what is stock of a business entity represents the original capital paid into or invested in the business by its founders

SharesThe stock of a business is divided into shares, the total of which must be stated at the time of business formation. Given the total amount of money invested in the business, a share has a certain declared face value, commonly known as the par value of a share. The par value is the de minimis (minimum) amount of money that a business may issue and sell shares for in many jurisdictions and it is the value represented as capital in the accounting of the business. In other jurisdictions, however, shares may not have an associated par value at all. Such stock is often called non-par stock. Shares represent a fraction of ownership in a business. A business may declare different types (classes) of shares, each having distinctive ownership rules, privileges, or share values.




Ownership of shares is documented by issuance of a stock certificate. A stock certificate is a legal document that specifies the amount of shares owned by the shareholder, and other specifics of the shares, such as the par value, if any, or the class of the shares.



[edit] UsageUsed in the plural, stocks is often used as a synonym for shares.[1] Traditionalist demands for the plural stocks to be used only when referring to stocks of more than one company are rarely heard nowadays.



In the United Kingdom, Republic of Ireland, South Africa, and Australia, stock can also refer to completely different financial instruments such as government bonds or, less commonly, to all kinds of marketable securities.[2]



[edit] Types of stockStock typically takes the form of shares of either common stock or preferred stock. As a unit of ownership, common stock typically carries voting rights that can be exercised in corporate decisions. Preferred stock differs from common stock in that it typically does not carry voting rights but is legally entitled to receive a certain level of dividend payments before any dividends can be issued to other shareholders.[3][4] Convertible preferred stock is preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Shares of such stock are called "convertible preferred shares" (or "convertible preference shares" in the UK)



New equity issues may have specific legal clauses attached that differentiate them from previous issues of the issuer. Some shares of common stock may be issued without the typical voting rights, for instance, or some shares may have special rights unique to them and issued only to certain parties. Often, new issues that have not been registered with a securities governing body may be restricted from resale for certain periods of time.



Preferred stock may be hybrid by having the qualities of bonds of fixed returns and common stock votingThe 2011 World Market Forecasts for Imported Unused Postage, Revenue, or Similar Stamps of Current or New Issue; Check Forms; Banknotes; Stock, Share, ... Certificates; and Similar Documents of Title rights. They also have preference in the payment of dividends over common stock and also have been given preference at the time of liquidation over common stock. They have other features of accumulation in dividend.



[edit] Stock derivativesFor more details on this topic, see equity derivative.

A stock derivative is any financial instrument which has a value that is dependent on the price of the underlying stock. Futures and options are the main types of derivatives on stocks. The underlying security may be a stock index or an individual firm's stock, e.g. single-stock futures.



Stock futures are contracts where the buyer is long, i.e., takes on the obligation to buy on the contract maturity date, and the seller is short, i.e., takes on the obligation to sell. Stock index futures are generally not delivered in the usual manner, but by cashTrend Trading for a Living: Learn the Skills and Gain the Confidence to Trade for a Living settlement.



A stock option is a class of option. Specifically, a call option is the right (not obligation) to buy stock in the future at a fixed price and a put option is the right (not obligation) to sell stock in the future at a fixed price. Thus, the value of a stock option changes in reaction to the underlying stock of which it is a derivative. The most popular method of valuing stock options is the Black Scholes model.[5] Apart from call options granted to employees, most stock options are transferable.



[edit] History

One of the earliest stock by VOC.During Roman times, the empire contracted out many of its services to private groups called publicani. Shares in publicani were called "socii" (for large cooperatives) and "particulae" which were analogous to today's Over-The-Counter shares of small companies. Though the records available for this time are incomplete, Edward Chancellor states in his book Devil Take the Hindmost that there is some evidence that a speculation in these shares became increasingly widespread and that perhaps the first ever speculative bubble in "stocks" occurred.[citation needed]



The first company to issue shares of stock after the Middle Ages was the Dutch East India Company in 1606. The innovation of joint ownership made a great deal of Europe's economic growth possible following the Middle Ages. The technique of pooling capital to finance the building of ships, for example, made the Netherlands a maritime superpower. Before adoption of the joint-stock corporation, an expensive venture such as the building of a merchant ship could be undertaken only by governments or by very wealthy individuals or families.



