Du Pont: The Soybeans Did It

It’s one of those days where the major averages are showing some decent-size divergences. While we’d normally blame Apple (AAPL) for the differences, today’s can be chalked up to EI du Pont de Nemours (DD), which has plunged after lowering its earnings guidance.

Bloomberg

du Pont has dropped 4% to $65.01, by far the largest loser in the Dow Jones Industrial Average, which has declined 0.2% today. The S&P 500, however, is down just 0.05%, while the Nasdaq Composite, which has no exposure to du Pont has gained 0.2%.

du Pont said it would earn between $4 and $4.10 in 2014, down from its previous guidance of $4.20 to $4.45, and blamed its corn seeds for much of the miss. Barclays’ Duffy Fischer and team explain what happened:

In Ag, we now expect profitability to be down modestly from last year, and down 12% for Q2. Much of the decline is due to the weaker corn seed (mostly volume but some price weakness). Soybeans are up, on increased planted acres, but this was an unlucky year for DuPont to have the market switch from corn to soy. Dupont is rolling its portfolio from Y-series to T-series germplasm and just introducing RR2 for RR1 so its soy seed lineup is relatively less competitive this year than any year in the last five. Other Detail: Crop protection volumes in the U.S. have also been impacted by a wet spring, a delayed and compressed application season and distributor destocking.

du Pont isn’t the only agricultural-exposed chemical company dropping today. Monsanto (MON) has declined 1% to $124.98, while FMC Corp (FMC) is off 0.8% at $70.45.

Barnes & Noble Split – Why Have One Bad Company When You Can Have Two?

Popular Posts: Apple Stock Has Gotten Too Far Ahead of ItselfShould I Buy Apple Stock? 3 Pros, 3 ConsNo Merger? No Reason to Buy Sprint Stock, TMUS Recent Posts: Barnes & Noble Split – Why Have One Bad Company When You Can Have Two? Apple Stock Has Gotten Too Far Ahead of Itself 3 Media Stocks to Buy Now View All Posts Barnes & Noble Split – Why Have One Bad Company When You Can Have Two?

Shares of Barnes & Noble (BKS) jumped nearly 5% Wednesday after the beleaguered bookseller announced plans to separate its retail business from its Nook e-reader operation.

However, it’s a strategy filled with enough magical thinking to wow Harry Potter.

Nook & Retail – Two Bad Businesses

First, let’s take a look at Barnes & Noble’s retail business, which operates about 700 stores.

Same-store sales have slumped for six straight quarters. And somehow, the company’s performance in that key retail metric is much worse than it seems. B&N’s results have been inflated for the past couple years after longtime rival Borders went out of business, and more recently, the runaway success of Fifty Shades of Grey helped propel sales.

Barnes & Noble can only get lucky like that so many times.

Then there’s the floundering Nook business. While it’s true that BKS has been talking about spinning off Nook since 2012 and even got Microsoft (MSFT) to put more than $600 million into the business. Nook lost about $56 million on an EBITDA basis in the latest quarter — even as it unveiled plans to partner with Samsung (SSNLF) to market a co-branded line of e-readers. (One of many reasons why no one was surprised that Nook laid off employees earlier this year.)

No Love for BKS

Many of the people who know BKS the best are leaving the company’s shares on the discount rack and not looking back. Liberty Media (LBTYA) is a case in point. John Malone’s company offered to buy the bookseller for nearly $1 billion in 2011, only to change its mind. Instead, it acquired $204 million in preferred shares — an investment which the company announced in April that it would mostly unload.

B&N founder Leonard Riggio also abandoned his plans to ride to the financial rescue.

The problem that has dogged Barnes & Noble and will continue to do so is that its main rival Amazon.com (AMZN) is an uneconomic competitor who is willing to operate on a razor-thin profit margins. Analysts have insisted for years that CEO Jeff Bezos sells his company’s Kindle e-readers at or below costs with the hopes of making up for that shortfall by selling them high margin e-books. AMZN continues to rule the e-book kingdom.

Unfortunately, that’s less of a prize than it used to be.

Demand for e-books is slowing down from its torrid pace of 10 years ago. As demand declines, prices will drop and competition will intensify, which means lower prices for readers and lower profits for BKS.

Because AMZN has its fingers in so many pies, declines in e-book prices will only pinch profits slightly. However, for B&N, the “pinch” will be more like a sleeper hold from which there is no easy escape.

About the only ray of sunshine in the bleak outlook for BKS is its college business, and that doesn’t count for much.

During the latest quarter, Barnes & Noble’s college business brought in about $298.3 million in revenue, second only to the company’s retail business. Moreover, it earned $14 million in profit — an impressive 272% improvement year-over-year.

But that wasn’t enough to off-set the 0.8% drop in the retail business and the nearly 69% decline in Nook.

Bottom Line

For those tempted to buy stock in ether Nook or Barnes & Noble Retail, I have a suggestion: Make sure you get a stock certificate, place it in your desk drawer, then keep it in there for the next 10 years.

Because it might gain value as a collectible. As an investment, it won’t do squat.

As of this writing, Jonathan Berr did not hold a position in any of the aforementioned securities.

You Got Into College! Now, Let's Figure Out How to Pay For It

Shutterstock / zimmytws Congratulations! Your high school senior just got accepted into college. Yours, and quite a few others -- a large fraction of colleges announce their acceptances around early April. Now, you can brag to all the relatives, and quietly enjoy a profound sense of relief. No more nagging the kid to write those essays. But your work isn't over quite yet. You have just reached the round in determining the survival of the fittest form-fillers, what I call "Darwinnowing": financial aid forms and scholarship applications. More essays, more research, and more ink for the printer, and a whole new test of your mettle as a competitive applicant. The Name of the Game The object of this exercise is to have your offspring graduate with as little debt as possible. The average U.S. undergrad walked across the stage to pick up his diploma carrying $29,000 in student loan debt last year, according to The Project on Student Loan Debt. So maximizing grants and scholarships is key. You may have already received a financial aid award letter from your child's institution of choice, assuming you filed the Free Application for Federal Student Aid. Regardless of your income level, most financial aid offices require the FAFSA as a to financial aid. If you haven't filed this application, please do it . Treat the financial aid award letter as a jumping-off point. Contact the nice people at the school's financial aid office and ask if are there any other state, local, or federal scholarship programs your child qualifies for. Is this amount listed in the letter the maximum possible for your student? Are there any merit-based scholarships? Even after four years of helping my daughter apply, there are always new programs cropping up. If you are the parent of a rising college freshman, ask his or her high school guidance counselor. Most colleges have a decent handle on what's available, but some outside sources are valuable for find less-known scholarships. Your local newspaper may occasionally mention smaller scholarships from area businesses and fraternal organizations. If you can access its archives online, it could be worth searching them. Your employer may offer scholarships for children of employees; a quick trip to HR should suffice to find out. My local grocery store chain has a scholarship competition for teenagers that work over the summer. Keep your eyes peeled everywhere. Thinking Outside the Box There are many free to use websites that are a treasure trove of merit and need-based scholarships. And those awards aren't all targeted to the star athlete/straight A/perfect SAT students. Consider Ball State's "C student" scholarship, endowed by alum David Letterman, or the scholarships that will be awarded to students who wore outfits made out of duct tape to the prom. Students who are the first in their family to attend college, children of active-duty military personnel, and even children of cancer survivors can find numerous programs looking to help them pay for college. Whatever your child's religion, ethnic background, hobby, interest, social affiliation, there is tuition money out there targeted at them. Some websites try to compile the opportunities for you. Typical of these is www.fastweb.com. Fill out a profile and it matches the student to hundreds of scholarships. You will get emails of new scholarships (internships, too) year round for which a student qualifies. The best part, many are no essay scholarships and some are legit sweepstakes offering college money from major companies. Full disclosure, my daughter won a scholarship through them a few years ago.

Discovery's Zaslav: $119 million man

The gold rush may have bypassed some of the characters on Discovery Channel's Klondike mini-series. But David Zaslav, CEO of parent company Discovery Communications, managed to strike it big.

Zaslav received compensation valued at $33.3 million last year - a drop from the $49.9 million he received in 2012 and the $52.4 million he got in 2011, the company says in its annual proxy.

Zaslav received no stock award last year after getting stock valued at $25.3 million in 2012 and $20.3 million in 2011. Discovery's board said it used "downward discretion" in its compensation plan this year. The board boosted Zaslav's stock option grant to $22.5 million, up 42% from $15.8 million in 2012. The company also paid out $1.5 million to a supplemental retirement plan.

Zaslav gained another $58.7 million exercising previously awarded stock options and another $26.6 million from vested shares, Discovery says. The gains were 300% greater than the $21.3 million Zaslav collected from vested shares in 2012, according to company filings.

Zaslav wasn't the only Discovery exec to hit compensation gold. Discovery founder and Chairman John Hendricks exercised stock options for an $86.2 million gain. That's on top of compensation valued at $7.8 million. Hendricks is scheduled to resign in May.

