas shares rose 0.9% as weekly crude inventory numbers are expected to show a 2.4 million decline last week.

However, the dollar failed to capitalize on the positive US economic news and sank to fresh yearly lows against a basket of currencies, due to its role as a funding currency given the fall in the benchmark US 3-month Libor rate to its lowest on record and the Fed's well-publicized promise to keep interest rates low.

Zacks Investment Research

FDA Play: Revolutionary Medical Device (OTC:IMGG)

Michael Vlaicu — Sun, 13 Sep 2009 23:31:11 +0000

Imaging3, Inc. (Public, OTC:IMGG) A new and radical medical device from Imaging3 Inc. (OTC:IMGG) is ready to set the standard, and revolutionize the way we look at X-ray, MRI and CT scans. Imaging 3 is currently awaiting FDA approval on their DViS (Dominion Volumetric Imaging Scanner). Currently, medical imaging is met with challenges of long waits, [...]

FDIC May Extend Debt Guarantees – Analyst Blog

Zacks Market Commentaries — Thu, 10 Sep 2009 14:19:01 +0000

The Federal Deposit Insurance Corporation (FDIC) may offer a six-month emergency extension to its debt-guarantee component of the Temporary Liquidity Guarantee Program (TLGP) that guarantees more than $270 billion of debt sold by U.S. banks.

The FDIC is considering two alternatives. Under the first, as planned, the program would expire October 31st with the FDIC's guarantee for such debt issued through the program expiring before December 31, 2012. According to the second, the debt guarantee program will end October 31, but for an emergency, the FDIC would extend the guarantee facility by six months. The proposed extension is intended to address emergency circumstances for insured depository institutions and some other entities participating in the program.

Institutions would have to apply to the FDIC for approval to participate in the extended program and show that they were unable to issue non-guaranteed debt due to market disruptions or other emergency circumstances.

According to the proposal, the emergency extension would cover debt issued through April 30, 2010, for any banks that get agency approval.

According to the FDIC Chairman, the TLGP has been very effective at helping financial institutions fight against the uncertainty that weighed down on the credit markets at the height of the financial crisis. As domestic credit markets are recovering and the number of entities utilizing the Debt Guarantee Program has decreased, FDIC does not expect institutions to need further access to the program, and thus intends to end it.

The program was started last October at the height of the financial crisis to help unfreeze bank-to-bank lending. Under the program, the FDIC has provided temporary insurance for inter-banks loans, guaranteeing the new debt in the event of payment default by the borrowing bank. As of September 4th, $304.1 billion in debt was outstanding under the program and 94 financial institutions have used it to issue debt.

As of July the FDIC guaranteed on more than $270 billion of debt sold by companies including General Electric (GE), Citigroup (C), Bank of America (BAC), J.P. Morgan Chase (JPM), Morgan Stanley (MS) and Goldman Sachs (GS).

In our view, though the domestic credit and liquidity markets appear to be normalizing, an extension of the debt guarantee facility will be helpful to speed up the complete recovery process.
Read the full analyst report on "GE"
Read the full analyst report on "C"
Read the full analyst report on "BAC"
Read the full analyst report on "JPM"
Read the full analyst report on "MS"
Read the full analyst report on "GS"
Zacks Investment Research

Stock Market News for September 10, 2009 – Market News

Zacks Market Commentaries — Thu, 10 Sep 2009 14:16:10 +0000

U.S. stocks jumped to their highest level in almost a year after Federal Reserve’s Beige Book survey said the economy is showing signs of stabilization. Although shares closed off their session highs, the report was enough to lift sentiments on the Street. However, the report did indicate that labor markets are weak and retail sales are not picking up. Industrial shares rallied after Goldman Sachs raised its view on the U.S. multi-industry group, noting the industrial activity is picking up. Treasuries made a partial comeback after the government’s 10-year note auction witnessed a strong response.

The greenback remained near its year lows against a basket of currencies while gold prices eased a little to settle at $995.30. Crude prices were slightly up ahead of the September OPEC meeting.

The Dow Jones industrial average, which rose as much as 80 points earlier in the session, pared some gains to close at 9,547.22, up 49.88 points. The broad S&P 500 index advanced 7.98 points, or 0.78%, to close at 1,033.37, its best finish so far this year, and the tech-heavy NASDAQ rose 22.62 points, or 1.11%, to close at 2,060.39. On the NYSE, volume was a moderate 1.24 billion shares as advancing stocks outpaced those that fell seven to three.

Even as unemployment levels continuing to remain vexing, the Fed’s Beige Book revealed “signs of improvements" in 11 of the 12 districts. Meanwhile, OPEC also exited its monthly meeting with soothing words, leaving production levels unchanged, and asserting current prices were within their desirable range. Nevertheless, fears of a jobless recovery have given rise to worries that the economic recovery might be reversed after inventory builds and government assistance end.

Apple (NASDAQ:AAPL) shares declined even as CEO Steve Jobs made a much-awaited comeback after his almost six-month long medical leave. The company announced the launch of new products and slashed prices of existing iPod Touch models. SanDisk (NASDAQ:SNDK) jumped 6.1% to $19.32, its highest close in 11 months; Palm (NASDAQ:PALM) shares declined more than 8.7% after the company announced the launch of its Palm Pixi phones. The stock was downgraded by Credit Suisse to “neutral" from “outperform."

Among the S&P500 industry groups, nine recorded gains with industrials (+1.5%) and financials (+1.4%) topping the list. Among the industrial conglomerates, General Electric (NYSE:GE) advanced 2.6% to $14.87, its highest level since January and Illinois Tool Works (NYSE:ITW) jumped 5% to $43.93. Goldman (NYSE:GS) raised Illinois Tool Works (NYSE:ITW) to “conviction buy" from “neutral." Caterpillar (NYSE:CAT) rose 3.1% to $48.41. GE also benefited from an analyst upgrade from JP Morgan (NYSE:JPM), and a hiked price target from Goldman Sachs (NYSE:GS). Boeing (NYSE:BA) shares added 2.1% following the firm's projection of a return to growth in global air traffic next year. United Technologies (NYSE:UTX), which rose 1.4%, was also upgraded by Goldman Sachs (NYSE:GS). 3M (NYSE:MMM) rose 2.1%

Zacks Investment Research

Stock Market News for September 9, 2009 – Market News

Zacks Market Commentaries — Wed, 09 Sep 2009 14:13:02 +0000

Increased activity on the merger and acquisition front and promising signs that the economic downturn is easing sent U.S. stocks higher Tuesday as traders, back after a long weekend, picked up energy and commodity stocks. With traders turning to riskier bets, Treasury prices sank, sending corresponding yields higher. Positive factors sent gold prices beyond the $1,000 per ounce mark, before prices eased a little to settle at $997.80. Dollar declined 1.1% to $1.4498 per euro. Copper prices gained 3.1% on improved global recovery prospects.

The 30-share Dow Jones industrial average rose 56 points, or 0.6%, to 9,497.34 and the S&P 500 index added 9 points, or 0.9%, to 1,025.39, its highest close in 11 months. The tech-heavy NASDAQ added 19 points, or 0.94%, to close at 2,037.77 points. On the New York Stock Exchange, advancing issues outpaced those that declined three to one on volume of 1.32 billion shares. However, a jump in the CBOE Vix volatility measure, which rose 1.4% to 25.62, added a note of caution to the upbeat mood.

Dollar’s plunge to an 11-month low was also due to a Monday release from the United Nations, which again called for less dependence on the greenback as the premier global reserve currency. Indications that China would diversify some of its interests into gold also hurt the dollar, although the size of China's reserves mitigates against much impact. Nevertheless, the news helped gold prices. This morning's news indicated Barrick Gold (NYSE:ABX) is planning to raise up to $3.5 billion through a new share offering priced at $36.95 per share.

Yesterday, General Electric (NYSE:GE) was the leading gainer on the DJIA after being upgraded by JP Morgan (NYSE:JPM). Costco (NASDAQ:COST) advanced 2.3% after two brokerages upgraded the stock. Among tech issues, IBM (NYSE:IBM) retreated 0.3% after it was downgraded; however, the firm noted it is "well ahead" of its 2010 earnings target of $10-$11 per share. Advanced Micro Devices (NYSE:AMD) surged 14.6% as Barclays Capital (NYSE:BCS) upgraded the shares to "outperform." AIG (NYSE:AIG) shares slumped 10.5% after Credit Suisse (NYSE:CS) downgraded the stock to "underperform," noting "little to no value for common equity" remains.

Nine of the ten S&P industry groups recorded gains Tuesday , with oil and gas (+2.7%) and basic material shares (+2.1%) leading the list of gainers. Only healthcare shares registered declines, declining 0.3%. Crude prices spiked $3.31 to $71.33 on expectations today's OPEC meeting will see no change in the production levels. Moreover, Goldman Sachs (NYSE:GS) maintained a favorable long-term view on the group, saying there is an "increasing evidence of a stronger-than-expected recovery in global industrial activity." Chevron (NYSE:CVX) and ExxonMobil (NYSE:XOM) shares gained 2.2% and 2.1%, respectively. Among basic material issues, Alcoa (NYSE:AA) rose 3.5% to $12.60.

In today's Presidential appearance before a rare joint session of Congress, President Obama will attempt to resuscitate his healthcare reform package and counter the groundswell of centrist opposition, which has driven his ratings to a low 52% point.

Zacks Investment Research

Company News for September 8, 2009 – Corporate Summary

Zacks Market Commentaries — Tue, 08 Sep 2009 14:18:57 +0000

• JP Morgan (NYSE:JPM) upgraded General Electric (NYSE:GE) to "overweight" from "neutral," and lifted its price target to $17, on relative valuation measures

• AIG (NYSE:AIG) was downgraded to "underperform" at Credit Suisse (NYSE:CS), with its price target lowered to $15 from $30, and 2009 estimate cut to a $13.98 loss, with 2010 initiated at an estimate of $5.70

• Smithfield Foods (NYSE:SFD) reported a fiscal first quarter loss of 56 cents a share, three cent under expectations versus last year's 17 cent loss, on revenues of $2.7 billion, off estimates of $2.8 billion

• Kraft (NYSE:KFT) advised its will continue to pursue its unsolicited offer for Cadbury (NYSE:CBY), after Cadbury rejected the firm's $16.7 billion cash and stock bid

• Airbus turned positive, projecting an air passenger volume rebound. In 2009 passenger volume is estimated to drop 2%, in 2010 to climb 4.6%, and in 2011 to soar 7%

• Goldman Sachs (NYSE:GS) upgraded Red Hat (NYSE:RHT) to "buy," and raised the price target to $28 from $18

Zacks Investment Research

General Electric (NYSE:GE): Upgraded to Overweight at JP Morgan; $17 target

Notable Calls — Tue, 08 Sep 2009 10:29:00 +0000

div style="text-align: justify;"JP Morgan is upgrading span style="font-weight: bold;"General Electric (NYSE:GE) /spanto Overweight from Neutral and raising target to $17 (prev. $12).br /br /Firm notes the the downside here looks attractive versus others that have run, which, combined with an ongoing discount for sentiment, sets up for an interesting relative risk/reward, in their view. Given the recent run in the most disliked stocks, and how quickly sentiment has turned, they would rather be early, especially for one such as this that has underperformed for such an extended period of time, and for which there has been arguably the most controversy. In short, the firm thinks this is one of the last “non-consensus, a little good news can go a long way” stocks in the group.br /br /span style="font-weight: bold;"Starting point: Negative sentiment and under-performance/span. GE is now among the lowest-rated stocks in our sector (only 30% Buy) with ongoing fear around GECS. Since June ’08, it’s down 55% vs. the group’s -35%, and down 68% vs. the group’s -43% since GE’s peak in October ’07.br /br /span style="font-weight: bold;"Yes, GE was as “too big to fail” as anyone, but this point is moot:/span There are a few things JP Morgan acknowledges, which are in line with their formerly bearish thesis. First, it’s likely the company would be in far worse shape if not for some extraordinary government help from the TLGP and CP guarantee programs, and they believe GE will go down as the least publicized “too big to fail” story in the crisis. Second, without the unusually large tax synergies, which should have been explained as the key reason why GE Capital will maintain its book earlier than this March, GE Capital would be eating into equity as they speak. These issues are what they are, however, and have little to do with the forward fundamental trajectory, which they think has the chance to not be as bad as stubbornly low expectations.br /br /a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://3.bp.blogspot.com/_YzBo7Kz5y1M/SqY0RmCYnJI/AAAAAAAAAKw/Pf1c0XKY5HI/s1600-h/GE_GECS.bmp"img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 400px; height: 280px;" src="http://3.bp.blogspot.com/_YzBo7Kz5y1M/SqY0RmCYnJI/AAAAAAAAAKw/Pf1c0XKY5HI/s400/GE_GECS.bmp" alt="" id="BLOGGER_PHOTO_ID_5379044281813605522" border="0" //abr /span style="font-weight: bold;"Wall of worry intact at GECS . . . /spanConcerns include 1) provision/impairment levels, 2) rising funding costs, 3) regulatory uncertainty, and 4) mark-to-market risks (CRE), all of which add to questions around LT earnings power.br /br /span style="font-weight: bold;". . . but they feel comfortable their expectations are conservative . . . /span1) On losses, the stress case looks reasonable; 2) Firm assumes a $10B infusion; 3) rising funding costs hit ROI by ~70bps, manageable; 4) forecasted 10%+ TCE by ’12 should satisfy regulators; and 5) with depreciation/impairments, CRE equity holdings should go to FMV gradually by ’12. In the end, the firm sees a pathway to $6B in normalized earnings here, a 1.4% ROI (1.2% ROA), below guidance of 2%.br /br /span style="font-weight: bold;" . . . while investors may already be numb to the worst case./span Similar to the stock dynamics around the dividend cut/AAA, even if something bad happens on one of these fronts (like a capital raise), it may not be all negative, as none are likely to critically destroy value long term. JP Morgan thinks risks to their estimates are to the upside, including an earlier peak in losses, or upside industrial FCF/asset sales that eliminate the need for a capital raise.br /br /span style="font-weight: bold;"Industrial fundamental visibility low, but they could be done cutting estimates. /spanJP Morgan remains Street low at $0.60 in EPS for ’10, the trough, and data points from here could point to “stabilization.” Importantly, their normalized EPS is based off of this conservative trough.br /br /span style="font-weight: bold;"NBCU, an auto/housing play, bottoming, undervalued./span Signs of life in media Mamp;A may rekindle hopes of a strategic move at NBCU. They think a move here could unlock ~$30B of value, meaningful at ~20% of GE’s market cap, and a significant positive given mixed recent history.br /br /span style="font-weight: bold;"Not expensive on trough/normalized EPS. /spanFirm sees support at ~$12, or 17x their conservative trough, with a best case at ~$20. They peg fair value and their PT at ~$17, enough to justify their OW in the context of an overvalued group.br /br /span style="color: rgb(255, 0, 0);"Notablecalls:/span I think GE will be up around 5-6% on this. JP Morgan is a solid player and their calls matter in the space.br /br /span style="font-weight: bold;"Don't buy too high because the open usually provides a nice entry in GE./span/divdiv class="blogger-post-footer"img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/29297569-1684419189509090447?l=notablecalls.blogspot.com'//div

Less Hunger for TALF, Really? – Analyst Blog

Zacks Market Commentaries — Fri, 04 Sep 2009 15:37:20 +0000

The U.S. Federal Reserve on Thursday said that it has sanctioned $6.5 billion in loans to investors under its Term Asset-backed Securities Loan Facility (TALF). This action follows investors’ application for loans to buy securities backed by auto, credit card and other types of consumer loans, in the seventh round of such funding.

The current loan amount is down from $6.9 billion requested in August but up from $5.4 billion in July. Also, it is substantially lower from $11.45 billion in June. The overall decrease in investors' appetite this month for government loans indicates that the investors are not relying much on the Fed for funding to buy these securities.

A total of $14.7 billion was borrowed by investors for purchasing eligible asset-backed securities sold by companies including American Express (AXP), Bank of America (BAC), General Electric (GE), Nissan Motor (NSANY) and Ford Motor (F). Though Fed finance for the full amount was available, more than half of the new bonds were bought directly by investors without the support of the Fed. The proportion was even higher in some segments of the market, such as for bonds backed by payments on auto loans.

Less dependence on the Fed for buying such securities can be viewed as a sign of market stabilization, which will finally help remove emergency measures.

Investors also applied for $4.4 billion to buy credit-card loan-backed deals, versus $2.6 billion last month and $1.16 billion to buy auto-loan-backed deals, versus $555 million in the prior period.

Last month, the Fed extended the TALF by another six months. The move will primarily cushion the commercial real estate industry from rising defaults and falling prices.

The time extension will not cover assets that are not already eligible. The authorities approved the expansion of TALF for newly issued securities backed by auto, credit card, student and small business loans through March 31, 2010. Also, TALF lending against newly issued commercial mortgage-backed securities (CMBS) was extended through June 30, 2010 as the arrangement of new CMBS deals can take a significant amount of time.

With sharply declining funding costs, securities backed by credit cards, auto loans and equipment leases are a little more comfortable. But the securities backed by commercial mortgages are still a problem. So there is a need for TALF, as the weak market conditions are likely to persist for awhile. However, the central bank should focus more on the problems of the asset-backed market.
Read the full analyst report on "AXP"
Read the full analyst report on "BAC"
Read the full analyst report on "GE"
Read the full analyst report on "NSANY"
Read the full analyst report on "F"
Zacks Investment Research

F-35 Engines Gather Steam – Analyst Blog

Zacks Market Commentaries — Wed, 02 Sep 2009 15:30:12 +0000

General Electric Co. (GE) and Rolls-Royce Group are gathering support for the second F-35 engine program, which Defense Secretary Robert Gates and President Barack Obama have singled out as unnecessary in the tightening credit environment. Representatives of the two companies met top Pentagon officials recently to offer a fixed-price package on about 100 low-rate production engines for the F-35 fighter.