Economic historians find the Dutch stock market of the 17th century particularly interesting: there is clear documentation of the use of stock futures, stock options, short selling, the use of credit to purchase shares, a speculative bubble that crashed in 1695, and a change in fashion that unfolded and reverted in time with the market (in this case it was headdresses instead of hemlines). Dr. Edward Stringham also noted that the uses of practices such as short selling continued to occur during this time despite the government passing laws against it. This is unusual because it shows individual parties fulfilling contracts that were not legally enforceable and where the parties involved could incur a loss. Stringham argues that this shows that contracts can be created and enforced without state sanction or, in this case, in spite of laws to the contrary.[6][7]



[edit] Shareholder

Stock certificate for ten shares of the Baltimore and Ohio Railroad Company.Main article: Shareholder

A shareholder (or stockholder) is an individual or company (including a corporation) that legally owns one or more shares of stock in a joint stock company. Both private and public traded companies have shareholders. Companies listed at the stock market are expected to strive to enhance shareholder value.



Shareholders are granted special privileges depending on the class of stock, including the right to vote on matters such as elections to the board of directors, the right to share in distributions of the company's income, the right to purchase new shares issued by the company, and the right to a company's assets during a liquidation of the company. However, shareholder's rights to a company's assets are subordinate to the rights of the company's creditors.



Shareholders are considered by some to be a partial subset of stakeholders, which may include anyone who has a direct or indirect equity interest in the business entity or someone with even a non-pecuniary interest in a non-profit organization. Thus it might be common to call volunteer contributors to an association stakeholders, even though they are not shareholders.



Although directors and officers of a company are bound by fiduciary duties to act in the best interest of the shareholders, the shareholders themselves normally do not have such duties towards each other.



However, in a few unusual cases, some courts have been willing to imply such a duty between shareholders. For example, in California, USA, majority shareholders of closely held corporations have a duty to not destroy the value of the shares held by minority shareholders.[8][9]



The largest shareholders (in terms of percentages of companies owned) are often mutual funds, and, especially, passively managed exchange-traded funds.



[edit] ApplicationThe owners of a company may want additional capital to invest in new projects within the company. They may also simply wish to reduce their holding, freeing up capital for their own private use.



By selling shares they can sell part or all of the company to many part-owners. The purchase of one share entitles the owner of that share to literally share in the ownership of the company, a fraction of the decision-making power, and potentially a fraction of the profits, which the company may issue as dividends.



In the common case of a publicly traded corporation, where there may be thousands of shareholders, it is impractical to have all of them making the daily decisions required to run a company. Thus, the shareholders will use their shares as votes in the election of members of the board of directors of the company.



In a typical case, each share constitutes one vote. Corporations may, however, issue different classes of shares, which may have different voting rights. Owning the majority of the shares allows other shareholders to be out-voted – effective control rests with the majority shareholder (or shareholders acting in concert). In this way the original owners of the company often still have control of the company.



[edit] Shareholder rightsAlthough ownership of 50% of shares does result in 50% ownership of a company, it does not give the shareholder the right to use a company's building, equipment, materials, or other property. This is because the company is considered a legal person, thus it owns all its assets itself. This is important in areas such as insurance, which must be in the name of the company and not the main shareholder.



In most countries, boards of directors and company managers have a fiduciary responsibility to run the company in the interests of its stockholders. Nonetheless, as Martin Whitman writes:



...it can safely be stated that there does not exist any publicly traded company where management works exclusively in the best interests of OPMI [Outside Passive Minority Investor] stockholders. Instead, there are both "communities of interest" and "conflicts of interest" between stockholders (principal) and management (agent). This conflict is referred to as the principal/agent problem. It would be naive to think that any management would forgo management compensation, and management entrenchment, just because some of these management privileges might be perceived as giving rise to a conflict of interest with OPMIs.[10]

Even though the board of directors runs the company, the shareholder has some impact on the company's policy, as the shareholders elect the board of directors. Each shareholder typically has a percentage of votes equal to the percentage of shares he or she owns. So as long as the shareholders agree that the management (agent) are performing poorly they can elect a new board of directors which can then hire a new management team. In practice, however, genuinely contested board elections are rare. Board candidates are usually nominated by insiders or by the board of the directors themselves, and a considerable amount of stock is held or voted by insiders.