Zaslav, 54, has been CEO since January 2007, overseeing a cable TV empire that includes the Discovery Channel, TLC, Animal Plant, the History Channel and OWN.

Discovery Communications says total shareholder return rose 56% last year, vs. 32% for the Standard & Poors 500 Index.

Tweet Strauss @gbstrauss

Oil prices spark economic growth concerns

LONDON (CNNMoney) Islamist militant gains in Iraq sent world oil prices higher Monday, sparking concerns that this could hurt global economic growth, especially in Europe where the recovery seems to be faltering.

Crude oil prices in London and New York touched levels not seen since last September after militants from the Islamic State in Iraq and Syria (ISIS) seized city after city over the weekend as they continued their march towards Baghdad.

Costlier energy could spell trouble for European economies still struggling to regain momentum after the region's debt crisis.

Growth in the eurozone has slowed to its weakest pace in six months, according to a June survey of purchasing managers released Monday. Companies across manufacturing and services reported higher input prices.

"Both sectors reported higher oil prices as a key cause of rising costs," survey compiler Markit noted.

Rising energy costs may ease fears of deflation, which prompted the European Central Bank to unveil an unprecedented range of stimulus measures earlier this month.

But they add to worries about growth in countries such as France, where business activity contracted for a second month running in June.

"Most important is the rise of energy prices," said Dominique Barbet at BNP Paribas, commenting on the weak French data. "This will not only add to the production cost of industry, but also put pressure on households' purchasing power."

The rapid advance of ISIS across northern and western Iraq this month has had little effect so far on exports of crude oil from OPEC's second biggest producer.

But prices have risen above $107 a barrel on the Nymex on fear that supplies could be hit later this year, just as world demand peaks. Prices are up 16% so far this year.

Even if ISIS is ! prevented from pushing into southern Iraq, which produces the vast majority of the country's 2.5 million barrels per day of exports, energy experts say output could fall back as foreign oil companies withdraw staff due to security concerns.

World growth forecasts have already been cut for 2014, in part due to the deep winter freeze which caused the U.S. economy to shrink in the first quarter.

Further sustained gains in oil prices could make for a weaker rebound in the second half. And it's not just major Western economies that would feel the pinch.

China is expected to surpass the U.S. as the world's biggest importer of oil this year. India, Asia's third biggest economy, is also highly sensitive to rising energy prices.

Operating conditions in China's vast manufacturing industry improved for the first time in six months in June, according to HSBC's preliminary survey of purchasing managers.

But that's likely due to a recent mini-stimulus package, which may do little more than sustain growth at 7.4%, the rate seen in the first quarter. The government has targeted growth of 7.5% this year.

Gold Up, Still Set for Biggest Weekly Drop in 4 Months

Deutsche Bundesbank, Frankfurt am Main/AP LONDON -- Gold rose Friday ahead of a series of speeches by U.S. Federal Reserve officials but was still on track for its biggest weekly fall since November following the Fed's hints of an interest rate hike in the first half of 2015. Fed officials including Richard Fisher, James Bullard and Narayana Kocherlakota are due to speak later Friday after Fed Chair Janet Yellen surprised markets mid-week by suggesting the possibility of raising interest rates early next year. Spot gold was up 0.6 percent to $1,336.40 an ounce by 1508 GMT (11:08 a.m. Eastern time), after falling to $1,320.24 on Thursday, its weakest since end-February. U.S. gold futures gained 0.5 percent to $1,336.80 an ounce. On Monday bullion briefly touched a six-month high of $1,391.76 on tensions in Ukraine and concerns about growth in China before the focus shifted towards the U.S. monetary stance. It was on course for a 3.1 percent weekly fall. "After the Fed policy meeting we saw gold fall and touch support around $1,320," MKS SA head of trading Afshin Nabavi said. "But with tensions again escalating between Russia and the West, the market has become more jumpy because it is not only the macroeconomics driving prices but also the political situation, at least in the short term." European and U.S. shares edged higher, while the dollar hovered near a three-week high against a basket of major currencies and 10-year U.S. Treasury yields rose above 2.7 percent. "The main longer-term factors remain expectations for higher yields, higher interest rates and a stronger dollar, which are negative for the metal," ABN Amro commodity analyst Georgette Boele said. Low interest rates, which cut the opportunity cost of holding non-yielding bullion above other assets, had been a key factor driving bullion higher in recent years. An escalation of U.S. sanctions against Russia over the crisis in Crimea kept investors cautious, giving support to gold, usually seen as an insurance against risk, analysts said. U.S. President Barack Obama raised the stakes in the East-West confrontation on Thursday by targeting some of Russian President Vladimir Putin's closest long-time political and business allies with personal sanctions. Physical Buying The physical sector noted light buying from jewelers, but demand from main consumer China remained slow because of a weak yuan. Premiums for gold bars in Hong Kong were unchanged from last week at $1 an ounce to the spot London prices. China's yuan fell to a 13-month low on Friday and was set to post its biggest weekly fall after the central bank lowered the midpoint of its permitted trading range, which is seen as a signal of official comfort with the currency's recent losses. Weakening differentials between 99.99 percent purity gold on the Shanghai Gold Exchange and cash gold discouraged imports. "Shanghai gold exchange is still at discounts to spot gold, and the market wants to know if the yuan will continue to depreciate," a physical dealer in Hong Kong said. Gold jewellery exports from India edged up 1 percent in February to $718.36 million from a year earlier, an industry body statement said on Thursday. In other precious metals, palladium rose 4 percent to $795.00 an ounce, its highest since August 2011, boosted by the launch of two exchange-traded funds in South Africa and increasing sanctions by Western countries on main producer Russia. Silver rose 0.6 percent to $20.39 an ounce and platinum gained 0.5 percent at $1,435.50 an ounce. -.

What's involved: You can buy gold bars or coins from coin dealers across the country. Many coin dealers have online businesses that will ship gold directly to your home. Pros: You have the gold in your possession, avoiding any risk of third-party misconduct that other methods of investing in gold entail. Some investors enjoy the coin-collecting aspect of gold bullion coins.

Celgene, Gilead and a Truckload of Patent Trouble

Shares of Gilead (GILD) and Celgene (CELG) have tumbled today after both companies revealed that they were facing patent pressures.

For Gilead, Idenix Pharmaceuticals (IDIX) filed a patent-infringement lawsuit that appears to target Gilead’s Sovaldi (someone please correct me if I’m wrong). For Celgene, it was the decision of a New Jersey court to schedule a hearing on a patent case for April 29, earlier than expected. It hasn’t helped that the UK’s National Institute for Health and Care Excellence also said that Celgene’s Revlimid doesn’t work well enough to be covered for “second line treatment of multiple myeloma.”

Bernstein’s Geoffrey Porges doesn’t expect the outcome of Celgene’s hearing to have a major impact:

Overall, the outcome of the case will likely not be impacted by the outcome of the Markman hearing. Revlimid is currently protected by some two dozen patents in the US. Our attorney consultants believe that the polymorph patent 7465800 (or ’800 patent) is a particularly solid pillar in the “dome” of patents that Celgene has built around Revlimid. Our outlook for Revlimid sales remains unchanged, we continue to project product sales growth from $9bn in 2015 to $16bn in 2019, and $21bn 2023. Based on our analysis of consensus expectations 2, we estimated that the stock had been already discounting a ~30% chance that Revlimid will lose its patent protection by 2019…

We continue to rate Celgene Outperform, with a target price of $214. We believe that the market’s concern about Revlimid’s patent protection and NICE recommendations is overdone. We see no reason to change our revenue and earnings forecasts for the stock and recommend investors add to positions on this temporary weakness.

Shares of Celgene have fallen 3.5% to $150.54, while Gilead has dropped 3.2% to $75.51 and Idenix Pharmaceuticals has declined 0.6% to $6.90.

Google Strengthens Its Position in Smart Home Solutions Through This Move

Last month, Apple's (AAPL) stocks soared as rumors about a smart home solution surfaced. But the Cupertino based tech giant is not the only one looking to grab a share of this new segment. Mountain View based Google (GOOG), through Nest Labs' internet-controlled thermostats and fire alarms, was already warming up the space. And now the tech bellwether is in talks to acquire Dropcam, a startup that specializes in cloud-based Wi-Fi video-monitoring and security.

About the deal

The move from Google comes as another step towards its dream of becoming the foremost player in the world of converged devices – ranging right from a smartphone, to smart home solutions and even automobiles.

Dropcam was founded by Greg Duffy and Aamir Virani back in 2009 and till date has raised close to $48 million through three levels of funding from venture capitals. The company is backed by Accel Partners, Menlo Ventures, Mitch Kapor, David Cowan, Aydin Senkut, Ben Narasin, Institutional Venture Partners and Kleiner Perkins Caufield Byers.

The acquisition will come through Google's home automation company Nest Labs. Sources close to the matter said the deal was complete put in place by Nest, which obviously kept Google's vision in mind. The company will have to part with a sum of $555 million in cash for the acquisition. As a part of the deal, Dropcam will shift its functioning from San Francisco to Palo Alto, where Nest is headquartered. However, though confirmed, the deal is yet to close and is awaiting regulatory approvals.

