In what I fear may become a regular feature here, the Federal Deposit Insurance Corporation (FDIC) arranged for the takeover of the 10th failed bank of 2008 on Friday. As I posted, the FDIC likes to close banks on Friday after hours so they can reopen as branches of the acquiring bank on the following Monday morning. According to the Associated Press, the bank in question is real estate lender, Integrity Bank of Alpharetta, GA.

How did Integrity lose its integrity? It was unusual in that it combined real estate and religion. AP reports that Integrity Bank started lending in November 2000 -- "specializ[ing] in real estate lending in the Atlanta area with a self-described 'faith-based culture.'" Integrity Bank "grew into a billion-dollar publicly traded company - but when the real estate market started faltering, the bank struggled."

AP interviewed an FDIC spokesman who said "its aggressive pursuit of construction loans, coupled with falling real estate values and 'inadequate risk management'" caused its failure. According to AP, its "construction loans were 76 percent of the bank's total loan portfolio" and it lost $33.6 million in the second quarter. Sometimes religion and finance don't mix.

Yesterday I speculated that McCain picked Sarah Palin as his VP over the objections of his advisers. I thought that McCain -- who prides himself on fighting corruption in politics -- somehow saw himself in her. But both politicians have experience with the very thing they pride themselves on fighting.

In the case of McCain, his efforts to rid politics of the corrupting influence of corporate money followed his protection of Charles Keating who was securing a real estate deal for his wife, Cindy. The bankruptcy of Keating's S&L cost taxpayers $3.4 billion. More recently former McCain Finance Chair Tom Loeffler, a lobbyist for French company EADS, parent of Airbus, helped it and Northrop Grumman (NYSE: NOC) to prevail in a $35 billion competition for airborne refueling Tankers in February over Boeing Inc. (NYSE: BA) before the General Accounting Office (GAO) concluded that the process was flawed.

Alaska's governor, Sarah Palin, knows a thing or two about lobbyists. The New York Times reveals that she won that post after taking on bribery charges from the oil industry against politicians -- her attack against such corrupting influences helped her prevail over former Alaska governor, Frank Murkowski. That's why it came as a surprise to learn that as governor Palin employed a lobbyist for an energy company for which she procured $500 million in state subsidies so it could build a gas pipeline.

Consumer confidence hit a five month high, according to a Reuters/University of Michigan survey. However, for those hoping for a recovery, that good news comes with a lot of negative.

General consumer spending dipped, probably in no small part to a dip in personal income of 0.7% in July, according to recent numbers. Also up, price increases that have pushed inflation to a 17-year high that has eroded consumer buying power. Both of these work to negate any impact consumer confidence might have.

Also adding weight to the market are worries and uncertainties surrounding the effect hurricane Gustav will have on oil production, ending a long run of lowering oil prices. Expect higher gas prices.

With all these worries on people's minds, here are today's unofficial closing bell levels:

DJIA: 11,543.96 -171.22 (-1.46%)
NASDAQ: 2,367.52 -44.12 (-1.83%)
S&P 500: 1,287.23 -13.45 (-1.03%)
10-Year Bond: 3.81% +0.03 (0.79%)

New York Times columnist Thomas Friedman, who perhaps most-accurately conceptualized the revolutionary production shifts implied by globalization in The World Is Flat, has a 'radical' economic prescription for the United States, as it moves toward the second decade in what is quickly becoming the century of change.

Friedman suggests that the United States try nation-building....at home.

Moreover, Friedman makes the case for nation-building as good for U.S. business - - a much-needed shot-in-the-arm for the U.S. economy.

U.S.: inadequate infrastructures for a major power

Friedman's main concern: the U.S.'s inadequate infrastructure (electric grid, roads/bridges/rail network, air travel system, hospitals, among others), which is antiquated compared to the infrastructure of the U.S.'s chief economic rival, China. Friedman has just attended the 2008 Olympics in Beijing and its clear China's public investments - - better airports, roads, parks, to go along with the sports venues - - have impressed him.

It's also clear to Friedman that the U.S.'s period of underinvestment is holding the nation back economically, and that has to change if the U.S. expects to remain commercially competitive on the global stage. Economist David H. Wang told BloggingStocks he agrees, for the most part, with Friedman's analysis, but adds that the journey to a better infrastructure is not a strictly an economic equation.

This post is part of a report entitled "Six-pack of technology favorites." You can read about the other top tech stock picks here.

"It's time to watch for buying opportunities -- and one of the companies on my personal list is Broadcom Corp. (NASDAQ: BRCM), whose shares are in buying range right now," says analyst Glenn Rogers.

