Are U.S. Stock Markets Rigged? Author Says, 'Yes'

Richard Drew/AP NEW YORK -- The U.S. stock market is rigged in favor of high-speed electronic trading firms, which use their advantages to extract billions from investors, according to Michael Lewis, author of a new book on the topic, "Flash Boys: A Wall Street Revolt." High-frequency trading is a practice carried out by many banks and proprietary trading firms using sophisticated computer programs to send gobs of orders into the market, executing a small portion of them when opportunities arise to capitalize on price imbalances, or to make markets. HFT makes up more than half of all U.S. trading volume. The trading methods and technology that make HFT possible are all legal, and the stock exchanges HFT firms trade on are highly regulated. But Lewis said these firms are using their speed advantage to profit at the expense of other market participants to the tune of tens of billions of dollars. "They are able to identify your desire to buy shares in Microsoft (MSFT) and buy them in front of you and sell them back to you at a higher price," Lewis, whose book is available Monday, said Sunday on the "60 Minutes" television program. "This speed advantage that the faster traders have is milliseconds, some of it is fractions of milliseconds," said Lewis, whose books include "The Big Short" and "Moneyball." Those milliseconds can be valuable, making it possible to send around 10,000 orders in the blink of an eye. Darting in and out of trades, HFT firms make just fractions of a penny per trade, but the sheer speed and volume of their trading activity allows those that are successful to make significant profits. Proponents of HFT argue that the presence of such firms makes it easier for all market participants to find buyers and sellers for their trades, and that the speed at which HFT firms can detect and take advantage of pricing imbalances between different markets and assets leads to smaller bid-ask spreads. But Brad Katsuyama, former head trader in New York for the Royal Bank of Canada and a major figure in Lewis's book, said he was finding that when he would send a large stock order to the market, it would only be partially filled, and then he would have to pay a higher price for the rest of the order. With the help of new hire Ronan Ryan, Katsuyama realized that his orders traveled along fiber optic lines and hit the closest exchange first, where high frequency traders would get a glimpse, and then use their speed advantage to beat him to the other 12 U.S. public exchanges and 45 private trading venues. HFT algorithms could then buy the shares Katsuyama wanted, and then sell them to him at a slightly higher price. Katsuyama and Ryan created a system in which RBC would send its orders first to the exchange that was the furthest away, and last to the exchange that was closest, with the goal of arriving at all places nearly simultaneously, cutting out HFT. "Essentially, our fill rates went to 100 percent. We couldn't believe it when we actually figured it out," Katsuyama told "60 Minutes." Katsuyama said he decided to start a new trading platform, called IEX, for the Investors' Exchange, employing similar tactics to those he used at RBC. "It almost felt like a sense of obligation to say we found a problem that is affecting millions and millions of people -- people are blindly losing money they didn't even know they were entitled to. It's a hole in the bottom of the bucket," he said. IEX has attracted the investment of David Einhorn, the billionaire owner of hedge fund Greenlight Capital, and an endorsement from Goldman Sachs (GS). The investors in IEX are fund companies and individuals, not banks. "We are selling trust, we are selling transparency, and to think that trust is actually a differentiator in a service business, is actually a crazy thought, right?" said Katsuyama. Earlier this month, New York state's Attorney General Eric Schneiderman said he believes U.S. stock exchanges and other platforms provide HFT firms with unfair advantages. Exchanges allow trading firms to place computer servers inside the exchange's data centers so that the firms can see the data as soon as possible. The practice, called co-location, is regulated and available to anyone who wants to pay for it. Schneiderman has begun meeting with the U.S. exchanges, which include IntercontinentalExchange Group's (ICE) New York Stock Exchange, Nasdaq OMX Group's (NDAQ) main bourse, and four platforms run by BATS Global Markets, on possible reforms, a source close to the situation told Reuters. A ban on HFT is unlikely, as U.S. regulators would be loath to put policies in place that could lead to a less liquid market, Robert Greifeld, chief executive officer of Nasdaq, said Thursday.

Why Your Kids Could Pay More Tax This Year

Most children don't have a lot of income and so don't have to pay much in income tax. But one provision meant to prevent parents from using their kids as tax shelters could stick children with higher tax bills this year.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at how the so-called "kiddie tax" provisions combine with new surtaxes on net investment income to raise kids' tax bills. Essentially, once children earn more than $2,000 in investment income, they have to pay taxes at their parents' higher rates. Dan notes that if the parents are subject to the net investment income surtax of 3.8%, then the kiddie-tax rules will impose that surtax on their children's returns. Dan concludes that it's important to know the limits on taking advantage of your children's lower tax rates to avoid paying more tax than you need to pay.

Take advantage of this little-known government tax rule
Recent tax increases have affected nearly every American taxpayer. But with the right planning, you can take steps to take control of your taxes and potentially even lower your tax bill. In our brand-new special report "The IRS Is Daring You to Make This Investment Now!," you'll learn about the simple strategy to take advantage of a little-known IRS rule. Don't miss out on advice that could help you cut taxes for decades to come. Click here to learn more.

Unemployment Continue To Cripple 4 States

Unemployment in the United States dropped to 6.7% in February, well below the 10% level it reached at the worst of the Great Recession. While the figure is not as low as economist would like, it represents a rebound which, along with housing and consumer spending, has indicated a modest recovery. However, the unemployment rate has stayed above 8% in four states, and that number may not improve in the near future.

The jobless rates in California, Illinois, Nevada, and Rhode Island were higher than 8% last month, according to the Bureau of Labor Statistics. As a matter of fact, the figure was 9% in Rhode Island. The reasons for the high numbers and the lack of recovery vary from state to state.

