Top 10 Biggest Gifts to Charity Fell in 2010

For the second straight year, big charitable donations are down from both individuals and their foundations. According to a report in The Chronicle of Philanthropy, the 10 largest gifts from Americans to charitable organizations fell from $2.7 billion in 2009 to $1.3 billion in 2010. The drop from 2008 to 2009 was far more precipitous: donations for 2008 totaled $8 billion.

The Chronicle editor Stacy Palmer explained to AdvisorOne that there’s a “quirkiness” about the end-of-year cutoff when calculating the amount of charitable donations. Since giving is made up of a mix of donors who prefer to see the results of their actions, thus making their gifts while they are alive, and others who choose to leave bequests in their wills, she added, “it could be many, many years until we see [those funds from the latter group] going to charity.”

Last year missed being the worst for giving by the wealthiest Americans, but not by much: in the 13 years since The Chronicle began tracking wealthy donors’ gifts, the total fell below $1.4 billion only once before, in 2003, when it was $1.2 billion.

Such low levels of giving come when Warren Buffett (left) and Bill and Melinda Gates have embarked on a mission to convince their billionaire peers to pledge to donate at least half their net worth to charity. “Given that Gates and Buffett have been making this push on the Giving Pledge,” said Palmer, “the gifts [for 2010] were really quite small. So if their goal is to [get the money into circulation,] then people will have to give more quickly and more generously. ... It seems that it’s not going to be a year where there are many very big gifts.”

Four of those who signed the pledge are among those who made the biggest gifts in 2010: oil tycoon T. Boone Pickens, who pledged $100 million to Oklahoma State University; Facebook founder Mark Zuckerberg, who pledged that amount to improve the public schools in Newark, N.J.; and Irwin and Joan Jacobs, who pledged $75 million to the University of California at San Diego.

In these hard times, when so many need so much, wealthy donors are putting their money into bricks and mortar—“safe causes,” as Palmer terms them. Nearly half of the wealthiest donors gave funds to build new campus buildings or to expand university campuses. Zuckerberg and Pickens, however, did otherwise; Pickens’ gift is earmarked for scholarships, and Newark faces serious poverty issues; Zuckerberg’s donation will do much to help the city’s struggling schools.

The Chronicle also found that the wealthiest are not as quick to give as those who are less wealthy but still affluent.

A Better Rule For Retirement Savings

For me, 2011 was the year I finally admitted that I’m getting older. In other words, I’ve realized that getting old isn’t just a state of mind. You can exercise, eat right, color your hair or even use Botox, but aging happens nevertheless. Of course, as my mother is so fond of pointing out, aging sure beats the alternative!

During this watershed year, I started seriously thinking about how to get all my ducks in a row for my future retirement. I also lined up one duck: I finally got around to consolidating my retirement accounts from past jobs into an individual retirement account that offers more investing options.

My focus in 2012 will be on figuring out how much to save to ensure I can retire with the lifestyle I want. I’m not, however, planning to follow the old rule of thumb that says retirement income should be about 80% of pre-retirement income. In other words, for every $50K I make today, I should expect to spend $40K in retirement.

According to a recent Reuters article, a number of academics are now poking holes in the common 80% approach. They are noting limitations such as that it doesn’t take into account an individual’s personal standard of living and it may cause people to save too much or too little. Other critiques of the 80% figure, meanwhile, have pointed out that it assumes that savers will have the same lifestyle after retiring as they did before.

Instead of focusing on a particular percentage of income, I’m instead planning to base my retirement savings figure on an analysis of what expenses “the Pilot” and I will have when we are both retired. This exercise will start with a look at what kind of lifestyle I envision us having when we retire. Then, I’ll examine which of our current expenses we’ll still have in retirement and what new expenses retirement will bring. This method should give me a pretty accurate estimate of how much I need to save to cover my particular retirement lifestyle.

I already know some of my expenses that will change. When I retire, I won’t, for instance, have such a high weekly dry cleaning bill. Other expenses will likely go up. I don’t drive much now because I’m often traveling for work, but I’m sure when I retire, my gas bill will go up. There’s also all the money I’ll need for our dream trips to Italy and Antarctica, and to spoil our future grandchildren (and no Katie, that doesn’t qualify as a hint).

Of course, once I retire, I’ll then need to figure out how to draw down on my savings. Thanks to my colleague Kevin Feldman, I know not to necessarily follow the approach of withdrawing 4% annually, another retirement-related rule of thumb that may be outdated.

How have you figured out how much to save for retirement?

Has Gerdau Become the Perfect Stock?

Every investor would love to stumble upon the perfect stock. But will you ever really find a stock that provides everything you could possibly want?

One thing's for sure: You'll never discover truly great investments unless you actively look for them. Let's discuss the ideal qualities of a perfect stock, then decide if Gerdau (NYSE: GGB  ) fits the bill.

The quest for perfection
Stocks that look great based on one factor may prove horrible elsewhere, making due diligence a crucial part of your investing research. The best stocks excel in many different areas, including these important factors:

• Growth. Expanding businesses show healthy revenue growth. While past growth is no guarantee that revenue will keep rising, it's certainly a better sign than a stagnant top line.
• Margins. Higher sales mean nothing if a company can't produce profits from them. Strong margins ensure that company can turn revenue into profit.
• Balance sheet. At debt-laden companies, banks and bondholders compete with shareholders for management's attention. Companies with strong balance sheets don't have to worry about the distraction of debt.
• Money-making opportunities. Return on equity helps measure how well a company is finding opportunities to turn its resources into profitable business endeavors.
• Valuation. You can't afford to pay too much for even the best companies. By using normalized figures, you can see how a stock's simple earnings multiple fits into a longer-term context.
• Dividends. For tangible proof of profits, a check to shareholders every three months can't be beat. Companies with solid dividends and strong commitments to increasing payouts treat shareholders well.

With those factors in mind, let's take a closer look at Gerdau.

Factor	What We Want to See	Actual	Pass or Fail?
Growth	5-Year Annual Revenue Growth > 15%	6.9%	Fail
�	1-Year Revenue Growth > 12%	14%	Pass
Margins	Gross Margin > 35%	14.2%	Fail
�	Net Margin > 15%	5.7%	Fail
Balance Sheet	Debt to Equity < 50%	50.8%	Fail
�	Current Ratio > 1.3	2.68	Pass
Opportunities	Return on Equity > 15%	8.7%	Fail
Valuation	Normalized P/E < 20	17.58	Pass
Dividends	Current Yield > 2%	3.4%	Pass
�	5-Year Dividend Growth > 10%	(12.4%)	Fail
�	�	�	�
�	Total Score	�	4 out of 10

Source: S&P Capital IQ. Total score = number of passes.

Since we looked at Gerdau last year, the steel producer has kept the same score. Slightly faster revenue growth over the past year offset a drop in the company's dividend.

Gerdau makes steel in Brazil, which many investors have looked to as a potential growth opportunity. With Brazil hosting the World Cup in 2014 and the Summer Olympics in 2016, Gerdau and peer Companhia Siderurgica Nacional (NYSE: SID  ) both looked like smart ways to play the need for huge infrastructure investment that accompanies both those events.

But at least this year, Gerdau's shares have suffered greatly. Despite higher sales, costs have risen at an even faster pace, crimping margins and hurting profits. Yet that's a problem that several other companies have faced, and worldwide, ArcelorMittal (NYSE: MT  ) , U.S. Steel (NYSE: X  ) , and Steel Dynamics (Nasdaq: STLD  ) have all seen substantial losses in their shares as well. Nucor (NYSE: NUE  ) is one of the only steel producers to buck that trend, perhaps because of its more cost-conscious use of locally placed mini-mills and other corporate initiatives.

What Gerdau needs is improvement in both the world economy and Brazil's in particular. After fighting back waves of huge capital inflows and resulting inflation, Brazil may be getting a handle on its once-overheating economy -- and in doing so, it sets the stage for Gerdau to make a run closer to perfection in the years ahead.

Keep searching
No stock is a sure thing, but some stocks are a lot closer to perfect than others. By looking for the perfect stock, you'll go a long way toward improving your investing prowess and learning how to separate the best investments from the rest.

Click here to add Gerdau to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Finding the perfect stock is only one piece of a successful investment strategy. Get the big picture by taking a look at our "13 Steps to Investing Foolishly."

Top Stocks For 2011-12-29-14

Crown Equity Holdings, Inc. (CRWE)

VoIP (Voice over Internet Protocol) is an internet-based system; you can track and manage your system from your computer. Most VoIP (Voice over Internet Protocol) systems allow you to track call volume and call time fairly easily- a feature that can be especially helpful for businesses that bill clients hourly or for time spent on the phone.

Cost savings is the number-one reason most people switch from a traditional phone service to VoIP (Voice over Internet Protocol). Companies or businesses can save big, too- using a VoIP service, you can virtually eliminate the equipment and maintenance charges that go along with owning a traditional on-site phone system. VoIP (Voice over Internet Protocol) also allows users to take advantage of advanced features only available on internet-based phone systems. Features like online call monitoring, and online phone system access to add or configure extensions are also available with VoIP (Voice over Internet Protocol) systems.

Crown Equity Holdings Inc. (CRWE) is pleased to announce that it has entered into a joint venture to deploy VoIP (Voice over Internet Protocol) technology delivering voice, video and data services to residential and commercial customers. The joint venture company is Crown Tele Services Inc. which was a wholly-owned subsidiary of Crown Equity Holdings Inc. Crown Equity Holdings Inc. will own fifty percent (50%) interest in the joint venture.