How Dropcam Fits in to Google's Plans

Nest has come a long way since its $3.2 billion acquisition by Google and after the Dropcam acquisition, the company will become a stronger player in the segment. Nest will integrate the expertise acquired from Dropcam into its current line of smart home solutions such as Learning Thermostats and Protect smoke detector.

Dropcam's business offerings are mainly three products – Dropcam, the basic offering that sells for $149; Dropcam Pro, the flagship offering that sells for $199; and Dropcam Tab, a motion detecting device that aids the use of both Dropcam and Dropcam Pro, and sells for $29. The focus of Dropcam's offerings is to enable its users to remotely monitor activities at home through cloud-based video and audio support and motion sensors. The company also offers features such as video sharing with friends and also making the video public through social networking platforms to share it with the world.

Dropcam and Dropcam Pro. Source: Dropcam Website

With features such as these, Nest can think of developing better devices aimed at providing the best in class security features. The consumer electronics space is evolving faster than ever and people want to be connected with everything that matter to them. Apple has already started working on smart home solutions that will be controlled through iPhones and iPads and will allow users incredible amount of flexibility. Unless Google bucks up and starts strengthening its service, it might fall back in the race.

Google is planning to build a world surrounding its devices that will provide its users with seamless integration between all smart devices. A person sitting in this office will be able to check whether his aging mom and dad are fine at home, whether the baby sitter is tacking proper care of his child or not, if someone has broken into his house or not. He will be able to record videos and also interact through voice streaming, he will be able to inform the nearby police station, and all this will be possible through his Android powered devices. Smartphones and tablets will pave the path for the future of all the tech giants and it will be these new-age services and their effectiveness that will decide which tech mammoth will win the space.

Departing Thoughts

The move from Google seems to be a logical one and something that was being expected. While some industry experts are excited about the ongoing developments, some are highly concerned about the repercussions of such developments. Analysts are expressing their concerns over privacy issues and are worried the big corporations might end up invading user privacy. However, Nest has confirmed the Dropcam will come under Nest's privacy policy and thus Google or any other company won't have access to the data without user permission. In my opinion, if Nest and Google and all other companies in this field can take care of the rising concerns over privacy, the tech gurus will be able to surely flourish through offerings such as these.

About the author:Quick PenA seasonal writer with a Management Degree in Finance and interests in automotive, technology, telecommunication and aerospace sectors.

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Best Blue Chip Stocks To Buy Right Now

Back on April 2nd, esteemed Seeking Alpha contributor Hawkinvest penned a piece wherein he posited there were five reasons why General Electric (GE) shares could have potentially significant downside risks from current levels. His reasons are as follows: 1) GE's relative underperformance over the past month or so 2) GE's decline during the financial crisis means it is not worthy of the "blue chip" moniker it covets 3) GE's dependence upon a booming global economy 4) GE's debt load 5) GE's payout ratio. Now, I won't go through his points in depth as you can read them for yourself but I've captured the essence of his arguments above. I intend to use this article to express my variant view on the author's theses and to counter them with bullish arguments.

Before I begin, I'd like to mention that I have a tremendous amount of respect for Hawkinvest and his work; I don't intend to be harsh or overly critical here, I just wanted to bring a differing viewpoint to the discussion.

Best Blue Chip Stocks To Buy Right Now: Colgate-Palmolive Company(CL)

Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. It offers oral care products, including toothpaste, toothbrushes, and mouth rinses, as well as dental floss and pharmaceutical products for dentists and other oral health professionals; personal care products, such as liquid hand soap, shower gels, bar soaps, deodorants, antiperspirants, shampoos, and conditioners; and home care products comprising laundry and dishwashing detergents, fabric conditioners, household cleaners, bleaches, dishwashing liquids, and oil soaps. The company offers its oral, personal, and home care products under the Colgate Total, Colgate Max Fresh, Colgate 360 Advisors' Opinion:

• [By Douglas A. McIntyre]

  Some traditional brand powerhouses have lost ground in the Top 100 since 2009. These include BMW, FedEx Corp. (NYSE: FDX) and Colgate-Palmolive Co. (NYSE: CL).

• [By Dividends4Life]

  Memberships and Peers: KMB is a member of the S&P 500, a Dividend Aristocrat, a member of the Broad Dividend Achievers��Index and a Dividend Champion. The company's peer group includes: The company's peer group includes: Procter & Gamble Co. (PG) with a 3.1% yield, Colgate-Palmolive Co. (CL) with a 2.3% yield, and Clorox Corporation (CLX) with a 3.4% yield.

Best Blue Chip Stocks To Buy Right Now: Philip Morris International Inc(PM)

Philip Morris International Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. Its international product brand line comprises Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris, and Red & White. The company also offers its products under the A Mild, Dji Sam Soe, and A Hijau in Indonesia; Diana in Italy; Optima and Apollo-Soyuz in the Russian Federation; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics, and Number 7 in Canada; Best and Classic in Serbia; f6 in Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia. It operates primarily in the European Union, Eastern Europe, the Middle East, Africa, Asia, Canada, and Latin America. The company is based in New York, New York.

Advisors' Opinion:

• [By Rupert Hargreaves]

  After a�record�first half, tobacco stocks are now starting to pull back as the high-yield sector of the market is sold-off. During the first six and a half months of the year, Altria (NYSE: MO  ) matched the S&P 500 with gains of 17.5%, while�Reynolds American (NYSE: RAI  ) �climbed 24% and Philip Morris International (NYSE: PM  ) �advanced�7.3%, all excluding dividends (the S&P 500 gained 18% over the same period). However, since the recent sell-off began, all three companies have wiped out most of their gains so far this year.��

• [By Dan Caplinger]

  The name change reflected the company's wish to have consumers and investors see beyond its tobacco business, which at the time was plagued by more substantial legal battles with billions in potential liability hanging in the balance. Shareholders approved the name change in 2002. The irony, of course, is that Altria has since spun off both Kraft and its Philip Morris International (NYSE: PM  ) global tobacco divisions, leaving Altria holding the old core Philip Morris USA division.

• [By Rich Duprey]

  Global tobacco giant�Philip Morris International (NYSE: PM  ) announced this morning its second-quarter dividend of $0.85 per share, the same rate it's paid for the past three quarters after raising the payout 10% from $0.77 per share.

Best Industrial Disributor Companies To Watch For 2015: International Business Machines Corporation(IBM)

International Business Machines Corporation (IBM) provides information technology (IT) products and services worldwide. Its Global Technology Services segment provides IT infrastructure and business process services, including strategic outsourcing, process, integrated technology, and maintenance services, as well as technology-based support services. The company?s Global Business Services segment offers consulting and systems integration, and application management services. Its Software segment offers middleware and operating systems software, such as WebSphere software to integrate and manage business processes; information management software for database and enterprise content management, information integration, data warehousing, business analytics and intelligence, performance management, and predictive analytics; Tivoli software for identity management, data security, storage management, and datacenter automation; Lotus software for collaboration, messaging, and so cial networking; rational software to support software development for IT and embedded systems; business intelligence software, which provides querying and forecasting tools; SPSS predictive analytics software to predict outcomes and act on that insight; and operating systems software. Its Systems and Technology segment provides computing and storage solutions, including servers, disk and tape storage systems and software, point-of-sale retail systems, and microelectronics. The company?s Global Financing segment provides lease and loan financing to end users and internal clients; commercial financing to dealers and remarketers of IT products; and remanufacturing and remarketing services. It serves financial services, public, industrial, distribution, communications, and general business sectors. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. IBM was founded in 1910 and is based in Armonk, New York.

Advisors' Opinion:

• [By Dan Caplinger]

  The key to the Dow's drop today is IBM (NYSE: IBM  ) , which fell 7.5% after releasing a disappointing first-quarter earnings report. The company suffered from delays in completing major sales of mainframe computers and software packages, which contributed to a 5% decline in overall revenue. Although the company kept its full-year earnings guidance stable, analysts quickly swarmed in to downgrade the stock.

• [By Jim Jubak]

  The main culprits in the Dow's decline were IBM (IBM) down 6.4%, Goldman Sachs (GS), down 2.6%, and United Health Group (UNH) down 4.97%.

  I think we saw two themes re-emerge, and one new theme emerge yesterday, that are likely to be major drivers of the US market for the next couple of weeks, as we move through the meat of earnings season.

• [By GuruFocus]

  International Business Machines Corp (IBM) Reached the 52-Week Low of $172.80

  The prices of International Business Machines Corp (IBM) shares have declined to close to the 52-week low of $172.80, which is 20.1% off the 52-week high of $215.90. International Business Machines Corp is owned by 34 Gurus we are tracking. Among them, 15 have added to their positions during the past quarter. Thirteen reduced their positions.

