Tag - Mcd

Remember that a long-term strategy for success means buying stocks when they are cheap and selling when they are expensive, or when you have gains. I urge you to stick by this strategy - it works.

Merger and acquisition activity is lifting the bid for many consumer stocks. In the past few weeks, Fortune Brands (NYSE: FO) said it would focus on its spirits business, including Jim Beam, and split off its consumer goods and sports products, making them ripe for acquisition. And an investor group headed by Kohlberg Kravis Roberts is looking to unlock the value in Del Monte Brands (NYSE: DLM), which it's acquiring for $5.3 billion.

After starting the day pointing to a lower open, the DJIA closed up just slightly by 0.02% at 8,764.49 after bank shares helped to offset bad news from McDonald's (NYSE:MCD) and Apple (Nasdaq:AAPL).

The S&P 500 close down just 1/10th of one per cent at 939.14 and the Nasdaq close down just 0.38% to 1,842.40. The Russell 2000, the bellwether index for the 2,000 largest small cap stocks shed 5.57 points for a loss of 1.05% to close at 524.79.

Small cap leaders for today included Park Bancorp (Nasdaq:PFED) up 46.27%; ArtiCure (Nasdaq:ARTC) up 35.48%; and MFRI Inc. (Nasdaq:MFRI) up 32.24%.

Another more well-known small cap gainer today was SLM Corp. (NYSE:SLM), known to those with student loans as Sallie Mae, with a gain of 19.97% after TV personality Jim Cramer called SLM a "speculative stock of the year". We'll see if SLM suffers the "Cramer effect" endured by so many other stocks over the years.

Small cap decliners were lead by two technology firms: Edgewater Technology (Nasdaq:EDGW) down 14.48% and VeriSign (Nasdaq:VRSN) down 14.19%.

*****I don't like to accuse people of lying. Those are fighting words. But after last night's 60 Minutes interview with Fed Chief Ben Bernanke I am compelled to say that I don't think he's telling the truth about America's banks.

The interviewer asked point blank if Bernanke believed our banks are solvent. Bernanke responded with an unblinking, unflinching "yes."

Of course he used the recently performed "stress tests" as his measuring stick. And that's where the problems begin…

*****The stress tests were supposed to assess each bank's viability if economic conditions worsen from where they are now. So you would expect for inputs into the formulas to reflect an even more dire economy - unemployment at 12% instead of 9%, mortgage default rates of 7% instead of 4%, that kind of thing.

Unfortunately, the stress tests didn't do that. The unemployment rate used in the tests was reported to be 8%. We passed that a month ago. The stress tests used a loss rate for subprime mortgages of 21% to 28%. But 40% of subprime mortgages are currently over 30 days late. And they could hit 55% according to one industry expert, a far cry from 21%...

So when the Fed required banks to raise an additional $75 billion to strengthen their capital base, it wasn't so the banks could stay afloat if things get worse, it was so they could survive right now.

Seems to me, the economy could easily get worse. Then what? The Fed will require the banks to raise more money?

*****In early March it was Citigroup (NYSE:C) that really got this rally going. You may recall Citi CEO Vikram Pandit announcing gleefully that Citi was going to turn a profit for the first quarter. There's been much rejoicing ever since.

At the time, I speculated that Citi was, um, full of it. I surmised their profits were based on mortgage modifications, credit card debt modifications and such. In other words, I believed at the time that Citi wasn't feeling the positive effects of new lending business, but rather, was creating revenue by re-casting existing loans. In other words, I thought it was basically an accounting trick.

(Of course, just because I was skeptical didn't stop me from squeezing substantial gains from stocks as they rallied. All of my advisory services, SmallCapInvestor PRO, Top Stock Insights, TradeMaster Daily Stock Alerts and Recovery Portfolio thoroughly beat the market so far this year.)

*****Good ol' Bloomberg. They ran an article on Friday that not only confirmed my suspicions about banks accounting practices, but now, I'm considering a bank or two, which would have been inconceivable just a week ago.

The change came on April 2nd, just three weeks into the rally. The Financial Accounting Standards Board changed the rules. Banks now have greater freedom to value assets how they choose. And what's more, banks can recognize losses on some assets without counting the write-downs against earnings. And you'll recall it was the write-downs that were a big issue for banks starting at the end of last summer.

Banks are also helped when the value of its own debt falls. So when the bonds they've sold go in the tank, the banks can actually record the difference between the issues price and the current price as income, because they could theoretically buy the debt back at a lower price. Of course, no banks are doing this, but it's estimated that Citi generated $2.7 billion in pre-tax revenue from its own impaired debt. (Think about it, your assets go down and you book it as a profit? Try that with your home and a friendly I.R.S. man will pay you a visit.)

One of my colleagues, Martin Weiss, estimates that without these and other accounting rule changes, Citi would actually have lost $2.5 billion for the 1st Quarter.

And it's not just Citi. Bloomberg also reports that Wells Fargo (NYSE:WFC) boosted its capital base by $2.8 billion by simply re-valuing $40 billion of bonds.

Joseph Stiglitz, economist at Columbia University, believes the government is trying to buy the banks time to earn their way out of this mess. Clearly, he doesn't believe Bernanke is telling the truth. But it's worse.

