Market Update

Japan Nuclear Crisis: New Power Plant Construction Renaissance in Peril

Concerns revived by the nuclear crisis in Japan could well reverse a renaissance in new power plant construction in many countries, while design upgrades to prevent similar reactor failures will make those that are built more expensive.

The 9.0 earthquake and resulting tsunami that struck northeastern Japan on Friday have caused a series of catastrophic failures in several nuclear reactors at the Fukushima Daiichi plant. Attempts to cool overheating fuel rods have led to four explosions, giving rise to fear over how much nuclear radiation may have escaped.

As the crisis has deepened, so has its potential to inflict lasting damage on the nuclear industry.

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Hot Stocks: Motorola Mobility Inc. (NYSE: MMI) Sending a Clear Signal That It's Ready to Bounce Back

A string of cutting edge products such as the Xoom tablet and the Atrix 4G smartphone, both of which use Google Inc.'s (Nasdaq: GOOG) Android operating system, have reversed Motorola Mobility Holding Inc.'s (NYSE: MMI) downward spiral.

The success of its new hardware, combined with strategic acquisitions that show Motorola's desire to offer its customers cloud-based services, has breathed new life into a company that was on life support just a couple of years ago.

Motorola's Droid line of smartphones helped turn a $1.6 billion operating loss in 2009 into a $76 million operating profit in 2010. The recently-launched Xoom has earned rave reviews and has given MMI a critical foothold in the tablet market.

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Hidden Inflation: Rising Prices Are Hitting Consumers Harder Than the Fed Will Admit

Any U.S. consumer that goes to the grocery store or the gas station on a regular basis knows that prices are rising.

Unfortunately, those rising prices are set to soar even higher – and their effects on consumers will continue to be ignored by the U.S. Federal Reserve.

The United States has had a break from inflation the past couple years, while it exported higher prices to emerging market economies. The Fed's easy money policies created excess money that flowed overseas, and now those countries are seeing prices rise to threatening levels.

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2011 Earnings Off to a Strong Start, but Will it Last?

Earnings season is well underway and the trend so far has been mostly positive. But as 2011 progresses, companies will be less and less likely to meet – much less surpass – Wall Street's lofty expectations.

That's because high unemployment, tight credit, an inability to further reduce cost structure and less favorable comparisons to 2010 will conspire to trip up the less nimble corporations.

Indeed, any sustained improvement in spending will depend largely on a significant reduction in the unemployment rate. And even the U.S. Federal Reserve doesn't believe the jobless rate will fall below 8% within the next two years.

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Shipping Prices Sink as Mining Companies Rack Up Record Profits

As big mining companies are set to book record profits the shipping companies that deliver the precious raw materials are plagued with the lowest freight rates since 2002.

Average leasing costs for capesizes, the 1,000-foot-long ships hauling iron ore and coal, will drop 34% to $22,000 a day this year, according to a Bloomberg News survey of eight fund managers and analysts.

When prices last plummeted that low, China's economy, the biggest consumer of the minerals used in steel and power, was 75% smaller and the benchmark Standard & Poor's GSCI commodity index stood 67% lower, Bloomberg reported.

This time, the problem isn't a potential economic meltdown, which caused shipping prices to tank in 2008-2009, but a glut of new capacity coming to the world's shipping lanes.

About 200 capesizes, spanning some 35 miles end-to-end, will leave shipyards this year, expanding the fleet by 18%, the Bloomberg survey showed.

While Clarksons PLC, the world's biggest shipbroker, expects seaborne trade in iron ore and coal cargoes to surpass 2 billion metric tons for the first time this year, the 7% increase won't be enough to overcome the glut.

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Investing Strategies 2011: Moves to Make After U.S. Stocks Hit a Two-Year High on the First Trading Day of the New Year

U.S. stocks soared on the first trading session of the New Year yesterday (Monday), and major market indices hit two-year highs after upbeat reports on construction and manufacturing boosted optimism for a continued U.S. economic recovery.

The jump in stock prices represents a continuation of investor bullishness that led to the U.S. Standard & Poor's 500 Index posting its best December performance in 19 years.

"The optimism at the end of 2010 continues into 2011," Kevin Giddis, a fixed-income expert at Morgan Keegan, wrote in a research note. "Investors, including me, hope that 2011 will be a better year for earnings, confidence, housing and jobs."

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Your 2011 Stock Market Leaders

Stocks drifted quietly in the past week, seemingly satisfied with the status quo and in no hurry to get to their next destination. The Dow Jones Industrial Average, Standard & Poor's 500 Index and Nasdaq Composite Index all clocked in tandem for a loss or gain of +0.1% to -0.1%.

Overseas stocks were the only major winners, with developed markets outside the United States up 1.4% and emerging markets up 2.2%.

Looking back at all of 2010, here are a few stats that stick out:

To find out which stocks will lead the market higher in 2011, read on...

China Auto Market Will Continue to Drive Sales for Western Manufacturers in 2011

The world's largest carmakers, including Toyota Motor Corp. (NYSE ADR: TM), General Motors Co. (NYSE: GM) and Volkswagen AG, expect China's red-hot economy to keep auto sales rolling at a record pace in 2011, making it the third year in a row the Red Dragon will top the U.S. in car sales.

China's vehicle sales jumped 46% in 2009, dethroning the United States as the world's largest auto market and ending more than a century of American dominance that started with the Model T Ford.

The nation's sales of passenger cars, buses and trucks rose to 13.6 million in 2009, the fastest pace in at least 10 years, according to the China Association of Automobile Manufacturers. At the same time, U.S. sales tumbled 21% to 10.4 million, the lowest level since 1982, according to Autodata Corp.

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No Holiday Cheer for Best Buy (NYSE: BBY) as Online Retailers Steal the Joy

The highlight of the week before Christmas, from a stock market point of view, is always the third-quarter earnings report of electronics retailer Best Buy Co. Inc. (NYSE: BBY). It's a tradition almost as old as St. Nick, and since the mid-2000s usually covered in just as much red.

Back during the 1990s, BBY was the alpha dog of retail stocks. In a period of fantastic strength in tech stocks, BBY was every bit their equal, rising more than 1,000% from 1997 to 2000 by promoting the digital good life.

Those were the days, huh?

But as you could see in its report and guidance last Tuesday, the technology-driven big box retailer from Minneapolis is now just a shadow of its former self, disappointing again with a 5% decline in same-store sales and offering weak guidance. The saddest part was that the market didn't even care. Investors of other retailing stocks basically just averted their gaze.

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Mobile Banking: Why VeriFone Systems Inc. (NYSE: PAY) is Positioned to Win

With the emergence of handset-driven e-commerce technology, banks, mobile-phone sellers and telecom-service providers are working feverishly to cook up a profitable recipe for the fast-growing mobile-banking business.

But with so many players setting up shop – and so many potential new mobile-payment services on the menu – the safest profit play for investors may be the one that's able to deliver all these services to end-users.

And we've identified a clear early leader.

For insight on the early leader in this new market, please read on...

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