Stocks Remain at Record YTD Highs as Long-Term Unemployed Lose Benefits

NEW YORK (TheStreet) -- Though rising throughout the morning, major U.S. markets reversed direction by midday, if only minimally, seemingly putting the brakes on a "Santa Claus" rally which propelled the Dow Jones Industrial Average to a record closing high on Thursday. Even so, with only three trading sessions left in 2013, equities are set to end the year with the best performance since 1997. By market close, the S&P 500 had dropped 0.03% to 1,841.46. The Dow had shed 0.01% to 16,479.05, while the tech-heavy Nasdaq suffered the worst losses, unloading 0.25% to 4,156.59. The equity markets look to be closing in on a stellar year, bolstered by ongoing Federal Reserve stimulus and the return of a robust U.S. economy. Year to date, the Dow has soared 25.75%, the S&P 500 gained 29.1% and the Nasdaq popped 37.66%. U.S. benchmark government bond yields increased to more than 3% on Friday, a two-and-a-half year high. The U.S. 10-year Treasury note yield topped 3.02%, a sign the U.S. economy is steadily improving.  An estimated 1.3 million long-term unemployed workers will lose essential federal unemployment benefits on Saturday, a product of the bipartisan federal budget agreed upon this month to curtail government spending. The number of long-term unemployed ballooned to more than 6.7 million in the first half 2010 but has since declined to 4 million. Global markets ended the week on a high, with the FTSE 100 0.85% higher, France's CAC 40 adding 1.44% and Germany's DAX up 0.92%. European markets were strengthened on the announcement the European Central Bank and Bank of England will leave interest rates at record lows for the foreseeable future.
A record week for Twitter (TWTR) ended badly when Macquarie Capital downgraded the stock, warning it was moving "too far, too fast." The stock closed 13% lower to $63.75. Before Friday, the social network had gained 22.2%, even in spite of a shortened trading week. A computer glitch on Thursday sparked an unintentional sale on Delta's (DAL) website, offering flights as low as $12.83. The airline said it would honor the discounted tickets sold. Textron (TXT) added 1.1% to $36.61 on the news it has agreed to pay $1.4 billion to acquire Beechcraft. The acquisition will see Textron, a relatively small plane maker, rapidly expand its manufacturing portfolio including the addition of Cessna planes and Bell helicopters. China's quality control group, the General Administration of Quality Supervision, Inspection and Quarantine, said it would recall more than 1.46 million General Motors  (GM) vehicles beginning Monday. The U.S. automaker, and its Chinese partner SAIC Motor Corp, are to recall inventory with defective fuel-pump brackets. After gaining 1.6% on Thursday, GM stock has shed 1.4% to $40.94.

--Written by Keris Alison Lahiff.

Stock quotes in this article: ^DJI, ^GSPC, ^IXIC, DAL, TXT, TWTR, GM, S, TMUS 

Benzinga's Top #PreMarket Losers

Ariad Pharmaceuticals (NASDAQ: ARIA) shares dropped 38.38% to $2.44 in pre-market trading on Iclusig marketing suspension.

NII Holdings (NASDAQ: NIHD) dipped 26.10% to $3.54 in the pre-market session after the company reported Q3 results.

Avon Products (NYSE: AVP) shares fell 11.42% to $19.85 in the pre-market trading after the company reported weaker-than-expected Q3 results.

Glu Mobile (NASDAQ: GLUU) dipped 10.29% to $3.40 on Q3 results.

Posted-In: PreMarket LosersNews Movers & Shakers Pre-Market Outlook Markets

(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  Around the Web, We're Loving... Learn to Use Trading Platforms Like Hedge Fund Traders do Rumsfeld: Denial of Benefits to Fallen Soldiers' Families 'Inexcusable' Come See How the Pro's Trade in this Exclusive Webinar Facebook, Baidu Lead Big Caps Beating Shutdown What Should You Know About AMZN? Most Popular IBM Authorizes $0.95 Dividend; Authorizes $15B In Additional Buybacks What is Apple's Tim Cook Hinting at for 2014? Facebook Shares Edge Higher After Hours Following Upgrade to Buy from BTIG's Greenfield Is a Beer Mega-Merger On Tap? Earnings Scheduled For October 30, 2013 Net Optics Announces Pending Acquisition by Ixia for $190M in Cash Related Articles (ARIA + AVP) Benzinga's Top #PreMarket Losers #PreMarket Primer: Thursday, October 31: BOJ Bullish On Inflation Market Wrap for October 30: Fed Worries Push Stocks Lower, Facebook Earnings Raise Concerns Mid-Day Market Update: US Stocks Turn Lower; Electronic Arts Shares Rise On Upbeat Earnings Mid-Morning Market Update: Markets Open Higher; GM Profit Tops Estimates Benzinga's Top #PreMarket Gainers View the discussion thread. Partner Network #marketfy-ae-block { display: none; border: 2px solid #0a3f75; overflow: hidden; width: 300px; height: 125px; text-align: center; background-color: #45719E; position: relative; z-index: 1; } #marketfy-ae-block a { display: block; width: 300px; height: 125px; position: relative; z-index: 2; color: #ffffff; text-decoration: none; } #marketfy-ae-block-countdown-text { color: #f9fc99; padding: 0px 0 0 0; font-size: 19px; font-weight: bold; line-height: 19px; } #marketfy-ae-block-countdown-text-start { font-size: 12px; } #marketfy-ae-block-countdown { padding: 5px 0 5px 0; font-size: 26px; } #marketfy-ae-block-signup { padding: 5px 47px; } #marketfy-ae-block-signup:hover { background-color: #457a1a; } #marketfy-ae-block #marketfy-ae-block-logo { display: block; padding: 3px 0 0 0; margin: 0; } #marketfy-ae-block-logo { text-indent: -9999px; } #marketfy-ae-block-free { display: block; position: absolute; top: 7px; right: -23px; width: 80px; height: 16px; line-height: 16px; text-align: center; opacity: 1; -webkit-transform: rotate(45deg); -moz-transform: rotate(45deg); -ms-transform: rotate(45deg); transform: rotate(45deg); font-size: 13px; font-weight: normal; color: #333333; background-color: yellow; z-index: 500; text-shadow: 1px 1px #999999; } #marketfy-ae-block-arrow { position: relative; width: 60px; height: 60px; z-index: 10; margin: -80px 0 13px -21px; } #marketfy-ae-block-arrow img { height: 60px; width: auto; } Marketfy's International
Traders & Investors Summit Register for this FREE Event! Hosted by Marketfy

Wealth Management for Wild Markets

Think of Commonwealth Financial Network, and practice management guru Joni Youngwirth probably comes to mind, or behavioral specialist Kol Birke, or maybe even Wayne Bloom, Red Sox fanatic and CEO of the Waltham, Mass.-based broker-dealer giant.

One other area, wealth management, is of course a critical offering, and one that’s receiving more attention of late.

“Wealth management in general involves a lot of different components, so our wealth management platform involves a lot of different areas; asset management, investment research, annuity research, retirement consulting and advanced planning,” explains vice president Gavin Morrissey, who is responsible for all as well coordinating interdepartmental efforts across the firm’s platform. (He has also contributed to ThinkAdvisor).

Noting the broad yet consultative nature of the group, he says that it tries to be proactive about conditions or events that would affect the client’s portfolio.

“Of course, we’re reactive as well,” he adds. “When our advisors bring us a case, we are comprehensive and collaborative and have the full team working on it and approaching it from different angles, so nothing happens by itself or in a silo.”

The firm claims 1,500 recurring fee advisors, but Morrissey emphasizes that how an advisor (or rep) affiliates with Commonwealth “will not affect how we serve you, recognizing there are some compliance issues, of course.”

Morrissey graduated from Lafayette College with a major in economics before earning a law degree at Thomas Jefferson School of Law in San Diego and his LLM in taxation at the University of San Diego School of Law. With Commonwealth for the past 15 years, he’s worked in various departments, gaining what he says is a broad-based knowledge of the internal workings of a full-service broker-dealer. This allows him to provide a bridge between wealth management concepts and operational implementation.

