Asian Shares Up Modestly on Greece

Most Asian markets gained Monday after Greek lawmakers approved austerity measures required to secure international bailout funds and avert a likely default.

Japan's Nikkei Stock Average closed 0.6% higher at 8999.18, and Australia's S&P/ASX 200 index advanced 0.9% to 4285.10, both notching their first gains in three sessions. South Korea's Kospi added 0.6% to 2005.74, its fifth gain in six sessions.

Hong Kong's Hang Seng Index rose 0.5% to 20887.40, while China's Shanghai Composite Index slipped fractionally to 2351.85, snapping a three-session winning streak, as property stocks were sold on signs that Beijing remains concerned about the sector. The Bombay Stock Exchange's Sensitive Index added 0.1% to 17772.84.

News that Greek lawmakers approved a package of austerity measures, which international backers had demanded before signing off on €130 billion ($176.6 billion) worth of fresh aid, triggered fresh gains in Asia.

The vote came amid violent protests in Athens against the latest round of deep spending cuts and public-sector job layoffs.

Some exporters with relatively large exposure to Europe gained. In Tokyo, Mazda Motor put on 1.4%, and Mitsubishi Motors added 2.1%, while Esprit Holdings, whose biggest market is Europe, climbed 4.5% in Hong Kong.

Softbank rallied 3.5% in Tokyo after a Saturday Nikkei report that the mobile carrier appears to have taken the lead in the race to access the 900MHz spectrum to be allocated by the Communications Ministry.

Fanuc added 2.2% following a Sunday Nikkei report that the firm plans to build new domestic plants this year to double the production of its machine tools to 5,000 units a month.

News that the eastern Chinese city of Wuhu reversed plans to ease home-buying restrictions hit mainland Chinese property plays, as the move appeared to signal Beijing would continue efforts to cool the real-estate market.

In Hong Kong, Evergrande Real Estate Group plunged 6.9%, Agile Property Holdings skidded 6.6%, China Resources Land slid 5.8% and China Overseas Land & Investment Ltd. dropped 4.8%.

In Shanghai, Gemdale fell 2.9%, and Poly Real Estate Group lost 3.1%.

Most major exporter shares did well in Seoul, as Samsung Electronics gained 2%, while Kia Motors jumped 3.6%, and LG Display climbed 2.6%.

Banks advanced in Sydney. Australia & New Zealand Banking Group rose 1.6% after announcing it would cut 1,000 jobs in Australia.

Shares in Leighton Holdings fell 2% as the construction firm issued what analysts said was disappointing guidance for the current calendar year. In addition, Australian federal police launched an investigation after it notified authorities of a possible illegal payment by one of its subsidiaries linked to work expanding Iraq's crude oil export facilities.

In Mumbai, State Bank of India fell 2%. While the lender's quarterly net profit beat market expectations, provisions for future loan losses nearly doubled, raising concerns over the quality of its assets.

Write to Sarah Turner at sarah.turner@dowjones.com

Chile ETFs: The Costs of the Earthquake

A devastating earthquake has disrupted everyday life in Chile. While cleanup and rescue efforts continue, though, many are still sorting out what the total impact on the economy and exchange traded fund will ultimately be.

Chile’s economy is regarded as one of the best in Latin America. Thanks to the country’s already stable economic position, the impact of the earthquake on the country’s economic well-being will likely be minimal, reports Will Smale for BBC News.

Eqecate, a company that helps insurers model catastrophe risks, believes that the Chilean quake may cost up to $30 billion in damages, or 15% of annual economic output. Research group Capital Economics estimates that the cost will be between the range of $15 billion to $30 billion. Despite the temblor, the research group projects that the economy will expand by 5% this year.

How’s that? Chile may have positioned itself to weather storms like this by thinking and planning ahead. The Chilean economy is seen to be sound as a result of prudent fiscal spending. The government has saved much of the revenue that came from its copper reserves. Additionally, inflation is currently 1.5% and the Chilean interest rate is 0.5%. All together, these factors contribute to Chile’s strong credit rating.

One black mark: Chile’s unemployment rate stands at 9.7%.

Chile’s copper mines suffered minimal damage from the earthquake and most have already resumed normal operations, but the country’s refineries are still closed. The earthquake halted nearly a quarter of the Chile’s copper output, but by getting back online so quickly, may close the gap sooner than later.

Copper prices have been surging since the quake, moving for a fourth consecutive session today.

For more information on Chile, visit our Chile category.

• iShares MSCI Chile Index (NYSEArca: ECH)

• iPath Dow Jones UBS Copper Tr Sub-Index ETN (NYSEArca: JJC)

• PowerShares DB Base Metals Fund (NYSEArca: DBB)

Max Chen contributed to this article.

Breaking Down the Alerian MLP Index: Kinder Morgan Partners

Interest in the Master Limited Partnership (MLP) space has been expanding rapidly in the last few years as the group's stability and high yields have attracted new people to these companies. To capitalize on the popularity of MLPs, index funds have emerged, promising to simplify holding these units from a tax perspective, while still allowing investors to take advantage of the high yields.

The Alerian MLP Index (AMZ) is "a composite of the 50 most prominent energy Master Limited Partnerships," according to its website. However, the top 10 holdings of the index represent 58.1% of the index, ranging from Enterprise Products Partners (EPD) being 15.1% as the largest holding to Energy Transfer Equity (ETE) at 3.2%, ranked as the 10th largest. That means these top 10 holdings will really drive the index's performance, as the remaining 41.9% of the index is spread over the 40 smallest positions. Therefore investors willing to do a little bit of research should be able to pick two or three of these top 10 holdings instead of buying the index, and benefit from the performance of the asset class. Since I have already written my opinion of Enterprise here, let us look at Kinder Morgan Energy Partners (KMP).

Kinder Morgan Energy Partners is a leading owner and operator of pipelines and terminals in the U.S. and Canada. The company operates in five business segments: Products pipelines, which move oil and refined oil products; natural gas pipelines, which move natural gas; a CO2 business that sells CO2 and produces oil; a terminals business tied to ethanol and coal; and its Canadian pipelines. This diversity of the businesses allows Kinder Morgan to benefit from all aspects of increased demand for energy resources in North America, with an emphasis on the U.S. Based on projections of $3.8 billion in earnings before DD&A for 2011, the CO2 segment will make up 29% of earnings, natural gas pipelines will be 28%, products pipelines will be 19%, Canada will be 5%, and terminals will be 19%. The vast majority of earnings come from stable, fee based businesses, however the CO2 segment does have some oil price risk as it produces oil and is not completely hedged. Distributions for 2010 of $4.40 were up 4.8% over 2009 and in line with prior guidance. Distributions are expected to increase to $4.60 in 2011, an increase of 4.5% YoY. Based on the 2011 distribution guidance KMP currently yields a very attractive 6.3%.

Distribution growth is, in my opinion, the most important metric to consider when examining an MLP. MLPs with consistent growth in distributions are more desirable, as the yield on units will hold up as unit price increases. MLPs are formed to pay out earnings in distributions, so a management that is able to grow the distribution each year, either through new projects or accretive acquisitions, is highly sought after. KMP has a strong history of rewarding its unit holders through increasing distributions, proving the value in a great management team. KMP has raised its YOY distribution rate every one of the last 11 years, exceeding guidance in five of those years, and failing to meet the guidance only in 2006. Distributions have gone from $1.71 in 2000 to the $4.40 paid last year, showing how long-term holders have benefited from management's dedication to its unit holders.

Another key metric to consider when looking at MLPs is the coverage ratio on distributions. This figure is a good measure to predict where the dividend is going, and how much room management has to possibly raise the distribution beyond projects. While KMP earned enough cash to cover the $4.40 in distributions paid, the company's 2010 annual report says it fell about $23 million short "of meeting its budgeted excess cash coverage above that distribution target." (Details here) For 2011, the company projects having excess cash coverage of roughly $37 million, a small number when considering the approximate 300 million units outstanding. Based on these numbers, it does not seem KMP has much excess room to increase distributions beyond guidance.

The partnership aims to spend $1.4 billion on growth expenditures in 2011, with nearly two-thirds of that spending in the natural gas pipelines and CO2 businesses. That number is on pace with the $22.4 billion in acquisitions and expansion projects KMP has undertaken over the last 13 years, and will enhance the partnership's ability to grow in the coming years. However, given the shortfall in projected excess cash coverage, investors might want to see a larger budget here to help fuel excess cash growth.

KMP has several other things potential investors should consider. First, unlike Enterprise or Inergy (NRGY), KMP has not bought out its General Partner. Therefore KMP still must make incentive distribution payments to its G.P., owned by the newly public Kinder Morgan Inc (KMI). These payments are made before the distribution is paid to Limited Partners, so - while common - can be seen as a negative when compared to MLPs without a GP. Second, the oil prices KMP is hedged at are all significantly below the market right now. For example, 79% of 2011 production is hedged at $69/barrel. While this shows short sightedness when the hedges were locked in, there is a silver lining here. KMP's earning projections are based on an average price of $89/barrel on unhedged production, so the company is benefiting from the higher prices, though admittedly not in as a significant way as it would be without the hedges. Third, the structure of the company includes Kinder Morgan Management LLC (KMR). The company describes KMR shares as effectively the same as KMP, the difference being that the distribution from KMP is paid in cash, while KMR holders receive new KMR shares. The distributions paid are the same value, however KMR trades at a discount to KMP, with the average discount being 7% since KMR was formed. KMR is supposedly more simple for tax purposes, and insiders buy more KMR then KMP.

Kinder Morgan Partners is a well run MLP with a fantastic long term record for growth. Its assets stretch further across North America than any other MLP, and touch everything from ethanol to coal terminals to oil fields. Its 6.3% yield is strong, and should support the units, even in a down market. However, a thin coverage of the distribution means management has left itself little margin for error, and missing distribution guidance would have a significant negative impact on the unit price. The low oil hedges are mistakes of the past, and as they roll off each year the company will benefit, should oil prices remain above $80 in the next five years. The strong operating history of the company makes me confident in its prospects going forward, but investors should keep a close eye on distribution coverage.