The deal would cover low-rate production engines to be built from 2012 to 2015. Without F-35, GE would be out of the large fighter-aircraft engine business. Gates recently reiterated his opposition in Fort Worth, Texas, where Lockheed Martin Corp. (LMT) builds the F-35. Lawmakers backing the program are of the view that continuing work on a second engine will stimulate competition and lower costs on the massive $300 billion fighter program in the long run.

United Technologies Corp.’s (UTX) Pratt & Whitney unit has seen the cost of developing its F135 engine soar by nearly $1.9 billion since 2002. The engine for the short-takeoff, vertical-landing version of the fighter needed redesigning after problems arose during testing several years ago.

Without a competing engine, Pratt & Whitney would essentially get a $100 billion monopoly on engines for over 3,000 airplanes expected to be sold over time. If the second engine program remains in place, current plans call for the two engine makers to compete for new engine orders every year, beginning in 2015 or 2016.

General Electric is a global infrastructure, finance and media company. With products and services ranging from aircraft engines, power generation, water processing and security technology to medical imaging, business and consumer financing, media content and industrial products, it serves customers in more than 100 countries and employs more than 300,000 people worldwide. We currently have a Neutral recommendation on GE.

Read the full analyst report on "GE"
Read the full analyst report on "LMT"
Read the full analyst report on "UTX"
Zacks Investment Research

Zacks Analyst Blog Highlights: General Electric, JPMorgan Chase & Co., United Technologies Corp., Tyco International and Precision Castparts Corp. – Press Releases

Zacks Market Commentaries — Fri, 28 Aug 2009 13:40:17 +0000

For Immediate Release

Chicago, IL – August 28, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: General Electric (GE), JPMorgan Chase & Co. (JPM), United Technologies Corp. (UTX), Tyco International (TYC) and Precision Castparts Corp. (PCP).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Thursday’s Analyst Blog:

GE to Sell Security Business

GE has hired JPMorgan Chase & Co. (JPM) to sell the portion of its business that makes security products. The business has drawn interest from GE’s rivals United Technologies Corp. (UTX) and Tyco International (TYC).

Security assets have traditionally attracted private equity buyers, but due to the difficult economic environment and an expressed interest by GE in selling these assets to a strategic buyer, bid amounts could be depressed for such a product portfolio. It remains in question whether acquirers will be interested in GE Security’s full portfolio of products, or only bits and pieces of the business.

Precision Castparts Strengthens

Yesterday, Precision Castparts Corp. (PCP) announced its decision to acquire Carlton Forge Works and related entities for $850 million. Carlton, with one facility in Paramount, CA, is a leading manufacturer of seamless rolled rings for critical aerospace applications. Carlton is a key supplier for Boeing 787 and Airbus XWB.

Precision Castparts will also acquire Arcturus Manufacturing Corporation, a hammer forging operation, as a part of this transaction. The acquisition, which is expected to be completed in the third quarter of fiscal 2010, will further strengthen PCP’s forging capabilities. The transaction is expected to be immediately accretive to the company’s earnings.

Precision Castparts derived 43.6% of its fiscal 2009 revenue from the Forged Products segment. The company is one of the leading manufacturers of forged components for the aerospace and power generation markets. The company has been expanding its Forged Products business through regular acquisitions. The previous acquisition was that of Hackney Ladish Holding Corp. a leading producer of forged pipe fittings for critical energy infrastructure and related applications, in fiscal 2009.

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Zacks Investment Research

GE to Sell Security Business – Analyst Blog

Zacks Market Commentaries — Thu, 27 Aug 2009 20:45:58 +0000

General Electric (GE) is arranging to sell its security business, which makes alarms, surveillance systems and other safety products, and hopes to attract bids in the range of $2 billion for the unit. This move represents GE’s strategy of exiting from non-core businesses.

GE has hired JPMorgan Chase & Co. (JPM) to sell the portion of its business that makes security products. The business has drawn interest from GE’s rivals United Technologies Corp. (UTX) and Tyco International (TYC).

Security assets have traditionally attracted private equity buyers, but due to the difficult economic environment and an expressed interest by GE in selling these assets to a strategic buyer, bid amounts could be depressed for such a product portfolio. It remains in question whether acquirers will be interested in GE Security’s full portfolio of products, or only bits and pieces of the business.

General Electric has products and services ranging from aircraft engines, power generation, water processing and security technology to medical imaging, business and consumer financing, media content and industrial products. It serves customers in more than 100 countries and employ more than 300,000 people worldwide. We currently have a Neutral recommendation on GE.
Read the full analyst report on "GE"
Read the full analyst report on "JPM"
Read the full analyst report on "UTX"
Read the full analyst report on "TYC"
Zacks Investment Research

Company News for August 27, 2009 – Corporate Summary

Zacks Market Commentaries — Thu, 27 Aug 2009 14:40:32 +0000

• Apple (NASDAQ:AAPL) shares shed 1.2% on rumors that the introduction of its touchscreen "iPad" netbook may be put off from a September event. However, reports suggest China’s Unicom is expected to announce a deal to start selling the iPhone in China as soon as Friday

• AIG (NYSE:AIG) shares jumped 11% yesterday. In an interview, new CEO Benmosche calmed fears of a fire sale of the firm's assets, instead pointing to a measured approach to retaining the company's diversified base, noting that in a year the company will be said to be performing well

• Microsoft (NASDAQ:MSFT) announced a $71 cut on its highest-priced Xbox 360 in Europe and US markets after Sony (NYSE:SNE) cut price of its PlayStation 3 last week

• General Electric (NYSE:GE) is reportedly seeking bids for its security business, with interest said to be forthcoming from United Technologies (NYSE:UTX) and Tyco (NYSE:TYC). The firm hopes for bids of about $2 billion

• Guess? (NYSE:GES) beat second quarter estimates with earnings of 64 cents a share, ahead of Zacks expectations of 44 cents a share, on revenues of $522.4 million, beating
estimates of $480 million. The company raised its quarterly dividend 25% to $0.125; guidance for the current quarter was set at 46 cents to 49 cents per share on sales of $465 million to $485 million

• The US Navy awarded a $2.4 billion contract to Northrop Grumman (NYSE:NOC) for work on nuclear-powered aircraft carrier, USS Theodore Roosevelt

• Toll Brothers (NYSE:TOL) reported a third quarter loss of $2.93 a share, worse than the Zacks projections of a $1.40 per share loss, on revenues of $461.38 million, compared with estimates of $414 million. The firms expects lower fourth quarter sales

Zacks Investment Research

Stock Market News for August 27, 2009 – Market News

Zacks Market Commentaries — Thu, 27 Aug 2009 14:37:12 +0000

U.S. stocks edged up slightly higher, after swinging back and forth in a narrow range, as investors preferred to remain on the sidelines. After yesterday’s better-than-expected reports on housing and consumer confidence, investors looked for fresh signs to help restart a rally that has catapulted major indexes to multi-month highs.

Yesterday, fifteen of the thirty DJIA components closed higher; 245 of the S&P500 closed up and 42 of the NASDAQ100 finished on higher ground. Trading was subdued with NYSE volume of 1.05 billion well below last year's average of 1.49 billion. The DJIA gained 4 points to close virtually flat at 9543; the NASDAQ and S&P500 each recorded gains of 0.01%. Declining issues beat those that advanced eight to seven. Treasuries were mixed after the government successfully auctioned $39 billion in five-year notes. The Treasury is scheduled to auction $28 billion of 7-year notes today.

Five of the S&P500 sectors recorded gains. The consumer services sector, which advanced 1.2% yesterday, edged up 0.5% on improved expectations for the consumer segment due to better-than-projected housing numbers and confidence report. Healthcare shares issues were off 0.2%.

Basic material and industrial shares each declined 0.7% on Chinese Premier Wen Jiabao's comments regarding economic difficulties in that country, particularly domestic consumption. The Chinese cabinet reportedly is assessing steps to control overcapacity in steel and cement production. US Steel (NYSE:X) and Nucor (NYSE:NUE) each dropped 2.4%.

DJIA components 3M (NYSE:MMM) fell 1.7%, Caterpillar (NYSE:CAT) was off 1.2%, and General Electric (NYSE:GE) declined 1.3%. Housing news, nevertheless, continued to signal a leveling off in the sector, with DR Horton (NYSE:DHI) up 5.7%, Beazer Homes (NYSE:BZH) up 5.0%, and Lennar (NYSE:LEN) up 4.1%. Hovnanian Enterprises (NYSE:HOV) rose 43 cents, or 9.4%, to $5

Zacks Investment Research

GE Adds Power to Kuwait – Analyst Blog

Zacks Market Commentaries — Wed, 26 Aug 2009 17:00:19 +0000

The Ministry of Electricity and Water in Kuwait recently selected General Electric Co. (GE) for building a 2,000 megawatt power plant. The company had submitted a bid for 770 million dinars ($2.7 billion) for the Subbiya plant.

In April, Kuwait floated a new tender for building turbines for a plant in the north of the country. At that time, the Ministry had expected costs for bringing the plant into effect by 2011 to be far less than 700 million dinars. Kuwait has one of the world’s highest per capita power consumption rates.

Apart from GE, other companies that initially qualified for the project included Germany's Siemens (SI), Japan's Mitsui & Co. (MITSY) and Marubeni Corp., Spain's Iberdrola Ingenieria Y Construccion and Canada's SNC-Lavalin Ltd.

General Electric has products and services ranging from aircraft engines, power generation, water processing and security technology to medical imaging, business and consumer financing, media content and industrial products. It serves customers in more than 100 countries and employs more than 300,000 people worldwide.

We currently have a Neutral recommendation on GE.

Read the full analyst report on "GE"
Read the full analyst report on "SI"
Read the full analyst report on "MITSY"
Read the full analyst report on "MARUY"
Read the full analyst report on "IBDRY"
Read the full analyst report on "SNCAF"
Zacks Investment Research

DrStockPick.com Stock Report! 8/24/09, MXM, GNBT, ESP, SHLD, XDSL

Dr. Stock Pick — Mon, 24 Aug 2009 18:48:32 +0000

DrStockPick.com Stock Report! Monday August 24, 2009 ************************************************************** MAXXAM Inc. (NYSE: MXM) announced that it will convene, as promptly as practicable, a special meeting of its stockholders to approve, subject to final action by the Board of Directors of MAXXAM Inc. (”MAXXAM” or the “Company”), a 1-for-250 reverse stock split of the Company’s [...]

PennyOmega.com Stock Report! 8/24/09, PONE, HFFI, HSC, XDSL, XCELE, JBT

PennyOmega.com — Mon, 24 Aug 2009 18:30:09 +0000

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Five stocks for those that missed the rally

Daniel Hung — Thu, 20 Aug 2009 01:46:40 +0000

The S&P has rallied nearly 50% from its lows and is up over 10% year to date. For those that sat out the rally afraid to get in, the market is starting to look (at the very least) fairly valued. It’s hard to say where things will go from here. But, a closer look at [...]

Biofuels Power Corporation (BFLS.OB) ‏is “One to Watch”

QualityStocks — Wed, 19 Aug 2009 19:44:42 +0000

Headquartered in The Woodlands, Texas, Biofuels Power Corp.’s mission is to introduce renewable fuels for North America power and reduce the nation’s dependence on foreign oil. Trading on the OTCBB, the company is the first in the biofuels power sector. This involves generating grid power from biodiesel and renewable gas. Incorporated in 2004, Biofuels Power [...]

QuoteMedia Reports 7% Increase in Revenue for Q2 2009

Stuart T. Smith — Sat, 15 Aug 2009 00:33:08 +0000

Aug. 14, 2009 (Business Wire) — QuoteMedia, Inc. (OTCBB: QMCI), a leading provider of market data and financial applications, announced financial results for the three and six months ended June 30, 2009. These results reflect a 7% increase in second quarter revenue, to $1,836,736 from $1,724,396 in the comparative period in 2008. Revenue for the [...]

A Hot Stock in a Cool Market

Andrew Snyder — Tue, 11 Aug 2009 21:30:39 +0000

pIt is hard to find a “true” growth story these days, especially in the United States. In China, however, things are not quite as bleak. The action from SmartHeat (NASDAQ:strong/strongstronga href="http://www.google.com/finance?q=heat" target="_blank"HEAT/a/strong) is a perfect example. /p pCall it an earnings season hangover. Call it profit taking. Or call it a technical reverse. Just don’t call it a good day on Wall Street./p pWith the equities market down by over 1% at the moment, investors who got in at the recent highs are wondering what in the world they may have gotten themselves into. A slew of the markets most-popular investments of late are taking it square on the chin./p pstrongGeneral Electric (NYSE:a href="http://www.google.com/finance?q=ge" target="_blank"GE/a) /strongis down by over 3%. strongHarley Davidson (NYSE:a href="http://www.google.com/finance?q=hog" target="_blank"HOG/a)/strong is down by nearly 3.5%.#8230;/p

Ultimate Sports, Inc. (USPS.PK), View Systems, Inc., (VSYM.OB), Fresh Harvest Products, Inc., (FRHV.OB) , Power 3 Medical Products Inc. , (PWRM.OB) (DrStockPick Stock Report!)

Dr. Stock Pick — Fri, 31 Jul 2009 14:21:39 +0000

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Company News for July 30, 2009 – Corporate Summary

Zacks Market Commentaries — Thu, 30 Jul 2009 14:26:27 +0000

• Goldman Sachs (NYSE:GS) raised General Electric (NYSE:GE) to "buy" and upped its price target on the firm to $15 from $13

• American Express (NYSE:AXP) joined the ranks of banks buying back TARP-issued warrants, as it paid the Treasury $340 million, providing the government a 26% return on its investment. Other firms include Goldman Sachs (NYSE:GS), US Bancorp (NYSE:USB), and State Street (NYSE:STT)

• Sumitomo Trust announced plans to acquire Citigroup's (NYSE:C) entire stake in Nikko Asset Management for $1.2 billion

• Sanofi-Aventis announced it agreed to acquire a 50% stake in Merck's (NYSE:MRK) animal health venture for $4 billion

• Visa (NYSE:V) reported earnings, ex-items, of 67 cents a share, ahead of Street projections of 64 cents on revenues of $1.6 billion, versus estimates of $1.64 billion

• Motorola (NYSE:MOT) topped estimates for the second quarter with adjusted results of a one cent loss versus estimates of a 4 cent loss. The company also provided third quarter guidance of a 1-cent loss to a 1-cent profit, with Street estimates at a 1-cent loss. Revenues of $5.5 billion missed estimates of $5.6 billion

• International Paper (NYSE:IP) reported second quarter earnings of 20 cents a share, beating estimates by 20 cents, on in-line revenues, off 0.1% to $5.8 billion

• Colgate-Palmolive (NYSE:CL) topped estimates by 2 cents, on earnings of $1.04, as in-line revenues of $3.75 billion fell 5.5%

• Mylan (NYSE:MYL) beat projections by 2 cents, posting second quarter earnings of 32 cents a share, as revenues rose 5% to $1.3 billion

• Dow Chemical (NYSE:DOW) earned a nickel in its second quarter versus an expected 8 cent loss, although revenues fell short at $11.3 billion compared to estimates of $13 billion
Travelers (NYSE:TRV) missed expectations with second quarter results of $1.25, off estimates of $1.28, on in-line revenues of $6.2 billion. Guidance for the year was raised to a range of $4.80-$5.05, still under consensus projections of $5.17

Zacks Investment Research

General Electric (NYSE:GE): Upgraded to Buy at Goldman Sachs

Notable Calls — Thu, 30 Jul 2009 11:00:00 +0000

div style="text-align: justify;"Goldman Sachs is upgrading span style="font-weight: bold;"General Electric (NYSE:GE)/span to Buy from Neutral with a $15 price target (prev. $13) as as comments reported after the close by US House Financial Services Chairman Barney Frank suggest broadening support for regulatory reform that would not mandate the separation of GE Capital. While numerous uncertainties remain, Goldman is reducing their probability assumption for a costly GECS separation to 25% from 50% and this drives their higher target. Greater potential for a manageable regulatory outcome should prompt investors to focus on longer-term benefits of economic and credit stabilization to GE shares.br /br /span style="font-weight: bold;"Catalyst/spanbr /After the close, Bloomberg reported that Barney Frank indicated that GE and “manufacturers with finance businesses should be allowed to keep the units under a revision to rules that govern banking.” This seems to strengthen the view that legislative support for reform requiring GECS separation as implied by the Treasury “White Paper” is declining. Goldman estimates separation could cost equity holders $40 bn (lower EPS on higher taxes, capital and other costs) and had assumed a 50% probability (now lowered to 25%) in their old $13 price target. While uncertainties remain and GE faces other challenges (e.g. later cycle industrial mix and rising credit losses), they believe that – along with economic and credit stabilization signs - risk/ reward is improved to justify upgrading their rating.br /br /span style="font-weight: bold;"Valuation/spanbr /The $15 12-month target assumes 1) $12 for Industrial on $0.85 mid-cycle EPS, 16x PE (vs. 14.5x prior on 25% lower probability of GECS separation), discounted 1.5 yrs at 10%, 2) $3 for GECS on $0.40 mid-cycle EPS, 10x PE, discounted back 2 years at 15%.br /br /span style="color: rgb(255, 0, 0);"Notablecalls:/span What can I say. The stock will trade up on this by about 4-6% but the $15 tgt is really uninspiring. It's more about getting a blessing from GSCO than anything else.br //divdiv class="blogger-post-footer"img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/29297569-3154621653679770216?l=notablecalls.blogspot.com'//div

Lockheed’s F-35 Increases Its Reach to Sea – Analyst Blog

Zacks Market Commentaries — Wed, 29 Jul 2009 23:46:00 +0000

Lockheed Martin Corporation (LMT), the nation's largest defense contractor, unveiled yesterday the carrier variant of the F-35 fighter plane. The F-35 variant, known as F-35C Lightning II, is the first-ever stealth fighter added the U.S. Navy's arsenal.

