stock market news
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The Best and Worst Stocks of 2012
As we prepare to invest in the New Year, we can learn from the five best and worst performing stocks of 2012 in the Standard & Poor's 500 Index.
While any investor would have loved to know this list a year ago, it's a good guide for 2013. Several of the factors that drove these share prices up and down in 2012 haven't changed.
The best stocks were led by signs of a recovery in housing, a slight return of consumer confidence, and the U.S. Federal Reserve's unprecedented monetary easing measures.
"The sector leaders are what one would expect with the [Fed] policy and with continued monetary injections into the economy this year through bond purchases," Peter Jankovskis, co-chief investment officer at Oakbrook Investments LLC, told The Wall Street Journal. "By pumping money into the economy the Fed boosts consumer confidence-and spending-which one would expect to boost consumer and financial shares."
While the leaders' success was tied to central bank actions, the biggest losers simply stumbled from their lack of innovation, inept management, and failed business models.
Best Stocks of 2012
Here are the best performing stocks in the S&P 500 for 2012:
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Three Stocks to Buy in Next Year's Most Promising Sectors
Whatever 2013 brings for the markets, there will be plenty of quality stocks to buy - if you know where to look.
Overall, the markets are expected to have another positive year.
A survey of 10 top financial strategists by Barron's projects the Standard & Poor's 500 will close at 1,562 in 2013, a 10% gain from current levels. (By the way, last year's picks outpaced the broader index by 6%.)
That would follow modest gains in 2012 of 13.5% for the S&P 500 and 8% for the Dow Jones Industrial Average.
For next year, Wall Street's top guns predict certain sectors of the market - technology, industrials, and energy - will lead the charge higher. Companies in more defensive sectors like consumer staples, telecoms, and utilities, will be laggards.
So let's take a closer look at three stocks to buy from among these favored sectors that should be an excellent place for your money in 2013.
Stocks to Buy in 2013: Cheap Tech
Tech stocks are hugely profitable and as a group currently carry a forward P/E ratio of about 11.
That's cheap versus historical levels.
Tech is also a bellwether for when companies start to invest capital.
"When we get an upturn in capital expenditures, it will show up in tech first," Barclays' Barry Knapp told Barron's.
One stock to buy that has a rock solid balance sheet and a mountain of cash is Cisco Systems Inc. (Nasdaq: CSCO).
Once the world's most valuable company with a market cap of $500 billion, Cisco's shares sank sharply when the tech bubble burst in 2000.
And the stock is still dirt cheap, trading around $20 a share, roughly 10 times next year's earnings. Plus, the company is sitting on more than $48 billion in cash, worth about $9 a share.
With a dominant market share of 60%, CSCO is the de facto choice in the switching market.
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Stock Market Today Fades Along with Chances of Fiscal Cliff Deal
The stock market today tumbled after chances of a fiscal cliff deal looked unlikely.
The stage was set Thursday night when a vote on Republican House Speaker John Boehner's Plan B, a fiscal cliff compromise to be presented to U.S. President Barack Obama, never even made it to vote among fellow Republicans. When word came of the setback, all major overnight future indexes sharply dropped.
When markets opened Friday, the slide continued. Shortly after noon, the Dow Jones Industrial Average slumped 176 points, the Standard & Poor's 500 Index dropped 20 points and the Nasdaq was lower by 43.
Investors appear to be bracing for the worst with just 10 days left before America falls over the cliff, with a deal is nowhere in sight.
Stocks on the Move Today
Shares of Research in Motion (Nasdaq: RIMM) rang lower Friday, sinking almost 20% in mid-afternoon trading.
RIM reported third-quarter earnings after the close Thursday that showed the BlackBerry maker swung to profitability, but lost about one million subscribers in the quarter. It marked the first time membership has fallen. The real test, analysts say, comes next quarter following the much anticipated release of the company's new Smartphone, the BlackBerry 10.
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ICE-NYSE Deal Signals Major Change in Future of Trading
Intercontinental Exchange (NYSE: ICE) and NYSE Euronext (NYSE: NYX) announced a deal before market open today (Thursday) by which ICE will acquire NYSE Euronext for $8.2 billion in cash and shares.
News of an ICE-NYSE deal pushed NYX shares up 33% by afternoon trading, near the $33.12 bid price. The acquisition is subject to approval by regulators in the United States and Europe.
This is ICE's second bite at the apple. A deal in which ICE and NASDAQ planned to take over NYX was scuttled last year by U.S. regulators who said that a combination between NYSE and NASDAQ OMX Group (NASDAQ: NDAQ) would create an equity trading monopoly in the United States.