Next up will be Energy Transfer Partners (ETP).

Disclosure: I am long EPD, NRGY.

Steps To Make Children Parties Successful

Parties are the best way of sharing your achievements, and happiness with your loved ones. The participation of your friends and family members increase the pleasure by several folds. Thus, adults as well as the children are always very keen to celebrate these moments. Parents always try to throw a memorable party for their children. Often they do not have any experience to manage the children parties. In fact, it is not a difficult task. You can make your party a big hit through these simple steps.

There are certain people who seem confused about the party preparations. They seem to lack decision powers as well as good orientation skills. But, the parents should try to make the arrangements themselves and try to manage every detail. Many people take the services of event organizers to help prepare their party. But actually, just with a little effort, you can make a successful party. Following are some simple steps and guidelines that can help you have successful children party that runs smoothly and everyone enjoys.

Keeping in view the interests of your child, the next important step is the right allocation of the budget. It is very important to spend money at its deserved place. After setting your budget limit, make a list of the things required at the party.

The party can also be successful if the child, whose party is to be celebrated, is asked about his/her own choice regarding the venue, decorations, food and other items. The decoration of the venue in children parties should be relatively special. The use of different, bright colours is better. Kids are usually attracted towards balloons, so balloons must be a part of the decorations. If different motives are used for decoration, they should not be philosophical, rather entertaining, for kids.

3.Consider how much have you got to spend? Set yourself a budget and stick to it. Party costs can easily increase while making arrangements for entertainment, prizes, favours, games and decorations. The parents should keep in mind that most of the young children are more concerned with having friends over, opening presents and eating cake than with the kind of decorations or menu being selected for the event.

The choice of food is also very important. All the food items should be included that kids like the most. There should be a variety of food items in children birthday parties. The food should be offered more than one time in children parties, because kids usually do not eat much at once. Some soft drinks should also be included in the party.

5.Food; the simpler, the better. Ordering some pizza and buying some pop and other snacks like cookies would be easy and convenient both for you as well as the guests. If you want to make your own food, make it simple. The most important of all the components is the birthday cake.

Bakeries can make any cake on order as well. It is important not only to choose a cake flavour they like, but the type of the cake as well. Chocolate, strawberry, pineapple and a lot of other flavours are available in cakes nowadays to cater to the need of a large number of people.

Find out more information about Childrens Parties and how to make it special.

Houston Wire & Cable Passes This Key Test

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

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

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

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

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

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

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

Watching the trends
When that red line (AR growth) crosses above the green line (revenue growth), I know I need to consult the filings. Similarly, a spike in the blue bars indicates a trend worth worrying about. Houston Wire & Cable's latest average DSO stands at 59.1 days, and the end-of-quarter figure is 60.8 days. Differences in business models can generate variations in DSO, and business needs can require occasional fluctuations, but all things being equal, I like to see this figure stay steady. So, let's get back to our original question: Based on DSO and sales, does Houston Wire & Cable look like it might miss its numbers in the next quarter or two?

I don't think so. AR and DSO look healthy. For the last fully reported fiscal quarter, Houston Wire & Cable's year-over-year revenue grew 16.8%, and its AR grew 6.6%. That looks OK. End-of-quarter DSO decreased 8.7% from the prior-year quarter. It was up 4.8% versus the prior quarter. Still, I'm no fortuneteller, and these are just numbers. Investors putting their money on the line always need to dig into the filings for the root causes and draw their own conclusions.

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

• Add Houston Wire & Cable to My Watchlist.

No Sign Of Recession In September Retail Sales

Any one economic indicator is suspect as a measure of the broad trend, but the updates arrive one at a time and so we must take ‘em as we get ‘em. Taking this morning’s retail sales report at face value suggests that the recession talk of late is premature. Retail purchases rose sharply last month, gaining 1.1% on a seasonally adjusted basis over August. That’s the best month for retail sales since February. Recession where is thy sting?

“It’s a strong performance,” says Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott. “Retailers are in good position to profit from the holiday season.”

It’s true that a big chunk of last month’s surge is due to auto sales. But excluding motor vehicle and parts dealers from the equation still leaves retail sales up by a healthy 0.6% last month. Proclaiming hard-and-fast rules in the dismal science is dangerous, but let's dispense with that caveat for a moment and state what's on everyone's minds this morning: It’s hard to argue there’s a recession under our noses in the face of robust consumption gains.

One month doesn’t make a trend, even a particularly strong month. But reviewing the 12-month rolling percentage change in retail sales doesn’t change the rosy glow that emanates from today’s update. September retail sales are higher by nearly 8% vs. the year-ago figure. For a mature economy the size of the U.S., that’s about as good as it gets. Is the strong annual pace a fluke? If it is, it’s a fluke that’s been unfolding for the better part of the last two years, as the chart below reminds.

The case for thinking there’s a recession near, or that one has already begun, looks weak if not laughable based on today’s retail sales report. Or have we hit a new strain of economic contraction that has no immediate effects on consumption? Never say never in economics, but I’d label that scenario as highly unlikely. History suggests that we’d see some deterioration in retail sales concurrently with the arrival of a new recession. As such, the evidence suggests we should be cautious in anticipating an outright contraction in GDP.

"It looks like third-quarter GDP is going to be better than the first and second quarter combined," advises John Canally, an investment strategist and economist for LPL Financial.

Then again, no one will confuse the current state of macro as healthy. The familiar troubles are still here, starting with the weak pace of job creation. But modest growth isn’t a recession, even if it feels like one.

Today’s retail sales report might be dismissed if there was no other supporting evidence of sluggish but sustained economic growth. But we have a number of recent updates that tell us the economy will muddle along. The ongoing if modest pace of job growth, for instance.

Can we be absolutely sure that a recession isn't upon us? Alas, no. Such definitive statements in matters of the business cycle can only be made with the benefit of hindsight. What we can say with confidence is that if there's a downturn brewing we'll see some evidence in slowing retail sales. The same is true for the trend in job creation, industrial production, and other crucial metrics. But there's no conspicuous decline in the broad numbers on several fronts. That's the basis for optimism. It's an optimism that comes with some baggage, of course. And the outlook could change, perhaps quickly. That's a risk for a precarious recovery.

For the moment, however, the expansion looks slightly less wobbly.

4 Highly Profitable Consumer Goods Stocks With High Sales Growth

Do you believe in the power of the US consumer? For a closer look at stocks affected by consumer spending, we ran a screen.

We began by screening the consumer goods sector for stocks with high sales growth, with over 15% growth in sales over the last 5 years. We then screened these names for those with strong profitability as indicated by DuPont analysis.

DuPont breaks down return on equity (ROE) profitability into three sources:

ROE

= (Net Profit/Equity)

= (Net profit/Sales)*(Sales/Assets)*(Assets/Equity)

= (Net Profit margin)*(Asset turnover)*(Leverage ratio)

Because increases in net margin and asset turnover are considered positive things, DuPont focuses on companies with these characteristics: Increasing ROE along with,

• Decreasing leverage, (i.e. decreasing Asset/Equity ratio)
• Improving asset use efficiency (i.e. increasing Sales/Assets ratio) and improving net profit margin (i.e. increasing Net Income/Sales ratio)

Those companies that pass DuPont are seeing positive trends in the sources of their increasing profitability, which adds further weight to the idea that the names are profitable.

Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

Your browser does not support iframes.

Do you think these names will continue to see growing profits and sales? Use this list as a starting point for your own analysis.

List sorted by sales growth over the last 5 years.

1. Phillips-Van Heusen Corp. (PVH): Designs and markets branded dress shirts, neckwear, sportswear, footwear, and other related products worldwide. Market cap at $6.18B. Price at $89.25. Sales growth over the last 5 years at 23.02%. MRQ net profit margin at 5.3% vs. 3.73% y/y. MRQ sales/assets at 0.227 vs. 0.206 y/y. MRQ assets/equity at 2.487 vs. 2.778 y/y.

2. Vera Bradley Designs, Inc. (VRA): Engages in the design, production, marketing, and retail of functional accessories for women under the Vera Bradley brand. Market cap at $1.10B. Price at $26.50. Sales growth over the last 5 years at 19.50%. MRQ net profit margin at 14.94% vs. 13.01% y/y. MRQ sales/assets at 0.613 vs. 0.531 y/y. MRQ assets/equity at 1.77 vs. 3.203 y/y.

3. Corn Products International Inc. (CPO): Manufactures and sells various ingredients to food and industrial customers in North America, South America, Asia, Africa, and Europe. Market cap at $4.34B. Price at $56.70. Sales growth over the last 5 years at 18.86%. MRQ net profit margin at 6.14% vs. 3.68% y/y. MRQ sales/assets at 0.291 vs. 0.279 y/y. MRQ assets/equity at 2.527 vs. 2.552 y/y.

4. Treehouse Foods, Inc. (THS): Operates as a food manufacturing company servicing primarily the retail grocery and foodservice distribution channels in the United States and Canada. Market cap at $2.10B. Price at $57.62. Sales growth over the last 5 years at 16.89%. MRQ net profit margin at 5.57% vs. 5.51% y/y. MRQ sales/assets at 0.223 vs. 0.213 y/y. MRQ assets/equity at 2.24 vs. 2.445 y/y.

*Accounting data sourced from Google Finance, all other data sourced from Finviz.

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

The Stocks Wall Street Loves

Despite all of Wall Street's conflict and contention, a fortunate few companies enjoy unanimous support among professional analysts. If the market's movers and shakers all believe these companies will beat the long-term averages, well, surely they will -- right?

Not so fast! With help from the 180,000 members of�Motley Fool CAPS, we'll see whether these highflying favorites deserve analysts' unwavering support.

