Archive for May, 2006

  • What Happened to the Natural Gas Crisis?
    , May 5th, 2006 at 2:37 pm

    Late last year, the financial media was in a tizzy about the soaring price of natural gas. We were told that it was hurting poor people and seniors were freezing. And as always, there was No. End. In. Sight.
    By December, the price of natural Gas soared to over $15 per million British thermal units, an all-time high. Also, these nasty Russians and their Gazprom were going to take over the world. We suddenly had a natural gas crisis on our hands.
    As it turns out, the end was clearly in sight. Since then, the price of natural gas plunged by about 60%. Funny how we don’t hear much about this now.
    The market did exactly what they’re supposed to do. It’s good to keep this mind when we hear all the horror stories about oil and gold. How high will oil go? Beats me. But I do know that where there’s a demand, there’s somebody trying to meet it with supply.
    Here’s a chart of natural gas for the last two years.
    natural gas.gif

  • Dow 11,500
    , May 5th, 2006 at 10:32 am

    We’re finally even for the century!
    The Dow closed at 11,497.12 on December 31, 1999. Today, we’re back above 11,500 for the first time in six years,
    This morning, the jobs report came in weaker-than-expected, so bonds are way up, and stocks are following.
    The economy added 138,000 jobs last month, which isn’t too good for a recovery. Most on Wall Street were expecting something closer to 200,000. The jobless rate held steady at 4.7%.
    The stock market doesn’t seem to mind. The Dow is one good push away from making an all-time high (11,723). The S&P 500, however, still needs to add about 15%.

  • Louis Rukeyser, RIP
    , May 4th, 2006 at 8:45 pm

    rukeyser.jpg
    A truly class act.

    From 1970 until 2002, at 8:30 p.m. on Friday evenings on public television, the dapper journalist began his half hour-long show Wall $treet Week with Louis Rukeyser to the clacking sound of an old stock ticker machine.
    Rukeyser reviewed the week’s news with witticisms, wordplay and factoids and then moderated a panel discussion. The better the market outlook, the more he liked it, his brother said. The format never changed.
    TV Guide called Wall $treet Week one of the best programs of on American television and wrote, “Louis Rukeyser’s opening remarks on the week’s business events are crafted gems of wry commentary; his airy and adroit handling of his big-shot guests is a pleasure to watch.”
    Produced by Maryland Public Television, the show drew the largest audience in financial journalism at the time and turned Rukeyser into a celebrity.
    Investment strategists like Goldman Sachs’ Abby Joseph Cohen and former Merrill Lynch Chairman David Komansky regularly traveled from New York to Maryland by plane, train and limousine to appear on his show.
    Over the years, the silver-haired commentator won many awards, including the G.M. Loeb Award, the most prestigious in financial journalism. People magazine crowned him “the dismal science’s only sex symbol” and Modern Maturity magazine named him as one of the world’s “50 Sexiest People Over 50.”

    He will be missed.

  • “Let’s kind of review the situation here”
    , May 4th, 2006 at 8:31 pm

    Everyone has an opinion about Dell. What does Michael Dell say?

    “Let’s kind of review the situation here. In the last 10 years our company has grown about 10 times and our stock is up a couple thousand percent,” Dell said.
    “During the last 22 years, we have had a pretty remarkable track record of growth in our business, but there’s no kind of perfect, linear path to success,” he said.
    “I do believe that what you’ll see is that we have a great business model. We are the leader in our industry in the United States, quite a bit larger than others, and the leader around the world, and so we’re confident our business will continue to grow.”
    He also said that the company’s sales had climbed in the last three years “from about $35 billion to, last year, a little over $56 billion” and that much future growth will come from outside the United States.