If banks' ability to hide losses is enhanced, and nothing is really done about the losses on the books that remain, banks will remain unwilling to do much lending, which will keep them from increasing earnings and also impair the economic recovery.

*****Jason Cimpl, technical analyst at TradeMaster Daily Stock Alerts, took 5% gains on the iShares China ETF (NYSE:FXI). This is one of the investments he covered in the video I gave you last week. You'll recall I promised to tell you when he sold…

You can find out more about TradeMaster Daily Stock Alerts HERE.

That's it for today.

P.S. If you're interested in discovering profits from more China opportunities, be sure to request your own copy of my new report, "Going for Growth: 3 Top Chinese Stocks to Buy NOW". It's available HERE.

Small caps are modestly rising this afternoon after large-cap benchmarks McDonald's (NYSE:MCD) and Procter & Gamble (NYSE:PG) lifted stocks from their morning descent. 

At 1:50 pm ET, the Russell 2000 (NYSE:IWM) was up 0.73%, the Dow was up 0.42% and the S&P 500 is 0.68% higher. 

Small caps on the move today include NxStage Medical Inc. (Nasdaq:NXTM), 30% higher after announcing a strategic business alliance with Asahi Kasei Kuraray Medical. Also on the rise are Pomeroy IT Solutions (Nasdaq:PMRY), up 28% after news broke the tech company would be acquired for $5.02 a share, and Internet Gold Golden Lines (Nasdaq:IGLD) is also 27% higher following a reported rise in Q1 profits. 

*****I was starting to think that Treasury Secretary Tim Geithner was secretly hoping that everyone had forgotten about his plan to remove toxic assets from bank balance sheets. But now he's out saying the Public-Private Investment Program (PPIP) should start in about six weeks. (Go ahead and mark your calendar now, in pencil, of course.) 

As you know, I'm not a big fan of Secretary Geithner. That's because, to me, he represents all that's wrong with how the government has dealt with the Wall Street banks, the likes of which nearly brought down our economy.  
He knew AIG (NYSE:AIG) was about to use TARP funds to pay bonuses and concluded there was nothing he could do. He knew AIG was about to pay Goldman Sachs (NYSE:GS) $12 billion out of TARP funds and again did nothing. He has consistently coddled the very companies that are in desperate need of tough love.  
And frankly, that's got me worried that Wall Street will go back to "business as usual" as soon as possible. Secretary Geithner has done nothing to stop it, and may even be encouraging a return to over-leverage by going to such great lengths to help these companies clean up their books.   

*****The big question surrounding the PPIP is how Secretary Geithner expects to get banks to sell their toxic assets. Banks believe these assets will regain value over time. And between government bailouts and stock sales (see Bank of America's (NYSE:BAC) $13.47 billion stock sale), banks are certainly going to operate under the assumption that they are well-enough capitalized to play the waiting game.  
It seems to me the "stress tests" were an ideal opportunity to force the banks to sell toxic assets. But Secretary Geithner chose to lob softballs, and now he has no leverage.  

Maybe he's got a plan. I sure hope so… 

*****As an investor and ruthless capitalist, I always look for profit opportunities in any situation. I might not like the outrageous stimulus spending coming from the government, but I'll darn well recommend the stocks that will benefit from government handouts. 

The PPIP is presenting a very nice profit opportunity for the companies that participate. That's because the Fed and Treasury will help finance-with your tax money, of course-any toxic asset sales. Companies that participate have an opportunity to make large profits with very little up front risk. It's a sweetheart deal, and I expect these stocks to move when investors realize what's going. I've prepared a Special Report on the subject and you can get it HERE. 

Small-cap stocks pushed higher after a flat open, underpinned by bullish enthusiasm stoked by news that Pfizer Inc. (NYSE:PFE) would pay $68 billion for Wyeth (NYSE:PFE) in one of the biggest pharma M&A deals in years. In addition, economic data on home sales and leading indicators topped expectations, fueling the rise in equities. At 10:06 a.m. ET, the Russell 2000 (NYSE:IWM) was up 11.42, or 2.57%, at 455.78.

Existing home sales came in at an annual rate of 4.74 million units, well above the forecast of 4.40 million. Sales were up 6.5%, compared with a slide of 9.4% in November. Lower mortgage rates spurred refinance and purchase activity, and it will be interesting to see if housing data continues to surprise, or if today’s news was a “flier.” Meanwhile, leading indicators came in at plus 0.3%, also much better than the projection for a slide of 0.3%. This marked the first rise in leading indicators since June 2008.

The news was Dow-30-heavy this morning, with five of 30 Dow stocks making big news. In addition to the Pfizer takeover, arguably the biggest wave came from Caterpillar Inc. (NYSE:CAT) as the maker of heavy equipment said that 2009 profits would shrink relative to 2008 and that the firm would slash some 20,000 jobs. Meanwhile, McDonald’s Corp. (NYSE:MCD) topped the profit forecast. Interestingly, even though the market was eager to embrace the Pfizer news, the potential breakup of the Dow Chemical/Rohm & Haas merger didn’t seem to phase investors.

