Tag - Hog

You've probably heard the quote from the great entrepreneur Henry Ford who once commented, "People can have the model-T in any color, so long as it's black".

 

The man's unique ability to combine innovation with simplicity is symbolic of the great entrepreneurial spirit that helped America become the world's leading superpower. Unfortunately, in modern America, the U.S. automobile industry has faltered and once great companies like Ford (NYSE:F) and General Motors have fallen from grace.

 

Ford also once said, "Nothing is particularly hard if you divide it into small jobs." That's the mentality that is needed right now for U.S. auto companies and parts suppliers if they are going to succeed in the 21^st century.

Small-cap stocks fell hard on the opening, pulled down by losses in overseas markets, and ongoing worries about corporate profits as we move through the heart of the earnings season. At 9:52 a.m. ET, the Russell 2000 (NYSE:IWM) down 7.95, or 1.80%, at 434.90, slipping to the lowest point since Dec. 5.

Stock markets in Europe and Asia were in retreat mode overnight, which only added to the selling bias early on in U.S. trading. Across the pond, U.K. data showed the biggest economic contraction since 1980 and the first recession since 1991. The European Stoxx 600 and the Australian equity index slumped to five-year lows, which heightens worries here that major U.S. indices may need a hard retest of those key November lows.

From a charting perspective, there is mild support today for the Russell near 424, but the key downside point is now near 416, which represents a double bottom on daily charts from early December, which was the first critical bounce pullback off the rally from the November lows. If the market starts to stabilize this afternoon, then resistance will be seen approaching 440, then up near 450.

After dreadful economic data on housing starts and unemployment claims Thursday morning, today’s focus reverts back to the rush of big earnings reports. While there have been occasional bright spots like Apple and Google, most of the news has been dreary. Even when a company like General Electric Co. (NYSE:GE) meets the estimate like they did this morning, investors are leery to embrace the news. Shortly after the open, GE was down 3.6%. And more often than not lately, the profit reports are decidedly bearish, such as with Harley Davidson Inc. (NYSE:HOG) or Advanced Micro Devices Inc. (NYSE:AMD) as the motorcycle maker and chipmaker . . .

U.S. stocks are expected to open sharply lower, pulled down by sinking equities in Europe and Asia. In the United Kingdom, economic contraction is the worst since 1980, and the European Stoxx 600 and the Australian stock indices are now at or near 5-year lows. In Asia, chipmakers and electronics firms were taking a hit overnight and here in the United States the latest batch of profit reports was spotty, but overall gloomy. The Dow was expected to open down 130 points, while the Russell 2000 (NYSE:IWM) was seen down about 1.8% near 434.80.

General Electric Co. (NYSE:GE) is often seen as the “national bellwether” for stocks because the company operates in such a variety of businesses. GE’s profit report before the opening today met the forecast and the stock was up in pre-market trading, but it didn’t seem to provide much of a lift to the overall market. Google Inc. (Nasdaq:GOOG) actually beat the estimate and was up a tad ahead of the open, but a majority of the profit stories mirrored the somber news coming out of firms like Harley Davidson Inc. (NYSE:HOG) as the motorcycle maker said it would shutter some operations and layoff 1,100 employees.

Crude oil prices were off about $0.40 a barrel heading toward the open, which could weigh on energy stocks. Foreign currency markets were making sizable moves overnight, with the U.K. pound at long-term lows against the dollar, most FX markets at long-term lows against the yen and the dollar up about 1.6% versus the euro at six-week highs, which could weigh on physical commodity markets this morning.

Looking at the chart structure, this morning’s opening appears set to test a . . .

In 1852, Horace Smith, who honed his skills in the firearms trade while working at the National Armory, and Daniel B. Wesson, a former apprentice to his brother, Edwin Wesson, the leading maker of target pistols and rifles during the 1840s, formed a partnership to market a lever action repeating pistol (to replace the cumbersome muzzle-loaded rifle). After struggling as a fledgling business, the company's products eventually gained prominence. The rest is, as they say, "history."
 
Springfield, Mass.-based Smith & Wesson Holding Corporation (Nasdaq: SWHC), parent company of Smith & Wesson Corp., built its reputation on producing high-quality, high-performance precision handguns. The legendary arms maker has equipped soldiers from the Civil War to Vietnam and the vast majority of American police forces. (Smith & Wesson's .357 Magnum was developed specifically for law enforcement agencies, and the world-famous .38 Special has, at one time or another, been the sidearm of choice for hundreds of police forces around the world.)
 
Known for merging age-old craftsmanship and state-of-the-art technology, Smith & Wesson produces some of the world's most coveted weapons. (It helps that their .44 Magnum was carried by Clint Eastwood's Dirty Harry character.) Smith & Wesson dominated the handgun business in the consumer, law-enforcement and military markets for almost a century.

But by the early 1980s, Smith & Wesson's market share with U.S. police departments dropped to 10% from 98% two decades earlier, as these law enforcement agencies transitioned from issuing revolvers to semi-automatic weapons. This gave the advantage to such high-profile competitors as Italy's Beretta, Austria's Glock and American rival Sig Sauer. By the end of fiscal 2002, Smith & Wesson had a net operating loss of over $5 million.