Stock	CAPS Rating (out of 5)	CAPS Bullish Sentiment	No. Wall Street Analysts	52-Week Price Change
AEterna Zateras (Nasdaq: AEZS  )	*****	98%	8	21%
Berkshire Hathaway (NYSE: BRK-B  )	*****	98%	18	(4%)
Pluristem Therapeutics (Nasdaq: PSTI  )	*	85%	3	104%

Source: Motley Fool CAPS.

There's a wide range of results here, so just because Wall Street loves 'em doesn't mean you have to. Use the list as a jumping-off place for your own research.

Hitting the gas
Although biotech AEterna Zentaris is nestled with Keryx Biopharmaceuticals (Nasdaq: KERX  ) hand-in-glove through its colorectal cancer drug perifosine, which it licenses to the pharmaceutical, it was able to report a surprise profit in the third quarter primarily because of higher sales of its hormone drug, Cetrotide, used as part of in vitro fertilization procedures. It also expects similarly high levels of Cetrotide sales in the fourth quarter, as marketing partner Merck Serono pushes the drug, but it's still a loss-making operation.

It's one of the reasons AEterna is banking on perifosine and AEZS-108, a treatment for advanced endometrial and advanced ovarian cancer, both of which are progressing through late-stage trials. Add in AEZS-130, an oral diagnostic test for AGHD, or adult growth hormone deficiency, and it has a pipeline of drugs that ought to prove valuable in years to come.

But highly rated CAPS All-Star and biotech guru zzlangerhans has a "jaundiced view" of AEterna's ultimate success with perifosine if for no other reason than there's a long history of small-cap biotechs failing to emerge from late-stage trials successfully: "[K]eep in mind that a recent review published in [the Journal of the National Cancer Institute] found that the number of positive phase III trials of cancer drugs from biotechs with caps under 300M in the last ten years was ... zero. I do feel it is more than likely that the share price will move higher from here before topline data, although the decline might certainly continue further before that happens."

Let us know in the comments section below or on the�AEterna Zentaris CAPS page�whether you think the biotech can run against the tide of history, and add it to your watchlist to be notified of the latest developments.

Not discounted enough
Warren Buffett's back to buying the U.S. again, and his revelation that Berkshire Hathaway acquired a 5% stake in IBM (NYSE: IBM  ) with a $10.7 billion cumulative purchase shows he thinks there are some real values in the market today. And that's despite a better than 30% jump in value by IBM over the past year (or perhaps the cause of it).

But he's also upped his stake in Wells Fargo (NYSE: WFC  ) -- or rather protege Todd Combs did. He's already advised investors to see more "Todd purchases" like the one he made in Dollar General to be revealed. Yet he won't reveal everything: The SEC grants Buffett special exemptions to reporting requirements that everyone else has to adhere to, because when he buys a stock it typically drives the price up as everyone else piles in. Essentially, the government ensures that he gets extra profits from his investments. No wonder he doesn't mind calling for higher taxes.

That's why you don't bet against Buffett. As CAPS All-Star�TheMiracleDJR notes, between him and Charlie Munger, it's a tag-team duo you don't want to get in the middle of.

Buffett-Munger greatest duo in history of business. The Corzine disaster further cements their true greatness. A stable of cash cows likely to remain so long after both men are gone.

Add Berkshire to�your watchlist�to see just what other surprises Buffett has up his sleeve, and see what are saying by heading over to the Berkshire Hathaway CAPS page.

Rising fortunes
Stem-cell research company Pluristem Therapeutics is on a roll. It reported its first quarterly revenues last week, after a licensing deal with United Therapeutics (Nasdaq: UTHR  ) saw cash start filling its coffers. United wants to use Pluristem's cells to treat pulmonary hypertension, but it's also seeing positive results from its trials for using its cells to treat critical limb ischemia, which is the end stage of peripheral artery disease.

Pluristem's shares have doubled in value over the past year, even though they sit some 35% below their 52-week highs. But with only a few dozen CAPS members weighing in on its prospects, the biotech is flying under the radar of both Main Street and Wall Street.

Add Pluristem to the Fool's free portfolio tracker, and tell us on the Pluristem Therapeutics CAPS page whether you sense this is a good place for your money.

Agree to disagree
It pays to start your own research on these stocks on�Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page.

Sign up today for the completely�free�service, and tell us whether these stocks deserve to have Wall Street marching lockstep.

Investing Strategies: Assessing Risk Tolerance

One of the things that you really need to think about before you even decide to put your money in a financial vehicle on the way to fiscal independence and early retirement is the risk tolerance that you are going to have. What does that mean? Well, simply put, you need to be absolutely comfortable with the amount of money that you are going to invest. That may sound easy enough but you are not going to believe how many people fall prey to the notion that they are going to have to put more money than they want into a prospect.

The concept seems simple enough: who dares wins. If you want to gain substantial returns, you must be ready to make substantial sacrifices. You really do not expect to make a dollar from pinching pennies, right? You must be ready to part with a lot of money for a longer amount of time – you do not make a fortune overnight and you must resist the temptation to buy out of your investment. People miss the fact that the moment you decide to buy out, that is the end of the road for you and it would be hard for you to recover if you already made a mistake in pulling out far too quickly.

You need to be really at ease with the money you are going to put into a stock or a bond or whatever it is that you are going to use as your way out of the job market and into the round the world cruise that you have always wanted. If you can’t sleep soundly with the amount, then it might be a good idea to reconsider. You definitely want to spend your earnings on things of pleasure and leisure, not to cure the medical bills that you have accumulated in the process of your stressing about the initial sum.

Of course, some people can’t help but to be bothered about it. Of course, naturally you would assume that the people who are younger can stand to lose more than the older people because of the fact that their youth allows them an opportunity to bounce back from a loss, something that old people might not have, and that is indeed how it goes. Of course, at the end of the day, it all comes down to how much you want to win and what you are prepared to lose to get it.

This is one of the better sites that you can visit if you want to know more about risk tolerance, among other topics, of course.

Asian Indexes Jump, Oil Futures Rise After Greek Vote

Asian stocks were rallying on Monday after the pro-bailout party in Greece was projected to have won enough seats to lead a coalition government.

Around 1:30 a.m. EST, Japan’s Nikkei index was up 2%, Hong Kong’s Hang Seng Index was up 1.2%, and Korea’s Kospi had advanced 1.9%.

Commodities also showed strength — Nymex crude futures were trading 1% higher at $84.90 per barrel. Chinese oil company CNOOC (CEO) was up 2.5% in Hong Kong trading.

Barron’s Jonathan Buck expects European markets to rally.

Sainsbury Beats Tesco

LONDON -- It seems such a short time ago that the U.K.'s FTSE 100�supermarkets,�Tesco�(OTC: TSCDY),�J Sainsbury�(OTC: JSAIY), and�Morrisons�were considered safe investments for troubled times.

But then we had Tesco's well-publicized disappointment in its pre-Christmas trading, though the resulting fall in the share price was enough for ace investor Warren Buffett to top up his holdings. (You can read about the deal in the free Motley Fool report "The One UK Share Warren Buffett Loves.") Then came a�first-quarter trading statement�this week that showed a further fall in like-for-like sales, which disappointed the market.

Sainsbury versus Tesco
And today it was time for Sainsbury to release its quarterly figures -- and it outshined Tesco.

Like-for-like sales for the 12 weeks to June 9 rose by 1.4%, with total sales excluding fuel coming in 3.8% higher than the same period last year. That was apparently boosted by Jubilee spending, with an estimated 2 million extra visits made to stock up on party cakes and flags.

Tesco's quarter ended too soon to include the holiday shopping, so we do need to take that into account when comparing the two. But on the other side, apparently the poor April weather will have had a negative effect on Sainsbury's sales.

Why the fall?
Though the company described its performance as "good sales performance in a challenging market", the punters weren't overjoyed, and the share price is down 11 pence, or 3.8%, as I write. On the current price of 280 pence, that suggests a price-to-earnings ratio for the full year of just more than nine and a dividend yield of 6%, which makes the shares seem crazily cheap to me. So why are they falling?

Presumably, the fall is due to like-for-like sales coming in a little behind City guesswork, and that might cause a lowering of full-year forecasts. But it surely won't be by much, and although the dividend wasn't mentioned in today's release, it should be well-covered, and I don't see much likelihood of its not hitting expectations.

Ignore the noise
To me, analysts' machinations over day-to-day effects on shopping footfall and basis-point minutiae are nonsense, and they are trying to rate things to a far greater degree of precision than the real world actually permits. Still, it keeps them in a job, and long-term investors can ignore the noise and concentrate on the all-important long-term fundamentals.

And those fundamentals are saying to me that the supermarket sector is undervalued and should provide nice returns over the next decade; dividend yields of this level from supermarkets don't come along that often in a lifetime.

Where is the U.K.'s leading dividend stock-picker investing today? The identities of Neil Woodford's favorite blue chips are revealed in this free Motley Fool report -- "8 Shares Held By Britain's Super Investor."

Further investment opportunities:

• A Rising Telecoms Dividend
• Beginners' Portfolio: A New Purchase
• 10 Steps To Making A Million In The Market

Will Wells Fargo Help You Retire Rich?

Now more than ever, a comfortable retirement depends on secure, stable investments. Unfortunately, the right stocks for retirement won't just fall into your lap. In this series, I look at 10 measures to show what makes a great retirement-oriented stock.

Wells Fargo (NYSE: WFC  ) has a reputation as one of the strongest banks in the industry. But that didn't stop the company from suffering during the financial crisis, especially as it took on ailing Wachovia and its troubled assets. Still, Wells Fargo has done a good job of bouncing back and getting earnings back to their pre-crisis levels. Can investors expect more good news from the bank? Below, we'll revisit how Wells Fargo does on our 10-point scale.

The right stocks for retirees
With decades to go before you need to tap your investments, you can take greater risks, weighing the chance of big losses against the potential for mind-blowing returns. But as retirement approaches, you no longer have the luxury of waiting out a downturn.

Sure, you still want good returns, but you also need to manage your risk and protect yourself against bear markets, which can maul your finances at the worst possible time. The right stocks combine both of these elements in a single investment.

