Tax Reform in This Election Year: It's Not Likely
Walmart's New Health Food Push: Is It Too Hard to Swallow?
So, Europe has stepped to the plate and agreed to a almost $1 trillion rescue plan to help avert a debt crisis, with the U.S. Federal Reserve pledging to do its part for overseas loans. The move has been cheered on the Street, as the major indices are significantly higher, the Dow Jones leading the way with a more than 400-point gain. This gain makes up a good portion of last week's plunge, which was driven by fears that Greece's debt problems would eventually spread to all of Europe. The fear was that such a scenario would put the future of the euro and the economies of the 16 countries using the currency in economic peril.
dow jones industrial posts
FeedDow Jones Jumps 400 Points, Now What?
Serious Money: Is gold an investment?
The amount of nonsense I come across misleading readers, or simply providing bad advice, makes me cringe. Sometimes our own site presents such information like discussing penny stocks and technical analysis.In general, I distinguish bad advice, misleading or misguided information from that regarding a stock idea that simply did not pan out, of which I have been guilty too -- all of us have hits and misses. However, a post I read on Seeking Alpha promoting gold, with suggestions of doom by tailoring the data to fit the theory. The author supported his point by back-testing only ten years to a known low water mark.
Cisco, Travelers join the Dow
After weeks of speculation - Apple! Amazon! Nike! Toyota! -- all became clear today when General Motors Corporation's (NYSE: GM) exodus from the Dow Jones Industrial Average (DJIA) made room for... Cisco Systems, Inc. (NASDAQ: CSCO). While perhaps not as sexy a name as, say, Apple, Inc. (NASDAQ: AAPL), it does add one more tech name to the venerable 30-stock average. Wall Street Journal Managing Editor Robert Thomson released a statement noting that CSCO made the cut "because its communications and computer-networking products are vital to an economy and culture still adapting to the Information Age -- just as automobiles were essential to America in the 20th Century." So there's the connection!
Caterpillar shares dig lower after its earnings report
Dow component Caterpillar (NYSE: CAT) appears to be in for a rough day after reporting a first-quarter loss of 19 cents per share. This was the first quarterly loss for the earth mover since 1992. Moreover, a year ago, CAT earned $1.45 per share in the first quarter. Excluding charges stemming from CAT's workforce reduction, the quarterly earnings would have totaled 39 cents per share -- far better than expectations. Quarterly sales dropped 22% to $9.22 billion, again topping the consensus estimate for $8.33 billion.
Continue reading Caterpillar shares dig lower after its earnings report
Market tanks amid fear, uncertainty and doubt
The glow is coming off yesterday's huge Fed rate cut. Just as I expected, the market gave back much of yesterday's huge gains.Investors sent the Dow Jones industrial average down 293 points, or 2.36%, to 12,099.66, while the Nasdaq Composite Index fell 58.30, or 2.57%, to 2,209.66 and the S&P 500 tumbled 32.32, or 2.43%, to 1298.42. Market watchers, who were jubilant yesterday, were downright depressed today.
"This whole market is driven by fear right now,'' James Gaul, a portfolio manager at Boston Advisors LLC told Bloomberg News. "Investors are thinking more and more this will be a long and drawn out recession, and that pulls down commodity prices and energy prices.''
"Clearly there is fear. I would say the needle is pointing more toward fear than greed right now," said
George Shipp, chief investment officer at Scott & Stringfellow, in an interview with the Associated Press.
O.K, we get the picture. People are scared. Fear rules the day.
That's the case for now, but the funny thing is this fear will not last. The slightest good news will send the market skyward yet again.
You can get whiplash watching this market rise and fall.
StockWatch: Between the bells with bearish trader Michael Panzner
We're in a rare moment in history where cash is king. That may sound like a cliche, but I think the 4% to 5% returns you can get in a money market account are very attractive compared to the risk you take by staying in stocks. My prediction is that the Standard & Poor's 500 could fall at least another 10% from here. I think the economy is weakening and the crisis in the credit markets will worsen from here.
As I explain in this video, I think this is not the time for a buy-and-hold strategy. But if you must stay in stocks, look at more defensive sectors like food, beverage and healthcare. Gold is another sector that could potentially provide a safe haven in the tough months to come.
Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle.Market increasingly short of breadth
Nearly all of the major stock market indices are "capitalization-weighted" (one notable exception is the Dow Jones Industrials Average, which is "price-weighted").
That means swings in the value of the largest constituent members have a proportionately greater influence on the price of the relevant benchmark than price changes in the shares of smaller companies.
In many cases, exchanges and financial services firms have also created "equal-weighted" versions of some of the more popular bellwethers (many of which also serve as the basis for certain exchange-traded funds, or ETFs).
With this type of structure, the equivalent percentage move in the price of a share of any company in the index, regardless of the firm's size, will have an identical impact on the value of the benchmark.
Because of the way each index is calculated, one can get a feel for whether or not a market trend has been broad-based, and thus "healthy," by examining the ratio of the price-weighted index to its capitalization-weighted equivalent.
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