Reasons Markets are Surging in the New Year in 2013 $CAT $HPQ $AAPL

1) Manufacturing: The Institute for Supply Management reported on Wednesday that U.S. manufacturing grew in December following an unexpected month of contraction in November. The PMI grew 1.2 points to 50.7, and investors celebrated by bidding up shares of Caterpillar (NYSE:CAT) as much as 4.2 percent in morning trading. The Dow-component stock is also enjoying an industry upgrade from ISI Group, following channel checks that indicate inventory levels at distributors are reducing, which precedes a long-awaited production increase. Positive December PMI numbers from Brazil (51.1), China (51.5), and India (54.7) are also fueling optimism for the sector, despite continuing contraction in euro-area PMI, which came in at 46.1 for December. 2) Technology: Tech companies that got beat up at the end of 2012 appear to be winning back the faith of investors who no longer fear a fiscal cliff-induced recession. Shares of Hewlett-Packard (NYSE:HPQ) jumped over 5 percent in morning trading following 2012 declines of over 45 percent. There is speculation that the struggling PC giant will put under-performing business units up for sale. Shares of Apple (NASDAQ:AAPL) are also beating index gains on Wednesday morning, adding up to 3 percent after closing up 4.43 percent on Monday. Apple was also beat up at the tail-end of 2012, but loyal investors or those who bought the dip could be rewarded for their good judgement if the company continues to deliver industry-defining technology in 2013. It’s also likely that consumer spending behavior will enjoy some vitality now that worst of the fiscal cliff shadow has been removed. Consumer dollars, previously held in a rainy-day fund, could easily find their way into the pockets of tech companies expected to release must-have devices in 2013, like wearable tech. 3) Financials: Some of the top headlines that came out of 2012 dealt with a series of tremendous financial scandals that rocked the banking industry and generated a huge amount of uncertainty. The financial sector went through dramatic restructuring and layoffs and continues to suffer fallout from the LIBOR rate-fixing scandal. With the 2008 crisis still fresh in Mr. Market’s memory, many investors were hesitant to put their money back into financial stocks. But with the cliff averted and confidence returning to the financial sector, Dow-component Bank of America (NYSE:BAC) is beating index gains, soaring over 3 percent in morning trading on Wednesday. A strong start to the New Year follows 100 percent gains in 2012, and comes with continued bullish calls from many analysts, such as those at Evercore. Shares of JPMorgan (NYSE:JPM) also popped as much as 2 percent on Wednesday morning. The bank, which made headlines for losing over $6 billion in the so-called London Whale Trade fiasco, joins Bank of America as a target of speculation regarding the potential divestment of its asset-management division. Ongoing banking reform is expected to do nothing but strengthen the financial industry and increase already attractive returns for their stock holders.

2013 Dow stocks not to buy (HPQ, INTC, MCD, CAT, AA)

Hewlett-Packard Co. (NYSE: HPQ) was a runner-up for the more properly named Dogs of the Dow for 2013, but that is solely because it was such a poorly performing stock in 2012. With this stock at $14.01, its shares are down about 44% in 2012. HP has a 52-week range of $11.35 to $30.00 and its yield is 3.78%. Analysts have a consensus target of $13.53 on HP, but the stock has fallen so much that we consider this an abandoned company due to its deep troubles. What can fix HP at this point? A miracle, or a sudden revolt against Apple products.

Intel Corp. (NASDAQ: INTC) is a member of the Dogs of the Dow, and its yield has risen handily due to the poor performance of its shares in 2012. At $20.64, this chip and processor giant has fallen by about 12% in 2012, and its dividend yield is 4.36%. The 52-week trading range is $19.23 to $29.27. and the consensus price target is $23.14. Intel has significant challenges ahead with PC sales sucking wind. Intel is just not even acknowledged as having any presence yet in smartphones and mobile devices.

McDonald’s Corp. (NYSE: MCD) had a poor 2012, but that was after it was the single best performing stock of the 30 DJIA stocks in 2011. At $88.29, this stock is down about 8% so far in 2012. Things were looking far worse just a few weeks ago when the stock was sliding daily. Its 52-week range is $83.31 to $102.22, and its yield is 3.4%. What is amazing is that analysts still have a consensus price target north of $97 for this fast-food giant.

Caterpillar Inc. (NYSE: CAT) is currently on the list of the Pigs of the Dow because it is in negative territory so far in 2012. At $87.48, this one is down in part because of its ex-dividend date being right at the end of December, and due to shares selling off so much due to a weaker macro and emerging market picture. If you adjust the share price for dividends, the stock is down only 0.8% and it only has to get back above $88.20 for it to be positive, if you back out the dividend payments. On a nominal basis, this one closed out at $90.60 in 2011. Analysts have a consensus price target of $97.93 for a year out and its 52-week range is $78.25 to $116.95.