When scrutinizing a stock, retirees should look for:

• Size. Most retirees would rather not take a flyer on unproven businesses. Bigger companies may lack their smaller counterparts' growth potential, but they do offer greater security.
• Consistency. While many investors look for fast-growing companies, conservative investors want to see steady, consistent gains in revenue, free cash flow, and other key metrics. Slow growth won't make headlines, but it will help prevent the kind of ugly surprises that suddenly torpedo a stock's share price.
• Stock stability. Conservative retirement investors prefer investments that move less dramatically than typical stocks, and they particularly want to avoid big losses. These investments will give up some gains during bull markets, but they won't fall as far or as fast during bear markets. Beta measures volatility, but we also want a track record of solid performance as well.
• Valuation. No one can afford to pay too much for a stock, even if its prospects are good. Using normalized earnings multiples helps smooth out one-time effects, giving you a longer-term context.
• Dividends. Most of all, retirees look for stocks that can provide income through dividends. Retirees want healthy payouts now and consistent dividend growth over time -- as long as it doesn't jeopardize the company's financial health.

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

Factor	What We Want to See	Actual	Pass or Fail?
Size	Market cap > $10 billion	$179 billion	Pass
Consistency	Revenue growth > 0% in at least four of five past years	5 years	Pass
�	Free cash flow growth > 0% in at least four of past five years	3 years	Fail
Stock stability	Beta < 0.9	1.33	Fail
�	Worst loss in past five years no greater than 20%	(12.2%)	Pass
Valuation	Normalized P/E < 18	11.61	Pass
Dividends	Current yield > 2%	2.6%	Pass
�	5-year dividend growth > 10%	(11.7%)	Fail
�	Streak of dividend increases >= 10 years	2 years	Fail
�	Payout ratio < 75%	34.2%	Pass
�	�	�	�
�	Total score	�	6 out of 10

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

Since we looked at Wells Fargo last year, the company has picked up a point. With its dividend yield now safely about the 2% level, shareholders are happy for two reasons, as the stock also picked up 20% over the past year.

Banking stocks have made a lot of headlines lately, often for the wrong reasons. With trading turmoil at JPMorgan Chase (NYSE: JPM  ) and a series of capital-raising concerns at Bank of America (NYSE: BAC  ) , the industry looks far from stable even four years after the financial crisis started to heat up. Especially among banks with big investment operations, like B of A and Morgan Stanley (NYSE: MS  ) , volatility has become standard.

But Wells Fargo has thrived by focusing largely on banking fundamentals. Having increased both deposits and loans, Wells has been able to cut its loan loss allowance and improve the quality of its lending portfolio. In its most recent quarter, Wells Fargo continued its good run with earnings that topped estimates. With 17% growth in earnings per share, the stock got an analyst upgrade.

Even so, Wells Fargo's valuation remains relatively low. Although it trades at a big price-to-book premium compared to B of A and Citigroup (NYSE: C  ) , its financial strength and asset quality arguably make Wells deserving of that premium.

For retirees and other conservative investors, the fact that Wells got the go-ahead to increase its dividends is just another step on the road to complete recovery for the bank. If you're looking for exposure to financials, Wells Fargo is a good way to get it without taking on inordinate risk.

Keep searching
Finding exactly the right stock to retire with is a tough task, but it's not impossible. Searching for the best candidates will help improve your investing skills, and teach you how to separate the right stocks from the risky ones.

If you really want to retire rich, no one stock will get the job done. Instead, you need to know how to prepare for your golden years. The Motley Fool's latest special report will give you all the details you need to get a smart investing plan going, plus it reveals three smart stocks for a rich retirement. But don't waste another minute -- click here and read it today.

Find out more about Bank of America and why it might not stand up to Wells Fargo. You'll find the latest on the bank here in the Fool's premium report on B of A.

Add Wells Fargo to My Watchlist, which will aggregate our Foolish analysis on it and all your other stocks.

Significance of Bankruptcy and Economic Growth

Bankruptcy is the most important part of any economic crisis. It is the plumbing of economics. It allows the market to flush away the inefficient businesses and reallocate capital to efficient businesses. Most countries have bankruptcy laws and many investors assume that they are all the same. But all laws have a problem regardless of the country or the legal system. They are just pieces of paper. To give life to law requires an entire legal infrastructure. This requires fairly honest courts and methods for enforcement. The quality or economic efficiency of legal infrastructure varies widely from country to country. Of course, certain areas of law are abused more than others. Tax law is unpopular for obvious reasons, but bankruptcy cannot be far behind.

Bankruptcy is about death, the death of a business. It hurts the owners or shareholders, management and employees. All of these people lose money and jobs. And exactly who benefits from this process? Creditors, banks and bond holders, the people who supplied the loans and the credit in the first place.

Bankruptcy suffers from a fatal flaw. There are usually more and better organized shareholders, owners, managers and employees than there are banks, depositors, creditors, and bondholders. So the political power usually ends up with the former rather than the latter. When bankruptcy becomes necessary in times of economic stress, politicians look for scapegoats. Creditors and banks make easy targets, especially if they are foreign. So telling creditors to forget repayment is often much easier than calming a mass of unemployed angry voters or protesters.

Yet credit is essential to economic growth. In game theory, a debtor’s best move is not to repay the debt. Creditors know this and their best move is not to lend. So without adequate legal protections, economic growth can come to an end. The issue is especially important when the owner is the government.

Government owned entities cause trouble because of their size and the politics involved. This problem is most prevalent in emerging markets, but not limited to them. The real estate financial giants Freddie Mac (FRE) and Fanny Mae (FNM) in the United States were allowed to amass huge quantities of toxic assets as a result of political power and poor management. Both are private companies and both are, or were, insolvent. They have avoided the bankruptcy courts due to support courtesy of the US taxpayer.

The situation in China is especially instructive. Not because it is unusual, it isn’t. It is interesting because of its size.

China’s first bankruptcy law was put in place in 1987. Unique among most bankruptcy laws, it applied only to state owned firms. Most bankruptcy laws are silent about insolvency of government related firms, but in those days that was all China had. Although quickly outmoded, it was not replaced until 2007, twenty years later.

The law’s one and only test came in 1999 and it was a disaster. In the 1980s several Chinese provinces and cities established vehicles called “Itics” (International Trust & Investment Corporations) to spur long term development for infrastructure projects. Without any restrictions and with the ability to attract foreign investment, they expanded rapidly an estimated 100 times over. They were able to diversify into a host of businesses, including securities brokerage, equipment leasing, silk textiles, leather and plastics, international trade, manufacturing projects, hotels and other real estate investments.

Some of these firms were way over extended when the effects of the Asia currency crisis hit China. One was GITIC, the “itic” established by Guangdong. In January of 1999, a local court declared GITIC bankrupt with over $4.5 billion in debts of which about $2 billion were owed to foreigners. The bankruptcy sent shock waves through the financial community. The lenders had assumed that the debts were guaranteed by the government. The realization that they were being repudiated dried up credit to China overnight.

The government in Beijing realized its mistake and shored many of the other of the 240 “Itics” that were having severe financial problems. There were no more bankruptcies, but it was too late for GITIC. Creditors eventually received about 3 cents on the dollar.

Memories fade. Creditors no longer relied on the implicit government guarantees. Chinese companies were able to borrow on the international credit markets at low rates. Investors mesmerized by the spectacular growth of the Chinese economy assumed that it would never stop in the same way that investors assumed that the price of American real estate would always increase.

Of course, nothing lasts forever and China has not been immune from the global recession. Investors in Asia Aluminum and FerroChina learned to their sorrow that even Chinese companies can fail. In both cases, the investors thought that they had the protection of other laws. They didn’t. Creditors have yet to pry either assets or information from the Chinese courts.

The problems of China are not unique. There are similar problems all over the world, often hidden from view by intentionally distorted information. China’s case is different only in size. Vast sums have been lent in China mostly by Chinese banks, but undoubtedly also by international lenders based on the optimism of the China growth story. Now vast sums are needed by other governments. To accurately determine the risk of these investments, it is important to look beyond the numbers to the legal institutions that provide transparency and consistency, because when things go sour, they are your only protection.

Disclosure: No Positions

Oracle: Euro Concern Overdone, Say UBS, Citigroup Analysts

A pair of analysts are coming to the defense of Oracle (ORCL) shares, asserting that the stock’s slide on worries about the weak Euro have been overdone – and that Oracle shares could be a good place to hide out in a tumultuous environment.

• Citigroup analyst Walter Pritchard writes that the impact of “southern European turmoil” is not likely to spoil the company’s “typically strong fiscal fourth quarter,” which ends in May. “Inputs from enterprise IT peers such as HP, Dell and Cisco” suggest “strong solid fundamentals in Europe overall.” But he adds that no one is likely to be able to prove that until after Memorial Day. Also, note that he trimmed his price target on the shares to $28, from $32. He also snipped his FY 2010 estimate to $1.65, from $1.66, and for FY 2011 goes to $1.95, from $1.99. Pritchard maintains a Buy rating on the shares,
• UBS this morning advised investors to take a more defensive stance on technology shares. “Given its growing percentage of the world economy, tech has not been immune from increased macroeconomic fears and investor de-risking,” analyst Nikos Theodospoulos writes in a research note. “Although tech earnings remain strong with reasonable valuation levels, we see less potential upside to second half 2010 fundamentals given tougher comps and growing demand uncertainty in Europe and China. As a result, we continue to recommend increasing exposure to more defensive sub-sectors, namely software and to a lesser degree services, while reducing exposure to cyclical areas of tech such as semiconductors and solar.” In connection with that call, UBS is adding Oracle to its “Tech 10″ list, replacing chip maker Semco.

ORCL is down 49 cents, or 2.2%, to $21.79.

Netflix: Street Estimates, Price Targets Keep Ratcheting Higher

The Street keeps raises its expectations for Netflix (NFLX), as the video rental service continues to expand.

