In a market dancing in bear market territory and with elevated inflation, it certainly doesn't hurt to own a defensive stock or two. And one that fits the bill, with an inflation hedge as a bonus, is Barrick Gold (NYSE: ABX).

Barrick Gold is the world's number one gold producer, with a 2007 production capacity of 8.1 million ounces, and 124.6 million ounces in proved/probable reserves. Analysts see a 20-30% revenue gain in 2008 for ABX, following a solid performance in 2007, due to a higher average gold price and increased production.

What's behind the gold bull market? Three factors: 1) increased use of gold in industrial and commercial applications, 2) rising demand for gold jewelry, and 3) increased reliance on gold and gold shares as an alternative investment. All three trends show only modest signs of abating in 2008. Asia-based jewelry demand looks especially promising in the immediate years ahead. The Reuters F2008/F2009 EPS consensus estimates for ABX are $2.43/$2.60.

PepsiCo (NYSE: PEP), major rival of Coca-Cola (NYSE: KO), is letting the investing world know that it's doing fine. In one of the shortest press releases I've ever read, management at the beverage maker let shareholders in on the fact that it intends to reiterate guidance at The Deutsche Bank Global Consumer and Food Retail Conference that takes place next week in Paris. PepsiCo believes it's still good for $3.72 per share in earnings for the fiscal year.

When the world seems to be heading for the dark pits of economic hell, it's nice to know that PepsiCo expects to be able to stay the course and deliver on an earlier forecast. After all, with all this talk of inflation, one would have to wonder how companies like PepsiCo and Coke can possibly remain stable given the difficult input-cost environment. The big question on my mind is how high these two companies might rise during the summer, since they are considered defensive plays. They didn't seem defensive at all on Wednesday during the Dow's 200-point bleed, but my gut is telling me they might be good short-term plays.

They certainly are excellent long-term plays, and while I own Coke, I'll concede that right now, in terms of P/E ratios and dividend yields, an investor wouldn't go wrong with either. And, yes, I'll further concede that one gets an added bonus with PepsiCo since it owns the strong Frito-Lay salty-snack business. But with both stocks down over the last six months (As of this writing, PepsiCo is down more than 11% for the six-month period while Coke is down more than 9%), and with problems in the markets, they might be interesting ideas right now. Again, though, the effect of input costs must be part of your due diligence before buying.

Disclosure: I own shares of Coke; positions can change at any time.

"Diageo (NYSE: DEO) is the world's biggest spirits company with operations in over 180 countries," notes Alexander Green. The contributing editor to The Money Map Report explains, "Diageo is a non-cyclical, recession-proof
stock we can count on to deliver solid results no matter which way the global economy heads."

The advisor explains, "The company's brands are some of the oldest and most successful: Smirnoff vodka, Guinness stout, Bailey's Original Irish Cream, J&B and Johnnie Walker Scotch whiskies, Jose Cuervo tequila, Captain Morgan rum and Tanqueray gin – among others.

"For the first six months of fiscal year 2008, the company beat expectations. Sales rose by 5.7%. Earnings advanced almost twice as fast, hitting $2 billion. And dissecting the results further reveals continued strength in international and emerging markets, with operating profits up 20%.

Given the uncertain U.S. economic landscape, and accompanying choppy / consolidating market conditions, adding a few defensive plays is a prudent tack. Among insurers, Aetna Inc. (NYSE: AET) is worth an evaluation.

Aetna's wide product offerings and comprehensive coverage is an operational strength, as is its geographic footprint. These factors, along with cost controls, should enable Aetna to maintain solid earnings growth in FY 2008-FY 2009.

Further, analysts like AET's projected F2008 800,000-900,000 organic net membership growth in its health care segment, superior underwriting discipline, and cost controls. Another positive: on the big client side, the Bank of America Corporation (NYSE: BAC) selected Aetna as its primary benefits provider for its employees, beginning in 2009.

Common sense suggests if your portfolio doesn't contain a defensive play or two by now, you should add at least one, with the consumer products segment representing a good choice. And with the aforementioned in mind, PepsiCo is worth a review.

PepsiCo, Inc. (NYSE: PEP), or simply Pepsi as it is known in the Concrete Canyon, has all the ingredients for a reasonably safe consumer play: a leading primary brand, product diversification, established market positions, a wide geographical footprint, marketing savvy, and cost discipline.

Pepsi has a large snack business, but the major business model here is, of course, beverages, led by the namesake Pepsi cola, which vies with The Coca Cola Company (NYSE: KO) for cola supremacy, globally. Operating in about 200 countries, look for PEP's international market share to increase in 2008-2009. The company is also well-positioned in the juice and non-carbonated drink segments, which are also expected to perform well, moving forward.

The U.S. stock market's choppy, volatile pattern continues. Technically, the Dow's rally from the February 2008 and March 2008 market lows around 11,800 to the 13,100-range is displaying signs that it may have been a false rally: the rally failed at the 200-day moving average and closed Thursday, for the second straight day, below the 50-day moving average.