Lockheed Martin is focusing on F-35 as its primary growth driver in the Aeronautics segment to offset the loss of F-22. The Senate recently voted to stop production of the F-22 plane, putting it as too advanced for the recent trend of low-intensity warfare.

Subsequent to the end of the second quarter of 2009, Lockheed Martin's Aeronautics segmental order backlog was $27.9 billion. The F-35 is slated to replace the F-16 and A-10 fleets. As per media reports, the Pentagon will have to procure about 3,000 F-35 variants over the coming decade for the purpose. The F-35 has three variants, of which two of them are land based differing on the take-off and landing aspects, while the third one is a carrier-based variant.

Lockheed Martin is the primary player in the F-35 program along with industry peers, Northrop Grumman (NOC) and BAE Systems (BAE).

The focus of the Pentagon on the F-35 program is evident as, to date, two separate, interchangeable F-35 engines are under development. The two engines under development are Pratt & Whitney F135 and GE Rolls-Royce Fighter Engine Team F136. However, given the recent White House focus on fund conservation, the GE Rolls-Royce Fighter Engine Team F136 engine being developed by General Electric (GE) for the F-35 has come under a lot of scrutiny lately.

We reiterate our BUY rating on LMT.

Read the full analyst report on "LMT"
Read the full analyst report on "NOC"
Read the full analyst report on "BAE"
Zacks Investment Research

VSYM View Systems Announces Acquisition of FiberXpress, Inc. (DrStockPick News Report!)

Dr. Stock Pick — Wed, 29 Jul 2009 20:54:30 +0000

VSYM, View Systems Inc, VSYM.OB DrStockPick News Report! Dr Stock Pick HOT News & Alerts! View Systems Announces Acquisition of FiberXpress, Inc. Wednesday July 29, 2009 DrStockPick News Report! *********************************************************** View Systems Announces Acquisition of FiberXpress, Inc. BALTIMORE, July 29, 2009 (CRWE NEWSWIRE) — View Systems, Inc. (OTCBB:VSYM), a security and teledata solutions provider, announced today that View has acquired FiberXpress, Inc., a [...]

VSYM, View Systems Announces Acquisition of FiberXpress, Inc. (PennyOmega.com Stock Report!)

PennyOmega.com — Wed, 29 Jul 2009 16:24:20 +0000

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Stock Market News for July 29, 2009 – Market News

Zacks Market Commentaries — Wed, 29 Jul 2009 14:29:48 +0000

A dip in consumer confidence for the second straight month and disappointing earnings reports weighed on sentiments as stock markets closed mostly lower Tuesday. However, some late-session bargain hunting helped the indices pare some losses but investors remained concerned that a recovery could be sluggish. To add to the caution, San Francisco Fed President Yellen painted a picture of a "painfully slow" economic recovery.

The Dow Jones industrial average lost 12 points, or 0.1% and the broader S&P 500 index declined 3 points, or 0.3% to 979. The technology-focused Nasdaq rose 7 points, or 0.4%. On the NYSE, 1.24 billion shares exchanged hands and 16 stocks ended lower for every 14 that advanced.

Among the ten industry groups in the S&P 500, six ended in the red. Leading the decliners were oil & gas equipment & services (-3.88%), followed by gold miners (-3.15%), industrial REITs (-3.15%), advertising (-2.86%), and agricultural products (-2.83%). Leading the gainers were technology and health care issues that edged up 0.3%, with consumer services also on the plus side, up 0.1%. Shares of Bank of America (NYSE:BAC) led the list of advancing issues on the DJIA with a 2.4% rise after the firm quashed media reports of its planned branch network retrenchment. Citigroup (NYSE:C) shares surged 10.4% to $2.97. The firm said it will deliver almost 6 billion new shares on Thursday, following its conversion of preferred stocks into common shares. General Electric (NYSE:GE) shares tacked on 1.6% on news that it expects profits next year from its financing unit even with increased loan-loss provisions, and will not need to tap its parent for funds until at least 2011.

The government’s sale of a record $42 billion in two-year notes, with the yield touching a higher-than-expected 1.08%, had a mixed reaction on treasuries. However, in a note to clients this morning Goldman Sachs (NYSE:GS) slashed its estimate for Treasury auctions through September 2010 by 28% to $2.9 trillion based on economic recovery prospects. The firm said, "The stabilization in financial conditions has occurred more quickly than most observers had anticipated."

BP (NYSE:BP) said its profits halved from a year ago, as declining oil prices and weaker refining margins hurt operations, even as its second quarter results topped estimates. Further cost-cutting measures were prescribed as its CEO noted, "We see little evidence of any growth in demand and expect the recovery to be long and drawn out," as "demand may be stabilizing, but...well below previous year levels." Valero Energy (NYSE:VLO) results were also hurt by the impact of sizeable inventories and weak demand.

The latest data from Bloomberg puts the announced results from S&P500 firms reported since June 17 at an average decline of 27%, beating analysts' estimates by 9.9% on a per share basis, but ahead of revenue estimates by a mere 0.2%. Today's expected posts include results from: ConocoPhillips (NYSE:COP), General Dynamics (NYSE:GD), Sprint Nextel (NYSE:S), Time Warner (NYSE:TWX), WellPoint Health (NYSE:WLP), and Visa (NYSE:V).

Zacks Investment Research

PennyOmega.com Stock Report! 7/27/09, FRS, HSC, USEG, RNIN, NGBF, AVT

PennyOmega.com — Mon, 27 Jul 2009 16:07:58 +0000

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First Blush on GE Earnings – Analyst Blog

Zacks Market Commentaries — Fri, 17 Jul 2009 18:53:49 +0000

Earlier today, General Electric (GE) released its 2Q09 results. Clearly the effects of the global economic environment have weighed upon GE's earnings during the quarter. We anticipate the continuation of a lackluster global economy over the next several quarters.

However, the company continues to focus on aggressively controlling costs and driving working capital improvements, actively maintaining its backlog, while placing efforts one higher-margin services and running its financial services business with credit quality restraint.

GE’s 2Q09 earnings from continuing operations were $2.9 billion, or $0.26 per common share, down 47% year-over-year. Revenues from continuing operations were $39.1 billion, down 17% year-over-year (down 12% adjusting for FX), in line with general guidance. Cash generated from operating activities totaled $7.1 billion, ahead of plan, and total company backlog of equipment and services held about steady at $169 billion.

Energy Infrastructure earnings grew 13% year-over-year; Technology Infrastructure earnings declined 11%.·Industrial operating profit rate was solid at 16.3% (down 10 bps from ’08, and up 200 bps from 1Q ’09), while Capital Finance earned $590 million ($149 million pre-tax) -- on track for a profitable 2009. Reserve coverage increased by $0.9B, up 22 bps vs. prior quarter.

The GE Capital operation continued to reduce its balance sheet in order to enhance liquidity, which resulted in an increase in its capital ratios, a reduction in leverage, an increase to reserves, an acceleration in its long-term debt funding and a lowering of its lowered commercial paper balances. During 2Q09, GE originated nearly $38 billion of new volume in the U.S. an increase of 25% over the prior quarter.

Since January 2008, the company provided $155 billion of new financings to companies, infrastructure projects and municipalities, and extended $127 billion of credit to 50 million consumers. GE Capital has outstanding credit with more than 330,000 commercial customers and 145,000 small businesses; in 2009 the company added 16,000 new commercial customers and supported 23,000 new small businesses through its retail programs.

In addition, GE Capital has an additional pipeline of over $2.0 billion in restructuring projects it is evaluating to improve operations performance in 2010 and beyond.
Read the full analyst report on "GE"
Zacks Investment Research

CIT: Thumbs Up or Thumbs Down? – Analyst Blog

Zacks Market Commentaries — Tue, 14 Jul 2009 14:28:01 +0000

While Treasury Secretary Timothy Geithner left open the potential rescue for CIT Group (CIT) -- a commercial financing and leasing products lending entity with and management advisory services focused on small and middle market companies worldwide -- clearly time would otherwise be running out for this company. Its shares have been under extreme pressure as investors doubt whether the company can pay off its mounting debts without filing for bankruptcy.

If CIT gets bailed out, the funds would most likely be supplied by the Federal Deposit Insurance Corp.'s Temporary Liquidity Guarantee Program. This program was used by General Electric (GE) and others in the past, and would aid in easing investor fears as CIT would be permitted to issue short-term debt guaranteed by the FDIC.

An alternative would be for CIT to issue higher yielding debt without government backing, which might attract investors with a potential for higher yield reward for the risk. However, the costs of such a plan might ultimately be prohibitive and may only postpone the inevitable. CIT has approximately $2.7 billion of debt coming due in 2009, with $8.0 billion coming due in 2010. 

As the failure of CIT is not perceived to pose a systemic risk to financial markets, there remains a high potential that this company would not be bailed out. This would stem from CIT already having had received $2.3 billion from the Troubled Asset Relief Program (TARP). If CIT were to fail, Wells Fargo (WFC) and GE Capital would definitely be in the wings to pick the carcass.

While there is a basis for not being interested in helping out another large financial institution, the potential passing of CIT (one of the oldest and largest lenders to small and mid-sized businesses) could send the wrong message to the financials of “Main Street America," and result in political risk -- considering most financial institutions in the country remain unfriendly to the prospect of lending.
Read the full analyst report on "CIT"
Read the full analyst report on "GE"
Read the full analyst report on "WFC"
Zacks Investment Research

Stock Market News for July 14, 2009 – Market News

Zacks Market Commentaries — Tue, 14 Jul 2009 14:25:04 +0000

US stocks staged a sharp recovery yesterday, helped by rebound in financial shares, as analyst Meredith Whitney’s bullish comments on Goldman Sachs (NYSE:GS) triggered a buying spree and investors snapped up banking and industrial stocks. The Dow Jones industrial average jumped 185 points. Bank of America (NYSE:BAC), which has been hit hard by loan losses, also surged after Whitney said on CNBC the shares were the cheapest among U.S. banking stocks. The S&P 500 index added 22 points, or 2.5%. The NASDAQ rose 37 points, or 2.1%, helped by a 2.1% rally in technology stocks.

However, CIT Group Inc. (NYSE:CIT) plunged 11.8% after the commercial finance lender said its failure would put prospects of 760 manufacturing clients in jeopardy and precipitate a crisis for about 300,000 retailers. American International Inc. (NYSE:AIG) rallied 24% and was the leading gainer among S&P 500 stocks after media reports said Primus Financial Holdings Ltd. is looking to make a $2 billion bid for the firm’s Taiwan life insurance unit.

Stock futures pared gains this morning, despite better-than-expected results from Goldman Sachs (NYSE:GS), as a government report said wholesale prices rose more than estimated in June.

Market breadth was positive. On the New York Stock Exchange, advancing shares beat declining issues five to one on volume of 1.19 billion shares. The market’s measure of volatility, the CBOE Vix, tumbled 9.3% to 26.31. Crude prices sank to an eight-week low, off $0.20 to $59.69.

All ten S&P500 industry groups recorded gains, led by a 5.9% rise in financial stocks. Financials rose, following Whitney’s "buy" rating on Goldman Sachs (NYSE:GS), that was issued a day before the firm reports its first-quarter earnings. Goldman Sachs (NYSE:GS) is expected to beat consensus estimates of earnings of $3.48 per share, helped by its lucrative bond trading operations. Bank of America (NYSE:BAC) jumped 9.3%, following Whitney’s comments. General Electric (NYSE:GE) surged 6.3% ahead of its earnings release on Friday, after Goldman Sachs (NYSE:GS) said the company is likely to beat Street projections. JP Morgan (NYSE:JPM), expected to report on Thursday, jumped 7.3% on expectations of better-than-projected earnings.

Yesterday's Treasury Budget statement for June of a slightly less-than-expected, but still onerous $94.3 billion deficit, sent the year-to-date cumulative deficit to a record $1.08 trillion. Treasury Secretary Geithner, however, countered suggestions of additional programs, noting, "...we're just beginning to come to the point when you're going to see the largest effective boost to the employment-intensive parts of the stimulus coming on stream," as he stated, "...we're starting to see a better basis for recovery."

Company earnings reports slated for release today include: Altera Corp (NASDAQ:ALTR), Goldman Sachs (NYSE:GS), Intel (NASDAQ:INTC), Johnson & Johnson (NYSE:JNJ) and Yum! Brands (NYSE:YUM).

Zacks Investment Research

Inflation May Show It’s Ugly Head, Big Week for Bank Earnings

Christian Hill — Mon, 13 Jul 2009 15:00:33 +0000

h3 class="post_date"strongMonday/strong/h3 pstrongEarnings Announcements: Novellus (/strongstrongNVLS/strong)/p div class="entry" pstrongTuesday/strongbr / Economic Reports: strongCore PPI, PPI, Retail Sales/strong/p pWill this be the month that we finally see inflation take hold? If expectations come true, it very well could be. PPI is anticipated to show an increase of nearly 1%. Core PPI (which excludes food and energy costs) is expected to show an increase of 0.10%. Retail Sales are expected to post a surprising increase. Most reports I have seen show that retailers are still struggling. I don’t expect this report to beat expectations./p pEarnings Announcements: Goldman Sachs (strongGS/strong), Johnson and Johnson (strongJNJ/strong), Yum Brands (strongYUM/strong)/p pstrongWednesday/strongbr / Economic Reports: strongCore CPI, CPI/strong/p pThe CPI is expected to show an increase of 0.60%, and Core CPI an increase of 0.10%. If both CPI and PPI meet expectations, we#8230;/p/div

Company News for July 13, 2009 – Corporate Summary

Zacks Market Commentaries — Mon, 13 Jul 2009 14:13:35 +0000

• Meredith Whitney raised Goldman Sachs (NYSE:GS) shares to "buy" from "neutral" with a $186 price target

• Goldman Sachs (NYSE:GS) added Discover Financial Services (NYSE:DFS) to its Conviction Buy List, taking off shares of Bank of New York Mellon (NYSE:BK)

• Goldman Sachs (NYSE:GS) posted positive comments ahead of Friday's forthcoming General Electric (NYSE:GE) numbers, saying it sees it earnings to beat Street estimates of 23 cents a share

• CIT Group (NYSE:CIT) warned of a possible "crisis" for 30,000 retailers should its failure to raise funds drive the firm into bankruptcy as it attempts to improve its near-term liquidity position

• Microsoft's (NASDAQ:MSFT) annual partner conference in New Orleans begins today, with reports expected on online software versions as well as plans for its "cloud" operating system, its next Office Suite software version, and pricing and plans for its Azure operating system

• Philips (NYSE:PHG), Europe's largest consumer electronics firm, surprised with second quarter earnings of $62 million, down 94% from a year ago, but ahead of Street estimates for a loss of $175 million, as well as offering optimistic comments of an improved second half helped by cost-cutting measures

• Rockwell Automation (NYSE:ROK) was upgraded by JP Morgan (NYSE:JPM), with a price target of $35, up from $29

Zacks Investment Research

Stock Market News for July 13, 2009 – Market News

Zacks Market Commentaries — Mon, 13 Jul 2009 14:08:16 +0000

Global stock markets continued their slide Monday as waning optimism about a stronger economic turnaround continued to weigh on sentiments. Investors remained in risk-averse mode and sold stocks across the board. In Asia, the Nikkei 225 stock average recorded its ninth straight loss, tumbling 236.95 points or 2.6% to 9,050.33. The Hang Seng Index in Hong Kong plunged 453.79 points, or 2.6%, to 17,254.63 and South Korea’s Kospi shed 50 points, or 3.5%, to 1,378.12.

On Friday, US stocks registered their fourth-straight week of declines as a dip in consumer confidence and Chevron’s (NYSE:CVX) bleak profit outlook highlighted concerns about the health of the global economy. The Dow Jones Industrial Average lost 37 points, or 0.4%. Tech-heavy Nasdaq rose 3 points or 0.2% and the S&P 500 index eased 3 points or 0.4%. Volume remained light with only 922 million shares trading and advancing issues ahead of decliners by a narrow margin. For the week, the Dow slipped 1.6%, the S&P 500 fell 1.9% and the Nasdaq declined 2.3%.

Although Alcoa (NYSE:AA) launched second-quarter earnings season with a smaller-than-expected loss, Chevron’s (NYSE:CVX) profit warning heightened concerns about second-quarter earnings and investors sold off stocks. Crude prices continued their decline, remaining near $60 level. Exxon Mobil Corp. (NYSE:XOM) slid 4.9%.