We have one other company as a runner-up for the worst performing DJIA stocks of 2012. That means that if its shares drop in the next three sessions then this one could make the list of the Pigs of the Dow for 2013. Alcoa Inc. (NYSE: AA) just has refused to do anything in 2012. At $8.62, this stock is up less than 1% in 2012, and its 1.4% dividend yield is just not very impressive for a company that many investors believe is not representative of a DJIA stock any longer. Analysts have an upside price target of $10.41 on this, so maybe a recovery of any sort would be a great harbinger in 2013

Top stocks to watch or buy this week

Marathon Oil (MRO 0.00%, news) is moving aggressively to ramp up oil and gas production in the United States. The company this month raised its 2012 capital-projects budget by $1 billion, to $4.8 billion, with more than half of the money dedicated to tapping shale deposits in Texas, North Dakota, Oklahoma, Wyoming and Colorado.
The move reflects confidence in what one analyst this week characterized as the "Goldilocks" scenario, with $100-a-barrel oil making development in unconventional shale plays economically feasible but still $15 to $20 below the price where demand would be destroyed.
The industry also has reason to be optimistic that localized opposition to the shale-gas boom is being successfully countered with arguments that environmental restrictions jeopardize desperately needed jobs and deprive depleted government coffers of new revenues.
Marathon Oil appears on a daily list created using StockScouter, an MSN Money tool that identifies stocks with strong growth prospects in the near term. All stocks with Scouter ratings of 8, 9 or 10 are considered for the list, which is then shortened to exclude those with a trading volume below 50,000 shares a day. The remaining stocks are ranked on the basis of market capitalization, sector membership and whether they are growth or value stocks.
The Houston company this year spun off refining operations to sharpen its focus on shale acreage in the United States, as well as on exploration and development projects in Canada's tar sands, as well as in Poland, Libya, northern Iraq, the deepwater Gulf of Mexico and off the coast of Angola.

Shale drilling to add 870,000 jobs

View more MSN videosGo to Bloomberg

The increased spending on domestic production should allow Marathon to boost its annual output by 5% to 7% a year, on average, to 2016, the company said. Marathon holds about 1 million acres across its U.S. plays, Investor's Business Daily reported. Daily production is projected to grow from 70,000 barrels of oil equivalent to 175,000 barrels by 2016.
But the technology known as hydraulic fracturing, or fracking, used to extract oil and gas from shale has sparked a backlash in communities from California to New York concerned about the effects on drinking water, noise levels and air quality. So far, at least, economic arguments in favor of drilling have trumped environmental concerns.
In economically distressed California, Gov. Jerry Brown recently dismissed the state's top two oil and gas regulators following industry complaints about the pace of permitting for natural-gas drilling projects. And suburban property owners in the Northeast who have invoked zoning laws and environmental rules to oppose gas drilling have largely been outmaneuvered.
The industry also is confronting air-pollution limits on energy production that were recently issued by the U.S. Environmental Protection Agency. The EPA is working on rules governing water discharge from drilling operations, which are scheduled to take effect in 2014. Fracking injects chemicals and water into rock formations to release the hydrocarbons trapped inside.

Investing in growth stocks

Paul Sankey, the Deutsche Bank analyst who described the Goldilocks scenario, raised his rating on Marathon to "buy" from "hold" on Dec. 13 and upped his price target by $4 to $37.
Of the 17 analysts covering the company, eight have a "strong buy" recommendation, one gives the stock a "moderate buy" rating and eight rate it a "hold."
Marathon Oil has a StockScouter rating of 9, meaning the stock is expected to significantly outperform the market over the next six months with average risk.

StockScouter top 10 for Dec. 16
Company	Sector	Dividend yield	Forward P/E	Scouter score
Medtronic (MDT 0.00%, news)	Implantable medical devices	2.74%	9.5	10
American Eagle Outfitters (AEO +0.76%, news)	Apparel retailer	3.01%	13.4	10
American Express (AXP 0.00%, news)	Credit and travel services	1.55%	11.3	10
Chevron (CVX 0.00%, news)	Oil and natural gas	3.25%	13.5	10
Philip Morris International (PM 0.00%, news)	Cigarettes	4.06%	14.5	10
Western Union (WU 0.00%, news)	Money transfers	1.84%	10.4	10
Caterpillar (CAT 0.00%, news)	Earth-moving equipment	2.10%	9.7	9
CSX (CSX 0.00%, news)	Railroads	2.40%	10.6	9
Marathon Oil (MRO 0.00%, news)	Oil and natural gas	2.22%	7.7	9
Annaly Capital Management (NLY 0.00%, news)	Real estate investments	14.77%	7.1	9

Jim Cramer's best Favorite Stocks

Jim Cramer is the host of CNBC's Mad Money show and the chairman of TheStreet.com. In 1987, Cramer started his own hedge fund and returned an average of 24% per year between 1987 and 2001. Cramer also authored six money management books.

During the last 30 days, his favorite buy recommendations (based on number of mentioned days) on Mad Money were as follows:

Company	No. Of Times Picked	First Date*	Return**	Excess Return (wrt S&P500)
Apple (AAPL)	7	2-Aug-10	49.9%	26.9%
Google (GOOG)	4	1-Jun-11	15.5%	16.1%
Netflix (NFLX)	4	14-Mar-11	32.7%	30.9%
Amazon.com (AMZN)	3	4-Aug-10	74.4%	47.9%
Caterpillar (CAT)	3	10-Aug-10	44.5%	21.9%
Chesapeake Energy (CHK)	3	6-Jan-11	25.9%	21.7%
Chipotle Mexican Gr (CMG)	3	29-Apr-11	21.0%	25.8%
Cummins (CMI)	3	28-Jul-10	40.5%	16.8%
ConocoPhillips (COP)	3	5-Aug-10	31.4%	11.3%
Consolidated Edison (ED)	3	11-Aug-10	17.1%	-3.9%
SPDR Gold Shares (GLD)	3	7-Sep-10	28.1%	5.4%
Intl Business Mach (IBM)	3	5-Oct-10	33.4%	16.9%
McDonald's (MCD)	3	17-Mar-11	19.5%	15.9%
Annaly Capital (NLY)	3	5-Aug-10	16.3%	-1.5%
VF Corp (VFC)	3	15-Nov-10	47.2%	33.4%
Average			33.2%	19.0%

*Represents latest recommendation change from sell to buy. The study interval includes only past one year.