  • Happy Fun Day
    , May 4th, 2006 at 8:23 pm

    Well that was a fun time. Expeditors (EXPD) opened $10 higher, and went up from there. At one point, the shares got up to $105.40, before closing at $103.80. That’s a one-day move of 18.3%. Good time, man. Good times.
    It’s about time the Buy List showed some life. Our 20 stocks have been pretty listless lately. So far, our strategy of side-stepping energy hasn’t worked out very well. However, oil has been dropping lately, which helped the Dow hit a six-year high today. The price of crude fell below $70 a barrel for the first time since April 17.
    AFLAC (AFL), Dell (DELL), Donaldson (DCI), and SEI Investments (SEIC) also had good days today. All told, the Buy List was up 1.42%, and the S&P 500 was up 0.43%. Without Expeditors, we were up just 0.25%.
    Tomorrow morning, Wall Street will be focused on the jobs report. The unemployment rate is currently at 4.7%, and I think it could fall to 4.6%. The members of the Fed will certainly be eyeing the report as the FOMC meets next week. Another rate is expected by everyone.
    Our “March Cycle” earnings are now over. Coming up, we have three stocks that ended their quarter at the end of April. Home Depot (HD) will report on May 16. Dell will report two days later, and Donaldson reports on May 24.

  • The Morning Market
    , May 4th, 2006 at 11:10 am

    Well that’s a nice start to the day. Expeditors (EXPD) is up 20% in this morning’s trading. In addition to its great earnings, the company also announced a 2-for-1 stock split, and a 46% increase in its dividend.
    The rest of the Buy List is fairly mushy. Dell (DELL) nearly fell below $25 a share yesterday. The company is due to report earnings in two weeks. The current estimate is for 38 cents a share, which is a penny more than it made last year.

  • Expeditors Soars After Hours
    , May 3rd, 2006 at 6:07 pm

    Expeditors International (EXPD) reported a great first quarter. For the first threee months of the year, Expeditors made $52.4 million, or 47 cents per share. This is a huge increase from the $30.9 million, or 28 cents per share, it made a year ago. Revenue rose to $1.02 billion from $825.2 million. Wall Street was looking for earnings of 39 cents a share. The stock is up over 10% in after-hours trading.

  • Nasdaq Raises London Exchange Stake to 18.7 Percent
    , May 3rd, 2006 at 1:41 pm

    The fight is on:

    Nasdaq Stock Market Inc. bought 119.2 million pounds ($219.4 million) of London Stock Exchange Plc shares, raising its stake to 18.7 percent and strengthening its hand against potential rival bidders.
    Nasdaq, which settled for 15 percent of LSE last month after its takeover offer was rejected, bought 9.72 million shares for 1218 pence each, the New York-based company said in a statement today. The purchase makes Nasdaq’s holdings three times larger than the LSE’s second-biggest shareholder.

  • Akamai’s Back
    , May 3rd, 2006 at 9:20 am

    One of the hottest stocks from the Internet Craze is popular again. Akamai Technologies (AKAM) went public in 1999 at $26 a share. Within a few weeks, the stock soared to $327.
    The stock soon became as hated as much as it was loved. By 2002, it reached just 67 cents a share. But now the sun is shining again on Akamai. It was just added to the Nasdaq 100 index.

    Akamai has been telling the same basic business story since it went public: The company can manage Internet traffic for its customers with an army of computer servers placed strategically all over the world. Proprietary software and algorithms route heavy traffic to those other servers to shorten the trip or avoid jams when a customer’s online material is so hot everyone wants to see or hear it at the same time.
    Akamai’s business picked up and the stock story came back into favor thanks to the boom in broadband Internet service. Fast connections available to the masses have created an explosion of demand for audio and video services, containing much more digital information that has to be moved through the Internet’s electronic pipes.
    “Clearly we are all doing things that were a lot more difficult and tedious before we got broadband Internet,” says technology analyst Tony Ursillo of the Boston investment firm Loomis Sayles & Co., which owns Akamai stock. “That’s opened up the doors for a lot of this content to be available to a broader audience and driven additional needs by those content providers. It’s driven them straight into Akamai’s arms.”

  • New Five-Year High
    , May 2nd, 2006 at 5:50 pm

    We done it! The S&P 500 closed at 1,313.21. This is the highest close since February 15, 2001.
    Other indexes, however, like the Nasdaq have lagged a bit, so the Wilshire 5000 is still below its levels of two weeks ago. It’s hard to say what this means. The market may becoming more narrowly focused. Hey, it can’t be oil and rocks every day. Can it?