• FBR Capital analyst Heath Terry today repeated his Outperform rating, lifting his price target to $85, from $71; the stock closed yesterday at $73.90. Terry raised his 2010 EPS forecast to $2.85, from $2.65. “As physical rental stores increase closures, NFLX develops additional streaming channels, and as the incremental growth in kiosks slows, we believe that subscriber growth could accelerate, particularly as NFLX rolls out its service to 28 million Wii users in the U.S. over the coming weeks,” he writes.
• Merriman Curhan Ford analyst Eric Wold today raised his 2010 EPS forecast to $2.61, from $2.48; for FY 2011 he goes to $3.33, from $3.01. He thinks the stock can move up to the $83.25-$93.25 range, based on a 25-28x P/E multiple and a projected 3-year average growth projection of 26.5%. “We continue to believe Netflix is beginning to experience the positive benefits stemming from a much-earlier-than-anticipated shift to a more profitable subscriber base,” he writes.
• Caris & Co. analyst David Miller on Monday lifted his target to $87.50, from $74, while repeating his Above Average rating; the new target is 25x his above-consensus 2011 EPS estimate of $3.50.

NFLX is up $1.42, or 1.9%, to $75.32.

Food Fight: Why Kellogg Stock Beats General Mills

In the past week, General Mills (NYSE:GIS) and Kellogg Co. (NYSE:K) both made public statements about their respective businesses. Comments by the former were far more positive than the latter. On the surface, General Mills and Kellogg appear to be two businesses heading in different directions. The safe play is to take General Mills. The contrarian move is to buy Kellogg instead. Here’s why you should consider going contrarian:

General Mills

The first page of General Mills’ presentation for the Morningstar Stocks Forum trumpets its global growth. Investors in attendance learned that General Mills’ long-term return to shareholders since 1960 has easily outpaced the S&P 500. In the past decade, GIS has delivered compound annual growth of 8% — 700 basis points higher than the index.

That’s excellent for sure, but how is General Mills achieving this growth? According to the company, it’s as simple as growing sales, segment operating profits and earnings per share by low- to high-single-digit compound annual growth rates, then adding its dividend yield to the mix. That might be so, but if General Mills wants this to continue, its brands will have to do it outside the United States.

Presently, General Mills’ international revenue accounts for about 20% of its overall business. The opportunity exists to develop a more balanced business where revenues outside the U.S. account for a bigger portion of its overall revenue. However, that same opportunity exists for every large processed and packaged goods company — including Kellogg.

General Mills paid $1.2 billion for a 51% controlling interest in Yoplait’s European business in July, as well as a 50% interest in the worldwide rights to the brand. Two questions come to mind about the acquisition. The first is how much additional revenue General Mills can generate from the Yoplait brand in Europe, and secondly, how much profit.

In the first quarter ended Aug. 28, the deal added $171 million in international revenue. Overall, its international business generated $80.7 million in operating profit on $856.3 million in revenue for a margin of less than 10%. Meanwhile, its U.S. retail business has an operating profit of 23%.

Looking at the glass half-full, I suppose one could surmise that General Mills management feels it can do more with the Yoplait brand overseas. Maybe so, but that’s not the real problem. The dilemma here is that its legacy brands don’t generate enough profits outside the U.S. Going after more international business could be seriously detrimental to its future profitability. Only time will tell.

Kellogg

Read through Kellogg’s third-quarter conference call transcript, and the words �supply chain� are mentioned 23 times. CEO John Bryant, at the company for less than a year, was hammered mercilessly by analysts. It wasn’t the company’s shining moment. Kellogg reduced its work force during the past few years in an attempt to cut costs, and in the process, Bryant came to the realization that the company was underspending when it came to quality control and its supply chain.

In the conference call, Bryant suggests the upfront cost for these supply chain investments is 12 cents per share, or approximately $43 million. Analysts seem to portray this sudden increase in spending as some sort of ambush. If analysts were actually paying attention, they probably should have known that Kellogg’s plants were running on vapors. Far better for the CEO to recognize its deficiencies now before things really got out of hand.

Valuation

What does all this mean? Kellogg will earn less this year and possibly into 2012 as well. Worst-case scenario, its forward 2012 earnings per share are around $3.10. That’s a forward P/E ratio of 15.8, below its five-year average.

At the end of the day, this is nothing more than a bump in the road. Kellogg generates almost as much EBITDA as General Mills using less debt, its return on invested capital is several percentage points higher than General Mills and its stock has seriously underperformed General Mills during the past five years. Once Kellogg gets its plants working more efficiently, it will move well above $50 once again.

FDA blocks orange juice shipments from Canada

NEW YORK (CNNMoney) -- The Food and Drug Administration said Friday that it had detained orange juice shipments from Canada after they tested positive for low levels of a banned fungicide previously found in Brazilian juice.

The FDA announced earlier this month that it would begin testing foreign orange juice shipments for the presence of the fungicide carbendazim before allowing them to enter the country. On Friday, the agency said that among 80 shipments from around the world it tested so far, six from Canada and five from Brazil had tested positive.

The samples that have tested positive so far had carbendazim levels of between 10 and 52 parts per billion. The Environmental Protection Agency says carbendazim levels under 80 parts per billion do not raise safety concerns.

Twenty-nine other shipments have tested negative so far, and 15 of those have already been released. Some of these negative tests have come from Canadian and Brazilian shipments, while others came from Mexico, Costa Rica and other countries.

Results are still pending on the rest of the orange juice shipments, as well as on samples from domestic manufacturers.

Brazil accounted for roughly 56% of all U.S. orange juice imports in 2010, shipping over 171 million gallons to the U.S. Canada, by contrast, shipped just 1.6 million gallons, according to the Florida Department of Citrus.

Siobhan DeLancey, a spokeswoman for the FDA, said in a email that it is "hard to tell" when the current testing process will conclude.

"It really all depends on what comes in and what we find," she said.

Coca-Cola (KO, Fortune 500), maker of Minute Maid and Simply Orange, alerted U.S. regulators last month to concerns regarding Brazilian orange juice after it found carbendazim in some of its own products as well as those of competitors.

Carbendazim is is legal in most parts of the world, including Canada, Brazil, Japan, and Europe. In the United States, however, the EPA has not approved its use as a fungicide, and under U.S. law, it's considered an unlawful pesticide chemical residue.

Orange juice futures have shot up on concerns that supply will be constrained by the fungicide concerns, hitting $2.07 a pound for March delivery on the ICE Futures Exchange Friday. 

Taking Stock Market at Face Value

On a simple price/earnings multiple, stocks look cheap. But things aren't so simple.

The S&P 500 now trades at 15.5 times the past year's earnings, under generally accepted accounting principles. That compares to an average price/earnings multiple of 17.8 since 1950. By that metric, the stock market is about 15% below where it should be. Load up your boots.

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Many stock-market cognoscenti are disdainful of comparing stock prices to the past year's earnings, however. Profits are highly cyclical: If earnings turn out to be at their peak, stocks can have low P/Es and be overvalued. So taking cues from Yale economist Robert Shiller (who took his from Benjamin Graham and David Dodd), they compare prices to earnings over the past 10 years. Do that, and stocks don't look cheap at all.

The S&P 500 trades at 22.3 times the past decade's average, inflation-adjusted annual earnings. That compares to an average level of 18.7 since 1950. So stocks are 19% higher than they should be. Sell.

But while comparing stocks to their past 10 years' earnings might normally be a fine idea, at the moment it is a bit problematic. The earnings collapse that followed the 2008 financial crisis was the worst in U.S. history. The earnings collapse in the early 2000s following the bursting of the dot-com bubble also affects the numbers. When it happened, it was the worst since the 1930s.

Both earnings collapses were consequences not just of downshifts in the economy but large write-offs associated with the accounting scandals that followed the dot-com bust and the mountain of debt that went bad after the housing bust. They may have had less to with the underlying profitability of companies in the S&P 500 than with those companies' past excesses.

Why the Dow Soared Today

Well it�s about time. The Dow Jones Industrial Average (INDEX: ^DJI  ) , finally shook off six days of losses to surge over 200 points on the day. Today's gain came despite disappointing consumer confidence data, and reports that showed China�s GDP grew at 7.6% last quarter, its sixth straight quarter of slowing growth.

Here�s how the three major U.S. indexes reacted to the news today.

Index	Change	Ending Value
Dow Jones Industrial Average	203.82 [1.62%]	12,777.09
Nasdaq	42.28 [1.48%]	2,908.47
S&P 500 (INDEX: ^GSPC  )	22.02 [1.65%]	1,356.78

Why did markets shoot up despite two seemingly bearish economic reports? In a word: earnings. JPMorgan soared 6% on the day after reporting earnings that beat expectations. The so-called London whale�s losses were booked at $4.4 billion, and will likely get significantly worse before it�s all said and done. But JPMorgan made up for it with gains from selling securities, some accounting quirks, and reducing loan loss reserves to beat expectations. Fellow bank Wells Fargo continues to dominate the mortgage market, and also reported a solid quarter, with its stock jumping 3.2% on the day. The great day for these two banks helped Bank of America surge 4.6%, as well. Check out the video below for more on what drove the Dow, and what to watch for from next week�s earnings.

Despite today's good news, there's still a tremendous amount of uncertainty surrounding the market. That may tempt many investors to take their money and run far from stocks. But that can be one of the biggest mistakes investors can make. Some of the most successful stock picks are great dividend stocks�purchased at attractive valuations on dips in the market. With that in mind, we've taken an in-depth look at all 30 Dow components, and picked out our three favorite Dow dividend�stocks that investors can buy right now. You can find the names and analysis of these companies in our brand-new free report, "The 3 Dow Stocks Dividend Investors Need." Read the report now -- it's�absolutely free.

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Gold Breaks 200-Day MA, Silver Plummeting

Gold and silver prices were falling hard Wednesday morning following renewed anxiety over euro zone leaders’ ability to agree on sufficiently strong treaty reforms and a debt solution, as well as the results of the last scheduled 2011 meeting of the U.S. Federal Reserve Board’s Open Market Committee.