Of course, wealth management increasingly involves the use of alternative investments. In the wake of the Medical Capital and Provident Royalty scandals that spelled doom for a number of competitors, is he conservative about what he allows on the platform?

“With our alternative investment offerings, I wouldn’t say we’re conservative; a more accurate term would be diligent,” he responds. “We have an entire due diligence team dedicated to ensuring products are appropriate. I know some firms will say ‘absolutely not.’ The issue is that high-net-worth clients, while not naming them as alternative investments, are demanding those types of strategies. Education, of course, has to go along with that to ensure advisors know how they should be used.”

As for current events in Washington, and how he sees them affecting advisors' clients and their portfolios, Morrissey is direct. “If you’re waiting on Congress to do something that makes you scratch your head, you won’t have to wait long and you’ll have plenty to work with,” he quips. “When a political event happens we tell our advisors how we see it working out and how it will affect them and their clients, whether it’s the health care law, the repeal of the Defense of Marriage Act, or anything else.”

He concludes by noting current volatility, and how it might compare with past periods of market turmoil.

“Is it a volatile time in the markets? I don’t know how to answer that. I’m sure you could look back at market history and see plenty of crazy times,” he diplomatically states. “I will say this, Washington seems to have much more of an effect; by that I mean people used to invest based on fundamentals, which is how it should be. No longer; they have to carefully watch what Congress is doing, because it seems to have so much more of an impact.”

---

Check out Gavin Morrissey's ThinkAdvisor contributor page.

Android's Ease-of-Use Advantage Over iPhone

NEW YORK (TheStreet) -- This is a sore subject, I know. I will try to make the case that for some people, getting up and running on a Google (GOOG) device such as Android is easier than on an iOS device such as the iPhone.

I can feel the blowback from the armies of Apple (AAPL) fans already. People get bent out of shape when you dare suggest that their favorite gadget isn't the best at everything.

I am focusing this "ease of use" analysis on one thing in particular, for reasons that will be obvious a little later in this article. This focus is account management and synchronization.

What do I mean by account management? Regardless of which mobile platform you use -- Android, iOS, Microsoft (MSFT) Windows or BlackBerry (BBRY) -- we have now moved to a cloud-centric world where your settings, app store and other functions are tied to a cloud account. You basically need one in order to operate your mobile gadget in any meaningful way, or even at all. Another word for account management is identity, which in turn is represented by an email account. Once upon a time -- say, 1996-97 -- you got a Hotmail account. Then you switched to Yahoo!, say around 1998-99. By 2005 you started graduating to Gmail. At 425 million accounts and growing fast, Gmail is what most computer-savvy people in the Western world are using more and more. Therefore, for most relevant people, they are now Gmail users and are confronted with which smartphone to buy. Let's examine the two scenarios of getting up and running on Google/Android vs. Apple/iPhone: 1. Apple: What to do about iCloud? When you first get your iPhone and fire it up, you are asked to enter or create an iCloud account. Here is where the confusion begins. It is not immediately obvious what an iCloud account is, or what it could be from an identity perspective. Do I have to create a new email address? What can my login be? Nobody who isn't yet an Apple customer has an @iCloud.com email address, and even those who do, don't (want to) use it as an actual email address. There are at least two reasons for this:

A. I already have an email address that I want to continue to use, thank you. I'm just looking to set up a new phone; not set up a new email address.

B. Having your email address with Apple basically makes you suspect that you might get locked into Apple. What would happen if you want to switch to Android or Windows Phone later? What about your PC, switching to Windows or Google's Chrome OS? Consumers are reluctant to lock-ins. In contrast, you already have Gmail and it is obvious that it's available to use on every kind of computer, large and small.

Perhaps you could still create an iCloud email account, but use some other account such as Gmail for your Apple ID? Who knows? The point here is that this first step in your interaction with the iPhone has already brought you great confusion and uncertainty.

What is the advantage of having an iCloud email address as your iCloud ID, compared to having some other email address such as Gmail? Perhaps there is an answer somewhere but it sure isn't anywhere near self-evident as to what that answer might be. 2. In contrast, Google: Setting up your Android. Turn on the Android for the first time. Enter your Gmail address and password. Done. Everything has now been synchronized. End of story. Notice the difference? With your new Apple device, you are induced to create a plan for how your online ID and account management should be set up. How are you going to deal with cross-platform issues such as using numerous products from Google, Microsoft and Apple as applicable now or in the unknown future? Should you create a new email address? Which existing one to use? With Google? No such question at all. You already have an obvious ID and you're in -- all done. I would argue that this extends even further to things such as documents. iCloud creates fine documents to be sure -- a worthy competitor to Microsoft Office in most respects. Likewise, you can argue that Google Docs is a bit simple and unsophisticated with respect to the richness of the features inside the app itself.

However, there is never any confusion about Google Docs synchronizing to your account and it being available on every platform. Need it on your iPhone or iPad? No problem -- the Google Docs are eminently available.

In contrast, what about accessing and editing iCloud documents on your Android smartphone or tablet? Whoops. Good luck on an elegant solution to that one.

Apple's comparative problem doesn't end with the initial account setup. Depending on how many iCloud accounts you set up -- using the new iCloud email address, plus something based on your Gmail address, perhaps something else as well -- you could get them mixed up between all of your Apple devices over time.

For example, you may have signed in under one iCloud account on your Mac PC. Then under another iCloud account when you set up your iPhone, and on another when you set up your iPad. I hear these kinds of scenarios from iCloud users all the time. I think most people would agree that these kinds of scenarios almost never happen with Android devices. The reason for this is that you're not creating one (or more) new account IDs, and you're not confused which is which. You sign in with your existing Gmail account everywhere and you're not induced to try something else. No confusion. I can hear the cries from the Apple back-benchers already: I have never had this problem! And you may be right. Clearly, some Apple users "just pick" one iCloud ID, stick to it or only use Apple devices and never look back. Some would refer to these people as the most loyal of iSheep; others perhaps don't rely on the Apple devices for everything they do. Yet, others have encountered a problem of conflicting or suboptimal Apple IDs chosen, go to the Apple Store and find some help in changing or consolidating these accounts. And that's great. In the end, they get it to work -- after some technical support. But it's not a matter of it working or not. The issue was ease of use. Whatever other issues there are with these devices, at the core is account management -- your choice of user identity and email address, and on this point it seems Google leaves almost no source for confusion. In this aspect, Google does have a somewhat "unfair" advantage over Apple: The issue of ID management is greatly enhanced when you already are using that company's email as your primary email to begin with. At over 425 million users, Google easily trumps Apple in this regard. Google's email ID advantage then translates into the less-confusing device setup and synchronization experience on smartphones, tablets and PCs. The problem I describe is perhaps not easily seen by someone who has only had one or two iOS devices, set them up once and have been happy campers since. They're going to ask, "What the heck is he talking about?" It is true this problem exposes itself more clearly the more devices you use, including more devices on more platforms -- so you can compare setting up new devices every day on Android, iOS, Mac, Chrome OS and more. With that, I buckle up and brace for the worst. At the time of publication the author was long AAPL and GOOG. Follow @antonwahlman This article was written by an independent contributor, separate from TheStreet's regular news coverage.

This contributor reads: RealClearPolitics Drudge Report Rush Limbaugh Engadget The Verge On Twitter, this contributor follows: Kevin Eder Byron York Dan McLaughlin David Limbaugh Tyler Durden

Agree To Purchase Priceline.com At $720, Earn 7.6%

Investors eyeing a purchase of Priceline.com Priceline.com (NASD: PCLN) shares, but tentative about paying the going market price of $1003.44/share, might benefit from considering selling puts among the alternative strategies at their disposal. One interesting put contract in particular, is the January 2016 put at the $720 strike, which has a bid at the time of this writing of $54.50. Collecting that bid as the premium represents a 7.6% return against the $720 commitment, or a 3.3% annualized rate of return (at Stock Options Channel we call this the YieldBoost).