Among the S&P 500 industry groups, telecom companies were the worst performers. AT&T (NYSE:T) fell 4.7% to $23.44, and Verizon Communications Inc. (NYSE:VZ) declined 5.2% to $28.62 after Sanford C. Bernstein & Co. cut profit estimates for these companies, citing declining revenue from corporate customers. Technology stocks got a boost after Goldman Sachs upgraded the U.S. hardware and software sectors to "attractive" from "neutral," citing potential growth in demand from businesses. Goldman (NYSE:GS) also raised its price target on Apple Inc (NASDAQ:AAPL) to $160 from $145. Apple rose 1.6% to $138.52.

Among the financials, results are expected from Goldman Sachs (NYSE:GS), Bank of America (NYSE:BAC), Citigroup (NYSE:C) and JP Morgan (NYSE:JPM). Analysts expected Goldman Sachs (NYSE:GS) to report second-quarter profit of more than $2 billion on strength in the firms' bond, currency and commodity trading operations. Among the technology companies due to report their earnings are: Intel (NASDAQ:INTC), Google (NASDAQ:GOOG), Nokia (NYSE:NOK) and IBM (NYSE:IBM). Also among the key companies reporting this week are: Johnson & Johnson (NYSE:JNJ), General Electric (NYSE:GE), CSX (NYSE:CSX), and Abbott Labs (NYSE:ABT). S&P500 second quarter earnings are projected to have declined 35% in the quarter, compared with a 33% first quarter drop.

Zacks Investment Research

Octus Energy Adds Two Energy Industry Executives to Its Management Team

Stuart T. Smith — Fri, 10 Jul 2009 13:49:50 +0000

DAVIS, CA — (Marketwire) — 07/09/09 — Octus Energy (OTCBB: OCTI) today announced the addition of two energy industry executives to its management team, strengthening the company’s commercialization of the Octus Smart Energy Platform (OctusSEP). Joining the company are Tobin J.M. Richardson as Senior Advisor, Energy Markets, and Siva Gunda as Senior Engineer, Smart Energy [...]

How to Avoid the Dividend Trap… and Find Stable, High-Yield Investments

Louis Basenese — Wed, 08 Jul 2009 17:52:42 +0000

pstrongCountless studies demonstrate that dividend-paying stocks outperform non-payers by a wide margin. From 1972 to 2006 dividend-paying stocks returned an average of 10% annually versus 4% for non-dividend payers, according to Ned Davis Research. Going back to 1926, other studies confirm almost half of the S#38;P 500’s return was due to the dividends paid by the companies in the index./strong/p pSo, I’ll take Bill Gross’ recommendation one step further. Forget now. Dividend-paying stocks ALWAYS deserve a place in your portfolio./p pYet, in this market, it’s increasingly difficult to find reliable dividend stocks./p p“This is going to be the worst [dividend-cutting year] in 50 years,” Howard Silverblatt, Senior Index Analyst at Standard #38; Poor’s, predicted in January. So far he’s right with industry titans like#8230;/p

Stay Out of the Water

Bill Bonner — Fri, 03 Jul 2009 18:30:59 +0000

pNEW Unemployment figures Show We#8217;re Still Lingering in Depression./p pThis week began with shrieks of joy. First, a federal court came down on Bernie Madoff like a brick on a bald head. Madoff, convicted of lying to investors, drew a sentence that only a sea turtle or a swamp oak could complete. Then, like children playing in the sea, investors were teased by one wave of good news#8230; and tickled by the next./p pBloomberg reported that “Wall Street’s largest bond-trading firms say the worst may be over for investors#8230; ” Then, General Electric’s CEO, Jeffrey Immelt and famous investor George Soros both said that the crisis is “behind us” and that growth will begin again next year. Finally, analyst John Dorfman opined#8230;/p

Need an Income Investment? Keep Dumping GE and Buy this Stock Instead

Louis Basenese — Thu, 02 Jul 2009 21:45:04 +0000

pBack in January, I advised you to dump everyone’s sweetheart dividend stock, strongGeneral Electric/strong (NYSE: a href="http://www.google.com/finance?q=NYSE%3AGE" target="_blank"GE/a) in favor of strongTEPPCO Partners/strong (NYSE: a href="http://www.google.com/finance?q=NYSE%3ATPP" target="_blank"TPP/a). Many balked at the idea. But the results don’t lie…/p pYear-to-date, strongGeneral Electric/strong is the worst-performing stock in the Dow, down 22.3%. Meanwhile, TEPPCO is up 69%, including dividends./p p(If any of you took me up on my income investment recommendation, e-mail us and let us know how you did at a href="mailto:comments@investmentu.com" target="_blank"comments@investmentu.com/a.)/p pOf course, part of the move higher for TEPPCO can be attributed to news that strongEnterprise Products Partners/strong (NYSE: a href="http://www.google.com/finance?q=NYSE%3AEPD" target="_blank"EPD/a) is buying the company, as I predicted./p pFor those of you that purchased the stock, I recommend you take profits now. And whatever you do, don’t reinvest them in GE./p pstrongGE: Reasons Why It’s#8230;/strong/p

Need An Income Investment? Keep Dumping GE and Buy This Stock Instead

Investment U — Wed, 01 Jul 2009 21:31:01 +0000

Need An Income Investment? Keep Dumping GE and Buy This Stock Instead by Louis Basenese, Advisory Panelist Back in January, I advised you to dump everyone’s sweetheart dividend stock, General Electric (NYSE: GE) in favor of TEPPCO Partners (NYSE: TPP). Many balked at the idea. But the results don’t lie… Year-to-date, General Electric is the worst-performing stock in the [...]

Zacks Bull and Bear of the Day Highlights: Research In Motion, Canon, American Electric Power, General Electric and First Solar – Press Releases

Zacks Market Commentaries — Tue, 30 Jun 2009 13:35:14 +0000

For Immediate Release

Chicago, IL - June 30, 2009 - Zacks Equity Research highlights Research In Motion (RIMM) as the Bull of the Day and Canon (CAJ) the Bear of the Day. In addition, Zacks Equity Research provides analysis on American Electric Power (AEP), General Electric (GE) and First Solar (FSLR).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.

Here is a synopsis of all five stocks:

Bull of the Day:

Research In Motion (RIMM), the manufacturer of BlackBerry'smart-phone devices, continues with robust financial performance in spite of facing a global economic recession and an extremely competitive industry.

The company's first quarter (ended May 30) financial results were above our expectations. Highend Blackberry handsets experienced significant market traction as the company maintains the momentum of net new subscriber additions. Sequential improvement of gross margin is another positive factor.

We expect the smart-phone device market to gain further momentum should economic conditions improve and as demand for portable mobile access remains firm on a global basis.

Bear of the Day:

We believe the sharp appreciation of the yen is eroding Canon's (CAJ) revenue and profits.

Canon's first-quarter 2009 results were mixed with revenue below expectations while earnings slightly exceeding our expectation. The company expects to improve profitability through product launches and cost cutting efforts. As a result CAJ raised its earnings forecast for the full year 2009, still below 2008 level.

We expect revenue in 2009 to be hurt by weak consumer spending and believe the company will struggle to meet expectations in fiscal 2009. We maintain our estimates for the full year 2009.

Who Wins From Cap & Trade? – Analyst Blog

Dirk Van Dijk — Mon, 29 Jun 2009 19:40:16 +0000

On Friday, the House narrowly approved the Waxman-Markey bill. This legislation will, for the first time, put a (indirect) price on CO2 emissions.

Most of the permits will be given away at first rather than being auctioned off. This will greatly ease the transition, much to the benefit to coal oriented utilities like American Electric Power (AEP).

According to calculations provided by the Congressional Budget Office, the cost of this bill should be very modest at about $175 per household per year by 2020. (The $3,000 number being thrown around by opponents comes from a self-interested study by the American Petroleum Institute.)

The bill's goal is to reduce carbon emissions by 17% from 2005 levels by 2020, and by 83% by 2050. The bigger idea is to have the rest of the world to go along with similar legislation, since recent evidence shows that climate change is happening faster than even the most pessimistic estimates of a few years ago.

Without the U.S. taking action, it will be impossible to bring major emerging emitters like China and India on board. While getting them to play ball is by no means guaranteed, China and India will not be on board without participation by the U.S. This makes passing a Waxman-Markey a necessity.

The bill will require that by 2020, that 20% of all U.S. electric power come from renewable sources. The means that the Wind Turbine unit should be one of General Electric's (GE) best performing divisions going forward. However, I'm not sure that it will be enough to totally move the needle on a firm the size of GE. Still, GE will get a benefit, and is a fairly conservative way to play it.

More direct plays like First Solar (FSLR) and Evergreen Solar (ESLR) are not exactly cheap, which makes them more risky. However, the potential upside is also huge.
Read the full analyst report on "AEP"
Read the full analyst report on "GE"
Read the full analyst report on "FSLR"
Read the full analyst report on "ESLR"
Zacks Investment Research

The UpTurn (UPTR.PK) Receives Support from High Powered Team at BGV

QualityStocks — Mon, 22 Jun 2009 20:04:10 +0000

The UpTurn, Inc., under the leadership of founder and CEO Jeffrey Eckman, is combining real estate needs with lifestyle interests to create what some are calling the world’s first Web 2.0 real estate site. As a startup venture, the company is being capitalized with investments from private funding and capital markets, and is also receiving [...]

A Discussion With John Bogle

IndexUniverse Staff — Fri, 19 Jun 2009 20:03:47 +0000

The full transcript of John Bogle’s recent webinar examining exchange-traded funds and the outlook for America’s investors.

As part of the festivities surrounding the 2009 Journal of Indexes editorial board meeting, IndexUniverse.com hosted a live webinar with Vanguard founder and index industry legend John Bogle.

During the one-hour presentation, Mr. Bogle unveiled new research regarding how successful (or not) investors are when trading exchange-traded funds, and took a big picture look at the state of American finance.

Moderated by JoI editor and IndexUniverse.com publisher Jim Wiandt, the webinar features an extensive audience Q&A session. A full transcript follows below.

Jim Wiandt, editor, Journal of Indexes (Wiandt): Good morning everyone, and welcome to a very special event that we have here today. We are actually at the NASDAQ market site and we have the Journal of Indexes editorial board meeting today.

We have a very special guest to present today at our webinar. John Bogle is a legend. He is an icon and is really the father of indexing and sensible asset allocation for average investors. We are delighted to have Mr. Bogle here today.

He is going to go through a series of slides, some of which are extremely interesting and very pertinent, which speak to the way the index industry has evolved in recent years.

The format for today will be first, Mr. Bogle will go through his slides, and then we are going to open things up for questions.

We have all of these slides posted to our Web site, IndexUniverse.com [available here]. Without any further ado, I will turn things over to Mr. Bogle. And, again, we are delighted to have you, Mr. Bogle, and look forward to the presentation.

[Editor’s Note: A replay of the webinar is available here.]

John Bogle, Bogle Financial Markets Center (Bogle): Thank you very much, Jim. And welcome, all you webinar listeners. I presume there are a few Bogle-heads there and I send a special welcome to them.

It’s fun to be with you this morning. I thought I would begin by giving you a report on the status of index funds in mid-2009. I guess the main point I would like to begin with is that we now know what we really suspected, or strongly believed, 25 or 35 years ago when I started the first index fund—that indexing would change the world of investing.

I believe it is now clear that indexing has changed the world of investing in some very remarkable ways. First and most notably, I think we’ve had an odd convergence of indexing in two different areas. Active fund management has become much more like passive fund management—for example, active managers are often quantitative, working off matching indexes or having enhanced index funds or closet index funds. Or when you look at brokerage recommendations, you see they overweight relative to the index or underweight rather than buy or sell. The way we look at investing has been changed by standard indexing.

But even as that has happened, passive indexing has gotten a lot more like active fund management. That is, we use index funds for rapid trading in some very remarkable ways, which I will discuss this morning.

We can go to the first slide there and just take a look at what I will call a triumph of indexing. You see the growth of indexing just in the last 15 years from $24 billion to $914 billion on the equity fund side. Throw in roughly $150 billion of bond fund indexing and you are over $1 trillion—about $1.60 trillion in index money in a long-term stock and bond mutual fund industry that has $6 trillion of assets. So indexing itself now accounts for one-sixth of all the mutual fund assets; quite a remarkable thing.

And so, it’s pretty nice to think that last year, 2008, is probably the best year indexing ever had in terms of performance. For the total stock market and the S&P 500—two good proxies for what is going on in the U.S. market—indexes of those two components put them in about the 65^th percentile [of overall fund performance], outperforming about two-thirds of all mutual fund managers. Sure, the decline was about 37%, but the typical U.S. manager went down about 40%; the typical developed market fund went down about 45 to 50%; and the typical emerging market fund went down 55 to 60%. So on the stock fund side, it was quite a triumph for indexing.

On the bond index fund side, it was even more of a triumph. The total bond market index was up 5% last year, outperforming about 85% of comparable bond funds, thanks largely to a big drop, as most of you may know, in Treasury yield.

So we’ve got this wonderful growth rate. We’ve got a dominant industry position. And yet, some unusual things are happening. We will take a look at what is driving the growth of indexing by looking first at ETFs—exchange-traded index funds. And as the next chart shows, I describe them as a truly great business model. Hear carefully when I say “business model.” We will talk about other kinds of models later on.

You can see in the next chart that ETFs have come from almost nowhere—back in the early 1990s, when the first exchange-traded fund was started—to the fact that they are now actually just a hair behind in terms of equity fund assets the traditional index funds, the kind of funds that Vanguard pretty much runs: $457 billion compared to $460 billion, or $456 billion plus. So the ETFs have proved great competition for the classic index funds, basically what I thought about all those years ago.

I’m often asked, “Who is going to win the war: mutual funds or exchange-traded funds?” That is not a good question, because exchange-traded funds are mutual funds. They are just mutual funds you can trade all day long in real time. We will talk a little bit about that. So what we have is, what is growing is index funds for people who want to trade or who believe that the opportunity to trade or the ability to trade is important, intraday trading; and equity mutual funds, which are more designed for long-term investors.

But going over to the next chart, you will see pretty much what has driven the growth of index funds even more clearly than the previous chart. Exchange-traded funds were about 2% of the index fund business back in about 1997, 1998. By 2000, they got up to about 11%. In 2008-2009, they are 11% of equity fund assets, just exactly the same, almost exactly the same as the 11% in traditional index funds.

So we have had a huge growth rate for ETFs. And in terms of market share, stability in a lot of ways, and maybe disappointing stability in the market share of traditional, classic index funds—old, broad market index funds. But for quite a few years, the cash flow went very much in favor of … active funds over index funds for years and years.

But in 2007, as you can see in this chart, the index funds took in about twice as much in the way of assets as actively managed funds. Last year, index funds took in $200 billion in assets. Active funds lost $250 billion. And this year, index funds are taking in a little bit of money so far. These are annualized numbers for 2009. And the active funds are, again, losing so far, on an annualized basis, about $150 billion this year. So clearly, the trends are there. The trends are also there for traditional index funds versus exchange-traded funds.

You can see on this chart the dominance of exchange-traded funds has really been quite remarkable these last three or four years. Where the traditional index funds were taking $40 or $50 billion a year in net cash flow—a good measure of success in the marketplace—the exchange-traded funds were taking somewhere between $140 billion to $150 billion a year and three or four or five times as much. Whether this is a trend or not is much too early to say.

That has been somewhat reversed here in 2009 with, on an annualized basis, the traditional index funds actually adding about $40 billion, expected to add about $40 million in cash flow—where for the first time ever, exchange-traded funds are actually having cash outflow roughly in the amount of $30 billion annualized this year so far. Whether that is a turn in the tide, only time will tell.

Now, if exchange-traded funds are a brilliant business model, are they a good investment model or, as this next slide asks, are they a flawed investment model? And we know they are a good business model. We know they are great for fund marketers. We know they are great for brokers. We know they are great for investment advisers. We know they are great for institutional speculators. But the question is, what are ETFs doing for individual investors?

That is an interesting question and we have done some research on it, which we are going to unveil here in a little bit for the first time. I come back now to the difference between an exchange-traded fund and a traditional index fund. An exchange-traded fund, to use the quotation from the original ad for the SPDR [NYSE Arca: SPY]: “And now you can trade the market all day long in real time.” That is what the original SPDR was advertised as doing. I’m not exactly sure why anybody would want to trade the market all day long in real time, but that is their slogan.

In many respects, as this chart shows, that idea of using ETFs, exchange-traded funds, for speculation has come true, come more than true, come true in spades. You can look at it any way you want, but look at those turnover rates for share turnover in the SPDRs there. And they are in second: 10,105% turnover last year. Just think of that. There are about 711 million shares outstanding of the SPDRS and they have 8 billion shares traded last year―8 billion shares of SPDRS traded.

And that doesn’t seem to be particularly good, even for those investors. Because while the SPDR had a five-year return of -1.9% a year—it’s been a difficult market—the average investor in SPDRs had a return of -8.2% a year. So you tell me whether all that trading is good for investors or is not good for investors. You can see what you would expect.

On the other more speculative side of the markets, the ETFs trades very heavily. Real estate funds have huge ups and downs. The turnover of the iShares real estate ETF we looked at was 23,977%—to put precision on a number that doesn’t need to be precise.

Obviously, Financial SPDRS were attractive both to buyers and sellers last year, with 9,600% turnover. The NASDAQ QQQs? 8,700%. These are remarkable numbers, suggesting that a great deal of what’s going on in ETFs is a business of very rapid trading among large, institutional investors.

Now, when you look at more normal share turnover, over on the right side of the chart—we just took out of a group of about 38 or 40 funds, the lowest turnover funds. More than about half of them seemed to be Vanguard funds, which have turnover in the range of about 200% per year, far lower than those high percentages. So there is a use for ETFs that doesn’t require the trading that seems to show up in the less speculative part of the market.