Spot gold was down more than 1.8% at 10:50 a.m., with a bid price of $1,601.10 per ounce and an ask price of $1,602.10, having traded as high as $1,632.50 and as low as $1,598. The London afternoon reference price fix came in at $1,603, according to Kitco market data.

The price of gold has now fallen to its 200-day moving average support level, which BullionVault puts at $1,610 an ounce. The 200-day MA support held repeatedly during the volatile market downturn during September-October, one market analyst noted. A breach would signal a reversal in trend and a bear market in gold.

“We have the beginnings of a real bear market, and the death of a bull (in gold),” said Dennis Gartman, who advised readers of his investment newsletter to avoid buying gold back in August.

Spot silver was down a whopping 6.2% Wednesday morning, bid at $28.94 per ounce with an ask price of $29.04. The morning high as of time of writing was $30.25 and the low was $28.74. Wednesday’s reference price was set at $29.92 in the London a.m.

A weaker euro and stronger U.S. dollar isn’t supportive of higher precious metals, or share prices, it appears, nor was word from the U.S. Federal Reserve yesterday and Europe today. For better or for worse, the markets were disappointed that the FOMC shied away from any additional easing of monetary policy. Italy had to pay a coupon rate of nearly 6.5% to sell all the five-year bonds it wanted to. Also, German leaders rebuffed another call by euro zone members for the European Central Bank “to intervene decisively to stop the crisis escalating,” according to Reuters.

Turning to stock exchange trading, gold and silver trusts were falling fast and hard.

• The SPDR Gold Trust (NYSE:GLD) was showing losses of more than 2.7%.
• The iShares Gold Trust (NYSE:IAU) was down around 2.9%.
• The iShares Silver Trust (NYSE:SLV) was falling sharply, down between 6% and 6.6%.

Gold and silver mining ETFs were following suit.

• The Market Vectors Gold Miners ETF (NYSE:GDX) was down about 4.6%.
• The Market Vectors Junior Gold Miners ETF (NYSE:GDXJ) fell about 5.25%.
• The Global X Silver Miners ETF (NYSE:SIL) was down some 6.2%.

Gold mining shares were showing sharp losses across the board.

• Agnico-Eagle Mines (NYSE:AEM) was showing losses of some 4.5%.
• Barrick Gold (NYSE:ABX) was down around 4.5%.
• Goldcorp (NYSE:GG) was showing losses of around 3.5%.
• Newmont Mining (NYSE:NEM) was around 3.25%.
• NovaGold Resources (AMEX:NG) was more than 5.8% lower.

Silver mining shares were taking it on the chin as well.

• Coeur d’Alene Mines (NYSE:CDE) was moving lower, down nearly 5.8%.
• Hecla Mining (NYSE:HL) was down more than 8.5%.
• Pan American Silver (NASDAQ:PAAS) was down more than 6.2%.
• Silver Wheaton (NYSE:SLW) was showing losses of 6.6%.
• Silver Standard Resources (NASDAQ:SSRI) was down more than 8%.

As of this writing, Andrew Burger did not own a share in any of the aforementioned stocks. Adrian Ash of BullionVault contributed to this report.

Stocks Push Higher As Fed Speculation Grows

• Dow Jones Industrial Average is up 95.51 (+0.75%) to 12,837.33
• S&P 500 is up 13.20 (+0.98%) to 1,357.98
• Nasdaq Composite Index is up 34.43 (+1.19%) to 2,929.76

GLOBAL SENTIMENT

• Hang Seng Index down 0.06%
• Shanghai China Composite Index down 0.66%
• FTSE 100 Index up 1.73%

Stocks rallied into Tuesday's close, rising for a fourth day to a one-month high as traders contemplated whether the Federal Reserve will announce additional liquidity measures tomorrow.

Nearly all industry sectors in the S&P 500 finished with broad gains - led by financial and energy companies, each rising nearly 2% each as a group. The only groups ending in the red today were the normally defensive consumer staples and utilities groups. Crude oil and copper rose on the stimulus speculation while gold declined despite the U.S. dollar weakening.

Economic data released this morning was mixed, with housing starts last month retreating to 708,000, down 9,000 from the prior month and also lagging estimates by 12,000 houses. But new permit activity surprised Wall Street, coming in at 780,000 units in May, easily beating expectation for contractors pulling 736,000 permits last month.

Retail sales at chain stores also improved, rising 2.4% from year-ago levels, according to the weekly Redbook survey. The ICSC-Goldman Store Sales index was up 3.6% over the same week last year.

But today's middling news on housing seemed to spark a risk-on trade, as investors speculated it would encourage further easing by the Fed. The most popular theory has the FOMC extending its Operation Twist program of selling short-term securities while buying longer-term ones, working to keep a lid on long-term interest rates.

In commodities trade, crude oil for August delivery rose 73 cent to $84.33 a barrel while, July natural gas fell 8 cents to $2.55 per 1 million BTU. August gold fell $3.40 to $1623.30 an ounce while July silver gave up 29 cents to $28.37 an ounce. July copper rose 3 cents to $3.43.

UPSIDE MOVERS

(+) NWK, Agreed to be acquired by Sonus Networks for $41.3 million.

(+) VRNG, Wins intellectual property and patent hearing in federal court.

(+) CTRN, Upgraded to Positive from Neutral at Susquehanna.

(+) ROSG, Company's miRview mets2 approved for Medicare reimbursement.

(+) ZLCS, Successfully completes Phase I study of new pain medication.

(+) URZ, Uranium producers rally as two Japanese reactors restart.

DOWNSIDE MOVERS

(-) BKS, Reports wider-than-expected loss.

(-) JCP, Company's chief marketing officer forced out after only 8 months on the job.

(-) MDGN, Completes $9.5 million private placement.

(-) WAG, Spends $6.7 billion for stake in Alliance Boots.

(-) OINK, Terminates exclusive sales and supply pacts with An Puluo Food Inc.

Stocks End Monday Near Highs But Rally Looks Limp

The S&P finished Monday up nearly 3% following a strong start to the holiday shopping season and optimism about further intervention in Europe.

The Nasdaq was even stronger today, finishing up 3.5%. Stocks closed about where they opened thanks to a late surge into the close.

Although stocks did technically hold onto most of their overnight gains, the action was unimpressive. After an initial surge off the open, the market trended lower most of the day before the push in the last five minutes of the day.

The SPDR S&P 500 ETF (SPY) hit $120.18, which was in the high end of resistance zone #1 that I outlined this morning. Intra-day traders do not like this type of gap up because it takes away the meat of the trade.

It was hard to buy this market after a nearly 3% gap up, but still hard to short knowing that many shorts are trapped and there are whispers of intervention in Europe and from the Fed. You need to be a surgeon to have any chance to make money in either direction after a big gap up from oversold levels.

Banks were some of the biggest winners overnight, which seemed to hint that market intervention could be coming. However, the group showed relative weakness during the session and did little to show that a bottom may be in. There were small pockets of stocks that did break above the morning 30-60 minute ranges, but they were not easy to find. They also failed a bit later in the day.

Sina Corp (SINA) gave some nice two way action today. The stock broke violently to the downside after an article in the Chinese Wall Street Journal suggested the company could be the next target of short-selling research firm Muddy Waters, but then rebounded sharply when Muddy Waters tweeted that it was not preparing any such report on SINA. Despite the clarification, the stock faded after the reflex bounce. Even without the early talk, SINA had been showing relative strength and looked prepared to break down. It was merely pushed off the cliff by the misconstrued report.

Molycorp (MCP) exploded higher early in the day following an official announcement that it has entered into an agreement with Daido Steel and Mitsubishi to manufacture sintered next-generation neodymium-iron-born (NdFeB) permanent rare earth magnets. The stock still gave some good entries after the news and initial pop.

Although there were selective opportunities out there today, I think it is more prudent to keep risk low and wait for better opportunities. The market has a lot to prove, and today�s gap up was not based on any really solid news.

Make Money in Growing Retail Stocks the Easy Way

Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect retailers to thrive as our economy eventually gets back on track, the SPDR S&P Retail ETF (AMEX: XRT  ) could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. This retail ETF's expense ratio -- its annual fee -- is a low 0.35%.

This ETF has performed rather well, beating the S&P 500 handily over the past three and five years, on average. But it's also very young, with just a few years on the books. As with most investments, of course, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

What's in it?
Several of this ETF's components made strong contributions to its performance since 2011 began. 99 Cents Only Stores (NYSE: NDN  ) , up 36%, has been benefiting from our wretched economy that has more folks than usual seeking deep discounts -- and speculation that it might be bought out has also propped up shares. Barnes & Noble (NYSE: BKS  ) , up 14%, is struggling as a brick-and-mortar bookseller in these electronic days, but it's also pinning a lot of hope on its new Android-based Nook Tablet, designed to compete with Apple's iPad and with Kindles, as well.

Other companies haven't added as much to the ETF's returns this year, but could have an effect in the years to come. Sears Holdings (Nasdaq: SHLD  ) has dropped more than 20%, as it has far more debt than cash. It's closing stores and posting losses, too.

Clothing retailer Aeropostale (NYSE: ARO  ) , down 40%, was whacked by surging cotton prices and financially pressured customers, but it remains a well-managed company. Brown Shoe (NYSE: BWS  ) , down 45%, is starting to see revenues rise in recent quarters, though its profit margins remain thin.

The big picture
Retail demand isn't going away anytime soon. A well-chosen ETF can grant you instant diversification across any industry or group of companies -- and make investing in and profiting from it that much easier.

Learn about the best dividend ETFs. And if you're looking for some great investments beyond ETFs, consider these 10 stocks for your retirement portfolio.

Drought Forces Russia to Ban Grain Exports

Russia yesterday (Thursday) banned grain exports after unrelenting heat left the country with its worst drought in at least a half-century.

