A lot to think about today
Today's Financial News - Posted December 8, 2009
It’s another busy day for Wall Street. Thanks to a strengthening dollar and weaker-than-expected fiscal results, investors have a lot to think about.
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): It is yet another interesting day on Wall Street. The dollar is stronger, gold is down and a handful of major American companies are reporting worse-than-expected figures.
If you think a strengthening dollar was going to hurt the equities market, wait until what happens when we pair a stronger dollar with a weaker economy. It won’t be pretty.
When I first fired up my computer, long before the sun popped across the morning horizon, futures looked relatively solid thanks to word from FedEx (NYSE:FDX) that revenues have been stronger than expected.
With the aid of global exposure and a quarter that has seen the dollar weaken significantly, the company’s top-line outlook looks better than most expected.
But the jubilation ends there.
About this time last year, McDonalds (NYSE:MCD) was a consistent market beater. As more and more Americans moved into the poorhouse, their appetite for comfort foods like Big Macs and Chicken McNuggets rose steadily.
But now that unemployment has nearly doubled and is sitting in double-digit territory, fewer folks are treating themselves to the delights of the Golden Arches. According to this morning’s report, same-store sales are down by 0.6%.
It’s the second straight monthly decline and is not a good sign for a company that is often touted as a recession-resistant play.
Cutting the fat
Another important market mover is 3M (NYSE:MMM), the maker of all things chemical. Shares of the globally important company are down today after management announced a lower-than-anticipated outlook for the year.
Instead of earning the $4.57 per share analysts predicted, 3M is now expected to bank $4.50 to $4.55. Not good news from a global conglomerate.
So where’s the good news?
It’s right where we expect it… in the small-cap sector.
Two companies worth watching today are ClearOne Communications (NASDAQ:CLRO) and Local.com Corp. (NASDAQ:LOCM).
Shares of Local.com, an $80 million business advertiser, are up by over 5% at the moment thanks to news updated fiscal guidance that paints a prettier-than-expected picture.
According to the company’s management, shareholders can expect to see annual revenue in the ballpark of $56.1 and $56.5 million for the year. That’s an increase of 47% above last year’s figure.
During a period when advertising budgets were slashed, the growth should be a clue of what’s to come for today’s investors.
As for ClearOne, this one is interesting because there is no news. It is a down-and-dirty volume spike, meaning it could be a momentary blip or it could be a sign of positive things to come.
This is a small, illiquid stock, but the action proves somebody wants in.
This is one to keep a close eye on over the next few days and weeks. Shares have surged by over 10% during the past week.
Next Article: My first prediction for 2010 came true in 2009
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