Click here to find out the Top YieldBoost Puts of the Nasdaq 100 »

Selling a put does not give an investor access to PCLN's upside potential the way owning shares would, because the put seller only ends up owning shares in the scenario where the contract is exercised. And the person on the other side of the contract would only benefit from exercising at the $720 strike if doing so produced a better outcome than selling at the going market price. (Do options carry counterparty risk? This and six other common options myths debunked). So unless Priceline.com sees its shares fall 28.4% and the contract is exercised (resulting in a cost basis of $665.50 per share before broker commissions, subtracting the $54.50 from $720), the only upside to the put seller is from collecting that premium for the 3.3% annualized rate of return.

Below is a chart showing the trailing twelve month trading history for Priceline.com, and highlighting in green where the $720 strike is located relative to that history:

The chart above, and the stock's historical volatility, can be a helpful guide in combination with fundamental analysis to judge whether selling the January 2016 put at the $720 strike for the 3.3% annualized rate of return represents good reward for the risks. We calculate the trailing twelve month volatility for Priceline.com, Inc. (considering the last 250 trading day closing values as well as today's price of $1003.44) to be 24%. For other put options contract ideas at the various different available expirations, visit the PCLN Stock Options page of StockOptionsChannel.com.

August Car Sales Climb Sharply

Automakers reported August sales throughout the day today, and the month was a big one for most carmakers. Based on analysts' estimates, the seasonally adjusted annual sales rate for 2013 is now forecast at 15.8 million units sold. Last year's sales total reached 14.5 million.

Retail sales at most of the automakers rose more than total sales, indicating that fleet sales are playing a much smaller role in the carmakers' revenues. That is good for profits because fleet sales typically occur when the company makes too many of one model and has to dump them at lower prices. Fewer fleet sales ultimately translates into higher profits.

Here are the number of total sales as reported by the carmakers so far today:

Chrysler Group up 12% from August 2012 Ford Motor Co. (NYSE: F) up 12% year-over-year General Motors Co. (NYSE: GM) up 15% from August 2012 Nissan up 22% from August 2012 Toyota Motor Co. (NYSE: TM) up 23% year-over-year

Chrysler Group's year-over-year sales rose to 165,552 units, as every one of the company's brands posted a gain. Ram light truck sales led the gains, up 29% for the month and up 25% for the first eight months of 2013. Chrysler's fleet sales are believed to have dropped from 30% a year ago to around 20% this year. The company forecast total auto sales from all manufacturers at 16.1 million for 2013.

Ford's retail sales jumped 20% compared with August 2012 sales, and small car sales rose 30%. Ford reported that 44% of total small car sales of 30,148 units came from its hybrid electric cars.

GM's sales were forecast to rise 11%, but came out even better than expected. Retail sales improved 22% year-over-year in August, while fleet sales declined by 8%.

Hyundai/Kia has not reported sales numbers for August yet. Analysts’ estimates call for a rise of 9.2% year-over-year.

Honda Motor Co. Ltd. (NYSE: HMC) does not report sales until after markets close. Projections call for sales to be up 20% year-over-year.

Nissan's year-over-year increase in August totaled 22%. The company claimed a record 120,498 U.S. sales last month.

Toyota has not published details on August sales yet, but the company did report an 22.8% year-over-year sales increase, well above the expected increase of 15%.

Volkswagen's year-over-year increase is expected to be around 4.4%.

U.S. new car sales fell to 10.4 million in 2009 but have climbed back on the strength of double-digit increases in each of the past three years. The expected total sales increase in 2013 now reaches nearly 9%.

Congress Will Punt Student Loan Rate Fix to CFPB: Washington Analysis

With only days left for lawmakers to prevent rates on some new federal student loans from doubling, Washington insiders say Congress will punt the private student loan issue to the Consumer Financial Protection Bureau.

Analysts at Washington Analysis said Monday that they believed “Congress will not move forward with legislation aimed at private student loans.” Rather, “we expect the CFPB will eventually develop private student loan servicing standards.”

During a hearing held Tuesday by the Senate Banking Committee called “Private Student Loans: Regulatory Perspectives,” Chairman Tim Johnson, D-S.D., offered some scary statistics about the state of student loan debt: It “now stands at over $1 trillion and is second only to mortgage debt as the largest form of debt in the country,” balances “have almost tripled since 2004,” and “an alarming one-third of borrowers are delinquent on their loans.”

Sen. Jack Reed, D-R.I., said that if Congress fails to act, interest rates will double July 1 on federal Stafford loans—jumping from 3.4% to 6.8%.

Eleanor Blayney, consumer advocate for the CFP Board, told AdvisorOne that because Congress has yet to reach an agreement, "it becomes more likely that rates will double on subsidized federal loans."

Rohit Chopra, student loan ombudsman for the CFPB, who testified before the committee, responded to Reed’s comment that the change in the Stafford student loan rates—if they doubled—would “only impact future borrowers, not those currently trying to refinance and pay back those loans.” He said that while “some would guess that change would be a slight tail wind to private loan origination, I don’t expect it to be a huge one.”

As revealed during testimony at the hearing, recent studies report that about 39 million borrowers have a student loan, with an average balance of about $25,000.

Of this total student loan debt, the CFPB has estimated the size of the private student loan market to be about $150 billion as of year-end 2011, representing about 15% of student loans outstanding, compared with 85% for the federal student loan market.

Johnson noted that nearly 1 million borrowers are in default on their private student loans. “While federal loans offer flexible relief during periods of hardship, most private student lenders do not offer the same options for struggling graduates,” he said.

Sen. Michael Crapo, R-Idaho, agreed, adding that one concern he often hears “is that banks do not offer enough borrower relief options,” such as refinancing of private student loans.

Todd Vermilyea, Senior Associate Director for the Division of Banking Supervision and Regulation at the Federal Reserve and Doreen Eberley, director of Risk Management Supervision at the Federal Deposit Insurance Corp., who both testified before the committee, offered to work with committee members to fill the refinancing gap.

It’s “unclear why there is not an active refinance market for student debt,” Eberley said. “We’d be interested in working with you on that.”

Added Vermilyea: “Regulatory policy would allow for it.”  

---

Check out 4 Tips for Paying Down Student Debt on AdvisorOne.

Can Individual Investors Influence Corporate Behavior?

As evidence mounts that climate change can present significant risk to companies' operations, many individual investors feel powerless to affect corporate management regarding such issues. You might be surprised that you have more pull than you think, and that your voice may matter now more than ever.

John Vechey of PopCap Games recently joined The Motley Fool for a climate change summit. Among his guests were Stu Dalheim, vice president of shareholder advocacy at Calvert Investments, and Todd Larsen, director of corporate responsibility for Green America. In the video below, Dalheim and Larsen talk about one tool that you have in your toolbox: your proxy ballot.

They discuss shareholder resolutions at two specific companies: Southern (NYSE: SO  ) and ExxonMobil (NYSE: XOM  ) . The shareholder resolution on Southern's ballot in 2012 sought to compel the company to report on its efforts to reduce environmental and health hazards associated with coal combustion waste, garnering 26% support from shareholders. Proponents dropped a 2013 resolution requiring that Southern adopt greenhouse gas emission reduction targets after they received "commitments" from the company.

At ExxonMobil, a shareholder resolution that the company adopt greenhouse gas emission reduction targets has appeared on the proxy ballot for the last three years, each time receiving support from more than a quarter of proxy voters.

The message in the video below? Vote your proxy to influence management.

If shareholders are increasingly rattling corporate cages to reduce greenhouse gas emissions, you might want to look for energy players with a lower carbon footprint. Forward-thinking energy players like GE and Ford have already plowed sizable amounts of research capital into this little-known stock... because they know it holds the key to the explosive profit power of the coming "no choice fuel revolution". Luckily, there's still time for you to get on board if you act quickly. All the details are inside an exclusive report from The Motley Fool. Click here for the full story!