How high is a 200% turnover rate? Well, the average mutual fund last year happened to have one of the highest turnover rates in a long time—a 33% redemption rate last year. That’s high, very high as far as I’m concerned. So you can imagine what I think of 200% turnover.

What we are seeing here is the use of funds, of ETFs, for speculation. For the bigger ones and for the more traditional ones, in some sense at least, we have much lower turnover, but still high compared to mutual fund turnover.

If we go to the next chart, we can try to answer the question on the next two charts. Okay, we know how ETFs do. But only in recent years have we found out how the investors in mutual funds do. You can actually calculate these returns, what we call the fund returns or the time-weighted return, or typical rate of return. Something starts at $10 and goes to $11―that’s 10%, not very complicated there. But then we do a dollar-weighted return, an asset-weighted return, to show how investor cash flows influence that return delivered by fund. The reality of life in this business is that it is very rare that investors do as well as the funds themselves.

And that is the point I’m making on this chart with the ETFs. These are all exchange-traded fund groups. You will be familiar with the groups: large-cap blend, large-cap growth and value, same in the mid-caps, European, emerging markets, and so on. And you will see that in general, investors lag those returns, just glancing at those numbers, by 5% or 6% a year of return. [That is, they earn] 5% or 6% less than the fund, than the ETF itself earns, showing that the trading is done in an unfortunate way in terms of timing.

The numbers shown over on the right side of this chart are unbelievably consistent. For example, on that page there are 46 ETFs, and in 40 cases out of 46, the investor returns lag the funds return. This is not an aberration. This is a very consistent return, which you will see again if we will flip over to the next chart, which just shows some additional subsectors of the market, in the ETF form, with the investor return and the investor lag.

You can see in some cases―the financial case, for example―the fund’s return trail the index return by almost 11% per year over the last five years. The investors had a negative return of almost 29% over the last five years, a lag in return of almost 18% a year. It is hard to believe. And there, 100% of the funds lag the index. So when you put those two charts together and add them up, out of 79 exchange-traded funds that we covered, 68 of them had investor returns that were either substantially, significantly, or moderately at least short of the returns earned by the funds themselves.

So if you want to take some kind of a simplified average and say that fund returns were generally negative to about 1% a year, and the investor returns on average were negative about 3.5% a year—I’m sorry. The fund returns happened to be positive, thanks to energy and utilities and emerging markets and such segments as that, just a simple average of positive 1%. You find the ETF returns averaged about 6% on these charts, accumulated over five years. But investor returns, if you take -3.5% with negative compounding over five years, investor returns were about -12%.

So when you put plus 6% for the five-year total return for the fund and -12% for the five-year total return for the investor, you are talking about 18% of investor capital that has been lost by all this trading. Now, you can ask, “Don’t regular mutual funds have this same problem of investor returns lagging the returns of the indexes or returns of the funds they own?” Of course they do, but it is not nearly as bad.

To show that, we will introduce one more chart, which I think will be the last chart I will use, so we can open it to your discussion. We happen to have Vanguard mutual funds that have ETFs, exchange-traded funds, in each of these categories. And we have compared the returns on the Vanguard mutual fund returns on this chart, beginning with large-cap blended funds, large-cap growth, large-cap value, mid-cap blended, small-cap blended, emerging markets and real estate investment trusts. We have a regular fund in those areas, Vanguard does: a regular mutual fund. Those returns are shown near the center section of the chart. And the investor returns on the exchange-traded funds are shown on the right side.

You will see that while the investor lag on the exchange-traded funds and side on the left have remarkably large and significant lags, the actual mutual funds themselves lag here and there, but in general, come very close to the returns earned by the market standard that they are in. So we have evidence, strong evidence, that exchange traded funds―because of the timing that goes on―are not acting in the best interest of investors, or investors are not acting in their own best interest, might be a fairer way to put it. While mutual fund investors have similar problems, they are nowhere near so serious. They are not even in the same league.

So the question I raise is―I suppose a broad, philosophical question―how long can a great business model last if it doesn’t deliver good returns to the investors who rely on it? And that is a question we might chat about. But first, before that, I would like to open the meeting and try to answer any questions any of you might have who were kind enough to attend this morning.

Wiandt: Thank you, Mr. Bogle. We have a lot of good questions. Why don’t we start out with one which talks about your methodology? There are a few questions in this area about how these returns are calculated. I guess the focus of these questions is, is most of this turnover retail turnover? Is it institutional? Is it both? And how did you come up with these calculations in terms of looking at the flows and calculating these returns?

Bogle: Well, first it is very hard to separate out institutional turnover, the huge turnover where people are speculating on, for example, the SPDRs. Investment adviser turnover, how big is that? How much is individual turnover by those who intend to invest and that other component of individual behavior, which is those that intend to speculate. I don't know anybody that has unscrambled that egg. I am not privy to Vanguard data on this point.

I think even more important would be the data that someone like Barclays could provide. They are, of course, the largest firm, the most dominant firm in this business with the broadest base of business. So we are just going to have to ask them how they would divide this up. I did have a conversation with a representative of Barclays three or four years ago, and I was making the same point I am making this morning. He said, “Well, that just is not right. Seventy percent of our investors are long-term investors.” And I said, “How do you define long-term?” And he said, “Six months to a year and a half.” Well, that is not my idea of a long-term investor. That is just another example of the difficulty of getting through. It is a matter of definition.

Now, as to the methodology, we don’t do these ourselves. These are Morningstar data. My understanding of how that data is compiled, and I take some comfort by the way, in its consistency from one group to the other—which suggests that there are not a lot of problems with the data. Although I’m the first one to state and underscore that all data has problems. When you see really consistent data like this, however, it’s an eye-opener. It may not be precise, but it’s got to be giving us an indication of what we know to be true.

One of my rules has always been, take a look at some numbers and if it flies in the face of your intuition, do the numbers over and over and over again. But if the numbers confirm your intuition―which is essentially that ETF shareholders and mutual fund shareholders generally look back at past performance and buy the funds that have done well―it is sort of performance-chasing…

We know that happens. We can’t measure it with precision.

Now when you get funds with a lot of daily cash flow in and out―I’m sure real estate REITs are a good example of that, and I’m sure the SPDR is a very, very good example of that―I don’t see how we can be precise in these returns. What you do is take monthly cash flows and compare them with the price of the fund, the average price of the fund during the month, then you figure out eventually how many investor dollars earn what returns over time. Is that way of aggregating the data precise? No, it is not.

But I’m persuaded in the absence of compelling evidence on the other side that these data are telling us something that is worth knowing. And it suggests that mutual fund trading is about as valuable as trading individual stocks, which is to say, not valuable at all, and harmful to your returns.

Wiandt: Every year we hear from active managers that “this is the year of active management.” Do you believe that there are environments that are more favorable to active management than passive management and index investing? And if so, what do those times look like?

Bogle: There is no way that active managers can possibly have an advantage no matter what the circumstances are. Just think about this: Almost 75% almost of all stocks are owned by institutional investors now, and they are basically, by and large, professional investors. They are pension fund investors. They are pension money managers, they are pension trustees I should say, pension money managers, mutual fund managers, which also manage pension funds and endowment funds. And that’s 75% of all stocks, and only 75% of all stocks. It is just not possible that they can be taking the individual investor on the other side— the remaining part of the market—to the cleaners with every trade. There is no evidence of that.

So what we find is that institutional investors and individual investors basically each capture the market return and they each capture the market—and together they each capture the total market return. That is inevitable. And that’s before cost. So when you take out costs, which are high, you end up explaining almost all the reasons that active managers cannot and do not beat the funds, beat the market itself. It is just statistically, mathematically, tautologically impossible.

Wiandt: How do you see the Barclays-Black Rock merger affecting the investment landscape? What do you view as the implications of that merger?

Bogle: Well, that’s a good question. I have a couple of observations. First, they paid a pretty good-sized price. I think since Barclays kept 20% of the company, the price comes out to be something like $17 billion or $18 billion. That’s a lot of money to pay for a fairly low-margin business. Second, ultimately, I think they are going to have to reduce the cost of the funds, which will make it less attractive as an investment—because they are just a very high-cost outfit, compared to the low-cost provider, which is always Vanguard.

iShares has an average expense ratio of 41 basis points. And those are the ETFs run by Barclays. Vanguard has an average expense ratio in its ETFs of 15 basis points. Eventually the low cost wins. That’s all there is to it. So they are going to have to worry about whether they can be able to be competitive with high prices—which can be providing them with a lot of revenues and maybe a lot of money to do marketing and a lot of money to create one new index-based ETF after another, which they seem to be doing.

I think it is going to be a hard business then to build market share. And since they are around a 50% market share now, in my experience, most firms, when they get to 50% market shares, find it much more likely for that market share to shrink than to grow.

There is also another kind of a subtle thing, and I don’t mean to be unkind at all to BlackRock, but they have a real problem with active management. There is no question they must be interested in index funds because they are indexed and not actively managed. We took a look at 100 funds. They have 100 closed-end bond funds and we took a look at them last year, and 99 of them—you know, the bond market went up 5%—99 of them had negative returns. Fifty-four of them had negative returns of over 20%, including 24 of the Black-Rock-managed bond funds that had negative returns of 30%–60% last year.

I mean you’ve got to be struggling with the business when active management is producing those kinds of returns on their bond funds, their area of expertise. So I wish them well. I don’t particularly want to be in a position of criticizing them. But with their record last year, I’m sure they are every bit as disappointed and surprised as I am. I would think, to them, indexing looks like a pretty darn good business.

Wiandt: What do you think the impact of all these leveraged ETFs and all the trading activity that you outlined is? Do you think that all that trading activity and the size of ETF trading—which some days is over 40% of trading in the market—is making for more volatile markets, is actually affecting what is going on in stock markets?

Bogle: Well, I struggle a little bit with that. I’m not sure enough of the data. For example, when we say that SPDR has 10,000% turnover, if you have a buy and a sell at the same time or almost at the same time of, say, 100,000 shares of the SPDR, that’s a volume number that is counted but doesn’t result in any stock changing hands. You are just offsetting the buyer against the seller. So I haven’t been able to cut through that fog. You know, the people that are running those businesses, I think, have some kind of an obligation to report exactly how much trading goes on. And, beyond my expertise, they may actually be doing that. I just don’t know that. It is certainly something we should know.

But in general, I looked at index fund trading, oh, a few years back before these ETFs got so big, maybe three or four years ago. And index fund trading counted for about 0.4% of all securities trading on the various companies—General Electric, Microsoft and companies like that. So 0.4% can’t be looked at as something that is driving the mare here. It’s got to be smaller. It is something that ought to be investigated. But the evidence I have so far is that you can’t really place the responsibility for market volatility on index funds. Although the growth of ETFs in the last few years may have changed that conclusion.

Wiandt: We have a couple of macroeconomic-focused questions. So I will ask those. The term “systematic risk” has become a scare tactic that the government uses to justify bailouts and defraud taxpayers. What is your view of systematic risk? What is your view of the bailout and how the government has reacted to the financial crisis?

Bogle: Well, I think it is a little over the top for me to say that the government is defrauding taxpayers. I don’t know quite the context to put that in. I would strike that from anything I could possibly respond to. I just don’t believe it is true. The more relevant question is, I suppose, that when we had this enormous risk to the financial sector of the economy, primarily—we will talk about that first.

The federal government had to do something. And I think what they have done is moving in the right direction, and that is, these banks were out of liquidity. They had created banks and investment banks together. And insurance companies we now know too were part of it, including AIG, American International Group, which was probably the worst of the bunch—doing all kinds of investment… engaging in all kinds of speculative activities that led to the market meltdown we had and where credit actually froze.

And all developed economies operate on free credit. When the credit markets close down, the government can’t just say, “Too bad.” Almost every small business, many individuals, we all depend on credit one way or the other for maybe just a short time, maybe a longer time. So the government had to take action. And I think they took the right action. I think they took the right action in approximately the right dimension.

Although it’s interesting that the actions they have taken have really … they said (a) and the actions turned out to be (b). So if we talk about the troubled asset repurchase program, so-called “TARP,” —I call it the toxic asset repurchase program—that was passed by the Congress under great, great pressure on October 15. It became a campaign issue, you may recall. And they still haven’t made their first purchase of a troubled asset all this time later. What they did, despite the obvious intent of Congress but maybe not the words, is funded the equity capital positions of banks rather than buying the troubled assets.

I’m not sure how easy it is going to be, even with this new public-private investment partnership—the PPIP—how easy it is going to be for us to do trading or have liquidity among these troubled assets. Because as I understand it, bank A is very reluctant to sell one of its toxic assets at, say, 25 cents on the dollar because they’ve got a whole portfolio of toxic assets. And they are scared to death they are going to have to mark them all to 25 cents.

My understanding of what’s going on in the financial economy out there is that 25 cents, give or take, may even be a little bit high. It is roughly what these toxic assets are going to prove to be worth, or at least most of them are going to prove to be worth. So it’s going to be very hard to get them paid off. It is going to take a lot of time. But, obviously, we eventually have to reverse this tremendous leveraging. We have to de-leverage our financial economy—to say nothing of our individuals who have heavy credit card debt, enormous mortgage debt. And there is a decent amount of corporate debt, although not nearly that excessive out there, too.

I mean, debt in our economy, I think, used to run around 60% of our gross domestic product. I believe it got up to around 135% or 140% of late. So we have to do the de-leveraging. The government had to play a role in maintaining liquidity in the system. So, while I can’t defend the exact way they did it—I don’t think anybody knows exactly how to do it—I would defend the policy that calls for government intervention.

Wiandt: We have a lot of questions about ETFs. There are a couple of lines of questions. One basic line is, are ETFs a good investment for a buy-and-hold investor? If someone buys an ETF and holds it for a long time, is it a good investment? Is it potentially a better investment than a traditional mutual fund structure?

Bogle: Well, the answer to that is yes. Unequivocally, it’s a better investment than a traditional mutual fund. Is it better than a classic mutual fund that is indexed? Or to put it another way, is the SPDR a better bet than the Vanguard 500 Index bought directly from Vanguard? That all depends, like everything else in this world—I don’t see that there is a particular, in the abstract, a particular advantage one way or the other. I don’t think the SPDR is necessarily better. Its cost might be a little bit lower than, say, a brokerage commission. The Vanguard 500 Index’s cost is a hair higher, but there is no commission.

I believe, by the way, that the tax efficiency of the SPDR, to the extent that it exists, is going to be indifferent from the standard S&P 500 Index Fund of Vanguard. We have been able to manage that fund with almost no realized gains. Particularly with the market of recent years, we’ve had plenty of high cost of stock in that index fund. Now, when you start to fine-tune it a little bit for an investor accumulating money, it’s absurd to buy the exchange-traded fund because you have to pay a commission every time you buy it—when you reinvest dividends, all those kinds of things—where that is done automatically for you at a known asset value in the 500 index fund.

So for the periodic investor or the retirement plan investor, it would seem to me, just on the mathematics involved, and assuming the performance of the two is the same … I’ll come back to that in a moment … but you don’t have to worry about tax efficiency for retirement plans. I’d say the 500 index is clearly―just because of the math―the superior choice. So you can flip a coin one way or the other.

But in general, long-term investing in the right kinds of index funds, by which I mean, broad market index funds—whether it is S&P 500, total U.S. stock market, possibly the emerging markets, certainly the developed international markets, the total international as we call it—I think they are pretty even competitors. And that is a perfectly good way to invest, and you almost certainly over time substantially outpace, no matter which way you go―ETF or standard index fund―the results of actively managed funds in the same area.

Did I cover all of that, Jim?

Wiandt: I think you did a pretty good job on that one. A follow-up question is, all this trading activity that you outlined for ETFs―does that damage the long-term buy-and-hold investor who is in ETFs?

Bogle: Well, the ETF returns―a little bit surprisingly to me―come pretty close to their category returns. It doesn’t seem to be damaging. And that said, if you are, in fact, are a long-term investor, it should matter very little. Because they seem to be able to produce the return of the index, or emulate it. For the short-term investor, there are often serious variations between the net asset value of the ETF and the market price at which it is trading, particularly in the less liquid market. So you are just flipping one more coin when you get into that game and, therefore, I wouldn’t recommend it.

Wiandt: Another question on ETFs: What are the safeguards and diligence that should be taken by an investor who is looking at ETFs? What sorts of ETFs should we be looking at, and what are the issues about structure or index that we should be looking at?

Bogle: Well, I’m someone who believes in simplicity rather than complexity. And buying the index funds in any of these broad categories is, by far, the simplest way to do it. You don’t have to worry about capital gains. And there are an awful lot of funny things going on in some of the wild ETFs and a great deal of tax inefficiency and large capital gains, things like that, that don’t seem to apply to the bigger indexes, like the bigger index funds, the bigger ETF funds.

But I just go the simple route, because it is clear and nothing can get in your way. You are not in business with all these speculators. And if that starts to make a difference, you won’t be influenced by it. So I would go to the standard index fund just on the basis of simplicity. If you’ve got a tenth of a point return less—and I can’t imagine it can be much different from that, 0.01% per year—I would say that is probably a price worth paying not to have the risk.

There are also quite a few variations on this. Some of these ETFs—I don’t want to speak too strongly about it, but they verge—their concepts verge on insanity: triple leverage, up markets, down markets, new ways to beat the market—how about exchange-traded notes, which are ETFs [or ETNs]? That is basically a call or a promise to pay you the index return by an outside financial organization. And some of them have gone bankrupt, so the exchange-traded notes became worthless. You just be very careful that you are not into the note business. You can’t be sure, ever, what will happen.