Wheat rose to a 23-month high after Russia, the world's third-largest grower, announced a ban beginning Aug.15 that will last through the end of the year. Corn and rice prices also surged yesterday after Russian Prime Minister Vladimir Putin said a ban on those grains would be "appropriate" in light of skyrocketing prices. 

Domestic grain prices gained 19% last week, faster than at the peak of the global food crisis in 2008.  The ban includes wheat, barley, rye, corn and flour exports, according to the government decree that also set aside nearly $1.2 billion for stricken farmers.

"As of today, Russia has no grain market," Kirill Podolsky, chief executive officer of Valars Group, the country's third-biggest grain trader told Bloomberg News. "This will be a catastrophe for farmers and exporters alike."

Valars will stop exports immediately because shipments may be held at customs until the start of the ban.

Russia's Agriculture Ministry on Tuesday cut its forecast for the country's 2010 grain output to between 70 million and 75 million metric tons, down from earlier estimates of as much as 90 million tons.

Wheat for September delivery yesterday rose the permissible limit of 60 cents to $7.855 a bushel on the Chicago Board of Trade, the highest since August 2008. Wheat reached a record $13.495 in February 2008, part of a surge in prices that sparked food riots from Haiti to Egypt. The Russian heat wave, combined with dry weather in Kazakhstan, Ukraine and the European Union, and flooding in Canada has stunted crops, sparking a 91% surge in wheat prices in Chicago since June 9.

World wheat stockpiles may decline by 2.5% to 192 million tons by June 2011 as dry weather hurts the outlook for crops, the International Grains Council said on July 29, reversing a forecast for higher inventories.

The damaged crops are spurring some analysts to warn that agriculture shortages and price increases could filter through to consumers, posing a challenge to central bankers trying to contain inflation as they struggle to sustain the global economic recovery.

Emerging-market consumers are increasingly eating meat, which means higher demand for grain that could push price rises for wheat further through the food chain. In India, where some grain stocks have been allowed to rot, annualized inflation in June rose to 10.55%, adding to the dilemma of a central bank facing calls to keep rates steady to support economic recovery.

Food costs advanced to records in 2008 as some exporters curtailed shipments amid a shortage. While the United Nations' food-price index is 22% lower than its peak in June 2008, the gauge is 13% higher than a year ago, Bloomberg reported.

Renaissance Capital boosted its forecast for Russian inflation in 2010 to between 7% and 7.5%, up from a prior estimate of 6.3% because of possible effects the drought could have on food prices.

Concern that lower-than-expected wheat output may contribute to a food crisis is "unwarranted at this stage," the United Nation's Food and Agriculture Organization said yesterday.

Although wheat accounts for just a fraction of the cost of bread, food companies passed those increases on to consumers during the 2008 crisis. But it may be different this time around as executives say they will be more cautious because recession-battered consumers are still feeling the pain in their wallets.

"Consumers are still hurting out there," Patrick Doyle, chief executive of Domino's Pizza Inc. (NYSE: DPZ), told The Wall Street Journal in late July, when the rally in wheat prices was well underway. 

The scorching temperatures and dry skies threatening Russia's wheat harvests have also been beating down on Western Europe, leading forecasters to predict lower output of crops from French wheat to Italian tomatoes. Economists forecast a boost in seasonal food prices, with the German government reporting a 12% to 15% rise in July.

Ben Lloyd-Hughes, a climate scientist at the University of Reading's Walker Institute in England, told The Journal that pockets of Western Europe also are being affected by drought, but that Southwest Russia, Ukraine and Belarus are hardest hit.

"It is the lowest rainfall and the highest temperatures that the area has seen in the last 30 years or more," he said. "Droughts at this time of year in that region tend to reinforce themselves because the soil dries out, which subsequently makes the drought worse."

The death toll from Russia's forest and peat fires hit 50 Thursday, as government efforts failed to stop the blazes from spreading.

Russian President Dmitry Medvedev declared a state emergency in seven regions on Monday, including around Moscow. Some 300 to 400 new blazes are starting every day, Vladimir Stepanov, head of the Emergency Situations Ministry's crisis center, told The Journal.

"As far as weather conditions go, unfortunately there won't be any positive dynamics, and this type of weather will persist to the end of the week, leading to a worsening of conditions on the ground," Stepanov said.

News & Related Story Links:

• Bloomberg: Wheat Soars to 23-Month High as Russia Bans Exports; Rice Gains 
  
• Wall Street Journal: Wheat Goes Up, Prices to Follow
  
• Wall Street Journal: Wheat's Jump Hints at Inflation Bellyache
  
• Wall Street Journal: Heat Wave and Drought Shrivel Harvests Across Europe

Mutual Funds, U.S. Stock Funds Lead January Inflows; ETFs Dip: Morningstar

Morningstar reported Monday that long-term mutual funds, after suffering outflows of $10.6 billion in December, collected $29.8 billion in January 2011, while stock funds experienced their best month since February 2006 with inflows of $15.8 billion after an eight-month run of outflows.

ETF inflows dropped slightly to $11.3 billion in January after collecting $18.4 billion in December. As of the end of 2010, assets under management exceeded $1 trillion. U.S. stock ETFs drove inflows in January with $9.9 billion, Morningstar reports, despite being down 50% month over month. In December, U.S. stock ETFs brought in $17.2 billion.

Taxable-bond ETFs gained $2.9 billion in January, the month's second highest inflows by asset class.

International stock ETFs had the second highest inflows in 2010 among ETF assets classes, Morningstar reports, but saw modest outflows in January, losing $491 million.

Commodities ETFs, especially precious metals, led outflows, losing $1.7 billion. Futures-based broad agricultural commodities funds experienced some inflows.

Municipal bond outflows totaled $12.5 billion in January after suffering record outflows in December of $13.4 billion.

Taxable bond funds reversed course, gaining $10.7 billion in January after $4.5 billion in outflows in December. Credit-oriented categories, especially bank-loan funds which gained assets of $5.6 billion in January, led inflows for the asset class. January was the second consecutive monthly inflow record for bank-loan funds, and was the sixth consecutive month-over-month increase.

Actively managed U.S. equity funds beat out passively managed funds with $10 billion in inflows, compared with $5.8 billion. Morningstar reported that January was only the fourth month over the past three years that actively managed funds have outdrawn passively managed funds.

Money market funds experienced their largest monthly outflow since April 2010, losing $75.9 billion in January.

Top Stocks For 6/12/2012-5

Dr Stock Pick HOT News & Alerts!

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FREE Daily Stock Alerts From DrStockPick.com

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Friday Jan. 22, 2010

DrStockPick.com Stock Report!

Stocks Upgraded Today

Company	Ticker	Brokerage Firm	Ratings Change	Price Target
EMC Corp	EMC	Brigantine	Hold � Buy	$23
Quanta Services	PWR	Robert W. Baird	Neutral � Outperform	$24
Gorman-Rupp Company	GRC	Boenning & Scattergood	Neutral � Outperform	$360 � $400
Plexus	PLXS	Longbow	Neutral � Buy	$50
Optimer Pharma	OPTR	Ladenburg Thalmann	Neutral � Buy	$13.50 � $16
Tyson Foods	TSN	BB&T Capital Mkts	Hold � Buy	$17
Petrohawk Energy	HK	Credit Suisse	Neutral � Outperform	$26 � $31
Rio Tinto PLC	RTP	HSBC Securities	Neutral � Overweight
Wilshire Bancorp	WIBC	B. Riley & Co	Neutral � Buy
Genomic Health	GHDX	Piper Jaffray	Neutral � Overweight
Perry Ellis	PERY	Sun Trust Rbsn Humphrey	Neutral � Buy	$18
Intl Game Tech	IGT	Oppenheimer	Perform � Outperform	$22 � $29
Del Monte	DLM	Deutsche Bank	Hold � Buy	$12 � $14
Basic Energy Services	BAS	Deutsche Bank	Hold � Buy	$6 � $18
Exco Resources	XCO	JP Morgan	Underweight � Neutral	$23 � $24.50
Teekay Shipping	TK	JP Morgan	Underweight � Neutral	$26 � $32
JP Morgan Chase	JPM	Citigroup	Hold � Buy	$48
Steiner Leisure	STNR	William Blair	Mkt Perform � Outperform
Empire District Elec	EDE	Jefferies & Co	Hold � Buy	$18 � $20.50
j2 Global	JCOM	Morgan Keegan	Mkt Perform � Outperform

Stocks Downgraded Today

Company	Ticker	Brokerage Firm	Ratings Change	Price Target
GATX	GMT	JMP Securities	Mkt Outperform � Mkt Perform
Royal Caribbean	RCL	Wedbush Morgan	Outperform � Neutral	$24
BostonPrivate Fin	BPFH	Sun Trust Rbsn Humphrey	Buy � Neutral
Google	GOOG	Collins Stewart	Buy � Hold	$635 � $615
Valley National	VLY	UBS	Neutral � Sell
Westamerica Banc	WABC	Cantor Fitzgerald	Buy � Hold
Federal-Mogul Corp	FDML	BB&T Capital Mkts	Buy � Hold
Watson Pharm	WPI	Needham	Hold � Underperform
Westamerica Banc	WABC	Stifel Nicolaus	Hold � Sell
SLM Corp	SLM	Ladenburg Thalmann	Buy � Neutral
Telecom Italia	TI	Citigroup	Buy � Hold
Telefonica S.A.	TEF	Citigroup	Buy � Hold
Health Fitness	FIT	B. Riley & Co	Buy � Neutral
Home Bancshares	HOMB	B. Riley & Co	Buy � Neutral
Becton Dickinson	BDX	Piper Jaffray	Overweight � Neutral
Simcere Pharma	SCR	Oppenheimer	Outperform � Perform	$9
KeyCorp	KEY	Keefe Bruyette	Outperform � Mkt Perform	$8

FOREX-Swiss franc slides on SNB measures but to stay high – Reuters

Reuters UK

FOREX-Swiss franc slides on SNB measures but to stay high Reuters NEW YORK, Aug 3 (Reuters) – The Swiss franc fell from record highs against the dollar and euro on Wednesday after the Swiss National Bank unexpectedly cut interest rates, a direction that should prove fleeting as global growth concerns … WORLD FOREX: SNB Surprises Market But Risk Aversion Still KingWall Street Journal Forex – SNB Moves in to Weaken the CHFFXstreet.com Forex – Swiss Franc Plummets on SNB Intervention ConcernsForexTV.com NASDAQ -Forex Pros -Action Forex all 504 news articles »

{forex} – Google News

7 Industrial Stocks to Sell

After the banks and homebuilders that fueled the housing bubble, the industrial sector was perhaps hardest hit by the financial crisis and resulting economic downturn. As overall spending and activity slowed, manufacturers took a beating — and many haven�t recovered.