• [By Tom Taulli]

  IT Spending: Last week,�IBM�(IBM) announced a terrible earnings report. It�missed expectations�on revenue by a stunning $1 billion.�But IBM�� weakness was more than just about poor execution. With the overall uncertainty in global economies, we’re seeing a general resistance to make to make commitments for IT purchases. And the recent budget showdown in DC was also no help. IBM also felt pressure in China. While the company blamed this on the government�� reform efforts, there may also be indications of a harder line on technology imports. These combined headwinds will all affect MSFT stock as well.

Best Blue Chip Stocks To Buy Right Now: Chevron Corporation(CVX)

Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. The Upstream segment involves in the exploration, development, and production of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as holds interest in a gas-to-liquids project. The Downstream segment engages in the refining of crude oil into petroleum products; marketing of crude oil and refined products primarily under the Chevron, Texaco, and Caltex brand names; transportation of crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car; and manufacture and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It a lso produces and markets coal and molybdenum; and holds interests in 13 power assets with a total operating capacity of approximately 3,100 megawatts, as well as involves in cash management and debt financing activities, insurance operations, real estate activities, energy services, and alternative fuels and technology business. Chevron Corporation has a joint venture agreement with China National Petroleum Corporation. The company was formerly known as ChevronTexaco Corp. and changed its name to Chevron Corporation in May 2005. Chevron Corporation was founded in 1879 and is based in San Ramon, California.

Advisors' Opinion:

• [By Robert Rapier]

  Seadrill Partners is presently the only offshore drilling services company structured as a partnership, although international offshore drilling contractor�Ocean Rig�(Nasdaq: ORIG) has plans to drop down assets into an MLP this year. The Seadrill Partners IPO involved a drop down of four drilling rigs from the parent — two semi-submersibles (the West Aquarius and the West Capricorn), one tender rig (the West Vencedor), and one ultra-deepwater drillship (the West Capella). These drilling rigs are under long-term contracts with major oil companies such as�Chevron�(NYSE: CVX),�Total�(NYSE:TOT),�BP�(NYSE: BP) and�ExxonMobil�(NYSE: XOM).

• [By M. Joy, Hayes]

  Shareholders, keep out
  A few years ago, when the SEC considered introducing a new regulation requiring public companies to include some shareholder-nominated candidates for the board of directors on their proxy statements, Chevron (NYSE: CVX  ) objected.

• [By Paul Ausick]

  Chevron Corp. (NYSE: CVX) opened flat this morning and peaked in mid-afternoon before sliding gack a little. Chevron has been the favorite big oil stock for about two years now and even though the stock is trading near its yearly high, sparse demand for equities today must have looked like a buying opportunity. Shares for this Dow 30 stock closed up 0.87% at $123.36 in a 52-week range of $105.75 to $127.83.

• [By Taylor Muckerman and Joel South]

  In the company's latest earnings release domestic and international struggles surfaced in the form of year-over-year revenue decreases in its two main segments: upstream and downstream operations. Luckily, and ironically, for Exxon, its chemical division bailed it out. Did peers like Chevron (NYSE: CVX  ) and BP (NYSE: BP  ) suffer the same fate? Check out the video below to find out.

Best Blue Chip Stocks To Buy Right Now: Apple Inc.(AAPL)

Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. The company sells its products worldwide through its online stores, retail stores, direct sales force, third-party wholesalers, resellers, and value-added resellers. In addition, it sells third-party Mac, iPhone, iPad, and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and other accessories and peripherals through its online and retail stores; and digital content and applications through the iTunes Store. The company sells its products to consumer, small and mid-sized business, education, enterprise, government, and creative markets. As of September 25, 2010, it had 317 retail stores, including 233 stores in the United States and 84 stores internationally. The company, formerly known as Apple Computer, Inc., was founded in 1976 and is headquartered in Cupertino, California.

Advisors' Opinion:

• [By Evan Niu, CFA]

  Apple (NASDAQ: AAPL  ) investors have been fretting lately over where future iPhone growth will come from, as data continues to pile up that the high-end segment of subsidized, developed markets approaches maturity. Before even including the very distinct possibility of an affordable iPhone, Apple still has a powerful weapon in grabbing share from Google (NASDAQ: GOOG  ) Android: customer loyalty.

• [By Evan Niu, CFA]

  That didn't take long. Just months after finally getting the iPhone in its lineup, Apple's (NASDAQ: AAPL  ) device is already surging at T-Mobile (NYSE: TMUS  ) .

• [By Ashraf Eassa]

  On the other hand, Taiwan Semiconductor (NYSE: TSM  ) and Samsung, the two remaining leading-edge foundries, are claiming that their 14/16-nanometer process technologies will be in high volume production during 2015. If we look at what has been announced so far in the way of products and timelines, we can get a sense of Intel's competitive position:

  Qualcomm (NASDAQ: QCOM  ) has announced 20-nanometer Snapdragon parts for sampling in H2 2014 and in devices by H1 2015. Apple (NASDAQ: AAPL  ) is reputed to be TSMC's major 20-nanometer customer for an iPhone 6 launch in the August-September timeframe. AMD (NYSE: AMD  ) has indicated that it will be moving to 20-nanometer during 2015 and then it will roll out designs based on 14/16 FinFET at some point during 2016 (likely mid- to late 2016 if the current product release cadence holds).

  Let's focus on Qualcomm
  Intel's fiercest direct competitor in the chip space is Qualcomm, so it's worth taking a look at what the product release�cadence for Qualcomm's products on new manufacturing technologies has been. (These are first device launches, so silicon is available a few months beforehand.)

• [By Jonas Elmerraji]

  Even though Apple's (AAPL) chart is a little more complicated than the ones of GE and SPY, the trading implications aren't: Now looks like a good time to be a buyer of the world's biggest tech company, believe it or not. Even though Apple can't get much love from investors, I'll go ahead and channel the great technician Walter Deemer by saying, "When the right time comes to buy, you won't want to."

  In the short-term, Apple is forming an inverse head and shoulders pattern, a price setup that indicates exhaustion among sellers. After the plunge shares have taken in the last year, sellers at least have reason to be exhausted. The inverse head and shoulders is formed by two swing lows that bottom out around the same level (shoulders) that are separated by a lower low (the head). The buy signal comes on a move through the neckline, which is currently right around $495.

  XOM's price pattern is the bearish opposite of the inverse head and shoulders that points to upside in Apple. Like AAPL, the neckline in XOM is sloped, but it's close enough to $85 right now to justify unloading shares (or shorting) if XOM still can't catch a bid down there. Yes, this stock has gotten shellacked in the last couple of months, but it could be due for even lower levels in the fourth quarter.

  Lest you think that the head and shoulders is too well known to be worth trading, the research suggests otherwise: a recent academic study conducted by the Federal Reserve Board of New York found that the results of 10,000 computer-simulated head-and-shoulders trades resulted in "profits [that] would have been both statistically and economically significant." That's good reason to keep an eye on both Apple and Exxon in the days ahead.

Best Blue Chip Stocks To Buy Right Now: Visa Inc.(V)

Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services. It also offers a range of payments platforms, which enable credit, charge, deferred debit, debit, and prepaid payments, as well as cash access for consumers, businesses, and government entities. The company provides its payment platforms under the Visa, Visa Electron, PLUS, and Interlink brand names. In addition, it offers value-added services, including risk management, issuer processing, loyalty, dispute management, value-added information, and CyberSource-branded services. The company is headquartered in San Francisco, California.

Advisors' Opinion:

• [By Teresa Rivas]

  It�� been a good week for Visa�(V) and�MasterCard�(MA)��wo days in and they��e enjoyed two rounds of upgrades.

  Today, the bullishness comes from Janney Montgomery Scott�� Thomas McCrohan and Leonard DeProspo, who boosted their ratings on both names to Buy.

  For Visa, the upgrade came with a target price increase from $210 to $240 and they write that the recent selloff in the name provides an attractive entry point ��o own one of the better business models in payments.��They count the company�� powerful network, worldwide brand, and its role in influencing payment standards among its core strengths, and note that the increase of mobile payments has also served to increase the number of places where Visa is accepted.

  They write that strong margin expansion in the past year and a half means that mid-to-high teens earnings per share growth is possible even if margins contract this quarter and next, as the company�� guidance suggests.

  More thoughts below:

  Changes to FANF fees beginning April 1, 2015. Last week, Visa modified its FANF pricing (Fixed Acquirer Network Fee) to include a 15 bps volume-based charge for sub-merchants of payment aggregators. Previously, payment aggregators only paid one lump sum payment of $40,000 per month, which created a cost advantage for aggregators versus traditional acquirers and ISOs that were required to pay a separate FANF fee per merchant location. The new FANF pricing is 15 bps of monthly volume, which translates into $30 million of incremental high-margin fee income for Visa based on $20 billion of aggregator volume.

