Mortgage rates were down nearly 50 basis points week-over-week (.5%) as the Fed cut borrowing rates and pumped a whole bunch of “dollars” in to the financial markets to improve liquidity. Such a massive swing shouldn’t be taken as a trend, as rates have been all over the board in recent weeks. As we learned in the past you definitely want to take your money off the table when you’re doing well with interest rates. They can easily turn around and bite you with a poorly-timed spike. I say lock now, take your low rate and be done with this market.

Update: See that? As I type this mortgage bonds are taking a turn for the worse, rates should be worsening today. Pick up the phone and lock your rate - pronto.

From Market Watch on the big drop in this week’s mortgage interest rates:

The 30-year fixed-rate mortgage averaged 5.87% for the week ending March 20, down from last week’s 6.13% average. The mortgage averaged 6.16% a year ago. The 15-year fixed-rate mortgage averaged 5.27%, down from 5.60%. The mortgage averaged 5.90% a year ago.

But adjustable-rate mortgages moved little. Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 5.56%, down from 5.58% last week. The ARM averaged 5.91% a year ago. And 1-year Treasury-indexed ARMs averaged 5.15%, up just slightly from their 5.14% average last week. The ARM averaged 5.40% a year ago.

To obtain the rates, the 30- and 15-year fixed-rate mortgages required payment of an average 0.5 point, while the 5-year ARM required an average 0.9 point and the 1-year ARM required an average 0.8 point. A point is 1% of the mortgage amount, charged as prepaid interest.

“Mortgage rates fell this week as various actions were taken to improve market liquidity,” said Frank Nothaft, Freddie Mac chief economist, in a news release. “In addition, the inflation report from the Consumer Price Index reflected weaker price increases than consensus expectations. Unchanged in February both including and excluding food and energy costs, it is the first time the core CPI did not report a monthly increase since November 2006.”

Nothaft also said that the condition of the economy might be weaker than previously thought judging from retail sales figures that fell by 0.6% in February, contrary to the consensus forecast of a 0.2% increase.

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Filed under: Industry, Google (GOOG), Time Warner (TWX), Options, Technical Analysis

Time Warner Inc. (NYSE: TWX) stock is declining after AOL did not perform well in a report detailing market share in the global web search market. According to comScore data, AOL, a division of TWX, pulled in a 4.9% market share in February, far behind Google (NASDAQ: GOOG), Yahoo (NASDAQ: YHOO) and Microsoft (NASDAQ: MSFT). However, data across the industry has led many analysts to believe that the market for web search is maturing, and that there is little growth to be found in the industry. This could be a bad sign for TWX, whose once-dominant AOL division is far behind industry leader GOOG with little hope at catching up. If you think this stock won’t be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on TWX.

After hitting a one-year high of $21.97 in June, the stock hit a one-year low of $13.65 on Monday. This morning, TWX opened at $13.98. So far today the stock has hit a low of $13.94 and a high of $14.35. As of 11:30, TWX is trading at $14.33, down 8 cents (-0.5%). The chart for TWX looks bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider a July bear-call credit spread above the $17 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn’t do what you think but still leverage nice returns. This particular trade will make an 11.1% return in four months as long as TWX is below $17 at July expiration. Time Warner would have to rise by more than 18% before we would start to lose money.

TWX hasn’t been above $17 by more than a few cents since December and has shown resistance around $16.50 recently. This trade could be risky if the US economy turns around quickly, but even if that happens, this position could be protected by resistance TWX might find at its 50 day moving average, which is currently around $16.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in TWX, but he does write for a financial blog on AOL.

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Filed under: Industry, Google (GOOG), Time Warner (TWX), Options, Technical Analysis

Time Warner Inc. (NYSE: TWX) stock is declining after AOL did not perform well in a report detailing market share in the global web search market. According to comScore data, AOL, a division of TWX, pulled in a 4.9% market share in February, far behind Google (NASDAQ: GOOG), Yahoo (NASDAQ: YHOO) and Microsoft (NASDAQ: MSFT). However, data across the industry has led many analysts to believe that the market for web search is maturing, and that there is little growth to be found in the industry. This could be a bad sign for TWX, whose once-dominant AOL division is far behind industry leader GOOG with little hope at catching up. If you think this stock won’t be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on TWX.