Further, the fundamental story does not look good, either: $130 per barrel oil, a housing market showing no signs of recovery and the specter of scant job creation for at least the next two or three months does not exactly represent the strongest magnets to attract new money to the market.

On February 4, 2008, I provided five defensive stocks worthy of consideration. Listed below is a progress report, with revised recommendations for each.

Procter & Gamble (NYSE: PG) - a diversified consumer products giant, extraordinaire.
February 4, 2008 price: $66. Sell / Stop Loss: $47.
May 22, 2008 price: $65.62. Revised recommendation: I'd continue to hold PG here if I owned it, definitely buy it if I didn't. Revised Sell / Stop Loss: $47.

Cola-Cola (NYSE: KO) - because no one ever went broke, holding Coke.
February 4, 2008 price: $59. Sell / Stop Loss: $43.
May 22, 2008 price: $58.27. Revised recommendation: I'd continue to hold KO here if I owned it, definitely buy it if I didn't. Revised Sell / Stop Loss: $47.

With the U.S. economy still exhibiting signs of anemic growth (or worse), it's best to consider including a few defensive stocks in your portfolio, and with the aforementioned in mind, General Mills is worth an evaluation.

General Mills, Inc. (NYSE: GIS) is the second largest U.S. producer of ready-to-eat breakfast cereals, including several iconic brands, and is a leading producer of other packaged consumer foods.

Most analysts see GIS's FY 2008 revenue advancing 6-8%, followed by a 7-10% rise in FY 2009.

Analysts also like the fact General Mills has braced itself for the higher-cost commodity era as a result of efficiency improvements, productivity gains, and a more-favorable product mix. The Reuters FY 2008/FY 2009 EPS consensus estimates for GIS are $3.48 to $3.78.

Kimberly-Clark (NYSE: KMB) reported for the first quarter today. Net sales increased almost 10% to $4.8 billion. Adjusted earnings per share increased 5% to $1.08. That's a rather small jump, granted, but you know something, it was enough to keep the stock in the green (at the time of this writing, at least) instead of in the red on a day when the major market averages -- and just about all of the stocks in my personal portfolios -- are bathing in the evil crimson color of doom. And according to Briefing.com, Kimberly-Clark played the beat-the-expectations game and won by the proverbial penny! Shareholders should be pleased.

A non-pleasing item to be found in the release centers on cash from operations -- it decreased by about $100 million to $426 million due to changes in working capital. That doesn't concern me so much right now, though, since Kimberly-Clark will probably do well over the coming years in terms of cash generation. The company, by the way, has been repurchasing stock, so management seems pleased with the shares as a potential investment idea.

Kimberly-Clark, which is a consumer-products business in the league of entities such as Procter & Gamble (NYSE: PG), Energizer (NYSE: ENR), Colgate-Palmolive (NYSE: CL), and Unilever (NYSE: UL), could be a value right now based on its P/E ratio and dividend yield. Out of the stocks mentioned here, I like P&G the best, but I do respect Kimberly-Clark -- in fact, it was mentioned recently in an article by Steven Halpern that centered on an analyst's picks for quality and yield.

Disclosure: I don't own shares in any of the companies mentioned; positions can change at any time.

Readers of this space know that the investment bias is toward large-cap companies with demonstrated business models and who have a competitive advantage in established markets, preferably with a favorable global trend as a support. And with the above in mind, Coca-Cola is worth an evaluation.

This is not your parents' The Coca-Cola Company (NYSE: KO) company. This is the drink-diversified KO. Coca-Cola has adeptly positioned itself in the health (Vitamin Water) and sports drink (Powerade) segments, while continuing to effectively publicize one of the most iconic brands in the world, its namesake cola drink.

Other positives: KO has dominant or large-lead market share positions in key developed nations, an impressive emerging market presence, a superior balance sheet, and marketing skills that many companies can only dream about. The Reuters FY 2008/FY 2009 EPS consensus estimates for KO are $3.03 to $3.32.

A year or so ago, a 10% total annual return on equity would have been unsatisfactory for many investors.

My, how the U.S. financial landscape has changed from April 2007! A 10% return today doesn't look so bad, and a company that can achieve that and more is utility NRG Energy.

NRG Energy Inc. (NYSE: NRG) is a wholesale power generating company that owns and operates power plants with a net capacity of 22,880 megawatts.

The majority of NRG's revenue is from base load power. The significance? A stable cash flow. Further NRG's power source is largely natural gas-based, which is preferred, given likely additional regulations moving forward for coal-fired plants, as nations address climate change. NRG's power source mix is 45% natural gas, 34% coal, 16% oil, 5% nuclear. NRG's stable includes 175 power generation units at 49 power plants.

With the markets still in a choppy/consolidation mode (or perhaps worse), it's best to consider including a few defensive stocks in your portfolio, and with the above in mind AT&T is worth an evaluation.