Owning shares does not mean responsibility for liabilities. If a company goes broke and has to default on loans, the shareholders are not liable in any way. However, all money obtained by converting assets into cash will be used to repay loans and other debts first, so that shareholders cannot receive any money unless and until creditors have been paid (often the shareholders end up with nothing).[11]



[edit] Means of financingFinancing a company through the sale of stock in a company is known as equity financing. Alternatively, debt financing (for example issuing bonds) can be done to avoid giving up shares of ownership of the company. Unofficial financing known as trade financing usually provides the major part of a company's working capital (day-to-day operational needs).



[edit] TradingThe shares of a company may in general be transferred from shareholders to other parties by sale or other mechanisms, unless prohibited. Most jurisdictions have established laws and regulations governing such transfers, particularly if the issuer is a publicly-traded entity.



The desire of stockholders to trade their shares has led to the establishment of stock exchanges. A stock exchange is an organization that provides a marketplace for trading shares and other derivatives and financial products. Today, investors are usually represented by a stock broker who buys and sells shares of a wide range of companies on the exchanges. A company may list its shares on an exchange by meeting and maintaining the listing requirements of a particular stock exchange. In the United States, through the inter-market quotation system, stocks listed on one exchange can also be traded on other participating exchanges, including the Electronic Communication Networks (ECNs), such as Archipelago or Instinet.



Many large non-U.S companies choose to list on a U.S. exchange as well as an exchange in their home country in order to broaden their investor base. These companies must maintain a block of shares at a bank in the US, typically a certain percentage of their capital. On this basis, the holding bank establishes American Depositary Shares and issues an American Depository Receipt (ADR) for each share a trader acquires. Likewise, many large U.S. companies list their shares at foreign exchanges to raise capital abroad.



Small companies that do not qualify and cannot meet the listing requirements of the major exchanges may be traded over the counter (OTC) by an off-exchange mechanism in which trading occurs directly between parties. The major OTC markets in the United States are the electronic quotation systems OTC Bulletin Board (OTCBB) and the Pink OTC Markets (Pink Sheets) where individual retail investors are also represented by a brokerage firm and the quotation service's requirements for a company to be listed are minimal. Shares of companies in bankruptcy proceeding are usually listed by these quotation services after the stock is delisted from an exchange.



[edit] BuyingThere are various methods of buying and financing stocks. The most common means is through a stock broker. Whether they are a full service or discount broker, they arrange the transfer of stock from a seller to a buyer. Most trades are actually done through brokers listed with a stock exchange.



There are many different stock brokers from which to choose, such as full service brokers or discount brokers. The full service brokers usually charge more per trade, but give investment advice or more personal service; the discount brokers offer little or no investment advice but charge less for trades. Another type of broker would be a bank or credit union that may have a deal set up with either a full service or discount broker.



There are other ways of buying stock besides through a broker. One way is directly from the company itself. If at least one share is owned, most companies will allow the purchase of shares directly from the company through their investor relations departments. However, the initial share of stock in the company will have to be obtained through a regular stock broker. Another way to buy stock in companies is through Direct Public Offerings which are usually sold by the company itself. A direct public offering is an initial public offering in which the stock is purchased directly from the company, usually without the aid of brokers.



When it comes to financing a purchase of stocks there are two ways: purchasing stock with money that is currently in the buyer's ownership, or by buying stock on margin. Buying stock on margin means buying stock with money borrowed against the stocks in the same account. These stocks, or collateral, guarantee that the buyer can repay the loan; otherwise, the stockbroker has the right to sell the stock (collateral) to repay the borrowed money. He can sell if the share price drops below the margin requirement, at least 50% of the value of the stocks in the account. Buying on margin works the same way as borrowing money to buy a car or a house, using a car or house as collateral. Moreover, borrowing is not free; the broker usually charges 8–10% interest.



[edit] SellingSelling stock is procedurally similar to buying stock. Generally, the investor wants to buy low and sell high, if not in that order (short selling); although a number of reasons may induce an investor to sell at a loss, e.g., to avoid further loss.



As with buying a stock, there is a transaction fee for the broker's efforts in arranging the transfer of stock from a seller to a buyer. This fee can be high or low depending on which type of brokerage, full service or discount, handles the transaction.
Make Money Trading Stocks & Options - Over 24 Hours!


