Posts by Brian.oco

A wild news day for tech stocks, with Sony posting its first quarterly loss in 14 years and rumors running rampant that Microsoft will start laying off employees after all.

A week or so ago, Microsoft issued a statement saying that the company would avoid layoffs, and would instead focus on cutting back on contractors and not replacing employees who left the company. So much for that, apparently. But we’ll know for sure by January 22, the date of Microsoft’s next earnings call.

Strangely, some Wall Street types say that layoffs would be lousy for impacted employees, but good business for Microsoft. Paul Kedrosky, who writes the financially-themed Infectious Greed blog, tells Tech Ticker this morning that Microsoft is suffering through the same economy as everyone else. So even though the company has a history of not laying off employees, it should think again. “Wall Street would be as giddy as a school girl” if the rumors about layoffs at Microsoft were true. Technology is maturing, and Microsoft needs to accept it and fight the conventional wisdom that you invest more in research and development in a downturn, Kedrosky says.

Apple is also in the news again. This after Cit analyst Richard Gardner downgraded Apple on Tuesday, citing “a more conservative view of consumer spending”. That’s Wall Street-speak for “consumers are throwing nickels around like manhole covers these days”.

Gardner lowered his share price target to $132 from $153, but a closer review reveals that his …

Not a good Friday on Wall Street, but then what else is new?

The Dow is down 100 points, and the Nasdaq off 31 points, to 1,585 after a lousy jobs number (but not as lousy as many thought) and a seller’s run on Apple, Cisco Systems, and on semiconductor stocks.

The Nasdaq Composite Index declined 31.84 points, or 1.97 percent, to 1,585.17. The jobs number, as reported by the U.S. Labor Department, was 524,000, triggering a rise in the unemployment rate to7.2%, a 16-year high.
.
People – even battle-hardened Wall Street types – are beginning to freak out. "We just keep seeing bad news. That's all we ever see," Ryan Detrick, a senior technical strategist at Schaeffer's Investment Research in Cincinnati, Ohio, told Reuters on Friday afternoon. "We really have to see the economy, housing show some type of life."

Things have gotten so bad that the Nasdaq has rolled out a new index to cover the growing number of government bailouts. It’s called the OMX Government Relief and its sole purpose is to monitor the performance of companies who have been paid bailout money by Uncle Sam. There are some qualifiers: The OMX will only track, with equal weight, companies of at least $1 billion market cap. So any little banks or auto parts companies probably won’t be covered in the index. Funny thing – the OMX has only been up since January 5, but it’s already down 941 points.

My …

If your company CEO is walking around with bags under eyes, clutching a balance sheet in one hand and a bottle of Chivas in the other, it could be because she can’t get financing to keep the company going.

Business Week has a great article on this topic, pointing out that the TARP money that is going to banks and lenders – about $350 billion in all – isn’t being used to loan out money to businesses. That was the idea when Congress scared the country half to death with talk of a financial meltdown if banks didn’t have money to lend.

$350 billion later, they still don’t have money to lend. Read the whole story at:

http://www.businessweek.com/magazine/content/09_03/b4116020094458.htm?chan=top+news_top+news+index+-+temp_top+story.

Elsewhere Dell is announcing that it’s laying off 1,900 employees in its laptop and desktop operation in Ireland. Dell is also moving a large chunk of its computer manufacturing from Ireland to Poland, where labor costs are 50% cheaper. Irish economists say that each Dell job accounts for four or five other jobs in the country, so the misery continues in the Emerald Isle.

"This is a difficult decision, but the right one for Dell to become even more competitive, and deliver greater value to customers," said Sean Corkery, vice president of operations at Dell's major facility in Limerick, southwest Ireland. Corkery added that Dell would "treat affected employees with dignity and respect and offer them every practical support."

Also on Dell, Kara Swisher …

Bloomberg is out with a story this week saying IBM will lay off 16,000 more employees, on top of the 15,000 the firm has already cut. Since economic recovery usually lags job losses, it’s another morbid sign that we’re still in the teeth of this economic hurricane.

Note also that the IBM numbers won’t be counted in the lousy jobs number coming out from the U.S. Labor Department later this week – that’s how bad things are getting. I’m also hearing rumors from Microsoft insiders that more layoffs are coming to Seattle, too.

Elsewhere, the stock market seems to have done a more orderly job of processing this week’s batch of bad economic news. True, the market fell 240 points today, but the retrenchment was expected after a decent start to the year. Consider this: if the same jobs estimates came out in October or November, the market would have fallen by 700 points today. It’s like we’re getting immune to bad news and already pricing financial Armageddon into the stock market on a regular basis.

Elsewhere – there’s always an elsewhere in the tech market – Forrester Research is out with a new survey saying consumers are significantly cutting purchases of gadgets and electronic toys. About 60 percent of survey respondents say their cutting back on the shiny tech baubles, as Forrester cuts the market into 10 easily-categorized areas in its report where at least 50 percent of respondents ay they won’t be buying anything.

…

Intel is killing the tech sector this morning, down six percent in trading – to $14.40 per share – after a particularly dismal earnings outlook.

I’ll get into the details in a moment, but it’s worth noting that we can’t just point the icy finger of guilt at Intel. I’m afraid the predictions of horrible quarterly corporate numbers are coming true. It’s just bad luck for Intel that the company was among the first out of the box.

It’s also worth noting that the day the Intel numbers, estimates are out that the U.S. economy will shed 677,000 jobs, according to Friday’s upcoming employment report. That number isn’t helping anyone on Wall Street today.

Back to Intel. According to company bean counters, Intel’s preliminary fourth quarter revenue was even more brutal than expected, primarily because of lower global demand for personal computers.

Overall, Intel estimates its revenue to be about $8.2 billion, down 23 percent from a year earlier. It had previously forecast $9 billion, so the big disparity is disturbing, especially because Intel Chairman Craig Barrett had said last November hat the early revision was final. Intel also sees a net loss from equity investments and interest of between $1.1 billion and $1.2 billion, worse than its previous expectation of a loss of around $50 million.

There’s no doubt that the Intel numbers have hurt the markets today. Worse, with more corporate numbers about to roll in, we can expect similar days in the …

Tech talk has more predictions for 2009, and the news continues to be grim. Economist Gary Shilling, president of A. Gary Shilling & Co., was on the show this morning with a laundry list of dark projections for the economy and the stock market. Specifically, Shilling says the recession will last throughout 2009 and he expects the S&P 500 to hit 600 in 2009.

Shilling also tells Tech Ticker that a recovery isn't likely until 2010, but he is bullish on the dollar and cautiously optimistic about high-grade corporate debt, but doesn't see much to be hopeful about from the long side in 2009. He says “we have a lot of downside to go and that the recession won’t end at nine o’clock in the morning on June 30, like most people are saying.”

He also sees “no sign of bottoming out in the housing market, and that if you want to sell your home, do it yesterday.” He says stay out of stocks and to buy high-grade bonds. Shilling adds that it’s too early to buy the tech sector – that should wait until 2010.

A pretty sober assessment, especially about tech stocks. After all, how much lower can they go?

One potential bright spot for consumers; Best Buy is jumping into the iPhone market, selling refurbished Apple iPhone 3G models at a $50 discount. According to a Reuters dispatch this morning, the lower prices of $149 for the 8GB iPhone (normally $199) and $249 …

CNN’s Rick Sanchez is the latest victim of the “Twitter” curse. Sanchez, a CNN on-air anchor, reportedly fell victim to a phishing scam that could undermine the investment rationale for Twitter by big investors, one of the most popular social networking sites on the internet. In a “tweet” on Monday, Sanchez’ account displayed the message "i am high on crack right now might not be coming into work today".