Rhode Island relied on manufacturing and the financial industry for its prosperity. Some of the big banks which were based in Providence haves left or were bought by larger financial companies. The manufacturing sector was hurt as many jobs left the state for areas where costs were based on better efficiency. None of the jobs lost because of these trends is likely to be replaced soon.

California’s jobless rate is based to some extent on extremely high joblessness in the Central Valley, well inland from Los Angeles and San Francisco. While tech jobs have caused a rebound in the area around San Francisco, the downturn in agriculture jobs has left the unemployment rate above 10% in several inland cities which include Riverside and Fresno.

In Nevada, the collapse of the real estate market and the construction jobs which went with it plunged home prices by well over a third in some parts of the state. People who relied on the value of their homes for their net worth lost all of that equity in some cases. The recession also dented traffic to the casinos in Las Vegas.

Illinois stands as a reminder that heavy industry manufacturing jobs are gone and will probably not return. It is part of the crescent of states where car, steel and auto parts companies drove the economies, including Michigan, Ohio and Indiana. Some large cities in these areas have still not recovered. The best known of these is Detroit, which has been forced into Chapter 9 bankruptcy.

Unemployment in these four states will almost certainly stay higher than in the balance of the country, and the jobs the four states have lost may never come back

Tesla beefs up battery shields, NHTSA ends fire…

Tesla announced on Friday that it has added three underbody shields to the Model S to further protect the electric car's battery from impacts. Meanwhile the National Highway Transportation Safety Agency on Friday closed its investigation of battery fires in the car without pushing for a recall.

NHTSA opened the probe after two U.S. reports of battery fires in Model S sedans after the cars ran over road debris that damaged the battery pack under the vehicle.

Tesla earlier changed the software that raises and lowers the car based on its speed to increase the default ground clearance.

Documents posted on the NHTSA web site said that the agency "believes impacts with road debris are normal and foreseeable. In this case, Tesla's revision of vehicle ride height and addition of increased underbody protection should reduce both the frequency of underbody strikes and the resultant fire risk."

It said that "a defect trend has not been identified. Accordingly, the investigation is closed." But it added, "The closing of the investigation does not constitute a finding by NHTSA that a safety-related defect does not exist, and the agency reserves the right to take further action if warranted by new circumstances."

Tesla CEO Elon Musk, in a blog posting noted that in the two incidents in the U.S., plus another in Mexico, the drivers walked away without injury and wrote that, based on these fires, the odds of a fire in a Model S crash are lower than a typical gasoline car.

Related story: Feds review Model S after third fire report

He also noted that the company already had updated the software in all Model S sedans "a few months ago to increase the default ground clearance of the Model S at highway speeds, substantially reducing the odds of a severe underbody impact."

Musk said, however, that the company decided "to bring this risk down to virtually zero to give Model S owners complete peace of mind" so it began adding the extra shielding to vehicle bodies being built as of! March 6.

Tesla is not recalling cars already on the road, but will "retrofit the shields, free of charge, to existing cars upon request or as part of a normally scheduled service," Musk wrote.

The battery already is protected by a quarter-inch aluminum plate and to the plate has been added:

A "rounded, hollow aluminum bar" designed to deflect objects entirely or absorb impact and push the object into the trunk area ahead of the battery.A titanium plate to protect "sensitive front underbody components."An angled aluminum shield that will absorb additional energy and cause "the Model S to ramp up and over the object if it is essentially incompressible and immovable."

Musk said the the additional components should not affect ride, handling or aerodynamics and would have only a 0.1% effect on the car's electric range. Musk added short videos of testing with various debris. The post and videos can be seen here.

Karl Brauer, senior analyst at Kelley Blue Book, believes the additional shields should close the fire issue. "Tesla has added substantial protective measures to the underbody of the Model S," says Brauer. "This combination of upgraded materials should further reduce the chance of a battery pack puncture. Given that no punctures have been reported over the past 4 months, even without the added protection, this fix should eliminate the potential of a battery-pack fire under all but the most extreme circumstances."

Tesla says the regular Model S can sprint from zero to 60 miles per hour in 5.4 seconds and has a top speed of 125 mph.  (Photo: Tesla)View Fullscreen Tesla Model S electric car, which has a range of 208 miles to 265 miles depending on the size of battery and price.  (Photo: Tesla)View Fullscreen The Tesla Model S electric car dashboard is devoid of the usual switches and knobs -- most car functions are handled via the 17-inch touchscreen in the center.  (Photo: Tesla)View Fullscreen The Model S has active air suspension and using the touchscreen in the dash, the drive can raise and lower the ride height for road and weather conditions.  (Photo: Tesla)View Fullscreen Tesla Model S.  (Photo: Tesla)View FullscreenLike this topic? You may also like these photo galleries:ReplayAutoplayShow ThumbnailsShow CaptionsLast SlideNext Slide

5 Stocks Under $10 Set to Soar

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 With Big Insider Buying

Just take a look at some of the hot movers in the under-$10 complex today, including Seanergy Maritime (SHIP), which is exploding higher by over 20%; Unwired Planet (UPIP), which is soaring higher by 16%; Supercom (SPCB), which is ripping to the upside by 14%; and Northwest Biotherapeutics (NWBO), which is surging to the upside by 12%. You don't even have to catch the entire move in lower-priced stocks such as these to make outsized returns when trading.

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.

>>3 Hot Stocks to Trade (or Not)

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.

Verso Paper

One under-$10 consumer goods player that's quickly moving within range of triggering a big breakout trade is Verso Paper (VRS), which produces and sells coated papers in the U.S. This stock has been on fire over the last six months, with shares up huge by 248%.