Don't Get Too Worked Up Over Arrow Electronics's Earnings

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Arrow Electronics (NYSE: ARW  ) , whose recent revenue and earnings are plotted below.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, Arrow Electronics generated $128.6 million cash while it booked net income of $470.6 million. That means it turned 0.6% of its revenue into FCF. That doesn't sound so great. FCF is less than net income. Ideally, we'd like to see the opposite.

All cash is not equal
Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it's ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at Arrow Electronics look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say "questionable cash flow sources," I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That's not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

With 21.1% of operating cash flow coming from questionable sources, Arrow Electronics investors should take a closer look at the underlying numbers. Within the questionable cash flow figure plotted in the TTM period above, stock-based compensation and related tax benefits provided the biggest boost, at 10.9% of cash flow from operations. Overall, the biggest drag on FCF came from changes in accounts receivable.

A Foolish final thought
Most investors don't keep tabs on their companies' cash flow. I think that's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns.

Looking for alternatives to Arrow Electronics? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

Add Arrow Electronics to My Watchlist.

How Housing Built the Dow's Surge

The housing market's recovery has been one of the best signs of the economy's comeback from the depths of the 2008 recession, and strong data from the sector has fueled stocks today. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) has rallied behind its financial stocks, jumping 80 points, or around 0.51%, as of 2:15 p.m. EDT. Housing's optimism has pushed the majority of the blue-chip index's members into the green in what's shaping up to be a good day for investors. Is this sector on pace for even more gains? Let's check out how housing spurred the market's gains.

Housing's big comeback
Pending home sales rose another 0.3% in April, according to a National Association of Realtors release today. That's a high not seen since April 2010, although it fell below economist predictions. It may be just one number, but the gain in pending sales comes on the back of multiple strong indicators of housing's rebound.

According to the Federal Housing Finance Agency, home prices rose 1.9% in the year's first quarter, and private housing starts in April were 13.1% ahead of April 2012's figure. While some have cautioned that reduced supply of houses on the market could hurt sales in coming months, prices should capitalize and continue to rise. That's good news for sellers as the market digs out of the drastic dive in prices brought on by the financial crisis.

Higher prices mean good things for the financial sector, too, and two of the Dow's big banks are on the upswing today. Bank of America (NYSE: BAC  ) has jumped 2.7% to lead the index higher, while fellow financial powerhouse JPMorgan (NYSE: JPM  ) has seen its stock rise 1.9%. Rising home prices are just what B of A needs to push past its losses from its Countrywide disaster and other problems related to the recession. While Bank of America doesn't finance quite so much as some competitors in the mortgage loan business, the firm still generated $24 billion in home loans in the first quarter. Lagging supply will reduce the number of loans the bank processes, but the hike in prices will keep the firm steady.

JPMorgan is set to ride housing higher with its business firmly behind CEO and chairman Jamie Dimon after he survived criticism and calls for his roles to be split. While the bank's still dealing with regulatory scrutiny over its "London Whale" trading losses and other affairs, JPMorgan has gotten back into home-loan-backed bond sales recently. The firm has already made one sale of "high-quality" mortgage-backed bonds this year, according to Bloomberg, and it's planning another sale soon. JPMorgan investors could use a breather from the drama of regulation and leadership issues, and if housing can continue to rise, this firm should be just fine.

The economy's comeback has fueled a rise in consumer confidence as well, and American Express (NYSE: AXP  ) is right in line to capitalize. The credit card company's shares have risen 0.9% today, and Japanese financial company Nomura Holdings reiterated its "buy" rating on the stock today as well. American Express isn't as directly tied to the housing market as the big banks are, but if Americans are returning to home-buying, expect consumption to follow that confidence higher. The U.S. economy already grew at an annualized rate of 2.4% in the first quarter, and if it keeps that figure up, average Americans should head back to stores regardless of tax hikes and sequester cuts.

Around the Dow, Boeing (NYSE: BA  ) shares are also on the rise today, gaining 1.7% to rank near the top of the index. Shareholders received good news today when Singapore Airlines purchased 30 of Boeing's stretched 787-10X Dreamliner aircraft. While the order wasn't perfect -- Singapore Airlines split its $17 billion order between Boeing's jets and rival Airbus' A350-900 planes -- the buy is a show of faith in the 787 after its grounding dominated headlines in the first few months of the year. Boeing boasts an order backlog of more than 800 787s, and the company's looking to ramp up production to keep deliveries coming. For Boeing, the skies are looking clear after a stormy start to the year.

Boeing is a major player in a multitrillion-dollar market in which the opportunities are massive. However, emerging competitors and the company's execution problems have investors wondering whether Boeing will live up to its shareholder responsibilities. In our premium research report on the company, two of The Motley Fool's best industrial-sector minds have collaborated to provide investors with the must-know info on Boeing. They'll be updating the report as key news hits, so don't miss out -- simply click here now to claim your copy today.

Rich-poor gap 'concerns me': Yellen

NEW YORK (CNNMoney) Is rising income inequality un-American?

That's essentially the question Federal Reserve Chair Janet Yellen raised Friday in a speech on the widening gap between rich and poor in the United States.

"I think it is appropriate to ask whether this trend is compatible with the values rooted in our nation's history, among them the high value Americans have traditionally placed on equality of opportunity," the central bank chief said.

By some measures, Yellen said economic inequality is near the highest levels in the past hundred years. This continued rise of income inequality "greatly concerns me," she said.

The remarks are somewhat unusual for the nation's top monetary policy maker, since the Fed is primarily tasked with managing interest rates and fostering employment.

But income inequality has grown severe enough that the Fed is holding a conference on the topic at its Boston branch.

Since the Great Recession of 2007 to 2009, income inequality has become an increasingly populist issue. The booming stock market has disproportionately benefited the wealthy, while the recovery in jobs and also of home prices has been slow.

Yellen said it's taken several decades for the current disparity between rich and poor to reach this point, where living standards for a majority of Americans has stagnated, while wealth at the top has ballooned.

Yellen said some degree of inequality is to be expected and can create incentives for people to work hard, get an education or take other steps to improve their situation.

But she warned that greater income inequality can lead to a decline in economic mobility across generations.

Citing figures from a recently released Fed survey, Yellen said a greater amount of wealth is increasingly concentrated in the hands of few -- the wealthiest 5% of American households held 63% of all wealth in 2013, up from 54% in 1989.

Compared to that, the poorer half of all American households held just 1% of wealth in 2013, down from 3% in 1989.

"In such circumstances, society faces difficult questions of how best to fairly and justly promote equal opportunity," she said.

W! hile she did not offer specific recommendations, Yellen did identify some areas that needed to be debated.

She said research has already shown the benefits of investing in early education for children, but that there are huge challenges when it comes to paying for college. In addition, she said it's becoming harder to start a small business and noted the role inheritances play in perpetuating income inequality.

  Education gap 'terrible for our democracy'

Weekly CFO Sells Highlight

According to GuruFocus Insider Data, the recent CFO sales were: Apple Inc, Facebook Inc, and Palo Alto Networks Inc.

Apple Inc. (AAPL): Senior Vice President, CFO Luca Maestri sold 12,274 Shares

On 09/10/2014, Senior Vice President, CFO Luca Maestri sold 12,274 shares at an average price of $99.79. The price of the stock has decreased by 0.4% since. Apple Inc. has a market cap of $603.28 billion and its shares were traded at around $99.39. The company has a P/E ratio of 16.10 and P/S ratio of 3.47 with a dividend yield of 1.80%. Over the past 10 years, Apple Inc had an annual average earnings growth of 63.40%. GuruFocus rated Apple Inc the business predictability rank of 4.5-star.

Apple Inc. announced their 2014 second quarter results with revenues of $37.4 billion and gross profit of $14.7 billion; the net income was $7.75 billion. The 2013 total revenue was $170.9 billion, a 9% increase from the 2012 total revenue. The 2013 gross profit was $64.3 billion, a 6% decrease from the 2012 gross profit. The 2013 net income was $37 billion.