For the record, Twitter says that Sanchez’s account was hacked, another red flag for investors looking to plow money into social networking sites.

Social networks are a lot of fun, and perhaps even useful commercially. But investor crave stability and sustainability. Twitter might have a problem there.

This week also offers the Consumer Electronics Show in Las Vegas, which threatens to be overshadowed by the dark economic climate. But one day the economy will rebound and today’s consumer electronics breakthroughs will be tomorrow’s hot sellers for companies we’ll all want to invest in.

Remember that Sony’s Wii and Research in Motion’s Blackberry were once exhibition hall prototypes so there is plenty of hope for both companies presenting at CES and curious investors. A lot of technology offerings that are being introduced have been in the pipeline for years, way ahead of the recession curve, so nobody expects there to be a dearth of quality products (we’ll see about CES, 2010).

In addition, consumer electronics companies can ill afford to sit on the sideline while a competitor …

Martin Sosnoff, writing in Forbes.com today, offers one of the most comprehensive, clear-minded takes on the U.S. economy in 2009. He’s not bullish on tech stocks – yet – but he is cheerleading the biotechnology sector, which could offer investors some significant upside in a year where profits will come at a premium.

Here’s his capsule review of key economic indicators for this year:

“At year end, the consensus for the economy and financial markets riffled into conformity. It is a mixed bag, both bullish and bearish, which means its value is probably zero. Bearish on the first half and seeing recovery in the backstretch is wish fulfillment. Too simplistic.”

“The baddies: First-quarter gross domestic product down 3% to 4%, but recovering to -1% in quarter two. Capital spending weakens for several quarters. The dollar drops another 10% on our rock-bottom Treasury bond yields across the maturity spectrum. Commodities markets strengthen. The unemployment rate reaches 8.2% with the federal deficit a shuddering $1.5 trillion.”

“The forecast by pundits covering the stock market is more convoluted than economists' music sheets. Meanwhile, analysts covering specific sectors of the market need to catch up by revising earnings projections downward. Top-down strategists see earnings for the S&P 500 Index falling to approximately $60. From peak earnings power in 2007 of about $85, this is a healthy cut with which I agree.”

Read the entire piece at http://www.forbes.com/financialadvisernetwork/2009/01/02/financial-2009-forecast-fan-ii-in_ms_0105sosnoff_inl.html.

Elsewhere tech stocks are off with one …

Let’s get the bad news out of the way first, and it starts with the semiconductor sector.

Last month I wrote how the market for consumer electronics was one of the first to go as consumers buckled down as the recession hit home. That has set the semiconductor market in a downward spiral and now the evidence is cropping up that the headache won’t be going away anytime soon.

First, a host of analysts have come out in the past month with downward projections for the entire semiconductor industry. Tristan Gerra, the chip analyst at Robert W. Baird is particularly bearish, downgrading chip market bellwethers like Texas Instruments and Analog Devices. Altogether, Gerra sees the chip sector losing 40% of its value – no, that’s not a misprint, in the fourth quarter of 2008 and the first quarter of 2009. As for investing in chip stocks in what would appear to be a market bottom, Gerra advises waiting until the second half of the year, when institutional investors factor in all the bad news and peg semiconductor stocks accordingly.

Needham Associates tech analyst N. Quinn Bolden is equally bleak, estimating that the semiconductor sector will fall of by 16% in 2009, as the economy slides deeper into recession. He is a bit bullish on 2010, where Bolden sees 10% growth. Again, like Gerra, Bolden doesn’t see any great buying opportunities in the semiconductor market until late 2009. The third quarter should be the ideal time for tech …

Will January be a big month for stocks?

Maybe so. Stocks have already grown by 20% since November, as measured by the Dow Jones Industrial Index. A new survey from CNBC suggests more of that is to come, with stocks expected to score double-digit gains in 2009. The CNBC report also said the economy should show signs of a rebound by the third quarter,

CNBC's Trillion Dollar Survey of money managers, analysts and traders said that 69 percent of respondents believe the S&P 500 could gain more than 10 percent in 2009. In that group, 26 percent said the S&P could even be up more than 20 percent. Just six percent saw negative returns, and all of those said the S&P could be down 10 percent or more. The third quarter of 2009 should be the next quarter to show positive growth for the U.S. economy, according to 51 percent of respondents. Another 22 percent said they expect positive growth in the fourth quarter, while 18 percent see it earlier, in the second quarter. Six percent do not expect positive GDP until 2010.

Tech Check’s Jim Goldman is also out this weekend with a new story saying Microsoft is going to aggressively cut costs, but not resort to layoffs, in early 2009.

Analysts have been waiting for the other shoe to drop in Seattle, with many expecting that Microsoft would have to start slashing jobs to fight back against slowing consumer demand for its products across the …

No Santa Claus rally for Wall Street today, with trading activity light and most investors taking it easy before the grind begins anew next Monday.

The markets were down, slightly with the Dow off by 31 points and the NASDAQ down 19 points.

Some odds and ends worth noting, however. Over at Tech Ticker, the self-proclaimed “schoolmarm of the Internet”, Kara Swisher, is out with her grades of the tech industry’s most powerful execs. On the “”most underrated” list is Mark Hurd of Hewlett-Packard (more on Hurd below), Bobby Kotick of Activision Blizzard and ‘every genius at Apple who isn’t Steve Jobs”. “He’s not the only person at that company, as if Steve Jobs makes every iPod and sends it out,” says Swisher. “He’s not overrated but he’s not the only talent at Apple.”

Jeff Bezo’s at Amazon comes in for kudo’s, for its Kindle digital book project and its highly-successful holiday season business model, she adds.

Most overrated tech company? Facebook – “Their growth has been phenomenal but they still need to find a business plan,” adds Swisher.

Dumbest investor in the valley is Yahoo rabble-rouser Carl Icahn, who has lost “a ton of money” in tech, she says.

Commentators on Tech Talk didn’t like the slam at Jobs. Says “Dave”, on Monday December 29, 2008 12:48PM EST; “What an idiot. Steve Jobs is the only one keeping Apple from becoming the next Sun or Palm or Commodore or Atari. She obviously doesn't …

Feast or famine (probably famine); 2009 should be another interesting year for the tech sector. After all, any industry that can provide sexual performance drugs (Viagra) for the CIA to give to Afghan warlords is always going to find room on the front pages of every news outlet in the world.

One technology sector that could suffer more than most is the cell phone industry, especially smart cell phones. I saw where Wal-Mart is going to begin selling iPhones today (Sunday, the 28th of December) making the popular phones even more popular and pervasive for U.S. consumers. The big question, however, is who’s going to buy one?

For the record, Wal-Mart is selling the black 8-gigabyte iPhone 3G model, which holds about 2,000 songs, for $197. The 16-gigabyte model, in black or white, will be priced at $297. All of the phones require a new two-year service agreement from AT&T or a qualified upgrade, Wal-Mart said in a company statement. The retailer added that its stores could match local competitors' advertised prices during a promotional period. Rumors are also afloat over a proposed 4-Gig iPhone being sold through Wal-Mart, although nothing official has been reported.

Maybe Apple should come up with a cheaper model, if that’s what it takes to get consumers buying iPhones in ’09. But even then, cell phone industry observers aren’t so sure.

“We expect Q1 ’09 to be the worst absolute quarter in terms of year-over-year decline for the industry,” says Michael …

The Street.com is out with its 2009 tech guide and it’s a good read. You can check out the whole thing at http://www.thestreet.com/story/10454493/4/the-tech-investors-guide-to-2009.html; but here are a few highlights on what tech insiders predict will happen in 2009.