Commenting on the joint venture, Kenneth Bosket, President of Crown Equity Holdings Inc., said: “We are excited to deliver VoIP communications solutions specifically designed to meet the business and residential market needs in this fast-growing global market.”

Crown Equity Holdings Inc’s selection of Core Link reflects recent diversification beyond CRWE’s original charter as a provider of services and knowledge to small business owners taking their own companies public. In addition to these services, Crown Equity Holdings Inc has transitioned into a multifaceted media organization that publishes clients’ news online; sells advertising adjacent with its digital network targeted at a high-income audience; designs, hosts and maintains websites; produces marketing videos from concept to final product; crafts press releases and articles for maximum SEO; develops email campaigns; and forges branding campaigns to bolster client company images.

Crown Equity Holdings Inc. together with its digital network currently provides electronic media services specializing in online publishing, which brings together targeted audiences and advertisers. Crown Equity Holdings Inc. offers internet media-driven advertising services, which covers and connects a range of marketing specialties, as well as search engine optimization for clients interested in online media awareness.

For more information, visit http://www.crownequityholdings.com

BlackRock Kelso Capital Corporation (Nasdaq:BKCC) announced that it will report earnings for the quarter ended September 30, 2011 on Thursday, November 3, 2011 prior to the opening of the financial markets.

BlackRock Kelso Capital Corporation is a private equity firm specializing in investments in middle market companies. The firm invests in all industries. It prefers to invest between $10 million and $50 million and can invest more or less in companies with EBITDA or operating cash flow between $10 million and $50 million.

Sonic Foundry Inc. (Nasdaq:SOFO) the recognized market leader for rich media webcasting, lecture capture and knowledge management, has been voted Best Video Capture, Production and Publishing Solution in the Best of Elearning! Awards.

Sonic Foundry, Inc. provides enterprise solutions and services for the Web communications market worldwide. It offers Web casting, lecture capture, and knowledge management solutions for higher education institutions, businesses, and government agencies.

ClickSoftware Technologies Ltd. (Nasdaq:CKSW) announced that it will release its third quarter 2011 financial results on Monday, October 31, 2011, during pre-market hours.

ClickSoftware Technologies Ltd. provides workforce and service management software products and solutions.

Gold Vs. Silver: Volatility Check

This article will discuss opportunities in the silver market in light of the Fed's recent declaration on interest rates. Silver offers more percentage upside in comparison to gold; however, it must be traded with more caution due to its volatile nature.

The Fed decision on interest rates coupled with excessive US government spending and debt approaching 100% of US GDP will prevent a strong US dollar. A weak US dollar will cause commodities to rise in general to offset this. If you notice on the charts below, the commodity index has risen quite substantially in the last ten years, while the US dollar (as compared to the second largest currency in the world, the euro) has done quite poorly. Commodities are real products that we use and consume on a daily basis. Any type of currency weakness will be offset by the producers requiring more of the weaker currency to purchase these products.

Charts courtesy of Wikipedia. Click to enlarge.

Silver has performed remarkably well since 2002. If we look at the chart above we see that Silver ETF SLV basically flatlined since 1998 only to catch fire in 2004. From 2004 forward the return has been stellar with 600% gains compared with gold's 400% rise. This dovetails nicely with the dollar's weakness versus the euro since 2004.

What worries me about silver is its propensity to correct, sometimes violently, in down markets. As we can see from the charts below, SLV performed remarkably well versus the S&P 500. It sold off in September, though gold hasn't. If you look at the year to date returns, gold has actually outperformed with less volatility.

Eurozone Crisis: The View From Singapore

 

With total trade amounting to three times its GDP, Singapore is one of the world�s more open economies. That makes it a canary in the proverbial coal mine during a global slump. So its warning of an imminent slowdown amid a protracted Eurozone crisis tells you that trouble may be afoot. Singapore�s government predicted last week that growth would slow to 1-3% in 2012, compared to an estimated 5% uptick this year and a dramatic 14.5% post-recession bounce in 2010. Talk about volatility. In its statement, the Ministry of Trade and Industry said its 2012 forecast excludes the downside risk of a �full-blown financial crisis in the developed economies�. So much for the decoupling of Asia from its Western trade partners. Yet it�s also misleading to extrapolate too much from tiny Singapore�s statistics, since it�s not exactly representative of developing Asia. Indonesia and Malaysia recently posted decent 3Q growth, and Thailand�s slowdown is a flood-related supply shock, not a fall in demand. Then there�s China, which rattled markets last week when a monthly manufacturing indicatorfell sharply.

Singapore isn�t only a trade-led bellwether. It�s also a global financial hub that�s brimming with Asia watchers who are plugged into the region�s economic prospects and its downside risks. Of course, by far the biggest risk is a Eurozone crisis that sinks banks in core economies and splinters the currency union. This would have a major impact on Asia�s output, says Rajiv Biswas, Asia-Pacific chief economist for IHS, as such a systemic shock to global markets could overwhelm domestic growth engines in countries like India and China. Singapore-based Biswas puts the chance of a Euro-wipeout at 35%. A more likely scenario, on which IHS has based its latest growth forecasts, is that Europe avoids a meltdown while going into a mild recession. He puts this possibility at 60%. Biswas argues that Europe can still pull through, provided that its rescue fund is properly capitalised and the European Central Bank backstops sovereign lenders. �You could stabilise the markets,� he says. On this basis, IHS predicts stronger growth next year for Asia, up from 4.6% in 2011 to 5.4% in 2012. Japan�s post-quake expansion would offset weaker growth in smaller economies, while a soft landing in China would see growth slowing to 8.1%, down from 9.7%.

As CEO for Southeast Asia at Standard Chartered Bank, Ray Ferguson is acutely aware of the credit risks in the region in the event of a Eurozone meltdown. Compared to the Lehman crash in 2008, Europe�s debt crisis is a �slow burning fire,� he says. Like Biswas, Ferguson think it more likely than not that Europe will pull out of its tailspin, though he declines to put a percentage on either scenario. As an emerging-markets lender, Standard Chartered has virtually no exposure to European sovereign debt (other UK banks are less lucky). But tighter credit in Europe is rippling outwards to trade-oriented markets in Asia, along with a corresponding slowdown in demand, which keeps Ferguson on alert. �It�s more about the outlook for 2012-13 than managing a crisis now in November,� he tells Forbes. �The wheels of commerce are still moving.� He remains bullish on Indonesia as a fast growing economy with underserved consumer credit markets. Standard Chartered has a 44.5% stake in Indonesia�s Bank Permata and advised the Indonesian government on its recent $1 billion Islamic bond issue.

Ironies abound in the reversal of fortune between emerging markets like Indonesia, which was virtually bankrupt just over a decade ago, and Europe�s sovereign borrowers. France�s 10-year bond currently yields 3.7% and is ripe for attack by short sellers. By contrast, Standard Chartered last week sold Indonesia�s 7-year bond with a yield equivalent to 4%, suggesting that the chance of being repaid is only slightly lower than in France, a G7 country. Another irony: Western banks stuffed with default-prone paper were only following the guidelines of their regulators. As Biswas points out, Basel II rules require banks to set aside more risk-weighted capital against wholesale lending to emerging markets like Indonesia. Lending to triple-A rated governments in Europe, however, was judged to be a safer investment and therefore required lower loss reserves. Not surprisingly, bankers responded by buying up sovereign paper issued by countries like Italy and Greece. �Sovereign bonds in the European Union turned out to be the biggest risk of all,� says Biswas.

Bank on Texas With Texas Capital Bancshares

By Brandon Clay

The black cloud hanging over the financial services sector for much of the past two years is beginning to evaporate. Financial stocks rallied recently, and wise investors are giving the sector a fresh look. We’ve discussed the financial sector at length, noting that successful stock-picking in this sector needs to be selective.

It pays to look beyond the usual suspects in the financial services group. The media gives disproportionate coverage to Citigroup (C), Bank of America (BAC), Goldman Sachs (GS), JPMorgan Chase (JPM) and a few others. That doesn’t mean these are the best banking stocks. In fact, some smaller regional players offer investors plenty of profit potential.

One of those names is Texas Capital Bancshares (TCBI). The Treasury Department recently sold $6.56 million in Texas Capital warrants, freeing the company from a big outside constraint. That’s a positive catalyst in its own right, but there are other reasons to give this stock a look. Dallas-based Texas Capital is a conservative bank that does the bulk of its business in its home state.

The Texas economy, second-largest in the U.S., has avoided the pain suffered by many other states during the recession. Texas remains vibrant in part thanks to strong energy prices. More important, though, the Texas real estate market did not overheat like Arizona, California, Florida and Nevada. That means Texas Capital’s balance sheet is not cluttered with risky loans that are susceptible to default.

Another Texas dynamic to consider: There is no bank that would qualify as “major” based in Texas. And yet, Texas is the second-largest state by population and a pivotal market for Bank of America and Wells Fargo (WFC). Despite the fact that the big boys operate in Texas, many Texans prefer to do business with Texas-based banks, a market dynamic that favors the likes of Texas Capital. Many business owners in Texas look to the favorable rates and favorable good-ole-boy system that regional banks offer.

Shares of Texas Capital are up about 30% in the last three months, nearly twice the performance of Bank of America and Wells Fargo. Traditionally one of the biggest reasons to own bank stocks was for their dividends, but many banks have now slashed their payouts to rock-bottom levels. Federal regulators are forbidding dividend increases until the economy improves. That means capital appreciation is what you need in the banking sector. Texas Capital has proven itself to be a winner on that front. The stock has already broken out, indicating more gains may be right around the corner. To play the regional banks in the second-largest economy in the United States, go with Texas Capital Bancshares.

click to enlarge

5 Top Tech Mea Culpas

Saying sorry can be hard to do, particularly in the unforgiving glare of Silicon Valley, but Netflix(NFLX) CEO Reed Hastings' heartfelt apology to customers is just the latest in a long line of tech mea culpas.

