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  • ICE-NYSE Deal Signals Major Change in Future of Trading Intercontinental Exchange (NYSE: ICE) announced Thursday it will acquire NYSE Euronext (NYSE: NYX) for $8.2 billion in cash and shares. What does it mean?
    Keith Fitz-Gerald weighed in. Read More...
  • 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
    Data released Monday from the Institute for Supply Management revealed the U.S. manufacturing sector dipped back into contraction in November. Businesses reined in spending and curbed expansion projects while they anxiously await the looming blows from the fiscal cliff.

    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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  • With the Fed Out of "Bullets," A Stock Market Crash Will Really Hurt Hang onto your hats. It's getting windy out there. Stuff is blowing all over the place.

    Oh, that's not wind! That's a giant fan.

    Well then, that must be why this "stuff" stinks so bad.

    What stuff?

    How about the Dow Jones Industrial Average falling more than 1,000 points from multi-year highs reached only a few weeks ago?

    Or that the Dow has nosedived 5%, ever since the fateful morning last week when we found out that polls don't mean anything, that Republicans don't have memories like elephants, and that Obamarama is still the game we're playing?

    Or that the Nasdaq - you know, that tech bellwether index that a lot of analysts believe is our economic canary in the coalmine - is down 10.6% (technically in "correction" territory) since reaching its highs back in late September? Or that it's down 5.5% since the elation, I mean election?

    That's not only stinky stuff; it is scary stuff.

    Supposedly the reason the market is going down is that we're nearing the fiscal cliff and may be heading over it. But that outcome doesn't worry me.

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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.
    A major reason for the post-election sell-off is the prospect of higher taxes next year, and yesterday U.S. President Barack Obama made it clear his agenda on that issue has not changed.

    • 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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  • What Happens to the Stock Market in an Election Year? With just about six weeks to go until Nov. 6, many investors are wondering how Election 2012 will affect the stock market as a whole and their portfolios in particular.

    There are many theories about what can happen to the stock market following a presidential election - although the performance spread is pretty wide.

    The highest election year return for the Standard & Poor's 500 Index takes us back as far as 1928, when Herbert Hoover beat Al Smith. The S&P 500 returned 43.6%.

    But the heady atmosphere just before the 1929 stock market crash probably had more to do with that high return than Hoover's election-or Smith's loss.

    The lowest return in the 80-year period came in 2008, when now-President Barack Obama beat John McCain. The S&P 500 dropped 37%. Once again, the 2008 financial crisis probably had a greater impact on that result than who won or lost the election.

    So what is likely to happen four years later, with the economy still struggling to recover and the S&P 500 ahead about 15%?

    Let's take a look.

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  • Who Says Money Can't Buy You Love? Not the Banksters Remember Tim Pawlenty, the former two-time Governor of Minnesota?

    Remember when he made a bid for the Presidency this go-round, but bowed out after a poor showing in Iowa?

    Remember that during his brief run he acted like he was a Wall Street critic, admonishing the Street to "get its snout out of the trough?" Remember that?

    Remember that T.P. became national co-chair of Republican presidential candidate Mitt Romney's run for the roses?

    Do you remember that T.P. was a top contender for the V.P. slot that eventually went to Paul Ryan?

    Don't worry if you don't remember any of that stuff about T.P. because none of his past politics matter (he's a Republican don't you know?) now that he has a new job.

    Oh yeah, with less than 45 days before his buddy Mitt faces off against a resurgent incumbent named Obama - you probably don't remember because it just happened a few days ago - T.P. quit the campaign for a new gig.

    You can't blame him. Everybody loves money, and the lure of a reportedly near $2 million salary is mighty enticing. So he took the job.

    Guess what he's up to now?

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  • Stock Market Today: Markets in the Red Ahead of Jackson Hole Here are the major headlines in the stock market today.

