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In today's Motley Fool Take:

Market Climbs Wall of Worry

With the major indexes all up better than 1.5% today, most news services are reporting that stocks are higher because of two pieces of positive economic data: growing consumer confidence (83.8 versus last month's reading of 81.0) and higher new home sales (up 1.7% from March to April). Both come as pleasant news, to be sure, but what's really lifting this market is the overlay of these positive economic developments on a backdrop of fear.

What kind of fear? All of the following economic problems have been in the news of late: excess industrial supply, post-bubble deflation, mounting federal and state budget deficits, rising healthcare costs, a falling U.S. dollar, unfunded pension liabilities, uncertain derivative risks, aging demographics in the Western world, a European economy on the brink of recession, a Japanese economy still showing no signs of life, the ever-present threat of terrorism, and the still-unknown ramifications of SARS.

Scary stuff, no doubt. But after three years of declining stock prices, a lot of this bad news is already "baked in" to current prices. The three-year bear market seems to have finally restored investor sentiment to a healthy level of paranoia. As such, we're finally back to the days where the market can climb the proverbial wall of worry -- at least for a while.

Even with the market looking bullish for the time being, Fools would be smart to keep the following in mind:

The overall market averages remain at historically high valuation metrics, so there's little case to be made for uniform, sustained bullishness.

It's a stock picker's market. While the averages may have rallies and fallbacks, there will be larger opportunities among certain individual stocks that have the right combination of valuation and business merits.

Don't forget about the host of problems outlined above. To the extent that they're not in the news, they become a risk to stock prices.

Quote of Note

"Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one." -- Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds

Sears' Softer Slide

As bidders begin lining up for the sale of Sears'(NYSE: S) credit card business, the two big mysteries of who will make a play and how much they are willing to offer should begin to clear over the next few days.

With Sears in the process of looking over its first batch of bids this week and hoping for a quick close to the transaction by the next quarter, it would be a shock if major credit card companies such as Citigroup(NYSE: C), J.P. Morgan Chase(NYSE: JPM), and General Electric(NYSE: GE) were absent from the process.

But are the bidders biting off more than Sears can shoo? Sure, Sears has 25 million accounts to offer, but while its Gold MasterCard is sturdy, how much faith can a bidder have in the struggling retailer's in-house Sears Card?

For starters, at a chain hungry for sales growth, how picky do you think the credit approval process actually is? Then you have the fact that you're talking about Sears here. The card is only good at the company's stores as well as paying for AOL Time Warner's(NYSE: AOL) America Online subscriptions and renting cars at Budget.

The nearest retailer to Sears in the credit card space is Target(NYSE: TGT), but at least Target is expanding its store base aggressively. Sears actually operates fewer stores now than it did three years ago. It is also being rightfully taken to task for waiting eight months before writing off its unpaid accounts over the more traditionally conservative six-month period.

Does that mean that the eventual winner will be a loser? It's possible. With so many interested parties, including European concerns like Royal Bank of Scotland and HSBC Holdings(NYSE: HBC) making a play thanks to favorable exchange rates given the weak dollar, it's quite likely that Sears will make out nicely.

But are the same investors that have bid up shares of Sears by nearly 50% since the divestiture plan was announced two months ago ready to accept the company they will be left with? Sure, the balance sheet is going to get an extreme makeover for the better, but you're still stuck with Sears.

The retailer's namesake store business failed to turn an operating profit this past quarter, and you've got a volatile situation with yet another CEO, who claimed a fat, undeserved bonus last year. Are shareholders really ready to own the softer side of Sears?

Discussion Board of the Day: Teens & Their Money

Fool Rick Munnariz is pondering the right allowance for his kids. Do you have any tips for teaching children about money? You do realize that 50 Cent is a rapper, not a financial denomination, right? All this and more -- in the Teens and Their Money discussion board. Only on Fool.com.