The contributing editor to Gordon Pape's Internet Wealth Builder explains, "This semiconductor maker is a good choice for investors who would like to add to their information technology position with shares of a first-class company."

"Broadcom, located in Irvine, California, designs semiconductors for the wired and wireless communications industry. It is a major supplier to Apple's iPhone, which has taken the world by storm this past year.

"Specifically, it powers the brilliant display screen that has captivated users since the launch of the iPhone last year. (Full disclosure: I've just picked up my new 3G iPhone.)

"It also provides the chip that delivers the GPS navigation in the new iPhone. The company holds over 2,000 U.S. and foreign patents and has more than 7,400 pending patent applications.

"But Broadcom is not just an iPhone supplier. It also powers the Motorola TV set top boxes, Netgear wireless routers, Bluetooth and Blu-ray applications, digital television, VOIP, etc. There are lots of chipmakers out there but Broadcom operates in the areas that offer the highest growth potential and the least commoditization in this sector.

The Associated Press reported on five upcoming albums this fall in an article posted yesterday, raising new questions about the music industry and the success these albums may enjoy. The big news are the number of comeback albums being released in the next few months, notably from Metallica and Australian band AC/DC. Both albums come after lapses of five years or more from the artists, a time period that has seen major upheaval and change in the industry, and the AP cites reports that both return the bands to their roots.

Nevertheless if Metallica and AC/DC are returning with new material, the music industry is simple not a safe place for anyone involved with it: artists, managers, investors, and vital customers. In fact, both Warner Music Group Corp. (NYSE: WMG) and Sony Corporation (NYSE: SNE), which owns Sony Music Entertainment Inc., have seen declining prices throughout the summer. None of this is any different from the declines the industry has been seeing in recent years, but digital sales and excitement over new albums in the summer might have pointed in the opposite direction.

The AP's projections for other top albums this fall include material from rapper T.I., still reeling from a weapons charge and punishment, and High School Musical 3 from Disney (NYSE: DIS). It is just too hard to suggest if these projections are reliable in an industry currently in flux and continuously declining. However, they are sure to be successful, in particular the next installment of High School Musical, but they will probably all be paled by an unexpected success. If the summer excitement could continue from the festivals and tours into the fall, then these albums could do well, but whether that will improve the industry or improve investors is just too risky to speculate.

Alaskan governor Sarah Palin will be the VP candidate for the Republican ticket. She is pro-drilling in Alaska but otherwise her business interests are not significant. And she has taken on the special interests in Alaska -- including Senator Ted Stevens, who wanted to build a bridge for nowhere.

I listened to her speech this afternoon, and I thought she did a very good job. She gave a simple speech which introduced herself and her family and described her union membership and her meteoric rise in Alaska politics.

It's clear that she was picked by McCain and not his advisors who might have preferred Romney for his fundraising prowess. Will she take Hillary votes from the Obama ticket?

Phillip Morris International (NYSE: PM - option chain) shares are relatively flat today in the face of a bearish market as the company announced it will raise its regular quarterly dividend to 54 cents. As long as they pay that dividend quarterly, then this makes a tidy 4% yield.If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on PM that can take advantage of that dividend.

PM opened this morning at $53.76. So far today the stock has hit a low of $53.66 and a high of $54.46. As of 12:35, PM is trading at $53.96, up 4 cents(0.1%). The chart for PM looks bullish and S&P gives PM a positive 4 STARS (out of 5) buy ranking.

For a bullish hedged play on this stock, I would consider a March covered call at the $60 level. A covered call is an options position that combines the purchase of stock with the sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.4% return in 7 months if PM is above $60 at March expiration. But unlike our normal credit spread trades, that is not the goal here. This position turns out strictly better than buying and holding the stock if it is below $61.25 at March expiration, and it makes a reasonable return in the unlikely event that the stock rises to that level. Plus, you can probably expect to catch at least two dividend payments over that time. We get about 2% of downside protection on this pretty stable stock by using a covered call. Learn more about this type of trade here.

PM has shown support just below $54 recently.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in PM.

I have been following Dell (NASDAQ: DELL) since its 1988 IPO. No question, this was a mega-gamechanger company for years. The vision of Michael Dell creating this company from his University of Texas dorm room is inspiring. The dorm room became the new substitute for company creation as the Hewlett-Packard (NYSE: HPQ) garage served beforehand. Dell was a great American success story---but the key here is WAS.

Dell remains a sell. I wrote back in early 2007 that this company is doomed because of the total commoditization of its product line. Desk tops, laptops and servers were judged more by pricing than by functionality. Hewlett-Packard took market share away from Dell these past five years, and even the return of founder Michael Dell to the CEO role was not going to save this company.