>>Beat the S&P in 2014 With the Stocks Everyone Hates

If you take a glance at the chart for Verso Paper, you'll notice that this stock recently formed a double bottom chart pattern at $1.96 to $2 a share. Following that bottom, shares of VRS have started to uptrend and the stock is now moving back above its 50-day moving average of $2.63 a share. Shares of VRS are spiking sharply higher today and the stock is quickly moving within range of triggering a big breakout trade.

Traders should now look for long-biased trades in VRS if it manages to break out above some near-term overhead resistance levels at $2.98 to $3 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 809,046 shares. If that breakout triggers soon, then VRS will set up to re-test or possibly take out its next major overhead resistance levels at $3.32 to $3.40 a share. Any high-volume move above those levels will then give VRS a chance to tag $4 to $4.50 a share.

Traders can look to buy VRS off weakness to anticipate that breakout and simply use a stop that sits right around some near-term support levels at $2.50 to $2.30 a share. One can also buy VRS 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.

ChinaNet Online

An under-$10 technology player that's starting to trend within range of triggering a near-term breakout trade is ChinaNet Online (CNET), which provides business-to-businesses Internet services for small and medium enterprise sales networks in the People's Republic of China. This stock is off to a monster start in 2014, with shares up sharply by 91%.

>>5 Big Tech Stocks to Trade for Gains

If you take a look at the chart for ChinaNet Online, you'll notice that this stock is starting to form a major bottoming chart pattern, since shares are finding buying interest each time it pulls back to around $1.55 to $1.50 a share. Shares of CNET have been trending sideways for the last few weeks, with shares moving between around $1.54 on the downside and $1.90 on the upside. This stock is currently trending near the bottom of its range, but shares of CENT are starting to uptrend and move within range of triggering a near-term breakout trade above the upper-end of its sideways trading chart pattern.

Market players should now look for long-biased trades in CNET if it manages to break out above some near-term overhead resistance at $1.90 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 247,174 shares. If that breakout gets set off soon, then CNET will set up to re-test or possibly take out its next major overhead resistance levels at $2.14 a share or even its 52-week high at $2.75 a share.

Traders can look to buy CNET off weakness to anticipate that breakout and simply use a stop that sits right below $1.50 a share. One can also buy CNET 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.

Sprint

One under-$10 telecommunications player that's starting to move within range of triggering a near-term breakout trade is Sprint (S), which provides wireless and wireline communications services to consumers, businesses, and government users in the U.S., Puerto Rico and the U.S. Virgin Islands. This stock has been in play with the bulls over the last six months, with shares surging higher by 50%.

>>4 Stocks Triggering Breakouts on Big Volume

If you consult the chart for Sprint, you'll see that this stock has been uptrending strong over the last two months, with shares moving higher from its low of $7.42 to its recent high of $9.46 a share. During that uptrend, shares of S have been consistently making higher lows and higher highs, which is bullish technical price action. Shares of S are spiking higher today and that spike is quickly pushing the stock within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in S if it manages to break out above some key overhead resistance levels at $9.46 to $10.19 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 19.40 million shares. If that breakout gets underway soon, then S will set up to re-test or possibly take out its 52-week high at $11.47 a share. Any high-volume moves above $11.47 a share will then give S a chance to tag $13 to $14 a share.

Traders can look to buy S off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $8.61 a share or near more support at $8.40 to $8.15 a share. One can also buy S off strength once it starts to bust above those key resistance levels volume and then simply use a stop that sits a comfortable percentage from your entry point.

J.C. Penney

Another under-$10 department store player that's starting to push within range of triggering a big breakout trade is J.C. Penney (JCP), which sells merchandise through department stores in the U.S. This stock has been rocking to the upside over the last month, with shares up sharply by 20%.

>>5 Hated Earnings Stocks You Should Love

If you take a glance at the chart for J.C. Penney, you'll notice that this stock recently gapped up sharply higher from just under $5.50 a share to over $7.50 a share with monster upside volume. Following that move, shares of JCP have continued to uptrend with the stock hitting a recent high of $9.28 a share. Shares of JCP briefly pulled back to its recent low of $8.13 a share, but now the stock is back on the upswing and quickly moving within range of triggering a big breakout trade.

Market players should now look for long-biased trades in JCP if it manages to break out above some key near-term overhead resistance levels at $9.25 to $9.28 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 29.48 million shares. If that breakout starts soon, then JCP will set up to re-test or possibly take out its next major overhead resistance levels at $10.30 a share to its 200-day moving average of $10.44 a share. Any high-volume move above those levels will then give JCP a chance to tag $12 to $13 a share.

Traders can look to buy JCP off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $8.50 or at $8.13 a share. One can also buy JCP 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.

Intermolecular

One final under-$10 technology player that's starting to trend within range of triggering a major breakout trade is Intermolecular (IMI), which develops and applies high productivity combinatorial research and development technologies for the semiconductor and clean energy industries This stock has been hammered by the bears so far in 2014, with shares off sharply by 40%.

If you take a look at the chart for Intermolecular, you'll see that this stock recently gapped down sharply from over $3.75 to $2.75 a share with heavy downside volume. Following that move, shares of IMI have started to rebound and uptrend, with the stock moving higher from its low of $2.55 to its intraday high of $2.98 a share. This stock is now quickly moving within range of triggering a major breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in IMI if it manages to break out above some near-term overhead resistance levels at $3 a share to its gap-down-day high of $3.25 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 325,726 shares. If that breakout materializes soon, then IMI will set up to re-fill some of its previous gap-down-day zone that started just above $3.75 a share.

Traders can look to buy IMI off weakness to anticipate that breakout and simply use a stop that sits just below some key near-term support levels at $2.70 to $2.55 a share. One can also buy IMI 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:

>>4 Big Tech Stocks on Traders' Radars

>>5 Stocks Set to Soar on Bullish Earnings

>>3 Stocks Rising on Unusual Volume

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.