So I would say, opt for simplicity. Remember Ockham’s razor. Our friend, Sir William of Ockham, says, “You know, if there are multiple solutions to a problem, choose the simplest one.”

Wiandt: It looks like we have got an active investor here with a question. I think you may enjoy this one. He says, “Jack, you continue to encourage individual investors to buy and hold. However, I challenge you to name one goal-oriented endeavor besides investing where an intelligent individual would select a passive approach over an active one. Can you name even one?” he says.

Bogle: I’m sorry. You are just going to have to explain the question. Name even one investor?

Wiandt: Some activity that you would want to do in life where you would choose to be passive instead of active as a way of succeeding.

Bogle: Oh, that is such a great question! And, you know, there is an answer to it. And this is why we get so messed up in the financial business. Would you go to an average doctor? No. Why would anyone go to an active doctor, to a passive doctor or not the best doctor around? The problem is, in the financial markets, they are different from any other endeavor in American life. And that is, there is a market out there and it has a certain value. And all of us together own that market.

So literally the only way to capture the market return is to own the market without cost. That cannot be done. But you can do it with a cost of as little as 0.1%, and you will, by definition, beat all these other investors who do it at a cost of maybe 2%–2.5%. There is really not any mystery about this. It is all what I’ve been willing to call or have been able to call the “relentless rules of humble arithmetic.” Get the croupiers’ take out and you capture the market return; you as a group of investors. Lave the croupiers’ take in—pay the croupier … pay Wall Street … pay the money managers … pay the brokers … pay the investment bankers … pay the investment advisers … and you get what’s left.

You know, you are sitting---you individual investor who has asked the question—you, pal, are sitting at the bottom of the food chain of investing. You know, everybody gets paid before you do. Where else is that true in American business? I don't know if it is true anywhere else at all. So, yes, unequivocally, it is different and it has to be different. And our failure to acknowledge that difference is what gets us into so much behavioral problem.

Wiandt: Is there a role for financial advisers in helping individual investors? And if there is, what is a reasonable sort of cost for a financial adviser?

Bogle: Well, I happen to believe the financial adviser serves a very useful purpose for many, certainly not all, but for many, and perhaps even most, investors. We put the stock market and the bond market and financial planning in this aura of great mystery. And if you have been around long enough, and I think I have been around long enough, although I have to be around a little bit longer—if you have been around long enough, you realize that there is not that much mystery about it. The idea is to capture the returns of the bond market and the stock market, essentially.

And that is all there is to it: to capitalize on the miracle of compounding returns and avoid the penalty of the tyranny of compounding costs. Because in the long run, the tyranny of compounding costs overwhelms the magic of compounding returns. If investors understand that much and are broadly diversified, they can really operate on their own. Now, not everybody can do that. There are motions that they don’t understand the system to begin with. They probably think they are a lot smarter than the system. They barely know a stock from a bond and don’t know what managers to trust and what managers not to trust.

So I think the investment adviser can play a very useful role, particularly in fund selection and in asset allocation and, in general, trying to help investors avoid the penalties of the behavioral kind of investing; of doing dumb things at dumb times. We may even need a financial adviser to, at times of crisis, have the courage to say to his clients or her clients, “Don’t do something. Just stand there. Stay the course.” It is generally better than moving your money around at times of crisis.

What is a fair price to pay for that? Obviously, it varies greatly. By the way, I should say much more than parenthetically, I don’t think we should rely on financial advisers to pick the best funds for us. They can pick intelligent funds. They can pick broadly diversified funds. They can pick funds with low turnover and funds with low cost. But picking funds that win is pretty much hazardous duty that nobody, now matter what their knowledge is, has really the ability to do. We rely too much on fast returns.

I think the idea is to have the adviser help you capture as much of the market returns as you can do. What’s a fair price to pay for that? Well, we talked. And in this funny, funny industry which I’m part of, we always talk about percentage turnover. I think we ought to be thinking more about dollars. And 1% is certainly not an excessive fee in terms of revenues it generates for an adviser who has got to be interested in taking care of you.

If you have $10,000 or $50,000 or $100,000 to invest, I would argue 1% might even be too low. But if you take any more of that, it is too big a hit out of your long-term compounded return. But once you get to a larger investment, I think that 1% should be scaled down somewhat—so the adviser is treated reasonably well, but not a flat percentage all the way up in the millions of dollars. I happen to believe that is just too much money for too many assets.

So the adviser has to be worthy of his hire. And then you’ve got to figure out what that worth is. And something in the range of 1% scaled down as the account grows is a reasonable place to start. I don’t think it is easy to go beyond that except to say that at some point, I would think, maybe advisers will start to work on a fee basis, like a lawyer might work, like a doctor might work, something like that. The amount of attention he gives you—the investor—is what you are paying for: his time and effort rather than an asset-based fee. That may come to develop over time.

Wiandt: An asset allocation question: One of the main reasons we use asset allocation and diversification in our portfolio is to balance the risk. So if one thing is going up, another thing is coming down. If one thing is coming down, you’ve got something else coming up. The problem is—and if you look to October you can see this—when things go bad, it seems like everything goes down. And so what can you say to that? Is there anything that people should do in that environment or do you just ride it out?

Bogle: To me, first, in general, the question is correct insofar as it applies to equities. And it’s been long said—many, many years ago, and it’s proved so true in every crisis since then—international diversification lets us down just when we need it the most. And truer words than that were never spoken. On the other hand, the fact is that bonds produce a very good countercyclical return.

I don't know exactly what they did in September. But I mentioned at the beginning of my remarks that the bond index fund went up 5% last year. That really was counter in direction, if not in amount, to the 35%, 37% decline in the U.S. stock market. Now I look at bonds as being the ultimate diversifier. I don’t look at diversification in equities [in terms of] being in different equity styles as being particularly helpful in the long run.

Look, we all know there are times when growth is doing better than value and vice versa, that large-cap is doing better than small-cap and vice versa. But they seem to come back. They seem to revert to the mean over long, long periods of time. And it’s very hard. Individual stocks, individual styles, have a very similar correlation with a stock market as a whole, a very similar correlation with one another and with the stock market as a whole—even down to the individual stock level and the style level and the manager level. So I think if you are looking for safety, the best instrument for safety is a high-grade bond portfolio, including Treasuries and high-grade corporates.

Wiandt: What are Jack’s thoughts on using inverse ETFs for short-term tactical hedges for those individuals who can’t stomach some of the rides for true long-run buy-and-hold theory? In other words, what role do these products have, if any?

Bogle: None. Did I make my position clear? No, the problem is, it is wonderful to buy a leveraged short ETF just before the market goes way down. I think to put the question in that way is to answer it. Who knows when the market is going to go way down? The time you are most likely to buy that kind of a fund is when the market has gone down. It’s a kind of inverse performance-chasing. I don’t like tricks. They require timing. They require more courage than I have. And they require a belief that you know more than the market.

In my very first book, one of my rules at the end, my principles, my 12 pillars of wisdom, was, “Never think you know more than the market. Nobody does.” Investing is putting money to work where it earns an internal rate of return: interest rates, dividend yields, earnings growth. It is not guessing what prices are going to do next. You know, we all ought to know by now that the stock market is the way we buy the returns of American business over time, the way we participate in the returns of American business over time.

But it also turns out that on any short-term basis, the stock market is a giant distraction to the business of investment. Of course it is. An inverse ETF is a bet on the market taking a certain direction and a bet that you are smart enough to do it, so you better double your bet on the way down. I don’t mean to be too tough on these kinds of funds, but I think anyone that does that is crazy. But I wish them well. I always wish them well.

Wiandt: Here is a bit of a technical question. Professor Jeremy Siegel has challenged the method of calculating the S&P 500. He believes that the calculation should be earnings-weighted as opposed to cap-weighted, capitalization-weighted by market weight. What are your thoughts on that?

Bogle: It just isn’t true. Can I make it clearer? The fact of the matter is, this issue arose earlier in the year. And by the way, the Wall Street Journal had a very powerful and accurate response from Standard & Poor’s as to why it was statistically unsound. It is just not a good statistical technique.

[The S&P response took the example of] one little company that had a great big dollar amount of earnings loss. And to think about it this way, supposing that little company, just before it announced the loss, had been bought by, let’s say, Exxon; the company was bought by Exxon. The loss would be exactly the same. It would be carried over to their balance sheet but it would be in a big company.

The index is already weighted by market cap. It is clearly weighted by dividends; each company’s dividends and each company’s aggregate earnings. When there is an aberration, you just have to live with it. Call it an aberration. Call it anything you want but don’t change the weightings of earnings because it just doesn’t make statistical sense. I’ll bet Jeremy Siegel has had second thoughts about his position, by the way.

Wiandt: Jack, are you planning to write another book, perhaps an opus of your life?

Bogle: Well, that’s a good question. I think when my life’s work is done I’m going to write the book, but I don't know when that will be. But I’m not planning it right now. As the last paragraph in “Enough” says, “One must wait until the evening to enjoy the splendor of the day.”

Wiandt: Where do you see dividend yields going forward? Conventional experts see much lower returns. What are your thoughts on this? What are your thoughts on forward market returns?

Bogle: Well, my theory, or my mathematical construct—which I’ve been using for a long, long, long time now, certainly decades—is that in the long run, market returns are 100% composed of what I call investment returns, dividend yields at time of entry into the market and the earnings growth that follows. That’s not a very complicated way to look at it. But it turns out that it is totally accurate when you look at the returns of the market over the long run.

You have this element of what I call speculative returns, which is changes in valuation. If the price earnings multiple of stocks goes from 10 times earnings to 20 times earnings, that doubling over 10 years adds 7% a year to the returns on stocks. And we actually had that. That happened twice, in the ’80s and again in the ’90s.

But it can’t happen forever. In the long run, 100% of market returns or investment returns and speculative returns come and go. But in the long run they amount to nothing. So investment returns in the future will probably drive the market. I don’t look for speculative returns to drive it up or down a great deal, certainly not by 7% a year.

Right now the dividend yield looks to me to be about 3.25%. I had it at 4% earlier this year but we had a big drop in dividends, one of the biggest cuts in dividends—around a 22% drop is forecast for the S&P 500, and I don’t see that drop is going to be repeated in the kind of economy I see. I think most of the drop is behind us. So using the current dividend yield, down 20% from last year’s, would give us around a 3.25% yield.

From this level—well, let me first say, when one spends just a moment of time on the simplicity of it, we know a lot about earnings growth. And that’s the other component of the investment return. We know that from the beginning of time, practically, corporate earnings grow at the same rate of our economy over the long term. And so if our GDP has been growing at 5%, then corporate earnings should be growing at 5% nominally. and they do.

And what is interesting about that is that they are in a very narrow channel. If you are looking at them a little bit differently, corporate earning generally account, after taxes, for 4%–8% of our gross domestic product. That is a very narrow channel and they average about 6% of GDP. So let’s assume from these depressed earnings levels, that instead of growing at 5% as the economy may grow—it may grow a little slower than that—the corporate earnings can grow at 6% or 7% from here. It is conceivable.

It’s a probability, I think, but certainly not a certainty. So if you are going to use 6%, that is a 9.25% return on stocks. Let’s assume that maybe that valuation comes down and takes a point of that return. You ought to be looking at 8%, perhaps 7% return on stocks, which is pretty good, if not very good. Because when we do the same mathematics for the bond market at today’s interest rate on a portfolio of governments and corporates roughly equally weighted at today’s interest rates—it is going to be 4.75% or 5%. So let’s call it 5% for simplicity.

If you compound over the next decade at 8% instead of 5%, you ought to be a pretty happy investor. So I’m optimistic, although I want to underscore that in these economic conditions, one has to look at not only the possibilities of what the future returns will be in the rough dimensions that I described here—but the consequences to you if they are not. And if you are too exposed to equities and things go wrong—and they can always go wrong—the stock market is a bad place for hope. You want to be conservative, even though the odds favor the stocks doing significantly better than bonds in the coming decade.

Wiandt: We have time for a couple more questions. The federal government has made a massive infusion of money into the market. What does this portend to the value of the U.S. dollar going forward, and is there anything that investors should be doing about that to protect themselves?

Bogle: Well, it should portend a rapid drop in the dollar. But the dollar is, of course, affected not only by the financial side but by the expectations of investors. So I’m not sure it’s a lead-pipe cinch that the dollar will be hugely weak. It came out about $1.17 relative to the euro all those years ago and it’s not all that far from it now. I don't know the current rate. Say maybe $1.40. I haven’t looked recently. That is not a huge change for a decade against the euro.

So predicting the dollar is like any other prediction. You can be right and you can be wrong. And if the dollar is, in fact, weak, I think everybody understands that will be great for international U.S. corporations. So it should help equity prices. I don’t think one should base an investment strategy on the fact that one thinks one knows what the dollar is going to do in the years ahead. Although I would be inclined to agree with the thrust of the question and that is, it’s hard to think that we can have a stronger dollar over the next four or five years.

Wiandt: This is another asset allocation-focused question: Given the almost unprecedented experience of 10 years with bond and equity prices—where you saw bonds really outperform equities over a very long time horizon—should investors be looking at how they do asset allocation between fixed income and equities in a different way?

Bogle: Well, it’s funny that after the previous 20 years ended in 1999 with bonds doing so much worse than stocks—although if you start at the beginning with very high interest rate yields, bonds did actually pretty well—the average return on bonds running through those years was probably about 6% or 7%. And the return on stocks was about 17% over 20 years. And everybody was saying, “Shouldn’t we have more stocks?”

And the answer is “No. You shouldn’t have more stocks.” They are selling at very high valuations and there is a lot of reversion to the mean. You know, high stock returns tend to be followed by low stock returns. Great booms are followed by great busts. Prices revert to kind-of normal valuations over time. So at this time, I don’t think that one should pay a lot of attention to what happened in the last 10 years. I think what happened in the last 10 years—particularly to the stock market, or entirely to the stock market---is very much a reversion of the mean of the excess, greatly excess return that we had in the two previous decades.

Don’t forget, as 1999 ended and 2000 began, stocks were selling at almost 40 times earnings. That can’t stay at 40 times earnings; it has to come down. Now, in this muddy situation that we have, they are probably selling about 20 times these depressed earnings. It’s hard to get a handle on that. But half as highly valued and could come down a little bit. But bond returns … people should understand very importantly about bond returns that today’s yields are the best possible approximation of what bonds will deliver in the next 10 years. Let’s call that a 5% return.

There happens to be, over time, a 91% correlation between the interest rate in which you go into the bond market at and the return that the bond market provides over the next 10 years. So we have a pretty good idea that bond returns would be about 4%–6%. You take your chances on stock returns, and if you think they are going to be much lower than that guess I gave—I suppose if you are a market timer, you should reallocate to bonds if you think stocks are going to return less than 5%. But I don’t think we know enough to do that with much confidence.

I would further say, to me, now—and I’m very conservator investor, extraordinarily conservative—that I believe your bond position should equal your age. And my bond position does equal my age. So I really had a good year last year. Sometimes it’s a blessing to be old, but only rarely.

So, I think one should look at one’s asset allocation in a certain way. Let’s say you decide, for a whole bunch of reasons, that you want to be, say 70%—you’re a younger investor—70% in stocks and 30% in bonds. If you think you can do some forecasting about the direction of the bond or stock market, particularly the stock market, and you think it is going to be down, don’t get out of stocks at 70%, maybe go to 60%. Don’t go below 50%—call it 20 percentage points below your allocation—any more than you should never go above that.

I don’t think that is a good strategy. But it is a much better strategy than thinking, “I’m either in the market or I’m out of it.” Those wholesale changes in equity ratio I think are going to destroy the retirement funds of countless investors that follow it.

Wiandt: We are moving toward wrapping up now. I just have a couple of things to note. We have all the slides up and a recording of the webinar up on the Web site, IndexUniverse.com.

With that, I just really want to thank you, Mr. Bogle, for taking the time with all the investors here. I think it was outstanding. And I’m sure that all the Bogleheads out there really enjoyed it. And thanks to all of you for attending as well.

Bogle: Well, I enjoyed being with all of you. I hope you will forgive my bluntness, but any of you who know me realize it is probably a little late to give up on that. Have a great day everybody.

Stock Market News for June 19, 2009 – Market News

Zacks Market Commentaries — Fri, 19 Jun 2009 14:06:37 +0000

US stocks rose Thursday, helped by an advance in banking and healthcare stocks and a report on jobless claims and regional manufacturing revived hopes that the worst of the economic crisis is over. Breaking a three-day losing run, the Dow Jones Industrial Average gained 58.42 points to 8555.60 and the S&P 500 index advanced 7.66 points to 918.37. Tech-heavy NASDAQ ended the day little changed. The S&P is now up 35.5% above its 12-year low hit on March 9.

Although financials have been a drag this week, Thursday saw the sector recording gains after a three-day losing streak and leading the list of gainers among the 10 S&P 500 industry groups with an advance of 2.5%. Discover Financial Services (NYSE:DFS) rose 4% after reporting a less-than-anticipated growth in bad loans. Lincoln National (NYSE:LNC) jumped almost 7% after it was upgraded by Credit Suisse (NYSE:CS). Bank of America (NYSE:BAC) surged 4.9% and JP Morgan (NYSE:JPM) added 4.4%. However, a WSJ report said there was a possibility that General Electric (NYSE:GE) may choose to spin off its financial unit rather than accept the burden of government oversight of its non-financial operations, sending its shares down 1.5%. However, volume remained light at 1.1 billion.