    • Consumer spending gains most in five months- Consumer spending rose for the first time in three months, increasing 0.4% in July from June but slightly below expectations of 0.5%. This follows no change in June and a slight drop in May. The gain was the best in five months for consumer activity which accounts for roughly 70% of the economy. Even though it was a good monthly gain, U.S. consumers' purchases advanced at a 1.7% annual rate in the second quarter, the smallest increase in a year. "The quarter is getting off to a decent start," Gus Faucher, a senior economist at PNC Financial Services Group Inc. told Bloomberg News. "The consumer's situation is slowly improving, but the job growth isn't there to support really big gains in future spending."
    • Jobless claims remain unchanged- The number of people filing for initial unemployment claims matched last week's upwardly adjusted figure of 374,000. Economists on average expected this week's initial claims to be 370,000 and the data suggests that hiring is not improving. The unemployment rate, which moved up to 8.3% in July, has been stuck above 8% for more than three years, the first time this has happened since the Great Depression.
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  • Stock Market Today: GDP, Home Sales Fail to Lift Market Here are the major headlines in the stock market today.

    • GDP revised slightly higher in second quarter- Even though U.S. gross domestic product (GDP) was adjusted to 1.7% from 1.5% during the second quarter, the fact remains that it was depressingly low. Since the U.S. officially exited the recession in mid-2009, GDP growth levels have been stagnant and economists do not expect the rest of 2012 to be any different. The U.S. is projected to grow 2.0% in the third quarter and 1.9% in the final three months of the year. The government will issue its third and final estimate of second quarter GDP in several weeks. "It shows slightly better government spending and consumer spending but overall the data suggest the economy stays in slow growth mode and is not likely to change," Peter Cardillo, chief market economist at Rockwell Global Capital in New York told Reuters." This certainly strengthens the hands of the Fed to aid the economy."
    • Gas prices rise 5 cents nationwide- AAA reported that gas prices will be a nickel higher on average when consumers head to the pump Wednesday, sparked by the destruction of Hurricane Isaac. Prices on average are $3.804, the highest level since May. Today's spike is the biggest one-day move since February 2011 when concerns over Libya caused prices to rise. Some states, particularly those in the Midwest who receive most of their oil or gas from the Gulf, saw the largest increases. Ohio had the largest rise with a 13.9 cent increase, followed by a 13.2 cent rise in Indiana and a 12 cent rise in Michigan.
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  • Just Another Summer on Wall Street Another week slipped by on Wall Street, and it was a quiet one. For summer, that is.

    And thank goodness. All the scandals, all the negative news, all the time, always something. I'm getting tired of writing so much.

    It's my summer too, you know.

    So, when my extraordinary good fortune led me into the company of a spectacular woman this past week, I escaped the Street reality, enjoyed the beach, the Hamptons... and did I mention a spectacular woman?

    But just because I was out of touch (from reality) last week doesn't mean the surreal wasn't spilling out all over the Street.

    Okay, so it was little stuff, but it's still stuff. And it's still surreal...

    Like finding out that Vikram Pandit, CEO of that little banking outfit Citigroup, got paid more last year than the bank paid in taxes.

    That's news you ask? No. Granted, we know that all those poor banks that suffered deep losses on account of a lot of sore-loser homebuyers who got the Street mantra wrong (it's "buy high, sell low," right?) won't have big tax bills for a while because they saddled the good-guy banks with huge tax loss carry-forwards.

    Besides, Vik (can I call you that?) deserves it.

    Can you imagine all the negative press he gets? He deserves more; I say give it to him and the other banksters who have to work so hard to keep their jobs while their firms don't have to work nearly as hard to not pay taxes.

    And then I heard that Jon Corzine was thinking about yet another career move.

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  • What Skirt Lengths Tell You About The Stock Market Over the years I've written a number of articles about trading indicators.

    They have ranged from the commonly used variety - like moving averages, crossovers, the VIX, death crosses, and Bollinger Bands - to the esoteric, including the tallest buildings, Big Money Polls, financial astrology and, more recently, magazine covers.