Citigroup Tumbles as Fed Rejects Capital Plans

Shares of Citigroup (C) have dropped 4.5% in after-hours trading after the Federal Reserve rejected its capital plans.

Agence France-Presse/Getty Images

The Fed explains why it said no to Citigroup:

The Federal Reserve's objection to Citigroup's CCAR 2014 capital plan in part reflects significantly heightened supervisory expectations for the largest and most complex BHCs in all aspects of capital planning. While Citigroup has made considerable progress in improving its general risk-management and control practices over the past several years, its 2014 capital plan reflected a number of deficiencies in its capital planning practices, including in some areas that had been previously identified by supervisors as requiring attention, but for which there was not sufficient improvement.

Practices with specific deficiencies included Citigroup's ability to project revenue and losses under a stressful scenario for material parts of the firm's global operations, and its ability to develop scenarios for its internal stress tests that adequately reflect and stress its full range of business activities and exposures. Taken in isolation, each of these deficiencies would not be deemed critical enough to warrant an objection, but, when viewed together, they raise sufficient concerns regarding the overall reliability of Citigroup’s capital planning process to warrant an objection to capital plans and require a resubmission.

Morgan Stanley (MS),  JPMorgan Chase (JPM) and Bank of America (BAC) had their capital plans approved. Morgan Stanley has gained 0.6%, JPMorgan Chase has dropped 0.8% and Bank of America has dropped 0.8%.

Mid-Day Market Update: Five Below Jumps On Upbeat Results; Exelixis Shares Decline

Related BZSUM Mid-Afternoon Market Update: Markets Turn Red as Dish Network Rises Mid-Morning Market Update: Markets Open Higher; Francesca's Issues Downbeat Q1 Forecast

Midway through trading Wednesday, the Dow traded up 0.11 percent to 16,386.22 while the NASDAQ dropped 0.22 percent to 4,225.05. The S&P also rose, gaining 0.12 percent to 1,867.77.

Leading and Lagging Sectors
Healthcare sector moved up 0.39 percent, with Keryx Biopharmaceuticals (NASDAQ: KERX) moving up 15 percent to gain the top spot. Top gainers in the sector included China Biologic Products (NASDAQ: CBPO), with shares up 7.4 percent, and Laboratory Corp. of America Holdings (NYSE: LH), with shares up 5.5 percent.

In trading on Wednesday, basic materials shares dropped by 0.30 percent. Among the sector stocks, Amyris (NASDAQ: AMRS) was down more than 8.5 percent, while Universal Stainless & Alloy Products (NASDAQ: USAP) tumbled around 5 percent.

Top Headline
Francesca's Holdings (NASDAQ: FRAN) reported a 29% drop in its fiscal fourth-quarter earnings and issued a weak first-quarter outlook. Francesca's expects current-quarter earnings of $0.20 to $0.24 per share on sales of $85 million and $90 million. However, analysts projected earnings of $0.28 per share on sales of $92 million. Francesca's posted its quarterly profit of $10.6 million, or $0.25 per share, versus a year-ago profit of $14.9 million, or $0.33 per share.

Excluding special items, its adjusted earnings came in at $0.27 per share. Its revenue rose 6.3% to $92.1 million. The company had projected a profit of $0.27 to $0.29 per share on sales of $93 million to $95 million. Its gross margin shrank to 50.6% from 53.4%, while comparable-store sales slipped 6%.

Equities Trading UP
Five Below (NASDAQ: FIVE) shares shot up 13.11 percent to $42.98 after the company reported better-than-expected fourth-quarter results. The company posted its quarterly adjusted earnings of $0.47 per share on revenue of $212 million. However, analysts were projecting earnings of $0.45 per share on revenue of $207.8 million.

Shares of Steelcase (NYSE: SCS) got a boost, shooting up 12.21 percent to $16.36 after the company reported better-than-expected fourth-quarter earnings. Steelcase reported its Q4 earnings of $0.18 per share, beating analysts' estimates by $0.01 per share. Raymond James upgraded the stock from Outperform to Strong Buy and lifted the price target from $17.50 to $19.00.

Movado Group (NYSE: MOV) was also up, gaining 9.18 percent to $45.89 after the company reported upbeat Q4 earnings and issued a strong FY15 outlook.

Equities Trading DOWN
Shares of Exelixis (NASDAQ: EXEL) were down 36.18 percent to $4.11 after the company issued an update on ongoing COMET-1 phase 3 pivotal trial in men with metastatic castration-resistant prostate cancer. Stifel Nicolaus lowered the price target on the stock from $11.00 to $9.00.

Francesca's Holdings (NASDAQ: FRAN) shares tumbled 14.43 percent to $17.85 after the company reported a 29% drop in its fiscal fourth-quarter earnings and issued a weak Q1 outlook.

International Game Technology (NYSE: IGT) was down, falling 8.82 percent to $13.54 after the company announced its plans to lower 7% of its workforce and cut its earnings guidance for the year.

Commodities
In commodity news, oil traded up 0.60 percent to $99.79, while gold traded down 0.52 percent to $1,304.60.

Silver traded down 0.67 percent Wednesday to $19.85, while copper fell 1.31 percent to $2.97.

Eurozone
European shares were higher today.

The Spanish Ibex Index rose 1.49 percent, while Italy's FTSE MIB Index climbed 1.14 percent.

Meanwhile, the German DAX jumped 1.12 percent and the French CAC 40 rose 0.83 percent while U.K. shares surged 0.15 percent.

Economics
The MBA reported that its index of mortgage application activity dropped 3.50% in the week ended March 21.

US durable-goods orders gained 2.2% in February, versus economists' expectations for a 0.8% rise.