Even though much of the early news today seemed soft (outside of the econ data), the market was holding together reasonably well. There was some thought that stocks were a little oversold following last week’s slide to the lowest weekly close since the November bear market lows were forged.

Looking at the chart picture, the market remains in a sideways consolidation range and bounce several times last week off dips toward 431 to 435. For today, important support will be at 435, then at 431; a breach of the latter could open . . .

Small-cap stocks jumped higher on the opening, lifted by news of a large fiscal stimulus plan out of China, and by a surge in commodity-related shares. At 9:54 a.m. ET, the Russell 2000 (NYSE:IWM) was up 5.81, or 1.15%, at 511.60.

China, which houses the world’s fourth-largest economy and which single-handedly accounted for 27% of global growth last year took an aggressive stance to stir up business activity, announcing plans for a fiscal stimulus package of $586 billion, primarily for infrastructure purposes. Traders saw the news as a good sign to help counter global slowing, and to perk up demand for commodities.

Crude oil prices were up nearly $4 a barrel, gold jumped 4% and copper prices surged about 8% overnight. BHP Billiton, the world’s largest mining company, soared some 13% ahead of the opening. In fact, metals and mining stocks were the top early performers today. Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) was up 11%, while Titanium Metals Corp. (NYSE:TIE) was up 4.2% and Newmont Mining Corp. (NYSE:NEW) was up 6.3%

In a research report this morning, analysts at Goldman Sachs said the China stimulus plan was “a major measure that signals the government's commitment to address the gathering signs of economic weakness in China. While the total size of the stimulus is still unclear (the headline total appears to rely on a smaller federal government commitment and may include some spending that would have occurred anyway), there is no doubt that this is a large and positive step … as we have argued before, more aggressive stimulus outside the US is a necessary and welcome development in dealing with the current broad-based global slowdown. Alongside European monetary easing last week (and the United Kingdom's particularly large move), we seem to be heading more firmly in the right direction on this front.”

Financial shares got a lift from a G20 statement over the weekend saying that “coordinated” action was needed to fight the global financial crisis, which spurred hope for further central bank rate cuts around the world. Citigroup Inc. (NYSE:C) was up 3.3%, while JP Morgan Chase and Co. (NYSE:JPM) was up 1%.

Some traders were still debating the impact of last Friday’s employment . . .

Small-cap stocks cascaded lower Wednesday as a spree of soft earnings reports and a dreary outlook as the economy veers into recession took a toll on the market. The Russell 2000 (NYSE:IWM) closed down 28.85, or 5.43% at 501.97. This was the second-lowest close in five years, and both of those closes have taken place within the last three weeks. This also marked the fifth-largest one-day decline of the year. The Russell is now down 33.4% for 2008, while the Dow is off 36.36% and the S&P 500 is down 38%. Although the Russell and Dow averted sinking to fresh closing lows for the bear market collapse, the S&P 500 and Nasdaq 100 did set new closing lows.

Although there were isolated upside earnings surprises as the market digests a flood of key reports this week, the overriding investor sentiment right now is that the results are relatively soft and were already watered down to begin with (from an expectation standpoint). What’s more, concerns that consumer spending and a global growth stall will pinch corporate profits even more in the months to come clearly had a negative impact on stocks. Even the companies with solid profits were wary of the operating environment heading into 2009. Even McDonald’s Corp. (NYSE:MCD) — which by most accounts posted impressive results — was unable to post a positive close for the day.

Another theme that remained at play was the wipeout in commodity valuation and the impact that had on stocks with commodity themes. Commodity firms dominated the list of worst performing sectors today, paced by metal and mining shares, coal stocks, oil and gas drillers, aluminum and gold. Other sectors taking a body blow today included motorcycle manufacturers, restaurants, tobacco companies and internet retail stocks. On a depressing side note, there wasn’t even one broad S&P sector group in the plus column late this afternoon.

The slide in commodities was reflected by a huge decline in the Commodity Research Bureau Index, which tumbled 4.5% to the lowest point since August . . .

Small-cap stocks fell hard on the opening, pressured by a run of weak guidance projections on recession fears from the flood of quarterly earnings reports and by a steep slide in equity markets around the world overnight. At 9:56 a.m. ET, the Russell 2000 (NYSE:IWM) was down 10.54, or 1.99%, at 520.27.

Even before we got this jolting steep opening slide this morning, it was a wild overnight ride for stock market futures. S&P 500 and Nasdaq futures saw ranges beyond 4% as the market rallied right after Tuesday’s close on solid earnings from Apple Inc. (Nasdaq:AAPL) and Yahoo! Inc. (Nasdaq:YHOO). The strong results from those firms set in motion a big run in the tech sector and even though those gains were relinquished by today’s opening, tech stocks were still outperforming the broad market, which is a switch from recent trends. AAPL was up about 6% and YHOO some 3% on the open. The Nasdaq 100 was down about 1% shortly after the open.

Another positive story on the earnings front came from McDonald’s Corporation (NYSE:MCD), which topped the forecast and rose at the opening, but is now down 1.49%. From a pessimist viewpoint, the bears will say that “Mickey Dees” is the only restaurant people will be able to afford in a prolonged recession.