After the transaction has been made, the seller is then entitled to all of the money. An important part of selling is keeping track of the earnings. Importantly, on selling the stock, in jurisdictions that have them, capital gains taxes will have to be paid on the additional proceeds, if any, that are in excess of the cost basis.



[edit] Stock price fluctuationsThe price of a stock fluctuates fundamentally due to the theory of supply and demand. Like all commodities in the market, the price of a stock is sensitive to demand. However, there are many factors that influence the demand for a particular stock. The field of fundamental analysis and technical analysis attempt to understand market conditions that lead to price changes, or even predict future price levels. A recent study[12] shows that customer satisfaction, as measured by the American Customer Satisfaction Index (ACSI), is significantly correlated to the market value of a stock. Stock price may be influenced by analyst's business forecast for the company and outlooks for the company's general market segment.



[edit] Share price determinationAt any given moment, an equity's price is strictly a result of supply and demand. The supply is the number of shares offered for sale at any one moment. The demand is the number of shares investors wish to buy at exactly that same time. The price of the stock moves in order to achieve and maintain equilibrium.



When prospective buyers outnumber sellers, the price rises. Eventually, sellers attracted to the high selling price enter the market and/or buyers leave, achieving equilibrium between buyers and sellers. When sellers outnumber buyers, the price falls. Eventually buyers enter and/or sellers leave, again achieving equilibrium.



Thus, the value of a share of a company at any given moment is determined by all investors voting with their money. If more investors want a stock and are willing to pay more, the price will go up. If more investors are selling a stock and there aren't enough buyers, the price will go down.



Note: "For Nasdaq-listed stocks, the price quote includes information on the bid and ask prices for the stock."[13]

Of course, that does not explain how people decide the maximum price at which they are willing to buy or the minimum at which they are willing to sell. In professional investment circles the efficient market hypothesis (EMH) continues to be popular, although this theory is widely discredited in academic and professional circles. Briefly, EMH says that investing is overall (weighted by a Stdev) rational; that the price of a stock at any given moment represents a rational evaluation of the known information that might bear on the future value of the company; and that share prices of equities are priced efficiently, which is to say that they represent accurately the expected value of the stock, as best it can be known at a given moment. In other words, prices are the result of discounting expected future cash flows.



The EMH model, if true, has at least two interesting consequences. First, because financial risk is presumed to require at least a small premium on expected value, the return on equity can be expected to be slightly greater than that available from non-equity investments: if not, the same rational calculations would lead equity investors to shift to these safer non-equity investments that could be expected to give the same or better return at lower risk. Second, because the price of a share at every given moment is an "efficient" reflection of expected value, then—relative to the curve of expected return—prices will tend to follow a random walk, determined by the emergence of information (randomly) over time. Professional equity investors therefore immerse themselves in the flow of fundamental information, seeking to gain an advantage over their competitors (mainly other professional investors) by more intelligently interpreting the emerging flow of information (news).



The EMH model does not seem to give a complete description of the process of equity price determination. For example, stock markets are more volatile than EMH would imply. In recent years it has come to be accepted that the share markets are not perfectly efficient, perhaps especially in emerging markets or other markets that are not dominated by well-informed professional investors.



Another theory of share price determination comes from the field of Behavioral Finance. According to Behavioral Finance, humans often make irrational decisions—particularly, related to the buying and selling of securities—based upon fears and misperceptions of outcomes. The irrational trading of securities can often create securities prices which vary from rational, fundamental price valuations. For instance, during the technology bubble of the late 1990s (which was followed by the dot-com bust of 2000–2002), technology companies were often bid beyond any rational fundamental value because of what is commonly known as the "greater fool theory". The "greater fool theory" holds that, because the predominant method of realizing returns in equity is from the sale to another investor, one should select securities that they believe that someone else will value at a higher level at some point in the future, without regard to the basis for that other party's willingness to pay a higher price. Thus, even a rational investor may bank on others' irrationality.



[edit] Arbitrage tradingWhen companies raise capital by offering stock on more than one exchange, the potential exists for discrepancies in the valuation of shares on different exchanges. A keen investor with access to information about such discrepancies may invest in expectation of their eventual convergence, known as arbitrage trading. Electronic trading has resulted in extensive price transparency (efficient market hypothesis) and these discrepancies, if they exist, are short-lived and quickly equilibra

U.S.A. Consumers Confidence rose in november 2009 ! Will the market make big gains today ?