After hitting a one-year high of $21.97 in June, the stock hit a one-year low of $13.65 on Monday. This morning, TWX opened at $13.98. So far today the stock has hit a low of $13.94 and a high of $14.35. As of 11:30, TWX is trading at $14.33, down 8 cents (-0.5%). The chart for TWX looks bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider a July bear-call credit spread above the $17 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn’t do what you think but still leverage nice returns. This particular trade will make an 11.1% return in four months as long as TWX is below $17 at July expiration. Time Warner would have to rise by more than 18% before we would start to lose money.

TWX hasn’t been above $17 by more than a few cents since December and has shown resistance around $16.50 recently. This trade could be risky if the US economy turns around quickly, but even if that happens, this position could be protected by resistance TWX might find at its 50 day moving average, which is currently around $16.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in TWX, but he does write for a financial blog on AOL.

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Filed under: Before the bell, Analyst upgrades and downgrades, Deals, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Apple Inc (AAPL), General Electric (GE), PepsiCo (PEP), Walt Disney (DIS), MasterCard Inc’A’ (MA)

Before the bell: Futures point to higher open — BGP, NKE, C, FDX

General Electric Co. (NYSE: GE) was raised to Buy from Neutral’ at Merrill Lynch, due to its defensive positioning in the current economic climate. GE shares are up 1.7% in premarket trading following the upgrade.

Visa Inc. (NYSE: V) shares soared over 28% in their stock market debut Wednesday. Already priced above expectations at $44 per share in the biggest IPO in U.S. history that raised nearly $18 billion, Visa shares closed at $56.50. Many assume that given the successful MasterCard (NYSE: MA) IPO and given Visa’s leading position, the shares are worth a shot, especially in today’s market conditions.

As Apple (NASDAQ: AAPL) enhances the the security of the iPhone and adds more enterprise-friendly version of firmware by June 2008, IT advisory and consulting firm Gartner Inc, originally concerned about about some security issues, may then raise its recommendation to “appliance-level” support status for the device, permitting it to be used for PIM, e-mail, telephony and browsing applications and more.

PepsiCo (NYSE: PEP) and Pepsi Bottling Group Inc. (NYSE: PBG) announced their second Russian deal this week, as they agreed to buy 75.53% of the country’s largest juice maker, JSC Lebedyansky, for $1.4 billion and could buy the rest.

The Walt Disney Co. (NYSE: DIS) confirmed that it is in advanced talks with The Children’s Place Retail Stores, Inc. (NASDAQ: PLCE) concerning the Disney Store retail chain where Disney might acquire ownership of a portion of the Disney Store chain in North America. PLCE shares are climbing 6.4% in premarket trading.

comScore released February search engine rankings. While there were no surprises in the ranking themselves, with Google Inc. (NASDAQ: GOOG), in the No.1 spot, as usual increasing its market share, while Microsoft (NASDAQ: MSFT) and Yahoo (NASDAQ: YHOO) in second and third place respectively losing some share, the number of queries data held some surprises as it declined across the board from the previous month. Citigroup’s Mark Mahaney notes that “GOOG’s U.S. query growth of 26% marked a deceleration vs. 37% growth in January and 40% growth in Q4.”

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Filed under: Industry, Google (GOOG), Time Warner (TWX), Options, Technical Analysis

Time Warner Inc. (NYSE: TWX) stock is declining after AOL did not perform well in a report detailing market share in the global web search market. According to comScore data, AOL, a division of TWX, pulled in a 4.9% market share in February, far behind Google (NASDAQ: GOOG), Yahoo (NASDAQ: YHOO) and Microsoft (NASDAQ: MSFT). However, data across the industry has led many analysts to believe that the market for web search is maturing, and that there is little growth to be found in the industry. This could be a bad sign for TWX, whose once-dominant AOL division is far behind industry leader GOOG with little hope at catching up. If you think this stock won’t be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on TWX.

