Market Wrap-Up for Oct.24 (ORCL, SJM, MAT, LO, VFC, more)

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A slew of big acquisition news came out this Monday morning, as major names like Oracle ( ORCL ), Mattel ( MAT ), J.M. Smucker Co. ( SJM ), and Cigna ( CI ) made moves to cement their top position with key purchases. As is always the case, some takeovers will pan out and some won't. Although it is important to make key acquisitions over time, innovation is what will give shareholders the biggest long-term reward. Like in sports, it's the companies whose executives and workforce remain hungry that win out over the long term. It certainly felt like a bit of melt-up in the markets today as fund managers chased the recent winners.

We also had a good amount of earnings reports out this morning, but the rest of the week promises to be much heavier. Moving the needle up today on better-than-expected earnings were shares of Caterpillar ( CAT ), V.F. Corp ( VFC ), and Eaton Corp ( ETN ). On the flipside, stocks like Kimberly-Clark ( KMB ) was lower and Lorillard ( LO ) bounced off earlier lows to close fairly unchanged.

New Mortgage Refi Proposal Coming from President Obama

Our president will unveil a plan later today to help borrowers (as many as 1 million perhaps) refinance underwater mortgages. The move is aimed to prevent homeowners from walking away from their mortgages, but the even bigger goal is for the borrowers to take the new-found money they'll be saving and spend it, thus augmenting the economy.


Unfortunately, the message from Washington is almost never to save your money. But then again, the saver has seen little in the way of thanks in the past several years. Maintaining historically low interest rates and bailing out people who can't afford their loans are a kind of slap in the face to responsible savers.

Again, the more we see Washington intercede in the economic cycle, the more a true recovery will be delayed. Don't forget there are millions of people who are set to see unemployment benefits run out at year-end. What do you think will happen to those folks? Their benefits will no-doubt be extended yet again. Rather than putting the emphasis on getting people back to work, the easy choice is to buy time and print more dollars to add to everyone's eventual tax burden.

International regulators are following America's lead now, and are pushing through their own brand of fiscal irresponsibility. The ramifications of all these programs that are created with the purpose of short-term relief are usually never thought out when it comes to the long-term effects. Eventually all the money being printed will cause a good dose of inflationary pain. The danger is if the pain comes quickly, and when many least expect it.

The irony will be when the real estate market starts to show signs of life, but the Federal Reserve being behind the inflation curve needing to raise rates dramatically to soak up all the currency they printed. This development will lead to yet another hard landing that politicians will have to patch together a makeshift solution. It'll be just enough to extend their own careers, of course.

We continue to eye these economic developments closely, as well as how the markets react to the news. If and when we see a true recovery in the works, we won't be be afraid to say things have reached a turning point.

Employment-Based Health Insurance Coverage Declining

According to the Employee Benefit Research Institute (EBRI), employment-based health insurance coverage remains well below the levels of the 1990s. The percentage of workers with coverage either in their own name or as a dependent was slightly above 61 percent in 1998. Fast forward to April of 2010, the percentage of workers with employment-based coverage was down to 56.2 percent.

We are hearing more and more about people rolling the dice on not carrying health insurance, which could deal a fatal blow to one's chances of building wealth in the event of an unexpected health event. If you are struggling to afford health care for your kids, there are government programs worth checking out, including a site like InsureKidsNow.gov . States also tend to have plans you can look into, so be sure to check these resources out. A simple Google search for "NJ kids health insurance" (substitute your own state in there) yields plenty of free resources to look into.

Speaking of health insurance, retail giant Wal-Mart Stores ( WMT ) announced late last week that all future part-time employees who work less than 24 hours a week on average will no longer qualify for any of the company's health insurance plans. Also, any new employees who average 24 hours to 33 hours a week will no longer be able to include a spouse as part of their health care plan, but children can still be covered. This is a big change from the stance the company took just a couple of years ago. If you remember, I noted recently about the big hike in health insurance rates we saw for our company after a couple of years of little to no increase.

A wealth plan without a viable health plan can be quite precarious, so I would advise anyone that is currently "rolling the dice" to do whatever you can to get some sort of coverage against a major health event that could jeopardize your financial future.

Preview My Be a Dividend Millionaire Book

My publisher (FT Press/Pearson) is giving away a free chapter of my popular Be a Dividend Millionaire book to download for free. Anyone interested can visit the Facebook page here to check it out:

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Did You Miss Our Weekend Updates?

I hope everyone had a chance to check out our Dividend.com Premium members-only weekend articles, including new features that highlight some of the biggest winners and losers from the week that was, such as analyst upgrades/downgrades and earnings/story stocks. These articles are a great way to catch up on the week that was in the markets. We also have a rundown of how various Dividend ETFs performed on the week.

Thanks for reading everybody. I'll see you tomorrow!

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Stocks

Referenced Stocks: CAT , CI , ETN , KMB , LO

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