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BusINess » Stock Market

Posts Tagged ‘Stock Market’

Activist investors to companies: Show us the money

Family Dollar employee Pamela Ramos, left, assists John Conner, right, with a purchase at a store in Waco, Texas. In September 2010, Family Dollar had announced plans to spend $750 million to buy back its stock, which would be partially funded by its cash on hand. Then in October, the retailer said it had repurchased $250 million of its shares as part of its previous announcement. (AP Photo/Tony Gutierrezfile)

Family Dollar employee Pamela Ramos, left, assists John Conner, right, with a purchase at a store in Waco, Texas. In September 2010, Family Dollar had announced plans to spend $750 million to buy back its stock, which would be partially funded by its cash on hand. Then in October, the retailer said it had repurchased $250 million of its shares as part of its previous announcement. (AP Photo/Tony Gutierrezfile)

NEW YORK (AP) — Companies stopped paying dividends and stockpiled cash during the Great Recession, and shareholders didn’t complain. Now they want a reward for their patience.

American companies are holding $1.9 trillion in cash, a record. The large businesses that make up the Standard & Poor’s 500 index, all of which answer to public shareholders, have $940 billion on hand — $300 billion of it accumulated since late 2008, says Howard Silverblatt, senior index analyst at S&P.

Shareholders want the companies to start putting that cash to use. The most pressure is coming from activist investors, who buy stakes in companies and then try to influence management to make certain changes that they say are in shareholders’ interest.

“We’ve been in bunker mentality for too long,” says Eric Jackson, who runs the hedge fund Ironfire Capital. He predicts that activist shareholders are about to become “a lot noisier.”
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Dow over 12,000 as remarkable bull market rolls on

Two years ago, the stock market was roadkill along the financial highway. Now one of the greatest bull markets in history is rolling along—maybe enough to finally get the attention of average investors.

The Dow Jones industrial average closed above 12,000 for the first time in two and a half years Tuesday, putting the Great Recession even farther in the rearview mirror and erasing most of the damage it inflicted on tens of millions of retirement accounts.

A broader measure of the stock market, the Standard & Poor’s 500 index, closed above 1,300 for the first time since Aug. 28, 2008. And at least one widely watched measure suggests stocks are still cheap by historical standards.
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How GM’s return played in 3 cities with a stake

Traders gather near the post where General Motors Co. stock trades at the New York Stock Exchange on Thursday. (AP Photo/Seth Wenig)

Traders gather near the post where General Motors Co. stock trades at the New York Stock Exchange on Thursday. (AP Photo/Seth Wenig)

General Motors returned to Wall Street with the satisfying roar of a muscle car’s engine, embraced by traders at the New York Stock Exchange who stood in a crowd eight deep for the chance to buy a piece of a resurrected American icon.

Elsewhere, the moment was more complex.

The White House walked a fine line, stressing that the government was eager to get out of the automotive business while also taking credit for a taxpayer bailout that helped save the industry, not to mention tens of thousands of jobs.
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Ford earns first profit in 4 years

In this photo made Nov. 29, 2009, a 2010 Ford Ranger pickup truck sits at a Ford dealership in Denver. Ford Motor Co. said Thursday, Jan. 28, 2010, it made $2.7 billion in 2009, its first annual profit in four years. (AP Photo/David Zalubowski)

In this photo made Nov. 29, 2009, a 2010 Ford Ranger pickup truck sits at a Ford dealership in Denver. Ford Motor Co. said Thursday, Jan. 28, 2010, it made $2.7 billion in 2009, its first annual profit in four years. (AP Photo/David Zalubowski)

Ford, the only U.S. automaker to avoid bankruptcy court, clawed its way to a $2.7 billion profit in 2009 and expects to stay in the black in 2010. It was the automaker’s first annual profit in four years.

Ford’s full-year revenue of $118.3 billion fell nearly 20 percent from 2008, but the Dearborn-based automaker benefited from cost-cutting, a $696 million profit in its credit arm and popular cars and trucks like the Ford Fusion midsize sedan and Ford Escape small SUV. It gained market share in North and South America and Europe, despite the worst U.S. sales climate in 30 years.

“While we still face significant business environment challenges ahead, 2009 was a pivotal year for Ford,” Ford CEO Alan Mulally said in a statement.
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S&P expert says odds are good for a bullish 2010

If there’s a single word that best sums up investors’ views toward stocks heading into 2010, it’s probably “wary.”

The market plunge of 2008 scarred psyches as well as portfolios. And even though the Standard & Poor’s 500 stock index is up more than 20 percent this year, few could forget the falling-off-a-cliff feeling when the downturn carried over into 2009 and stocks continued to plummet another 25 percent.

The ride is likely to be bumpy again in 2010. Volatility is here to stay, says S&P’s chief investment strategist Sam Stovall. He cites the impact of hedge funds, computerized trading, inverse ETFs where investors can profit from a declining market, and “the mindset that you really can’t engage in buy-and-hold any more.”
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