Oil declines by $30 from record highs. Other commodity prices moderate. The dollar rallies. The nation records better-than-expected GDP growth in Q2.

All are positive data points that suggest that the U.S. economy, while it's certainly not in the midst of robust growth, has not run totally into a ditch, either.

What do the latest economic data points mean for the Dow Jones Industrial Average, and U.S. stocks, in general, for the next six to nine months? Here's the bullish and bearish cases:

Bullish case: Technical analysts would cite the Dow's close above the 50-day moving average for three consecutive days, the fact that the Dow held support at the 11,000 level, and a series of higher closing highs and higher closing lows in the past two months.

Further, technical analysts would also cite the fact that the Dow has completed the volume-light June-July-August summer season (typically bearish for stocks) during a period of anemic growth (if the U.S. economy isn't already in a recession), without plunging to nerve-wracking lows. True, the Dow fell from about 12,400 in June to 11,000 in July, but technicians would cite the aforementioned positive technicals as an argument that a bottom is in place.

Bearish case: Technical analysts would cite the fact that the Dow, although above the 50-day moving average, nevertheless remains below the 200-day moving average -- the toughest moving average line to break in trading. Also, market 'up days' have lacked sustained buying strength as measured by the MACD Histogram.

Further, and equally important, Dow bears would say that although the Dow has risen from its 11,000 low, the roughly 600-point increase is still well within the range of a correction -- or in this case short-covering -- in a long-term bearish trend. In other words, the Dow's recent rise could be Pyrrhic or false -- a classic example of a 'dead cat bounce.'

Market Analysis: With all due respect to technical analysts and their indicators, the view here argues that investors/ traders should take their cue from the U.S. economy's fundamentals: specifically, corporate profits and job growth. Absent substantial, sustained gains in each, any Dow rally is viewed with skepticism.


**

What's your view of the Dow? Is this stock market rally real? Or is it temporary? Let us know what you think.

As my colleague Doug McIntyre posted this morning, the New York Times reports that Lehman Brothers Holdings Inc. (NYSE: LEH) plans to cut 1,500 jobs -- that's 6% of its workforce and Lehman has already terminated 6,000 staffers since June 2007. While Lehman has been a big player in mortgage origination and securitization, there is also the potential for cuts in other lines -- such as investment banking and trading, according to the Times. Since the credit crunch is so enormous in scale and scope, there may simply not be enough demand for Lehman to survive in its current form.

Lehman is expected to have a rough quarter. The Times reports that it could take a "$4 billion loss for the quarter of $3.30 a share." Much of the loss is due to its mortgage- and asset-backed securities -- of which it owns "about $61 billion." And since there is no market for them, Lehman must write down their value and take a charge against earnings and capital. Meanwhile after dropping 71% in the last year, Lehman's stock market value is roughly a sixth of the size of that portfolio of dodgy securities.

Lehman has evidently leaked several options for raising capital -- to add to the $6 billion it got earlier this year. The Times reports that these include "the sale of Lehman's investment management division, which includes Neuberger Berman and could fetch $7 billion to $10 billion. Other options include the sale of about $40 billion of troubled commercial real estate, and the creation of a separate unit that would be owned by Lehman shareholders and house a substantial portion of Lehman's commercial and residential mortgage assets, freeing the investment bank to try to move forward."

The J. M. Smucker Company (NYSE: SJM) is a leading North American maker of fruit spreads, peanut butter, shortening and oils, ice cream toppings, sweetened condensed milk, and health and natural foods beverages. Company brand names include Smucker's, Jif, Crisco, Eagle Brand, Hungry Jack, Laura Scudder and Robin Hood. The firm also markets Pillsbury, Pillsbury Doughboy, Carnation, Borden, and Elsie brand products under license. ConAgra Foods (NYSE: CAG) is a major competitor.

Smucker pleased investors earlier in the month, when it reported fiscal Q1 EPS of 82 cents and revenues of $663.7 million. Analysts had been looking for 77 cents and $647.2 million. Management also guided FY09 EPS to $3.45-$3.50 ($3.44 consensus) and FY09 revenues to $3.8-$4.0 billion ($3.86B consensus). The outlook figures take into account the previously announced purchase of Procter & Gamble's (NYSE: PG) Folgers coffee business.

Analyst upgrades:

• Merriman upgraded shares of Netezza (NYSE: NZ) to Buy from Neutral following the company's solid Q2 results as they believe it is well-positioned for strong operating results heading into 2H09.
  