The preliminary reading of the Markit services PMI came in at 55.50 in March, versus economists' expectations for a reading of 54.00.

Crude stockpiles climbed 6.6 million barrels for the week ended March 21, the US Energy Information Administration reported. However, analysts were expecting a gain of 2.6 million barrels.

Gasoline supplies slipped 5.1 million barrels, while distillate stockpiles increased 1.6 million barrels.

Posted-In: Earnings News Guidance Eurozone Futures Forex Global Econ #s Economics Intraday Update Markets Movers Tech

© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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3 Chinese Stocks Set to Gain On China’s Economic Rebound

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There have been some concerns on Wall Street the past few weeks about the Chinese economy. The latest sign was a decline in the Purchasing Managers Index, which came in below the consensus expectation and made the markets nervous Chinese stocks.

However the weakness just makes it that much more likely that the Chinese government will add stimulus programs to get the economy back in gear. The Chinese government is targeting a 7.5% growth rate this year and earlier this month said they will increase spending on things like construction spending and other programs designed to get growth back on track.

This will be great news for our Chinese stocks. We hold several high quality China-related stocks that are still exhibiting best of the best fundamentals. I am willing to add to these positions on any weakness as they still have very strong sales and earnings growth and the analysts are increasing their estimates for these powerful companies.

Let’s take a look at these winners:

SouFun Holdings Limited (SFUN) is a great example of a best in class Chinese stocks that I am excited about right now. The company operates a real estate internet portal that serves real estate developers in the marketing phase of new property developments, as well as to real estate agencies. They also allow companies that make housing related products like home furnishing and improvement products as well as companies selling consumer products like furniture and electronics.

Earnings are up over 80% this year and sales on fire rising by about 50%. SFUN has posted four consecutive earnings surprises and analysts recently raised their estimates for 2014 and 2015 profits. Portfolio Grader raised the company to a strong buy back in July and this stock is still a strong buy at the current price.

Education is a top priority in China and competition for the best schools are intense. TAL  Education Group (XRS) benefits form the focus on education by offering tutoring services for kids in grades k-12. They operate a network of 270 learning centers and 247 service centers in China and also have 5 call centers in Beijing, Shanghai, Tianjin, Guangzhou, and Shenzhen.

XRS also operates eduu.com, an online education platform that serves as a gateway to its online courses on topic such as college entrance examinations, high school entrance examinations, mathematics,  English and Chinese composition. The high level of interest in education is powering strong earnings growth with profits up over 38% this year and in the most recent quarter the bottom line was up 66% year over year.

The company has posted a positive earning surprise the past four quarters in a row and Portfolio Grader has ranked the stock an A since last August. XRS shares remain a strong buy today as the fundamentals just keep getting better.

Qihoo 360 Technology Co. Ltd (QIHU)  is a stock I have mentioned a few times in the past few weeks. The company provides Internet and mobile security products in the People’s Republic of China and is growing a very high rate. In the most recent quarter this company had sales growth of over 100% and earnings surged by more than 200% year over year. They are now the undisputed leader in smart phone security in China with over 70% market share.

Analysts have recently raised their r2014 and 2015 profit estimates after three consecutive big positive earning surprises in a row. Portfolio Grader upgraded this stock to an A back in June and the stock remains a strong buy today.

Even though there may be a few fists and starts along the way China will be one of the fastest growing companies in the world for the foreseeable future. Furthermore the government is committed to growing the economy at a high rate as it expands its role in the world and develops a thriving middle class. This is great news for those Chinese companies that have the very best fundamentals as identified by Portfolio Grader.

Sleep Well with Mattress Firm

Our latest featured breakout stock recommendation is a Houston, Texas retailer of mattresses, with annual revenues of $1.2 billion, notes technical analyst Leo Fasciocco, editor of Ticker Tape Digest.

Mattress Firm Holding (MFRM) offers both traditional and specialty mattresses, bedding accessories, and related products. MFRM also offers bed frames, pillows, tempurpedic pillows, headboards, and memory foam mattresses.

The stock has broken out from an 11-week, cup-and-handle base. The move was triggered by the company upping its earnings forecast for the year.

MFRM reported earnings for the fourth quarter increased to 25 cents a share from 22 cents a year ago. The reported earnings topped the consensus estimate by one cent a share.

Analysts are forecasting 14% increase in MFRM's earnings for the fiscal year ending in January of 2015. They look for net of $1.90 a share, up from $1.66 in fiscal 2014. Going out to fiscal 2016, profits are expected to climb 19% to $2.25 a share.

The stock came public back in late 2011, trading around $22. It soared to a peak of $48 in 2012, before falling back sharply to $22. Since then, the stock has worked higher to get close to its prior peak.

We are targeting MFRM for a move to $54 off this breakout. A protective stop can be placed near $44.50.

A key fund buyer recently was the 4-star rated Wasatch Small-Cap Growth Fund which purchased 405,738 shares. That gave it a 1.2% stake in MFRM. The largest fund holder is Baron Small-Cap Retail Fund, 4-star rated, with a 4.4% stake.

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BALTIMORE (Stockpickr) -- Put down the 10-K filings and the stock screeners. It's time to take a break from the traditional methods of generating investment ideas. Instead, let the crowd do it for you.

