Wedbush says it's time to buy Netflix...

Wedbush upgrades Netflix (NFLX -0.3%) and raises its target to $155 from $110, based on a belief that the driver for the separation of Netflix into two businesses was to position the streaming business for sale to Amazon (AMZN -4.7%). Wedbush thinks Amazon has always wanted to be in streaming but has been constrained from buying Netflix by tax considerations.

Netflix is up 1.67 to 130.25 this morning.

Ugly open....

Stocks are getting hammered again this morning as it seems that all of a sudden the world is collapsing again.  So much of this is manipulated by negative headlines that seem to build up and are then conveniently released when the market weakens, like yesterday.  The big takeaways from yesterday's actions were the breakdown in the transports and gold.  The gold breakdown was to be expected by anyone who can pull away and look objectively at such a runup in price.  No different than the Housing bubble or the Tech bubble. 

More significant is the drop in Transports.  Strength in Transportation stocks is characteristic of a healthy world economy.  We need to keep an eye on this and heed its warnings.

As of 9:50 am:

Dow -341
Nas -75
S&P -35 to 1132

Here is a chart on the Dow Jones transports:

Bed, Bath and Beyond reports better than expected earnings...

Bed Bath & Beyond Inc. (BBBY). The company posted a quarterly profit that beat Wall Street expectations, as more shoppers showed an interest in decorating their homes. Net income for the second quarter was $229.4 million, or 93 cents a share, compared with $181.8 million, or 70 cents a share, a year ago. The company's same-store sales rose 5.6 percent. For the third quarter, Bed Bath expects to earn 82-87 cents a share, compared with average analysts' expectations of 86 cents per share.

BBBY is down 1.50 to 56 this morning.

United Technologies buys Goodrich...

United Technologies Corp. (UTX). The diversified manufacturer has reached a $16.5 billion cash deal to acquire aircraft components maker Goodrich Corp (GR), in what would be United Tech’s biggest deal in a decade.  United Tech said on Wednesday it would pay $127.50 a share for Goodrich, a 47 percent premium over the stock's closing price last Thursday. It also includes $1.9 billion in assumed debt.


Goodrich had been running up on rumors of this buyout over the last few sessions.  Guess these rumors actually came true.  Here is the chart as of last night, where the stock closed at 109.49.  Note the stock should open today at around $127.50.

Gold prices breaking lower premarket....

The price of gold is currently down $70 to $1738 an ounce.  Take a look at the chart below.  Gold had been holding up above 1750, but is clearly breaking thru that level today.  If you own gold, be careful.  The next support level is 1700, after that "look out below".

Futures lower...

US stock index futures pointed to a sharply lower open on Wall Street Thursday after the Federal Reserve warned of significant risks to the struggling economy and as data showed a further contraction in China's manufacturing sector.

The Fed launched a new plan to lower long-term borrowing costs and bolster the battered housing market by saying it would sell $400 billion of short-term Treasury bonds to buy the same amount of longer-term US government debt. This was its latest attempt to kickstart growth that slowed to a crawl over the first half of the year, but global markets were unimpressed.

Stocks sell off on Fed action...

Stocks closed at the lows of the day:

Dow -283 to 11124
Nas -52 to 2538
S&P -35 to 1166

Transports got crushed losing nearly 6%.

Maybe something good will come out overnight.

Thank you Fed!!!

I mean, am I the only one who sees that the market clearly wants the Fed to STOP pulling out new ways to knock interest rates lower???

Today's action is supposed lead to lower mortgage rates...as if interest rates aren't low enough.  Here's the problem:  there is now nowhere to invest your safe money!!!

IDIOTS just don't get it.

Gold dropping as market sells off???

I've been tracking the performance of the Gold ETF lately and it is no longer a place to hide when markets sell off.  This afternoon, the Dow is down 171 points...and Gold is selling off, in fact looking like it it is going to break down.

Here is the GLD chart.  We'll keep a close eye on it:

Facebook changes front page...

Have you been on Facebook yet today???  Be prepared to see alot more crap on your front page.  Big Mistake Facebook!!!  Looks like Facebook is turning into an advertising site. 