On 09/22/2014, CEO Timothy D Cook sold 348,425 shares at an average price of $101.17. The price of the stock has decreased by 1.76% since. On 09/22/2014, Senior Vice President Philip W Schiller sold 348,846 shares at an average price of $101.06. The price of the stock has decreased by 1.65% since. On 09/22/2014, Senior Vice President Jeffrey E Williams sold 348,846 shares at an average price of $101. The price of the stock has decreased by 1.59% since.

Facebook Inc. (FB): CFO David M Wehner sold 11,533 Shares

On 08/20/2014, CFO David M Wehner sold 11,533 shares at an average price of $74.96. The price of the stock has increased by 4.31% since. Facebook Inc. has a market cap of $204.86 billion and its shares were traded at around $78.19. The company has a P/E ratio of 84.70 and P/S ratio of 20.15.

Facebook Inc. announced their 2014 second quarter results with revenues of $2.91 billion and gross profit of $2.44 billion; the net income was $788 million. The 2013 total revenue was $7.87 billion, a 55% increase from the 2012 total revenue. The 2013 gross profit was $6 billion, a 61% increase from the 2012 gross profit. The 2013 net income was $1.5 billion.

On 09/24/2014, COO Sheryl Sandberg sold 283,334 shares at an average price of $78.17. The price of the stock has increased by 0.03% since. On 09/22/2014, Chief Technology Officer Michael Todd Schroepfer sold 35,000 shares at an average price of $77. The price of the stock has increased by 1.55% since. On 09/18/2014, VP Marketing and Bus. Part. David B. Fischer sold 36,000 shares at an average price of $76.64. The price of the stock has increased by 2.02% since.

Palo Alto Networks Inc. (PANW): CFO Steffan Tomlinson sold 232 Shares

On 07/22/2014, CFO Steffan Tomlinson sold 232 shares at an average price of $79.96. The price of the stock has increased by 21.61% since. Palo Alto Networks Inc. has a market cap of $7.8 billion and its shares were traded at around $97.24. The company has a P/S ratio of 12.11.

Palo Alto Networks Inc. announced their 2014 third quarter results with revenues of $178.2 million and gross profit of $129.6 million; the net income was $32 million. The 2014 total revenue was $598.2 million, a 51% increase from the 2013 total revenue. The 2014 gross profit was $438.6 million, a 53% increase from the 2013 gross profit. The 2014 net income was $226.5 million.

On 09/23/2014, President an

Wall St. drools over El Pollo Loco's earnings

El Pollo Loco has 401 restaurants, mostly located in California. NEW YORK (CNNMoney) Wall Street seems to have a hankering for some crazy grilled chicken.

Shares El Pollo Loco's stock rose as much as 5% Thursday evening after the company released earnings for the first time since going public.

El Pollo Loco said quarterly sales are up about 6%. It also turned a profit, earning $6.1 million compared to the $410,000 it made during the same quarter last year when the company was still private.

It went public on July 25, opening at $15 per share and immediately jumping 60% to finish the day above $24. Shares closed Thursday at $34.79.

The California-based restaurant chain specializes in Mexican-style grilled chicken. It competes with Chipotle Mexican Grill (CMG) and other fast-casual restaurants like Chick-fil-A and Yum! Brands (YUM) KFC.

El Pollo Loco (LOCO) has 401 company-owned and franchise locations in five states, including Texas and Arizona. But the vast majority of its restaurants are in the Golden State.

  El Pollo Loco en fuego after IPO

The company said Thursday that it expects to open more than a dozen new stores before the end of the year, including its first in the Houston area.

Why Is There a Bidding War to Buy Family Dollar?

Richard Levine/Alamy These aren't the best of times for discount retailers, but it certainly seems as if Family Dollar (FDO) has become the belle of the marked-down ball. Two chains catering to thrifty-minded shoppers have entered into an unlikely bidding war for Family Dollar, and it's shaping up to be a bit more interesting than your typical love triangle between three retailers with the name "Dollar" in their monikers. The story began late last month when Family Dollar announced that it would be acquired by Dollar Tree (DLTR) in an $8.5 billion transaction. It seemed like a simple enough transaction. Dollar Tree would be paying a reasonable 22 percent premium for Family Dollar. The deal would create a discounting behemoth with 13,000 stores across North America. The combined companies would eventually result in trimming $300 million in annual overhead. It seemed like a great way out for frustrated Family Dollar shareholders. The deep discounter had missed Wall Street's profit targets for three consecutive quarters. Analysts see declining profitability on flat sales for its fiscal year that ends this week. It seemed as if Dollar Tree would have Family Dollar all to itself, but then it got some unexpected company. Turning Down a Fistful of Dollars Dollar General (DG) stepped into the picture last week, offering to pay even more for Family Dollar. It offered an all-cash deal valued closer to $9 billion. The deal seemed to be clearly superior on the surface, but Family Dollar's board shot it down. This wouldn't be the first time that a board sided with a friendly buyout offer to a higher hostile one. Arranged deals often mean cushier positions for the acquired company. However, there was a method to the board's madness this time. Family Dollar declined Dollar General's offer because it felt that antitrust regulators wouldn't let that particular buyout go through. Dollar General rings up more than twice as much in sales as Dollar Tree. The bigger the rivals are, the larger hurdle that they have to clear for a corporate combination to go through. However, despite the "Dollar" name in the signage of all three, the chains aren't all alike. Dollar Tree is a true dollar store. It's North America's leading operator of discount variety stores where everything sells for a buck or less. Family Dollar and General Dollar are traditional deep discounters, offering general merchandise at various price points. They do help shoppers stretch their dollars, but they're not dollar stores like Dollar Tree. The Buck Stops Here Offering shoppers bargains isn't enough anymore. Walmart (WMT) -- the world's largest retailer and a bellwether when it comes to discount department stores -- has posted flat or negative comparable-store sales at its U.S. stores for six consecutive quarters. "Cheap chic" discount department store operator Target (TGT) has also been posting uninspiring sales, clocking in with flat store-level sales in its latest quarter. Given the dicey environment, it's not a surprise to see deep discounters giving sector consolidation a hand. Family Dollar will get bought out. It may seem as if Dollar Tree has the upper hand with the lower bid, but it remains to be seen if it will have to sweeten its offer. We also can't rule out Dollar General, especially if it agrees to close enough stores to make the deal more likely to clear regulator objections. Investors are encouraged to keep following the "Dollar" signs.

Employment, Factory Data Signal Strengthening Economy

Matt Rourke/APA technician working at the Rodon Group manufacturing facility in Hatfield, Pa. WASHINGTON -- The number of Americans filing new claims for jobless benefits fell last week and factory activity in the mid-Atlantic region accelerated in June, more evidence the economy was strengthening after a disastrous first quarter. "The economy has improved markedly in recent months," said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan. "Signs point to continued growth in the coming quarters, and further improvement in labor market conditions." Initial claims for state unemployment benefits slipped 6,000 to a seasonally adjusted 312,000 for the week ended June 14, the Labor Department said Thursday. The four-week moving average for new claims, considered a better measure of underlying labor market conditions as it irons out week-to-week volatility, fell 3,750 to 311,750, not far from a seven-year low touched in May. Separately, the Philadelphia Federal Reserve Bank said its business activity index jumped to 17.8 this month, the highest level since September, from 15.4 in May. Any reading above zero indicates expansion in the region's manufacturing. Gains were driven by a surge in new orders, as well as an increase in factory employment and working hours. There were also improvements in delivery times, shipments, and unfilled orders, which rebounded strongly from May's slump. Upbeat Growth Picture Another report showed a gauge of future growth rose for a fourth straight month in May. The reports joined data on employment and the manufacturing and services sectors in painting an upbeat picture of the economy after a contraction in the first quarter. The government said last month the economy shrank at a 1 percent annual pace, but economists say more recent data have suggested the contraction was even deeper. But second-quarter data, including the reports on Thursday, bolstered the case the Federal Reserve made this week that the economy was bouncing back. The central bank Wednesday slashed its 2014 growth forecast, but it further reduced the amount of money it is pumping into the economy each month through bond purchases and hinted at a slightly faster pace of interest rate increases starting in 2015. U.S. financial markets were little moved by the data as traders continued to digest Wednesday's statement from the Fed's policy-setting committee. The claims data covered the survey week for the government's report on June's nonfarm payrolls, which will be released in two weeks. The four-week average for claims fell 11,000 between the May and June survey periods, suggesting payroll growth probably increased from last month's gain of 217,000 jobs. "The ongoing low levels of initial claims suggest there is a good chance that we will see another respectable advance in payrolls," said Guy Berger, an economist at RBS in Stamford, Connecticut. Other measures such as job openings and hiring intentions by small businesses have also pointed to a healthier labor market. The economy has recovered the 8.7 million jobs lost during the recession and has enjoyed four straight months of job gains above 200,000, the strongest stretch since early 2000. The claims report showed the number of people still receiving benefits after an initial week of aid hit its lowest level since October 2007 in the week ended June 7. The so-called continuing claims have been trending lower, an indication that some long-term unemployed were finding work. The unemployment rate for people collecting unemployment benefits fell to 1.9 percent in the week ended June 7, the lowest since October 2007, from 2 percent the prior week.

