The steel business faces its biggest hurdle in 60 years with some analysts predicting double digit production cuts in 2009. Now, a sudden change in China trade policy may spell even more trouble for Western steelmakers, as Beijing is currently considering measures to shore up its ailing steel industry with new export policies.

According to World Steel Dynamics, a U.S. steel consulting firm, steel production could fall next year by 13.9% compared with this year. This downturn comes after a long period of growth in the steel industry. In fact, output has grown every year since 1998 - soaring from 777 million metric tons a decade ago to 1.34 billion metric tons in 2007.

The catalyst behind the expansion has been a robust world economy and a steep rise in demand in China - by far the world’s biggest steel producing and consuming nation, accounting for more than a third

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The steel business faces its biggest hurdle in 60 years with some analysts predicting double digit production cuts in 2009. Now, a sudden change in China trade policy may spell even more trouble for Western steelmakers, as Beijing is currently considering measures to shore up its ailing steel industry with new export policies. According to World Steel Dynamics, a U.S. steel consulting firm, steel production could fall next year by 13.9% compared with this year. This downturn comes after a long period of growth in the steel industry. In fact, output has grown every year since 1998 - soaring from 777 million metric tons a decade ago to 1.34 billion metric tons in 2007. The catalyst behind the expansion has been a robust world economy and a steep rise in demand in China - by far the world’s biggest steel producing ...

Nucor Corp. (NUE) said that it expects to earn a marginal profit for the fourth quarter, as the steelmaker is finding it difficult to deal with the falling demand.

The Charlotte-based company projects a 40% decline in its steel shipments for the fourth quarter in comparison to the previous quarter's levels. Nucor expects its average steel mill utilization rate to be slightly higher than 50%.

Analysts forecast earnings of $1.55 for the current quarter.

Meanwhile, the company raised its quarterly dividend to 35 cents from 32 cents a share, but suspended payment of a bonus dividend.

Shares are up more than 5% today. Nucor is a Zacks #3 Rank ("Hold") company.

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

As the economy deteriorates, one of the first casualties will be corporate profits.  Earnings estimates have been falling very fast for 2009.  Recently estimate cuts for 2009 have been running at about 8x the number of estimate increases.  P/E-based valuations become tricky in such an environment -- you are shooting at a moving target.  One way around this is to focus on the low (or most pessimistic) estimate, rather than on the mean estimate.  Assume that everyone else will move to where the biggest pessimist is now. This is not to say that the most pessimistic analyst today can't be too optimistic, but at least he will be closer than most. On this basis, there are some very compelling values out there. 

Below we present a list of the cheapest S&P 500 companies based on 2009 low estimates.  Since I simply do not trust the numbers, I have excluded from

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Google Doesn’t Disappoint; Jobless Claims Drop but Remain High; Peabody’s Third Quarter Lights Out; Nucor Profit Doubles; Nokia’s Profit Dip; AMD Narrows Loss; Hershey’s Sweet Surprise; Citi’s Consumer Credit Woes

Google Inc. (GOOG) said yesterday (Thursday) that profit climbed 26% to $1.35 billion, or $4.24 per share in the third quarter, up from $1.07 billion, or $3.38 per share, at the same time last year. Revenue soared 31% to $5.54 billion. Initial claims for unemployment insurance last week fell 16,000 to a seasonally adjusted level of 461,000 the Labor Department reported yesterday (Thursday). However, the four-week average, which is less volatile, increased slightly to 483,250 – a seven-year high. The number of people continuing to receive jobless benefits rose 40,000 ...

With the markets in turmoil and sinking like a stone, nobody wants to try and catch a falling knife -- even if the knife is sterling silver.  The silver lining in every bear market is that it creates true bargains.  You need to have a shopping list prepared and scoop up some of these babies that are being tossed out with the bath water.  I ran a quick screen to try and identify some of these.  Here were my criteria: the stock had to be selling for less than 8x this years consensus earnings estimates, and less than 7x next years.  It had to have a current market cap of greater than $1 billion.  Since I do not trust the books of most financial companies, I eliminated all firms from that sector.  I also eliminated all firms that had a negative (4 or 5) score on the ...

The U.S. financial-services sector is undergoing the broadest restructuring of a single industry in the history of Corporate America, and Bank of America Corp. (NYSE: BAC) has positioned itself to emerge as one of three clear frontrunners. Indeed, along with Citigroup Inc. (NYSE: C) and JPMorgan Chase & Co. (NYSE: JPM), Bank of America could well emerge from this financial maelstrom as one of the premier players on the global stage: All three will benefit from increasing market share and increased financial intermediation margins as their weaker rivals have failed and/or been taken over in part or in total by a stronger industry player. During the many financial crises that I have analyzed around the world, the result has always been the same: The prudently managed, under-levered institutions that did not overstretch their capital bases and that were ...

Q: What’s the outlook for Garmin Ltd., the GPS system maker? Reader Diane Begue of Medina, Ohio Garmin Ltd. (Nasdaq: GRMN), a leading producer of global-positioning systems, has a strong market position, meaning its stock should deliver nice profits if purchased at the current low valuation. It was just about midnight, on a chilly and rainy Dec. 10, when the diesel engine of my 42-foot sailboat, “Southern Cross,” suddenly stopped dead in the middle of the Delaware Channel, just north of the Elbow of Cross Ledge, two thirds of the way up the Delaware Bay from Cape May. I knew I was in trouble. The green-and-red bow lights of a big freighter less than a mile behind me indicated that I was smack in the middle of his intended course. And with my 11-year-old daughter sleeping deeply down below as my sole company on board ...

Stocks stared into the abyss, again, and finally jumped in, as the financial crisis that has been percolating for weeks finally overwhelmed Wall Street. The Dow posted its largest one day drop since just after the September 11 attacks.

The day started with an orderly sell-off that picked up steam in the second half of the session. No sector escaped the carnage.

The Dow lost 504 points, or 4.42%, to 10917. The Nasdaq Composite Index fared slightly better, giving up 81.36 points, or 3.60%, to 2179. The S&P 500 Index now finds itself below its July lows, shedding 59 points, or 4.71%, to 1192.

There were historic deals, and non-deals, all weekend long, as two of Wall Street’s most revered investment banks threw in the towel. Lehman Brothers (LEH) declared bankruptcy after it couldn't find a partner who would take on its problems. Merrill Lynch (MER) fared

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Several Money Morning readers have written to ask about steel-sector stocks, which have taken investors on a roller-coaster ride in the past year. After analyzing the sector, I came to one very strong conclusion: With its terrific fundamentals, Nucor Corp. (NYSE: NUE) is poised for significant gains. Steel stocks, which had seen a 36% climb this year, have sold off dramatically and are now down about 16% for the year.  That’s a 42% drop from their peak. Wow! Shares of the Charlotte, N.C.-based Nucor could not escape the carnage and have endured an even bigger swing: From their low of $50.30 a share in early January, the shares of the No. 1 U.S. steelmaker soared 66% to a trade at a high of $83.56. From their peak, Nucor’s shares have declined 42%, closing Friday at $48.45. They’re down 18% for the ...