Filed under: Google (GOOG), Apple Inc (AAPL), AT and T (T), Verizon Communications (VZ)

Verizon Communications Inc. (NYSE: VZ) certainly likes to tout its mobile network (hey, that’s what old-telcos do, right?) But, this means having a closed system, which could mean less innovation.

Well, things are changing. That is, Verizon is going to loosen things up. This means that you will be able to use some non-Verizon cell phones on the Verizon network.

To get some perspective on things, I had a chance to talk to Frank Dickson, who is the chief research officer at MultiMedia Intelligence (an independent research firm that’s focused on mobile technology):

“One of the key themes of 2007 has been the evolution of the handset from a dedicated device to a platform. The migration of PDAs into handsets with an open OS started the trend. Apple Inc. (Nasdaq: AAPL)’s iPhone and Google Inc. (Nasdaq: GOOG)’s Android seemed to have thrown gas on the evolution fire. The Verizon announcement seems to continue the trend, responding to consumer desires to customize their mobile experience. The evolving mobile experience goes far beyond communication but also includes entertainment and productivity. Verizon may simply be recognizing the difficulty and complexities of satisfying the needs of all the needs of niche and sub-niche needs with a standard offering.

“One of the facets of this announcement that cannot be overlooked is the movement to becoming a bandwidth or conduit provider. After all, Verizon Wireless did say, ‘that it will provide customers the option to use, on its nationwide wireless network, wireless devices, software and applications offered by the company.’ This announcement is certainly a small step in that direction.”

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

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Filed under: Good news, Google (GOOG), Microsoft (MSFT), Citigroup Inc. (C), JPMorgan Chase (JPM), Bank of America (BAC), Comcast Cl’A’ (CMCSA), Goldman Sachs Group (GS), Procter and Gamble (PG), Texas Instruments (TXN), Lehman Br Holdings (LEH), Bear Stearns Cos (BSC), Housing, Federal Reserve

The market today took its head out of the oven, thanks to a decline in oil prices and talk from Federal Reserve Vice Chairman Donald Kohn reinforcing the need for further rate cuts.

The Dow Jones Industrial Average surged more than 322 points to 13,280.76 while the tech-heavy Nasdaq Composite Index surged 74.86 to 2,655.66. The S&P 500 jumped 37.94 to 14,566.17. CNBC’s anchors were positively orgasmic, saying it was the best one-day point gain for the year, even though home sales and durable goods orders continue to be weak.

Beaten-up financial stocks rebounded. Merrill Lynch (NYSE: MER), which had gotten pounded because of subprime mortgage concerns, surged $4.42, or 8.3%, to $57.49. Citigroup (NYSE: C), another stock in Wall Street’s doghouse until recently, jumped $2.13. or 7%, to $32.45. Goldman Sachs (NYSE: GS), Bank of America (NYSE: BAC), Lehman Brothers (NYSE: LEH), Bear Stearns & Co. (NYSE: BSC), JPMorgan Chase (NYSE: JPM) and even Washington Mutual (NYSE: WM) also showed gains.

“Kohn’s comments just add to a perception that the Fed is embarking on a sustained path of easing,” Oppenheimer Holdings Chief Investment Strategist Michael Metz told Bloomberg News. “There’s also huge relief that the worst of the financial crisis may be behind us.”

Other stocks showing gains include Comcast (NASDAQ: CMCSA), which dodged a huge regulatory bullet from the FCC. Procter & Gamble (NYSE: PG), perhaps the most sensitive to worries about consumer spending, also rose, as did tech heavyweights such as Google (NASDAQ: GOOG), Texas Instruments (NYSE: TXN) and Microsoft (NASDAQ: MSFT).

Not everyone was impressed.

Tom Higgins, chief economist at Payden & Rygel, told the Wall Street Journal that “it’s more of a technical correction of oversold conditions.There’s no fundamental reason that today should [bring a] rally.”

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Filed under: Earnings reports, Forecasts, Internet, Google (GOOG), Yahoo! (YHOO), Short stories

The short interest in Yahoo! (NASDAQ: YHOO) fell by 11.8 million shares to 54.3 million between October 31 and November 15, according to figures from the Nasdaq. The stock has never really recovered from poor earnings late last year and the perception that Google (NASDAQ: GOOG) will suck up a huge share of internet ad dollars. Yahoo!’s stock was over $43 in early 2006, but now trades at only $25.59.

To some extent, believing that Yahoo!’s shares will rise is believing that all internet advertising will continue to rise quickly. Yahoo!’s quarterly numbers show that its revenue is actually not growing as fast as online advertising in general, a rate that is put at about 20% year-over-year. But the company has moved to make acquisitions that will allow it to target display advertising better, and its Panama search ad platform has received at least modest reviews from customers.