The Best Stocks to Play the Housing Trend: AvalonBay Communities, Essex Property Trust, and Equity R

Source: Flickr / archer10.

The U.S. Census Bureau's recent housing construction report for April showed a 43% month over month surge in the number of multi-family housing starts, while single-family homes barely moved, showing a paltry 0.8% increase. Since last April, authorizations for buildings with five or more units rose by 29%, compared to a 12% increase in single-family houses.

Apartment REITs: The new housing play?
The upturn in the multifamily space looks like the new normal, with single-family home ownership below the 50-year average of 65.4% -- and some analysts predicting that it will fall even further.

With 93% of the multifamily units breaking ground in the first quarter slated for rental, apartment REITs like AvalonBay Communities (NYSE: AVB  ) , Essex Property Trust Inc. (NYSE: ESS  ) and Equity Residential (NYSE: EQR  ) are looking like a great way to invest in the new "renter nation".

Stocking up on rentals
The apartment REIT sector has been buying up a storm, investing in $1.5 billion apartments in just the first quarter – not counting Essex Property's purchase of BRE Properties, which closed on April 1. That deal, the terms of which included $6.2 billion in cash and stock, created the biggest REIT on the west coast. The combined value of the company is now a little over $1 billion.

In late 2012, AvalonBay and Equity Residential banded together to purchase Archstone, the huge, high-end multifamily landlord whose acquisition in 2007 helped bankrupt Lehman Brothers. In addition to acquiring Archstone's nearly $10 billion in debt, the two REITs put up $6.5 billion in cash and stock to close the deal. AvalonBay acquired 22,000 apartments, while Equity took on 23,000.

As for 2014, AvalonBay management notes that it is on track to deliver over 5,000 new apartments by the end of the year, and Equity bought a five-year-old apartment project in Los Angeles in the first quarter, after selling one of their older San Diego assets in late 2013. Equity is planning to continue in this vein, selling its older, more suburban properties in order to buy apartments in well-populated urban locations.

Source: Flickr / Kevin Dooley.

Apartment REITs are having a great year
All in all, this sector is having a wonderful year. Vacancies are the lowest in the sector since 2001, and rents are rising nicely, averaging $1,089 per month last quarter, compared to $1,055 one year earlier. In its first-quarter earnings call, AvalonBay management noted that, as the job market has begun to recover, the stronger economy will be able to support not only higher rents, but more apartment deliveries, as well .

So far, all three REITs have gained at least 19% since the beginning of the year, and yields are sweet, at around 3%. According to NAREIT, the apartment REIT sector was up 16.4% from January to April of this year.

With the economy healing and the employment market improving, rising rents will likely fuel higher dividends, too. For investors looking for a place to put their real-estate investment dollars, the multifamily sector looks hard to beat.

More great dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

5 Stocks Under $10 Ready to Explode

DELAFIELD, Wis. (Stockpickr) -- There isn't a day that goes by on Wall Street when certain stocks trading for $10 a share or less don't experience massive spikes higher. Traders savvy enough to follow the low-priced names and trade them with discipline and sound risk management are banking ridiculous coin on a regular basis.

>>5 Stocks Insiders Love Right Now

Just take a look at some of the hot movers in the under-$10 complex from Thursday, including BioFuel Energy (BIOF), which is ripping higher by 33%; LiveDeal (LIVE), which is soaring higher by 27%; SGOCO Group (SGOC), which is jumping to the upside by 17%; and GenVec (GNVC), which is moving higher by 7%. You don't even have to catch the entire move in lower-priced stocks such as these to make outsized returns when trading.

One low-priced stock that recently made a huge run after I featured it was technology solutions player Rambus (RMBS), which I highlighted in Feb. 20's "5 Stocks Under $10 Ready to Explode" at $1.27 per share. I mentioned in that piece that shares of Rambus of were starting to spike higher off its 50-day moving average at that time of $9.12 a share. That spike was beginning to push shares of RMBS within range of triggering a near-term breakout trade above some key overhead resistance levels at $9.73 to $9.81 a share.

Guess what happened? Shares of RMBS didn't wait long to trigger that breakout, since the stock busted out above those levels a few weeks later. This stock has gone on to make an incredible move higher even during the recent market decline, with shares of RMBS tagging an intraday high today of $12.50 a share. That represents a massive gain of well over 30% from the time I featured this stock. The best part about this move is the clean uptrend you'll see on the chart for RMBS as the stock marched higher over the last few months.

Low-priced stocks are something that I tweet about on a regular basis. I frequently flag high-probability setups, breakout candidates and low-priced stocks that are acting technically bullish. I like to hunt for low-priced stocks that are showing bullish price and volume trends, since that increases the probability of those stocks heading higher. These setups often produce monster moves higher in very short time frames.

>>5 Stocks Set to Soar on Bullish Earnings

When I trade under-$10 names, I do it almost entirely based off of the charts and technical analysis. I also like to find under-$10 names with a catalyst, but that's secondary to the chart and volume patterns.

With that in mind, here's a look at several under-$10 stocks that look poised to potentially trade higher from current levels.

FuelCell Energy

One under-$10 alternative energy player that's starting to move within range of triggering a big breakout trade is FuelCell Energy (FCEL), which designs, manufactures, sells, installs, operates and services stationary fuel cell power plants for distributed baseload power generation. This stock is off to a monster start so far in 2014, with shares up a whopping 70%.

If you take a glance at the chart for FuelCell Energy, you'll notice that this stock has pulled back sharply over the last month and change, with shares falling from its high of $4.74 to its recent low of $2.25 a share. During that downtrend, shares of FCEL have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of FCEL have formed a double bottom chart pattern at $2.29 to $2.25 a share over the last few weeks right above its 50-day moving average. Shares of FCEL are now starting to uptick a bit and trend within range of triggering a big breakout trade.

Traders should now look for long-biased trades in FCEL if it manages to break out above some near-term overhead resistance at $2.50 a share and then once it takes out more key overhead resistance levels at $2.81 to $2.94 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 24.26 million shares. If that breakout triggers soon, then FCEL will set up to re-test or possibly take out its next major overhead resistance levels at $3.25 to $3.75 a share.

Traders can look to buy FCEL off weakness to anticipate that breakout and simply use a stop that sits right below those double bottom support levels at $2.29 to $2.25 a share or right around $2 a share. One can also buy FCEL off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Plug Power

Another under-$10 alternative energy player that's starting to trend within range of hitting a big breakout trade is Plug Power (PLUG), which is engaged in the design, development, manufacture and commercialization of fuel cell systems for the industrial off-road markets worldwide. This stock has been an absolute favorite play for the bulls in 2014, with shares up a whopping 368%.