Most analysts agree that the major rationale behind ICE's interest in NYSE Euronext is the latter's ownership of LIFFE, the leading European derivatives exchange. European regulators would have to approve the acquisition of LIFFE by ICE, which is a major electronic commodities and derivatives exchange in the U.S.
"ICE is after Liffe, that is the crown jewel of NYSE Euronext," said Peter Lenardos, analyst at RBC Capital Markets in an interview with Reuters. "Strategically it makes sense for ICE to enter the European derivatives space in a meaningful way."
Lenardos said that a combined entirety would be able to compete more effectively with the CME Group in both trading and clearing of OTC products.
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Stock Market Today: Biggest Winners and Losers
The stock market today rallied for a second session on hopes lawmakers in Washington will ink a fiscal cliff deal before year's end.
In afternoon trading Tuesday all three major index were sharply higher. The Dow Jones Industrial Average soared some 90 points by 2:30 p.m., the Standard & Poor's 500 Index climbed 11, and the Nasdaq jumped 33. That followed Monday's gains of 100.38 points, 16.78 points and 39.27 points, respectively.
With few economic releases scheduled for Tuesday, investors' focus was pinned on Washington. House Speaker John Boehner, R-OH, and U.S. President Barack Obama continued to haggle over a fiscal cliff deal, with the president making a counter offer late Monday.
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Stock Market Today: U.S. Markets Flat; Focus Shifts to Europe
The stock market today opened quietly in the United States as investors prepared for a very busy week ahead.
Just after the opening bell on Wall Street, all three major indexes were flat.
As Barron's noted, the average daily volume on the NYSE last week fell to 3.3 billion shares, compared with 5.5 billion that changed hands during the same period in 2009, when we were slowly emerging from the Great Recession.
The "fiscal cliff," which could drain $607 billion from the U.S. economy through tax increases and spending cuts, dominated U.S. news and moved markets.
But the fiscal cliff, along with the $16.4 trillion national debt and the growing federal deficit, took a back seat Monday as the focus shifted to Europe.
Anxious market participants kept a wary eye on Italy after Prime Minister Mario Monti announced he is resigning, citing a loss of support in Parliament. Italian bonds plummeted with the yield on the 10-year rising the most since August.
French, Belgian and Austrian 10-years dropped to euro-era lows, and Spain's debt also declined.
Bucking the trend was Greece, where bonds gained after the ailing country pushed further out the deadline for buying back some of its mountainous debt.
Elwin de Groot, a senior economist at Rabobank Nederland in Utrecht, Netherlands, told Bloomberg News: "We are seeing a selloff but I wouldn't call it a panic yet. The auction this week could be an interesting litmus test for investors. This has also created uncertainty for
Europe-wide policymaking."
Italy's deep-rooted economic troubles and political drift have been taken too lightly, a bevy of analysts warned.
As Nomura Securities' Silvio Peruzzo wrote in a note to clients, "Markets have grown too complacent about Italy, in our view."
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Stock Market Today: Gauging the Fiscal Cliff Effect
U.S. markets were mixed and relatively quiet Monday as investors digested the weekend news that fiscal cliff talks had failed to lead to a deal - possibly even derailing earlier progress.
Just before 2 p.m. on Wall Street, the Dow Jones Industrial Average was down 26 points, and the Standard & Poor's 500 Index and Nasdaq were both treading slightly lower.
On the economic calendar to kick-off the busy week were reports on October construction spending, November manufacturing and auto sales.
What's Moving the Stock Market Today
- Manufacturing Data
The ISM's manufacturing purchasers' index fell unexpectedly last month to 49.5 from 51.7 in October, marking the lowest reading since July 2009. Forecasts were for a reading of 51.5. A reading above 50 suggests expanding activity. Monday's reports gave no such hints.
According to economists surveyed by Dow Jones Newswire, demand has slowed in the second half of 2012. The culprit is the imminent fiscal cliff.
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Stock Market Today: Fiscal Cliff Fears Can’t Stop This 160% Gainer
The stock market today opened flat before turning negative as negotiations on the fiscal cliff have not progressed, outweighing Greece's new deal concerning its debt.
- Greece Close to Massive Bailout- Late Monday the International Monetary Fund, Eurozone finance ministers, and Greece came to an agreement that drastically eases the terms regarding Greece's repayment of debt and sets the stage for a third bailout. The deal lowers interest rates for bailout loans, suspends interest payments for a decade, pushes the deadline back for final repayments until the 2040s, and initiates a bond buyback program. Greece is also now on the brink of receiving a $44.7 billion loan beginning Dec. 13. "The big challenge now is to implement the decisions," Greek Finance Minister Yannis Stournaras said. "Greece has huge potential." The agreed upon measures aim to bring Greece's debt-to-GDP ratio down to 124% by 2020 from the projected level of 190% in 2014. The deal was accomplished by installing unprecedented measures such as carefully monitoring how Greece spends the debt, keeping an account strictly for debt servicing, and insisting that Greece completes the bond buyback before receiving more aid. "Euro-zone countries have put their money where their mouth is," Carsten Brzeski, an economist at ING Group NV in Brussels told Bloomberg News. "However, it is clearly not a carte blanche for Greece but rather a very tight leash."