**Includes the duration from first date till July 27.

Cramer's favorite stock recommendations returned 33.2% on average since they have been recommended. The average relative performance of these stocks against the S&P 500 is 19%. 13 out of 15 of his favorite stocks have managed to beat the market.

Cramer's most favorite stock during last 30 days was Apple. He repeated his buy recommendation of AAPL seven times during the last 30 days. AAPL has a market cap of $364.3 billion and P/E ratio of 15.5. AAPL recently traded at $392.59 and has gained 49.9% since August 2, 2010, beating the SPY by 26.9 percentage points. Rob Citrone’s Discovery Capital Management had $633 million invested in AAPL at the end of March. (See Citrone’s top holding here.)

Cramer repeated his buy recommendation of GOOG four times during the last 30 days. GOOG has a market cap of $196.8 billion and P/E ratio of 23.7. GOOG recently traded at $607.22 and has gained 15.5% since June 1, beating the SPY by 16.1 percentage points.

On July 25, Cramer said the following about Google:

In the changing landscape of tech, right now, repeat after me: Social media, mobile, the cloud .... You've got to have all three. That's what Wall Street wants to see. Google has all three, which is why it's worth buying even up here, as it goes higher.

Chesapeake Energy Corporation produces natural gas in the United States. Cramer repeated his buy recommendation of CHK three times during last 30 days. CHK has gained 25.9% since Jan 06, 2011, beating the SPY by 21.7 percentage points. CHK has a market cap of $21.3 billion, P/E ratio of 28.4 and dividend yield of 1%. Chesapeake is also one of the 11 energy companies hedge funds are buying like crazy. Twelve hedge funds had CHK among their top 10 holdings. Hedge funds collectively own 5% of CHK’s outstanding shares. Mason Hawkins’ Southeastern Asset Management and Robert Pohly’s Samlyn Capital had large CHK holdings at the end of March.

On July 26 Cramer said the following about Chesapeake Energy:

If you want "steady as she goes," I want you to buy CHK ... buy, buy, buy ... which has been creeping up nicely, even though it doesn't get the credit it deserves.

Netflix has gained 32.7% since March 14, beating the SPY by 30.9 percentage points. Leonard Brecken predicted that Netflix (NFLX) is going to fall 70% within 12 months. He was on CNBC’s Fast Money and told viewers that Netflix is playing accounting games and that content costs are skyrocketing. Blue Ridge Capital’s John Griffin had $125 million invested in Netflix shares at the end of 2010.

CMG has a market cap of $10.1 billion and P/E ratio of 55. CMG recently traded at $325.2 and has gained 21% since April 29, beating the SPY by 25.8 percentage points. CMG plans to open 135 to 145 new restaurants in 2011, bringing the total restaurant count to roughly 1,220. CMG’s revenue for the first quarter was $509.4 million, up 24.3% from the prior year period. Net income for the first quarter of 2011 was $46.4 million, compared to $37.8 million in the first quarter of 2010. Mark Broach’s Manatuck Hill Partners and Jim Simons’ Renaissance Technologies had the largest positions in CMG. Manatuck Hill Partners was the second best performing hedge fund during second quarter. by Insder Monkey

Stocks to watch today

By D. Kansas


Stocks to watch this morning, including Caterpillar and Sears Holding.



The U.S. Department of Justice gave the go-ahead for Caterpillar Inc.’s largest acquisition ever–a $7.6 billion takeover of Bucyrus International Inc.



Soros Fund Management LLC, the investment vehicle of billionaire investor George Soros, disclosed a 5.7% stake in business-software company MicroStrategy Inc.



Sears Holdings Corp. said Chief Financial Officer Michael D. Collins resigned Friday and appointed William K. Phelan, a senior vice president and controller at the department-store operator, as his temporary replacement.



Perry Ellis International Inc.’s fiscal first-quarter earnings rose 37% as the acquisition of Rafaella women’s sportswear helped boost revenue, though it contributed to lower margins. Adjusted earnings topped expectations. The company also raised its full-year earnings estimate and backed its revenue guidance.



Steven Madden Ltd. acquired privately held footwear company Topline Corp. for $55 million in cash, a deal it said will complement its private-label business.



CoStar Group Inc. unveiled plans to offer at least 3.75 million shares to raise funds for its pending $860 million acquisition of LoopNet Inc.



Flir Systems Inc. said it will pay two former executives $39 million to settle claims over the night-vision goggle maker’s use of infrared technology obtained through a past acquisition.



Fossil Inc. received preliminary court approval of a $8.7 million settlement to resolve three lawsuits alleging the watch and fashion accessories retailer’s 2006 directors breached their fiduciary duties by backdating stock options.
Born This Way (Special Edition)


Tech Data Corp.’s fiscal first-quarter earnings climbed 6.8% as the computer equipment and software distributor saw sales growth continue in its European segment, along with positive effects from exchange rates. The results missed Wall Street expectations.