I watch more than 5,000 publicly traded companies with my Portfolio Grader tool, ranking companies by a number of fundamental and quantitative measures. And this week, I�ve identified seven industrial stocks to sell.

Each one of these stocks gets a �D� or �F� according to my research, meaning it is a �sell� or �strong sell.�

ABB Ltd. (NYSE:ABB) works with power and automation technologies. While the Dow Jones has posted a gain of 9% in the last year, ABB has recorded a loss of 11% in the same time. ABB stock gets an �F� grade for its ability to exceed the consensus earnings estimates on Wall Street and a �D� grade for the magnitude with which earnings projections have increased over the past months. For more information, view my complete analysis of ABB stock.

Emerson Electric Co. (NYSE:EMR) is a diversified global technology company that has dropped 13% in the past 12 months. Emerson stock gets a �D� grade for sales growth, a �D� grade for earnings growth and a �D� grade for its ability to exceed the consensus earnings estimates. For more information, view my complete analysis of EMR stock.

Koninklijke Philips Electronics (NYSE:PHG) is the parent company of Philips Group and has 118 production sites in 27 countries. PHG stock has dipped more than 36% since March 2011. Philips stock gets a �D� grade for sales growth, an �F� grade for operating margin growth, an �F� grade for earnings growth, a �D� grade for earnings momentum, an �F� grade for its ability to exceed the consensus earnings estimates on Wall Street, a �D� grade for the magnitude in which earnings projections have increased over the past months, a �D� grade for cash flow and a �D� grade for return on equity. For more information, view my complete analysis of PHG stock.

General Electric Co. (NYSE:GE) is the most well-known stock on this list. It’s involved in aircraft engines, power generation, water processing, household appliances, medical imaging, consumer financing and other endeavors. Despite its big name, GE has posted a loss of 4% in the last year. GE stock gets an �F� grade for sales growth. For more information, view my complete analysis of GE stock.

Siemens (NYSE:SI) is an electronics and electrical-engineering company. Despite gains by the broader markets, SI stock is down 21% in the last year. Siemens stock gets a �D� grade for sales growth, a �D� grade for earnings growth, an �F� grade for earnings momentum, a �D� grade for its ability to exceed the consensus earnings estimates on Wall Street and a �D� grade for the magnitude with which earnings projections have increased over the past months. For more information, view my complete analysis of SI stock.

Ingersoll-Rand (NYSE:IR) is involved in enhancing the comfort of air in homes and buildings, in the transport of food and perishables and in secure homes and commercial properties. Ingersoll-Rand stock has lost 13% in the last 12 months. IR stock gets an �F� grade for sales growth, an �F� grade for operating margin growth and a �D� grade for cash flow. For more information, view my complete analysis of IR stock.

CSX Corp. (NYSE: CSX) is a transportation supplier that rounds out the list with a 17% drop in the past year. CSX stock gets a �D� grade for its ability to exceed the consensus earnings estimates on Wall Street. For more information, view my complete analysis of CSX stock.

Get more analysis of these picks and other publicly traded stocks with Louis Navellier�s Portfolio Grader tool, a 100% free stock-rating tool that measures both quantitative buying pressure and eight fundamental factors.

SM: Term or Whole Life?

The right type of life insurance can be summed up in a single word: term. But before we explain why, it's important to understand the differences between the most common types of insurance available. Our glossary can help with that, and decipher some of the more common insurance lingo.

• How Much Disability Insurance Do You Need?
• How Much Life Insurance Do You Need?

The basic difference between term and whole life insurance is this: A term policy is life coverage only. On the death of the insured it pays the face amount of the policy to the named beneficiary. You can buy term for periods of one year to 30 years. Whole life insurance, on the other hand, combines a term policy with an investment component. The investment could be in bonds and money-market instruments or stocks. The policy builds cash value that you can borrow against. The three most common types of whole life insurance are traditional whole life policies, universal and variable. With both whole life and term, you can lock in the same monthly payment over the life of the policy. (Read more on how to buy a life insurance policy or determine how much life insurance you will need.)

Whole life insurance is expensive: You're paying not only for insurance but also for the investment portion. That extra cost might almost be worth it if these policies were a good investment vehicle. But usually they aren't. Insurance agents like to call these policies retirement plans, emphasizing the "forced savings" inherent in forking over the premiums each month "for retirement."

Fixed or Adjstable

To determine if you should get an adjustable-rate mortgage, fill in the rest of this calculator.

Loan Amount$Fixed Rate%Adjsutable Rate%

Get started here and finish your calculations in the complete calculator at SmartMoney.

What's This?

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Leaving aside the fact that there are many better ways to save for retirement, these policies come with high fees and commissions, which sometimes lop off as much as three percentage points from the annual return. On top of that, there are up-front (but hidden) commissions that are typically 100% of your first year's premium. Worse, it's often impossible to tell what the return on the investment will be, and how much of what you pay in goes toward the insurance and how much toward the investment.

Premiums for term insurance are downright cheap for people in good health up to about age 50. After that age, premiums start to get progressively more expensive. The same holds true for whole life policies, though people who need coverage starting in their 60s and beyond may have no alternative but to buy whole life. Most companies simply won't sell term policies to people over about age 65.

To get a real sense of the value of term, let's compare a term policy and a universal life policy. Say a 40-year-old nonsmoking male has a choice between a $250,000 Met Life universal policy with a $3,000 annual premium and a same amount of renewable term coverage with a 20-year fixed premium of $350. At the end of one year, the universal policy, assuming it paid 5.7% per year, tax-deferred, would have a cash value of exactly zero (cash value is the amount you would get back if you canceled the policy). But say he had instead invested $2,650 (the difference between $3,000 and $350) in a no-load mutual fund that averaged a total return of 10% annually. At the end of the first year, he'd have $2,841, accounting for taxes on the earnings at a 28% rate. At the end of 10 years, he would have accumulated more than $46,000 in after-tax savings in the mutual fund. Over the same period, the cash value of the policy would have climbed only to $31,819.

Retirement PlannerAre you on track?Current Salary$Annual Savings10% Total Assets$

Can you afford to retire? Enter your info to find out.

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That's not to say that whole life insurance is always a bad idea. Wealthy people can use whole life in their estate planning by setting up an insurance trust that will pay their estate taxes from the proceeds of the policy. And for the growing number of people in their late 40s or early 50s who are just starting families, whole life is at least worth a look.

One of the great problems with whole life is only an expert can tell if a policy you own or are considering will ever become a decent investment. James Hunt, actuary for the Consumer Federation of America, who has analyzed thousands of policies, notes that whole life policies hardly ever yield a reasonable return unless held for 20 years or more. So if you buy one be prepared to pay into it for the very long haul.

The key to a whole life policy is its internal rate of return -- the yield on the policy after all fees and charges are subtracted. A competent analysis can determine at a minimum whether the weight of the fees and charges built into one of these policies will ever allow a worthwhile return. Such an analysis will also pinpoint the minimum amount of cash value that you can derive from a policy at any given time interval.

You've been faithfully paying into that whole life policy a good pal of your brother-in-law sold you 10 years ago. And now you're thinking, "Hey wait a minute, I should be bailing out and getting a cheap term policy." Not so fast. First and foremost, keep in mind the substantial sum you've probably paid in over the years. How much will you get if you "surrender" or cash it in now? The answer to that question can be found in the illustrations you got when you signed on the dotted line. If you can't determine the surrender value you may have to -- heaven forbid -- call your agent and ask. But it's worth taking the trouble before you make a decision.

To Convert or Not?

Should you convert your IRA to a Roth IRA?

Amount$Expected Return 5% 6% 7% 8% 9% 10% 11% 12%Tax Rate 10% 15% 25% 28% 33% 35%Years to Retirementyrs

Get started here and finish your calculations in the complete calculator at SmartMoney.

What's This?

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Most policies don't start to build decent a cash value until their 12th or 15th year. So if you cash in after 10 years, you could be out of a lot of money. And you can be sure that if you surrender in the first five years or so, practically every dime you put in will be down the toilet. The next thing you have to consider is whether you are still insurable at a reasonable rate if you switch to term. That's because you'll have to requalify medically. If you are over 50, smoke or have health problems, you may find it's cheaper to hold onto your old policy. Another option worth considering is a tax-free transfer of the value in your old policy into a better one, perhaps from a low-commission company like Ameritas.

If you're looking for whole life coverage or a term policy that you'll want to keep 20 or 30 years, the financial soundness of the insurer is a critical concern. You want some assurance the company will be around in case you aren't. For insurance companies, the major credit agencies like Standard & Poor's rate claims-paying ability.

Fortunately, information on the credit worthiness of insurance companies is easy to obtain. Reports are cheap or free over the Internet. You can always contact the insurance company and ask about its ratings, but it's best to get this information independently. In general, go with an insurer rated A or better; the most financially sound insurers are rated AAA, though some rating agencies use slightly different letter grades.

The premier Web site in terms of detail and ease of use, (best of all, it's free) is insure.com where you can get ratings online from Standard & Poor's as well comprehensive reports on individual insurers. AM Best has a huge database, but you have to pay for it. While you can access ratings free of charge, a detailed company report will set you back $75.

Make sure any report you get is current, say within the last six months. Be extra careful to confirm ratings you'll find on many of the online quote services, which may be stale.