In a blog posting on Sunday, Hastings acknowledged that he "messed up" in his handling of new subscription prices, a move which had fueled intense criticism from customers.Netflix's CEO, however, is hardly the first tech chieftain to eat humble pie, following in the footsteps of Cisco(CSCO) boss John Chambers, Microsoft's(MSFT) belligerent-in-chief Steve Ballmer, and Facebook's Mark Zuckerberg. Even Internet giant Google(GOOG) issued a high-profile apology last year as privacy issues swirled around its Buzz social network.Read on for more details on tech titans begging for forgiveness.

Netflix

Netflix supremo Reed Hastings pulled out all the stops late on Sunday, attempting to calm customers (and shareholders) in a blog posting explaining the firm's unpopular price hike and its decision to split its DVD and streaming services into separate businesses."I messed up. I owe everyone an explanation," he wrote. "It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming, and the price changes. That was certainly not our intent, and I offer my sincere apology."Hastings acknowledged that he "slid into arrogance" based on past successes and failed to communicate the reasons behind the pricing and strategic changes. "We realized that streaming and DVD by mail are becoming two quite different businesses, with very different cost structures, different benefits that need to be marketed differently," he noted, by way of explanation. "And we need to let each grow and operate independently."As part of this change, Netflix is renaming its DVD-by-mail program "Qwikster", an offering which also marks the firm's entry into the video game rental market.Shareholders largely shrugged off Hastings' candor as Netlix's shares crept up 0.17% on Monday. Customers were less impressed. The CEO's blog posting has attracted more than 6,000, often scathing, comments from users.

Cisco

With questions being asked about the networking giant's long-term strategy, Cisco CEO John Chambers made a major act of contrition earlier this year, laying the foundations for a slew of changes at the embattled tech heavyweight."Today we face a simple truth: We have disappointed our investors and we have confused our employees," he wrote in the internal memo. "Bottom line, we have lost some of the credibility that is foundational to Cisco's success -- and we must earn it back." The comments precipitated a huge shake-up at Cisco, which involved 6,500 job cuts, a massive internal overhaul and a strategic refocus.These changes are now starting to reap dividends. After a run of quarters marred by weak outlooks, the switch maker put out solid fiscal fourth-quarter results and decent guidance last month. Shares of Cisco, now touted as a turnaround tech stock, have gained more than 7% over the last month.

Google Buzz

Google's(GOOG) infamous second effort at social networking became a privacy nightmare that helped show how inept the search giant was at people skills.In February 2010, Google launched Buzz in response to Facebook's enormous success in linking people and keeping those people on its site for hours a day.Unfortunately, Google failed to consider how guarded people are and automatically set up users' accounts with following lists based on their closest contacts. And if that wasn't enough of an invasion, Google Buzz also auto-shared its users' pictures, profiles and reading lists with others.After four days of blistering blowback from users, Google shut down the automatic oversharing and offered this apology: "We quickly realized that we didn't get everything quite right. We're very sorry for the concern we've caused and have been working hard ever since to improve things based on your feedback. We'll continue to do so," Todd Jackson, the Buzz product manager, wrote on the company blog.

Microsoft Vista

Companies are usually getting beaten up by competitors, but occasionally the biggest punches are self-administered. Windows Vista landed a devastating blow that helped knock Microsoft(MSFT) back on its heels. The ambitious, resource-taxing PC operating system was a complete fiasco for the tech giant.Its predecessor, Windows XP, was a relatively sturdy system and its successor Windows 7 is a winner. But Vista opened a hole in Microsoft that Apple(AAPL) was more than willing to fill.Windows Vista was launched in 2007 and early on it was clear from its heavy hardware requirements and poor reviews that it wasn't destined to be a blockbuster. In fact, most PC users passed on Vista and stuck with XP or bailed altogether on Microsoft and converted to Apple.Three years later, CEO Steve Ballmer finally acknowledged the Vista failure and offered an apology of sorts. Speaking at the company's annual CEO Summit in May 2010, Ballmer bemoaned the setback and all the years lost due to Vista.In a mea culpa that could hardly be more understated Ballmer said: "It was just not executed well."

Facebook

Facebook, no stranger to privacy battles, issued a big apology in 2007 over its controversial 'Beacon' tracking tool. Beacon, which tracked user activity on partner Web sites, provoked a firestorm of criticism from privacy advocates, and prompted a mea culpa from the youthful Facebook CEO."We've made a lot of mistakes building this feature, but we've made even more with how we've handled them," explained Mark Zuckerberg, in a blog posting. "We simply did a bad job with this release, and I apologize for it." Facebook, which saw Beacon as a simple way to let people share information with their friends, goofed by requiring users to opt-out of the system, he said. "The problem with our initial approach -- was that if someone forgot to decline to share something, Beacon still went ahead and shared it with their friends," explained Zuckerberg.The social networker duly overhauled Beacon, requiring users to sign on for the feature, and also added a privacy control to turn Beacon off completely.Still, the Beacon brouhaha rumbled on. Facebook pulled the plug on Beacon less than two years later as part of a $9.5 million settlement in a lawsuit over the divisive program. >To follow the writer on Twitter, go to http://twitter.com/jamesjrogers.>To submit a news tip, send an email to: tips@thestreet.com. >To order reprints of this article, click here: Reprints

Euro Worries Hurt Asia Markets

Asian stock markets ended mostly lower Thursday, with Chinese banks struggling in Hong Kong, as European sovereign debt concerns resurfaced after a dismal result from Spanish bond auctions Wednesday.

Hong Kong investors returning from a one-day holiday pushed the Hang Seng Index down 1% to 20593.00.

The Shanghai Composite Index, trading for the first time this week, was a sharp contrast, moving off early losses to finish with a gain of 1.7% at 2302.24; some reports pointed to the more-than-doubling of the quota for foreign investment to $80 billion.

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U.S. Stocks Follow Global Selloff

Markets Fear End of Stimulus

Japan's Nikkei Stock Average lost another 0.5% to 9767.61, following up on Wednesday's fall, which was the biggest of the year and took the index back below the key 10000 level for the first time in almost a month. Australia's S&P/ASX 200 index fell 0.3% to 4319.8.

South Korea's Kospi joined Shanghai on the positive side, rising 0.5% to 2028.77.

U.S. and European shares closed with steep losses Wednesday after a weak bond auction in Spain renewed concerns about Europe's debt problems. Markets were still reeling from minutes of the U.S. Fed's latest interest-rate meeting, out earlier in the week. They showed only two of the central bank's members suggesting more bond-buying could become necessary if the economy loses momentum, damping hopes for more such easing.

"Risk markets look to be grieving the fact that the 'Bernanke put' may be less supportive than the past," said strategists at BNP Paribas. The "Bernanke put" refers to the notion that Fed-induced liquidity would support the stock market.

Banks were notably weak in Hong Kong, with Bank of Communications down 3.2%, Bank of China off 1.6%, Agricultural Bank of China 2.6% lower and Industrial & Commercial Bank of China (ICBC) down 1.6%.

Chinese Premier Wen Jiabao had said Tuesday that it was too easy for China's state-run banks to make profits, and that the government needs to break their "monopoly."

Analysts at Bernstein Research called it "a warning for the large banks that reforms are coming (after a three-year hiatus) that will alter the competitive landscape."

They added, though, that they expect the pace of reform to be moderate, "allowing the better-run large banks ... to adapt," citing ICBC and China Construction Bank as likely outperformers. China Construction Bank's Hong Kong shares traded down 2% Thursday.

But commodity stocks moved off lows in Hong Kong and gained in Shanghai, with Aluminum Corp. of China up 3.7% in Shanghai but down 0.3% in Hong Kong. Jiangxi Copper was up 2.7% in Shanghai, but down 1.2% in Hong Kong.

Other gainers in Shanghai included Citic Securities, up 5.8%, and real-estate major Gemdale, up 1%. Airlines did well, benefiting from a drop in crude-oil prices since the last Shanghai equities session: Air China climbed 1.9% and China Eastern Airlines rose 1.7%.

Air China's Hong Kong shares lost 1.5%, but China Eastern's were up 2%.

A drop in commodity prices overnight hit other Asia resource companies, with Tokyo-listed JFE Holdings down 2%, and Sumitomo Metal Metal Mining lower by 1.2%.

Miners were notable decliners in Australia, where BHP Billiton fell 0.9% and Rio Tinto retreated 1.7%.

While the U.S. dollar gained against most currencies, it declined against the safe-haven yen; the dollar was a at ¥81.92 Thursday afternoon, down from ¥82.49 late Wednesday in New York. The stronger yen and European concerns combined to send most major Japanese exporters lower.

Honda Motor lost 1.1% and Fuji Heavy Industries fell 0.8%, while Nikon surrendered 1.9% after a downgrade to hold from buy at BNP Paribas.

Japanese shipping shares also sank, with Mitsui O.S.K . Lines down 2.3%, and Nippon Yusen K.K . off 1.2%.

In Hong Kong, ports operator China Merchants Holdings International fell 3.6%, while rival Cosco Pacific fell 1.4%.

In Seoul, STX Pan Ocean dropped 3.8% and Hyundai Heavy Industries lost 1.3%.

Write to John Phillips at John.phillips@dowjones.com

Toyota: Do January Sales Show Recall Effect? Some Models Fine While Others’ Sales Plunged

As mentioned a moment ago, Toyota Motor (TM) said sales of its vehicles in the U.S. fell 9% in January from the prior year, and the company offered its sales chart to track the actual changes in vehicles.