-- Confidence among U.S. consumers unexpectedly rose in November as a brightening outlook masked growing concern over joblessness.

The Conference Board’s confidence index increased to 49.5 from 48.7 the prior month. The New York-based Conference Board’s index, which focuses on the labor market and purchase plans, averaged 58 in 2008 and 103.4 in 2007.

The report showed Americans fretted over jobs, signaling the highest unemployment rate in 26 years may restrain spending and limit the recovery from the worst recession since the 1930s. Target Corp. last week said it remains cautious about sales this quarter and expects to offer incentives spur holiday shopping.

“Labor market perceptions are very weak,” said David Sloan, chief U.S. economist at 4Cast Inc. in New York, who forecast an increase in confidence. “What did drive is up was expectations, optimism that things will get better, not that things have gotten better.”

Other reports today showed home prices rose and the economy grew at a slower pace last quarter as consumer spending climbed less than the government previously estimated.

Stocks Fall

Stocks dropped following the reports on concern over the outlook for household purchases. The Standard & Poor’s 500 Index fell 0.6 percent to 1,099.45 at 10:23 a.m. in New York.

Federal Reserve Chairman Ben S. Bernanke last week said joblessness and limited bank lending were “headwinds” for the economy.

Economists forecast confidence would decrease to 47.3 from a previously reported 47.7 for October, according to the median of 74 projections in a Bloomberg News survey. Estimates ranged from 40.7 to 53.

The S&P/Case-Shiller home-price index of 20 U.S. cities increased 0.3 percent in September from the prior month on a seasonally adjusted basis after a 1.1 percent rise in August, the group said today in New York. The gauge fell 9.4 percent from September 2008, the smallest year-over-year decline since the end of 2007.

The world’s largest economy expanded at a 2.8 percent annual rate in the third quarter, down from the 3.5 percent pace estimated last month, the Commerce Department reported today. The figures also showed corporate profits climbed 10.6 percent, the most in five years.

Job Concerns

The Conference Board’s measure of present conditions decreased to 21, the lowest level in 26 years, from 21.1 the prior month. The decrease reflected growing concern over unemployment with a measure of job availability reaching the lowest level since 1983.

The share of consumers who said jobs are plentiful fell to 3.2 percent from 3.5 percent, according to the Conference Board. The proportion of people who said jobs are hard to get increased to 49.8 percent from 49.4 percent.

The gauge of expectations for the next six months climbed to 68.5 from 67 the prior month.

The proportion of people who expect their incomes to rise over the next six months decreased to 10 percent from 10.7 percent. The share expecting more jobs dropped to 15.2 percent from 16.8 percent.

Buying plans for automobiles and real estate dropped this month, the report showed. Home-buying expectations decreased to the lowest level since 1982.

Less Income

“Income expectations remain very pessimistic and consumers are entering the holiday season in a very frugal mood,” Lynn Franco, director of the Conference Board’s Consumer Research Center, said in a statement.

The U.S. has lost 7.3 million jobs since the recession began in December 2007 and more losses are forthcoming. Goldman Sachs Group Inc. chief U.S. economist Jan Hatzius forecast earlier this month that unemployment would average 10.4 percent next year.

Citing the labor market as an “area of great concern,” Bernanke last week told the Economic Club of New York that “jobs are likely to remain scarce for some time, keeping households cautious about spending,”

AOL, the Internet unit being spun off from Time Warner Inc. in December, plans to cut about one-third of its 6,900 employees over the next several months. The company will begin a voluntary layoff program Dec. 4 and said it’s looking for as many as 2,500 volunteers, AOL spokeswoman Tricia Primrose said in an e-mail last week. The company will make up the shortfall of volunteers through firings, she said.

Smaller Purchases

Saks Inc., the U.S. luxury retail chain, and Target, the second-largest discount chain, last week said they remain cautious about demand after reporting third-quarter earnings that beat analysts’ estimates. Target said average transaction sizes shrank in November and fourth-quarter comparable-store sales may fall after third-quarter earnings rose more than analysts projected.

Target expects a “highly promotional” holiday season, Chairman and Chief Executive Officer Gregg Steinhafel said on a conference call. November sales “provide additional justification for being cautious in this uncertain environment,” he said.

Lending rates near record lows and government incentives such as “cash for clunkers” and first-time homebuyer credits have helped spur purchases of cars and houses in recent months.