>>5 Stocks Insiders Love Right Now

From hedge funds to individual investors, scores of market participants are turning to social media to figure out which stocks are worth watching. It's a concept thats known as "crowdsourcing," and it uses the masses to identify emerging trends in the market. Crowdsourcing has long been a popular tool for the advertising industry, but it also makes a lot of sense as an investment tool. After all, the market is completely driven by the supply and demand, so it can be valuable to see what names are trending among the crowd. While some fund managers are already trying to leverage social media resources like Twitter to find algorithmic trading opportunities, for most investors, crowdsourcing works best as a starting point for investors who want a starting point in their analysis. Today, we'll leverage the power of the crowd to take a look at some of the most active stocks on the market today. >>5 Rocket Stocks Worth Buying This Week These "most active" names are the most heavily-traded names on the market -- and often, uber-active names have some sort of a technical or fundamental catalyst driving investors' attention on shares. That's especially true now that earnings season is officially underway. And when there's a big catalyst, there's often a trading opportunity. Without further ado, heres a look at today's stocks. KB Home Nearest Resistance: $20.50

Nearest Support: $19

Catalyst: Earnings >>5 Stocks Poised for Breakouts Shares of small-cap homebuilder KB Home (KBH) are up more than 7% this afternoon, following first-quarter profits that were bigger than analysts expected. The firm saw earnings of 12 cents per share for the first quarter, vs. an average earnings estimate of 8 cents per share. Rising housing prices were the catalyst for the earnings beat at KBH. KBH gapped up hard this morning, shoving their way back in the uptrending price channel that's been in play since November. While this homebuilder broke down through the bottom of the channel earlier this month, today's move erases that downside. Even though re-entering the trend channel isn't that exciting, it does make higher prices look likely in this stock.

Stock quotes in this article: KBH, REN 

Renren

Nearest Resistance: $7.70

Nearest Support: N/A

Catalyst: Earnings

>>5 Stock Charts Screaming "Buy" in March

On the other side of the spectrum is Renren (REN), the Chinese social media stock. A nasty earnings miss this morning is shoving shares down double digits this afternoon. While raw earnings numbers came in looking good, REN's numbers included the results of a former subsidiary; without them, profits and revenues nosedived for the quarter. From a technical standpoint, this chart is broken. Renren actually broke down through a key support level on Monday, failing to catch a bid at the $7.70 price tag that had previously been a floor for shares. With no semblance of buying pressure in sight, REN is a name that's best avoided from here. To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.

 -- Written by Jonas Elmerraji in Baltimore. RELATED LINKS:   >>Hedge Funds Are Selling These 5 Stocks -- Should You?   >>5 Big Health Care Stocks to Trade for Gains   >>5 Hated Earnings Stocks You Should Love Follow Stockpickr on Twitter and become a fan on Facebook.

Stock quotes in this article: KBH, REN  At the time of publication, author had no positions in stocks mentioned. Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation. Follow Jonas on Twitter @JonasElmerraji

March Madness evokes marketer madness

March Madness doesn't have the heft of the Super Bowl. Nor the scope of the recent Olympic Games. But, dang, marketers big and small are going absolutely ga-ga over it this year.

Never mind that even after the much-awaited 68-team bracket is revealed on Sunday, many folks still won't be able name a single player in the NCAA Basketball Championship tournament that stretches for nearly three weeks on TBS, CBS, TNT and TruTV. But who gives a hoop?

Bracket frenzy is upon us.

March Madness is a marketing mix that advertisers crave but can rarely find. It has wide appeal to a very young and very desirable audience. It's live sports — one of the few things that's TiVo proof. And March Madness is a social media gabfest. "Twitter will be on fire during the tournament," says George Belch, marketing professor at San Diego State University.

Perhaps that's why the tournament generated more than $1.15 billion in ad revenue last year and is expected to easily top that figure this year, according to the media research firm Kantar Media. "March Madness is the right time, right place and continues to grow with no signs of peaking," says Rob Prazmark, CEO of 21 Sports & Entertainment Marketing Group.

That's why March Madness marketers are:

• Debuting new ads. Burger King's new two-for-$5 TV spot stars five-time NBA All-Star Chris Webber, Papa John's has new spots featuring Jim Nantz of CBS Sports. Audi has new ads starring comedian Ricky Gervais. Pizza Hut debuts spots to promote its WingStreet wings featuring ESPN anchor and radio personality Scott Van Pelt.

• Devising new apps. AT&T is co-sponsor of the NCAA March Madness Live app, which provides access to more than 150 hours of live streaming on Windows and Android versions of the app. AT&T also happens to be the hometown sponsor of Dallas' AT&T Stadium.

• Rebranding hotels. Bud Light has set up temporarily re-branded "But Light Hotels' in Super Bowl cities for years. Now, the brew wil! l do it with March Madness, by setting up a Bud Light Hotel in downtown Dallas. It will have live concerts and celebrity players, and it even will have Bud Light-branded signage, pillow cases, soaps and key cards.

• Giving away eats. Hooters on March 20 and 21 gives away free fried pickles to folks who download coupons from its Hooters.com/Hooky site. On March 27 and 28, it offers 10 free wings to folks who buy 10 — and have the coupon.

• Hosting concerts. A three-day concert fest in Dallas will be hosted one day each by AT&T, Coke Zero and Capital One. Headliner for the Capital One JamFest: Bruce Springsteen.

Investing: New index funds aren't always great

When you're investing, one of the easiest things to do is to run with your gut instinct. You smell money in Macy's? Buy! Your gut tells you the Federal Reserve is going to raise interest rates? Sell! Worried that Vladimir Putin will kill Italy just by staring at it? Sell!

Reams of academic studies, however, have shown that listening to those little voices in your head is about as helpful as giving in to your urge to burn things. In fact, the most sensible approach for most investors is the simplest: Buy a diversified selection of low-cost index funds, add to them regularly, and rebalance them from time to time.

Lately, though, the fund industry has been rolling out a number of index-fund variants — some of which may make sense, and others of which may not. Do you need them? In most cases, no. But it's worth looking at them before you get the urge to do something you shouldn't.