If you take a look at the chart for Plug Power, you'll notice that this stock has been trending sideways and consolidating over the last month, with shares moving between $6.21 on the downside and $8.48 on the upside. That sideways trend has been occurring right above PLUG's 50-day moving average that's currently at $5.97 a share. Shares of PLUG are now starting spike higher and trend within range of triggering a big breakout trade above the upper-end of its recent sideways trading chart pattern.

Market players should now look for long-biased trades in PLUG if it manages to break out above some near-term overhead resistance levels at $7.70 to $8.10 a share and then once it takes out more key overhead resistance at $8.48 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 43.84 million shares. If that breakout materializes soon, then PLUG will set up to re-test or possibly take out its 52-week high at $11.72 a share.

Traders can look to buy PLUG off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $6.53 a share or right below its 50-day moving average of $5.97 a share. One can also buy PLUG off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Capstone Turbine

One under-$10 industrial electric equipment player that's starting to move within range of triggering a near-term breakout trade is Capstone Turbine (CPST), which engages in developing, manufacturing, marketing and servicing microturbine technology solutions for use in stationary distributed power generation applications worldwide. This stock is off to a hot start in 2014, with shares up sharply by 65%.

If you consult the chart for Capstone Turbine, you'll see that this stock recently pulled back off its 52-week high at $2.60 to its recent low of $1.91 a share. That low took shares of CPST right below its 50-day moving average and the stock has subsequently started to bounce higher back above that key technical level. Shares of CPST are now starting to uptick and move within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in CPST if it manages to break out above some near-term overhead resistance levels at $2.22 to $2.32 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average volume of 7.72 million shares. If that breakout gets underway soon, then CPST will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $2.60 a share.

Traders can look to buy CPST off weakness to anticipate that breakout and simply use a stop that sits right below that recent low of $1.91 a share. One can also buy CPST off strength once it starts to smash above those key resistance levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Harvest Natural Resources

Another under-$10 independent energy player that's starting to push within range of triggering a big breakout trade is Harvest Natural Resources (HNR), which engages in the acquisition, exploration, development, production and disposition of oil and natural gas properties. This stock has been hit by the sellers over the last six months, with shares off by 15.6%.

If you take a glance at the chart for Harvest Natural Resources, you'll notice this stock has just started to trend back above both its 50-day and 200-day moving averages, which is bullish technical price action. That trend is quickly starting to push shares of HNR within range of triggering a big breakout trade above some key near-term overhead resistance levels.

Market players should now look for long-biased trades in HNR if it manages to break out above some key near-term overhead resistance levels at $4.75 to $5 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 312,623 shares. If that breakout starts soon, then HNR will set up to re-test or possibly take out its next major overhead resistance levels $5.50 to its 52-week high at $6.08 a share. Any high-volume move above $6.08 will then give HNR a chance to tag $7 a share.

Traders can look to buy HNR off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day at $4.20 a share or around $45 a share. One can also buy HNR off strength once it starts to clear those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Gran Tierra Energy

One final under-$10 independent energy player that's starting to trend within range of triggering a big breakout trade is Gran Tierra Energy (GTE), which  is engaged in the acquisition, exploration, development and production of oil and gas properties in Colombia, Argentina, Peru and Brazil. This stock is up a bit so far in 2014, with shares higher by 4.9%.

If you take a look at the chart for Gran Tierra Energy, you'll notice that this stock have been uptrending over the last month and change, with shares moving higher from its low of $6.73 to its intraday high of $7.68 a share. During that move, shares of GTE have been making mostly higher lows and higher highs, which is bullish technical price action. Shares of GTE are starting to break out today above some near-term overhead resistance at $7.64 a share. That move is quickly pushing shares of GTE within range of triggering a much bigger breakout trade.

Traders should now look for long-biased trades in GTE if it manages to break out above some near-term overhead resistance levels at $7.73 to $7.88 a share and then once it clears its 52-week high at $8 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 981,956 shares. If that breakout kicks off soon, then GTE will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $10 to $11 a share.

Traders can look to buy GTE off weakness to anticipate that breakout and simply use a stop that sits just below its 50-day at $7.33 or its 200-day at $7.08 a share. One can also buy GTE off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

To see more hot under-$10 equities, check out the Stocks Under $10 Setting Up to Explode portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>Side-Step the Selling With These 5 Big Trades

>>3 Stocks Spiking on Unusual Volume

>>Want to Buy Apple? Think Again

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

Tittsworth to step down as Investment Adviser Association head in 2015

David Tittsworth, executive director of the Investment Adviser Association for the past 18 years, said Tuesday that he intends to resign next year.

He is resigning for health reasons.

"Beyond that, I want to explore personal goals and interests," Mr. Tittsworth, 60, said.

He said that he decided to announce his resignation so far in advance — he intends to step down on Feb. 6, 2015 — so that the IAA board would have ample time to find a successor.

“You're going to have to deal with me for another year,” he said. “There's a lot of work to do in the next 12 months.”

Mr. Tittsworth has presided over the IAA during a period of growth.

When he took the helm, the group had 200 member firms managing $1 trillion in assets. Today, it has 550 firms managing $11 trillion in assets.

“This has been a terrific position for me,” Mr. Tittsworth said in an interview.

Mr. Tittsworth came to the IAA from Capitol Hill, where he served as counsel to the Democratic staff of the House Energy and Commerce Committee from 1992-96. He also was a staffer on the House budget and transportation committees from 1987-91.

In his role as a congressional aide, Mr. Tittsworth would sit behind members of Congress at hearings. When he testified at a 2012 hearing of the House Financial Services Committee, he was at the witness table.

The panel was considering legislation introduced by then-chairman Rep. Spencer Bachus, R-Ala., that would establish a self-regulatory organization for investment advisers. Financial advisers adamantly opposed the bill, fearing that it would bring them under the aegis of the Financial Industry Regulatory Authority Inc., already the regulator for broker-dealers.

Mr. Tittsworth became the star of the nearly three-hour hearing. He fielded about 70% of lawmakers' questions, including many from Mr. Bachus, as he made the case for why advisers should remain under the supervision of the Securities and Exchange Commission.

“June 6, 2012, is a date that will be forever etched in my memory,” Mr. Tittsworth said. “It's very different being on that side of the fence.”

The following day, the IAA held a Capitol Hill Day in which 50 of its members lobbied lawmakers to push an alternative bill to Mr! . Bachus' legislation. Their proposal would have allowed the SEC to charge user fees to fund adviser examinations.

The group also sent more than 1,000 e-mails to legislators.

Although he was chairman of the committee, Mr. Bachus never brought his bill up for a vote. It died at the end of 2012. The hearing and the IAA's grass-roots effort helped turn the tide.

“Those two factors made a difference in his decision not to move the legislation,” Mr. Tittsworth said.

Adviser oversight continues to be debated this year, as the SEC searches for ways to increase the percentage of the 11,000 advisers that it examines annually — currently 8%. In addition, the SEC is considering a rule that would raise investment advice standards for brokers to the level met by investment advisers, another issue in which the IAA is deeply involved.