Of the 8 different modelscovered by the recall – RAV4, Corolla, Matrix, Avalon, Camry, Highlander, Tundra, and Sequoia — the change in sales in the month is widely varied, suggesting there’s no immediate evidence of the recall, which came late in the month.

Corolla sales were down 3.6%, for example, and RAV4 SUVs were up 6.4% for the month, while the Sequoia SUV’s sales fell 56% year over year.

Toyota shares have steepened their decline following the results, with shares now down $3.06, or 4%, at $76.88.

New Reasons To Buy GE

A few days ago, there was good news for investors in General Electric (GE) when the finance arm of the company GE Capital won the approval of the regulators to return some of its profit to its parent. The move came ahead of the expectation of many analysts who thought that there would be no approval until 2013 and that even this would depend on the number of uncertain variable factors. Now there is reason for GE investors to hope that the stock buybacks will be speeded up and the dividend will be raised. The finance arm had emerged as a concern for many investors during the financial crisis and led the company to reduce its dependence on the finance arm and pay more attention to the industrial activity which is its core.

Now that the Fed has confidence in the financial position of GE Capital, a special dividend of $4.5 billion is planned for later this year. Analysts point out that this removes a large cloud that has hung over GE and will awake new interest in income investors. GE has traditionally received a dividend from its finance arm of the practice was discontinued following the financial crisis in the fourth quarter of 2008. Now the board of GE Capital has declared a dividend of $475 million which is 30% of its first-quarter earnings in advance of the special dividend. The GE board will consider its next move is on dividends in December. GE Capital dividend payments are planned at 30% of earnings for the year 2012 and GE itself plans to return 45% of its profit to shareholders as a dividend.

GE Capital was a major contributor to GE's profits in the past, offering financial products such as loans and leases, but it has recently been a drag on the parent. Now that it is once again contributing cash to its parent, the parent will have more resources for its own dividend which now offers a handsome dividend yield of well over 3%. GE is a capital intensive company and requires plenty of cash for its own dividends and a share repurchase program of $12 billion. In addition, GE is back to its acquisition strategy with its planned purchase of Industrea, an Australian manufacturer of mining equipment, for nearly $470 million. In the year 2011, GE spent around $11 billion in acquisitions related to the energy industry. Finance and energy account for nearly 70% of the company's revenues and it is still vulnerable to the slowdown in energy spending caused by economic weakness as well as shocks to the financial system such as the crisis in the Eurozone.

The proposed acquisition of Australia-based Industrea and Virginia-based Fairchild is a fair indication of GE' s interest in the mining machinery market. This is a good move on the part of the company provided it can deal with the competition. Mining is globally a $60 billion industry and definitely has high potential. You just have to look at some of the major mining equipment manufacturers to see how well they have been doing lately. Joy Global's (JOY) first-quarter sales grew by 21% on higher shipments while Caterpillar (CAT) has reported a jump of over 70% in sales for the first quarter in its mining business. Komatsu, another giant in the industry, expects record sales this year on the back of strong demand. So robust is demand that Caterpillar is reported to have quoted delivery dates extending into the year 2014 for some of its equipment.

Industrea, for which GE will pay $700 million, has a strong foothold into one of the hottest mining areas in the world which is China. China is both the biggest producer and the biggest consumer of coal in the world and plans to increase coal production from 3.5 billion tonnes last year to 3.9 billion tonnes in 2015. However the opposition is not sitting on its hands. Joy is working towards strengthening its position in China with judicious acquisitions and Caterpillar has continued to be aggressive particularly with its acquisition of Bucyrus International. However GEs acquisitions should provide it with a firm platform from which to push for growth.

GE has just announced that it is going to open a new research and development center in China to help the company to build stronger relationships with Asian customers. This will be the second R&D centre in the country and clearly marks the emerging markets as GEs new hope for sales growth. The company is expecting to see double digit growth for the next few years in these markets. The initial focus of the new centre is going to be medical, energy telecommunication and transportation. Later on, other industries are expected to be added. GE has recently paid out $535 million to buy a 15% share in XD Electric after two years of negotiation. The deal also envisages that the two companies will set up their own joint-venture company in China in which GE will take a 40% stake. The presence of that the GE is going to build will give them a major advantage over their competitors.

In my opinion, there are many compelling reasons to invest in GE right now. It is an attractive income investment with a dividend yield of around 3.5% and there is every prospect of a substantial increase this year. GE has over $80 billion in cash and equivalents and this cash mountain should be enough to service dividends for many years. In addition, there is a free yearly cash flow of over $40 billion. The return of GE Capital to financial health and the company's moves in areas such as mining equipment augurs well for the future and should enable them to take advantage of developing markets where the growth is. I would have no hesitation in recommending GE as a long-term buy as it will surely return to its "bluest of blue chips" status. Hang on to your existing holding and you are bound to be rewarded by the dividend yield as well as capital appreciation.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

This Grocer Has a Growing Problem

The following video is part of our "Motley Fool Conversations" series, in which consumer goods editor/analyst Austin Smith discusses topics across the investing world.

In today's edition, Austin talks about Whole Foods' growing problem, its multiple. Despite everything the grocer has done right, it is priced a bit rich right now, especially compared to the competition. The problem with being priced to perfection is that one small stumble can send shares spiraling when the company can't meet the market's expectations.

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Every now and again, we come across a stock that has us so excited we can hardly contain our investing enthusiasm. We've uncovered one such pick with so much promise that we've dubbed it: "The Motley Fool's Top Stock for 2012." We've created a special free report for investors to uncover this soon-to-be rock star. The report highlights a company that is revolutionizing commerce in Latin America, and you can get instant access to the name of this company by clicking here to download it now.

Myanmar May Float Currency

Resource-rich Myanmar may be about to undo one of the financial holdovers of 50 years of military rule: it could be preparing to decouple the kyat from the International Monetary Fund’s special drawing rights–a 35-year-long restriction that kept the official exchange rate at about 6.4 kyat to the dollar. If it perseveres, it would be offering yet another victory to reformers, according to one economic researcher.

In a Bloomberg report, the possibility of currency reform in Myanmar was viewed by the IMF as removing obstacles to the country’s potential to become “the next economic frontier in Asia.” Currently the official exchange rate is about 125 times stronger than the informal market rate of 800 kyat to the dollar.

Not only that, but there are seven different exchange rates currently in force in the country. The currency float would do away with all of those, which would bring the country closer to shedding the remnants of a half century of military dictatorships and would be the largest economic change instituted thus far by President Thein Sein, who took office last year. It would also open the door to the country’s entrée into global commerce.

Sean Turnell, a professor at Macquarie University in Sydney, Australia, who conducts research on Myanmar’s economy, was quoted saying of the move, “It would be a considerable victory for the reformers.” He added, “The people who would lose out the most would be the inner core of the highest echelons of the military, which used the old rate to accumulate reserves that were used to do what the military wanted to do.”

Economic sanctions during the military regime have also led to a dearth of technical expertise in banking, something a number of regional lenders are hoping to reverse. Numerous European and U.S. companies are also looking to invest in Myanmar once barriers to trade come down.

This Stock May Be a Surprisingly Good Buy

I wrote in a previous article about how falling demand for Medtronic's (NYSE: MDT  ) heart devices in the U.S. squeezed the company's top line and led to a fall in earnings in the just-concluded quarter. However, CEO Omar Ishrak had pledged to accelerate the company's global growth and rev up its sales. Let's look at Medtronic's fundamentals and plans to see whether it might be a stock worthy of your investment dollars.

Problems and solutions
The sticking point for Medtronic in the last quarter was declining sales in the United States. Domestic sales account for a little more than half of total revenue, and the company had to contend with a fall in demand for its heart defibrillators and spinal products in U.S. markets as stiff hospital budgets and concerns over the safety of its implantable cardioverter defibrillator (ICD) device pushed down sales. However, the company has taken steps to arrest the sales decline through the introduction of a new ICD device known as Protecta.

As far as expansion outside the U.S. is concerned, the company is doing well to make its presence felt in emerging markets such as China and the Middle East, where revenues grew a significant 25%. The company appears confident about its prospects in the growing international markets. With Ishrak at the helm, we can expect Medtronic to push itself into new territories, as the former GE executive has a history of stepping up business, and he looks to do the same at Medtronic by expanding it internationally and bettering returns on research expenditures.

Money matters
As far as funding its expansion is concerned, the company has a healthy unlevered cash flow of $3.4 billion, up from $2.7 billion a year ago. This will stand the company in good stead as it pursues Ishrak's vision of expanding in global markets. Medtronic's debt-to-equity stands at 62%, and it sports an impressive interest-coverage ratio of 13, which means that the company wont find it difficult to service its interest payments in case it wishes to raise money through debt for its expansion.

What the pundits say
Let's look at how Medtronic's plans reflects analysts' estimates and how it stands up compared with its peers.

Company	Trailing P/E (TTM)	Forward P/E
Medtronic	11.8	9.2
Stryker (NYSE: SYK  )	15.0	12.0
Baxter (NYSE: BAX  )	14.8	11.6
St. Jude Medical (NYSE: STJ  )	14.3	11.1

Source: Yahoo! Finance. TTM = trailing 12 months.

Medtronic is the cheapest of the lot when stacked up on a price-to-earnings basis. It seems like the negative publicity by a medical journal about its Infuse device weighs heavily on investor sentiment, along with a fall in earnings on a sequential basis. However, analysts also seem to have taken into account the product innovation and geographical expansion moves when estimating next year's earnings. I can say that the stock is attractively priced when we consider the potential it holds.