After hitting a one-year high of $21.97 in June, the stock hit a one-year low of $13.65 on Monday. This morning, TWX opened at $13.98. So far today the stock has hit a low of $13.94 and a high of $14.35. As of 11:30, TWX is trading at $14.33, down 8 cents (-0.5%). The chart for TWX looks bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider a July bear-call credit spread above the $17 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn’t do what you think but still leverage nice returns. This particular trade will make an 11.1% return in four months as long as TWX is below $17 at July expiration. Time Warner would have to rise by more than 18% before we would start to lose money.

TWX hasn’t been above $17 by more than a few cents since December and has shown resistance around $16.50 recently. This trade could be risky if the US economy turns around quickly, but even if that happens, this position could be protected by resistance TWX might find at its 50 day moving average, which is currently around $16.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in TWX, but he does write for a financial blog on AOL.

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Filed under: Industry, Google (GOOG), Time Warner (TWX), Options, Technical Analysis

Time Warner Inc. (NYSE: TWX) stock is declining after AOL did not perform well in a report detailing market share in the global web search market. According to comScore data, AOL, a division of TWX, pulled in a 4.9% market share in February, far behind Google (NASDAQ: GOOG), Yahoo (NASDAQ: YHOO) and Microsoft (NASDAQ: MSFT). However, data across the industry has led many analysts to believe that the market for web search is maturing, and that there is little growth to be found in the industry. This could be a bad sign for TWX, whose once-dominant AOL division is far behind industry leader GOOG with little hope at catching up. If you think this stock won’t be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on TWX.

After hitting a one-year high of $21.97 in June, the stock hit a one-year low of $13.65 on Monday. This morning, TWX opened at $13.98. So far today the stock has hit a low of $13.94 and a high of $14.35. As of 11:30, TWX is trading at $14.33, down 8 cents (-0.5%). The chart for TWX looks bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider a July bear-call credit spread above the $17 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn’t do what you think but still leverage nice returns. This particular trade will make an 11.1% return in four months as long as TWX is below $17 at July expiration. Time Warner would have to rise by more than 18% before we would start to lose money.

TWX hasn’t been above $17 by more than a few cents since December and has shown resistance around $16.50 recently. This trade could be risky if the US economy turns around quickly, but even if that happens, this position could be protected by resistance TWX might find at its 50 day moving average, which is currently around $16.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in TWX, but he does write for a financial blog on AOL.

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Filed under: Industry, Google (GOOG), Time Warner (TWX), Options, Technical Analysis

Time Warner Inc. (NYSE: TWX) stock is declining after AOL did not perform well in a report detailing market share in the global web search market. According to comScore data, AOL, a division of TWX, pulled in a 4.9% market share in February, far behind Google (NASDAQ: GOOG), Yahoo (NASDAQ: YHOO) and Microsoft (NASDAQ: MSFT). However, data across the industry has led many analysts to believe that the market for web search is maturing, and that there is little growth to be found in the industry. This could be a bad sign for TWX, whose once-dominant AOL division is far behind industry leader GOOG with little hope at catching up. If you think this stock won’t be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on TWX.

After hitting a one-year high of $21.97 in June, the stock hit a one-year low of $13.65 on Monday. This morning, TWX opened at $13.98. So far today the stock has hit a low of $13.94 and a high of $14.35. As of 11:30, TWX is trading at $14.33, down 8 cents (-0.5%). The chart for TWX looks bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider a July bear-call credit spread above the $17 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn’t do what you think but still leverage nice returns. This particular trade will make an 11.1% return in four months as long as TWX is below $17 at July expiration. Time Warner would have to rise by more than 18% before we would start to lose money.

TWX hasn’t been above $17 by more than a few cents since December and has shown resistance around $16.50 recently. This trade could be risky if the US economy turns around quickly, but even if that happens, this position could be protected by resistance TWX might find at its 50 day moving average, which is currently around $16.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in TWX, but he does write for a financial blog on AOL.

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My friend and trader Tim Sykes is a big fan of ignoring blue chips in favor of more volatile penny stocks — many of which he admits are outright frauds, but can still serve as vehicles for profitable speculation.

