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Retail Winner and Loser: Costco and Sears
Tweet Share on Facebook May 29, 2008 Comment (1)The American economy looks a bit stronger than expected with today's upbeat GDP report, but consumer worries are still causing a big rift in retail earnings.
New winners are emerging. Price-conscious big-box stores are the clear leader right now. As the big boxes continue to wrest share away from department stores and malls, the tale of Costco vs. Sears today highlights just how stark a divergence is emerging.
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Bucking the Trend: Petrobras, Darden
Tweet Share on Facebook May 28, 2008 CommentOnline brokers: 27/7 Wall Street notes climbing short interest in most of the sector—except in TD Ameritrade.
Restaurants: Darden, home to the Red Lobster and Olive Garden chains, won an upgrade to "buy" from Merrill Lynch and others this week, despite high food costs that have pummeled the sector this year. Food and fuel costs matter, but Merrill is betting the chain's size mean efficiencies will keep profits flowing.
IPOs: Public offerings may have been sunk by the credit crunch, but two trends—Brazil and oil—haven't soured at all. There, Bloomberg says, OGX Petroleo e Gas Participacoes SA is planning a $3.37 billion offering. A well-timed deal could catch what has become a real boom in Brazilian oil. Shares of state-run Petrobras have climbed this year on rising prices and hopes that the Tupi field, one of the largest offshore finds in decades, will prove hugely profitable. Offshore drillers are salivating at big new projects, and Petrobras confirmed new Gulf of Mexico finds just this week.
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IPO Watch: RackSpace
Tweet Share on Facebook May 21, 2008 Comment (5)Corrected on 5/22/08: An earlier version of this post incorrectly named the blog 37signals.
A Web hosting company is going public—in 2008. It's worth keeping a cautious eye on.
This summer RackSpace, a data-center manager, is planning a $400 million auction-style (or Google-style, if you prefer) initial public offering. The company runs eight data centers, four in the United States and four in Britain, and is joining a crowd to be part of the "cloud computing" revolution.
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Steel Expands
Tweet Share on Facebook May 21, 2008 CommentThink the global expansion is dead? Not in the steel sector.
ArcelorMittal is still on the march. The world's largest steel conglomerate, forged over the last several years by billionaire Lakshmi Mittal, has reportedly taken a 14.9 percent stake in Australia's Macarthur Coal in what could be the start of a $4 billion bid to expand its global reach.
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Today's Bounce: Amazon
Tweet Share on Facebook May 19, 2008 CommentToday's market rally fizzled a bit, but one big tech name that jumped in the morning held strong all day: Amazon.
Goldman Sachs upgraded the online retail giant and added it to its influential "America's Conviction Buy" list with a six-month price target of $98 (from about $82 after today's gain). Goldman's James Mitchell is predicting revenue growth above 20 percent for the next five to 10 years, even as Amazon critics worry that the slow economy and price cutting will eat into margins this year. Mitchell sees revenue growth—which caught up to Google's last quarter—as a bigger catalyst for gains.
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Good Signs for Microsoft, Apple, Intel
Tweet Share on Facebook May 19, 2008 CommentBrian Belski, Merrill Lynch's U.S. sector strategist, says tech is now in the pole position among market sectors as share prices roar back—even though he says most clients aren't paying much attention to the surge.
His historical research says the second half is traditionally the best time to own tech, and that more stable earnings growth could continue to propel double-digit gains over the next 4-6 quarters. That includes most bits of the market, including software firms offering growth at a reasonable price, a semiconductor sector "prime for recovery," and computer sales that mark "one of the few industries exhibiting sequential growth over the past few quarters."
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Nintendo's New Run
Tweet Share on Facebook May 19, 2008 Comment (5)A video game sequel beats tough sales expectations and helps define the future of gaming platforms. The stock of the game maker climbs.
I'll give you one guess, with this caveat: The game is not Grand Theft Auto IV. The company is not Take-Two Interactive.
It's Mario, and the company is Nintendo.