  Fiscal 2014 EPS guidance achievable. First quarter margins of 65.8% were a record, and were 230 bps above the previous record (FQ1-2012). FY 2014 EPS guidance calls for mid-to-high teen growth but assumes higher operating expense in 2Q and 3Q and ongoing F/X headwinds from current turmoil in emerging markets. Mid-to-high teen EPS growth appears reasonable gi

• [By Chris Hill]

  Shares of Visa (NYSE: V  ) rose to an all-time high this week after the company reported stronger-than-expected second-quarter earnings. Earlier in the week, Mastercard (NYSE: MA  ) reported a 12% increase in first-quarter profits, but shares fell on lower-than-expected revenues. In this installment of Motley Fool Money, our analysts discuss Visa, MasterCard, and the future of electronic payments.

• [By Sean Williams]

  And then there's payment processing company Visa (NYSE: V  ) , perhaps one of the very few long-term investments you can get charged up about that combines the potential for rapid growth with consistency in nearly all economic environments. The way I see it, Visa has five opportunities that put it at the head of the class.

• [By WWW.DAILYFINANCE.COM]

  Andrew Harrer/Bloomberg via Getty Images MasterCard (MA), the world's second-largest debit and credit card company, said it was extending its zero-liability policy for cardholders in the United States to include all PIN-based and ATM transactions. The move follows several data breaches at U.S. companies including one at Target (TGT) late last year involving the theft of about 40 million credit and debit card records. "The move by MasterCard just enhances the sense of security for people at a time when it has been shaken up significantly in recent times," said Gil Luria, an analyst with Wedbush Securities. Zero-liability protection currently covers card transactions that require a customer's signature but doesn't apply if an account holder's personal identification number, or PIN, was used for unauthorized transactions. The new policy will take effect in October. Zero-liability protection means the account holder won't be held responsible for unauthorized transactions. Larger rival Visa's (V) zero-liability policy doesn't apply to PIN-based and ATM transactions, according to information available on the company's website. "The changes that we're making in cardholder protection combined with our efforts to move the U.S. payments industry to EMV chip technology will help deliver safer shopping experiences to consumers," said Chris McWilton, president of North American markets for MasterCard. The two companies have urged banks and retailers to meet an October 2015 deadline for the adoption of "EMV" chip technology that would make it safer to pay with plastic. "This all comes back to the adoption of EMV. Of all the cards that are breached at ATMs, a majority of them are non-EMV cards. This is just another way for the company to impress upon the importance of quickly adopting EMV cards," said Philip Philliou, managing partner of Philliou Partners, a firm that helps banks and retailers select payment processors. U.S. cards issued by MasterCard will also

Best Blue Chip Stocks To Buy Right Now: McDonald's Corporation(MCD)

McDonald?s Corporation, together with its subsidiaries, operates as a worldwide foodservice retailer. It franchises and operates McDonald?s restaurants that offer various food items, soft drinks, coffee, and other beverages. As of December 31, 2009, the company operated 32,478 restaurants in 117 countries, of which 26,216 were operated by franchisees; and 6,262 were operated by the company. McDonald?s Corporation was founded in 1948 and is based in Oak Brook, Illinois.

Advisors' Opinion:

• [By Paul Ausick]

  On Monday, the McResource�website for employees of McDonald’s Corp. (NYSE: MCD) suggested that employees avoid eating too much fast food, and showed a photo of something that looks very much like a McDonald’s meal labeled as an “unhealthy choice.” By Thursday, the website had been taken down. Spending on advertising promoting fast food likely will�continue.

• [By Dan Caplinger]

  McDonald's (NYSE: MCD  )
  The fast-food giant missed expectations both for revenue and for earnings, producing less than 1% greater sales and a 2.4% gain in net income. Comparable-store sales fell in the U.S., Europe, and the Asia-Pacific/Middle East/Africa region, and McDonald's said it expected weakness to persist in April as well.

• [By Nicole Seghetti]

  3. McDonald's (NYSE: MCD  ) McDonald's can be crowned not only a Dividend Aristocrat, but also the king of fast food. This server of Big Macs has boosted its dividend for 36 straight years. The stock currently boasts a dividend yield of 3%.�

Keurig Green Mountain: Time to Take Profits

How good has 2014 been for Keurig Green Mountain (GMCR)? So good that it’s time to take profit, says Buckingham Research’s Matthew DiFrisco and Katherine Heng. They explain:

Jason Myers for the Wall Street Journal

We are lowering our investment rating to Neutral on Keurig Green Mountain shares and recommend investors with shorter time horizons use the recent share appreciation to take profit. Keurig Green Mountain shares are up over 65% YTD, meaningfully ahead of the S&P’s 5% gain. We maintain our above consensus outlook for both FY14 and FY15, reflecting greater revenue and margin estimates. Upside to our outlook is limited given upfront investments for both the F4Q14 introduction of 2.0 hot brewing platform and the FY15 launch of the cold system in addition to unfavorable YoY coffee costs in FY15.

As you might have noticed, however, DiFrisco and Heng still like what Keurig has been able to do, including its deals with Target (TGT) and Coca-Cola (KO):

Keurig Green Mountain has already begun to recoup dollar market share from its unlicensed rivals as well as convert them to licensed partners. Notable partner conversions include Target’s Archer Farms and Peet’s Coffee transitioning later this summer. Keurig Green Mountain’s company and licensed brands grew 11.6% YoY in the last 4 week period measured by Nielsen and garner 74.8% dollar share of grocery vs. 74.5% the prior month and 84.5% a year ago. The single serve coffee category as measured by Nielsen in grocery grew 26% last month, vs. 46.5% in the year ago period…

If you assume in the first 3 years that Keurig Green Mountain’s cold system, with the aid of Coca-Cola, could garner ~1% of the ~$125B soft drink market in the US at its current EBIT of ~20%, it would add $250M in EBIT, or 25% of FY14E EBIT.

Shares of Keurig Green Mountain have dropped 2.7% to $122.63 at 11:53 a.m., while Coca-Cola has gained 0.5% to $41.75 and Target has risen 0.4% to $58.95.

Forget the Head and Shoulders: S&P Is Now Breaking Out

"The difference between average people and achieving people is their perception of and response to failure." -- John Maxwell    

NEW YORK (TheStreet) -- We saw very slow and weak action all day leading into the Federal Open Market Committee meeting.

It's never fun watching your stocks float lower but with the news to come I had to hold onto my stocks and see how they reacted to the news. Had they reacted poorly I would have just had to suck it up and take more of a loss, or smaller gains, than I wanted.

My thinking was stocks would come back and were just trying to shake week hands out.  Luckily, I was right this time and the news was a non-event.

We saw some great moves and some superb closes in many leading stocks. The closing price is always the most important price to focus on. Let's move right into the SPDR S&P 500 ETF Trust (SPY) chart that has now cancelled out the small head and shoulders pattern and should now rip higher -- just how I like it. I am still into margin and only did one trade today, adding a new long position. SPY is now breaking out of the wedge pattern and off to the races.  Nice volume pushed it to the breakout point which is what I always like to see.

We remain in a very strong market environment and buying dips is a great strategy for now along with breakouts. No matter what the bears tell you, the action speaks for itself and that is what I listen to, not someone's opinion. We still are on track for a very busy and strong summer. Enjoy your evening. Warren Bevan This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff. >>Caveat Emptor, Investors: The Regulators Are Trying to Protect You

If Only Buffett Could Buy These Five Small Caps

With a fortune close to $60 billion and a reputation as perhaps the smartest investor of all time, Warren Buffett has plenty of advantages over individual investors. If Buffett wants to have an in-depth discussion with the CEO of a company he's considering investing in, for example, you can bet that CEO will take Mr. Buffett's call.

In addition, Buffett's own personal fortune probably gives him an advantage in terms of being patient and focusing on the long-term—he could lose half of his net worth in the short term and still be one of the richest people in the world; if you lose half your net worth, there's a good chance that panic could set in and lead you to compound your losses with more rash decisions.

Finally, of course, Buffett's contacts and friends include some of the business and political worlds' most influential people, which one would have to imagine gives him a leg up on getting the inside scoop on a whole variety of issues that impact investing decisions.

But make no mistake: As an individual investor, you have at least one advantage over Buffett, and it's a very big one. The advantage: Buffett is constrained by the size of his Berkshire Hathaway Berkshire Hathaway empire. Because the company has a market cap of nearly $300 billion and an investment portfolio of more than $90 billion, the universe of stocks from which Buffett can choose is dramatically smaller than the universe from which you and I can choose.

In order for an investment to make any sort of significant impact on Berkshire's massive portfolio, Buffett has to be able to deploy a big chunk of capital into that investment. If he were to buy 10% of a $200 million market cap company's shares, he'd have an investment that would barely move the needle at Berkshire, regardless of how well that particular stock did.

That doesn't mean Berkshire won't occasionally invest in smaller firms. Managers Ted Weschler and Todd Combs handle smaller portfolios for the firm while Buffett focuses on Berkshire's big, core holdings, like Coca-Cola Coca-Cola and American Express American Express. That gives Combs and Weschler a chance to dip into somewhat smaller stocks.