• JP Morgan raised Cabot (NYS: CBT) to Overweight from Neutral. The firm expects 2009 to be a better year given lower raw material costs and higher contract prices.
  
• JP Morgan also upgraded Royal Ahold (OTC: AHONY) to Overweight from Neutral on valuation.
  
• Liberty International (OTC: LBYIY) was upgraded to Hold from Sell at Deutsche Bank.
  
• BMO Capital upgraded Royal Bank (NYSE: RY) to Market Perform from Underperform and Bank of Montreal (NYSE: BMO) to Outperform from Market Perform.

Analyst downgrades:

• Jefferies downgraded shares of Constellation Energy (NYSE: CEG) to Underperform on Hold on concerns the company will come under increasing pressure to issue equity. The firm lowered its target to $60 from $71.
• Thomas Weisel downgraded Williams-Sonoma (NYSE: WSM) to Market Weight from Overweight citing continued macro pressures.
  
• Wachovia has concerns that Kayne Anderson's (NYSE: KED) book value will be pressured by its investment in ProPetro Services, trading losses associated with SemGroup, and negative developments at Quest Midstream. The firm cut shares of Kayne to Market Perform from Outperform.
• Energy Conversion (NASDAQ: ENER) was downgraded to Neutral from Buy at Piper.
  
• Deutsche Bank cut International Paper (NYSE: IP) and Domtar (NYSE: UFS) to Hold from Buy.
  
• H&E Equipment (NASDAQ: HEES) was lowered at Credit Suisse to Neutral from Outperform.

Analyst initiations:

• Morgan Stanley yesterday initiated Elan Corp (NYSE: ELN) with an Overweight rating. The firm sees a low-probability of a Tysabri withdrawal.
  
• ThinkPanmure views On Semiconductor (NASDAQ: ONNN) as a nice turnaround story with opportunities for shares gains in notebooks and consumer gaming platforms. Shares were initiated with a Buy rating and $14 target.
• Petrohawk Energy (NYSE: HK) was assumed with an Outperform rating at Morgan Keegan.
  
• Regency Energy (NASDAQ: RGNC) was initiated at Merrill Lynch with a Neutral rating.

The new Apple (NASDAQ:AAPL) 3G iPhone is becoming more popular for all the wrong reasons. It drops calls and has trouble connecting to some cell carrier's high-speed wireless network.

All sorts of analysts are out in the field trying to discover what is wrong with the new product. No one has come up with an answer. But AT&T's (NYSE:T) rivals have decided to use the opportunity to attack its products and services. According to The New York Times, "A phone is only as good as the network it's on," said a full-page Verizon Wireless newspaper ad."

Even if the iPhone is only a brick with a dial pad, the challenges are off the mark. Wireless systems, including those from Verizon Communications (NYSE: VZ) and Sprint (NYSE:S), are full of dead spots. A set of tests of almost any cell network in the U.S. or abroad would show that dropped calls are not rare.

Verizon has decided to use something that is common to go after its competition, which is fine until someone goes out and tests its network.

Douglas A. McIntyre is an editor at 247wallst.com.

Just as soon as Sears Holdings (NYSE: SHLD) re-arranged deck chairs on the Titanic, the retailer, headed by hedge-fund guru Eddie Lampert, reported another absolutely dismal quarter Thursday morning. In 2008, shares in Sears Holdings have sunk 36% as the retailer continued to report quarter after quarter of sluggish sales, declining revenue and underinvestment in its retail locations.

Lampert's idea of cutting investment in stores to boost actual investment returns has failed, and failed miserably. One thing customers respond to is constant change in their shopping environment, and this is where Sears has failed. Its stores look the exact same as they did four years ago. Even the logo has not changed.

Retailers like Target Corp. (NYSE: TGT) and Wal-Mart Stores, Inc. (NYSE: WMT) apparently know way better how to get seasonal and high-request goods to their stores. They do it in a fashion that turns inventory and makes sales far better than Sears' manages with its current grip on retail. In fact, I am not sure Sears even has a current grip of retail. It's a goldfish (albeit a large one) nearing the top of the fishbowl. With Lampert's track record, one would think he would have made changes a year ago. He has not, and Sears continues to flounder badly. The Wall Street Journal thinks Lampert should go, and go now. What do you think?

Even Lampert's acumen in taking out pieces of an investment and selling for a profit hasn't worked out. What about selling off a good portion of its real estate holdings under the combined Sears/KMart umbrella to help make a profit? Even that time has passed though. Lampert's original prediction for Sears Holdings has failed, and unfortunately he won't be adding this experiment to his resume that includes the years-ago notion that he was the next Warren Buffett.