Payment-processing firms VeriFone Systems Inc. and Hypercom Corp. scrapped plans to sell Hypercom’s U.S. point-of-sale business after U.S. regulators last week said the divestiture wouldn’t satisfy antitrust concerns

Hot Stocks To Watch Today

Tickers in this article:


JPM

BA GE

DIS BAC

AXP

EVBS Eastern Virginia Bankshares Inc. 10.26%


YUII Yuhe International, Inc. 10.10%

PCLN priceline.com Incorporated 10.01%

HQS HQ Sustainable Maritime Industries, Inc. 9.89%

EXK Endeavour Silver Corp. 9.80%

DPTR Delta Petroleum Corp. 9.77%

URZ Uranerz Energy Corp. 9.73%

WMCO Williams Controls Inc. 9.57%

PCBC Pacific Capital Bancorp 9.46%

BRD Brigus Gold Corp 9.36%

ACFC Atlantic Coast Federal Corporation 9.33%

SCEI Sino Clean Energy Inc 9.29%

CRZO Carrizo Oil & Gas Inc. 9.21%

STEM StemCells Inc. 9.10%
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BIOF BioFuel Energy Corp. 8.87%

JSDA Jones Soda Co. 8.80%

TNDM Neutral Tandem, Inc. 8.75%

SINO Sino-Global Shipping America, Ltd. 8.64%
TheStreet Ratings 10 Best Dow Stocks Since March 2009 Low


By Jake Lynch



Add CommentStock quotes in this article:JPM, BA, GE, DIS, BAC, AXP, CAT BOSTON (TheStreet) -- Those who claim you can't make money in blue-chip dividend stocks should take a look at the following 10 Dow components. They've at least doubled since the March 2009 low, which was two years ago this week. Although the mega-cap index has lagged the S&P 500 and Nasdaq since then, several companies have surged. Several may still outperform in 2011. Below, they are ordered by performance since the low, from great to best.

More on JPM

After Historic Gains, Are Stocks Nearing A Bubble?Stock Market, March 7: What's on Tap
Up on Futures
Market Activity

General Electric Company
GE American Express Company
AXP Walt Disney Company
DIS 10. JPMorgan(JPM_) is a financial company, with retail-, commercial- and investment-banking units.

JPMorgan's stock has doubled since the March 2009 low. It has gained 8.8% in 12 months and 15% in three. Make Money Trading Stocks & Options - Over 24 Hours!

JPMorgan currently ranks as analysts' favorite Dow stock, based on aggregate ratings. Currently, 28, or 85%, of the analysts in coverage rate its stock "buy" and five rate it "hold." None rank it "sell." Oppenheimer forecasts a rise of 35% to $61. Nomura predicts a gain of 11% to $50. The stock trades at a trailing earnings multiple of 12, a forward earnings multiple of 8.2 and a sales multiple of 1.5, 16%, 26% and 14% peer discounts. JPMorgan's adjusted fourth-quarter earnings surged 84% to $1.12, beating researchers' consensus estimate by 12%. The company's quarterly revenue grew 23%. Developing A Winning System For Trading High-Performance Stocks With Tim Cho [VHS]





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9. United Technologies(UTX_) is an aerospace, defense and industrial company.

United Technologies' stock has more than doubled since the March 2009 low. It has gained 17% in 12 months and 3.8% in three.

United currently ranks as analysts' third favorite Dow stock, with 74% of those in coverage ranking it a "buy." Nomura values the stock at $98, suggesting 20% upside. FBR Capital Markets forecasts a modest rise to $83. United shares sell for a forward earnings multiple of 14 and a book value multiple of 3.5, 11% and 55% industry discounts. Yet, they're fairly valued based on cash flow and trailing earnings. United's fourth-quarter adjusted earnings rose 9.8% to $1.31, exceeding consensus by 1.3%. Sales expanded 5.4% to $15 billion.
8. Boeing(BA_) builds commercial and military aircraft as well as satellites and missile defense systems.


Boeing's stock has soared 123% since the March low. It has risen 7% in 12 months and 3.5% in three.
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Boeing currently ranks as the thirteenth highest rated Dow stock, based on analyst grades. Of researchers covering Boeing, 69% advise purchasing its shares. Gleacher & Co. offers a target of $100, implying 45% of upside. In contrast, HSBC predicts a decline to $63. Boeing's stock trades at a trailing earnings multiple of 16, a forward earnings multiple of 13 and a sales multiple of 0.8, 12%, 13% and 38% peer discounts. It's expensive based on cash flow and book value. Boeing's adjusted fourth-quarter earnings tumbled 38% to $1.11, meeting consensus expectations.





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7. General Electric(GE_) is a conglomerate, with businesses ranging from turbine manufacturing to energy infrastructure.



AIB Allied Irish Banks plc 8.59%

DXCM DexCom, Inc. 8.54%

CGV Compagnie G 8.51%

BSDM BSD Medical Corp. 8.50%

ITI Iteris, Inc. 8.44%

IEC IEC Electronics Corp. 8.41%

MDR McDermott International Inc. 8.39%

USU USEC Inc. 8.30%

CHNR China Natural Resources Inc. 8.16%

AGQ ProShares Ultra Silver 8.13%

MGH Minco Gold Corporation 8.12%

THTI THT Heat Transfer Technology, Inc. 8.08%

AQQ American Spectrum Realty Inc. 8.07%

GBG Great Basin Gold Ltd. 8.02%

RRC Range Resources Corporation 8.00%
agriculture, materials, and pharmaceutical units.


DuPont's stock has rocketed 184% since the March 2009 market low. It has returned 56% in 12 months and 9.4% in three.
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DuPont currently places as researchers' 12th favorite Dow stock, receiving 10 "buy" calls, five "hold" recommendations and no "sell" ratings. Citigroup is bullish, expecting an advance of 22% to $65. Credit Suisse forecasts a more modest increase to $58, ranking DuPont "neutral." DuPont trades at a trailing earnings multiple of 16, a forward earnings multiple of 13, a sales multiple of 1.5 and a cash flow multiple of 11, 25%, 24%, 47% and 23% chemicals industry discounts. Adjusted quarterly earnings rose 14%, beating consensus by 60%.





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3. Bank of America(BAC_) is a financial company, with retail- and commercial-banking units.