Outside of the earnings flood, SanDisk Corp. (Nasdaq:SNDK) tumbled some 25% in after-hours trading after Samsung Electronics Co. Ltd. withdrew a $5.9 billion bid for the flash memory card maker. SNDK was down 29% early on.

Earlier this morning, the MBA Mortgage Application Index fell sharply, sinking 16.6% to the lowest point in nearly eight years, which underscores ongoing troubles in the housing market. Mortgage rates upticked into that survey period, which likely hurt the application activity, but with home prices not doing well, secondary mortgage activity remains soft and we already saw single-family home sales collapse to 26-year lows on last week’s economic data. In addition, there are reports that homes . . .

Small-cap stocks spent most of the day in the green, but closed well off the intraday highs as a slide in crude oil prices was countered by mixed returns on the earnings front. The Russell 2000 (NYSE:IWM) edged up 2.36, or 0.33%, to 719.19, the highest close in four weeks.

The market also may have been ripe for a little bit of a consolidation “breather” session today as the Russell has rallied 12% off the July 15 lows in just seven sessions. Short-term intraday momentum readings were overdone coming into today’s action, which could easily have sparked some long profit-taking from traders who caught the recent bounce. Also, it’s a little easier to find the silver lining in the news when the market is oversold.

In recent days, the dominant upside theme has been the financial story. Big-name banks have had a string of upside earnings surprises, and that momentum easily spilled over into the small- and mid-cap financial names as well. While GSEs were a strong performer today, the overall financial landscape was a little more cautious, with the Financial Select Sector SPDR hovering near breakeven levels late in the session.

Large-cap stocks that dominated the picture today included McDonald’s (NYSE:MCD), Pfizer (NYSE:PFE), Boeing (NYSE:BA), AT&T (NYSE:T) and Washington Mutual (NYSE:WM). Those stocks reflected the mixed signals investors had to navigate when trying to read through earnings results to get a feel for consumer spending, economic turmoil and macro trends. Washington Mutual was clobbered 19%, which took some of the wind out of the financial sails, but was countered by optimism on the GSE horizon, as hope for a quick passage of the Treasury rescue plan lifted both Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE). As for the aforementioned names, MCD was down about 0.9% after reporting earnings, PFE was up over 3%, BA was down nearly 4% and T . . .

After falling off slightly after the opening, small-cap stocks staged a swift rally but then deflated somewhat as oil continued to pull back for a second straight trading session amid mixed corporate earnings reports and as President Bush and the House came to an agreement on a housing bail-out plan.

At 12:30 p.m. ET, the Russell 2000 (NYSE:IWM) was up 0.68, or 0.09%, at 717.50 amidst a broad market rally. The Dow was up 4.39, or 0.04%, to 11,606.89, while the tech heavy Nasdaq gained 9.1, or 0.39%, to 2,313.06 as investors welcomed the deflation in oil prices, which may ease pressure on the consumer and businesses.

Crude oil prices slipped roughly $0.60 dollars a barrel to $127 midday, marking the second consecutive day the commodity has lost its mojo. Today, an increase in U.S. gasoline stockpiles added to the downward pressure on crude. The energy market has been sinking this week as Hurricane Dolly veers away from key production areas in the Gulf of Mexico and on worries about demand for high-priced crude oil amid sluggish economic conditions in the United States and new usage curbs in China.

As crude oil prices have slipped in recent sessions, the U.S. dollar is turning green again, rising against the euro and the yen in mid-day action. The assent in oil, has contributed to the dollars demise this past year, so naturally that correlation has reversed itself today. A stronger dollar often has a bearish impact on global commodity values since so many products are priced in dollars. Also on the commodities front, grains markets are expected to trade sharply lower today amid improving Midwest weather and the firm dollar tone.

President Bush dropped his veto against the House’s housing package that bails out struggling homeowners by offering $3.9 billion for areas containing the most foreclosures. The House is expected to vote on the bill as early as today. Additionally, lawmakers came to a mutual agreement that permits Treasury Secretary . . .

Small-cap stocks hovered near steady levels in early trade, pulled down modestly at times by sporadic profit-taking from short-term traders who caught the rally Tuesday and by a mixed tone on the earnings front. However, selling was limited by an extension in the crude oil pullback and by gains in overseas stock markets. At 9:50 a.m. ET, the Russell 2000 (NYSE:IWM) was up 1.24, or 0.17%, at 718.06.

Crude oil prices were down about $1 dollar a barrel shortly after the open, supportive to stocks, but the bounce above overnight lows took some of the upside steam away from equities. The energy market has been sinking this week as Hurricane Dolly veers away from key production areas in the Gulf of Mexico and on worries about demand for high-priced crude oil amid sluggish economic conditions in the United States and new usage curbs in China.

The decline in energy prices overnight was a boon to equity markets around the world, with Hong Kong shares up 2.7%, Taiwan up 3.5%, Japan up 1%, Australia up 2%, Singapore up 3%, South Korea up 1.9% and India up 5.9%.

In conjunction with the pullback in crude oil prices, the U.S. dollar has caught a bid the last couple of days. The greenback was up about 0.3% against the euro this morning and about 0.4% versus the yen. A stronger dollar often has a bearish impact on global commodity values since so many products are priced in dollars. Also on the commodities front, grains markets are expected to trade sharply lower today amid improving Midwest weather and the firm dollar tone.