When we throw in a dividend yield of 2.9%, the stock becomes even more attractive. Considering Medtronic's development moves and cheap valuation, the stock could turn out to be a good buy.

To stay up to speed on the latest developments at Medtronic, add it to My Watchlist.

Another Chapter 11 Written in a Sad Industry

To say I wasn't surprised would be a lie, but I thought it wouldn't be for another few months.

The market awoke to news this morning that American Airlines and American Eagle parent AMR (NYSE: AMR  ) had filed for Chapter 11 bankruptcy protection, making it the last of the major carriers to do so in an industry wracked by bankruptcies and mergers since September 2001. AMR believes its $4.1 billion of cash, as well as cash from ongoing ticket sales, will be enough to operate through the bankruptcy process. The airline also announced the retirement of current CEO Gerard Arpey, who will be replaced by Thomas Horton.

Business as usual for airlines
The primary reason for the bankruptcy filing was out-of-control labor costs that gave AMR a disadvantage over nearly all of its competitors. This $800-million-a-year cost disadvantage combined with the inability to restructure debt led to the Chapter 11 filing. Despite these debt costs, AMR plans to go ahead with its recent order of 460 new planes, including 200 new 737s from Boeing. These planes are needed to update its aging fleet, though it feels strange for a company to buy brand new jets while losing $4.8 billion over the past three and a half years, with losses expected to continue through at least 2012.

Not all airlines are created equally
Despite industrywide profitability problems, there are a few bastions of hope away from the major carriers. Last year marked the 38th consecutive year that Southwest Airlines (NYSE: LUV  ) has been profitable, a trend that is expected to continue this year. Allegiant Air (Nasdaq: ALGT  ) operates a regional airline focusing on leisure travelers, serving airports that have limited or no service from major carriers, and it recently reported its 35th consecutive profitable quarter. JetBlue (Nasdaq: JBLU  ) has returned to profitability after an $84 million loss in 2008, posting profitable years in 2009 and 2010.

What's ahead for AMR?
While I don't think this bankruptcy will eliminate American Airlines as a major carrier, the possibility exists. Other major airlines such as Delta Air Lines (NYSE: DAL  ) and United Airlines used bankruptcy protection to cut costs and acquired other bankrupt airlines, with Delta purchasing Northwest Airlines and United merging with Continental to become United Continental Holdings (NYSE: UAL  ) . Even US Airways (NYSE: LCC  ) got in the act when America West purchased the airline and retained the more widely known US Airways name.

It wasn't that long ago that American Airlines was the largest carrier in the world. I don't think that will happen again anytime soon, though it is possible for it to look for another airline to merge with.

These things take time to resolve, so if you want to follow the latest developments, add AMR to your free My Watchlist.

Intel Income Up 875%, Continuing Major Momentum

Intel (INTC) posted a fourth-quarter net income of $2.3 billion, up 875% over its report last year at this time. Record revenues came in at $10.6 billion, up 28% year over year. Further the company yet again boosted its revenue guidance saying it expects first quarter revenue of $9.30 billion to $10.10 billion. The consensus estimate had been for revenue of $9.26 billion for the quarter ending March 31, 2010.

The impressive swing in net income was about 10 times greater than the $234 million (4 cents per share) that the firm reported last year on January 15.

We've continued to watch in amazement as Intel seemed completely unfazed by the economic downturn of 2008 and 2009:

1. January 2009: Intel beats its Q4 2008 estimates amidst negative headlines everywhere else.

2. April 2009: Intel declares, "We believe PC sales bottomed out during the first quarter and that the industry is returning to normal seasonal patterns." In the first-quarter, the firm's profit far exceeded analyst views.

3. July 2009: Still swimming upstream, Intel posts its largest quarterly sequential increase in sales since 1988, further boosts its guidance for Q3 in the face of naysayers calling forlackluster Q3 growth.

4. Oct 2009: Cisco (CSCO) joins Intel in declaring that "Recovery Is Gaining Momentum."

And just prior to yesterday's Intel announcement you'll remember that analyst firm IDC declared that in Q4 2009, the U.S. PC "market exploded higher."

Dish TV Wants to Be In Your Home and On Your Mobile

Dish Network (NASDAQ:DISH) executive and majority owner Charles Ergen has a plan for the TV satellite network that he believes will change the telecommunications and satellite television industry: mobility.

Ergen announced a 10-year plan that would put the company on a path to offer cable television, internet access, and video and voice services both in the home and on the go through mobile devices of any and all kinds.

Typically cable television operators and providers offer data, video and voice services for home use, but none that work on mobile devices, according to AP.

Ergen is out to change that model. “When we go install video in your home we can say, `No matter where you are, you can take that video with you,’” Ergen said. “You can also get your broadband and make your voice calls.”

Of course, to accomplish the task Dish Network will need to make major investments in equipment, and the company has started to address that task by purchasing two satellite operators, DBSD North America, Inc., and TerreStar Networks, Inc. looking to use their wireless licenses to offer Internet access.

The company already has video capability after purchasing the bankrupt Blockbuster chain of video rental and purchase stores, and operations with television networks through DishTV.

In a fast-moving industry like satellite television and Internet access, a 10-year plan may seem like a lifetime, but any time a company gets even one leg up on the competition, they are closer to filling a need nobody foresees today.

And that is always worth trying to accomplish.

Stocks Keep Dropping in Pre-Market Action; Banks Show Weakness

Investors remained pessimistic early Tuesday after equities fell sharply on Monday, sending the S&P 500 below 1,100. If the S&P 500 falls below 1,090, the market will officially be in bear territory, having fallen more than 20% from its April highs. European stocks are showing broad weakness, with the FTSE 100 off 3%.

Investors will also be watching Fed Chairman Ben Bernanke testify before the Joint Economic Committee on Capitol Hill today.

Dow futures fell 150 points to 10,440. S&P 500 futures fell 9.8 points to 1,076.5.

Financial stocks continued to show weakness after a miserable Monday. Bank of America (BAC), off 10% yesterday, is down another 0.9% in pre-market trading. Citigroup (C) is off 1.7%.

How Australian Air Express Serves Pet Owners

Australian Air Express or AaE is a logistics company offering domestic freight-only services across Australia. In its operations, it leases aircraft from various airlines, including Pel-Air, Qantas, and National Jet Systems. One of the notable services of AaE is transporting your pet safely to your destination. This is a very timely service as pet owners want to treat their pets to visit different places, too.

Pets must be cared for before and during air travel, that’s why one must select for a company which offers this very unique service. On the part of pet owners, they must obtain the right documentation and make a visit to the veterinarian just to make sure that the animal is fit to travel. Keep in mind that Australian Air Express doesn’t easily accept animals without the right certification.

For one, pet containers are limited on an airplane. Additionally, there are certain schedules wherein pet travel service is not available. So, when reserving, you must inquire about the service’s availability. Before taking care of your own flight schedule, you must book for your pet travel first. Then, you can reconcile your schedule so that your pet will not reach the destination first.

What all these mean is that your pet has a chance to go on a travel, thanks to the service offered by Australian Air Express. To ensure that you won’t encounter many problems, you must prepare the paperwork prior to booking the pet. One of the important documents that should be ready with is the Household Pets Shippers Statement.

In the end, owners must consider their pets above anything else. This means that they must ensure that the animal can endure the long flight. If their pet is happy to stay behind, then one shouldn’t force the animal from going anywhere. This is because there’s a big tendency for the pet to be anxious or agitated in a strange environment. Riding a plane is a new experience to the dog or cat, so it might react negatively to what is currently happening. Don’t forget that even pets deserve a relaxing flight, although it will be more challenging for them than for their owners.

Are you thinking of treating your pet to a vacation? Well, think again because there are challenges that you could be facing. For one, the pets are treated as luggage and put in a specific area away from their owners. Fortunately, pet owners can rely on the services offered by Australian Air Express for taking care of pets.

The Facts About Silver Coin Prices

A variety of precious metal effect investors do place more preference on silver than any other metal located in the market for a number of factors. These factors are very well-known within the overall price of silver market community, and will be subcategorized into numerous subcomponents that are all very lucrative from the general precious metal market.

A lot of inventors cherish silver components because they are usually very cheap and also considerably popular than competitors such as platinum or even gold. These types of pieces are high on demand in the market and people who would like to sell them would be guaranteed a ready market. In a lot of instances cost of silver ranges at very firm market value which is usually not influenced by changing market rates.

This is mostly since the value of this commodity is primarily dependant on material content compared with market fluctuations. In contrast to other competitors such as platinum or even gold, silver units tend to be considerably popular and this essentially signifies that traders are assured of a stable market even in times of economic downturn when costs of other investments are decreasing.

This kind of price of silver pieces might be bought within the typical market at very financed rates provided one finds a good dealer that knows how to efficiently strike deals between all related events for utmost profit to be obtained. There are several special categories on silver that are featured from the lucrative marketplace and people can choose their preferable items based on individual preferences and market recognition as well.

There are many prices of silver categories within the general market that you could consider trading in and they have quite varied representations of value based on value status they keep within the general market.

Here one could be required to make purchase on value of chosen silver brands and keep a close look on the general market ratio so that ultimately results may be traded over only if they are on high demand-some financial analysts have been swift to notice that it could be quite hard for price of silver traders to expertly receive these specific silver categories or alternatively consider delivery since they are not very material.

The preferred alternative during this situation shall integrate cashing up on favored units and then settling up on same value ratio rendering while offering heed on existing currency unit status. Another alternative in such a scenario would be investing in coinage representations while getting attention on well-known price of silver categories such as American Silver Eagle as well as Silver Maples which has been relatively popular in the precious metal market due to high value on returns.