- Fiscal Cliff Talks Resume- Congress returned from its Thanksgiving recess and the fiscal cliff will be at the forefront of discussions this week. After last week's short burst of optimism there has not been any further progress on a deficit reduction deal. But for now consumers seem unfazed by the whole debacle, as today the consumer confidence index reached levels not seen since February 2008. The onset of higher taxes coupled with deep spending cuts was thought to lower consumer confidence, but instead consumers spent a record amount of money through Black Friday and Cyber Monday. The consumer confidence gauge interestingly showed expectations for six months from now, when we could be off the fiscal cliff, unexpectedly rose. The percentage of respondents expecting more jobs to be available in six months rose to its highest level since February 2011, and the percentage expecting to buy a home in the next six months hit a new all-time high. "The consumer is in a better place than several years ago," Michael Gapen, a New York-based senior U.S. economist at Barclays PLC (NYSE ADR: BCS), told Bloomberg. "A lot of the numbers are improving, whether it is household balance sheets or the state of the housing market or employment."
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Stock Market Today: Why We'll Continue to "Drift Sideways"
The stock market today opened higher before falling once again as fiscal cliff concerns continue to weigh on investors' minds.
- Stocks continue to slide- After Cisco Systems Inc. (Nasdaq: CSCO) reported its fiscal first-quarter earnings the markets started the day positive, but quickly turned red. One week after the election, fiscal cliff concerns continue to mount as the president and Congress meet later this week to hopefully negotiate a deal. So far no progress has been made on the debt reduction talks and until that happens don't expect the markets to change course. "We will continue to drift sideways until we see some progress on the fiscal cliff negotiations," Peter Jankovskis, co-chief investment officer for Oakbrook Investments told Bloomberg News in a phone interview.
- President calls for $1.6 trillion more in revenue- When President Obama meets with congressional leaders on Friday he will ask for double the amount of revenue that was discussed at budget talks in 2011. On Tuesday, the president met with union leaders and other liberal groups and stated he will now seek $1.6 trillion in additional revenue over the next decade. That will be accomplished partially through higher tax rates, something Republicans have not yet said they would agree to. But Republicans have offered to accept extra revenue if Democrats can agree to making structural changes to entitlement programs. "New revenue must be tied to genuine entitlement changes," Senate Minority Leader Mitch McConnell, R-KY, said Tuesday. "Republicans are offering bipartisan solutions and now it's the president's turn. He needs to bring his party to the table." An agreement, which included $800 billion of extra revenue, between House Speaker John Boehner, R-OH, and President Obama failed when the President asked for $1.2 trillion in additional revenue. That deal would have lowered the deficit by $4 trillion over ten years, and now President Obama is seeking $1.6 trillion, a number much higher than Republicans will likely agree to.
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Why the Dow Fell Yesterday
Concerns over how politicians will handle the fiscal cliff was the biggest driver behind why the Dow fell yesterday, tumbling more than 300 points in its biggest loss this year.
Political worries were exacerbated by worse than expected monthly sales from McDonald's Corp. (NYSE: MCD) and fears that Apple Inc. (Nasdaq: AAPL) had entered a bear market.
The fiscal cliff continued to dominate investor sentiment today as both Republicans and Democrats expressed their intentions of working together to find a solution to the impending crisis but failed to offer any concrete evidence of their willingness to budge from long-held positions.
Afraid that Republicans and Democrats will not compromise, even when the stakes are high, investors are bailing out. It is too close to the end of the year-too close to bonus time-to be a hero now.
In his victory speech following his re-election on Tuesday, U.S. President Barack Obama said that he is "looking forward to reaching out and working with leaders of both parties to meet the challenges we can only solve together."
Senate minority leader Republican Mitch McConnell said, "To the extent [the President] wants to move to the political center, which is where the work gets done in a divided government, we'll be there to meet him halfway."
Jim Manley, a former aide to Senate majority leader Democrat Harry Reid, hoped that President Obama would become more personally involved in the negotiations on the resolution of the fiscal cliff.
"He's simply going to have to take a more active and forceful role," Manley told Bloomberg News. "He never got involved in the nitty-gritty of the legislative process. In light of the hyper-partisanship that still surrounds Capitol Hill, he's going to have to change, and he's going to have to take more of a lead in breaking the logjam."
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