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Wednesday's "Earnings Beat" Makes This The Perfect "Bad-Market" Tech Stock

In last week’s Private Briefing report Our Experts Show You the Stocks to Pick in a ‘Stock-Picker’s Market’,” Money Map Press Chief Investment Strategist Keith Fitz-Gerald identified SanDisk Corp.(NasdaqGS: SNDK) as one of three stocks to buy in the face of the stock market sell-off.

And now we see why…

  • Featured Story

    Big Banks May Be Forced to Buy Back Bad Mortgage Loans

    Major U.S. banks are under pressure from government officials, as well as groups of investors and insurers, to repurchase or modify bad mortgage loans they pooled into securities and sold to unwitting buyers.

    In the latest effort, a group of investors with roughly $500 billion invested in 2,300 mortgage securities is trying to force the large banks that originated or are now servicing faulty subprime-mortgage loans to repurchase or modify them, The Wall Street Journal reported.

    Some investors "had no idea that their money was being invested in mortgage-backed securities," Dallas-based attorney Talcott Franklin told The Journal. "And yet somehow these people are now the ones being punished, and that's just not right."

  • Don Miller

  • More Americans Tapping Into Entitlement Programs Swells Budget Deficit As many U.S. citizens continue to rail against the ballooning budget deficit, the reality is that most Americans are unwilling to swallow the bitter pill it will take to tame it.

    Perhaps that's because nearly half of all Americans live in a household in which someone receives government benefits, more than at any time in history, according to a report from The Wall Street Journal.

    At the same time, the number of American households not paying federal income taxes has grown to an estimated 45% in 2010, up from 39% five years ago, according to the Tax Policy Center, a nonpartisan research organization.

  • Investors Flock to Gold and Silver on Recovery Worries Investors worried about the global economic recovery pushed gold prices to fresh highs on Friday, marking the third time in a week the shiny metal set a new record. Silver also climbed to its highest price in thirty years.

    Spot gold climbed above $1,282 an ounce in New York and London as a weakening dollar spurred demand from investors for wealth protection, while silver rose to $21.44 an ounce, its highest level since 1980.

    Bullion, which usually moves inversely to the dollar, posted its biggest weekly gain since May as the greenback touched a five-week low against the euro.

    Holdings in gold- backed exchange-traded products (ETP) reached a record this month as investors sought protection from financial turmoil and the prospect of slowing economic growth.

  • China Trade Surplus Reignites Tensions Over the Yuan China in August posted its third straight trade surplus of more than $20 billion, putting friction with the United States over the nation's currency back in the spotlight.

    Exports rose 34.4% in August and imports climbed a greater-than-expected 35.2%, leaving the country with a $20.03 billion surplus, a customs bureau report showed Friday.

    But a sustained trade gap with the United States could embolden American lawmakers who are pushing to penalize China for what they consider unfair trade practices.

  • July's Narrowing Trade Gap Lifts Hope for U.S. Economic Recovery The United States in July posted the biggest drop in its trade deficit in 17 months, as imports plunged and exports shot higher, according to a government report that could lift hopes for the economic recovery.

    The U.S. trade deficit narrowed by 14% to $42.78 billion from a downwardly revised $49.76 billion the month before, the Commerce Department reported yesterday (Thursday).

    U.S. exports expanded 1.8% to $153.33 billion - the highest level since August 2008 - from $150.57 billion in June. Imports registered their biggest decline since February of last year, falling 2.1% to $196.11 billion from $200.33 billion in June.

  • Obama Floats $350 Billion Stimulus Package to Re-Ignite Economy Faced with pre-election polls showing strong Republican support leading up to the mid-term elections in November, President Barack Obama is floating a $350 billion stimulus package designed to assuage the fears of troubled homeowners and create jobs.

    In another move aimed at stabilizing a shaky economic recovery, the president today (Wednesday) will officially unveil a new $200 billion tax cut that gives businesses across the country incentives to buy new equipment, an anonymous administration official told CNN.

    The proposal would be in addition to a $100 billion permanent extension of the business tax credit for research and development, as well as a $50 billion six-year program to fix roads, railways and runways and modernize the air-traffic control system.

  • Petrobras Sets Long-Term Financing Plan by Selling $42.5 Billion of Stock to Government Petroleo Brasileiro SA (NYSE ADR: PBR), the Brazilian national oil company better known as Petrobras, announced Wednesday that it had agreed to issue $42.5 billion in new stock to the Brazilian government to obtain the rights to five billion barrels of oil in offshore fields.

    Petrobras will pay an average of $8.51 a barrel for the oil after almost two weeks of negotiations with the government, according to a regulatory filing. More than half the oil will come from the Franco field in the offshore Santos Basin, the company said.

    Even though the company paid what is seen by many analysts as a premium for the rights, the deal is the linchpin for the Latin American oil giant's long-term financing plans.

  • Déjà vu All Over Again: Boeing Delays Dreamliner for Sixth Time In what seems like a never ending saga, The Boeing Co. (NYSE: BA) postponed delivery of its 787 Dreamliner for the sixth time, promising now to finally hand over the first plane to customers in the middle of the first quarter of 2011.

    The latest delay came after Rolls-Royce Group PLC told the world's largest aircraft maker it would be unable to supply an engine needed to complete flight testing, Boeing said in a statement Friday. Rolls said the delay wasn't related to a 787 engine blowout on a test bed in Derby, England, which this month forced it to shut the site for repairs.

    The composite-plastic plane is already more than 2 1/2 years late following delays caused by working with new materials, parts delays from suppliers and redesign work involving an Italian sub-contractor.