In a recent post, he mentions the huge losses shareholders have been handed at the following companies: Merrill Lynch & Co. Inc (NYSE: MER), The Bear Stearns Companies (NYSE: BSC), Citigroup Inc (NYSE: C), MF Global Ltd (NYSE: MF), E*Trade Financial Corp (NASDAQ: ETFC), Sirius Satellite Radio Inc (NASDAQ: SIRI), Bank of America (NYSE: BAC), Washington Mutual Inc (NYSE: WM), Thornburg Mortgage Inc. (NYSE: TMA), Alcatel-Lucent (NYSE: ALU), Sprint Nextel Corp. (NYSE: S) and Intel Corp. (NASDAQ: INTC).

But there’s something fascinating about the names in that list: They are exclusively banks and tech companies. I have to wonder then — how many of the investors who lost money on those stocks read and understood the risks disclosed in the SEC filings, particularly those pertaining to to loans and accounting?

My bet is that none. It seems that the people who did the in-depth research to really “buy what they know” on the financials ended up shorting. William Ackman’s brilliant bets against bond insurers come to mind.

Bottom line: Looking at some ratios and then buying a stock because it has a good dividend, high ROE and low P/E does not constitute buying what you know. The people who lost money on these stocks, I would argue, had no idea how the companies they were investing in really earned their money. They weren’t buying what they knew after all!

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My friend and trader Tim Sykes is a big fan of ignoring blue chips in favor of more volatile penny stocks — many of which he admits are outright frauds, but can still serve as vehicles for profitable speculation.

In a recent post, he mentions the huge losses shareholders have been handed at the following companies: Merrill Lynch & Co. Inc (NYSE: MER), The Bear Stearns Companies (NYSE: BSC), Citigroup Inc (NYSE: C), MF Global Ltd (NYSE: MF), E*Trade Financial Corp (NASDAQ: ETFC), Sirius Satellite Radio Inc (NASDAQ: SIRI), Bank of America (NYSE: BAC), Washington Mutual Inc (NYSE: WM), Thornburg Mortgage Inc. (NYSE: TMA), Alcatel-Lucent (NYSE: ALU), Sprint Nextel Corp. (NYSE: S) and Intel Corp. (NASDAQ: INTC).

But there’s something fascinating about the names in that list: They are exclusively banks and tech companies. I have to wonder then — how many of the investors who lost money on those stocks read and understood the risks disclosed in the SEC filings, particularly those pertaining to to loans and accounting?

My bet is that none. It seems that the people who did the in-depth research to really “buy what they know” on the financials ended up shorting. William Ackman’s brilliant bets against bond insurers come to mind.

Bottom line: Looking at some ratios and then buying a stock because it has a good dividend, high ROE and low P/E does not constitute buying what you know. The people who lost money on these stocks, I would argue, had no idea how the companies they were investing in really earned their money. They weren’t buying what they knew after all!

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My friend and trader Tim Sykes is a big fan of ignoring blue chips in favor of more volatile penny stocks — many of which he admits are outright frauds, but can still serve as vehicles for profitable speculation.

In a recent post, he mentions the huge losses shareholders have been handed at the following companies: Merrill Lynch & Co. Inc (NYSE: MER), The Bear Stearns Companies (NYSE: BSC), Citigroup Inc (NYSE: C), MF Global Ltd (NYSE: MF), E*Trade Financial Corp (NASDAQ: ETFC), Sirius Satellite Radio Inc (NASDAQ: SIRI), Bank of America (NYSE: BAC), Washington Mutual Inc (NYSE: WM), Thornburg Mortgage Inc. (NYSE: TMA), Alcatel-Lucent (NYSE: ALU), Sprint Nextel Corp. (NYSE: S) and Intel Corp. (NASDAQ: INTC).

But there’s something fascinating about the names in that list: They are exclusively banks and tech companies. I have to wonder then — how many of the investors who lost money on those stocks read and understood the risks disclosed in the SEC filings, particularly those pertaining to to loans and accounting?

My bet is that none. It seems that the people who did the in-depth research to really “buy what they know” on the financials ended up shorting. William Ackman’s brilliant bets against bond insurers come to mind.

Bottom line: Looking at some ratios and then buying a stock because it has a good dividend, high ROE and low P/E does not constitute buying what you know. The people who lost money on these stocks, I would argue, had no idea how the companies they were investing in really earned their money. They weren’t buying what they knew after all!

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