But the point is that even if they or Buffett find a big time winner of a small-cap, it's just not going to make a big impact on the company's returns. You, on the other hand, can make the small-cap universe a big chunk of your portfolio, if that's where you see the best opportunities. (And, over the long haul, many studies have shown that small caps tend to outperform their larger peers.)

My Buffett inspired Guru Strategy uses Buffett's approach (as described in the book Buffettology, written by his former daughter-in-law and colleague Mary Buffett and David Clark) to screen thousands of stocks, including small caps.

Among the model's criteria: the company should have a decade-long track record of increasing annual earnings per share; long-term debt should be no more than five times annual earnings; average return on equity over the past ten years should be at least 15%, while average return on retained earnings (those not paid out as dividends) should be at least 12% over that span; and earnings yield should be higher than the long term Treasury yield.

The strategy often will find smaller stocks that meet its criteria, and, while Buffett and Berkshire can't really profit much from these stocks, you can. Here's a sampling of some of the small stocks it's keen on now. (As always, you should invest in stocks like these as part of a broader, diversified portfolio.)

Hibbett Sports: This Alabama-based sporting goods retailer focuses on small and mid-sized markets, mostly in the South, Southwest, Mid-Atlantic and Midwest. It has about 850 retail stores across 26 states, mostly under the Hibbett Sports name but with some also under the Sports Additions and Sports & Co. names.

Hibbett ($1.5 billion market cap) gets a 100% score from my Buffett-based model. It has upped EPS in all but one year of the past decade, has no long-term debt, and has a 23% average 10-year ROE.

Raven Industries (RAVN): Formed more than 50 years ago as a manufacturer of high-altitude research balloons for the U.S. space program, South Dakota-based Raven ($1.3 billion market cap) still makes research balloons and other products like parachutes and protective wear. It also has operations that blend technology and agriculture, making field computers, planter and boom controls, GPS guidance, and protective films and sheeting used to protect environmental resources.

Raven gets a strong 92% score from my Buffett-based model. A few reasons: Its EPS have dipped in only one year of the past decade; it has no long-term debt; and its 10-year average ROE is 25.3%.

Ebix (EBIX): Atlanta-based Ebix ($570 million market cap) supplies software and e-commerce solutions to the insurance industry. Shares have struggled over the past year as growth has slowed, but my Buffett strategy thinks that has made it a great bargain, giving it a 99% score. It likes that EBIX has upped EPS in every year of the past decade (it is on track for a dip this year, but the model sees that as a buying opportunity).

It also likes that Ebix has more annual earnings ($62 million) than long term debt ($46 million), and that it has averaged a return on retained earnings of nearly 23% over the past decade. Factor in a 10.9% earnings yield and there's quite a bit to like.

With a Quiet Dow, All Eyes Are on Gold

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Tuesday's post-holiday Dow Jones Industrials (DJINDICES: ^DJI  )  trading session proved to be uneventful. Throughout the day, the index stayed within a very tight range for an unusual lack of intraday volatility on the stock market, closing down 24 points. Yet even though bullion prices gave back some ground from their gains in the global gold and silver markets on Monday, many stock market skeptics believe that gold could prove to be a solid alternative for 2014.

The first thing to remember is that while bullion exchange-traded funds and mining stocks didn't trade yesterday, bullion did. So even though spot gold was down today, the SPDR Gold Shares (NYSEMKT: GLD  ) were actually up 0.2%. Meanwhile, silver's gain was magnified, with the iShares Silver Trust's (NYSEMKT: SLV  ) 2.3% rise reflecting two days of strong results.

Metal

Today's Spot Price and Change From Yesterday

Gold	$1,323, down $6
Silver	$21.96, up $0.12
Platinum	$1,418, down $7
Palladium	$734, down $5

Source: Kitco. As of 4 p.m. EST.

What you need to know about the World Gold Council report
The big news for gold investors today came from the latest annual look at the gold market from the World Gold Council. In its report, the WGC noted several potentially positive developments for the market. Jewelry-related demand for gold rose in 2013 by the largest amount in 16 years, as the plunge in bullion prices made gold jewelry much more affordable for ordinary consumers. With more than 2,200 tons of gold used, the jewelry market saw demand rise 17% from 2012 and reached its best performance since the financial crisis encouraged panicked investors to seek safe havens.

Image sources: Wikimedia Commons; Creative Commons/Armin Kubelbeck.

From an investment standpoint, though, 2013 was mixed. A huge drop in demand for ETFs such as the SPDR Gold Shares was reflected in outflow of more than 880 tons. But investors bought up physical gold bars and coins at almost twice that rate, with more than 1,650 tons representing an all-time record for physical bullion. Meanwhile, gold supplies fell 2%, and central-bank net purchases slowed their pace despite a fourth straight year of bankers buying more gold than they sold worldwide.

Meanwhile, among precious-metals miners, fundamentals and earnings-related news are playing a vital role. For instance, Coeur Mining (NYSE: CDE  ) jumped 7% after the company said that its proven and probable silver reserves jumped 16% and gold reserves rose 12% in 2013. Measured and indicated silver resources jumped 27% as well, with even larger jumps in inferred resources in both silver and gold. With earnings due out later this week, Coeur is putting itself in position to benefit greatly if precious metals can rebound further. More generally, the Global X Silver Miners ETF (NYSEMKT: SIL  ) posted a 1.2% gain today, outpacing its gold-miner counterpart, which had a more modest rise.

Even if the bull market is back in place, gold investors shouldn't expect straight-up movement in precious-metals prices. Instead, you'll have to endure the same stepwise motion that has always characterized bull markets. Still, the overwhelmingly negative sentiment in gold and silver is clearly gone, and investors will have to stay on guard to make sure that the market doesn't get too frothy too quickly.

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Goldman Sachs: ‘Positive Sentiment is Building,’ Still Not Worth Buying, Nomura Says

Once the highest of high-flying bank stocks, Goldman Sachs (GS) has recently been a laggard.

Reuters

Its shares have dropped 5.5% this year, while JPMorgan Chase (JPM) has fallen 2.2%, Bank of America (BAC) has dipped 0.7% and Morgan Stanley (MS) has gained 2.4%.

Nomura’s Steven Chubak and Sharon Leung, however, believe “positive sentiment is building” for Goldman Sachs. They explain:

While Goldman Sachs shares have underperformed YTD (down -6% vs. +3% for S&P Fins.), recent discussions suggest that positive sentiment is building. Despite revenue headwinds in some core businesses (e.g. FICC), growing contribution from higher-multiple segments, coupled with future sources of capital relief (e.g. Volcker sales), should help drive value. We have been more cautious on the shares given "bindingness" concerns, i.e., that the recently proposed Supplementary Leverage Ratio (SLR) will become the binding capital constraint for Goldman Sachs (vs. risk-based measures), dampening long-term ROE potential. However, there are additional capital / earnings levers which could meaningfully improve GS’ ROE profile. Findings indicate the most likely path (deleveraging) could yield as much as a +100-200bp ROE uplift, or 7-14% upside vs. our current TP ($156).

Still, Goldman’s valuation remains a concern so Chubak and Leung leave their rating unchanged at Neutral.

Shares of Goldman Sachs have gained 1% to $167.56 at 10:52 a.m. today, while Morgan Stanley has risen 1.4% to $32.16, Bank of America has advanced 1.1% to $15.45 and JPMorgan is up 0.6% at $57.22.

 

A Safer Strategy for Munis

We believe the municipal bond market's fundamentals are improving, and that there are ETFs that give investors the opportunity to limit their exposure to rising rates, suggests Todd Rosenbluth, S&P Capital IQ director of ETF Research in The Outlook.

There are several positive signs in the municipal bond market according to J.R. Rieger, Vice President of Fixed Income Indices for S&P Dow Jones Indices.

Home prices, as tracked by the S&P Case Shiller US National Home Prices Index, have recovered from their early 2009 level and are back to where they were in mid-2004.

Meanwhile, many municipalities run balanced budgets and, through the second quarter of 2013, there were positive trends in state and local government tax collections.

Lastly, despite the shock of Detroit's bankruptcy filing, municipal bond defaults, among the 2,848 deals in the S&P Municipal Bond High Yield Index, occurred less frequently in 2013 than in 2012 or 2011; just 23 issues, or 0.81%, defaulted, down from 1.0% and 1.5%, respectively, in the prior two years.

This compares favorably to the 2.1% default rate among speculative grade corporate bonds, according to Standard & Poor's Ratings Services. (S&P Capital IQ operates independently from S&P Dow Jones Indices and Standard & Poor's Ratings Services.)

Defaults are less common in municipal bonds because credit quality tends to be stronger. Indeed, when we look at iShares National AMT-Free Muni Bond ETF (MUB), which tracks the S&P National AMT-Free Municipal Bond Index and is the largest muni ETF, we find 50% of the assets are in bonds rated AA and just 2% are rated BBB.

Meanwhile, the SPDR Nuveen S&P High Yield Municipal Bond ETF (HYMB), which tracks the aforementioned S&P High Yield Index, has approximately 46% of assets with an investment-grade rating. We think this helps alleviate some of the credit quality concerns for muni bond ETF investors.