    You'd think the tools market technicians typically use would generate the most interest. But inevitably, it's the more unusual indicators that people are most attracted to.

    Why?... I have no idea. I am not a social scientist.

    But I can tell you this - having spent tens of thousands of hours computer modeling almost every indicator you can conceive of, the most consistent and best performing indicators are almost always behaviorally-based.

    What I mean by that is that there is inevitably an element of human behavior that is either: a) responsible for the indicator itself; or b) contributes significantly to how it functions and why it's relevant.

    My grandmother, Mimi, a seasoned successful investor in her own right after being widowed at a young age, used to chalk this up to what she called the "complexity problem" - as in, if it's too complex for me to understand, it's a problem.

    She didn't use the term like I do today in a non-linear sense. She simply reasoned that if something was too complex to explain to her, it wasn't worth her time or her money.

    Skirt Chasing and the Stock Markets

    And that brings me to women's skirts.

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  • Beware the Distorted Reality of the Stock Market Money Morning's Keith Fitz-Gerald appeared on Fox Business' "Varney & Co." this morning (Friday) and offered his take on whether the markets are ignoring economic and social moods.

    He was asked about stocks that in a way represent the American Dream and if these stocks' recent rise is disconnected from reality.

    "Four stocks suggest the American Dream is alive and well in the markets," said today's host Charles Payne. "What do you make of it? And, is the market a leading indicator?"

    Keith offered up a unique way to assess the current situation....

    Read More...
  • Don't Expect the Obamacare Ruling to Calm the Markets Even before the Supreme Court decision on Obamacare was handed down yesterday the markets were selling off hard.

    They were tanking on news that the latest European summit was unlikely to be a game-changer, that U.S. gross domestic product was a paltry 1.9% in the first quarter, and a New York Times story that JPMorgan Chase's derivatives loss could top $9 billion.

    Then came the long-awaited decision from the country's highest court on the divisive healthcare law, the Patient Protection and Affordable Care Act, which unhinged markets further.

    The Court's historic decision shook the markets for several reasons.

    But the single overriding effect of the mixed-bag decision will be its impact on markets going forward.

    That's because the divided decision further fuels partisan politics going into the November elections and sets the stage for an all-or-nothing battle between Republicans and Democrats.

    The chances of there being any compromise anywhere on any divisive issues before the elections is now mathematically zero, where before it was somewhere between slim and none.

    The Bigger Issues Behind the Obamacare Ruling

    What the markets now face aren't just healthcare, tax and spending issues.

    As a result of the Court's stunning decision, we face something much bigger -- Constitutional issues of the highest and deepest order.

    The High Court, with Chief Justice John Roberts unexpectedly siding with the Court's four liberal justices, rendered a 5-4 victory for President Barack Obama's prized legislation.

    The ruling upholds the "individual mandate" that requires citizens to either pay for "minimum essential" health insurance or pay a "penalty" through the IRS as a "tax" towards offsetting the shared costs of national healthcare.

    But the Court also struck down the Act's provision allowing the Federal Government to effectively "hold a gun to the head" of states if they failed to increase Medicaid benefits, largely expanded under the new law.

    In its original form, states could lose all Federal funding of Medicaid for non-compliance with Federal demands.

    By its decision the Court effectively admitted that the Commerce Clause argument underpinning the individual mandate's Constitutionality was null and void.

    But while they said that the individual mandate that "forced" citizens to buy health insurance wasn't intended as a "command" that fell under the Commerce Clause, they incongruously flipped the argument on its head and agreed (by a one-vote majority) that the mandate was legal under Congress' authority to "tax" citizens for the benefit of the nation.

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  • The Best of the Best Dividend-Paying Stocks Over the past few years there have been unprecedented swings in the major indexes, scaring some investors out of the markets altogether.

    What people don't realize is that successful investing is a matter of continuous performance, not instantaneous performance.

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