The early glimpse of “big-name” corporate earnings was a mixed bag this morning, with fast-food giant McDonald’s Corp. (NYSE:MCD) topping the forecast and rising 1% overnight, but slipping into the red shortly after the open. Also, Pfizer Inc. (NYSE:PFE), the maker of Viagra, reported solid results and rose 2.8%. Conversely, Washington Mutual (NYSE:WM) reported sloppy earnings and was down 1.2%, while Costco (Nasdaq:COST) warned they would miss the Street’s forecast . . .

Small-cap stocks are expected to open higher, lifted by an extension in the crude oil pullback, solid action in the U.S. dollar and a decent tone on the earnings front. The Russell 2000 (NYSE:IWM) was up about 0.3% in after-hours trading, which suggests an open near 719.

Crude oil prices continued to slide after Tuesday’s big decline, and were down about $2 dollars a barrel heading toward the U.S. stock market open, with benchmark crude prices around $126.50. The decline in energy levels was tied to ideas that Hurricane Dolly would not threaten a large portion of production in the Gulf of Mexico.

The downdraft in energy prices this week has been accompanied by a resurgent U.S. dollar, which was up about 0.2% against the euro and 0.4% versus the yen just in front of the stock market open.

On the earnings front, McDonald’s Corp. (NYSE:MCD) topped the forecast, was up about 2% in after-hours trading and should provide a lift to large-cap index products. Pfizer Inc. (NYSE:PFE) was up about 3% after solid results, but Washington Mutual (NYSE:WM) was off about 3% before the opening bell after sloppy quarterly results. Also, wholesaler Costco Wholesale Corp. (Nasdaq:COST) was down . . .

Americans love their coffee — and they love convenience. Those two demands could help Green Mountain Coffee Roasters (Nasdaq:GMCR) turn some well-placed singles into a home run.

Admittedly, investors looking at the stocks of caffeinated beverage companies have had the jitters after Starbucks (Nasdaq:SBUX) suffered bitter aftertaste from an oversaturation of the U.S. market. The company is closing 600 outlets.

Green Mountain Coffee isn’t facing the same troubles. Far from it, the Waterbury, Vt.-based company has continued to report hefty double-digit profit growth, and its fiscal second-quarter results might have jolted investors seeking a safe haven in a squishy stock market to act.

In part it’s because of a line of single-serve coffeemakers that delivers to java junkies what they might judge is a near-perfect cup of coffee.

In 2006, Green Mountain Coffee Roasters celebrated its 25th anniversary by paying $104.3 million for the 65% of Keurig that it didn’t already own. Ten years ago, Green Mountain was an early investor in Keurig (from the Dutch word for “excellence”), and an eight-year courtship turned into a marriage.

Just as the drip coffeemaker replaced the percolator thanks to Joe DiMaggio pitching Mr. Coffee, some industry observers think the single-cup sector is the next big thing. Keurig is the leader in its field, with more than a third of the market share. Slipping a little plastic pod into the patented Keurig brewer delivers a fresh cup of coffee, . . .

Small-cap stocks were unable to sustain a mild opening upside brush as support from a dip in crude oil prices was countered by concerns over the credit crunch impact on financial companies. At 10:02 a.m. ET, the Russell 2000 (NYSE:IWM) was down 0.31, or 0.04%, at 740.05.

Crude oil prices were off some $3 dollar a barrel into the U.S. stock market open, slipping below $136 dollars a barrel, a welcome sign following Friday’s dramatic surge in energy prices and national pump prices breaking the $4 barrier over the weekend.

A mild uptick in equity index prices took place after April pending home sales were reported up 6.3%, well above the forecast for a dip of 0.3%.

A big acquisition deal among large-cap insurers also boosted investor psychology. Willis Group Holdings (NYSE:WSH), the world’s third-largest insurance brokerage, announced a deal to buy rival Hilb, Rogal and Hobbs Co. (NYSE:HRH) for $1.7 billion, news that sent HRH shares soaring some 44% on the opening.

The U.S. dollar was firm versus the yen into the stock market opening, gaining some 1.3% and up about 0.5% against the euro. The greenback took a big hit late last week, as European central bankers talked up rate hikes after Fed Chairman Ben Bernanke spoke about a desire to strengthen the dollar, which told foreign exchange traders that the world’s policy leaders were not in step with each other.

Stock markets around the world took a hit overnight, catching up with the big slide in U.S. equities from Friday. Japan shares were off 2.1%, Taiwan down 1.8%, Singapore down 1.9% and Bombay slumped 3.2%. Markets in Hong Kong, China and Australia were closed for holidays. However, European stocks were tame given the global rout in play.

The fact that European stocks were able to hold together relatively well overnight supported U.S. stocks this morning, as did the oversold condition from Friday’s big slide, according to Scott Fullman, director of derivatives with WJB Capital Group. “The market has been difficult to call because of volatility and the close ties to crude oil prices,” Fullman said in a phone interview with SmallCapInvestor.com. He suggested looking at trades to hedge against a potential downturn in stocks amid a . . .