Both of these are viewed as remarkable investments with guaranteed value on returns. Another common alternative which could also be considered on this specific category are Silver Unit Rounds that are coin representations of silver but they also substantially vary from the general government approved pieces based on the realization they don’t have any established state inscribed rubber stamp on them like that one presented on it’s predecessors. You would get simply the best with any of these lucrative prices of silver trading portfolios.

Searching for silver coin prices? Then you come to the perfect spot! You could also check the writer’s site: http://priceofsilvertodayhere.com

DirecTV Seen Range-Bound for 2011

By David Russell

DirecTV (DTV) has had a big pullback, and traders apparently think that it will seesaw in a range for the next year.

optionMONSTER's tracking systems detected the sale of 2,700 March 37 puts for $0.67 and 2,700 March 42 calls for $0.72 on Thursday. About three hours later, 5,000 January 2012 45 calls were sold for $2.02 and 5,000 January 2012 35 puts were sold for $2.18. Volume was more than twice open interest in all four strikes.

The activity resulted from the sale of two strangles--trades designed to earn income from the passage of time. For the strategy to work, DTV must remain in specific ranges for given periods. (See our Education section)

The first trade predicts that DTV will stay between $37 and $42 through March expiration. If the investor is right, he or she will get to keep $1.39 in premium.

The second trade gives the satellite-television company more room to move and will earn $4.20 if it stays between $35 and $45 in the next year.

DTV rose 0.66 percent to $39.92 on Thursday. On Nov. 4 it traded as high as $44.61, the highest price since the March 2000 tech bubble. But it reversed amid concerns about rising costs and has been falling ever since.

The shares have now returned to the same $39-$40 level where they peaked the spring and summer. Some chart watchers will likely expect support around this price area, protecting them against further downside.

The trades pushed total option volume in DTV to 12 times greater than average in the session.

(Chart courtesy of tradeMONSTER)

Chipotle Mexican Grill Meets on the Top Line, Misses Where it Counts

Chipotle Mexican Grill (NYSE: CMG  ) reported earnings on Feb. 1. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Chipotle Mexican Grill met expectations on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share increased significantly.

Gross margins grew, operating margins improved, and net margins were steady.

Revenue details
Chipotle Mexican Grill booked revenue of $596.7 million. The 23 analysts polled by S&P Capital IQ foresaw net sales of $591.3 million. Sales were 24% higher than the prior-year quarter's $482.5 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
EPS came in at $1.81. The 25 earnings estimates compiled by S&P Capital IQ averaged $1.83 per share. GAAP EPS of $1.81 for Q4 were 24% higher than the prior-year quarter's $1.46 per share.

Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 37.6%, 40 basis points better than the prior-year quarter. Operating margin was 16.0%, 30 basis points better than the prior-year quarter. Net margin was 9.6%, about the same as the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $615.4 million. On the bottom line, the average EPS estimate is $1.90.

Next year's average estimate for revenue is $2.70 billion. The average EPS estimate is $8.66.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 2,494 members out of 2,955 rating the stock outperform, and 461 members rating it underperform. Among 1,041 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 928 give Chipotle Mexican Grill a green thumbs-up, and 113 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Chipotle Mexican Grill is outperform, with an average price target of $337.10.

• Add Chipotle Mexican Grill to My Watchlist.

LSI Q2 Revs Light; Q3 Guidance Well Below Street; Stock Falls

LSI Corp. (LSI) this afternoon posted Q2 revenues of $639 million, up from 23% from a year ago, but below the Street consensus of $654.4 million. Non-GAAP profits of 11 cents a share were in line with estimates.

For Q3, the semiconductor and storage products company sees revenue of $625 million to $655 million, with profits of 8-14 cents a share, below the Street at $695 million and 13 cents.

CEO Abhi Talwalkar noted that the company saw “customer inventory adjustments late in the quarter that modestly affected our sequential revenue growth.” On the outlook, he said that “end market demand for enterprise IT products continues to bode well for us,” but that “our outlook for the third quarter is one of tempered optimism as macro-economic conditions appear to be somewhat fluid at the present time.”

LSI in late trading is down 30 cents, or 6.3%, to $4.45.

Trading Slows in the Dog Days of Summer

Trading has been very light in the past week as beach-bound investors have conveniently left their brokers’ numbers at home. Or perhaps they’ve all been scared off by the high-speed breakdown at Knight Capital Group (KCG) or the slow-speed political breakdown in the euro zone.

Either way, fewer than 3 billion shares traded hands on the NYSE for the fourth straight day on Wednesday, as NYSE composite volume hit 2.64 billion shares (versus the average this year of 3.7 billion). The S&P 500 ended the day 0.11% higher, while the Dow was down 0.06%. Not, perhaps, a ton of conviction there.

If the sub-3-billion volume trend holds tomorrow, it will mark the longest such streak since last December.

Stepan Passes This Key Test

There's no foolproof way to know the future for Stepan (NYSE: SCL  ) or any other company. However, certain clues may help you see potential stumbles before they happen -- and before your stock craters as a result.

A cloudy crystal ball
In this series, we use accounts receivable and days sales outstanding to judge a company's current health and future prospects. It's an important step in separating the pretenders from the market's best stocks. Alone, AR -- the amount of money owed the company -- and DSO -- the number of days' worth of sales owed to the company -- don't tell you much. However, by considering the trends in AR and DSO, you can sometimes get a window onto the future.

Sometimes, problems with AR or DSO simply indicate a change in the business (like an acquisition), or lax collections. However, AR that grows more quickly than revenue, or ballooning DSO, can also suggest a desperate company that's trying to boost sales by giving its customers overly generous payment terms. Alternately, it can indicate that the company sprinted to book a load of sales at the end of the quarter, like used-car dealers on the 29th of the month. (Sometimes, companies do both.)

Why might an upstanding firm like Stepan do this? For the same reason any other company might: to make the numbers. Investors don't like revenue shortfalls, and employees don't like reporting them to their superiors.

Is Stepan sending any potential warning signs? Take a look at the chart below, which plots revenue growth against AR growth, and DSO:

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. FQ = fiscal quarter.

The standard way to calculate DSO uses average accounts receivable. I prefer to look at end-of-quarter receivables, but I've plotted both above.

Watching the trends
When that red line (AR growth) crosses above the green line (revenue growth), I know I need to consult the filings. Similarly, a spike in the blue bars indicates a trend worth worrying about. Stepan's latest average DSO stands at 54.8 days, and the end-of-quarter figure is 53.8 days. Differences in business models can generate variations in DSO, and business needs can require occasional fluctuations, but all things being equal, I like to see this figure stay steady. So, let's get back to our original question: Based on DSO and sales, does Stepan look like it might miss its numbers in the next quarter or two?

I don't think so. AR and DSO look healthy. For the last fully reported fiscal quarter, Stepan's year-over-year revenue shrank 1.4%, and its AR dropped 5.5%. That looks OK. End-of-quarter DSO decreased 4.1% from the prior-year quarter. It was down 4.5% versus the prior quarter. Still, I'm no fortuneteller, and these are just numbers. Investors putting their money on the line always need to dig into the filings for the root causes and draw their own conclusions.

What now?
I use this kind of analysis to figure out which investments I need to watch more closely as I hunt the market's best returns. However, some investors actively seek out companies on the wrong side of AR trends in order to sell them short, profiting when they eventually fall. Which way would you play this one? Let us know in the comments below, or keep up with the stocks mentioned in this article by tracking them in our free watchlist service, My Watchlist.

• Add Stepan to My Watchlist.

Is Abercrombie on the Rebound?

There’s a word for Abercrombie & Fitch’s (ANF) second quarter results and that word is “bad.” The company reported a big drop in year-over-year earnings and a 10% plunge in comparable store sales. Yet the stock is up 8.8% this afternoon.

The company’s 19 cents of EPS did surpass its forecast for 15 cents to 18 cents, and beat analysts’ expectations by 2 cents. And management offered some optimism on the conference call:� “Comps have improved at the start of Q3 both in the U.S. and internationally, but management noted it�s still too early to call it a trend,” wrote Sterne Agee analyst Margaret Whitfield.

Stifel Nicolaus analyst Richard Jaffe expects Abercrombie to eventually rebound in the U.S. as it closes underperforming stores. But the macroeconomy and continued pressure overseas could weigh on the stock. And margins may continue to suffer.

“[W]e believe ANF will find it difficult to return its operating margin to historical levels (operating margin is currently about half of its historical peak) due to the diminished appeal of the brand and uninspired product, which we believe will hold back the company�s ability to raise AUR significantly above its current levels.”

Ruby Tuesday Plunges on Weak Sales and Guidance

Ruby Tuesday (RT) fell 9% after-hours as the company released guidance at the low end of analysts’ expectations.

Ruby Tuesday posteda nickel of EPS for the fiscal first quarter, in line with analysts’ expectations. Domestic same-restaurant sales fell 3.7%. The restaurant chain also said it now expects full-year earnings of 60 to 75 cents per share, against expectations for 75 cents. The company also expects same-restaurant sales to be flat to down 2% for the year.

“We continue to operate in an aggressive competitive promotional environment with very heavy advertising levels and we expect these competitive marketing trends to continue given the soft economy and low consumer confidence,” said CEO Samuel Beall.

Beall said Ruby Tuesday has “several initiatives in test that are designed to position our brand favorably with the consumer and help us increase our same-restaurant sales.” Among the ideas: a Seafood Festival for $9.99.

