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Saturday, June 06, 2009
Stocks In Focus For Monday
MarketWatch
MarketWatch
SAN FRANCISCO -- Among the companies whose shares are expected to see active trading in Monday's session are Pall Corp., Texas Instruments Inc. and Bank of America Corp.
Pall (PLL) is expected to report third-quarter earnings of 41 cents a share, according to the consensus of analysts surveyed by FactSet Research. The company manufactures a wide range of filtration and separation equipment and products used in such applications as electronics and health care.
Texas Instruments (TXN) is scheduled to provide its mid-quarter update for the second quarter. In April, the company had forecast second-quarter earnings of 1 cent to 5 cents a share on revenue pegged in a range of $1.95 billion to $2.4 billion.
After Friday's closing bell, Bank of America (BAC) said its board elected four new directors. The independent directors are Susan Bies, 62, a former member of the Federal Reserve board of governors; William Boardman, 67, a former BankOne Corp. and Visa International Inc. executive; D. Paul Jones, 66, former chairman and chief executive of Compass Bancshares Inc.; and Donald Powell, 67, a former Texas banker and the chairman of the Federal Deposit Insurance Corp. from 2001 through 2005.
Watch list
CBS Corp. (CBS) (CBSA) had its corporate credit rating downgraded to BBB- from BBB by Standard & Poor's. The rating outlook is negative. "The ratings downgrade is based on our concern that the company's efforts thus far to rein in leverage through cost and dividend reductions have been more than offset by revenue weakness," said Heather Goodchild, an S&P credit analyst, in a statement. "We believe that the extent and pace of a recovery, especially in local TV and radio, is highly uncertain, given structural shifts in end-market ad demand."
Mattel Inc. (MAT) and its Fisher-Price unit said they will pay $2.3 million in civil penalties over violations of the federal government's ban on lead paint. In 2007, about 95 Mattel and Fisher-Price toy models were found to exceed the federal lead limit of 0.06% by weight. Affected toys were recalled between August and October 2007.
Rio Tinto (RTP) (RIO) may get a ratings upgrade from Standard & Poor's because the mining giant decided to pursue a $15 billion rights issue rather than sell an 18% stake to state-owned Aluminum Corp. of China. S&P has BBB corporate credit and debt ratings on Rio Tinto.
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Some mutual funds want you to pay for the privilege of them (or your investment adviser) taking your money to invest. It's called a load, and it works like a cover charge to get into a nightclub. Luckily, there are such things as no-load funds. As the name implies, shares of these funds are sold without a fee paid to a broker or investment advisor.
The entire amount you invest in no-load funds goes to work for your returns. On the other hand, with load funds, right off the bat you're charged commission (not to mention other fees incurred over the life of the investment). Let's say, for example, you invest $25,000 into a load fund that charges a 5% commission. This costs you $1,250 off the top, bringing your actual investment down to only $23,750.
The often-cited horse race analogy argues against investing in load funds. Here's the logic behind it: Would you place a bet on a horse that had to start a race 200 yards behind the others? Well, maybe you would if you got a tip from a sketchy, trench coat-clad man in a dark alley. However, under most circumstances, it's not smart to put your money on that handicapped horse.
But some argue that at times that man in the trench coat (aka your broker) knows more about the horses than you do, and has a better shot at picking a winner. Also, sometimes these fees are unavoidable because some funds are available only through investment advisers.
Cost-benefit analysis can help determine when a load fund is worth it (in other words, when it will score you a load) and when it is better to "do it yourself" and avoid the fees. Load-fund fees range depending on share class and can cover a variety of costs, such as paper work and fund management.
