Dollar mixed after brief rally

NEW YORK -The dollar is retreating again after a brief rally following news of the death of al-Qaida leader Osama bin Laden.

The dollar has fallen against a group of six major currencies for the past eight trading days. Investors expect that the Federal Reserve will keep interest rates super low and continue other stimulus efforts, while central banks overseas are raising interest rates. Higher rates tend to make currencies more attractive to investors seeking higher yields.

In morning trading Monday in New York, the euro is up to $1.4845 from $1.4839 late Friday. The dollar is giving back some of its overnight gains against the British pound and Japanese yen, but is higher against the two currencies than it was on Friday.

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Gold Tops $1,500 on Outlook for Escalating U.S. Debt, Dollar

Gold futures rose to a record $1,500.50 an ounce as U.S. debt concerns weighed on the dollar, boosting demand for the precious metal as an alternative investment. Silver surged to a 1980 high.

The greenback dropped against the euro on speculation that the European Central Bank will continue to raise borrowing costs as some nations struggle to contain sovereign debt. Standard & Poor’s yesterday revised its long-term outlook on U.S. debt to negative from stable. Gold has climbed 32 percent in the past year, and silver prices have more than doubled.

“The U.S. credit rating will undoubtedly be lowered in the next few years,” said Michael Pento, a senior economist at Euro Pacific Capital in New York. “This will mean much higher borrowing costs and a much lower currency. International investors have been using gold and silver as an alternative currency and an alternative to the dollar, and this will only exacerbate and accelerate that process.”

Gold futures for June delivery rose $2.20, or 0.1 percent, to settle at $1,495.10 at 1:38 p.m. on the Comex in New York. Earlier, the price climbed as much as 0.5 percent to the record.

Gold for immediately delivery rose $1.97 to $1,497.27 at 3:49 p.m. New York time. Earlier, the price gained as much as 0.3 percent to an all-time high of $1,499.32.
Silver Climbs

Silver climbed as much as 2.8 percent to $44.175 in after- hours trading. The most-active contract settled up 95.7 cents, or 2.2 percent, to close at $43.913 an ounce.

“Silver is like gold on steroids,” said Jon Nadler, an analyst at Kitco Inc. in Montreal.

Euro Pacific’s Pento, who correctly predicted gold’s rally in the past three years, said the metal will reach $1,600 in 2011. The commodity has gained every year since 2001 on increased investment demand for raw materials.

“The bullish trend becomes pronounced as more and more people get out of the dollar to buy hard assets,” said Lim Chae Myung, a Seoul-based trader with Hyundai Futures Co.

The Treasury Department projected that the government may reach the $14.3 trillion debt-ceiling limit as soon as mid-May and run out of options for avoiding default by early July.

The Federal Reserve has kept its benchmark interest rate at zero percent to 0.25 percent since December 2008 and has pledged to buy $600 billion in Treasuries through June to stimulate growth.

The ECB this month raised its main rate to 1.25 percent from a record 1 percent to stem inflation.

The Fed probably won’t risk damping economic growth by raising borrowing costs rapidly, Pento said.

S&P changed its long-term rating, citing “material risk” that policy makers won’t reach an accord on “medium- and long- term budgetary challenges.”

“There certainly has always been that lingering concern over U.S. debt and the S&P people are finally identifying the threat,” said Stephen Platt, an analyst at Archer Financial in Chicago. “The world is awash in liquidity. Gold’s slow, grinding action upward shows the deterioration in the dollar, excess liquidity and deficit problems are still in force.”

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Dow falls 118 as oil slides, Japan worries rise

Energy stocks stumble as crude oil falls below $107. Drivers are cutting back, a new report shows. Japan raises the severity rating on its nuclear problem. Gold pulls back, but airlines jump. Wal-Mart and Procter & Gamble boost the Dow; Alcoa lags.

A series of inconvenient truths dawned on Wall Street today: The economy may not be as strong as thought; high gas prices are already causing people to change their driving habits; and the Japanese nuclear crisis is worse than thought.

The result was a sell-off in crude oil, gold and a broad array of commodities -- and a steep decline in stocks. In the afternoon, bargain hunters emerged, and the market modestly trimmed its losses.

The Dow Jones industrials ($INDU) were down 118 points, or 1%, to 12,264. The blue chips had been down as many as 148 points. The Standard & Poor's 500 Index ($INX) dropped 10 points, or 0.8%, to 1,314, and the Nasdaq Composite index ($COMPX) was off 27 points, or 1%, to 2,745.