Google Sets Its Sights on iTunes

By MG Siegler

Today at Google I/O, Vic Gundotra introduced Froyo, aka Android 2.2. But he also went a bit beyond Froyo. Coming soon, is a way to download an app through the Android Market over the web — and have it automatically download on your Android devices too. But that’s not all. Gundotra also showed off a new section of the Market — Music. Yes, an iTunes competitor on the web from Google (GOOG).

Details are sparse at the moment, but here’s how this basically works. You go to the Market on the web, find a song you like, click the download button, and just like with apps, the song starts to download on your Android devices. So it’s iTunes, over the web, with auto-syncing. No word on who the partners are for this, what the prices will be, etc. Undoubtedly, we’ll hear more about that soon.

And that’s not all.

Gundotra also announced that Google recently made an aquisition: Simplify Media. Using this technology, Google will soon offer a desktop app that will give you access to all of your (DRM-free) media on your Android devices remotely.

Top Stocks For 2012-2-24-18

 

Non-GAAP total revenue of $55.4 million increases 49% year-over-year
Non-GAAP operating income of $11.7 million increases 43% year-over-year
Non-GAAP EPS of $0.21 increases 40% year-over-year

BRIDGEWATER, N.J.–(CRWENEWSWIRE)– Synchronoss Technologies, Inc. (NASDAQ:SNCR), the world�s leading provider of transaction management, cloud enablement and connectivity services for connected devices, today announced financial results for the second quarter of 2011.

�We are very pleased with the company�s performance in the second quarter, which led to revenue and profitability that were above the high-end of our guidance,� said Stephen G. Waldis, President and Chief Executive Officer of Synchronoss. �We are making excellent progress with the expansion of our relationships with tier one service providers. We have expanded our AT&T relationship with the addition of a meaningful new channel. We also moved to the second phase of our platform deployment with Vodafone and advanced our work on the deployment of additional ConvergenceNow� Plus+ capabilities with Verizon that are scheduled for the second half of 2011.�

Waldis added, �Synchronoss is benefitting from the investments made in our highly differentiated ConvergenceNow Plus platform. We believe our growing ability to deeply embed Synchronoss directly on devices that take advantage of the new cloud-based capabilities will add significant value to our customers and provide our company with a growing number of significant long-term growth opportunities.�

For the second quarter of 2011, Synchronoss reported generally accepted accounting principles (”GAAP”) net revenues of $54.8 million, an increase of 47% compared to the second quarter of 2010. Gross profit was $28.9 million in the second quarter of 2011. Income from operations, determined in accordance with GAAP, was $4.6 million. GAAP net income applicable to common stockholders was $3.2 million and GAAP diluted earnings per share were $0.06, compared to $0.09 for the second quarter of 2010.

Synchronoss reported non-GAAP net revenues, which adds back the purchase accounting adjustment related to FusionOne�s revenues, of $55.4 million, an increase of 49% compared to the second quarter of 2010. Non-GAAP gross profit for the second quarter of 2011 was $30.8 million, representing a non-GAAP gross margin of 56%. Non-GAAP income from operations was $11.7 million in the second quarter of 2011, representing a year-over-year increase of 43% and a non-GAAP operating margin of 21%. Non-GAAP net income, which takes into account adjustments to non-GAAP income from operations, was $8.0 million in the second quarter of 2011, leading to non-GAAP diluted earnings per share of $0.21, an increase of 40% compared with $0.15 for the second quarter of 2010.

A reconciliation of GAAP to non-GAAP results has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

�Synchronoss� ability to balance investing for growth with driving efficiencies is evidenced by our strong non-GAAP operating income margin and growth for both the second quarter and first half of 2011,� said Lawrence R. Irving, Chief Financial Officer and Treasurer. �As we look to the second half of 2011, we will continue to invest in areas that support the strong growth of our business and new customer initiatives such as the AT&T channel which is expected to launch late in the third quarter. We will continue to target strong profitability margins, and we expect to gain leverage from our investments as volumes scale and automation rates improve as new ConvergenceNow� deployments ramp.�

Other Second Quarter and Recent Business Highlights:

Business related to AT&T accounted for approximately $27.6 million of non-GAAP revenue, representing 50% of total non-GAAP revenue. Business outside of the AT&T relationship accounted for approximately $27.8 million of non-GAAP revenue or a record level of 50% of total non-GAAP revenue for the quarter. Verizon was the largest contributor to Synchronoss� business outside of AT&T, representing over 10% of the Company�s revenue for the quarter.

Conference Call Details

In conjunction with this announcement, Synchronoss will host a conference call on Monday, August 1, 2011, at 4:30 p.m. (ET) to discuss the company’s financial results. To access this call, dial 866-314-4865 (domestic) or 617-213-8050 (international). The pass code for the call is 33953317. Additionally, a live web cast of the conference call will be available on the �Investor Relations� page on the company�s web site, www.synchronoss.com.

Following the conference call, a replay will be available at 888-286-8010 (domestic) or 617-801-6888 (international). The replay pass code is 32736547. An archived web cast of this conference call will also be available on the �Investor Relations� page of the company�s web site, www.synchronoss.com.

Non-GAAP Financial Measures

Synchronoss has provided in this release selected financial information that has not been prepared in accordance with GAAP. This information includes historical non-GAAP revenues, operating income, net income, effective tax rate, and earnings per share. Synchronoss uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating Synchronoss� ongoing operational performance. Synchronoss believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends, and in comparing its financial results with other companies in Synchronoss� industry, many of which present similar non-GAAP financial measures to investors. As noted, the non-GAAP financial results discussed above add back the deferred revenue write-down associated with FusionOne acquisition, fair value stock-based compensation expense, acquisition-related costs, changes in the contingent consideration obligation, deferred compensation expense related to earn outs and amortization of intangibles associated with acquisitions.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures as detailed above. As previously mentioned, a reconciliation of GAAP to non-GAAP results has been provided in the financial statement tables included in this press release.

About Synchronoss Technologies, Inc.

Synchronoss Technologies is the world�s leading provider of transaction management, cloud enablement and connectivity services for connected devices. The company�s technology platforms ensure a simple and seamless on-demand channel for service providers and their customers. For more information visit us at:

Web: www.synchronoss.com

Blog: http://blog.synchronoss.com

Twitter: http://twitter.com/synchronoss

Forward-looking Statements

This document may include certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts and statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” �outlook� or words of similar meanings. These statements are based on our current beliefs or expectations and are inherently subject to various risks and uncertainties, including those set forth under the caption “Risk Factors” in Synchronoss� Annual Report on Form 10-K for the year ended December 31, 2010 and other documents filed with the U.S. Securities and Exchange Commission. Actual results may differ materially from these expectations due to changes in global political, economic, business, competitive, market and regulatory factors. Synchronoss does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.

The Synchronoss logo, Synchronoss, ConvergenceNow, InterconnectNow, ConvergenceNow Plus+ and SmartMobility are trademarks of Synchronoss Technologies, Inc. All other trademarks are property of their respective owners.

Source: Synchronoss Technologies, Inc.

Contact:

Investor:
Tim Dolan, 617-956-6727
investor@synchronoss.com
or
Media:
Stacie Hiras, 908-547-1260
Stacie.hiras@synchronoss.com

 

 

 

THIS IS NOT A RECOMMENDATION TO BUY OR SELL ANY SECURITY!

Through The Economic Lens: 2012 Looks More Like 2010

The recent sell-off in the market, with nervous investors made all the more so because of the media's obsession with financial issues in Europe, is renewing talk about bear markets and recessions as people head for cover. In the midst of their misguided fears of a contagion effect, there is also concern about the "fiscal cliff," spending cuts and higher tax rates that, at this point, will take effect on January 1 (funny how that sounds like it would be a good idea for our debt problem).

Looking at recent events through an economic lens makes things much clearer to see and understand. The recent deviation between economic data and market performance -- whereby the economy slowed and even contracted, but the market appreciated -- was highly unusual. The explanation (read: excuse) is most likely the mildness of the contraction compared to the severity of the 2008 economic disaster combined with highly unusual central bank actions. This rare outlier, however, does not make a trend. As the current economic data and sentiment continue to show improvement, we need to see market fluctuations and overreactions to events that do not materially impact our economy as just that: fluctuations and overreactions.

The short-term economy reminds me of Q2 2010, when concern over Europe and a flash crash had investors heading for the sidelines with the events of 2008 fresh in their minds. Unlike 2008, however, the economy in 2010 was growing, not slowing. The market, which ultimately took its cue from the underlying economic trend, also improved over the next few quarters. In fact, by the time we got to Q2 2011, the market was up 18% from Q2 2010.

The opposite occurred in 2011, as the market responded to the Japanese tsunami, debt problems here and abroad and a faltering economic expansion. The economy, based on our analysis, was slowing and even contracting in 2011. With all that turmoil over the last 12 months, there is about a 30% differential between the high and the low. But if you compare where we are at Q2 2012 (for example, as of May 14, 2012), versus Q2 2011, the market is only slightly lower. That kind of volatility made the timing of portfolio shifts over the past 12 months more statistically significant than before. However, that is unlikely to continue.

In other words, the impact of timing will be less relevant to longer term performance. Of far greater importance, especially to our economics-based investing approach, is that the data suggest improvements in the economy are sustainable. Equity prices will most likely be higher this time next year -- not because of arbitrary price levels today, but because the economy's sustainability will likely produce steadily higher values.

Our portfolios have experienced lower volatility from our high to our low, but unfortunately we are not basis points from levels one year ago. However, we are confident that our portfolios are positioned to perform over the next few quarters to be well above current levels and with less volatility.