However, the 10-year Treasury yield rose in 2013 amid expectations that the Federal Reserve would begin to taper, or scale back, its bond buying program.

We think the issue of potentially higher rates remains a concern for 2014. Indeed, these portfolios have durations that are quite high relative to taxable bond equivalents, making them more prone to suffer, if rates indeed climb in 2014.

Fortunately, there are some short-term muni ETFs to choose from. The largest is SPDR Nuveen Barclays Short-Term Muni Bond (SHM). About 65% of the bonds inside have a AA rating, with most of the remaining ones having a AAA rating.

Two others are iShares Short-Term National AMT-Free Municipal Bond ETF (SUB) and Market Vectors Short Municipal Index ETF (SMB).

The Market Vectors fund, not surprisingly, has more A bond exposure and less AA exposure than the iShares fund. However, both have lower average durations than iShares National AMT-Free Muni Bond and thus might appeal to investors concerned about the impact of higher rates.

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More from MoneyShow.com:

Inflation Protection for Global Investors

A Favorite ETF for Munis

Three Top-Rated Funds for Rising Rates

Cisco Earnings Report Steps Over a Low Bar – Dividend Hike As Well

Cisco Systems Inc. (NASDAQ: CSCO) has now reported its second quarter earnings report. We suggested in our earnings preview that the bar was set very low because of the poor report last quarter. Its target price has also come down handily since the last report.

Now we know… Earnings came in at $0.47 per share and revenues came in at $11.2 billion for the quarter. The consensus forecast from Thomson Reuters was $0.46 in earnings per share (versus $0.51 a year ago) and $11.03 billion in revenue (down 8.8%). WhisperNumber had issued a whisper number of $0.48 for the earnings report.

Another bit of big news is out – Cisco is raising its quarterly dividend up to $0.19 per quarter from $0.17. That takes the 3% yield up to 3.3%. Cisco ended the quarter with $471. billion in cash and equivalents.

Cisco is claiming a record quarter of returning $4.9 billion to its shareholders – some $900 million in dividends and $4 billion worth of share repurchases. Cash flows from operations were $2.9 billion for the second quarter.

Cisco now holds its guidance for the conference call, making the report unfinished business. Estimates for the quarter ahead are $0.48 in earnings per share (versus $0.51 a year ago) and $11.34 billion in revenue (down 7.1%).

Sterne Agee just maintained a Buy rating a day ahead of the report, and it gave a $25 price target. The team there said that there is likely downside protection to $21 based on eight-times adjusted 2015 earnings.

The networking giant had previously lowered its longer-term revenue and earnings guidance, down to 3% to 6% in revenue and down to 5% to 7% in earnings. Of course, that is after this year as analysts are looking now for a drop of 2% in earnings per share and a drop of almost 5% in sales.

The stock has traded in a range of $19.98 to $26.49 in the last 52-weeks, and its valuation is roughly 11.5 times expected forward annual earnings. Shares are directionless in the after-hours reaction after closing up $0.14 at $22.85 ahead of earnings.

Stocks to Watch: Green Mountain, Pandora, Twitter

Among the companies with shares expected to actively trade in Thursday’s session are Green Mountain Coffee Roasters Inc.(GMCR), Pandora Media Inc.(P) and Twitter Inc.(TWTR)

Akamai Technologies Inc.(AKAM) said fourth-quarter earnings rose 18%, helped by a jump in revenue. Shares surged 16% premarket to $55.20.

AOL Inc.(AOL) said its fourth-quarter revenue climbed a bigger-than-expected 13%, driven primarily by stronger global advertising revenue. Shares climbed 6.1% to $50.45 premarket.

Coca-Cola Co. has taken a 10% stake in Green Mountain Coffee Roasters, as the companies unveiled a 10-year agreement to collaborate on the development of a forthcoming Keurig Cold at-home beverage system. The news weighed on shares of at-home beverage carbonation system SodaStream International Ltd.(SODA) Green Mountain shares surged 41% to $113.62 premarket, while SodaStream slipped 6.9% to $38.25.

Glu Mobile Inc.'s(GLUU) fourth-quarter loss narrowed from the previous year, as the mobile-game maker reported strong success for “Deer Hunter 2014.” Results for the period were stronger than expected and Glu Mobile issued outlook targets that exceeded Wall Street’s expectations. Shares surged 21% to $4.67 premarket.

L Brands Inc.(LB) lifted its earnings guidance for the fiscal fourth quarter, as the retailer reported same-store sales for January that easily topped expectations. Shares edged up 3.3% to $53.50 premarket.

Pandora provided guidance for the first quarter and 2014 that missed the current consensus views, though the Internet-radio service continued to report strong revenue growth in its fourth quarter. Shares dropped 9.9% premarket to $32.27.

Shutterfly Inc.'s(SFLY) fourth-quarter earnings fell 18% as the e-commerce company recorded higher expenses. Shutterfly also said it expects to post a loss for the current year. Shares dropped 7.6% to $45.90 premarket.

Twitter said its fourth-quarter revenue more than doubled, thanks to a surge in advertising spending, but the site’s ability to attract new users, and keep current users engaged, is becoming a concern. Shares dropped 22% to $51.50 premarket.

Walt Disney Co.(DIS) said its fiscal first-quarter profit jumped 33%, as the company reported revenue increases across all its segments, led by the studio division. Shares edged up 3.8% to $74.49 premarket.

Yelp Inc.(YELP) said fourth-quarter loss narrowed as revenue soared, as the internet company continued to attract more visitors and added local business accounts. Shares rose 8% to $81.25 premarket.

Allstate Corp.(ALL) said its fourth-quarter profit more than doubled, boosted in part by rising insurance policies in several units and fewer catastrophes.

Cummins Inc.(CMI) said its fourth-quarter earnings rose 17%, as the supplier of engines for heavy-duty trucks reported revenue growth in its components and engine segments divisions. Sales beat expectations, but the bottom line missed.

Kellogg Co.(K) swung to a fourth-quarter profit on lower expenses and a mark-to-market benefit that offset a decline in the cereal maker’s revenue. Earnings slightly beat views.

Lincoln National Corp.'s(LNC) fourth-quarter profit rose 9.7%, as it posted higher-than-expected operating revenue.

Marathon Oil Corp.(MRO) reported lower fourth-quarter sales volume, though the crude oil and natural gas producer’s bottom line grew 16% due to fewer income tax provisions.

Noble Energy Inc.(NBL) said its fourth-quarter earnings fell 47%, as higher operating expenses offset the oil-and-gas explorer’s revenue growth. Earnings missed expectations.

O'Reilly Automotive Inc.'s(ORLY) fourth-quarter net grew 15%, as the auto-parts retailer reported higher same-store sales.

Plains All American Pipeline LP(PAA) said its fourth-quarter earnings fell 13%, hurt by weaker adjusted results at its supply-and-logistics business.

Prudential Financial Inc.'s(PRU) fourth-quarter loss widened, as the insurer recorded a jump in net investment losses, particularly due to changes in the value of the Japanese yen.

Teva Pharmaceutical Industries Ltd.(TEVA) said its fourth-quarter earnings rose 19% on stronger revenue, led by its specialty medicines. Results beat expectations.

U.S. stock-index futures point to lower open

LOS ANGELES (MarketWatch) -- U.S. stock-index futures early Monday were suggesting a lower open, as conflict intensified in Iraq, sending oil prices higher. With just over 12 hours to go before the New York open, futures for the Dow Jones Industrial Average (DJIA) were down 0.3%, as were those for the Nasdaq 100, while futures for the S&P 500 (SPX) were quoted 0.4% lower. Nymex July crude-oil futures (CLN4) were up 0.4% as reports said the U.S. and Iran may cooperate to ease fighting in Iraq. Asian stocks were mostly lower, with Tokyo's Nikkei Average (JP:NIK) down 1.1% in early afternoon trade, and Hong Kong's Hang Seng Index (HK:HSI) down 0.1% at the midday break.

Southwest (LUV) Starts Offering International Flights

NEW YORK (TheStreet) -- Southwest Airlines (LUV) announced Monday that it will start offering international flights on July 1.

Shares of the airline fell 1.3% to $20.57.

The airline is now selling tickets for flights to Aruba, the Bahamas, and Jamaica out of Atlanta, Baltimore, and Orlando. AirTran Airways, which Southwest acquired in 2011, currently handles those routes. In July Southwest will take them over.