Bank of America's stock has more than tripled since the 2009 stock-market low. It has fallen 16% in 12 months, but rallied 18% in three


PLM Polymet Mining Corp. 8.00%

ASTM Aastrom Biosciences, Inc. 7.94%

ENER Energy Conversion Devices, Inc. 7.91%

TRIB Trinity Biotech plc 7.91%
Ford Motor Co.(F)-Share of Ford Motor closed at $15.77 on Friday. Ford (F) will have resistance at $16-$16.36. Ford will now hit the next big resistance level $16.50. Ford continues to be a strong buy between $15,49-$16,24. Ford continues is a strong buy below low $14.This is my long term investment.This is my one top pick for 2010 - 2011.


DRYS DryShips, Inc. 7.84%

HK Petrohawk Energy Corporation 7.71%

CABL China Cablecom Holdings, Ltd. 7.69%

SAPX Seven Arts Pictures plc 7.69%

ONP Orient Paper Inc. 7.69%

VGZ Vista Gold Corp. 7.67%

NBN Northeast Bancorp 7.66%

FPTB First Pactrust Bancorp Inc. 7.57%

PRIM Primoris Services Corporation 7.52%

DROOY DRDGOLD Ltd. 7.43%

LDK LDK Solar Co., Ltd. 7.41%

SEED Origin Agritech Limited 7.40%

TLR Timberline Resources Corp. 7.38%

COG Cabot Oil & Gas Corporation 7.31%

HL Hecla Mining Co. 7.21%

KBX Kimber Resources Inc. 7.21%

VIAS Viasystems Group Inc. 7.20%

DAG PowerShares DB Agriculture Dble Long ETN 7.16%

RIC Richmont Mines Inc. 7.13%

GCC GreenHaven Continuous Commodity Index 7.03%

LOOK LookSmart, Ltd. 6.99%

SVBI Severn Bancorp Inc. 6.86%

MGN Mines Management Inc. 6.86%

DGSE DGSE Companies Inc. 6.82%

GRRF China GrenTech Corp. Ltd. 6.79%

UAG UBS E-TRACS CMCI Agriculture TR ETN 6.73%

KAD Arcadia Resources Inc. 6.72%

MIDD Middleby Corp. 6.70%

FOSL Fossil, Inc. 6.69%

EDGR EDGAR Online Inc. 6.66%

ETRM EnteroMedics, Inc. 6.63%

CCJ Cameco Corp. 6.60%

DCTH Delcath Systems Inc. 6.57%

SF Stifel Financial Corp. 6.55%

GRH GreenHunter Energy, Inc. 6.45%

REE Rare Element Resources Ltd. 6.45%

URG UR-Energy Inc. 6.33%

CHGS China GengSheng Minerals, Inc 6.28%

MOTR Motricity, Inc. 6.26%

CGA China Green Agriculture, Inc. 6.26%

LIVE LiveDeal, Inc. 6.25%

TELK Telik Inc. 6.24%

FFI Fortune Industries, Inc. 6.22%

CDE Coeur d`Alene Mines Corporation 6.19%

CSII Cardiovascular Systems Inc. 6.14%

PKOH Park-Ohio Holdings Corp. 6.07%

RAME RAM Energy Resources, Inc. 6.01%

IIJI Internet Initiative Japan Inc. 6.00%

HCII Homeowners Choice, Inc. 6.00%

MCOX Mecox Lane Limited 5.98%

GMET Geomet, Inc. 5.97%

EMAN eMagin Corp. 5.85%

UCD ProShares Ultra DJ-UBS Commodity 5.81%

XOMA XOMA Ltd. 5.79%

YHOO Yahoo! Inc. 5.75%

EQT EQT Corporation 5.72%

DNN Denison Mines Corp. 5.71%

GKNT Geeknet, Inc. 5.70%

SUSS Susser Holdings Corporation 5.68%

CALM Cal-Maine Foods, Inc. 5.68%

NFEC NF Energy Saving Corp. 5.65%

SLW Silver Wheaton Corp. 5.65%

SYUT Synutra International Inc. 5.63%

ESA Energy Services of America Corporation 5.63%

EDAP EDAP TMS SA 5.62%

GMXR GMX Resources Inc. 5.61%
American Express(AXP_) is a credit-card company, competing with the likes of Visa(V_).


American Express's stock has more than tripled since the 2009 low. It has advanced 12% in 12 months, but fallen 4.6% in three.

American Express places as researchers' ninth least-favorite Dow stock. Of the analysts covering AmEx, 18, or 67%, rate its stock "buy", six rate it "hold" and three rank it "sell." Piper Jaffray offers a target of $62, suggesting a 12-month rise of 44%. Raymond James forecasts a fall of 16% to $36. American Express, undervalued based on its 5.6 cash flow multiple, is fairly valued when considering forward earnings and book value. Its fourth-quarter adjusted earnings jumped 59% to 94 cents, missing analysts' consensus estimate.





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1. Caterpillar(CAT_) makes and sells construction and mining equipment.

Gloom and Doom for the Market & the end of the earnings season this week ..

The gloom was very broad. The Dow Jones industrials ($INDU) fell 58 points on Friday to 10,214, on top of a 144-point loss on Thursday.




For the week, the blue chips were down 0.9%. The Standard & Poor's 500 Index ($INX) was off 0.7% on the week, but the Nasdaq Composite Index ($COMPX) bucked the trend, ending the week up 0.3%.



There was a bizarre, even disturbing, dichotomy as the week ended.



The Dow finished the week down 2% on the year, with the S&P 500 down 3.9% and the Nasdaq off 3.9%. Yet, the yield on the 10-year Treasury note was 2.61%. A rate below 3% is a signal that many investors and analysts believe a major bad event is near.