The euro turmoil and the financial cliff will likely cause the market to be volatile, but when looking at economic factors, we believe that 2012 looks more like 2010 (when the economy was growing) than 2011 (when it was slowing/contracting). As a result, we would also anticipate this year will produce returns in line with 2010, as well.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Zynga’s Q3 Profits Plunge 50%: Blame Facebook?

Today, it�s hard for IPO investors to think of anything but Groupon (NASDAQ:GRPN). But you shouldn’t miss some other interesting news items. For example, Zynga filed another amended S-1. In it, the company disclosed that revenues for the third quarter came to $306.8 million, up 80% over the past year. However, net income was only $12.5 million, which compares to $27.2 million in the same period a year ago. In fact, the online game maker posted a profit of $42.9 million in the fourth quarter of 2010.

True, Zynga has been ramping up marketing expenses and recently built a fancy new headquarters. The employee count is also 2,789 (Silicon Valley engineers don�t come cheap).

Yet, a more compelling reason may account for the drop-off in profitability: Facebook.

Why? To get some insight on this, I talked to Gene Hoffman this morning. He created eMusic in the late 1990s and now operates Vindicia, which develops billing systems for online properties (such as the social games Zynga is famous for).

Hoffman thinks Facebook�s Credit system has become a big drag on the bottom line for Zynga. Typically, a partner must pay Facebook a third of the gross revenues it receives for each transaction. And indeed, Zynga reported in its latest S-1 that it also pays this percentage — even though it operates at such large scale on Facebook. But even at this level, certainly a big chunk of change goes out Zynga’s door.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of �All About Short Selling� and �All About Commodities.� Follow him on Twitter at @ttaulli. As of this writing, he did not own a position in any of the aforementioned stocks.

Consumer bureau chief showdown looms

WASHINGTON (CNNMoney) -- The Consumer Financial Protection Bureau -- a point of pride in the Obama administration's efforts to reform Wall Street -- faces a key test in the Senate on Thursday over whether it will have a director with real power.

No one in Washington expects the Senate to muster the 60 votes needed to break a filibuster against confirming former Ohio Attorney General Richard Cordray to be the first director of the bureau. Senate Republicans have vowed since May to block confirmation of any director unless they get structural changes to the bureau, which was formed as part of the Wall Street reform law passed last year.

Nevertheless, the White House is making a big push this week. In July, the president nominated Cordray, bypassing Elizabeth Warren, who came up with the idea for the bureau and helped set it up.

President Obama made a public case for confirmation in a speech on Tuesday in Osawatomie, Kan., accusing Senate Republicans of refusing "to let him do his job."

Obama: New income inequality rhetoric, old policies

"Every day we go without a consumer watchdog in place is another day when a student or a senior citizen or member of our armed forces could be tricked into a loan they can't afford -- something that happens all the time," Obama said during the speech.

What's at stake?

At stake are vast new powers the consumer bureau can't wield without a confirmed director. Until there's a confirmed director, the consumer bureau can't regulate financial products from non-banks, including student loan providers, debt collectors, payday lenders and check cashers.

Without a chief, it also can't regulate mortgage originators and servicers, which played a big role in the financial crisis for providing subprime mortgages to families who couldn't afford them in the years leading up to the financial crisis.

Those "toxic" mortgages ended up getting chopped into pieces and bought by the big banks that eventually needed government bailouts to prevent a repeat of a Great Depression, according to Federal Reserve chief Ben Bernanke. Bank of America (BAC, Fortune 500) is still in trouble in large part due to the remains of bad mortgages on its balance sheets.

Without a director, the independent watchdog agency can still regulate mortgages and credit cards that banks issue, a big part of those markets right now. But it can't regulate mortgages and credit cards issued by nonbanks.

Another thing the consumer bureau can't do is declare financial products deceptive or abusive and ban them, according to a Treasury Inspector General report.

The bureau also might not be able to force banks to issue the simpler mortgage disclosure form the bureau has been working on that's due out in 2012.

What Republicans want

Republicans say their filibusters has nothing to do with Cordray. They say it's about getting more oversight of the consumer bureau.

They want three big changes: They want to replace the director with a board, make the bureau ask Congress for money each year, and prevent the bureau from making rules that could threaten the health of financial institutions.

Republicans have complained for months that they've heard no answer from the White House about their proposals. But in a Senate Banking committee hearing in October, Treasury Secretary Tim Geithner basically told them no way.

Volcker Rule gets FDIC approval

"This is not about him (Cordray)," said Richard Shelby, the ranking Republican on the Senate Banking panel on Tuesday. "It's about the structure of this, a powerful monster as far as future regulation to overregulate our economy, create more regulations and fewer jobs."

The White House is trying to paint this filibuster as more Republican obstructionism. They've held conference calls and press calls all week, targeting lawmakers in Alaska, Indiana, Iowa, Maine, Nevada, Tennessee and Utah.

In a briefing on Wednesday, White House Press Secretary Jay Carney declined to say whether the president would consider a recess appointment when Congress isn't in session or other possible next steps.

He did say that the White House would not consider changes to the structure of the bureau and suggested the White House campaign to push Republicans may sway minds.

"There's time for (Republicans) to reconsider, and we hope they do," said Carney. "Politics is a wondrous thing and, sometimes, opinions change." 

Red Hat CEO: Downturn Equals Dollars

The jittery economy presents big opportunities to software maker Red Hat(RHT), according to CEO Jim Whitehurst, fueling demand for the company's open source products.

Red Hat sailed past analysts' estimates in its second quarter results, released last night, and hiked its full-year guidance. Whitehurst told TheStreet that a difficult spending environment has added to the appeal of the firm's open source offerings, which it touts as a cheaper alternative to products from the likes of Microsoft(MSFT).

See if (RHT) is in our portfolio

"In a tight economy, people are looking to save money," he told TheStreet. "We have been able to do quite well selling value in an uncertain economy."Whitehurst, the former chief operating officer of Delta Airlines(DAL), also struck a bullish tone on his company's long-term prospects. "No matter what the market is, we will see strong double-digit growth," he explained. "It beats the hell out of the airline business!"Red Hack racked up second-quarter revenue of $281.3 million, a 28% increase on the same period last year, and comfortably above analysts' estimate of $271.8 million. The company's subscription revenue climbed 28% year over year to reach $238.3 million during the second quarter.Specifically, Whitehurst credited the explosion of cloud computing as driving demand for his firm's Enterprise Linux offerings. "Clouds run Linux -- it's a reality," he said, pointing to open source deployments at cloud trailblazers Google(GOOG) and Amazon(AMZN) which have set the tone for other companies. "Our products, I think, are seen as clear long-term winners in the next-generation of computing."Additionally, the CEO said Red Hat's annuity-based subscription model ensures a solid revenue stream, even in an uncertain economic climate. "The nature of the economic model relatively buffers us," he said. Concerns about IT spending are swirling round Silicon Valley although Red Hat rival Oracle(ORCL) deftly side-stepped these fears earlier this when it posted robust first-quarter numbers.Red Hat's shares surged following the company's results on Wednesday, and continued their momentum on Thursday, climbing $1.69, or 4.19%, to reach $41.98.>To follow the writer on Twitter, go to http://twitter.com/jamesjrogers.>To submit a news tip, send an email to: tips@thestreet.com.

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Stocks Post Best Weekly Gain Since 2009

Investors should consider putting Fed Chairman Ben Bernanke on their list for holiday cards this year. He and his fellow central bankers did more than anyone this week to give the market its biggest lift in more than two years.

The Dow rose 7% on the week, to end at 12,019. In fact, it was the second-largest weekly point gain for the index ever. The S&P 500 rose 7.4%, its best showing since March 2009, ending up at 1,244.3. The small-cap Russell 2000, meanwhile, soared 10% on the week.

The indexes made the majority of those� gains on Wednesday after the Fed and five other central banks worked together to increase liquidity in the market by lowering rates on dollar swaps.

Bank stocks, while still beaten down, had a strong week, with Bank of America (BAC) rising 9% and Morgan Stanley (MS) jumping 17%.

Some Thoughts on the Seis de Mayo Mini-Crash

There are a lot of excellent charts and commentary out there, but I thought I would share a couple of thoughts about yesterday’s action and the market’s prospects for today and beyond.

So…in no particular order:

• The possibility of a fat finger order entry error cannot be dismissed, but even if there were one or more unintentional large trades, this does not nullify the concerns about sovereign debt contagion, breaking of technical support, recent excessive bullish sentiment, etc.
• The bottom line is that stocks still have serious problems of a fundamental and technical nature.
• Yesterday’s correction would not have been so steep if stocks had not rallied so sharply, with only brief interruptions, for the past 14 months.
• The VIX spiked over 40 yesterday. While there is no magic number that signals a VIX top, the volatility index is up more than 110% in the last 18 trading days. Apart from September-October 2008, this has never happened in the 17 years since the VIX was launched.
• Whether this morning opens up or down, I would not give much credence to any big moves at the open today. If I trade at all in the first half hour, I expect I will be fading any big moves.
• Looking next week and beyond, I would not be surprised to see stocks enter into a trading range, with the late April highs as a top and yesterday’s lows as a bottom.
• Traders should keep in mind that watching and waiting for more market clarity is an appropriate strategy at times. Patience and discipline almost always trump trying to make something happen.
• In times of increased uncertainty, I try to focus on preserving capital, evaluating the fundamental causes and likely duration of high uncertainty, targeting only high reward-risk opportunities, scaling in to new positions, and adhering to stringent stop loss and position management guidelines.
• Finally, a personal motto is, “In volatility, there is opportunity!”