Blue-chip giant AT&T Inc. (NYSE: T) is the industry-leading provider of voice, IP-voice, video, and data communications services, with operations in every major country and metropolitan area in the world.

Analysts expect AT&T's 2008 revenue to increase 4-6% in 2008, followed by 5-7% growth in 2009.

Further, AT&T's wireless division is expected to be a star performer, with 2008 revenue advancing 13-20% in 2008, on new subscribers and expanded services.

With the markets still in a choppy/consolidation mode (or perhaps worse), it's best to consider including a few defensive stocks in your portfolio, and with the above in mind Duke Energy is worth an evaluation.

If you're looking for a balanced, longer-term utilities play, consider Duke Energy (NYSE: DUK).

Duke is that rare type of utility that offers investors an ample amount of safety, an adequate dividend, and the potential for capital gain upside via growth.

In general, analysts expect DUK to register solid revenue results in 2008-2009. Duke has exited several higher-risk businesses, and what's left is impressive, particularly in a choppy, uncertain stock environment: 3.9 million utilities customers in the South and Midwest, 8,700 MW of unregulated generating capacity in the U.S., 4,200 MW of generating capacity in Latin America, and 500,000 natural gas customers. Further, given current population projections in the South, the long-term trends look good for a considerable portion of Duke's operations.

Other positives: Look for Duke to better-utilize its Midwest gas-fired plants and maintain cost-control discipline, in the years ahead. Finally, DUK's 88 cent annual dividend adds to the mix. The Reuters F2008/F2009 EPS consensus estimates for DUK are $1.27/$1.35.

The risks? Duke's revenue could be hurt if a generally-favorable regulatory stance in its regions changes. An unusually cool summer could also keep revenue below analysts' expectations. Don't look for a major upside revenue surprise with Duke, but everything else, from a utilities investment standpoint, lines up.

The First Call mean rating for DUK is: Hold. [18 firms.] Mean 2008 target: $20 [high: $23, low: $18.]

Stock Analysis: Duke Energy is a moderate-risk stock not suitable for low-risk investors. Consider buying Duke's shares if your portfolio does not contain a utilities stock. Investors with an investment horizon longer than 2 years should be rewarded from DUK's shares. Sell / Stop Loss if you were to purchase shares in this company: $13.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.

With the markets still in a choppy/consolidation mode (or perhaps worse), it's best to consider including a few defensive stocks in your portfolio, and with the aforementioned in mind Colgate-Palmolive is worth an evaluation.

Colgate-Palmolive Company (NYSE: CL)'s restructuring is working, and its 2008/2009 results will continue to show it. In late 2004 CL initiated a 4-year cost reduction program including a 10% workforce reduction, new product roll-outs, an emphasis on larger-growth markets, and the more-savvy deployment of marketing resources.

The results to-date? The CL train is moving forward, with analysts generally seeing near-double-digit annual revenue growth through at least 2009, and probably longer. An eye-opening stat -- Colgate is an enhanced, global consumer products defensive play: 65% of CL's revenue stems from personal, oral, and home care sales outside North America.

With the markets still in a choppy/consolidation mode (or perhaps worse), it's best to consider including a few defensive stocks in your portfolio, and with the aforementioned in mind Procter & Gamble is worth a review.

If General Electric Company (NYSE: GE) is 'the mutual fund in one company,' then The Procter & Gamble Company (NYSE: PG) is the 'consumer products aisle' in one company. Pick a brand, any brand. PG has about 300, including names you know well: Crest toothpaste, Folgers coffee, Bounty paper towels, Tide detergent, Gillette shavers - - PG's core product line contains brands that are entrenched in U.S. culture... and entrenched in U.S. consumer buying patterns.

Procter & Gamble says its mission is "to provide superior quality and value to the world's consumers," and both revenue and consumer satisfaction surveys suggest it is 'on message,' to borrow a political campaign strategy phrase.

"The recent fits and spasms of the stock market predict tough times ahead; and ironically, that's good news for Raytheon (NYSE: RTN)," says Louis Basenese, Oxford Club Associate Investment Director.

In The Oxford Insight, he notes, "When stocks are anticipating a recession, the best offense is often defense stocks -- and there's plenty of reason to expect this defense contractor to shine, even if a recession is confirmed."

"Defense will likely remain one of the largest budget items for the United States, regardless of which political party wins the fall election. And, according to JP Morgan Securities, the defense outlays of the United States actually increase, by an average of 6.5% during recession years since 1945.

"So in the end, recession or not, as the world's fifth largest defense contractor, Raytheon's sure to enjoy steady demand.

"I'm sure you've recently read, all about the large spy satellite that became disabled and was poised to re-enter earth's atmosphere with a dangerous load of toxic fuel. What few know is that Raytheon's Standard Missile-3 was specially modified to intercept the target 153 miles over the Pacific Ocean.