The 10-year yield is, in fact, down a third this year. The decline is so big that Morgan Stanley (MS) apologized for being so wildly wrong on its interest-rate forecast at the beginning of the year. The investment bank thought the 10-year yield would be 5.5% this year.



In fact, you had to look to find someone who doesn't think the world was falling apart.



One was Doug Oberhelman, the new CEO of Caterpillar (CAT).



At the construction equipment maker's analyst meeting this past week, he said bluntly, "We don't think the world has ended." Caterpillar is bullish. There are big projects going on around the world and more in the pipeline. The company has even started to hire back some of the employees it cut in the last year or so.



Investors seemed to buy the Caterpillar story, especially the global growth story. Shares were up 1.3% for the week and are the best Dow performer this year with a 21% gain. That doesn't suggest they see a collapse any time soon.



Maybe Oberhelman is right. But let's get the market through next week. It won't be easy. Here's why.



Markets for the week







8/20/2010



8/13/2010



% chg.



YTD chg.

Dow industrials



10,213.62



10,303.15



-0.9%



-2.1%

S&P 500



1,071.69



1,079.25



-0.7%



-3.9%

Nasdaq



2,179.76



2,173.48



0.3%



-3.9%

Russell 2000



610.78



609.49



0.2%



-2.3%

Crude oil



$73.82



$75.39



-2.1%



-7.0%

(per barrel)

























U.S. Dollar Index



83.16



83.04



0.1%



6.3%

10-yr. Treasury



2.61%



2.69%



-2.8%



-32.0%

Gold



$1,228.80



$1,216.60



1.0%



12.1%

(per troy ounce)



























The economic news will continue to challenge

It's a relatively light week for economic reports, but it will be hard to get a lot of cheer from them. Here's what to look for:



Existing-home sales for July. Due Tuesday morning from the National Association of Realtors. This number could take your breath away. The consensus is for sales to come in at an annualized 4.6 million units, a 13% decline from June. IHS Global Insight is expecting a 4.3-million-unit rate, which would be a decline of 20%. The reason is that sales that qualified for the homebuyer tax credits are done. So, numbers will drop.



Durable-goods orders for July. Due Wednesday from the Commerce Department. This number will show a gain of at least 2.5%, maybe more. The gain will be entirely due to orders that Boeing took at the big Farnborough Air Show in England and auto sales.



New-home sales for July. Due Wednesday from the Commerce Department. The annualized number should be around 325,000. That would be very close to the lowest sales rate on record, 267,000 in May. New-homes sales are a function of interest rates, prices and jobs. And the national unemployment rate is 9.5%.



Initial jobless claims. Due Thursday from the Labor Department. Jobless claims have moved higher over the past three weeks. And the trend is worrying lots of analysts. "It seems to reflect a real deterioration rather than seasonal adjustment distortions," Nomura Securities said Friday. Unless it turns around, the August nonfarm payrolls report, due Sept. 3, will likely disappoint again.



Gross-domestic-product growth for the second quarter. Due Friday morning from the Commerce Department. The first estimate on GDP was a relatively robust 2.4% (annualized). Expect that to be cut to 1.2% or so. Weaker-than-expected results for both inventories and net exports should account for most of the downward revision.



Reuters/Michigan Consumer Sentiment Index for July. This measure of consumer confidence has been falling of late, and declines tend to affect consumer behavior far more than gains.



Can Canada save the market?

The second-quarter earnings season effectively ended this past week with earnings from Wal-Mart Stores (WMT), Target (TGT), Lowe's (LOW), Home Depot (HD), Hewlett-Packard (HPQ) and Dell (DELL).



A number of retailers will report results next week. The most interesting are Barnes & Noble (BKS), which recently put itself up for sale, and Tiffany (TIF).



Investors and customers will want to know how the sale is progressing and if Barnes & Noble -- and other book chains -- can survive.



Tiffany will be the cheeriest. The affluent, especially in Asia, have been unafraid to spend. So, watch how the company describes the current operating environment.



Only six S&P 500 companies will report results next week, and they're all small.



But a number of big Canadian banks will report in the week ahead and the week following. And they're worth paying attention to.



Reporting next week are Bank of Montreal (BMO) on Tuesday, Canadian Imperial Bank of Commerce (CM) on Wednesday and National Bank of Canada (NTIOF) and the Royal Bank of Canada (RY) on Thursday.



The Toronto Dominion Bank (TD) and Bank of Nova Scotia (BNS) will report the week of Aug. 30.



The Canadians have the advantage of an economy that's benefited from a global boom in natural resources. Plus, they've been relatively conservative in how they lend. And Canadian tax laws on mortgages have limited speculation.



But there are worries, Credit Suisse analysts said this week that retail lending will slow as the Canadian economy adjusts in part to stresses in the American economy.



Other reports due next include:



Monday: Sanderson Farms (SAFM) and Tuesday Morning (TUES).



Tuesday: Barnes & Noble, Big Lots (BIG), Burger King (BKC) and Medtronic (MDT).



Wednesday: American Eagle Outfitters (AEO), BHP Billiton (BHP), brewer Heineken (HINKY).



Thursday: Bebe Stores (BEBE), Credit Agricole (CRARY) and Bank of China (BACHY).



Friday: National Bank of Greece (NBG) and Tiffany.

msnmoney.com

Should you buy Caterpillar ?

Caterpillar Inc. (NYSE: CAT - News), citing robust growth across all regions, reported a 32% year-over-year jump in global sales for the three-month rolling period ended July 2010, a stark contrast to the 48% drop in sales in the comparable year-ago period. In May 2010, the company had recorded a growth of 11%, reversing a long trend of global decline since September 2008. Compared to May, growth doubled in June and almost tripled in July.