Barrons

TRADERS TAKE AUGUST OFF because they won't miss much, but these days the market stasis owes nothing to calm and everything to nervous paralysis.
The stock-market rally off its mid-July low was lubricated by falling oil prices, but its momentum has stalled now that oil's retreat has slowed. Aggressive government action may have turned the nation's "financial crisis into a crisis in the financials," according to Brown Brothers Harriman managing director Charles Blood. But continued mortgage losses and the uncertain fates of Fannie Mae (ticker: FNM) and Freddie Mac (FRE) remind investors how far the financial system is from rehabilitated.
Fannie shares, for example, tumbled 37% last week as a potential government bailout threatens the value of existing shares (See "Final Test for Fannie and Freddie"). Goldman Sachs cut estimates of big banks and brokerages and warned of intensifying mortgage-related losses in the third quarter -- a decline with no end yet in sight as mortgage rates remain above levels needed to revive the housing market.
Meanwhile, producer prices increased in July at the fastest annual pace in 27 years, and while this is a lagging indicator, and hopes run high that inflation will subside as oil pulls back, the differential between inflation felt by producers of goods and services and what they could pass on to consumers had reached 4.2 percentage points, its widest in more than three decades. "This is a serious cause for concern," notes Devina Mehra, chief strategist at First-Global Securities, since producers unable to pass on higher costs ultimately suffer compressed margins and weaker profits.
But if investors see little impetus to buy as the elusive economic recovery recedes further into the future, there is at least some comfort in stocks' marked-down prices and their relative value compared to overseas stock markets that have only just begun to grapple with slowing growth and still-tight monetary policies. For all their recent tumult, the U.S. stock indexes haven't fallen far below their January lows, as the increasingly drawn-out bottoming process eats up more of 2008.
Given the time it takes to repair household balance sheets and for prices of homes -- one of the slowest-moving assets -- to stabilize, the eventual U.S. recovery will be "lackluster" and is "unlikely to be driven by the consumer," says Ben Halliburton, chief investment officer of Tradition Capital Management. But he expects oil's recent retreat to hold, given increased Saudi production and the recent signs of demand destruction.
Last week's stock-market pullback might have been more severe if it weren't for Friday's bounce, which came after Ben Bernanke suggested that moderating inflation may allow the Federal Reserve to hold off raising interest rates. The looming prospect of a Lehman Brothers (LEH) takeover also lifted the stock and steadied the sector.
The Dow Jones Industrial Average ended the week down 32, or 0.3%, to 11628, its eighth decline in 10 weeks. The Standard & Poor's 500 gave up 6, or 0.5%, to 1292 and is 17% off its October peak. The Nasdaq Composite Index ended its five-week winning streak and fell 38, or 1.5%, to 2415, while the Russell 2000 halted its six-week run and surrendered 16, or 2.1%, to 738.
RADIOSHACK SHARES (RSH) have surged 57% in just six weeks, but what really has changed?
A sharp slide in oil prices might boost discretionary spending, but when was the last time you saw a good crowd at RadioShack? A 6.9% rebound in same-store sales surprised analysts and helped beat second-quarter estimates, but it remains to be seen if the knack for moving digital converter boxes at the height of tax-rebate season will translate into sustainable long-term growth.
A recent plan to buy back $200 million of shares prompted some short covering that helped nudge the stock higher. Speculation and high hopes that the Fort Worth company might begin selling Apple 's (AAPL) 3G iPhones were doused only so slightly after Best Buy (BBY) was recently given first crack at carrying the popular devices outside Apple and AT&T (T) stores. Its respected CEO, Julian Day, has cut costs, and the wireless business has improved. But it could still be a while before the turnaround turns RadioShack into a destination, if at all.
At almost 19, shares fetch 10.7 times 2008 profits, a justified discount to the 13.4 times for electronic retailers. Like the two parts of its throwback name, RadioShack is good for a little nostalgia, a reminder of what consumer electronic retailing once looked like. But unless cash-strapped, credit-deprived Americans begin buying up computers and stereos and batteries in droves -- and doing so at RadioShack! -- the only thing to marvel at in time might be the height of this dead cat bounce.
EXCHANGE STOCKS HAVE been hammered this year as investors brace for an extended spell of financial deleveraging, risk aversion and mousier trading. But this new age of fiscal propriety has been particularly harsh on the IntercontinentalExchange (ICE), a young, brash electronic commodities market so modern it dispensed with proper grammar when spelling its name.
ICE shares have lost nearly 60% of their value this year as lawmakers threaten to increase regulation of the energy market, and ICE is a big player in energy futures. ICE also ceded market share to rival Nymex (NMX) as oil companies hedged against a pullback using Nymex-traded options. And while second-quarter net income surged 58% amid a big jump in trading volume, the momentum appeared to have fizzled in July as the oil rally lost its sizzle.
Anxious Times: Friday's 1.7% bounce cut last week's loss in the Dow to 0.3%. Stocks perked up after the Fed's chief said that he expects inflation to moderate.
Still, has the pullback gone too far? At about 88, ICE shares fetch 13.5 times projected 2009 earnings. This, quite remarkably, is now on par with the valuation of Nasdaq OMX Group (NDAQ), a fine exchange that has made great strides with cost cuts and expansion but whose stocks can easily trade at rival markets -- unlike "non-fungible" derivatives that can only be bought and sold at the same futures market. The stock also trades at 17.6 times 2008 profits, compared with more than 20 times for specialized finance stocks.
Sandler O'Neill analyst Richard Repetto argues that ICE faces comparable risks as other U.S. exchanges. Yet its stock has suffered bigger declines, even with better growth so far this year in transaction revenue, operating income and per-share earnings.
To be sure, ICE may never see the staggering multiples it once commanded back when growth was unfettered and booming. But a pesky hurricane season could easily goose energy trading this fall and arrest the stock slide. So could mounting geopolitical tension surrounding Russia.
Helping to put a floor under the stock is the company's recent plan to buy back $500 million worth of shares over the next 12 months, which Repetto estimates would cover more than 8% of diluted shares outstanding. His price target: $165.