The problem with gambling that Yahoo! can do better is that its performance does lag online revenue in general, and there is a perception that a recession could slow the flow of all internet dollars. Yahoo!’s modest growth rate might get worse. And its share of the U.S. search market is not really improving. Yahoo! sits at about 20%, while Google’s monthly numbers run closer to 60%.

The market was also excited about Yahoo!’s big stake in China e-commerce company Alibaba. The firm went public last month, and, at one point, the U.S. company’s piece of the IPO was worth over $5 billion. But Wall Street figured out that selling such a large stake was impossible. And Alibaba’s shares did drop.

Yahoo! may not be going up and some shorts may get burned.

Douglas A. McIntyre is an editor at 247wallst.com.

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Filed under: Google (GOOG), Time Warner (TWX), Economic data, DJIA

Fortune — which like BloggingStocks is owned by Time Warner (NYSE: TWX) — believes that the stock market needs to fall another 18% in order to put equity investment risk and return back in balance. Thanks to what it calls the equity risk premium — the amount of additional return over risk-free treasury bills that an investor needs to justify buying riskier stocks — the market has further to fall.

How did Fortune arrive at the 18% drop? It calculates the current equity risk premium by adding stocks’ earnings yield which it gets by flipping the market’s P/E on its head (calculating E/P) to the inflation rate and then subtracts the t-bill yield. Then it compares the current value with the long run equity risk premium to conclude that stocks have a ways to fall before their prices align with that long-run value.

Here are the numbers. The market currently trades at a PE of 16 — but based on adjustments to remove short term spikes by Yale market guru Robert Schiller — Fortune uses a PE of 22 — which is the inverse of the market’s earnings yield of 4.5%. Investors expect equity returns of 7% — calculated by adding expected inflation of 2.5% to that 4.5%. To get the equity risk premium of 3% Fortune subtracted the 10-year treasury rate of 4% from that 7% expected return. Got that?

But we’re not there yet. Over the past 50 years, the risk premium has averaged around 5%. Given the ease of diversifying portfolios and the Fed’s ability to smooth economic cycles, investors only need 4%. To get from the current equity risk premium of 3% to long run level of 4%, Fortune calculates that stocks still need to drop an additional 18%.

Technology stocks like Google Inc. (NASDAQ: GOOG) are likely to take a hit. Google’s P/E now stands at 52 — so an investor expecting a 10% annual return would need Google’s market capitalization to double to more than $400 billion by 2014. Even if Google kept a P/E of 30, it would need to earn $13 billion by then. Today, it earns about $4 billion. So its profits would need to more than quadruple in seven years. That seems like quite a stretch to me.

What do to about this 18% market tumble? You could sell now and wait for the market to fall and then buy back in when it hits bottom. Unfortunately, nobody rings a bell for you when that happens. Or you could just prepare for a rocky ride and hold onto your stocks for the long run.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Google or Time Warner securities.

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Filed under: Google (GOOG), XM Satellite Radio (XMSR), Sirius Satellite Radio (SIRI), Money and Finance Today, Verizon Communications (VZ), Wells Fargo (WFC)

‘Free’ Credit Reports Sometimes Aren’t Free
Confusion awaits any consumer who dares tread online in search of a credit score, personal finance experts say. “It’s one of the biggest rip-offs you can find.” Misleading credit scores aren’t the only snare. Consumers are also getting tricked into paying for basic credit reports before obtaining the ones they can get free, as mandated by the federal government in 2003. The only place those free reports are available is at AnnualCreditReport.com. Yet, dozens of websites affiliated with the bureaus falsely imply that they can also distribute the government-mandated free reports. At FreeCreditReport.com, ConsumerInfo.com, PrivacyMatters.com, Free3BureauCreditReport.com and other similarly named websites, free trial offers and package deals abound.
‘Free’ credit reports sometimes aren’t free - USATODAY.com

Dare to Retire Before 50?
Some are retiring in their 30s and 40s even though they’re not rich. Can you buck the mainstream and do the same? Can you afford extreme early retirement? - Bankrate.com

Time to Hedge Your Home?
Housing prices continue to slide, and analysts see more declines ahead. Should you hedge against a housing crash by betting on a futures market? Time to Hedge Your Home? - BusinessWeek

Housing Outlook Worsens
If you thought that the worst is already over in the housing market, don’t hold your breath. Futures traders are betting that there’s much, much worse ahead. By next November, these traders are betting that the blood bath will continue and home prices will fall as much as 25% in San Francisco and 23.8% in Miami. The only city holding its own is Chicago, where the news isn’t that great either, but is contained in a single digit 5.6% decline. 10 Housing Markets: Outlook Worsens

Single? You Need a Plan of Your Own
The system just isn’t set up for households of one. That means planning is even more important for you. Single? Then You Need a Plan of Your Own - MONEY

What is Your Bosses Myers-Briggs Personality?
Recognizing the Myers-Briggs personality types of your boss or business partners can help you get what you want in your career. Myers-Briggs Personality Types - Portfolio.com

Shopping for a Portable GPS?
The next best thing to having your own local guide is becoming more affordable and feature packed. Consumer Reports tells you what is available and how to buy one. ConsumerReports.org - Portable GPS navigation systems, buying advice

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Filed under: Earnings reports, Sears Holdings (SHLD)

When Sears Holdings (NYSE: SHLD) reports Q3 earnings tomorrow, we’ll see again if chairman and out-of-his-retail-league financier Eddie Lampert will wow investors.

