When you think "Bond girl," you picture a woman who's beautiful, sexy, and generally perfect in every way. So it's no surprise that the latest incarnation is no other than, yes, Barbie.
In market news, on positive forecasts from IBM
In today's Motley Fool Take:
- IBM Reboots the Market
- Quote of Note
- Home Starts, Mortgages Surge
- Shameless Plug: TMF Money Advisor
- The Worm in Apple
- Discussion Board of the Day: Apple
- Quick Takes: Eastman Kodak, Sears, United Technologies , more
- And Finally...
Reports of the death of corporate spending are apparently greatly exaggerated, at least when it comes to computer services. IBM's
Last month, the company's biggest competitor, Electronic Data Systems
Translated, "Things may be bad, but they're not that bad. Something smells at EDS." Indeed, the SEC is now investigating EDS about events leading up to that warning, as well as a stock-hedging strategy that backfired.
Today, after IBM beat previously lowered forecasts and reaffirmed fourth-quarter targets, investors and analysts began jumping back on the Big Blue bandwagon. Since EDS warned, its stock has sunk over 60%, but IBM is actually up a couple of percentage points.
But before we all get too giddy over the better-than-expected news from the tech bellwether, it's worth considering the words of Chief Financial Officer John Joyce, who called this "one of the toughest spending environments" he's ever seen. "Customers are still spending," he said, but more on services that enhance their overall return in the short term.
"I think there is a world market for maybe five computers." -- IBM Chairman Thomas Watson, 1943
Build it and they will come. That's what someone has been whispering in the ears of homebuilders, and they've listened. The Commerce Department today announced that builders broke ground on new houses in September at an annualized rate of 1.843 million. That's the highest number in 16 years, and the percentage increase over August's numbers (13.3%) is the biggest gain in seven years. The number of single-family homes being built rose to a 24-year high.
The No. 1 reason for the surge in new construction: low mortgage rates. The average rate on a 30-year mortgage in September was 6.09%, and dipped below 6%. These are the lowest rates since Freddie Mac began tracking mortgages in 1971.
But don't hope to see rates drop that low in the near future. Today, Freddie Mac announced rates on a 30-year mortgage jumped to 6.15%, an increase of 17 basis points in one week. The rates on a 15-year mortgage saw a bigger jump, from 5.34% to 5.56%. Bankrate.com announced an even higher rate for the 30-year fixed mortgage, 6.23%, based on its survey of mortgage providers.
Blame the enlivened stock market. As investors moved money out of bonds and into equities, bond prices fell, driving up yields.
Will rates continue rising, thus pouring water on the hot housing market? Most experts believe rates will be higher a year from now, though at least one sees rates approaching 5%. We do know this much: If you haven't refinanced your mortgage, or you've been considering a home-equity loan (for worthwhile expenses, not luxuries or depreciating assets), now is the time to see which rates are available. Visit our Home Center for more information.
There's no better independent help for your financial affairs than TMF Money Advisor. It gives you all the tools you need to plan ahead and -- more importantly -- take action to secure your financial future.
Worm in Apple
No matter how you wax Apple, the reality lies somewhere between the good and the bad. Apple's $1.44 billion revenue showing in its fiscal fourth quarter was essentially flat with last year's results, and in line sequentially with its June period report. However, gross margins took a hit this time.
Thankfully, the company still sports a shiny $4.3 billion cash-rich balance sheet. And about the holidays... earlier this month, Dell
But Apple is about more than just beautiful computing machines. From its iPod MP3 player to its latest Mac operating system, the company isn't a vanilla commodity in a world of spec sheets. Apple also has outstanding inventory. Its retail stores are doing well, and you can't dismiss the fact that the company sees sequential improvement in the current quarter. But if you think pointing to higher holiday sequential sales is a lay-up, consider that the top line took a fiscal first quarter dip last year.
The company's hardly rotted to the core. With the stock trading for almost half of what it fetched in April, it looks like there's some value to be found in the orchard.
So, do you believe Apple can win back market share? Should the company really open up retail stores? Our Motley Fool Community's own Plato90s has a great take on the quarterly report. Do you agree? All this and more -- in the Apple discussion board. Only on Fool.com.
We're scratching our heads at mixed economic data from the Federal Reserve today. On the one hand, factory, mines, and utilities production fell for the second month in a row, but on the other, gladder hand, new housing starts jumped 13.3%, raising the roof at 1.83 million units a year, the highest rate since 1986. Call it econ-whiplash.
Rusty old Eastman Kodak
Bad news sheared Sears
Today on Fool.com: Rick Munarriz covers five stocks that pay, even in this market.... How can someone with five kids and a humble income retire in his 40s? Tom Jacobs explains.... Don't mix family and financial advice -- here's why!... In Fool's School, when to use a credit card vs. cash.... The Fool Community wonders if college is worth it these days.... The Post of the Day: more on Apple Computers.
Bob Bobala, Robert Brokamp, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Jackie Ross, Reggie Santiago, Dayana Yochim