Market Wrap-Up for Sept.22 (UTX, GR, FDX, MOS, MS, GS, more)

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The markets continued yesterday's late-day swoon following the Fed's "Operation Twist" declaration. Bond bears were getting crushed in the process, as interest rates continue to move even lower. Investors are looking to park their money away from higher-risk (momentum) equities, while the best high-yield stocks are holding up much better amid the massive sell-off. Talk of a European Tarp-like liquidity plan helped the markets finish off the absolute lows of the day. Regardless, it was a tough day for investors and it certainly pays to raise a little cash if one can continue to get rid of significantly under-performing positions in a portfolio.

Looking at some of today's big stock headlines, the rumored takeover for aerospace parts maker Goodrich ( GR ) was publicly unveiled, as United Technologies ( UTX ) announced a $127.50 a share takeover. Interestingly enough, shares of GR spiked yesterday as deal news likely began to leak out. The SEC will certainly be looking into any unusual options activity whenever a stock moves as Goodrich has done in a short amount of time.

Meanwhile, FedEx ( FDX ) shares closed lower following the company's reigned-in outlook. We have more on FedEx below. Elsewhere, Mosaic ( MOS ) investors went from euphoria about the company's addition to the S&P 500 yesterday, to not feeling so hot after it announced a massive 100 million share secondary offering. Shares closed down

Financial stocks' shares continue to trade as if more bad news could be headed their way. Morgan Stanley ( MS ) is trading back to Lehman-crisis price levels (Nov. 2008). We are watching the entire financial sector closely here, as further selling could spur more action from the Fed or the ECB perhaps.

Gold Investors Must Take Heed

A few days ago, I wrote in my newsletter that gold was nearing key technical points that, if broker, could lead to a big drop in the yellow metal in a short amount of time. Today, we're seeing more signs that gold is not immune to sell-offs during down days in the equities markets.

Gold's big down move today (over 4%) indicates further upcoming downside action could be ahead. If you have been hedging your portfolio against downside risk by buying gold, it may be time to lighten up and look to raise some cash instead. As I've said all along, I feel that gold is nothing more than a trade - not a viable long-term investment. In contrast an August Gallup poll indicated that 34% of Americans believe gold is the best long-term investment. Real estate (19%) and stocks (17%) were far distant second choices.

Five years ago, real estate would have likely been at the top of the survey results list, and in the late 90s, would have held the top spot in the public's mind. So, is gold's meteoric rise over? The only to know for sure is to wait and see how gold prices recover. If we see a continuing series of lower highs, then the gold rush will likely be over. A series of lower highs has normally been the best way to determine whether a run is over, not just for gold, but for and investment vehicle.

Wall Street Analysis - Where Do I Begin?

We monitor a ton of research reports on a daily basis, and today came across yet another classic "did I just read that?" moment. Recently, Chinese stocks have been beaten up amid accounting practice concerns within many of the companies. Well, just this morning, Goldman Sachs ( GS ) removed Youku.com ( YOKU ) from its "Conviction Buy" list but maintained a Buy rating and $50 price target. Seems innocent enough as far as a call goes, right? But when you realize the shares closed at $16.21 last night and are down 60% year-to-date, how was the stock still a Buy, let alone deserving of a $50 price target? At what point does the stock actually come off the Buy list? The answer: when it's already way too late to save investors from taking a big hit in their portfolio.

Fuel Costs - Always There When Transports Need Them

It was no surprise to hear from FedEx ( FDX ) this morning about how fuel costs were a factor in the company's lowered earnings guidance. It's a common excuse companies in the space will use. That's interesting, since prices have remained relatively stable lately, as far as we can tell. Yet the "fuel cost" issue tends to be a "go-to" whenever a transport company delivers disappointing results. It makes our job a bit more frustrating when you expect one thing and get another.

Now many companies do hedge fuel costs (airline companies do it all the time - not so well, I might add) and that could be part of the underlying problem in some cases. We just hope companies will be more consistent with their justifications on how earnings estimates were beaten or missed. And on another note, it certainly wouldn't hurt if FedEx boosted their dividend on par with competitor United Parcel Service ( UPS ). We don't currently recommend either stock, but UPS and its 3% plus dividend yield would certainly have an advantage (from a yield perspective) when compared to FedEx's less than 1% yield.

A Downgrade Today and Some Stocks to Keep an Eye On

Despite the many calls from analysts that stocks are "cheap," we have remained vigilant in our calls for investor caution. On that note, we removed another name from our "Recommended" list today, so be sure to check out our article detailing the downgrade if you haven't already. Also, be sure to check out our weekly "Top 50 Watchlist Names" post that is out today, only for Dividend.com Premium members. Some high-beta dividend stocks will certainly be on this list as we keep everyone up-to-date on names that are working better than others in this current market environment. Our focus is more on yield, so be sure to recognize the risk of buying lower-yielding stocks.

Thanks for reading, and I'll see you tomorrow! P.S. Please pass this e-mail on to someone you think can use some financial motivation as well as being kept in the financial news loop that could affect them.

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: FDX , GS , MOS , MS , UPS

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