By Steven Russolillo Getty Images Blue-chip stocks can’t catch a break this month. The Dow Jones Industrial Average has tumbled 5.7% in May as anxiety about Europe’s sovereign-debt crisis has ramped up. The fearful are dumping stocks, leaving�positive trading days few and far between. The Dow has seen only four “up”�days this month, which is tied for the least number of positive days in a month during the index’s history, according to WSJ Market �Data Group. The only other month with this few positive trading days was September 1903. Even amid the gloom, the Dow managed a 0.7% gain this week, snapping a three-week losing streak. Sharp gains on Monday held up even as stocks gyrated sharply for the remainder of the week. On Friday, ... Continue reading →
By Steven Russolillo It’s quiet out there today. Stocks are little changed, the euro is perched (precariously, but perched) around$1.25 and benchmark 10-year Treasury notes continue to hover near record lows. Unless something earth shattering drops out of Europe, that’ll probably be where they end the day as well. The bond market closes early today and both the bond and stock markets are closed on Monday for Memorial Day. Calm market activity is a stark contrast to what has played out for much of this month. Major stock indexes have tumbled, following the euro’s steep decline, amid worries over what the fallout would be if Greece were to leave the euro zone.�The swooning stock market has been eerily similar to the previous two years, when ... Continue reading →
By Steven Russolillo Consumer confidence just jumped to the highest level since October 2007, and the stock market barely blinked. The Thomson Reuters/University of Michigan final reading on consumer sentiment in May rose to 79.3, above the 77.8 figure economists were expecting. The survey underscores how consumers don’t appear too perturbed by the latest worries of �Greek exit from the euro zone, and instead are feeling better by the continued drop in gas prices. “This is clearly a very strong report,” TD Securities says. “The surge in confidence, while at odds with the general pessimism that has descended on financial markets, is largely consistent with improving tone in housing market activity and the decline in gasoline prices recently.” As Dow Jones’ Kathleen Madigan points out, ... Continue reading →
Scott Olson / Getty ImagesA shuttered Best Buy store in Chicago on April 16, 2012Best Buy released its first-quarter 2012 earnings this week, and though the numbers beat Wall Street expectations, net income took a tumble — falling 25%, compared with last year. And more than just poor earnings have plagued the nation’s largest retailer of late. Six weeks ago, former CEO Brian Dunn left the company amid allegations of an inappropriate relationship with a female staffer. Though sex scandals make for good headlines, Dunn’s departure is a sideshow compared with the real issues Best Buy faces. And another quarter of declining revenues has pundits wondering if these latest results are just another step on the road to the end of the big-box store phenomenon. ... Continue reading →
By Mark Hulbert, MarketWatch CHAPEL HILL, N.C. (MarketWatch) — Well, then, what should be the price of Facebook’s stock? Rather than endlessly rehashing the events that have taken place over the last week, it is this question that investors should be asking. Surprisingly, however, few are doing so. And yet, courtesy of a just-released study, calculating a fair price for Facebook’s stock isn’t as difficult as it might otherwise seem. The study is entitled “Post-IPO Employment and Revenue Growth for U.S. IPOs, June 1996–2010.” Its authors are Jay Ritter, a finance professor at the University of Florida, and two researchers at the University of California, Davis: Martin Kenney, a professor in the Department of Human and Community Development, and Donald Patton, a research associate in ... Continue reading →
David Kostin, chief U.S. equity strategist at Goldman Sachs has bucked the bullish trend in the first few months of the year after having been bullish for a long time. Kostin vocally called for S&P 1,250 despite the persistent rally in the first 4 month of the year (see here). Kostin now says the S&P is likely to end the year down slightly at 1250 (4.2% lower than today). He broke his reasoning down based on three big trends: 1. Stagnating US economy. 2. Multiples are likely to stagnate 3. Earnings growth is slowing. Kostin says the S&P is likely to earn $100 this year and that margins are likely to contract. I think his positioning is totally rational given my own outlook for earnings ... Continue reading →
For the euro area’s policy makers, there’s one path forward in the Greek drama that’s even worse than the country plunging itself into chaos by splitting from the currency union: that it leaves, and thrives. Because if Greece can walk out and move on, then what’s to stop the 16 remaining members of the common currency doing the same? “That’s the real nightmare scenario, that Greece thrives,” said Simon Derrick, a currencies analyst at BNY Mellon in London. Nightmarish, yes. Likely? Not really. Quite aside from compromising decades of intra-regional harmony building, the biggest practical concerns from a potential Greek exit center on the possibility of bank runs, and nasty losses for creditors at risk of getting paid back not in euros, but in drachma. ... Continue reading →