Crude oil settled down $3.67 to $106.25 a barrel in New York. Brent crude was down $3.34, or 2.7%, to $120.64 a barrel in London.

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Believe It or Not, These $100+ Stocks Are Cheap

Everyone loves a $5 stock that doubles, including me. But right now I'm finding some of the biggest gains are coming from stocks trading in the $100 range. Don't make the mistake of thinking a $100 stock is expensive. With growth rates going through the roof and strong buying pressure, these stocks should prove to be bargains at current valuations.

I'm here to help you make money year in and year out and right now there's money to be made in the five stocks I'm going to tell you about today. Let's start with Apple (AAPL) and Amazon.com (AMZN).

Both of these companies have been on my favorites list for more than a year. I first recommended APPL in October of 2009 when shares were nearly $190 apiece! I'm sure there were people out there who thought I was crazy, but with the launch of iPhone 4 and the iPad since and shares now trading around $330, crazy like a fox is more like it. And right now I still like the company at current prices and would recommend it for purchase in just about any portfolio.

The same is true for AMZN. I recommended this one in my Blue Chip Growth service back in June of 2009 when shares were about $83 a share. This may have seemed like a pricey stock in a sector that many were writing off–online retail–but I saw the potential for the company to grab customers looking for a bargain. And boy has that paid off. The stock is up 122% for my subscribers and even with shares trading over $185 right now, I still think the company has a bright future.

Across all four of my newsletters, there are about 14 stocks trading near or above $100 a share. In addition to AAPL and AMZN, the three that I like best right now are Netflix (NFLX), Novo Nordisk A/S (NVO) and Millicom International (MICC).

These are fantastic companies with incredible growth prospects that you shouldn't be afraid to buy at current prices.

Netflix (NFLX): This movie rental company has developed an ingenious business model built around the idea that individuals don't want to leave their houses in order to rent a movie. Instead, Netflix sends movies directly to consumers; through the mail… people walk no further than their mailboxes to rent DVDs. Netflix says that it ships around 2 million DVDs every day. It also streams thousands of movies directly to subscribers through their computers and video game consoles at no extra charge. Netflix caters to the "inner couch potato," and since we all have that potato inside of us to some degree, it should come as no surprise that the company boasts more than 12 million subscribers! NFLX currently trades at about $178 a share and I'm recommending it as a buy in Emerging Growth.

Novo Nordisk A/S (NVO): This company has made multiple appearances on my Buy Lists because it is one of the world's leading producers of insulin. The company also makes insulin injection devices and diabetes education materials. Its products include Levemir and NovoLog (which mimic natural insulin regulation more closely than human insulin) and FlexPen, a prefilled insulin injection tool. In addition to its diabetes portfolio, Novo Nordisk also has products in the areas of blood clotting management, human growth hormone regimens and hormone replacement therapies. Forward growth estimates are compelling and that's why this $111 stock is a top buy in my Global Growth service.

Millicom International (MICC): As you can probably guess by the name, Millicom provides cellular phone service. It has more than 23 million subscribers in 16 emerging markets. These are subscribers who typically have limited landline exposure because of a lack of infrastructure. Millicon's core market is Latin America, where it does approximately 75% of its business, but the company also has cellular operations and licenses in countries in Africa and Asia. Nearly all of Millicom's subscribers are prepaid wireless service users. This gives the company a great opportunity to upsell its products to this new customer base and ensure growth for the company. MICC is trading just under $100 right now and I'm betting that it will cross the $100 threshold and more in the weeks to come. My Quantum Growth subscribers are up about 3% in this position, but it's really early in the game for MICC and there's still time for you to grab your share of the profits in this play.

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Top 6 Stocks for January 2011

Technical strength should make these picks winners

Best Buys for the New Year - Top Stocks to Buy

Stocks had one of the best Decembers in recent years, and the internal and sentiment indicators are now very overbought. But with an enormous inflow of cash into the system from pension, profit sharing and 401(k) plans, and other sources that generally put money to work early in the year, we are unlikely to see a correction before mid-January.

A pullback later in the month would be welcome, though, since it could provide an excellent opportunity to jump on some of our favorite growth and cyclical stocks. The following technical picks represent the best stocks to buy for the month ahead.

Top Stock #1 – Anadarko Petroleum Corp. (APC)

Oil and gas exploration and production company, Anadarko Petroleum Corporation (NYSE: APC), has operations primarily in the United States, the deepwater of the Gulf of Mexico, and Algeria.