Southwest may also take over four AirTran destinations in Mexico and the Dominican Republic later in 2014. The airline may also add international flights from Houston and Fort Lauderdale, Fla., among other U.S. cities. Those routes may not come until 2015 or later, however. Prior to the announcement Southwest was the only major U.S. airline that did not offer international flights. TheStreet Ratings team rates Southwest as a "buy" with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation: "We rate SOUTHWEST AIRLINES (LUV) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins." Highlights from the analysis by TheStreet Ratings Team goes as follows: Despite its growing revenue, the company underperformed as compared with the industry average of 14.0%. Since the same quarter one year prior, revenues slightly increased by 6.1%. Growth in the company's revenue appears to have helped boost the earnings per share. SOUTHWEST AIRLINES reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SOUTHWEST AIRLINES increased its bottom line by earning $1.06 versus $0.56 in the prior year. This year, the market expects an improvement in earnings ($1.30 versus $1.06). Powered by its strong earnings growth of 172.72% and other important driving factors, this stock has surged by 86.97% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels. Net operating cash flow has increased to $302.00 million or 30.73% when compared to the same quarter last year. Despite an increase in cash flow, SOUTHWEST AIRLINES's cash flow growth rate is still lower than the industry average growth rate of 46.68%. The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that LUV's debt-to-equity ratio is low, the quick ratio, which is currently 0.63, displays a potential problem in covering short-term cash needs. You can view the full analysis from the report here: LUV Ratings Report

Stock quotes in this article: LUV 

Why Alcoa Keeps Rising and Rising

If you were to ask investor to name a high-flying stock, Alcoa Inc. (NYSE: AA) probably wouldn't come to mind. But the shares are up more than 8 percent in January. Alcoa's performance since the summer is even better. The shares have risen more than 48 percent since hitting a bottom of $7.70 on August 30.

To add some irony to this price rise, the shares are up nearly 36 percent since Alcoa was taken out of the Dow Jones Industrial Average on September 20. Here are three reasons why Alcoa’s stock has been moving.

Alcoa is cutting capacity in its primary smelting business. Just this week, the world's largest aluminum producer said it was shutting the   last two smelting potlines at its Massena East facility in northern New York State. The company said the potlines were no longer competitive. Alcoa has been struggling in the commodity smelting business against lower-cost competitors, particularly those in China. The primary metals business produces lots of revenue but little in profit.

The airline industry is booming. Boeing Co. (NYSE: BA) and archrival Airbus Group (OTC: EADSY) have been posting record orders for new jetliners as newly profitable airlines look to modernize their fleets. Alcoa has been building up a profitable business of very light, high-strength aluminum alloys that airlines love because it means lower weight for new planes — and lower fuel consumption.

The automotive industry is starting to move into aluminum. Traditionally, cars and trucks have been built mostly from steel. Ford Motor Co. (NYSE: F) announced this week that it will use a high-strength, military grade aluminum in the body panels of its 2015 model of its popular F-150 pickup. The move will cut 500 to 700 pounds from the vehicle's weight. (Steel will still be used in the pickup's frame.)

Ford earns roughly $10,000 in profit from the F-150, compared with $5,000 from the average car. Small business owners are among the biggest buyers of the pickup. Federal fuel-economy rules are becoming more stringent.

Alcoa's shares have withstood what was perceived as a weak earnings report on January 9. Alcoa reported a loss of $2.19 a share for the fourth quarter. Most of that was special items. Once those were taken out, the company earned made four cents a share, Barron’s calculated. That was lower than the six cents predicted by analysts. Revenue was $5.6 billion, ahead of the consensus estimate of $5.4 billion.

The shares dropped 5.4 percent the next day but have rebounded since. To be sure, Alcoa has struggled since the Great Recession battered industrial companies around the world.  The stock is still off 73 percent from its January 2000 peak of $42.44.

Alcoa shares were at $11.43 Friday afternoon, up 39 cents or 3.5 percent, and hit a 52-week high of $11.53 at midday.

FPA Crescent Fund Moves into Emerging Markets

The managers at FPA Crescent (FPACX) make no apologies for lagging the stock market over the past five years. The trio—Steve Romick, Mark Landecker and Brian Selmo—expect the go-anywhere fund's contrarian strategy to lag the broad market when stocks are hot, as they have been since the end of the financial crisis. But they also expect the fund to outperform by a large margin when times are tough.

See Also: Our Favorite No-Load Mutual Funds

Over the long run, that's proved to be a winning combination. From Crescent's inception in 1993 through June 11, the fund, a member of the Kiplinger 25, has topped Vanguard 500 Index fund (VFINX) by an average of two percentage points per year. Over that period, Crescent turned a $10,000 investment into $93,191, compared with just $63,403 for the Vanguard fund, which tracks Standard & Poor's 500-stock index.

Crescent can invest almost anywhere in the world and in nearly any kind of asset, from stocks, bonds and cash to currencies and home loans. But the managers—Romick has been with the fund since its inception, and Landecker and Selmo became co-managers in 2013—tilt toward deeply out-of-favor sectors and try to buy stocks that they believe are trading at steep discounts to the value of the underlying companies. Because stock and bond prices have risen so much over the past year (most of the run-up in bonds has occurred in 2014), the trio have made few purchases. These days, 46% of the fund's assets sit in cash, Romick told clients on June 2, at FPA's annual investor day in Santa Monica, Calif.

But the managers have found a few pockets of opportunity. One surprising purchase recently: Lukoil (LUKOY), the Russian energy giant. (Symbols for Lukoil and other foreign stocks mentioned in this article are for the company's American depositary receipts.) Although many investors have abandoned the Russian market in the wake of the turmoil on the Ukraine-Russia border, Landecker says the crisis left the shares of Russia's biggest oil producer too cheap to ignore. Lukoil posed a safer bet than other Russian stocks, he says, because it has a long history of paying generous and rising dividends; the company's leaders are increasing their personal stakes in the company. Lukoil, he notes, is buying back its own stock. Moreover, Lukoil's products are exported throughout Europe, providing a revenue stream that is divorced from the ruble. So Lukoil's performance is less susceptible to a decline in the value of the currency than the typical Russian company.

Lukoil isn't Cresent's only foray into emerging markets. The managers also invested recently in two sister companies headquartered in Hong Kong, Jardine Matheson Holdings (JMHLY) and one of its businesses, Jardine Strategic Holdings (JSHLY). The pair are akin to a Chinese Berkshire Hathaway, in that they own businesses in everything from commercial real estate to insurance, manufacturing and retail. The two firms have a long history of delivering double-digit-percentage earnings growth.

The fund's biggest recent purchase, Alcoa (AA), is another good example of its contrarian style at play. Stock in the century-old, New York City-based aluminum company traded as high as $42 in 2007 but dropped below $8 last year as declining aluminum prices put pressure on profits. The share price got so low, in fact, that in 2013, the overseers of the Dow Jones industrial average ousted Alcoa from the index after a 54-year presence. But Landecker, Romick and Selmo considered multiple possible outcomes, from aluminum prices remaining depressed to prices rising with increased demand. In a worst-case scenario, the fund could lose 10% to 50% on the holding. But in a best-case scenario, the investment could triple, Landecker says. This attractive risk-reward trade-off made Alcoa worth buying in quantity. The stock is now a top ten holding and accounts for 1.4% of Crescent's assets.

Weak jobs report is not all bad for investors

Investors — and job seekers — won't cheer Friday's jobs report, which showed that just 74,000 more people were employed in December, vs. 205,000 expected by USA TODAY's survey of 37 economists.

The report was a disappointment for anyone hoping that the economy had turned a corner. Rising employment means that more people have money to spend, and that, as they become more confident about the economy, they will be willing to commit to bigger purchases in the future: major appliances, cars and even houses. And corporations have plenty of cash in their coffers to expand and meet future demand. But the jobs numbers don't reflect that yet.

BIG MISS: Economy adds just 74,000 jobs in December

But you should be aware that bad economic news isn't bad news for all investments. The bond market, for example, is only happy when it rains. Bad economic news means falling rates, which will drive up prices in the bond market. The yield on the 10-year Treasury note fell to 2.90%, and bond prices rose.

INVESTING: Choosing the best bond fund for 2014

The stock market, to some extent, has already discounted some of the good news on the economy. The average stock mutual fund gained more than 30% last year. And, measured against earnings, stocks are reasonably valued.

The Standard and Poor's 500 stock index sells for a price-to-earnings ratio of 17.44 times its previous 12 months' earnings, vs. 16.89 since 1935, but 24.58 since 1988.

FUNDS: Mutual fund investors celebrate 2013

Nevertheless, there's plenty of room for the economy to expand, and for corporate earnings to expand with them. Even with Friday's report, the economy still has about 880,000 fewer jobs than it did at its peak in December 2007, says John Lonski, chief economist for Moody's Analytics. Another 26.5 million Europeans are out of work, indicating that those lucky enough to have jobs won't be getting much of a raise this year.

With savings rates near zero and bond prices expected to fall, stocks remain! the best option for most long-term investors. Given 2013's run-up, another 30% year in stocks seems unlikely. But even a 5% return would beat the expected returns from bonds and money market funds. Aggressive investors might consider health-care stocks, which soared in 2013 and are no longer cheap. But they do have the benefit of huge profit potential from breakthroughs in biotechnology, and sizable dividends in the big drug makers.

Those looking for more prosaic gains should stick with diversified stock funds, especially index funds, which keep expenses low and pass the savings on to shareholders.