Cloud clearing – 2009 will be the year of the cloud – cloud computing that is. Cloud technology enables users to channel computer power and storage via the internet. Companies that should benefit include Hewlett-Packard, EMC, Sun Microsystems, IBM, and Microsoft. All big companies, and all heavily invested in cloud computing.

HP to withstand recession – Few tech companies will emerge unscathed from the great, ’08 recession. But Hewlett-Packard will do better than most. A big cash cushion of $10 billion and $1 billion in operations savings from its EMS deal should position HP nicely for an economic rebound, whenever that happens. "Though macroeconomic conditions are likely to remain very challenging, we believe HP will effectively manage expenses, expand operating margins and drive EPS in Fiscal 09," says R.W. Baird analyst Jayson Noland. "We continue to recommend HP as a diversified, well-positioned player with attainable cost cutting improvements through F'09."

Software security offers some upside – As the economy suffers, people will do anything to survive – even commit identity theft. That should help companies like Symantic and McAfee which make software that offers users more security fro their computers, and the private information that’s lodged inside.

Good things in small packages – International …

After a year featuring tectonic shifts in the stock market and the economy, 2008 is set to go out with barely a tremor.

A quiet Monday in the technology market, with the big news that palm looks like it’s going to get its own version of a bailout. That after Elevation Partners agrees to infuse the struggling handset maker with an additional $100 million, in a move to underwrite the company's 2009 new product launch. The move spurred Palm’s stock up 50% to $3,71 in Monday trading, as investors digest the news that Palm will put the money right to work on some of its 2009 new products launches.

Elsewhere, an interesting article in CNet’s “Digital Media” web site, on whether we are seeing a huge shift in the U.S. business superpower category. For decades, the “Big Three” has meant only one thing: auto kingpins General Motors, Ford, and Chrysler. But Bernstein Associates says the current recession has realigned the corporate power structure in the U.S., with three technology behemoths supplanting the big three.

The new kings of the hill? Google, Microsoft, and Yahoo. I would counter that Apple belongs in that group, if only for creativity and consumer attraction. But the underlying argument by Bernstein analyst Jeffrey Lindsay that the past ten years has seen the ascension of Google (most notably) and the descent of the Big Three automakers is an intriguing one. Says CNet, “Lindsay notes that the downturn of 2001 to 2003 in Web …

There’s a light trading load on Wall Street this week, with trader’s thoughts turning to visions of sugarplum martinis dancing in their heads.

Anything to help forget 2008, right? Although 2009 looks like it won’t be any better. This, from Subir Gokarn, chief economist at Standard & Poor’s, Asia Pacific. “The U.S. won’t recover from a recession until 2010,” he says. Gokarn says it won’t be like the last few recessions, when the U.S. could climb out of a financial hole by itself. This time, he says, China and India will help lead the way.

Other than tomorrow’s Q3 GDP confirmation number, there is not much going on in the economy. In the tech sector, though, it’s becoming apparent that there is at least one winner in the holiday retail season – Apple. The Financial Times reports this morning that Apple iPods, traditionally accounting for up to 50% of Apple’s fourth-quarter revenues, are reportedly enjoying strong sales figures this month. Analysts at the Consumer Electronics Association say that the iPod, going away, is the most popular consumer choice this holiday season.

Amazon is also reporting that there are six iPods in its top 20 lists of bestseller list for consumer gift ideas this year, including the $230, 8GB iPod that is drawing crowds of budget-conscious buyers who still value quality. Says Michael Gartenberg, vice-president of Mobile Strategy at Jupitermedia. “In a down economy, people can be willing to spend more on a premium product because they don’t …

Oracle, Research and Motion and Palm are all releasing earnings statements today, and that should pick up momentum in what has been a fairly dormant technology trading week. The web site Tradingmarkts.com thinks the earnings news means opportunity in two technology-heavy exchange-traded funds (ETFs); Technology Select Sector (SPDR ETF XLK); and the ProShares Ultra Technology ETF, ROM. Both ETF’s have more tech company assets than most tech indexes, and has a two-to-one weighting over the Dow Jones U.S. Technology Index. Could be a quick score, there.

Elsewhere, trading is light as the Christmas-New Years season looms and traders and investors look to close down their books and go home for the holidays. Already we are starting to see some of those ubiquitous “predictions for the new year” columns and CNBC today has a good one. In it, David Karsbol, an analyst at Saxo Bank, offers his “10 Outrageous Predictions for 2009”. I particularly like #’s 2 and 3 . . .

2. Crude Oil to $25 - The ongoing economic crisis will further dent oil demand throughout next year, sending the price ever closer to $25 a barrel, Saxo Bank said. OPEC production cuts will be hampered by disagreement and fail to stem the slide, it added.

3. S&P 500 to 500 - The S&P 500 will fall to 500 points in 2009 as slowing corporate earnings will drag on the U.S. index, according to Saxo Bank. Earnings will slow because of a continued consumer …

The stock market is up today on news that the Federal Reserve will lower interest rates to spur lending and, hopefully, economic growth. The Dow is up 78 points and the Nasdaq is up 24 points in mid-morning trading.

Analysts say that the Federal Reserve will lower the key U.S. official interest rate, known as the fed funds target rate, by a half-point, lowering the rate to 0.5%.

Lower interest rate effectively cheapen the cost of buying goods and services, so tech companies are all in favor of them. Companies might loosen their purse strings to a buy a loading dock’s worth of computers or laptops if they can borrow money to do it at a lower cost. One problem: ever since the Fed has begun lowering rates, a lot of banks have failed to follow suit, choosing instead to horde cash reserves and keep lending tight. But the U.S. Treasury, as part of its TARP bailout program, is getting more aggressive about hitting banks over the head with the “stick” part of the carrot and stick strategy.

If banks decide to loan money at lower rates, that’s good news for the big computer companies.

One retailer with tight ties to the tech sector is Best Buy, and right now it could use a lifeline of its own. The company announced yesterday that its third-quarter profit sank and says it will offer buyout packages to nearly all its corporate employees in an effort to cut costs.

I've said before that I'm not a big fan of Netflix. Anything that makes me keep tabs on envelopes, stamps, and post offices is so 20th century. Plus, I already have video on demand via Direct TV and don't see the need.

But guess what? That puts me in the minority among home movie buffs. Netflix CEO Barry McCarthy said last week that the company's sales numbers were "remarkably strong", even in the midst of a recession. And, according to Piper Jaffrey digital media analyst Michael Olsen, Netfliex is gaining ground fast on chief rival Blockbuster.

Back to McCarthy for a moment. The Netflix CFO says that sales growth is about skyrocket, as consumers opt for the 'cocoon" approach and stay home, increasingly, to meet their entertainment needs. Companies like Dominos, Mattel (which makes board games), and even Sony (which makes the Wi) have all seen sales spike in the last half of 2008, as people cut down on going out for their entertainment needs. Once you already have a big screen, high-def television, going out to spend $40 at a movie theater seems almost redundant - and quite expensive.

Said McCarthy, to a group of analysts at a Barclay's investment conference last week; "Sometime in the next couple of days we are going to punch through the top end of the range that we gave for subscribers. We're experiencing an extraordinarily strong quarter but probably will not raise our quarterly forecast because of continuing uncertainty in …

The stock market held its gains of earlier today, although doubts about how financial companies are going to raise capital when their balance sheets are in complete disarray are prevalent on the street. The Dow was up 70 points and the Nasdaq up 18 points - thus providing some relative stability in the financial markets this week.