If they don't change back to the old, uncluttered front page, I'm afraid they may have lost me as a user.

Fed initiates "Twist"...

The Fed announcement is in and the"Twist" is on - the central bank will swap $400B of Treasurys into longer maturities in a range of six to 30 years, by selling in a range of three years or less, to be completed by end of June 2012. Three voters dissent.

As the news was released, the market initially rose thinking the Fed was doing nothing, but as more details of the plan were read, the market sold off.  As I said, I think the market wanted nothing.

As I write this:

Dow -48
Nas +6
S&P -8

Hopefully we hold up here....but I'm not too optimistic.

Americans are grumpy...

Gallup's latest polling finds Americans in a grumpy mood. They're more skeptical than ever of the federal government’s spending habits, convinced it squanders more than half of each dollar it uses, and six in 10 don't think the economy will improve any time soon, a sharp increase in pessimism from two years ago.


6 in 10???..I think it's more like 9 in 10. 

Hansen Natuaral upgraded by UBS...

Hansen Natural (HANS) is up 1.6% after UBS reiterates a Buy, predicting the company's Monster energy drink line will continue posting double-digit growth through 2013. It also expects Hansen as a whole to average 20.5% annual earnings growth over the next 3 years.


I sense this stock has run up enough based on one energy drink.  We are taking our profits on this upgrade....locking in a 20% gain in 6 weeks.

Moody's also cuts Wells Fargo debt...

Moody's cuts Wells Fargo's (WFC -0.2%) rating from A1 to A2, expecting - as with Bank of America (BAC) - less likelihood of government support should things get rough again. "It is also more likely now than during the financial crisis to allow a large bank to fail should it become financially troubled."

Moody's cuts Bank of America debt...

Bank of America (BAC -3.2%) is downgraded by Moody's to Baa1 from A2. The move comes from a decrease in the probability the government would support the bank, if necessary, but "do(es) not reflect a weakening of the intrinsic credit quality of BofA."

Noon update...

Stocks are mixed at noon, as trading is slowing as we await Fed announcement at 2:15 pm.

Dow -44
Nas +11
S&P -4

Commodities are the weakest sector, but some of the familiar names are still moving higher:

Apple +6.50 to 420
Chipotle +7 to 340
Hansen +1.94 to 93.90
Mako +1.09 to 40.18
Amazon +5.04 to 238.30

As we saw yesterday, those gains could evaporate quickly if traders don't like what comes out of the Fed meeting.

I think the market would react more favorably if the Fed announces nothing new.  Traders have made it clear that they are now just wanting all problems to work themselves out on their own.  We really should not be doing anything else to push interest rates any lower. 

I'll be back after the Fed decision.

At 10:00 am....

Stocks are higher, but just barely.  Looks like we may just tread water here until the 2:15 pm announcement from the Fed on interest rates.

Dow +18
Nas +17
S&P +1 to 1203

Gold opened higher but is now selling off. 

MSFT Boosts dividend 25%...

Microsoft (MSFT) boosts its quarterly dividend +25% to $0.20 per share, payable December 8 to shareholders of record on November 17.

OK.  Not that I am against dividends, but Microsoft's stock was down 23 cents yesterday.  That is more than the quarterly dividend.  So, what's the point in buying a stock because of it's dividend???  Without growth, that dividend means nothing.

Coal stocks tumbling after Walter Energy warns...

Keep an eye on Market Vectors Coal ETF (KOL) following weak guidance from Walter Energy (WLT) (-10.7% premarket) and Alpha Natural Resources (ANR) (-11.2% premarket). WLT is a pure-play met coal producer, and ANR cited soft met coal shipments to Asia amid a surprising dip in customer activity.

I tell you...it's just not worth playing with these commodity stocks!!!

Now this is stupid to me....

Netflix (NFLX) has issued $200M in bonds, paying 8.5% interest, to buy back shares and boost its tumbling share price. The company now has less than half the cash it held five years ago, and subscriber defections are likely to accelerate, as it faces costly expansion and $2.4B in future commitments to license content for its streaming service.

Let's do the math:  The stock is currently at 130.  They need 8.5% (or 11 point) gain in the the stock to break even.  Problems start accelerating if the stock price goes lower.