The Russell 2000 (NYSE: IWM) led the pack with the major U.S. indices posting solid gains as investors disregarded mixed earnings news and a decline in housing. The small-cap index added 13.79 points, or 2%, to 702.39. The Dow Jones Industrial Average (INDU) climbed 176.72 points, or 1.45%, to 12,383.89.

On a year-to-date basis, the Russell 2000 has let go 8.31%, while the Dow has let go 6.64% and the S&P 500 has shed 7.79%.

Small-cap stocks began the week with a strong showing despite beginning the session in negative territory following mixed earnings news from major corporate players.

McDonald’s Corp. (NYSE: MCD) reported that sales at restaurants open at least 13 months were unchanged in December, disappointing analysts expecting a rise.

“While severe winter weather throughout the month and softer consumer spending resulted in December U.S. comparable sales being flat, we remain confident in our U.S. business,” said CEO Jim Skinner in a statement.

The result brought out the bears, as consumer spending comprises about 70% of gross domestic product and a decline will surely be bad news for the economy. Previously, retailers had also reported weak December sales, raising the fear that American consumers are pulling back.

However, the fast food chain operator also announced that its net income for the three months ended Dec. 31 increased to $1.27 billion, or $1.06 per share, compared with $1.24 billion, or $1 per share, a year earlier.

The Russell 2000 (NYSE: IWM) is posting solid gains after a bearish start. At 12:41 p.m. ET, the small-cap index had advanced 4.42 points, or 0.64%, to 693.02. The Dow Jones Industrial Average (INDU) had climbed 38.61 points, or 0.32%, to 12,245.78.

Stocks small and large have recovered from a brief dip at the start of the session and are now comfortably in the green.

Corporate earnings took center stage this morning following news before the opening from fast food chain operator McDonald’s Corp. (NYSE: MCD) that sales at restaurants open at least 13 months were unchanged in December, while analysts were expecting a rise.

“While severe winter weather throughout the month and softer consumer spending resulted in December U.S. comparable sales being flat, we remain confident in our U.S. business,” said CEO Jim Skinner in a statement.

The Oak Brook, Ill.-based company also reported that its net income for the three months ended Dec. 31 increased to $1.27 billion, or $1.06 per share, compared with $1.24 billion, or $1 per share, a year earlier.

But the December sales number nevertheless spooked investors already on edge about the possibility of a U.S. economic recession. With consumer spending comprising about 70% of gross domestic product, a slowdown spells trouble.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices are rising despite news of mixed earnings and a decline in home sales.
 
At 10:31 a.m. ET, the small-cap index had added 3.31 points, or 0.48%, to 691.91. The Dow Jones Industrial Average (INDU) is up 56.66 points, or 0.46%, to 12,263.82.

Small-cap stocks fell out of the gate but recovered and moved into positive territory at about 10:35 a.m. ET even though economic concerns again came to the forefront following news of disappointing corporate news from major players and more housing woes.

Fast food chain operator McDonald’s Corp. (NYSE: MCD) reported before the start of trading that sales at restaurants open at least 13 months were unchanged in December, while analysts were expecting a rise.

However, the Oak Brook, Ill.-based company also reported that its net income for the three months ended Dec. 31 increased to $1.27 billion, or $1.06 per share, compared with $1.24 billion, or $1 per share, a year earlier.

Similarly, Towson, Md.-based power tool maker The Black & Decker Corp. (NYSE: BDK) announced that fourth-quarter profit increased due to a one-time tax gain, but forecasted that its first-quarter profit will come in below analysts’ projections.

“Looking ahead, we recognize that the U.S. economy is slowing, and we do not expect a housing recovery in 2008,” said chairman and CEO Nolan Archibald in a statement.

The Russell 2000 (NYSE: IWM) futures are pointing lower and the small-cap index is poised for a decline.

Small-cap stocks are headed for a bearish opening at the start of a week that will see a number of important economic releases, as well as the U.S. Federal Reserve’s decision on interest rates, which will be announced at the conclusion of a two-day meeting on Wednesday.

The only thing on the docket is a report on new homes sales for December. The U.S. Census Bureau will release the numbers at 10 a.m. ET, with economists expecting to see a decline.

Concerns about the U.S. economy are dominant this morning, with fast food chain operator McDonald’s Corp. (NYSE: MCD) reporting that sales at restaurants open at least 13 months were unchanged in December, while analysts were expecting a rise.

Similarly, Towson, Md.-based power tool maker The Black & Decker Corp. (NYSE: BDK) forecasted that its first-quarter profit will disappoint analysts.

Pro beach volleyball has become big business and one little-known micro cap represents a pure-play on this growing trend in sports entertainment.

Los Angeles, Calif.-based AVP, Inc. (OTC: AVPI) is the producer and marketer of the AVP Pro Beach Volleyball Tour, the largest and most well-regarded national touring series in the sport. AVP has exclusive contracts with 200 of the top American male and female volleyball players, including Olympic medalists. The size of the company’s tour has more than doubled since 2001 with the popularity of the sport having been enhanced in recent years by improved TV coverage on NBC and Fox. AVP staged 18 outdoor events across the U.S. last summer and, in a move to capitalize on the sport’s rising popularity, will kickoff a new 19 event winter tour this January. 