10 people to watch in Davos next week

Enlarge Image Photo: Bloomberg Enlarge Image Photo: Getty Images Enlarge Image Photo: Getty Images Enlarge Image Photo: Getty Images for the New York Times Enlarge Image Photo: AFP/Getty Images Enlarge Image Photo: AFP/Getty Images Enlarge Image Photo: AFP/Getty Images Enlarge Image Photo: Getty Images Photo: World Economic Forum Enlarge Image Photo: AFP/Getty Images MarketWatch Slide Shows

Retirement
• 10 best big cities to retire happily in
• 10 best places to retire abroad
• 10 essentials for your retirement plan
• 10 best states to retire in
• The 10 worst states for retirees

Real Estate  Shutterstock • States with the most 'zombie' homes
• The 10 best places to live in the U.S.
• The 10 best U.S. suburbs to live in
• The 10 most dangerous cities in America
• 10 most expensive cities for expats
• 5 U.S. cities with the happiest workers
• 10 U.S. cities with the lowest taxes

Technology
• 5 sites teens flock to instead of Facebook
• 10 apps that could save your life
• 40 years of cellphones: car phone to iPhone
• CEOs who think like Steve Jobs

LIFESTYLES
• 10 people you're not tipping enough
• 10 NFL teams with the most expensive tickets
• 10 U.S. cities with the worst traffic
• 13 companies everyone wants to work for
• 7 office gadgets headed for the graveyard
• 10 companies with the worst reputations
• Will and Kate's royal baby arrives
Cars, Planes and More
• 5 cars the richest Americans are buying
• The 10 best new midprice cars for 2014
• The 10 most expensive states to own a car
• 6 top cars for fuel efficiency, and 2 guzzlers
• 10 of the fastest super cars in the world

Entertainment
• 10 spy movies that would grip the NSA
• Investing lessons from the 'Sopranos'
• The 10 best rock-and-roll movies ever made

TRAVEL
• 10 of the oddest cruise-ship innovations
• 10 best travel spots — if money's no object
• 10 best places to buy a vacation home
• 7 reasons to cheer airport delays
• 8 ways to spot counterfeit money
• The world's weirdest theme parks
• 5 Gettysburg re-enactment moments

HEALTH
• 10 countries that spend most on health care

Food AND DRINK


• 10 retro foods making a comeback
• Hot dogs have their (national) day
• Nine beers America has quit drinking
• Highest-calorie items at 10 fast-food chains
• The 10 best U.S. cities for pizza /conga/story/misc/slide_shows.html 287847 1 of 11 Tweet Email

Deflation fears, the Yellen Fed, China, income inequality, Europe's still-troubled banks, and a steady flow of snark and indignation: That's right, the World Economic Forum's annual meeting gets underway Wednesday in Davos and runs through Saturday.

Here are 10 of the big shots whose words will have the potential to move markets and dominate headlines at the exclusive and oft-maligned gathering in a remote resort town in the Swiss Alps.

— William L. Watts at @wlwatts

More on Davos:

Income inequality biggest risk facing world, says World Economic Forum

James Dimon and Lloyd Blankfein

While the Geneva-based WEF think tank pursues lofty ideals, the Davos annual meeting has often been criticized as a sanctuary for elite bankers and other highflying C-suite denizens to rub elbows with each other and world leaders. Bankers laid relatively low in the immediate aftermath of the crisis, but were soon back to try to plead their case.

Last year, J.P. Morgan Chase & Co. (JPM) CEO James Dimon used the event to protest that regulators were being overly aggressive and moving too fast, while arguing that banks had got a bum rap. He also offered something near to an apology over the "London Whale" fiasco.

The highest echelons of the banking fraternity will be represented this year. In addition to Dimon, look for Goldman Sachs Group (GS)  CEO Lloyd Blankfein, Bank of America Corp. (BAC)  CEO Brian Moynihan, Deutsche Bank (DB)  co-CEO Anshu Jain and others.

(at left, James Dimon and Lloyd Blankfein)

Marissa Mayer

It isn't all banking and finance. After all, a belief in the transformative, globalizing power of technology is a tenet of the Davos mind-set. The chief Yahoo (YHOO) , Marissa Mayer, is a co-chair of this year's event. Other high-profile techies in attendance include Facebook (FB)  COO Sheryl Sandberg, Cisco Systems (CSCO)  CEO John Chambers and Google (GOOG) Executive Chairman Eric Schmidt.

We'll see if Mayer gets any questions over the recent, high-profile exit of chief operating officer Henrique de Castro after just 15 months on the job. But the Davos sessions will be focused on broader questions, including a Saturday session featuring former U.S. Treasury Secretary Lawrence Summers that debates the long-overdue question of whether technological innovation is driving a rise in joblessness.

Ray Dalio

The founder of hedge fund Bridgewater Associates is one of several high-profile investors who will be in the spotlight at Davos and, no doubt, in interviews on the sidelines of the meeting. Last year, Dalio laid out a bullish case for stocks as well as other assets as investors reacted to "terrible" returns on cash and bonds.

Hedge-fund legend George Soros, no shrinking violet himself, is set to attend. Other notable finance heavyweights include Paul Singer, founder of hedge fund Elliott Management Corp., and private-equity honchos Stephen Schwarzman of Blackstone Group (BX) and David Rubenstein of the Carlyle Group. (CG)  

Joseph Stiglitz

By one count, at least 70 billionaires will be descending on Davos this week. While behind-closed-doors networking and deal making often seems to be on top of the agenda, income inequality appears likely to be a key theme. The issue was again identified as the most likely threat to global stability in an annual WEF report last week.

Nobel Prize-winning economist Joseph Stiglitz, who contends that inequality is largely the result of political choices ,will be one high-profile speaker on the subject.

Christine Lagarde

The International Monetary Fund chief is a Davos regular. She made big headlines in 2011 when the then-French finance minister spurned a thank-you from then-Barclays CEO Robert Diamond, saying gratitude would better be served by increased lending, a better grip on compensation and higher capital levels.

Lagarde, in her role as head of the IMF, has used Davos to rail against an emphasis on austerity and a lack of focus on growth in Europe. Expect her to keep pressure on central banks to fight the threat of deflation , which she earlier this month called a growth-threatening "ogre that must be fought decisively."

Mario Draghi

Europe's debt problems remain on the back burner. Most of the credit goes to the ECB chief, whose "whatever-it-takes" pledge in the summer of 2012 and a subsequent bond-buying plan (that remains untested) has managed to put a lid on Spanish and Italian government bond yields. But while the region has enjoyed a tentative return to growth, inflation is running well below target, contributing to deflation fears.

Draghi is set to talk about the "path from crisis to stability " on Friday. It's a safe bet traders will be looking for any clues the ECB is ready to take further action.

Shinzo Abe

Japan's prime minister has been a very busy man since last year's annual meeting. He's followed through on an election pledge to see the Bank of Japan undertake aggressive quantitative easing in an effort to break a long deflationary spiral, while also undertaking aggressive fiscal stimulus efforts. The Bank of Japan is also holding a policy meeting on January 21 and 22.

Japanese equities soared last year and the yen dropped. Abe, who will address the annual meeting on Wednesday, is under pressure to follow up his efforts with structural reforms.

Jiang Jianqing

The chairman of Industrial and Commercial Bank of China is another of this year's Davos co-chairs. Chinese executives and media have been a growing presence for years, in keeping with China's ever more influential role in the world economy.

Investors pay close attention for clues to the state of the Chinese economy and policy. Other high-profile attendees include Sun Yafang, the chairwoman of Huawei Technologies and one of the country's most powerful businesswomen, and Gao Xiqing, president of China Investment Corp., the country's powerful sovereign-wealth fund.

Hasan Rouhani

Davos has often provided a backdrop for Middle East political developments, though not always in a good way. A rare blowup in 2009 saw Turkish Prime Minister Recip Tayyip Erdogan storm offstage after an argument with Israeli President Shimon Peres over the Gaza conflict.

This year, Iranian President Hasan Rouhani is scheduled to address the annual meeting and perhaps court potential investors after world powers and Iran agreed earlier this month to begin implementing a pact to ease sanctions against Tehran in return for Iran curbing its nuclear program.

Israel Prime Minister Benjamin Netanyahu will also attend. Netanyahu said he might "consider" a meeting with Rouhani if Tehran says it's willing to recognize Israel, news reports said.

More Slide Shows 10 global risks of highest concern at Davos 10 people to watch in Davos next week Detroit Auto Show's newest hotties GE nails profit target, misses on margins 5 tips to help you retire early Who did the hiring in 2013 and what they pay Decades of classic Ferraris up for auction Best and worst airlines for passengers in 2013 10 of the most beautiful classic Italian cars 8 examples of 3-D printing creations at CES 10 best global travel destinations for food lovers What to look for in December jobs report Dentists, vets, and bikini waxers now make house calls 10 film classics added to National Registry Audi's SQ5: performance crossover done right