Some tech stocks in the news include Advanced Micro Devices and Expedia. Says Michael Yoshikami of YCMNET Advisors, appearing on CNBC this afternoon, both stocks have issues, but they also have merit.
""You can find opportunities when things drop out of sentiment that maybe are not really as troubled as the asset that caused the overall sector drop in the first place," he said. Exhibit A is Advanced Micro Devices, which has performed sluggishly of late. It's a buy in Yoshikami's eyes. He also likes likes Nvidia, which has a business partnership with a tech biggie that should keep the cash rolling in.
"Nvidia now is providing graphics services to Apple computers," he said. "Also, they have a tremendous amount of cash in the bank."

One stock that Yoshikami is not currently touting, but has potential, is Expedia. "The news is going to continue to be tough (for Expedia), and when it drops a couple of dollars, it's still a very dominant player," he said. "Travel's going to get very bad — but it's not going to fall off the earth, so I think it's a matter of buying …

The stock market seems to be stabilizing after yesterday’s selloff, with the Dow Jones average up 120 points, and the Nasdaq up 24 points in early trading. We’re starting to see a trend where we have more days in positive territory than not – a historical sign that suggests the pros think we’ve hit some kind of bottom in the stock market.

Analysts are also starting to weigh in on the relative health of technology stocks. Here’s a glimpse of analyst tech picks compiled by TheStreet.com this morning . . .

➢ Amazon.com: Rated new Hold at Jefferies. $54 price target. Valuation call even though the company should continue to grow faster than the industry in the long term.

➢ Bristol-Myers Squibb: Upgraded at Citigroup from Hold to Buy. $25 price target. Company has among the best 3-year growth potential in the industry and an attractive 6% dividend yield.

➢ Electronic Arts: Downgraded to Neutral at Bank of America. $18 price target. Electronic Arts downgraded at Smith Barney to Hold from Buy. Price target lowered to $21 from $31. Fiscal 2009 EPS estimate lowered to $0.70 from $1.05. Electronic Arts price target cut at Goldman to $22 from $36. Maintained Buy rating.

➢ Apple: Numbers lowered at Morgan Stanley. Estimates cut through fiscal 2010. U.S. consumer survey suggests lower demand for iPhone, despite price cuts. Equal-weight rating and new $95 price target.

One company that could face some more negative returns this …

I've been a nag about how many media outlets have been wrong about the reasons for the current economic breakdown we're experiencing. So many pundits who don't understand Wall Street want to make it political, and subsequently blame President Bush for "deregulating" Wall Street (not the reason, and besides, President Clinton and then Treasury Secretary Robert Rubin triggered deregulation back in the 1990's).

No, the real reason has been about housing and credit. More to point, while investment companies have behaved horribly and hid the damage from toxic mortgage paper they own, the American homeowner, who has been living on credit and beyond his or her means, is at the top of the list of culprits. Sure, banks and lenders made it easy to borrow money; and yes, the fine print tripped up armies of mortgage borrowers. But in the end, our generation thrived on credit and never gave any thought to the concept that what goes up (housing prices) must come down.

But that is changing.

Goldman Sachs has issued an interesting report stating that now, the economic crisis is turning away from housing and real estate, and toward the credit markets. Instead of blaming housing depreciation for the mess we're in, Goldman says that now "the cycle is broadening and unemployment is replacing home prices as the "main loss driver."

The unemployed, especially ones who purchased homes they can't afford, represent the next wave of foreclosure victims, supplanting the sub-prime borrowers who fueled all …

Is today the worst day of the recession? A lot of people seem to think so.

I’ll get into that in a moment, in an otherwise light trading day for technology stocks. I think we’re seeing a run out of tech this week and into more stable companies, especially in the consumer staples marketplace.

Watching CNBC this morning I saw Grant Tinker, global portfolio manager at Axa Framlington Gemini, talking about the flight to stability. "Buy great companies at fair prices, instead of fair companies at great prices," Tinker said. He thinks that the U.S. 'nifty fifty' is a good place to invest, with household names like Johnson & Johnson, Wal-Mart, Colgate-Palmolive, and McDonald's. It’s all about protecting your money from further losses. Said Tinker; “They won't be the leaders in a bear-market rally, but they will be the leaders in a new bull market.”

Back to the recession. With 533,000 jobs lost in the past month, CNBC was once again the place to be – if you want to get a grip on what the horrific jobs number means to the economy. Strangely, the market seemed pretty passive about the jobs number, only off about 100 points in mid-day trading. Most experts on CNBC seem to think that the number represented the bottom of the recession, with some calling it the worst day of the recession, adding that we can only go up from here.

• “This is history,” says economist Ram Bhagavatula. “December payrolls …

Investors were banking on a lousy jobs number, and the last two days of trading have reflected that point That’s what I’m hearing from the traders I know – shrewd peope I shared trading pits with back in the day – almost to a man (and woman) saying that next to the housing market, the next most important key in rebounding from a deep recession is jobs.

So when the day before the U.S. Labor department is expected to announce new U.S. employment numbers, the market falls in the last hour of trading over 200 points alone. Hmmm. I’m betting that Wall Street isn’t bullish on what we’re all going to hear tomorrow, but maybe it will finally signal a bottom to the recession.

One company that seems to be holding up pretty well under a harsh economic spotlight is Marvel. No, not the comic-book provider, but the Barbados-based semiconductor developer. True, Marvel (MRVL) fell 0.44% yesterday, after rising 20% in Wednesday’s trading to $6.13 per share.

But investors who study the Marvel management style say that the company has figured out, more or less, how to control costs in a recession – no mean feat. On Wednesday, the world got a peak into Marvel’s management style, as the company announced third-quarter earnings that bested Wall Street expectations.

The company earned $70.9 million, or 11 cents per share, compared with a loss of -$6.4 million, or -1 cent a share, a year earlier. Excluding one-time items, …

It almost seems out of place – like a spritz of a lilly inching up through the crusted snow after a long winter – to report some good economic news these days.

But there it is, in the form of an investment forecast by the investment bank UBS that says the U.S. stock market will rise, and significantly, in 2009.

“The consensus outlook for 2009 is a full year of gloom,” writes UBS analyst David Bianco in a research report released this week. “We believe 2009 will bring signs of a dawn in confidence with the first faint light appearing earlier than most investors expect.”

To say that, if Bianco’s forecast comes to pass, the stock market could rise by as much as 53% - yikes – to 1,300 by the end of 2009, would be wonderful news. But let’s have some balance, and know that Bianco also predicted a 16% upward spike in the S&P 500 for 2008, but it fell (freefell may be a better term) 42% for the year.

Bianco’s is basing a large part of his forecast on what has happened in the past few weeks. He notes that the S&P 500 climbed 13 percent from an 11-year low on Nov. 20 as the government agreed to protect New York-based Citigroup Inc. from further losses and the Federal Reserve stepped up efforts to unfreeze credit markets. Now he notes that 2008’s market collapse gives investors a chance to buy the biggest “growth” …

Both the Dow and the Nasdaq are flirting with positive territory today, thanks in part to one biotechnology stalwart, Amgen, which is up three points in trading.

Why? Well, the Street is getting excited about life sciences stocks again, as several research reports hit the street suggesting that the biopharm sector was undervalued, fueling a run-up in the sector today.

Overall, the market seems to be digesting the lousy jobs number issued this morning, with the private sector lopping off 250,000 more jobs in November. Brightening things up a bit is news from the Labor Department that productivity, the key ingredient for rising living standards, rose at an annual rate of 1.3 percent in the July-September quarter. That's down from the 3.6 percent growth rate in the second quarter, but slightly higher than the 1.1 percent increase initially reported a month ago and better than the 0.9 percent rise economists expected.