Reorganized in 2001 under a new management team led by sports agent and CEO Leonard Armato, AVP’s revenue rose to $21.5 million in 2006 from less than $5 million in 2002. The explosive top-line growth and near breakeven results last year prompted a buyout offer in April from Shamrock Capital Growth Fund, a unit of Shamrock Holdings, a private equity investor with over $2 billion in assets under management. Shamrock, the investment arm of the Roy E. Disney family, has a long history of successful media and entertainment related investments.

The April buyout offer at $1.23 a share represented an 18% discount to the $1.50 a share that AVP was trading at directly ahead of the offer. The low-ball price was met soon after with strong resistance by several major AVP shareholders. Under the terms of the Shamrock deal, AVP CEO Armato would have retained his management position and “rolled-over” his 30% ownership stake in AVP into the new Shamrock-controlled company. AVP officially announced in early September that it and Shamrock had mutually decided to terminate the proposed deal.

Since that time, shares in lightly-traded AVP have continued to drift lower. At a recent price of $1.02 a share, the stock is now down over 30% since April. While the pulled buyout offer has certainly weighed on the stock over the short term, looking out over the longer term, this pullback could represent an attractive entry point for aggressive investors. After all, Shamrock wouldn’t have made its offer unless it saw good long-term value in the name. Plus, AVP CEO Armato likely wouldn’t hold onto his hefty stake in AVP unless he saw good things ahead.

The Russell 2000 (NYSE: IWM) and the Dow moved up today following good news from major players and a moderately upbeat jobs report. The small-cap index was the least impressive performer of the major U.S. indices, adding 2.45 points, or 0.31%, to 780.35. The Dow Jones Industrial Average (INDU) closed up 133.23 points, or 1.00%, to 13,424.88.

Stocks opened with modest gains following news that General Motors Corp. (NYSE: GM) received an analyst upgrade. Citi Investment Research, the research arm of financial services giant Citigroup Inc. (NYSE: C), recommended as a “buy” shares of the Detroit-based automaker.

Citi justified its decision by saying that the stock price could potentially double should United Auto Workers agree to support a union-managed health-care fund. Today shares jumped 10%, to close at $33.14.

Also contributing to the bullish sentiment before the start of trading was McDonald’s Corp. (NYSE: MCD), based in Oak Brook, Ill. The world’s largest fast-food restaurant chain reported after the close on Wednesday that it is raising its annual dividend by $0.50 and plans on returning between $15 billion and $17 billion in cash to shareholders between 2007 and 2009.

The Russell 2000 (NYSE: IWM) and the Dow made solid advances today on positive economic news and more speculation about future U.S. Federal Reserve policy moves. The small-cap index ended a two-day losing streak, rising 12.46 points, or 1.62%, to 782.27. The Dow Jones Industrial Average (INDU) added 180.54 points, or 1.38%, to 13,308.39.

Trading began on a bullish note following news that the U.S. trade deficit decreased 0.3% in July $59.25 billion from an upwardly revised $59.43 billion in June, according to the U.S. Commerce Department. The result was in line with the projections for a $59.20 billion deficit.

Strong global economic growth and a weak U.S. dollar led exports to rise 2.7% to $137.7 billion, while imports added 1.8% to $196.9 billion. On a year-to-date basis, exports have increased 11.4% to $916 billion, while imports have risen 4.6% to $1,330 billion.

“With our trade deficit for the year shrinking by 8 percent, today’s numbers clearly show the positive impact of exports and trade on the American economy,” said Commerce Secretary Carlos Gutierrez in a statement.

If you've ever filled up your gas tank, ordered a meal at a fast-food drive-through or even bought a vehicle from an automotive dealership, chances are you have unwittingly contributed to the success of a little-known small cap.
 
The reason: LSI Industries Inc. (Nasdaq: LYTS), based in Cincinnati, Ohio, supplies indoor and outdoor lighting fixtures, signage, menu boards, LED displays, digital billboards and sports screens to the petroleum/convenience store, multi-site retail (including automobile dealerships, restaurants and national chain stores) and the commercial and industrial lighting markets.

LSI's client list reads like a veritable Who's Who in big business: Ford Motor Company (NYSE: F), General Motors Corporation (NYSE: GM), DaimlerChrysler AG (NYSE: DAI), Exxon Mobil Corporation (NYSE: XOM), BP plc (NYSE: BP), Chevron Corp. (NYSE: CVX), ConocoPhillips (NYSE: COP), McDonalds Corp. (NYSE: MCD), Burger King Corporation (NYSE: BKC), Wal-Mart Stores, Inc. (NYSE: WMT), Best Buy Co. Inc. (NYSE: BBY), CVS Pharmacies, Inc. (NYSE: CVS), Target Stores (NYSE: TGT)...the list goes on.

LSI's creations do the seldom-thought-of, but highly important job of providing essential illumination for businesses and strategic visibility for their products and services. Some of the company's more popular specialty designs are custom backlit menu boards, indoor and outdoor signs and graphics, decorative light fixtures, solid-state LED displays, and most recently, digital billboards.
 