The Department of Labor's report yesterday showed number of people collecting unemployment benefits after the initial week recorded its biggest decline since November 2001. New jobless claims, however, were up slightly as expected.

With massive treasury auctions due next week, Treasury prices declined, sending yields higher. The Treasury has announced plans to sell a record $165 billion debt next week, including $31 billion 13-week, $30 billion 26-week, $40 billion 2-year notes, $37 billion 5-years and $27 billion 7-years, to help fund stimulus spending. However, traders are increasingly getting worried that massive government spending could push food and energy prices higher, and eventually lead to inflation. As protection against a possible inflationary spiral and US dollar weakness, traders have bid up crude and other commodity prices, even as demand remains weak. Goldman Sachs (NYSE:GS), however, recently advised oil prices could hit $95/barrel by late 2010. Further pressuring the outlook for inflation, No one expects the supply train to dwindle soon.

Utilities gained 2.2% yesterday as investors sought higher-yielding investments. Healthcare stocks rose 2.2% as traders picked up defensive plays. Technology stocks declined after Needham & Co. downgraded SanDisk (NASDAQ:SNDK) to "underperform," citing weakness in the NAND flash sector. SanDisk (NASDAQ:SNDK) shares plunged 6.1%, and Advanced Micro Devices (NYSE:AMD) fell 5.6%; Broadcom (NASDAQ:BRCM) was off 3.2%. After the market close, Research in Motion (NASDAQ:RIMM) reported better-than-expected results, but gave an outlook at the low end of Street targets.

Today being the end of the two day "quadruple witching" period, which marks the June expirations of stock futures and options with positions rolled into September contracts, trading is expected to remain volatile. CarMax (NYSE:KMX) is due to report quarterly earnings.

Zacks Investment Research

Video-o-rama: Regulatory reform dominates debate

Prieur du Plessis — Fri, 19 Jun 2009 09:44:37 +0000

The financial debate during the past few days was dominated by President Obama's sweeping revamp of financial market supervision, and this issue also occupies a number of slots in today's Video-o-rama. But the video clips are not all about regulation, as pundits are also trying to figure out whether there are in fact economic "green shoots" and what the implications for financial markets might be.

GE Looking Better and Better

Investment U — Thu, 18 Jun 2009 19:19:47 +0000

GE Looking Better and Better by The Investment U Research Team As the details of yesterday’s shareholder meeting at General Electric (NYSE: GE) hit newsstands, we are left with the impression that GE is looking better and better as an investment. Yes, shareholders were pretty livid about the dividend cut and the amount of [...]

Real Media Losers: Not DIS

Investment U — Wed, 10 Jun 2009 20:08:34 +0000

Real Media Losers: Not DIS Morningstar had an interesting article on The Next Game Changers this morning. It presented a number of intriguing points, but missed the boat on several others. For example, in the “game changing” event that is the shift away from traditional media companies, the article claims that the losers will be media companies [...]

QuoteMedia Announces Enterprise Agreement with TradePMR

Stuart T. Smith — Wed, 03 Jun 2009 13:50:46 +0000

QuoteMedia, Inc. (OTCBB: QMCI), a leading provider of market data, corporate research information and financial applications, announced today an enterprise agreement with TradePMR, Inc. TradePMR is a major provider of brokerage and custody services, and related technology, to the financial services industry. TradePMR will integrate a wide array of QuoteMedia’s offerings into its eCustody platform, which [...]

Top Performer for Tuesday: Sears Holdings (SHLD) – Zacks #1 Rank Top Performers

James Giaquinto — Tue, 02 Jun 2009 05:00:00 +0000

Sears Holdings Corporation (SHLD) has enjoyed some impressive earnings estimate increases lately, including sharp gains in just the past week.

The more than 7% advance in its share price today hasn't been near as dramatic, but is enough to make this retailing staple a Zacks #1 Rank Top Performer for Tuesday.

Volume today is approximately 1.476 million, which is slightly above the average of 1.452 million.

Earnings Estimates Soaring

The current profit consensus for the fiscal year ending January 2010 is $2.06 per share. A month ago, the outlook was only 34 cents, marking a more than 500% improvement as 4 of 6 covering analysts revised higher.

That gain includes an advance of more than 36% in just the past 7 days.

Meanwhile, expectations for next fiscal year, ending January 2011, are also on the rise. Estimates are higher by more than 300% in 1 month and 38% in 7 days.

Fiscal First Quarter Returns to Profitability

Late May saw the company blow past Wall Street expectations with fiscal first-quarter EPS of 39 cents, excluding items. Analysts were expecting a loss of 88 cents, making a positive surprise well into the triple digits.

Of course, SHLD still had to deal with an uncooperative retailing environment, as total sales declined to $10.1 billion from $11.1 billion. Domestic same-store sales declined 7.4%.

Despite its challenges though, SHLD is happy with the progress it has made in improving its gross margin rate, controlling inventories and further reducing its costs structure.

Thanks GE Capital!

In more recent news, GE Capital, the finance arm of General Electric (GE), loaned $400 million to SHLD as part of a $4 billion loan for working capital.

This marks the latest contribution of new capital to the company under this loan, which also includes contributions of $375 million from Bank of America Securities and $400 million from Wells Fargo Retail Finance.

Improving Environment?

In addition to the specifics for SHLD, the overall environment for retailers may not be as dark as in the recent past.

According to Charles Rotblut's Industry Rank Analysis titled "Retailers: Better Forecasts, Tough Conditions", recent consumer confidence data and rising earnings estimates suggest that a better outlook could be in store for retailers.

However, as is always the case, this bit of optimism is tempered with the fact that the economy is struggling and retailers remain cautious.

Lots of Retailers on the Zacks #1 Rank List

This is the second consecutive day that a retailer has been highlighted as the Zacks #1 Rank Top Performer; though the two retailers are quite different. On Monday, home decor specialty retailer Kirkland's, Inc. (KIRK) was highlighted with a gain of approximately 14% at midday.

There are currently 39 retailers of one type or another on today's 225-stock Zacks #1 Rank List. SHLD is a member of the Retail-Discount industry, which also includes BJ's Wholesale Club, Inc. (BJ), The TJX Companies, Inc. (TJX) and WAL-MART de Mexico (WMMVY).

Zacks Investment Research

Industrial Names That Haven’t Gotten Ahead of Themselves

Bullish Bankers — Fri, 29 May 2009 19:00:47 +0000

Today’s markets maintain a level of anxiety that another leg-down is coming, namely the notion that we may revisit our former lows of March. As the more bullish investors continue to invest in financial and IT names, it would seem that the vast majority of market movers are taking profits off of the table in [...]

Buy and Hold is Alive and Well

Bullish Bankers — Wed, 27 May 2009 11:00:40 +0000

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 [...]

QuoteMedia Reports 13% Increase in Revenue for Q1 2009

Stuart T. Smith — Mon, 18 May 2009 13:42:09 +0000

QuoteMedia, Inc. (OTCBB: QMCI), a leading provider of market data and financial applications, announced financial results for the three months ended March 31, 2009. These results reflect a 13% increase in first quarter revenues, to $1,910,824 from $1,687,675 in the comparative period in 2008. “As expected, global economic challenges, including a severe downturn in the financial [...]

QuoteMedia Reports 13% Increase in Revenue for Q1 2009

Stuart T. Smith — Fri, 15 May 2009 13:52:30 +0000

Stock Market News for May 14, 2009 – Market News

Zacks Market Commentaries — Thu, 14 May 2009 14:14:34 +0000

Asian markets witnessed sharp losses Thursday after a decline in American retail sales dampened hopes of an economic recovery. Japan's Nikkei 225 Stock Average slumped 2.6% to 9,093.73 and Hong Kong's Hang Seng Index declined 3%. South Korea's Kospi Index slid 2.4%. Oil prices fell below $57 a barrel as disappointing retail sales numbers deflated hopes that consumer spending is starting to stabilize. A study by Paris-based International Energy Agency said global oil consumption is expected to decline 3% in 2009.

The Commerce Department reported yesterday that U.S. retail sales declined 0.4% in April. Economists had expected the number to remain unchanged. Purchases at U.S. stores had tumbled 1.3% in March.

On Wednesday, U.S. stocks declined with the New York Stock Exchange witnessing the broadest sell-off in three weeks. The Dow Jones Industrial Average shed 184.22 points, or 2.2%, to 8,284.89. The S&P 500 Index declined for the third straight session, wiping off most of the gains it made last week. The benchmark declined 2.7% to 883.92, and has lost 4.9% since the beginning of this week. The tech-heavy Nasdaq declined 3%, or 51.73 points, at 1,664.19. Shares of industrial producers and consumer-related businesses bore the brunt. On the NYSE, volume was heavy as 1.76 billion shares exchanged hands and losing stocks outpaced advancing issues by a sixteen-to-one margin.

Treasury prices rallied as the unexpected decline in U.S. retail sales pushed investors towards risk aversion. Dollar rose 0.7% against a basket of currencies. Copper prices fell 3.2%; The DJ-UBS commodity index was off 1.2%.

Premarket futures are almost flat as inline earnings from Wal-Mart (NYSE:WMT) provided little boost to sentiments. According to a Financial Times article by a former US comptroller general, David Walker, the US' AAA debt rating is imperiled by the government's current excessive spending levels.

Optimism on the Street related to yesterday's retail sales was short lived as analysts failed to adequately assess the one-time, positive impact of January and February rebates from Social Security, which had helped revive consumer spending early this year. Excluding autos, sales declined 0.5%. As investors turned to cut positions, retail shares suffered, with Saks (NYSE:SKS) dropping 11.9%, Macy's (NYSE:M) plunging 6.7%, Target (NYSE:TGT) declining 4.8%, Costco (NASDAQ:COST) losing 2.3%, and Wal-Mart (NYSE:WMT) declining 1.2%. Office Depot (NYSE:ODP) shares plunged 15% after Moody's (NYSE:MCO) lowered the firm's debt rating. Citigroup (NYSE:C) raised Home Depot (NYSE:HD) to "buy" from "hold," saying it expects the company to exceed this year's estimates; although fellow retailers declined, the shares bucked the trend with a 0.8% gain.

Basic materials led the declining sectors, off 5.8%, after weak demand assumptions from any economic recovery in the near-term hurt prospects. Alcoa (NYSE:AA) shares declined 8.8% on reports China may have restarted up to 1.4 million metric tons of capacity in April. Industrial shares fell 4.2%. Caterpillar (NYSE:CAT) shares declined 5.2%, General Electric (NYSE:GE) lost 5.6%, 3M (NYSE:MMM) fell 4.4%, and United Technologies (NYSE:UTX) lost 4.2%.

Financial shares were once again under renewed pressure, falling 5.0%, as investors pondered over the banks' ability to raise fresh capital from private sources. Among DJIA components, Bank of America (NYSE:BAC) plunged 9.5%, Citigroup (NYSE:C) lost 6.8%, and American Express (NYSE:AXP) declined 5.3%. BB&T (NYSE:BBT) joined the growing list of banks tapping the market to raise funds, selling 75 million shares at $20 apiece, a discount to Tuesday's close of $22.50. SunTrust (NYSE:STI) declined 6.9%, even as Goldman Sachs (NYSE:GS) upgraded the stock to "neutral" from "sell," citing better-than-expected stress test capital-raising needs.

Technology stocks showed signs of strength. IBM (NYSE:IBM) said it expects 2009 earnings to be at least $9.20, versus consensus projections of $9.11, and noted it is "ahead of pace" to meet 2010 earnings projections of $10 to $12 per share.

Treasury Secretary Geithner's positive comments of "welcome signs" in the housing markets failed to convince investors as RealtyTrac reported increased foreclosures in April, with one in every 374 US homes receiving notices. Beazer Homes (NYSE:BZH) shares plunged 21.8%, and Hovnanian (NYSE:HOV) declined 12.2%.

Today's economic news covers wholesale prices for April, expected to show prices increased 0.1%. Besides the Wal-Mart (NYSE:WMT) inline post, weekly initial jobless claims are also expected to rate high on sentiment's Richter scale, with traders hoping for a continued diminished pace of claims.

Zacks Investment Research

General Electric in Discussion With Notos on the Green Star/Notos JV Projects in Serbia

Stuart T. Smith — Tue, 12 May 2009 13:51:45 +0000

SAN DIEGO, CA — (Marketwire) — 05/12/09 — Green Star Alternative Energy, Inc. (PINKSHEETS: GSAE) announces negotiations with ‘GE Energy’ Development Group for South East Europe. Executives from ‘GE Energy’ met with Green Star’s Serbian partner — Notos — in Belgrade for an exchange of experience and knowledge in the area of wind data collection, [...]

Gold Stocks – the Best Strategy for Portfolio Building

Contrarian Profits — Tue, 12 May 2009 13:25:19 +0000

pOctober 27, 2008 was the gold mining sector’s Black Monday, the day nearly every stock hit rock bottom. Hindsight makes it plain they got caught in the violent deleveraging that sucked down every equities market in the world./p pThe broader markets were of course making year-to-date lows at the same time, and unlike gold stocks, they continued falling after a short intermission. In fact, the Dow fell 2,000 points after Obama was elected. In sharp contrast, the mining stocks went on a tear. Between November ’08 and January ’09, many of our BIG GOLD picks made substantial gains, rising anywhere from 45% to 149%./p pThis good news isn’t the whole story, of course; many mining stocks saw percentage losses greater than the#8230;/p

The “Free Money” Strategy: Cash Is King When Selling Put Options

Contrarian Profits — Tue, 05 May 2009 19:33:15 +0000

p“Cash is king,” as the old investment adage goes. Question is: How do you go about getting it - especially in a tough climate like this one? After all, cash is only king if you have it./p pIn today’s column, I’m going to show you how to squeeze cash from the stock market - without really having any to begin with./p pYes, you read that right - money from next-to-nothing./p pBut before you embark on this “free money” strategy, you have to have an implicit understanding of what you are doing, because there are no free lunches on Wall Street for those who don’t do their homework./p pBut for those who do, this is the freest lunch you’ll find…/p h3A Moneymaking Strategy For All Markets/h3 pLet’s#8230;/p

Buffet Calling Troubled Investors – Zacks Tale of the Tape

Zacks Market Commentaries — Sun, 03 May 2009 22:53:32 +0000

Will Berkshire Hathaway (BRK.A) devotees hear words of hope and promise from Warren Buffet at the annual meeting in Omaha, Nebraska this weekend? It seems unlikely. Yet, America's most respected investor is expected to draw an estimated 35,000 investors to the Midwest city for the event.

Shares of Berkshire Hathaway have slumped 40% to their lowest level since Buffet assumed office, and the net worth of the company shrank by 9.6% in 2008. As the world sank deeper into the worst downturn since the Great Depression, Buffet had warned investors that the economy would be in "shambles throughout 2009."

"Most of the Berkshire businesses whose results are significantly affected by the economy earned below their potential last year, and that will be true in 2009 as well," Buffett wrote in his annual letter to shareholders on Feb. 28.

Buffet has admitted to making some investment blunders of late. Of the more notable ones would be the move to buy into ConocoPhillips (COP) at a time when gas prices were near their peak, just before energy prices slumped. Such moves not only cost his business empire several billion dollars, but also stripped Berkshire of its triple-A credit rating.

However, Berkshire still has strong credit and plenty of cash. Moreover, with two-thirds of its businesses in utilities and insurance, Berkshire is expected to be more resilient in volatile times. The 78 year-old top boss of the group also played a key role in steadying the economy by injecting $8 billion into Goldman Sachs (GS) and General Electric (GE), calling them "the symbol of American business to the world."

While everyone has been wondering about who will eventually succeed Buffet, as long as the Oracle of Omaha is still around, investors would value his insight more than ever during these troubled times.

"BRK.A" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Buffett Calling Troubled Investors – Zacks Tale of the Tape

Zacks Market Commentaries — Fri, 01 May 2009 21:20:20 +0000

Buffett Calling Troubled Investors

Will Berkshire Hathaway (BRK.A) devotees hear words of hope and promise from Warren Buffett at the annual meeting in Omaha, Nebraska this weekend? It seems unlikely. Yet, America's most respected investor is expected to draw an estimated 35,000 investors to the Midwest city for the event.

Shares in Berkshire Hathaway have slumped 40% to their lowest level since Buffett assumed office and the net worth of the company shrank by 9.6% in 2008. As the world sank deeper into the worst downturn since the Great Depression, Buffett had warned investors that the economy would be in "shambles throughout 2009."

"Most of the Berkshire businesses, whose results are significantly affected by the economy, earned below their potential last year and that will be true in 2009 as well," Buffett wrote in his annual letter to shareholders on Feb. 28.

Buffett has admitted to making some investment blunders as of late. Of the more notable ones would be the move to buy into ConocoPhillips (COP) at a time when gas prices were near their peak, just before energy prices slumped. Such moves not only cost his business empire several billion dollars, but also stripped Berkshire of its triple-A credit rating.

However, Berkshire still has strong credit and plenty of cash. Moreover, with two-thirds of its businesses in utilities and insurance, Berkshire is expected to be more resilient in the recession. The 78 year-old top boss of the group also played a key role in steadying the economy by injecting $8 billion into Goldman Sachs (GS) and General Electric (GE), calling them "the symbol of American business to the world."

While everyone has been wondering about who will eventually succeed Buffett, as long as the Oracle of Omaha is still around investors will value his insight more than ever during these troubled times.