  • Plunge in Capital Spending Could Slow Hiring & Economic Recovery Although initial claims for jobless benefits fell more than expected last week, a slowdown in U.S. business investment indicates hiring will continue to stall.

    Applications for unemployment benefits dropped by 31,000 last week to 473,000, the Labor Department said yesterday (Thursday), providing some relief that the job market isn't deteriorating rapidly as the economy slows. Economists surveyed by Dow Jones Newswires had predicted filings would decline by 10,000.

    But claims still remain elevated and aren't likely to boost confidence in the economic recovery. The four-week moving average, which smoothes volatility in the data, rose by 3,250 to 486,750, the highest level since Nov. 28, 2009. And new claims for the previous week were revised upward to 504,000 from 500,000.

  • South Korea Moves on U.K. Energy Assets as Competition with China Increases Korea National Oil Corp. (KNOC) on Friday made a hostile bid for the United Kingdom's Dana Petroleum PLC, marking the first time a state-owned Asian company has gone directly to shareholders.

    The move underscores South Korea's determination to double its oil output by 2012 and increase its energy security. It also shows that South Korea will not be denied energy assets, despite being outbid by Chinese companies in several instances.

    KNOC took the $2.9 billion (1.87 billion pound) bid to Dana's shareholders after the oil explorer rejected KNOC's previous offer of 1,800 pence a share offer. In a filing with the London Stock Exchange, KNOC said it had support from 48.62% of shareholders, putting the needed 50% approval target within close reach.

  • GM's IPO Filing Reveals Challenges That Could Discourage Investors  When General Motors Co. filed registration papers for an initial public stock offering (IPO) on Wednesday, it also revealed the formidable challenges it faces - some of which may give pause to investors considering taking a stake in the venerable automaker.

    The 734-page document GM filed with the Securities Exchange Commission (SEC) paints a picture of a company that is alternately confident about its progress since it nearly failed last year and cautious about the future.

    The IPO raises the stakes for taxpayers who own 61% of GM and will be at least partially repaid based on its success.
    ...
  • CPI Shows Inflation May Be a Bigger Problem than the Fed Thinks It Is A hodge-podge of government reports released Friday has rekindled debate amongst economists over a question central to the future of the U.S. economic recovery: Is inflation slowly on the rise, or is deflation about to sink prices and future growth?

    The consumer price index (CPI) rose for the first time in four months in July, signaling higher prices in some sectors and easing concerns that a slowdown would sink the U.S. economy into deflation. Meanwhile, the government released a string of weak economic reports that point to slower economic growth.

    The consumer price gauge increased 0.3%, the most in a year, outpacing the 0.2% gain projected by the median forecast of economists surveyed by Bloomberg News, figures from the Labor Department showed Friday. The so-called core rate favored by government economists, which excludes volatile food and fuel costs, met expectations, increasing 0.1%.

  • Whitacre Resigns, but Is GM Really Ready to Roll On with its IPO? Whether it's because the company is ready to again stand on its own two feet, or because of undue political pressure, General Motors Co. looks to be preparing an initial public offering (IPO) that would repay billions to taxpayers who own a majority stake in the company.

    The company yesterday (Thursday) reported a 44% increase in net profit and announced that Chief Executive Officer Ed Whitacre would step down from his post on Sept. 1.

    Whitacre, who was named GM's chairman last year as the company emerged from bankruptcy protection, will be replaced by GM board member Daniel Akerson. Akerson has little experience in the automobile industry, but he boasts a solid track record of leading telecommunications companies.

  • Google-Verizon Deal Could Spell the End of "Net Neutrality" A proposed agreement between Google Inc. (Nasdaq: GOOG) and Verizon Communications Inc. (NYSE: VZ) could spell the end of "net neutrality," and have smartphone users seeing red instead of their favorite videos.

    The arrangement, which has yet to be unveiled, would allow Verizon to charge content providers more to give their services priority on its network, the Financial Times reported, citing people familiar with the plan.

    News of the agreement spread like a virus on Thursday, when the Federal Communications Commission (FCC) called off industry-wide talks, saying it had failed to reach an agreement on a "robust framework to preserve the openness and freedom of the Internet."

  • Drought Forces Russia to Ban Grain Exports Russia yesterday (Thursday) banned grain exports after unrelenting heat left the country with its worst drought in at least a half-century.

    Wheat rose to a 23-month high after Russia, the world's third-largest grower, announced a ban beginning Aug.15 that will last through the end of the year. Corn and rice prices also surged yesterday after Russian Prime Minister Vladimir Putin said a ban on those grains would be "appropriate" in light of skyrocketing prices.

    Domestic grain prices gained 19% last week, faster than at the peak of the global food crisis in 2008. The ban includes wheat, barley, rye, corn and flour exports, according to the government decree that also set aside nearly $1.2 billion for stricken farmers.

  • Why Second Quarter Earnings Haven't Spurred a Stock Market Rally Second quarter earnings season is in full swing on Wall Street and investors are keeping a close eye on corporate profits.

    But rather than pinning their hopes on earnings for relief from the recent downturn in stocks, investors seem to be suffering from tunnel vision. They're ignoring numerous positive earnings reports and instead focusing on macro-economic trends to determine the day-to-day fate of the markets.

    And as a slew of economic reports continue to display conflicting trends, investors are finding it difficult to read the tea leaves. So far this earnings season, the market and the investors that drive it are all over the place.

    The result has been a string of volatile trading days featuring gyrating and erratic stock trading.