Should u Buy Bank Stocks ?

AFTER A RECORD-SETTING RALLY LAST Wednesday, the brutal selloff in financial stocks -- the worst for any major industry group since the technology bubble burst in 2000 -- could be over.

Many financial companies face additional loan losses and credit-related write-downs in the coming quarters, particularly if the economy stays weak into 2009. Yet a slew of earnings reports last week from marquee banks like Wells Fargo and JPMorgan Chase suggests that most financial companies have sufficient earning power to offset a rising tide of bad loans and should be able to absorb further write-downs without having to seek significant amounts of additional capital.

Financial stocks in the Standard & Poor's 500 index are down 29% this year and off 43% in the past 12 months, even after a record-setting 13% gain Wednesday and a 6% rise Thursday. The group was up slightly Friday. Financials are the worst-performing group this year in the S&P, which is off 14%. And they've risen just 10% since the most recent bull market began in October 2002, against a 62% advance by the index. Financials are down to 14% of the S&P 500 from a high of 23% in late 2006 as more than $1 trillion of market value has vaporized, in part because of huge declines in such former mega-stocks as Citigroup (ticker: C) and American International Group (AIG).

I would buy companies like BAC,Citigroup ( C ) , American Express & Wells Fargo w/ caution , Buy the stocks in stages like 25% of your holdings now , and if the stock dips down another 10 % - 20 % put your next 50 % into the stock ! this is a long term hold not a short term Play , so if u have the stomach for a bumpy ride u can make some good money in the long term !!

June Stock Pick ( BZP ) 2008

BZP stock price 26.10 a share , Target price is 35.00 by summer end . Jim Cramer! (Mad Money) has hit a grand slam with his "wildcatting" series, and he deserves serious credit for highlighting this sector, and this company. Jim has zenned the single biggest story in the economy going forward, and I believe these small, exploration companies may actually be poised to run for a generation.Play on "Soaring OIL." Good Spec. Play although it's a bit more risky being in Peru with the ever possible government involvement. with a devastating economy crisis, this stock is surely to outperform SP500 very soon.has estimates of producing 11000 barrels of oil a day by this time 2009 and has 48000 acres of untapped land in Peru.The need for alternate energy sources is top priority for most Americans right now. Looks like a good time to invest in exploration.