Your basic index fund boots the manager and selects its stocks (or bonds, or other securities) according to an index, such as the Standard and Poor's 500. Until recently, most stock indexes weighted their holdings according to the market value of the stock.

For example, the largest holding in the Vanguard 500 index fund (ticker: VFINX) is Apple, followed by ExxonMobil, and that's because the computer maker's current market value is $472.4 billion, vs. $409.2 billion for the multinational oil company. As each stock in the fund increases or decreases in value, it gets a bigger weighting in the fund. Among the cognisi, this is called a "cap-weighted" approach, short for "capitalization weighted," short for "ranked by the market value of the stock."

The problem with cap weighting is that as a stock gets more popular — and hence pricier — it becomes a larger percentage of an index fund's holdings. For example, the three largest holdings in the S&P 500 in 1999 were Microsoft, General Electric and Cisco Systems. Those stocks all remain below their Dec. 31, 1999, levels.

Over the years, and esp! ecially recently, fund companies have rolled out variants of index funds, all aimed at correcting the problems with cap-weighted funds. (Among the cognisi, these are called "smart beta" funds.) Among them:

• Equal-weighted funds. These funds simply give each stock in the index equal weighting, an approach that works best in a broad-based market rally, especially where small-company stocks outperform. The Guggenheim S&P 500 Equal Weight ETF (RSP) has gained an average 9.31% a year the past 10 years, vs. 7.39% for the Vanguard 500 Index fund.

• Rules-based funds. These indexes would give greater weight to stocks according to fundamentals, such as the amount of dividends paid out. WisdomTree LargeCap Dividend fund (DLN) has gained an average 20.92% a year the past five years, vs. 21.28% for the Vanguard 500 Index fund. (These are bull-market returns: Don't expect them the next five years.)

In short, the new index funds seek to beat the broad-based, cap-weighted indexes by doing something differently than the index: Emphasizing smaller-company stocks, for example, or a history of dividend payouts. That's no different than what active managers try to do, says Vanguard's senior investment strategist Joel Dickson. "We don't see these funds as an alternative to indexing, but rather a low-cost alternative to active management," he says.

And, as such, there's no harm in that. But you have to bear in mind that you're attempting to beat the index, something that stymied great minds for a long time. And, while certain strategies have had great success over many years, there's no Northwest Passage to superior stock returns.

For example, value investing is generally viewed as a way to get above-average returns. Value investors, such as Warren Buffett, look for cheap stocks, relative to earnings and hold them for the long term. And the Vanguard Value ETF (VTV) has indeed gained 7.47% a year the past decade, a hair more than the Vanguard 500 Index fund. But the Vanguard Growth Index! , which i! nvests in stocks with growing earnings, has beaten both, gaining an average 8.24%.

What's the harm in new index strategies? "The question should be turned on itself: What's the harm in cap-weighted indices," Dickson says. A company's market value represents the market's consensus on what the price of a stock should be. "If you believe that a sector of the market is mispriced, that's by definition active management."

The counterargument, of course, is that the components of the S&P 500 are chosen by Standard & Poor's, and that is, to some extent, active management. "There is a true statement there," Dickson says. "It's a committee-driven approach." But the index covers nearly all large-company stocks, and other large-company stock indexes track the S&P 500 fairly closely. And if you really want, you can choose a fund that chooses an even broader index — as the Vanguard Total stock Market fund (VTSMX) does.

For someone simply wanting exposure to the stock market at a very low price, then a broad-based index fund is a clear winner. In fact, if you want exposure to all the world's stocks, you could simply buy the Vanguard total World Stock index (VT) and knock off for the afternoon. Or you could mix and match a selection of diversified U.S. and international index funds, depending on your risk tolerance.

What if you hear a little voice urging you to try one of the new index funds? If that voice is telling you that it's way cheaper than a red-hot actively managed fund that charges 1.5% a year in expenses, well, that little voice probably has a pretty good idea. And if you're thinking that you'd like a fund that pays out above-average dividends because you need the income, then an index fund that focuses on rising dividends, such as the iShares S&P Dividend ETF (SDY), is a pretty good idea, too. Just don't listen to that little voice tell you to get into a staring match with Vladimir Putin.

Top 10 Warren Buffett Companies To Own In Right Now

One of the benefits of attending the Berkshire Hathaway (NYSE: BRK-B  ) shareholders' meeting is learning from the great value investors and Buffettologists who also make the yearly trek to Omaha. In this multipart series, Fool analyst Rex Moore speaks with Lawrence Cunningham, author of The Essays of Warren Buffett: Lessons for Corporate America. The book offers a unique approach by arranging all of Buffett's shareholder letters thematically, rather than chronologically.

Today, Professor Cunningham explains the major difference in how Buffett invests now compared to early in his career.

Is Berkshire for you?
Thanks to the savvy of investing legend Warren Buffett, Berkshire Hathaway's book value per share has grown a mind-blowing 586,817% over the past 48 years. But with Buffett aging and Berkshire rapidly evolving, is this insurance conglomerate still a buy today? In The Motley Fool's premium report on the company, Berkshire expert Joe Magyer provides investors with key reasons to buy as well as important risks to watch out for. Click here now for instant access to Joe's take on Berkshire!

Top 10 Warren Buffett Companies To Own In Right Now: Northstar Realty Finance Corp. (NRF)

NorthStar Realty Finance Corp. operates as a real estate investment trust in the United States. It invests in real estate debt business, which acquires, originates, and structures debt investments secured primarily by income-producing real estate properties; real estate securities business that invests in commercial real estate debt securities, including commercial mortgage backed securities, REIT unsecured debt, and credit tenant loans; and net lease properties business, which acquires properties that are primarily net leased to corporate tenants. The company has elected to be taxed as a REIT and it would not be subject to federal income tax, provided it distributes at least 90% of its taxable income to its shareholders. NorthStar Realty Finance was founded in 1997 and is based in New York City.