If there is any good news for the technology sector, it’s that the Labor Department seems to think future layoffs won’t come as much from key sectors like technology and manufacturing, but from service sectors like restaurants, hotels, and financial services. That should help some tech workers sleep a bit better at night – the Labor Dept. projection could mean that technology, along with health care and energy companies may have found a bottom, layoff-wise. Wish I could say the same about the auto industry and banking and financial sectors, but with 400,000-to-500,000 more layoffs in …

It was the fourth-worst trading day in Wall Street history, with the Dow off 679 points (about 8% of the index's total value) and the Nasdaq falling almost 9%, to 1,398 for the session.

There's a lot to point at here, but the main culprit seems to be the fact that a leading economic group has declared the U.S. is in a recession, and has been since December of 2007. Any bump we received from better-than-expected holiday sales last weekend was ground down by the gloom and doom surrounding the overall economy. A dispatch showing that manufacturing activity was at a 27-year low didn't help matters. Also, the economic malaise has really started to spread, with Spain reporting three million job losses last month and Japan's government issuing a report expecting tough economic times ahead for that country.

On the tech side, Dell was particularly hard hit on Monday, losing 10% of its overall value to finish at $10 per share (the other big dippers in tech were Qualcomm, also off 10% to close at $29.96 per share, and Comcast, which slid 10.9% to close at $15.45 per share).

It's not so hard to pinpoint Dell's exact troubles. The industry research firm Gartner came out with a report saying that global computer server sales fell sharply in the third quarter of 2008, declining by 5.4% to $12.7 billion. Every big computer maker seems to feel the pinch in the server arena, with IBM losing 4.2% in server …

Call it a tale of two headlines:

"Microsoft and Yahoo in talks again on online unit": 30 Nov 2008/Reuters

"Microsoft-Yahoo deal "total fiction:" 30 Nov 2008/Reuters

So which is it?

One of the key players originally mentioned as a possible replacement for Yahoo CEO Jerry Yang has told a Wall Street Journal blog that a proposed Microsoft/Yahoo deal is "total fiction". That story was unveiled by the U.K.-based Sunday Times, which reported that Microsoft would buy Yahoo's search division for $20 billion; and that a key part of that deal would be Microsoft bringing in its own management team.

"The team would be led by ex-AOL Chairman and CEO Jonathan Miller and former Fox Interactive Media President Ross Levinsohn," the report said. Tell that to Levinsohn, who told the AllThingsDigital blog that there was no truth to the story. The blog went on to report that key sources at both Yahoo and Microsoft also dismissed the report.

Either all of the key sources are lying or there is no deal in place. Right now, it looks like the latter. But the soap opera we know as Yahoo-Microsoft looks like it might go on forever.

With that story on the back burner - again - the focus is on the stock market today. The Dow Jones Industrial Average and the Standard & Poor's 500 Index were able to string together gains for five straight days in the last five trading sessions, the first time …

An update on the report from the UK’s Financial Times and The Telegraph that Microsoft is all set to buy Yahoo’s search engine division for $20 billion: more media outlets are carrying the story on Sunday night, including Drudge and CNET.

But CNBC found an inside source who claims the deal is not complete and may not happen, at least until a new Yahoo CEO is in place. That is said to be a personal objective of Microsoft CEO Steve Ballmer, CNBC reports.

This story should be breaking mainstream by Monday morning on the East Coast and I’ll keep an eye on it for you.

Until then, let’s turn our gaze over to the holiday shopping season, where scores of tech industry CEO’s have their stockings all hung on chimneys with care, in hopes that a profitable Black Friday soon will be there.

Well, they got their wish – sort of. Retail analyst Comscore reports that U.S. online spending numbers were actually up for BF 2009; to $534 million from $531 million in 2007.

Web consumer site PriceGrabber.com also issued a somewhat cherry report, citing an 11% spike on Internet shoppers on BF 2008. Looking forward, Comscore estimates that online sales for the holiday season will clock in at $29.2 billion – about the same number as last year.

More numbers from the National Retail Federation look even rosier for companies looking to sell goods online this Christmas. According to the NRF, …

The market’s four-day rally, where it has recouped 14% of its losses – the biggest pickup in decades – is about to get a legitimate curveball this week with a new report out from the UK-based Telegraph that Microsoft is in serious discussions to buy Yahoo. The proposed $20 billion deal isn’t for the entire company – just Yahoo’s online search business.

The Telegraph says that the removal of CEO Jerry Yang and the negotiations to buy Yahoo’s search operation were orchestrated together. The crux of the new deal is that Microsoft gets the last say over the new management team. Rumors have it that ex-AOL chairman Jonathan Miller and Fox Interactive Media Ross Levinsohn will lead the new management team.

Rumors also persist that corporate raider Carl Icahn may be pulling the strings on a Microsoft-Yahoo deal. Icahn owns over 5.5% of all Yahoo stock – a stake that Wall Street analysts peg at $850 million. Icahn was a vocal advocate of Yahoo accepting the original $47 billion deal that Yahoo, led by a reluctant Jerry Yang, turned down. Now, with Yang out of the way, the coast is clear for another shot at Microsoft, which should boost Yahoo’s stock price and give the company some much-needed capital – about $2 billion annually, Wall Street already estimates.

Already Microsoft has promised Yahoo a new $5 billion facility for its new search company, with investors supplying an additional $5 billion to get the new Yahoo-Microsoft operation up …

Trying, ever so hard, to find some good news amidst the doom and gloom on Wall Street.

At least the market went up for a second straight session, with the DJIA up 400 points on Monday trading; that after rising 500 points last Friday. Investors seemed cautiously optimistic about the Federal Reserve/U.S. Government's plan to bail out Citicorp to the tune of $300 million. And one trader, perhaps suffering from a nasty case of irrational exuberance, thought that the stock market had finally found its bottom. I won't go that far, but two straight days of triple-digit gains on Wall Street is worth popping a cork or two, no?

Perhaps some investors noticed that SAP AG is somewhat serene about global business decisions. A top exec told Reuters last Friday that the downward economy hasn't "gotten any worse" since October. "There's business out there," says SAP co-CEO Leo Apotheker. "We just need to continue to move ahead." The SAP comments, coupled with HP's stronger-than-expected Q4 earnings picture, are the best news the tech sector has gotten in weeks (okay, feel free to throw Jerry Yang's resignation into the mix).

Investors will get a better sense as to where tech stocks are headed after SAP rival Oracle Corp releases results next month. Oracle's stock price rose 6.4% today, perhaps due to the SAP sentiments, but not everyone is convinced that buying Oracle is such a great idea.

One highly-followed tech analyst, Barclay's Israel Hernandez, cut his price …

Leave it to a Swedish postal worker to restore some credibility to the financial marketplace.

Okay, Lars. G. Nordstrom isn't exactly a postal worker - just the head of the Swedish postal service. He's been at the post since July, and is paid the U.S. equivalent of $110,000 per month for the job (900,000 kronor). Nordstrom is making news by deciding to forego his salary -- he is paid more than 45 Sweden postal workers combined -- and work for free.

No special reason for the decision, Nordstrom says, he just doesn't want people "to think he's greedy", he said to a Swedish newspaper. A caveat: Norsdtrom has already banked millions as the former head of the Swedish banking group Sverige AB.

Another CEO, Mark Hurd at Hewlett-Packard, is in the news but for a more traditional, if not compelling reason. He's engineering a surge at Hewlett-Packard at a time when most computer hardware makers are losing their shirts in a lousy business & consumer market.

I love what he pulled last week, pre-announcing on Tuesday that HP's performance will surpass Wall Street projections.