Nuclear Debate ( Should u buy Nuclear stocks ? )

Obama Takes Both Sides in Nuclear Debate
By JIM MCTAGUE
OBARACK OBAMA, THE DEMOCRATIC PARTY'S PRESUMPTIVE STANDARD bearer, is not a proponent of nuclear power. He has said so publicly. Then again, he is not opposed to nuclear power. He's said this publicly, too.
Like a subatomic particle in quantum mechanics, Sen. Obama has been able this primary season to be in two places simultaneously when discussing nuclear energy. His has been a masterful piece of political legerdemain. He's appeased both the nuclear industry, which continues to line his campaign's pockets, and the environmental community, which fetes him as an enviro-warrior. But this fence-straddling strategy could cause him acute pain once the press and the public begin to parse his statements more carefully to ascertain exactly what the charmingly vague senator from Illinois stands for.
His campaign machinery does not operate smoothly under the bright lights. His press team responds to direct questions with evasion. This is a mechanical reaction engendered by a candidate's fear of being defined by his opponents rather than by his own, highly paid consultants.
A case in point: We asked his campaign spokesman Tommy Vietor several times for an explanation of intriguing and baffling remarks Obama made in Miami last month promoting the transfer of U.S. energy know-how to Mexico, Brazil, Chile and Argentina, and seven days later had not received an answer. As of deadline, we were still waiting.
In this speech to a predominantly Hispanic crowd, Obama promised U.S. support for investments by global organizations like the World Bank to preserve the rain forests and its fauna. He promised to rigorously enforce environmental standards in U.S. trade deals. Then, he suddenly dropped this little bombshell: "We'll establish a program for the Department of Energy and our laboratories to share technology with countries across the region. We'll assess the opportunities and risks of nuclear power in the hemisphere by sitting down with Mexico, Brazil, Argentina and Chile. And we'll call on the American people to join in this effort through an Energy Corps of engineers and scientists who will go abroad to help develop clean-energy solutions."
What technology are we to share? Would it be the fruits of his so-called Manhattan Project for green energy that will be financed from billions in fees paid by U.S. companies under his proposed cap-and-trade system for carbon emissions? Why a nuclear powwow? Is he proposing that the U.S. help construct new nuclear plants in South America while opposing them at home, or is he merely building on President Bill Clinton's 1997 agreement to sell nuclear technology to Brazil and Argentina? And what's the deal with an Energy Corps?
We wanted Obama's team to flesh out these points, since they seemed like major policy proposals from a major speech.
Vietor's reaction was not what you'd expect from a press secretary representing a candidate who promises to change the way things are done in Washington. "I think you are reading too much into the speech," he said.
VIETOR SAID THE CAMPAIGN'S official stance on nuclear energy is that it is unlikely the nation can meet its aggressive climate goals if nuclear energy is taken off the table. "However, there is no future for expanded nuclear without first addressing four key issues: public right-to-know; security of nuclear fuel and waste; waste storage; and proliferation."
When Obama was a state senator in Illinois between 1996 and 2004, he was considered pronuclear -- although he introduced no major legislation. Chicago-based Exelon and its subsidiary ComEd, big nuclear-plant operators, are big employers. And Obama's statehouse patron, Emil Jones, the Illinois Senate's Democratic leader, was also a friend of the industry.
In the U.S. Senate in 2006, Obama took up the banner of Illinois residents outraged that Exelon had not publicly disclosed leaks at one of its nuclear plants. Mike McIntire of the New York Times reported in February that Obama rewrote a tough measure in order to please Senate Republicans, Exelon and nuclear regulators before the bill even cleared committee. The bill died on the Senate floor.
In July 2007, Obama said he was in favor of "energy independence" from despotic oil regimes. To achieve this independence, he talked positively about renewable energy, clean coal and increased mileage standards for cars. Nuclear energy was not specifically identified as part of the mix.
In December 2007 in Iowa, a young woman asked him where he stood on the question of nuclear energy: "I know you consider it an essential component of your alternate-energy plan. Are you truly comfortable with the safety of nuclear power?"
Obama's response: "Let me tell you that I start off with the premise that nuclear energy is not optimal; so I am not a nuclear-energy proponent." He said nuclear was not an option until it was safer and could be built "without enormous subsidies from the U.S. government." He said he favored solar and wind. He acknowledged that every proposed solution had some problems. And then he concluded, "I have not ruled out nuclear as part of the package."
Welcome to the world of quantum politics, where a candidate can be two places at once. It worked in the primary. We doubt it will hold up in the larger political universe.