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Jim Cramer Says Boeing Selloff is Overdone And Investors Should Stay Calm
TheStreet's Action Alerts PLUS co-portfolio manager Jim Cramer says the selloff in Boeing (BA) shares on Wednesday is overdone. Cramer says investors who own shares should stay the course, and for others the next few days could be a buying opportunity. Cramer says Boeing is a great multi-year story and the Farnborough International Airshow in July should give investors another look at orders that could be placed by airlines. Cramer says the only reason for the Boeing downgrade was that the analyst said shares had run-up too high. Cramer says there is no single data point that signals Boeing is finished.
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Jim Cramer Says Defense Stocks a Place to Go in the Downturn
If you're looking for cycles that haven't peaked, Jim Cramer says look at defense stocks. He believes the U.S. defense budget is going to increase given all the geopolitical hot spots around the globe. Cramer likes Lockheed Martin, which is down a lot, Northrop Grumman whose bread and butter is the unmanned drone business and also has a good cyber security business, weapons-maker Raytheon, and Alliant Tech Systems whose stock has been down. He says all of these defense companies have good buybacks and great dividends. Cramer advises investors to look at this group as a place to go in the downturn.
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Dow Down Triple Digits, Job Cuts at General Mills & NY Times
Global worries are once again hitting investors. The Dow Jones Industrial dropped triple digits in midday trading Wednesday on an array of concerns including ISIS, Ebola and economic slowdown overseas. Manufacturing in the U.S. continues to expand, although at a slightly slower pace. The ISM Index for September came in at 56.6, short of expectations but still indicated growth. General Mills (GIS) is cutting up to 800 more jobs. This is part of a big cost-cutting effort, which includes two plant closings. The layoffs will be completed by next spring and will save the company up to $150 million annually. The New York Times (NYT) is also planning to hand out pink slips. The newspaper is cutting about 100 newsroom jobs through buyouts and possibly layoffs. The company said the reduction is intended to safeguard the newspaper’s long-term profitability. Biotech stocks are on the rise after the first case of Ebola was reported in the U.S. Tekmira Pharmaceuticals (TKMR) is the biggest gainer as investors see it as a play on the treatment of Ebola. BioCryst Pharmaceuticals (BCRX) and Sarepta Therapeutics (SRPT) are also gaining in the session.
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Markets Await Details From European Central Bank on Balance Sheet
Riccardo Barbieri, Chief European Economist at Mizuho, details what to expect from the European Central Bank's policy meeting on Thursday. Barbieri says ECB president Mario Draghi may clarify that the target is not on the overall size of the balance sheet, but is on the assets the bank can control. He says, considering where the balance sheet was in 2012, the ECB needs to expand by at least $750 billion, but the refinancing operations depends on the behavior of banks. Barbieri says the interesting thing will be to see if the ECB announces a size for the program, as he believes markets will be guessing between $750 billion and $850 billion in additional assets to be held on the balance sheet.
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eBay Bombarded with Downgrades on Plans to Spin-Off PayPal
Analysts on Wall Street are downgrading eBay (EBAY), Tyson Foods (TSN) is upgraded and Boeing (BA) is a 'Top Pick' in Wednesday's Analysts' Actions. eBbay is now lowered to a NEUTRAL rating from OVERWEIGHT at JPMorgan Chase. It's also downgraded at JMP Securites to MARKET PERFORM from OUTPERFORM. Wedbush Securities is now rating eBay a NEUTRAL from OUTPERFORM. Tyson Foods was upgraded to NEUTRAL from UNDERPERFORM at Credit Suisse. The firm said it raised its rating because they think margins will be driven higher by demand in Tyson's protein business. Credit Suisse raised its price target on Tyson Foods to $42 from $38. Boeing is now a Top Pick at Drexel Hamilton. The firm has a BUY rating for the stock with a $157 price target.
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Stocks Start Q4 Modestly Lower as Private Sector Adds More Jobs
U.S. stocks are starting the fourth quarter lower. The ADP data showed private employers added slightly more jobs in September than expected. The report showed the addition of 213,000 jobs versus estimates of 205,000. The private-payrolls report comes before the much-watched government jobs report Friday. JPMorgan Chase (JPM) is a stock to watch in today's trading. A federal judge warned the bank could face a class-action lawsuit from investors who claim they were misled about the safety of mortgage-backed securities they were sold just before the financial crisis. U.S. auto sales for September will roll in all day Wednesday. Chrysler was the first to report sales topping expectations showing an increase of 19%. General Motors (GM) and Ford (F) will also report September auto sales throughout the day.
What to Watch on Wall Street for Wednesday, October 1st 2014
On Wednesday October 1st, we watch earnings for lighting solutions company Acuity Brands at 10 a.m as it hopes to beat analysts’ expectations for its fiscal fourth quarter. It's another big day on the U.S. economic calendar in this economic data heavy week. ADP's employment report for September will be released before the opening bell. We'll also be on the lookout for Markit's manufacturing PMI, expected soon after market open. Also, ISM's manufacturing index for September and construction spending data are due out. For the latest financial news and updates from Wall Street, check back here on TheStreet.com throughout the day.
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eBay Skyrocketed Tuesday After Announcing PayPal Spinoff
News of a PayPal spinoff sent eBay shares skyrocketing on Tuesday making it TheStreet's Move of the Day. The e-commerce giant announced its plan Tuesday morning to separate the online marketplace from PayPal, its growing mobile payment processing unit it bought back in 2002. eBay's shares initially jumped as much as 8.8% after the announcement. The move comes after several months of pressure from activist investor Carl Icahn for the two divisions to split. The company's traditional e-commerce business had been slowing. eBay and Paypal will spin off into two publicly traded companies by the second half of 2015.
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S&P 500 and Nasdaq Post Q3 Win Despite Stocks Closing in the Red
Stocks ended Tuesday's roller coaster trading in the red but the S&P 500 and Nasdaq still posted quarterly gains. Gold prices dropped more than $7 on the strengthening dollar. Crude oil fell to its lowest settlement in nearly two years. Crude for November delivery tumbled $3.41 to settle at $91.16 a barrel. Energy stocks fell with falling oil prices. Chevron (CVX) and Exxon (XOM) closed the day in the red. eBay (EBAY) was a big winner in today's trading. The stock gained 7.54% on its announcement it will spinoff PayPal into a separate company. Bank of America (BAC) is the first major U.S. bank to issue debit cards with chip technology. The new security feature is already being used in other countries and is expected to be standard for card payments in the U.S.
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U.S. Home Price Increases Slow Everywhere But New York City
The latest S&P/Case-Shiller home price index report shows that while prices of homes around the country are continuing to climb, they are not climbing as fast as they once did. In July, 19 of the 20 housing markets the report tracks, only New York City saw prices climb. S&P's Index Committee Chairman David Blitzer attributes the slowdown in rising home prices to home buyers who may want a new home, but haven't seen their wages or incomes climb in tandem to justify paying higher prices for homes. New home sales saw a small increase in August, but for the most part, Blitzer said the housing market has been pretty weak. Blitzer points to the anemic pace of new construction which 'suggests the builders don't see a lot of reason to be optimistic either.' TheStreet's Ruben Ramirez reports from New York.