Research In Motion Stalled

How many of us have had a brilliant idea only to discover that somebody had the idea well before us? It's a sobering experience, especially when the idea has already been patented. Research In Motion(Nasdaq: RIMM) is suffering the pain of just such an experience, recently losing a patent lawsuit related to wireless e-mail.

Research In Motion (RIM) has sold the popular BlackBerry e-mail device, with its handy little keypad, for several years, but last November it lost a lawsuit to NTP that claimed infringement of five patents on wireless transmission of e-mail. Apparently, NTP made several inventions first, and patented them.

Privately held NTP was awarded a $23 million judgment, and now Research In Motion has been ordered to pay an additional $8.8 million in enhanced damage charges, as well as paying 80% of NTP's legal fees. Research In Motion has subsequently planned for $58 million in litigation provisions that it will book quarterly over the next year.

Perhaps oddly, the company's stock steadily advanced to 52-week highs (at $20) before today, valuing the unprofitable firm at $1.5 billion. That may prove a steep price given the challenges ahead. Research In Motion is likely to face higher royalty rates and stalled licensing contracts. The company has agreements to license its technology to Nokia(NYSE: NOK) and others.

Additionally, a judge is pondering NTP's request to halt U.S. BlackBerry sales altogether (which Research In Motion would immediately appeal). On the positive side for RIM (and demonstrating the complexity of lawsuits), even with NTP's victory the U.S. Patent Office is reviewing the contested patents to see if they'll stand.

Overall, it's an unfortunate turn of events for the Canadian-based RIM. Giving it the benefit of the doubt, it's very unlikely that the company aimed to use someone's patented invention -- it just accidentally stepped on it. Patent law is tricky. Even eBay(Nasdaq: EBAY) faces litigation claiming it infringed on someone's patent for online auctions.

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Quick Takes

Data provider Fidelity National Information Solutions(Nasdaq: FNIS) jumped 26% after majority owner Fidelity National Financial's(NYSE: FNF) late Friday offer to buy the remaining shares it doesn't own. As of Friday's close, the offer valued the target at $38.36, a 25% premium to Friday's $19.70 close. The data provider supports real estate professionals through the national Multiple Listing Service (MLS) industry.

Shares of troubled biotech drug maker ImClone Systems(Nasdaq: IMCLE) vaulted over 18% on news that partner Merck AG (not the domestic company of the same name) paid a $6 million milestone on German approval of ImClone's U.S. manufacturing facility and for Merck to import ImClone's colon cancer drug candidate, Erbitux. Merck plans to submit Erbitux for European Union approval this summer. It's still in development in the U.S., with data on trials expected this week at the American Society of Clinical Oncologists annual meeting.

Once-darling solar power company AstroPower(Nasdaq: APWRE) dropped 9% today on news that the CEO and CFO would resign. The stock is in noncompliance with Nasdaq requirements and trades in penny stock (below $5 a share) and penny company (below $100 million in market cap) land. Stay away.

New home sales inched up 1.7% and existing (why don't they ever say "used"?) homes sales rose 5.6% in April over March. The national average rate on 30-year mortgages hit 5.34% last week, and the price of a median home was $163,400, up 8% over last year.

And Finally...

Today on Fool.com:

  • For updated stories throughout the day, bookmark our ever-changing News section.
  • Should you fire your pro?: Dayana Yochim explains why good help is so hard to find these days.
  • Asset Allocation: Tom Jacobs introduces our asset allocation seminar.
  • Buy, Sell, or Hold?: Liar's Poker author Michael Lewis on Microsoft, The New York Times, and Eliot Spitzer.
  • After 11 straight quarters, there are signs VC funding may finally stop declining.
  • Tenet Healthcare's CEO, Jeffrey Barbakow, bids adieu.
  • In Fool's School, understanding P/E ratios.

Bob Bobala, Robert Brokamp, Mathew Emmert, Jeff Fischer, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Reggie Santiago, Dayana Yochim