Growth in July was led by the Asia Pacific region with sales increasing 41% compared with a 30% decline in the year-ago period. The Asia-Pacific region has been Caterpillar's fastest growing geographic market in recent years as rapid infrastructure development and mining expansions fueled demand for machinery. The region has posted continuous growth since March 2010 after suffering declines in 2009. Sales growth on a month-on-month basis shows a continuous upward trend from 11% in March 2010 to reach 41% in July.



The North American markets followed with a growth of 38% in the reported month, a noteworthy improvement from the decline of 59% in July 2009 and increase of 26% in June 2010. Latin American markets posted a 32% increase and EAME (Europe, Africa and the Middle East) upped 19% in the period.



As per sector-wise business performance, Caterpillar saw reciprocating and turbine engines sales in the industrial segment jump 31%, sales to the electric power unit rose 14% and sales to the petroleum sector inched up 3%. Sales to the marine sector remained weak, dropping 34%. Sales growth to the petroleum sector comes after a long wait as the sector had last seen growth in April 2009.



Looking Forward



Caterpillar affirmed its earlier guidance of revenue in a range of $55–$60 billion and earnings per share in a range of $8–$10 for fiscal 2012. The company plans to invest in global expansion and fine tune operational execution to drive profits over the next five years.



Caterpillar also confirmed its previously declared goals that are focused on delivering superior earnings per share growth, operating profit after capital charge and cash flow through 2015. The company strives to become the global leader in its area of businesses and products, as well as inculcate the best team of people. Caterpillar also expects to boost its share of industry sales and aftermarket parts growth.



Caterpillar’s targets are all geared toward delivering total shareholder returns over the business cycle to reach the top 25% quartile of the S&P 500. The company believes, in order to accomplish the above-mentioned ends, it has to deliver compound annual earnings per share growth of 15%–20% over the business cycle.



The Caterpillar Production System (“CPS) will be helpful in executing its strategy as it has led to gains in product quality, cost savings and employee safety. This system has also been instrumental in the company’s improvement in manufacturing efficiency every quarter since the end of 2008.



Leveraging its strong financial position, Caterpillar has in the past few months announced investments of roughly $2.5 billion. These investments, encompassing United States, Brazil, China and India, involve opening new facilities, expansion of existing operations and development of a new mining shovel product line. The investments also include the acquisition of Electro-Motive Diesel.



It is encouraging to see the company delivering on its promises and even exceeding them. Caterpillar’s 2009 sales of $32.4 billion were within its guided range of $32–$33 billion. Its EPS of $2.18 for the fiscal outperformed the company’s expectation of $1.85–$2.05 per share. In the recently reported second quarter of fiscal 2010, Caterpillar’s EPS of $1.09 exceeded the Zacks Consensus Estimate of 85 cents, keeping up with its outperforming trends in the past three quarters.



For fiscal 2010, Caterpillar expects revenues to be in the range of $39–$42 billion, compared with its previous guidance of $38–$42 billion. The fiscal 2010 EPS outlook was also increased to a range of $3.15–$3.85 from $2.50–$3.25 earlier. The Zacks Consensus Estimate for fiscal 2010 currently stands at $3.69.



The increased outlook is driven by heightened revenue expectations, margin expansion given its cutting efforts, favorable material costs and the absence of redundancy costs. These positives are, however, expected to be partly offset by an unfavorable product mix, higher income taxes, increased research and development expenses, pension expenses and incentive compensation.







We believe Caterpillar’s investments in expansion and acquisitions would boost its long-term earnings potential. We particularly appreciate Caterpillar’s expansion plans in the emerging markets. Robust growth in the Asia-Pacific region and Latin America, and continued improvement in the mining and energy markets will strengthen Caterpillar’s volumes and sales. The company will be a prime beneficiary of increased domestic and international infrastructure spending, going forward. We maintain our Outperform rating on Caterpillar supported by a Zacks #1 Rank (‘Strong Buy’).

Jim Cramer's Top 10 Bull Markets .. ( CAT,MAR,AMR,BA,FDX,MET )

The bears are on the run,” Cramer said during Monday’s Mad Money.

According to the technicals, they’ve got nowhere to hide. Cramer said that the charts of sector on top of sector are signaling true signs of strength, and many of them depend on discretionary spending. So something is happening among consumers, it seems. Something that’s prompting them to spend.

These charts seem to be pointing to the end – finally – of health care and its affect on the markets. Not to mention the anti-business bias from Congress. If Verizon, Deere and Caterpillar [CAT 64.99 1.00 (+1.56%) ] can take the hits they have and still power higher, Cramer said, then maybe Washington just isn’t that important. Maybe the recovery will be incredibly strong and we can expect some job growth.

And the other lesson the charts had to offer? This isn’t one bull market at work – it’s many. Cramer on Monday highlighted the top 10:

First, retail. Cramer has spent a lot of time on this sector, most recently covering the bull market in shoe stocks like Nike [MOS 57.99 -0.34 (-0.58%) ]. But apparel makers like Urban Outfitters are doing well, too. And the same goes for electronics stores such as Radio Shack and even high-end outfits like Tiffany. If the consumer wasn’t spending, Cramer said, then these stocks wouldn’t be hitting new highs.

Second is the food business, namely restaurants. Brinker, Darden, Yum! and The Cheesecake Factory all said that Americans are eating out again.

Apparently they're hitting the open road as well, because number three is travel and leisure. Everything from AMR and Continental to Royal Caribbean and Carnival – and hotels Marriott and Starwood – are on fire, Cramer said.