So what? Well, most CEO's would have waited a week for the actual earnings report to come out (HP delivers its Q4 earnings on Monday afternoon) but not Hurd. He saw the handwriting on the wall and opted
to buck up the company's share price by delivering the good news to Wall Street six days early. And it worked. HP's …

The invaluable Tech Ticker pour more gasoline on the fire we started yesterday on the historical decline of the U.S. stock market in 2008.

Says TT; "Any way you slice it, the 2008 is shaping up to annus horribilis for the U.S. stock market. Heading into Friday's session, in which an early rally effort quickly faded, the S&P was down 49% year-to-date and on track for its worst year ever. Down 43% year to date, the Dow is heading for its second worst year in history, the WSJ reports, trailing only the 53% decline in 1931."

An astonishing number of one high-flying stocks are now trading at historic lows. Cue the tape, Tech Ticker . . .

-- 115 S&P stocks were trading under $10
-- 41 were trading under $5
-- 204 were trading with a market cap of less than $4 billion

Typically, S&P stocks are pretty big deals, with market caps averaging north of $4 billion and stock prices that trade above $5. Lots of fund manages are banned from owning stocks that sink below $5 (hello, Citibank), so we really are entering into a new financial world order. Also, the $5 rule is bad for market business. If fund managers have to automatically sell stocks that fall below $5 per share, imagine the carnage if valuations trigger a huge run on selling based on the $5 rule?

Tech Ticker points out that Alan Greenspan made his famous "irrational exuberance" …

Is it 2010 yet?

Few people want to wish their lives away, but Wall Street might gladly trade a year of its life for a time machine that would take the market straight to 2010, when hopefully this mess will be behind us.

Today's Barron's lays out the numbers and it's a grim story, with Nasdaq as Exhibit "A". The Nasdaq Composite70.30, or 5.1%, to 1,316.12. The Nasdaq has fallen 167 points, or more than 11% in just two days. The Nasdaq is down 464 points, or 35% since closing on Election Day at 1780.12. Since peaking at 2859.12 on Halloween 2007, the Nasdaq is down 1,543 points, or 54%.

"In case you were wondering, the Nasdaq’s post-bubble low came on October 9, 2002, at 1114.11. That’s only 202 points away, which at the rate we’re going we could hit by Turkey Day," says Barron's.

The financial daily lays out a "hit list" of high-tech heavyweights and how they're faring in 2008 . . . .

-- Microsoft (MSFT) fell 76 cents, or 4.2%, to $17.53. That’s a 10-year low.
-- Cisco (CSCO) fell 61 cents, or 4.1%, to $14.47. That’s a new 5-year low.
-- Intel (INTC) fell 26 cents, or 2.1%, to $12.23. That’s a 12-year low; the stock now offers a 4.3% dividend yield.
-- Flextronics (FLEX) fell 67 cents, or 29.5%, to $1.60. As noted earlier, the stock has been in free-fall of late, thanks in part to …

More news on the economy, this time from Bank of America Chief Executive Kenneth at a speech today at The Detroit Economic Club. He told the Club that it is "pretty clear" the U.S. economy is in a recession, adding there will be “no recovery until the housing market stabilizes around the middle of 2009.”

"We won't see a real turnaround until the core problem, housing, reaches a bottom, stabilizes and turns the corner. Lewis calls for a $500 billion economic stimulus plan from Washington, primarily to help homeowners behind on their mortgages. "I can't promise the pain won't get any worse before it starts to get better," he added.

One tech stock that might tide you over, if you can stomach a company whose stock price has tanked in the past few months (and they’re hardly alone), is Itron, one of the companies at the vanguard of the utility meter industry.

With President-elect Obama heading to the White House, the federal government is expected to ramp up its green energy initiatives and Itron is well positioned to take advantage. Trading at about $42 right now, Itron has been called the “Microsoft of the utilities meter movement.”

Itron is a driving force in turning dumb utility meters into smart ones. No more will we see some guy out on the side of a house, pencil and pad in hand as he reads your meter. No, thanks to companies like Itron, meters will “read” themselves, relaying information …

"Jerry, how can we miss you if you won't go away?"

Such was the refrain from Yahoo investors for months on end, who could only watch helplessly as the company lost $20 billion in value under the reign of Jerry Yang.

Sure, it's not all Yang's fault. The economy cratered at a time when Yahoo could least afford it and Google's ascent to the top of the web search engine mountaintop didn't give Yahoo a lot of room to maneuver.

But tell that to Yahoo shareholders today, many of whom are ecstatic - or whatever passes for ecstatic these days -- as the news of Yang's imminent departure as CEO of Yahoo has triggered a 14% run-up in the value of Yahoo's stock today in early trading.

As a lot of pundits are saying, perhaps Yang's departure is the best move he's ever made as head of Yahoo. In the 17 months Yang has been running the company, Yahoo has lost an obscene amount of value - that $20 billion I mentioned above. In the hours after Yang admitted he was in over his head and resigned (my interpretation and not his exact words) Yahoo's stock rose from $10.50 per share to over $12 per share - a $2 billion hike in the company's value, according to Wall Street analysts.

Some of that excitement is no doubt linked to the possibility that, with Yang out of the picture, negotiations with Microsoft over a Yahoo buyout …

Barrons has a great article today on how tech industry chief information officers and chief financial officers can't keep up with the free-fall in consumer spending. That's why we're seeing so many downward adjustments in industry revenue estimates that, right now, seem to be spread way out into 2009. The magazine is forecasting that with a strengthening dollar and the decline in consumer spending, the technology sector is looking at "multiple quarters of negative revenue growth."

That scenario is more bearish than the one presented today by U.S. economists, who are predicting a recession that will last 14 months (with the recession officially starting in April, 2008.) Economists predict slightly negative growth for the first two quarters of 2009, with the economy finally picking back up in July, 2009.

According to Bill Whyman, senior managing director at International Strategy & Investment,
tech revenue is likely to fall for the next two or three quarters. He tells Barrons that the decline in the current quarter could be as much as five percent compared with the same period last year, if the dollar keeps flexing its muscle.

Such estimates are weighing heavily on tech industry big-wigs, who are adjusting their spending budgets accordingly - and on the fly. "It's not as though Silicon Valley CIOs haven't been trying," writes Barrons. "They simply can't revise spending fast enough to keep up with the precipitous decline in the economy. In the latest quarter, an unprecedented 80% of companies lowered their …

Monday through Wednesday of this week saw some of the worst damage to investors in stock market history - over $1 trillion lost in shareholder value. Buyers inched, and then flooded in after the S&P 500 bounced back from a trough that veteran traders hadn't seen in years. That triggered a buyers rush, as Ryan Larson, senior equity trader at Voyageur Asset Management told the Associated Press "It's a herd effect. We started going higher -- and you don't want to be the last one on the boat."

But the damage done on the technology side of the market lingers on. Look at two perennial tech giants - Microsoft and Google. Earlier today, before the bull rush, Microsoft's stock fell to its lowest levels since 1998. It's been a long time since traders saw Microsoft trading south of $20 per share, but that's where we're at with Bill Gates' former cash cow. Microsoft saw its stock drop to $18.74 in Thursday trading, its lowest 52-week low since the stock fell to $20.28 (its previous 52-week low). Analysts are blaming a fallout effect from lousy earnings news from Intel and Cisco Systems. Reuters reports that Intel slashed its fourth-quarter sales guidance by more than $1 billion Wednesday after the close of trading. And Cisco said last week that sales fell off sharply in October.