APC is in a bull market that began in October 2008. The stock spent most of 2010 retracing a breakdown that occurred in April. In December, the stock broke out on a huge breakaway gap amid rumors that BHP Billiton Limited (NYSE: BHP) had its sights set on APC after it failed to acquire Potash Corp. of Saskatchewan (NYSE: POT). The rumors have not been confirmed, but based on the current price, the stock is still worth purchasing as a play on the continuing increase in the price of crude oil. Technically, the breakout has a target of $90-plus

Top Stock #2 – Oracle Corp. (ORCL)

Enterprise software company Oracle Corp. (NASDAQ: ORCL) broke from a double-top in September to a new two-year high. The breakout was supported by very high volume and is a strong signal that even higher prices are in the stock’s future.

The acquisition of Sun Microsystems has “transformed ORCL into a software and systems vendor,” according to S&P. And S&P currently rates the stock a “five-star strong buy” with a fundamental price target of $37. The trading target for the breakout is $35.

Top Stock #3 – PowerShares DB Agriculture Fund (DBA)

The PowerShares DB Agriculture Fund (NYSE: DBA) seeks to track the price and performance of the Deutsche Bank Liquid Commodity Index. Food shortages and higher prices for commodities like wheat, corn, soybeans and sugar are being forecast by economists worldwide. And the recent move by China to raise interest rates is evidence that the country’s central planners are concerned about possible inflation in food prices that could cripple their economy.

Note the impressive pickup in volume on the chart, as well as the golden cross and the recent breakout from a double-top following a bounce from its 50-day moving average. Traders should target $36 for a quick trade since DBA broke down from $36 in August 2008, but long-term investors may want to hold this ETF as a cornerstone investment with a price objective north of $50.

Top Stock #4 – Rio Tinto (RIO)

Metal and mineral production company Rio Tinto (NYSE: RIO), which is based in London, is one of the world’s largest mining companies. It produces aluminum, copper, diamonds, coal, iron ore, uranium, gold and a variety of industrial minerals. The current demand from China and India for manufacturing metals, especially for base metals, particularly iron ore and copper, bodes well for the company.

S&P rates RIO a “five-star strong buy” with a 12-month price target of $75. Our trading target is $82 with a longer-term target of $100.

Top Stock #5 – Suntech Power Holdings (STP)

Suntech Power Holdings (NYSE: STP) is one of the leaders in the manufacturing of photovoltaic (PV) cells for use in both residential and commercial applications. Sales are expected to be up 24% in 2011, according to S&P, and annual profit margins are estimated to increase to 20% from 18% in 2010. Long-term demand from China and encouragement from the U.S. authorities are all positives for this solar company.

Daiwa Securities’ target was raised to $9.90 in early December. Technically, the stock is still in a downtrend, but recently got a buy signal from the stochastic. If it can reverse its trend with a strong close over the bearish resistance line at $8.50, the trading target would be $10. This is a “bottom-fishing” choice.

Top Stock #6 – Thermo Fisher Scientific (TMO)

Formed from the merger of Thermo Electron and Fisher Scientific, Thermo Fisher Scientific (NYSE: TMO) is a leading maker of lab and scientific instruments used in life sciences, drug discovery, etc. According to S&P, Thermo Fisher has made significant inroads in China and is undervalued versus its peers. S&P has a “five-star strong buy” rating on TMO with a 12-month price target of $68.

Technically, the stock has hesitated at $56, a double-top, and appears to be vulnerable to profit-taking. But a pullback to the open gap at just under $54 could be an excellent opportunity to buy TMO for a breakout target of $68.

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Opening View: DJIA Futures Plunge 80 Points Ahead of ADP Jobs Data

Falling commodity prices provide fuel for Wall Street sell-off

Futures on the Dow Jones Industrial Average (DJIA) are trading sharply lower this morning, pointing toward a potential opening loss of about 82 points. The S&P 500 Index (SPX) is also on the rocks this morning, with futures trading about 9.4 points below fair value. Yesterday's modest bump, following the release of minutes from the Federal Open Market Committee's latest meeting, has faded quickly, with a sharp drop in commodities and anxiety ahead of today's ADP employment report taking center stage.

Technically, short-term resistance at the 11,700 level looms large for the Dow, with the blue chip barometer closing a hair's breadth below this hurdle on Tuesday. Look for the DJIA to struggle here today, while support should materialize near the 11,550-11,600 region. Meanwhile, the SPX edged above 1,270 yesterday, but the victory appears to be short lived. Resistance remains firm in the 1,275-1,280 area, with short-term support creating a floor near 1,255-1260.

-Schaeffer-

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