The jump in air travel translates into a bull market for aerospace, as the airlines presently don’t have enough planes to handle their new customers. That explains the moves in Boeing [BA 72.04 -0.95 (-1.3%) ], Honeywell International, Goodrich and others.

The industrials are making their presence known as well. Eaton, Caterpillar and 3M are among a group of companies that should be dreading the Obama administration, Cramer said, but are doing anything but.

Part of the driving force behind the industrials comes from the autos, which we can see from ramping names like Johnson Controls, Magna International and Autozone. Cramer said he expects 12 million new cars built this year, up 50% from 2009.

The shippers are number seven, because the Johnson Controls and Autozones of the world have to deliver their parts. Hence the rallies in FedEx [FDX 92.46 0.29 (+0.31%) ], UPS and the rails.

Cramer also said that anything with the word “health” in it works now, whether it’s a real estate investment trust, testing company or health maintenance organization. He thinks the new reform law means good things for Lincare, too, because it seems the government is going to back homecare companies in a big way.

Also in the government-backing department is defense. Cramer sees no let-up in spending here, which is great for General Dynamics, Northrop Grumman and Lockheed Martin.

Lastly there are the financials. Few markets are as strong right now as the insurance companies, Cramer said, despite the fact that they were supposed to be carrying some toxic commercial real estate. MetLife [MET 44.95 0.94 (+2.14%) ], Principal Financial, Lincoln National and Hartford Financial are all great examples. Believe it or not, the mortgage insurers are pushing higher now, too, as are the regional banks, an industry Cramer has been bullish on for some time. Even the annuity sellers are taking off, as can be seen in T. Rowe Price, Legg Mason and their peers.

Of course, not every sector’s booming right now. The oils and tech are on pause, Cramer said, “but who knows what happens when they wake from hibernation and morph into bulls.” In the meantime, investors should stay focused on these 10 raging markets, especially as we’re just about to start another earnings season.

“And I think it’s going to be a darned good one,” Cramer said

Jim Cramer Lighting Round Stock Picks

Mad Money Recap

Segment 1: The Obama Accountability Index
Cramer said that things were much better today than they were yesterday with IBM (IBM), Johnson & Johnson (JNJ), Abbott Labs (ABT), Forest Labs (FRX), Northern Trust (NTRS), and PNC (PNC) all reporting good earnings today, Wal-Mart (WMT) reporting good numbers, mineral plays announcing that they are cutting back on production, which is good for stocks like Freeport McMoran (FCX), and Apple (AAPL) and Research in Motion (RIMM) reporting good sales as well. Cramer said that the high yielding stocks are back at the lows that they bounced off of in November, and that they will bounce back again.
However, said many of the financials are still weighing us down, like Citigroup (C) and Bank of America (BAC). As long as they don't go under, the stock indexes should be OK.
Cramer thinks Obama needs to save the good banks like J.P. Morgan (JPM) and Wells Fargo (WFC) from the bad ones like C and BAC. He added that the bonds and preferred stock of C and BAC need to be preserved, because if they go down, investors will be even more afraid of the financials. To track Obama's performance, Cramer created an index of 6 Dow stocks, made up of Bank of America (BAC), Citigroup (C), Caterpillar (CAT), General Electric (GE), General Motors (GM), and J.P. Morgan (JPM). It will start at a value of 100 as of the closing price at the end of today, and all the stocks have an equal weight. They were picked because it includes good and bad banks, a test of the infrastructure stimulus, the auto sector, and a large conglomerate that represents a large section of the overall economy.

Segment 2: Dow All Stars Review
In the first week of 2009, Cramer recommended Verizon (VZ), Caterpillar (CAT), Hewlett Packard (HPQ), Johnson & Johnson (JNJ) and Home Depot (HD), and he wanted to review how they did after the big drop in the market recently. His group is down 3%, which isn't great, but is better than the Dow and S&P 500, which are down 8% and 9% respectively. He thinks this is good news because they should go up more than the index when times get better, plus they all have a yield over 3%, except HP. He still likes HP because they have great management, recently made a smart acquisition of EDS, and is beating their printer competition. Cramer is still bullish on Verizon because of its high yield, good CEO, and strong Blackberry Storm and FiOS sales. He also still likes J&J because it is a good defensive play and a strong balance sheet. Cramer is bullish on CAT because of its accidentially high yield and because it is in position to benefit from the U.S. and Chinese infrastructure stimulus plans. He is also still bullish on Home Depot because he thinks housing will bottom in about 5 months, and people will begin making home improvements then.

Segment 3: Interview with Google (GOOG) CEO Eric Schmidt
Cramer talked to Schmidt about his experience on Obama's transition team, and his ideas to reduce unemployment. He didn't make any stock picks in this segment.

Segment 4: Lightning Round!
Zions Bancorp (ZION): Cramer won't recommend any regional bank right now, so he gave it a "Don't buy".
CME Group (CME): Cramer would rather own NYSE Euronext (NYX) because it has a higher yield, or Ameritrade (AMTD) or Charles Schwab (SCHW).
Electronic Arts (ERTS): Cramer is bearish because it is not cheap right now, and the company doesn't have any momentum.
Barclays (BCS): Cramer is bearish because he thinks it is in serious trouble.
Huntsman (HUN): Cramer thinks it is too risky and recommended PPG (PPG) instead.
CBS (CBS): Cramer is bearish because media companies have not been doing well, and the ownership structure of CBS is unusual.

Segment 5: Quiz Cramer
Cramer had a live audience for the show today, and he took general questions but didn't make any stock picks.