Some analysts think Microsoft is price way too low and they're likely on the money. Jefferies & Co. analyst Katherine Egbert has set a target …

Stem cell stocks have been trading higher this week on reports President-elect Barack Obama will allow federal funding of stem-cell research. According to reports from the Wall Street Journal, "Mr. Obama could also lift restrictions placed by President George W. Bush on the type of stem-cell research that can be funded with federal dollars. Democratic congressional leaders have vowed to push a twice-vetoed stem-cell research bill as one of the first acts of the next Congress."

After John Podesta, a close advisor to Obama, confirmed the Journal report on Sunday, the stocks of prominent stem cell stocks went up in Monday (AM) trading:

-- StemCells Inc (Nasdaq: STEM) up 25% in pre-open trading
-- Geron Corporation (Nasdaq: GERN) up 15% in pre-open trading
-- Aastrom Biosciences Inc (Nasdaq: ASTM) up 20% in pre-open trading

But I’m not so sure that a moratorium lift on embryonic stem cell research will result in long-term gains for biotech companies in the stem cell field.

Obviously, my heart goes out to stem advocates who believe the technology can save lives. I think of Michel J. Fox, who has demonstrated a great deal of courage in going public with his condition and in personalizing the disease that is impacting his own life as a lens into the insidiousness and seriousness of Parkinson’s disease. If I were in his shoes I’d be doing all I could to find a cure – or funding for a cure – for Parkinson’s, too.

…

The competition between Apple and RIM appears to be taking on Ali-Frazier status, even though both companies are taking another beating, as it were, in trading today.

Apple is down 3.33%, and RIM is down 2.4% at 3:40 EST - both victims of an overall market decline that once again can be attributed to deep disillusionment over the health of the overall economy. No major economic number came out today, although the White House meeting between President Bush and President-elect Barack Obama made news all over the world. That said, it wasn't a surprise and no big economic announcement came out of it.

I did see Harvard Professor Thomas Frankel on Bloomberg news today - he's one of those guys who figure out when the U.S. economy is in a recession - and his prognosis can be summed up in one word he (almost comically) kept using over and over again after being badgered by the Bloomberg interviewer.

"Bleak".

That's the sentiment on Wall Street today with Apple and RIM losing value, even though both can justifiably maintain their core business strategies are in good shape. Today's Tech Ticker affirms that while both companies are vulnerable to a consumer slowdown, "relatively speaking, Steve Jobs & Co. are holding up much better than its rivals, notably Research In Motion."

Why? Because of the continuing success of Apple's G3 iPhone - the best-selling phone in the U.S. during the third quarter.

"I have never seen a …

With all the focus on the imminent Obama presidency, the actual health of the economy has taken a bit of a back seat. That changed somewhat after President-elect Obama’s high level economic summit on Friday. In a press conference after the meeting, Obama called the economic data “sobering” and warned that we are facing the “economic crisis of a lifetime.”
Increasingly, for the information technology sector, the grim economic news is finally taking its toll. Even the online software market, once thought to be recession-proof, is showing signs of collapse. The SaaS 20 Stock Index is down 40% for the year, pretty much no worse or better than the S & P 500. That tells us that even the online software market is weakening.

Says The Wall Street Journal last week, “This week, two online software companies issued weaker-than-expected guidance. Netsuite, which sells general ledger and other management software online, reported revenue for its third quarter in line with expectations, but issued guidance that was lower than analysts expected. Kenexa, which makes online human-resources software, said that revenue from the subscriptions it sells will be flat or slightly down next quarter. Online software companies tend to collect payments before they can recognize them as revenues, meaning that negative sequential growth can only be achieved if they lose customers.”

The biggest SAS provider of them all, Salesforce.com, comes out with its quarterly revenue numbers this week. Company CEO Marc Benioff won’t talk numbers, but he did …

Uh-oh.

When Barack Obama promised change, this wasn't what Wall Street was hoping for.

The market was down, big time, today as investor came to grips with an Obama administration and its taxing impact on the investor class.

Today's Yahoo.com headline said it all: "Stocks fall as investors ponder Obama presidency"

Reports Yahoo: "A case of post-election nerves sent stocks plunging Wednesday as investors, again anxious about a recession, began questioning what impact a Barack Obama presidency will have on business and the overall economy. The Dow Jones industrials dropped more than 400 points and the major indexes all fell more than 4 percent.
Stocks fell initially as investors cashed in gains after a six-day run that lifted the Standard & Poor's 500 index more than 18 percent. But the selling picked up momentum as the market worried anew about the weakness of the economy and pondered what an Obama administration might do."

That's the thing about Wall Street. It's not neither red nor blue, just green - as in the color of money. With Obama promising protectionist policies that would financially penalize U.S. companies sending jobs overseas, and gearing up to hike taxes on the wealthy, and on all investors via a capital gains tax, Wall Street is already worried about that Obama might damage, and not help, the U.S. economy at a particularly fragile moment.

Regime change in Washington usually bodes well for the stock market. The stock market …

Obama or McCain? The people speak today, but no matter who wins, Wall Street likes the fact that a regime change is underway, and change, by and of itself, is a ray of sunshine on the investment community.

That's why the stock market is up over 200 points and let's hope that the momentum we're seeing can accelerate into the rest of November and December. Don't get me wrong - we're in a world of hurt economically. But so much of what we see in the stock market is based on emotion (and lately, fear) that even the fresh breath of air we invariably get with a new face in the White House is good news.

Of course, tell that to an employee at Dell Computers. The computer giant has already shed 9,000 jobs but that's not going to be enough. Reuters is reporting today that the company is asking employees to think about taking five days of unpaid vacation. Dell is also getting more aggressive about issuing severance packages and has called for a worldwide hiring freeze.

Computer maker Dell, which is nearing the end of nearly 9,000 job cuts, has asked employees to consider taking up to five days of unpaid vacation, is offering voluntary severance packages and has instituted a global hiring freeze.

The company was rocked with huge losses in the second quarter, and the market outlook for its high-end computers isn't exactly rosy. Dell, along with the other big personal computer …

Halloween is well over but the pin-drop silence on the financial markets today was downright eerie. On one hand, a calm trading market is welcome relief after six weeks of extreme volatility. On the other hand, will tomorrow's election usher in a new period of market jitters, with today's placid calm only a short-term event?

I figure that the stock market has priced in an Obama election victory, although no investor I know is happy about Barack's plan to tax both small businesses and investors (via a hike in the capital gains tax). The wild card is if McCain pull off the upset, which I doubt (although he'll keep it close). Then I'd look for a stock market liftoff that could last for months. Why? A McCain win would guarantee gridlock with a Democratic Congress and increase the chances of the markets correcting themselves without too much market intervention.

Going forward into 2009, the stock market will not react well if either candidate assumes office and immediately hikes taxes.

"The first thing to do will be to get an economic plan that everybody agrees on in place and start restoring confidence to the market," says Peter J. Tanous, president of Lynx Investment Advisory in Washington, D.C., and co-author of "The End of Prosperity," a book that examines the extent to which higher taxes will decimate the economy. "That's clearly job one."

Tanous, an Obama supporter, says raising taxes, even on the rich, will seriously injure sectors …

With loan foreclosures up 176% this year, compared to 2007, it’s high time that we took a good look at the software tool – and the company that makes it – that promises to help troubled mortgage holders work out more favorable terms for their mortgages.

In doing so, Computer Sciences (the company that created the mortgage adjusted software I’m talking about) could make a boatload of money on fixing bad mortgages.

Loan “workouts” are up 125% since 2007 but there are millions of anxious homeowners who, the U.S. Treasury Department says, won’t pick up the phone and seek help with their house payments. I suspect that such homeowners are being inundated with mailers, circulars, phone calls, and email pitches touting the mortgage of their dreams. But responding willy-nilly to such pitches is what got many of these folks in trouble in the first place.