Since having its stock downgraded to "sell" from "hold" by Matric USA analyst Daniel Scalzi on June 22 (after which the stock tumbled from more than $18 a share to $16.40), the visual image-solutions company has been lighting up far more than the usual. In late June, following news that the rollout of re-imaging programs by several large clients would boost the company's fourth-quarter and fiscal year results beyond expectations, LSI began grabbing attention, in a good way.

The Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) are still firmly in negative territory. At 2:29 p.m. ET the Russell 2000 was down 16.49 points, or 1.97%, to 819.13, on track for a third consecutive fall. The Dow has shed 121.28 points, or 0.87%, to 13,822.14.

In more earnings news, McDonald’s Corp. (NYSE: MCD) reported a second-quarter net loss due to a large charge associated with the sale of approximately 1,600 Latin American restaurants.

Excluding the charge, earnings came in as expected.

Toronto-based Kaboose, Inc. (TSX: KAB) is North America's largest independent online media company in the kids-and-family market — a sector dominated by giants such as Walt Disney Co. (NYSE: DIS), Time Warner Inc.'s (NYSE: TWX) AOL unit and Viacom Inc.’s (NYSE: VIA) Nickelodeon. Solid planning, creative financing, strategic marketing, and sound partnerships have this small-cap standing strong in the face of stiff competition from larger competitors with well-oiled marketing machines.

Founded in 1999, right before the dot-com bust, Kaboose plowed full steam ahead, aggressively snapping up kid-oriented websites. After a round of acquisitions, the small media company conceded it would never win the battle for children's attention on the Internet, so it shifted gears and targeted their moms. Today, the company runs a string of content-related sites that focus on mothers and young families. Visitors to Kaboose's sites can do everything from staying informed of the latest trends and reading product and service reviews to planning birthday parties and family vacations to creating online photo scrapbooks.

With a Web portfolio including popular sites like BabyZone, ParentZone, Birthday in a Box, Two Peas in a Bucket and the recently acquired image-sharing service Bubbleshare, Kaboose's 120,000 pages of content attract 12 million unique visitors a month and its family of sites have more than 2 million registered users (return visitors who can be tracked and cross-promoted)—a fact that has brought advertisers knocking.

"Kaboose is one of only a handful of Canadian companies that is benefiting from the significant shift in advertising spending from traditional media to online media," Ron Shuttleworth of Jennings Capital Inc., said in a recent report.

"As the company scales and solidifies its position as a pre-eminent destination for families, we expect that Kaboose should capture more share of advertising budgets and higher rates," he wrote.

Last year, the advertising dollars poured in: Kaboose revenues swelled 200% to $11.7 million and in the third quarter of last year, the company recorded its first ever profit, $500,000 (a $1-million turnaround from the same period in 2005). All in all, sales have grown more than 1,000% since 2003. And the company has built an impressive list of business partners, including the likes of McDonald's Corp. (NYSE: MCD), Target Corporation (NYSE: TGT), Hewlett-Packard Company (NYSE: HPQ), DaimlerChrysler AG's (NYSE: DCX) Mercedes-Benz subsidiary, Mattel, Inc. (NYSE: MAT) and M.J. Heinz Company (NYSE: HNZ).

Back in the 1940s, so the story goes, the owner of a certain Sam’s Tavern in Seattle was fond of singing while he worked, particularly the hit tune about “The red, red robin goes bob, bob, bobbin’ along.” Eventually the bar and grill became known as Sam’s Red Robin Tavern and evolved into Red Robin Gourmet Burgers, Inc. (Nasdaq: RRGB).

Now headquartered in Greenwood Village, Colo., a Denver suburb, Red Robin has 370-some owned and franchised restaurants in 40 states – and it has more and more analysts singing its song. Four analysts have upgraded their ratings on Red Robin in the past three months, bringing the tally to two strong buys, five buys, and seven holds (no sells). Also, JP Morgan initiated coverage at neutral.

The restaurant market is growing more differentiated as analysts cast a wary eye on the consumer economy. Starbucks Corp. (Nasdaq: SBUX) is on the outs, while McDonald’s Corp. (NYSE: MCD) is in. Red Robin, which offers 20-plus gourmet burgers on its menu – all-beef as well as chicken, salmon and others (“anything between two buns”) – is bobbin’ on the threshold of being in.

For one thing, a cloud hanging over the company since ex-CEO Michael Snyder was booted out in 2005 for running up $1.2 million in unauthorized expenses, mostly in personal trips on a charter jet, has recently been dispelled. Snyder, still a major shareholder in Red Robin, agreed earlier this month to a $250,000 fine and a ban from corporate office. The SEC said it has dropped its investigation of the company, and Red Robin settled a class action shareholder suit over the matter for $1.5 million.

April 20 (SmallCapInvestor.com) – Wall Street is rallying following news of better-than-expected financial results by Google Inc. and other heavyweights.  Among small caps, Bell Microproducts Inc. (Nasdaq: BELM) has reported record first-quarter revenue, while Strattec Security Corporation (Nasdaq: STRT) received an analyst upgrade.

At 11:18 AM the Russell 2000 was up 7.66 points, or 0.93 percent, to 826.98, after losing ground for three days in a row.  The Dow Jones Industrial Average had added 106.95 points, or 0.83 percent, to 12,915.58.