Regardless of how its retail operations have performed, how is Sears doing when it comes to returning equity to shareholders? Now that William Ackman has taken a 3.5% stake in the holding company (oops, retailer), will that investment start paying off tomorrow? Lampert still controls 46% of the retailer, so with activist investor Ackman’s new slice, it’s unclear if he’ll soon be forcing any changes at the company. But, in previous stints, Ackman has forced real estate sales and similar actions at large food service companies and other retailers to get his return. Things are different in Lampert-land, though.

The company has so far underperformed from the retail side of the business, and it’s probably forced Lampert to wake up and and realize he has to ensure those operations continue to perform. Analysts polled by Thomson Financial expect a profit of $0.50 on revenue of $11.61 billion tomorrow.

Will we see that? Perhaps. It is still not clear how long it will take Lampert to unlock the value of his grand masterpiece, but so far it’s either not working and impatience from the market is bubbling up.

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Filed under: Earnings reports, General Electric (GE), Technical Analysis, Hitachi,Ltd ADR (HIT), Stocks to Buy

Emerson Electric Company (NYSE: EMR) is a diversified technology firm, providing electrical products and engineering services to industrial, commercial and consumer markets. Products include motors, appliances, tools and monitoring devices for controlling industrial plant operations, providing commercial and residential power and environmental control, and operating commercial refrigeration units. Competitors include General Electric (NYSE: GE) and Hitachi (NYSE: HIT).

The company pleased investors earlier in the month, when it reported fiscal Q4 EPS of 78 cents and revenues of $6.13 million. Analysts had been expecting 75 cents and $6.04 billion. Management also guided FY08 EPS to about $2.93-3.06 ($2.98 consensus) and FY08 revenues to about $24.15-24.83 billion ($24.03B consensus).

Continue reading Emerson Electric Company (EMR) shares form bullish ‘flag’ after good earnings

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Filed under: Options

Hologic (NASDAQ: HOLX) develops, manufactures and supplies diagnostic, medical imaging and radiology systems. The Radiological Society of North America (RSNA) 2007 Annual Meeting is this week in Chicago at McCormick Place. CIBC says “HOLX maintains Strong lead over competition.” HOLX overall option implied volatility of 38 is near its 26-week average according to Track Data, suggesting non-directional risk.

Daily Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

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Filed under: Deals, Dell (DELL)

While Dell, Inc. (NASDAQ: DELL) continues to make up lost ground to competitor Hewlett-Packard Co. (NYSE: HPQ) in terms of overall sales, one area that it’s attacking in seemingly full force is the retail sector. Over the summer, Dell joined up with retailers Wal-Mart Stores, Inc. (NYSE: WMT) and Staples, Inc. (NASDAQ: SPLS) as an entry point to get its nameplate in front of U.S. retail consumers who might not know that Dell existed outside of a website. That’s because until then Dell really didn’t exist outside of its direct-sales phone and web order channels when it came to the consumer market.

Dell is now eying the European retail market, and has announced yesterday a partnership with European retail giant Carrefour. Carrefour will act as the sole distributor (at this time) for Dell’s consumer PC sales efforts in Europe. To start off, Dell will begin selling PCs in four European countries next year, although those countries are unknown at this time.

Dell has seen middling success in the European consumer market and this new partnership should help its efforts greatly as it cracks into yet another retail market. Dell has a lot of catching up to do in order to bolster its retail presence and image among consumers, as one of Hewlett-Packard’s main reasons for such a splendid quarter last week was due to the strength of its retail laptop systems.

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Filed under: International markets, Economic data, Oil, Housing

Sudden large, negative financial events can disrupt, or at least critique, even the most bedrock economic tenets, let alone recently-percolated conventional wisdom.

On the heels of the housing and credit market crunches, one conventional wisdom item that’s currently coming under criticism is the notion of “decoupling” [Subscription required] - the theory that despite a slowing U.S. economy, the European and Asian engines of growth would be sufficient to maintain adequate global GDP growth, The Wall Street Journal reported.

The International Monetary Fund published a chapter in April 2007 entitled “Decoupling the Train,” which argued that the U.S.’s mild GDP growth was caused by a housing sector correction. Housing was less global than other commodities, it argued, and hence would not impact the world economy as much.

For example, about two months ago, the IMF projected that global economic growth would slow just slightly in 2008 to 4.8% from 5.2% this year.

Continue reading Maybe the global economy isn’t so global

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