Naturally, they’re skittish.

But that’s where CSC comes in. Mortgage services really don’t mind talking to homeowners about reworking their mortgages. Better to lose $25,000 off of the principal than lose $150,000 in a foreclosure deal. But there hasn’t been a soup-to-nuts software package that lays out best practices, new loan scenarios, and loss mitigation factors and wraps them all up in in one neat, tidy package. At least one that makes sense to both the mortgage servicer and the mortgage holder. But CSC's mortgage-workout software is changing the game.

A recent article in Forbes describes how the CSC software …

At mid-afternoon trading today the Dow was up 339 points and the NASDAQ is up 47 points.

I’m a bit surprised because most of the economic news coming out today was negative. Housing prices are down, foreclosures are up, consumer confidence is at its lowest point in 35 years, and the White House has been reduced to begging banks that took part in the $700 billion bailout to stop hoarding the money they got from Uncle Sam. Fidelity Investments, Whirlpool and General Motors have all promised big layoffs, as well.

Go figure.

So we’re probably seeing some bargain hunting out there and any jump in stock prices is, I’m afraid, of the temporary variety. Some of this volatility should abate after next Tuesday’s presidential election but Wall Street seems resistant to the reality of an Obama administration. If the Obamanator is elected, look for more short-term volatility until he clears up his plans on taxes, particularly capital gains taxes, which Obama advocates hiking. Further explanation would be needed on the 2003 Bush tax cuts, which expire in 2010 and are seemingly gone for good under an Obama administration.

Fair or unfair politically, Wall Street hates tax hikes, especially capital gains tax cuts. It takes money out of the pockets of investors and into Uncle Sam’s wallet. Where it goes from there is up in the air, but you know it’s not going back into the capital markets.

Aside from all that, another tech biggie weighed …

Stocks are mixed today, which isn't really bad news considering the overseas selloff we saw on Sunday night and early Monday morning.

Helping U.S. markets was decent news from the housing sector, where home sales were up 2.7% for September, with some of the country's hardest-hit regions like the southwest, showing the biggest gains. If the home-buying consumer can start chipping away at some of the home inventory out there, that could boost the economy at a time when we need it most. Overall, there are about 345,000 unsold homes sitting on the market. That number has to decline for the economy to get better.

On the technology side of the market, one seemingly recession proof stock appears to be Verizon. I've said that the telecom sector is one of the most resilient bear market survivors out there. People seem prepared to starve for a day or two rather than give up their Blackberries, and that is serving Verizon well.

Overall, the telecom giant, the company posted Q3 earnings of $1.67 billion, up from $1.27 billion this time last year. On a per share basis, the company met analyst expectations of $0.66. Their per-subscriber fee rate rose by 0.9%, meaning that customers are sticking to their phone plans.

Also, with its $28.1 billion purchase of Alltel, Verizon will be the undisputed global wireless services provider, making the company's bottom line even more impregnable. Verizon chief operating officer Dennis Strigl, in a conference call with analysts admitted …

The stock market is in apparent free fall again this morning, with the Dow Jones Industrial Average down 387 points and the Nasdaq is off 56 points. Global markets are particularly hard hit, with Japan's stock index down 10% - at lows we haven't seen since 2003.

Weirdly, gold and oil are also down - just a complete selloff across the board. Traders are saying that today is the day that we finally might see complete capitulation - a day where investors cry "uncle" and sell everything. I though 7,000 - which would mean a 50% decline in the dow - would be an especially hard landing for stocks. Now I'm wondering if we won't go lower.

Here is what some trading experts have to say about Friday morning trading:

Dennis Gartman, editor of The Gartman Letters: "Madness. It's unlike anything any of us have ever seen before."

Art Cashin, director of NYSE floor operations for UBS: "What happens over the next five to eight days will be spoken about for generations."

James Awad, managing director of Zephyr Management: "We've surpassed the 1973-74 situation (one of the worst periods in stock market history). You're seeing a significant ratcheting down of expectations for worldwide economic prospects, which means earnings estimates have to come down dramatically."

In the tech sector, Google and Apple are being particularly hard hit, with a heavy wave of stock losses washing over into the biotech sector after Merck announced it was …

Are we near a market bottom? That's the question on every investor's mind this week, even as the stock market falls another 500+ points in Wednesday trading.

Lord knows we're on uncharted terrain here, and that we've experienced enough false bottoms to last us a lifetime. But increasingly, more and more economists are beginning to believe that we are near what the market calls "capitulation"; where enough is enough and the buyers began flooding back into the market.

Exhibit "A" is Liz Ann Sonders, chief investment strategist at Charles Schwab & Co., who told Tech Ticker today that we're near that foggy capitulation line. Sonders says that outflows from mutual funds in the first two weeks of October exceeded the record $75 billion of redemptions set for the entire month of September. Furthermore, outflows are, more and more, are coming from hard-hit sectors like commodities (gold and oil), and overseas, emerging markets in places like China, India and Russia. (That's happening because U.S. consumers are buying less goods and services from foreign economies).

Says Sonders, via Tech Ticker; "That level of "I give up, get me out"-type activity -- which is also evident in massive redemptions from hedge funds - is typically associated with market bottoms. Conversely, mutual fund investors were most bullish at the market's peak in early 2000." Sonders maintains that while the end may be near, investors should still stock to fundamentals -- have a plan, stick to it, stay diversified and periodically rebalance.

Anxiety over corporate earnings is driving the stock market down this week, with stocks dropping 232 points on Tuesday and the futures market dipping downward in early Wednesday trading. While many companies (like Apple, covered below) are hitting their Q3 numbers, most are forecasting a gloomy revenue picture going forward into 2009.

The U.S. Treasure issued a statement saying that the U.S. economy will continue to struggle for a year, but should strengthen "by late 2009". So we have that going for us, which is good.

When the economy does rally, more and more economic pundits are saying that technology will lead the way. That's the thrust of a CNBC.com interview this week with Intel CEO Paul Otellini, who says his company, in particular, is ready to rebound.

"What we have to do is focus on where the markets are going,” Otellini tells CNBC. “Over the past few years we developed a whole new product line that will introduce lower cost computers while still allowing for very good profit margins for Intel. We used our best technology to build tiny devices but at lower costs. To me that gives us a great buffer no matter which way the economy blows.”

Otellini adds that new markets like cell phones represent a great opportunity for Intel. "I’d like to see us take our architecture into three other markets that are right near us. The first is the cell phone business. The second is consumer electronics and …

Let’s get the bad news out of the way first.

The Red Sox lost and it’s the Tampa Rays (hard to believe I’m even writing these words) who will move on to play the Phillies in the World Series.

It’s not like I can count on the Patriots this year, either. Sigh.

Back in the real world, on Wall Street, the credit markets are showing some signs of warming up. At least, the street thinks so, as the markets soared another 400 points today. My sources tell me that investors are also hearing that new bailout program – this one focusing on the home mortgage owner – will take shape and pass into law in time for next spring’s house-hunting season. Specifics are sketchy but the talk is that Uncle Sam will back mortgages for troubled homeowners at a reduced interest rate of 5.25%. That number is low, I believe, and will be renegotiated upward 50 basis points or so before any bailout passes.

Even so, like seeds planted in spring with months to go to harvest, the long-tem economic clouds are lifting. But the short-term clouds very much remain and they’re pouring cold water all over the tech industry these days, with a few exceptions.

One of those outliers is Netflix, the online DVD rental company. With consumers snapping shut their wallets, a cheap DVD from Netflix is the 2008 equivalent of a big night out, price-wise at least, for the anxious U.S. consumer. …