Zacks Investment Research

QuoteMedia Reports 31% Increase in Revenue for 2008 Fiscal Year

Stuart T. Smith — Fri, 01 May 2009 14:01:08 +0000

QuoteMedia, Inc. (OTCBB: QMCI), a leading provider of market data and financial applications, announced financial results for the fiscal year ended December 31, 2008. These results reflect a 31% increase in year-over-year revenue, from $5,569,107 in 2007 to $7,276,980 in 2008. At December 31, 2008 the Company’s cash balance was $536,624, an increase of $179,308 [...]

Disney Buys Equity Stake in Hulu – Zacks Tale of the Tape

Zacks Market Commentaries — Thu, 30 Apr 2009 21:14:09 +0000

Walt Disney Co. (DIS) bought an equity stake in the video website Hulu, where it will now feature its popular primetime television series and movies.

"Disney has sought to meet the constantly evolving viewing habits of our consumers, and today's Hulu announcement is the next important step in that ongoing journey," Chief Executive Bob Iger said.

After the deal, Disney will be a joint venture associate in the website along with News Corp. (NWS), General Electric's (GE) NBC Universal and private equity firm Providence Equity Partners.

However, none of the other companies own equity stake in the website. The Wall Street Journal reported that Disney bought a 30% stake in the rapidly growing rival of Google's (GOOG) YouTube.

While Hulu will soon start featuring shows like Lost and Desperate Housewives that Disney airs on its ABC TV, some other most-watched programs like Hannah Montana and the High School Musical will be kept exclusively for cable TV viewers. Programs from sports network ESPN will not be part of the Hulu deal.

After NBC, News Corp.'s Fox and now ABC, CBS (CBS) remains the only major U.S. broadcast player that is not associated with Hulu. This could be a matter of concern for YouTube, which has often been on the line of fire for pirated content. Disney shares were up more than 4% to $21.99 at noon on the New York Stock Exchange.

"DIS" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Zacks Analyst Blog Highlights: Cree, Inc., General Electric, B/E Aerospace, Honeywell and Anadys. – Press Releases

Zacks Market Commentaries — Wed, 29 Apr 2009 12:50:34 +0000

For Immediate Release

Chicago, IL - April 29, 2009 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Cree, Inc. (CREE), General Electric (GE), B/E Aerospace (BEAV), Honeywell (HON) and Anadys (ANDS).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=4579.

Here are highlights from Tuesday's Analyst Blog:

CREE: The Lights Are On

With the signing of the energy bill in December 2007, the U.S. government has decided to ban inefficient light bulbs by 2012. The energy efficiency standards set by the government effectively do away with incandescent light bulbs as we know them today. Although General Electric (GE) has stated that it is developing a more efficient bulb that will meet the efficiency standards, a delay in development may actually put it out of the running.

B/E Aerospace Hits Turbulence

B/E Aerospace (BEAV) reported Q1-09 results. Overall Sales of $523.7 million were up by 10.7% because of the July 28, 2008 acquisition of Honeywell's (HON) Consumable Solutions (HCS) distribution business. However, on a pro-forma basis (i.e., assuming HCS had been on-board last year), Overall Sales were down 15.6%.

Further, on the same pro-forma basis, sales were down in all of BEAV's Segments: Consumables Management (the segment in which HCS is parked) was off 11.1% to $239.4 million; Commercial Aircraft declined by 18.9% to $225.9 million; and Business Jet was down 19.7 % to $58.4 million. However, it should be noted that Consumables Management was up by 96.2% on an as-reported basis.

Anadys: Too Early for HCV Drug

ANA598 is Anadys' (ANDS) lead anti-HCV (hepatitis C Virus) drug candidate currently under phase I studies. The company's share price got a boost recently on its strong efficacy data from a phase Ib study.

Anadys presented the final antiviral and safety data from all three dose levels (200, 400 and 800 mg bid) at the 44th annual meeting of the European Association for the Study of the Liver (EASL) on April 23, 2009. The trial enrolled total 35 subjects. ANA598 treatment resulted in rapid and sustained reductions in HCV RNA with median reductions at end of treatment (day 4) exceeding 2 log10 (>99%) at all dose levels.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=2649.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=2677

About Zacks

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Visit: www.zacks.com

Zacks Investment Research

CREE: The Lights Are On – Analyst Blog

Zacks Market Commentaries — Mon, 27 Apr 2009 20:37:23 +0000

The global movement to energy-efficient lighting is prompting lighting companies and consumers to look at other options. Therefore, lighting will be the strongest end market for Cree, Inc. (CREE), likely followed by video displays and notebooks. Yield improvements, higher capacity utilization, larger wafers and offshore production will increasingly offset new product ramp up costs. The LED market is hot in our opinion, and the LLF acquisition opens up new opportunity.

With the signing of the energy bill in December 2007, the U.S. government has decided to ban inefficient light bulbs by 2012. The energy efficiency standards set by the government effectively do away with incandescent light bulbs as we know them today. Although General Electric (GE) has stated that it is developing a more efficient bulb that will meet the efficiency standards, a delay in development may actually put it out of the running.

The Australian government has already banned the usage of incandescents, which transfers users to CFL. The Irish government has also taken a decision to phase out incandescents by 2009. The EU is committed to converting a fifth of the block to efficient lighting by 2020. China, which currently makes 70% of the world's light bulbs, has agreed to phase out its incandescent production and shift to more energy-efficient products by 2018.

The only viable alternative that is currently available is the CFL, although a lot of effort is on to develop whiter and brighter LEDs that could be used for lighting purposes. At present, LEDs appear to be the most environmentally suitable alternative, and lighting solutions based on this technology are likely to become extremely popular over the next decade.

Sejuti Banerjea contributed to this post.
Read the full analyst report on "CREE"
Zacks Investment Research

Markets Coming Down with Swine Flu

Investment U — Mon, 27 Apr 2009 14:18:36 +0000

Markets Coming Down with Swine Flu by The Investment U Research Team If the markets weren’t walking on eggshells already, they didn’t need an outbreak of swine flu to put them back in the intensive care ward. We’ve been looking for proximate causes for a pullback in the markets, but swine flu wasn’t one [...]

Stock Market News for April 20, 2009 – Market News

Zacks Market Commentaries — Mon, 20 Apr 2009 13:53:50 +0000

US stocks ended another week on a winning note as earnings reports, although not great by normal standards, and a consumer sentiment survey indicated the economy and financial markets are showing signs of stabilization. The Dow Jones industrial average closed the week up 47.95, or 0.6%, at 8,131.33. The Standard & Poor's 500 index rose 13.04, or 1.5%, to 869.60. The tech-heavy Nasdaq rose 20.53, or 1.2%, to 1,673.07. The broad-based S&P 500, which recorded its steepest six-week gain since 1938, is now up 29% since hitting its 12-year nadir on March 9.

As risk appetite grew treasuries declined, taking the yield on the 2-year to 0.981% and the 10-year to 2.953% as prices fell 4/32 and 30/32, respectively on Friday. The Vix, CBOE's volatility index, declined 2.59 points over the week, closing at its lowest in seven months and the week's success with IPOs Rosetta Stone (NYSE:RST) and Bridgepoint Education (NYSE:BPI) also signaled the market's heightened interest in assuming riskier investments.

First-quarter corporate earnings will reach a peak this week, with 40% of the Dow Jones Industrial Average companies and a quarter of those in the Standard & Poor's 500 Index reporting their quarterly numbers. Markets are likely to face turbulence as big names including Microsoft (NYSE:MSFT), IBM (NYSE:IBM), Apple (NYSE:AAPL), Eli Lilly (NYSE:LLY), Merck (NYSE:MRK), Coca-Cola (NYSE:KO), PepsiCo (NYSE:PEP) American Express (NYSE:AXP), Bank of America (NYSE:BAC), and McDonalds (NYSE:MCD) report their earnings.

On Friday, financial companies jumped 4.1% to help fuel a slender advance in stocks. Citigroup (NYSE:C) which has been hit hard by the credit crisis, was the leading gainer on the DJIA. The stock jumped 20% to close at $3.65 after swinging to a $1.6 billion first quarter profit. JP Morgan (NYSE:JPM) rose 1.6% to close at $33.26 and Goldman Sachs' earnings of $3.39 a share surpassed Street expectations. Huntington Bancshares (NASDAQ:HBAN) jumped 81% to $3.89.

General Electric (NYSE:GE), which reported a 35% decline in first-quarter earnings, advanced 9.4% as the numbers were better than Street expectations. The firm advised it saw no need for a fresh capital. GE reported net income of $2.9 billion, or 26 cents a share, versus Street estimates of 21 cents a share. Revenue fell 9% to $38.41 billion.

On Friday, the Reuters/University of Michigan preliminary consumer sentiment index for April showed consumer confidence jumped to 61.9, compared with 57.3 in March, and was better than expected 57.5.

General Motors Corp. (NYSE:GM) interim Chief Executive Fritz Henderson did not rule out liquidation, saying bankruptcy remains a "probable" outcome for GM, subsisting on government loans and in need of more cash.

This Friday's release of the preliminary assumption of the stress tests performed on 19 US banks will bring into sharper focus the likely capital-raising needs of several banks. Today's media reports indicate the administration is considering taking what some consider back-door steps toward nationalization by stretching existing loans through equity conversions to up firms' capital cushions.

The week's major economic reports will reveal March leading indicators on Monday (10:00 AM ET), expected to indicate a lessening pace of decline, down 0.2% versus the prior month's 0.4% drop. Housing will remain in focus as investors seek signs of its bottoming after last week's report that U.S. March housing starts fell 11 percent and building permits, a sign of future construction, fell to a record. Existing home sales and new home sales for March are expected to reveal existing sales eased to 4.54 million from 4.72 million, while new sales edged higher to 340,000 from 337,000. Friday's durable orders report for March is expected to reverse February's 5.1% jump with a 1.5% drop.

Zacks Investment Research

Words from the (investment) wise for the week that was (April 13 – 19, 2009)

Prieur du Plessis — Sun, 19 Apr 2009 08:31:44 +0000

Spring is in the air – at least in the Northern Hemisphere and on global bourses. Last week marked the sixth consecutive up-week for stock markets as the risk appetite of investors returned amid signs of global economies and the financial sector embarking on the road to recovery. Read all about this and the implications for financial markets in the weekly "Words from the Wise" review.

Company News for April 17, 2009 – Corporate Summary

Zacks Market Commentaries — Fri, 17 Apr 2009 14:19:56 +0000

* Google (NASDAQ:GOOG) reported better-than-expected first quarter results due to improved margins on cost-saving measures. Revenues, though down 3% from the previous quarter, was up 6% from a year ago, marking the firm's first-ever sequential quarterly drop caused by the recession's impact on consumers' clicking activity and advertisers' fees paid per click. The company's conference call which suggested further sensitivity to the general economy, stressing the likely impact of seasonality on second quarter returns, bothered investors

* Citigroup (NYSE:C) reported its first profit in over a year on investment banking strength, as net income rose to $1.6 billion during the first quarter. On a per share basis, however, the firm reported a loss of 18 cents, resulting from a 24 cent loss on the conversion reset of preferred shares, which was narrower than the expected 34 cent loss and the $1.03 loss a year earlier. The Company also delayed its exchange offer

* Economic bellwether General Electric (NYSE:GE) reported better-than-expected first quarter earnings of $2.9 billion, or 26 cents per share, as revenues declined 9% to $38.41 billion. The showing compared with estimates of 21 cents and revenues of $39 billion

* Mattel (NYSE:MAT) reported a loss of $51 million, or 14 cents per share, versus the prior year's loss of $46.6 million or 13 cents a share. Analysts had expected a 13 cent loss

* Lincoln National (NYSE:LNC) received a Moody's Investor Service (NYSE:MCO) debt and financial- strength ratings downgrade amid warning that further cuts are possible if the company fails to get government aid

* GlaxoSmithKline (NYSE:GSK) and Pfizer (NYSE:PFE) plan a joint venture combining HIV drug operations, with Glaxo (NYSE:GSK) to wind up with an 85% and Pfizer a 15% interest

* AIG (NYSE:AIG) said it plans to sell its US car insurance operations to Zurich Financial Services for $2 billion

Zacks Investment Research

Precious Metals Come Roaring Out Of Holiday Weekend

Doug Casey — Tue, 14 Apr 2009 19:02:49 +0000

pGold was higher in the far East on Monday, flattened out in London, but took off once New York opened and continued to rise to a peak of $900 at noon, at which point it was driven down and declined through the rest of the Comex and went flat on the Globex, finishing at $892.60/oz., up $13.40. Overnight, gold has been flat. /p pPlatinum prolonged its recent bull run, shooting as high as $1245 in the first hour after noon in New York, then eased slightly for the rest of the day, ending at $1237/oz., up $50. Overnight, platinum is trending lower./p pSilver burst higher in Hong Kong, trailed off in early London trading, then really caught fire at the New York#8230;/p

Stock Market News for April 14, 2009 – Market News

Zacks Market Commentaries — Tue, 14 Apr 2009 14:21:44 +0000

Asian shares, outside of Japan, rose to a six-month high on Tuesday after Goldman Sachs' stronger-than-expected profit signaled the worst may be over for US banks, but plenty of concern remains about the condition of the global economy.

Whether a rally for Asian stocks outside of Japan -- up more than 30% from their low in 2009, set on March 4 -- can be sustained remains in doubt, with analysts saying that the full brunt of the global recession has yet to be reflected.

In Japan, the Nikkei 225 Stock Average fell 0.9%, to close at 8,842.68. The Japanese market remained weak after Sumitomo Realty & Development Co. missed its profit target and on concern that valuations at a seven-year high overstated earnings prospects. A senior equity analyst wondered if the recent gain in Japanese shares is reasonable relative to earnings prospects for this year.

Singapore devalued its currency after posting, on Tuesday, its worst ever quarterly economic contraction due to shrinking global trade. A forecast for weaker demand for oil by the International Energy Agency sent crude oil prices tumbling to below $50 a barrel.

Media reports pointing to higher odds of a bankruptcy outcome for General Motors (NYSE:GM), as well as a reduction in guidance from Boeing (NYSE:BA), were a drag on the continuing rally by financial-sector shares, following the announcement of good quarterly results by Goldman Sachs. The DJIA clawed its way back from a 120-point loss shortly after the open to close with a 25-point drop. Trading on the NYSE was a moderate 1.5 billion shares, with advancing shares ahead of decliners by a 3 to 2 margin. Sentiment is expected to be guided by the likes of Phillips Electronics and defensive play Johnson & Johnson (NYSE:JNJ).

Financial stocks in the DJIA turned in dramatic advances on Monday, as Bank of America (NYSE:BAC) breached $11 for the first time since January 12, rising 15.4%, and Citigroup (NYSE:C) rose 25.0%. Also posting sharp gains were American Express (NYSE:AXP) which moved up 8.7%, and General Electric (NYSE:GE) which rose 7.1%. On the downside, General Motors (NYSE:GM) shares fell 16.2% after the NYT reported that the US Government had notified the troubled auto maker that it should plan for a June 1 bankruptcy filing, should its talks with bondholders and the UAW on restructuring plans fail to materialize. Among other notable movers, Boeing (NYSE:BA) shares fell 5.1%, after Cowen & Co. downgraded the stock to "underperform" from "neutral," noting airlines' inability to finance purchases of new planes.

Four out of the ten sectors in the S&P showed gains, topped once again by advances in financials, up 4.1%, followed by gains of 1.4% in basic materials, 0.3% in health care, and 0.1% in consumer services. On the downside, oil and gas shares fell 1.2%, utilities -1.3%, consumer goods -0.8%, telecommunications -0.7%, technology -0.6%, and industrials -0.03%. Oil and gas shares were adversely affected by Chevron's (NYSE:CVX) earnings warning based on lower oil prices and shrinking refined-product margins. Moreover, the latest oil inventory report is expected to reveal a 2.2 million barrel increase in US crude stockpiles. Metal prices increased on hopes for an upturn in the global economy. Gold prices gained $12.50 to reach $895.80 and copper prices rose 5% during the session, sending Freeport McMoran (NYSE:FCX) and Rio Tinto (NYSE:RTP) shares up 4%.

Goldman Sachs reported better-than-expected results of $3.39 per share, beating estimates by $1.79. The firm also announced plans to sell $5 billion of new stock in its effort to pare down the $10 billion in government aid. The case was different for Genworth Financial (NYSE:GNW), whose shares fell 17.8% after it was denied S&L status, necessary for recipients of TARP funding, and granted to its competitors including Hartford Financial Services (NYSE:HIG).

Today's economic releases include government reports on wholesale prices. Retail sales for March are also on the docket, and expected to post a 0.3% gain, following the prior month's 0.1% decline. At 10:00 am, ET business inventories are expected to be announced. Technology bellwether Intel (NASDAQ:INTC) will release results after the close.

Zacks Investment Research

Ocean Piracy: Fill Your Trading Account With Booty From The ‘Pirate Portfolio’

Contrarian Profits — Mon, 13 Apr 2009 14:57:35 +0000

pThe saga on the high seas continued… As much of the world continued to monitor the story of the American cargo ship that was captured by Somali pirates and held its captain hostage, the increase in piracy has sparked a fascinating conversation. /p pIt involves the use of innovative products that enable shippers to defend themselves from pirate attacks./p pWhile it may not seem like a lucrative business, the uptick in high seas shenanagins over the past year or so threatens to become more prevalent if it’s not addressed. And with millions of dollars worth of cargo traveling by sea every day, both the shipping industry and the companies whose cargo they’re hauling hardly want to see the trend become a full-blown epidemic./p pAt#8230;/p