Advisors' Opinion:

• [By Lauren Pollock]

  NorthStar Realty Finance Corp.(NRF) disclosed a plan to spin off its asset-management business into a separate publicly traded company, a move investors praised. NorthStar’s shares rose 17% to $11.60 premarket.

• [By Rich Duprey]

  Not only will following the north star help you find your way when lost, but it will lead you to riches, too. NorthStar Realty Finance� (NYSE: NRF  ) �announced yesterday it�will pay a�regular quarterly dividend�of $0.19 per share on May 17 to the holders of record at the close of business on May 13.�

• [By alicet236]

  Northstar Realty Finance Corporation (NRF): Chairman and CEO David T. Hamamoto Sold 639,182 Shares

  Chairman and CEO of Northstar Realty Finance Corporation (NRF) David T. Hamamoto sold 639,182 shares on 01/13/2014 at an average price of $14.14. NorthStar Realty Finance Corporation is a Maryland corporation formed in October 2003. Northstar Realty Finance Corporation has a market cap of $4.16 billion; its shares were traded at around $14.00 with and P/S ratio of 4.15. The dividend yield of Northstar Realty Finance Corporation stocks is 5.57%.

Top 10 Warren Buffett Companies To Own In Right Now: Dollar Financial Corp.(DLLR)

DFC Global Corp. provides retail financial services to unbanked and under-banked consumers, and small businesses. Its primary products and services include short-term consumer loans, single-payment consumer loans, check cashing services, secured pawn loans, and gold buying services. The company also provides other retail services and products comprising money order and money transfer products, foreign currency exchange, VISA and MasterCard branded reloadable debit cards, electronic tax filing, bill payment, and prepaid local and long-distance phone services. In addition, it offers military installment loan and education services, such as fee based services to enlisted military personnel applying for loans to purchase new and used vehicles. The company provides its products and services through storefront locations, as well as via the Internet. As of August 25, 2011, it operated through a network of approximately 1,300 retail storefront locations. It operates its locations principally under the Money Mart, The Money Shop, mce, Insta-Cheques, Suttons and Robertson, The Check Cashing Store, Sefina, Helsingin Panttism, Optima, and Money Now in Canada, the United Kingdom, the United States, Poland, the Republic of Ireland, Sweden, and Finland. The company was formerly known as Dollar Financial Corp. and changed its name to DFC Global Corp. in August 2011. DFC Global Corp. was founded in 1990 and is headquartered in Berwyn, Pennsylvania.

Advisors' Opinion:

• [By John Udovich]

  Despite�a slow global economy and continued high unemployment in many countries, small cap payday or pawn stocks Cash Store Financial Services Inc (NYSE: CSFS), DFC Global Corp (NASDAQ: DLLR) and Cash America International, Inc (NYSE: CSH) have not exactly been performing well since the start of the year. In fact, these three stocks are the worst performers in the payday or pawn loan sector, down 38.5%, down 14.4% and up 4.6%, respectively, since the start of the year.

• [By John Kell]

  DFC Global Corp.'s(DLLR) fiscal second-quarter profit tumbled 88% as the operator of check-cashing stores was hurt by weaker gold prices and a weaker Canadian dollar. Results for the period badly missed Wall Street’s expectations, and DFC cut its expectations for the fiscal year. Shares dropped 24% to $8 premarket.

Top Mid Cap Stocks To Buy Right Now: American Eagle Outfitters Inc (AEO)

American Eagle Outfitters, Inc. (AEO, Inc) is a specialty retailer that operates in the United Sates and Canada, and online at ae.com. AEO, Inc operates under the American Eagle (AE), aerie by American Eagle (aerie), and 77kids by american eagle (77kids) brands. Through the Company�� family of brands, it offers clothing, accessories and personal care products. As of January 28, 2012, the Company operated 1,090 stores in the United States and Canada under the American Eagle Outfitters, aerie and 77kids brands. The Company also had 21 franchised stores operated by its franchise partners in 10 countries. During the fiscal year ended December 31, 2011, the Company opened 33 new stores. As of December 31, 2011, it operated in all 50 states, Puerto Rico and Canada. During fiscal 2011, the Company remodeled and refurbished a total of 106 AE stores.

AE Brand

The American Eagle Outfitters brand targets 15 to 25-year old men and women. Denim is the cornerstone of the American Eagle product assortment, which is complemented by other categories including sweaters, graphic t-shirts, fleece, outerwear and accessories. As of January 28, 2012, the Company operated 911 American Eagle Outfitters stores. During fiscal 2011, it opened 11 AE stores.

aerie by American Eagle

The Company�� aerie is a collection of Dormwear, intimates and personal care products for the AE girl. The collection is available in aerie stores throughout the United States and Canada, online at aerie.com and at select American Eagle stores. As of January 28, 2012, AEO, Inc operated 158 aerie stores. During fiscal 2011, it opened 10 aerie stores.

77kids by american eagle

77kids offers clothing and accessories for kid�� ages 2 to 14 and babies under the brand name little77TM. As of January 28, 2012, the Company operated 21 77kids stores. All 77kids clothing is backed by the brand�� 77wash and 77soft. During fiscal 2011, AEO, Inc opened 12 77kids stores.

AEO Direct

The Company's online business, AEO Direct, ships to 77 countries worldwide. The Company sells merchandise via its e-commerce operations, ae.com, aerie.com and 77kids.com, which are extensions of the lifestyle that it conveys in its stores. As of December 31, 2011, AEO Direct shipped to 77 countries worldwide. In addition to purchasing items online, customers can experience AEO Direct in-store through Store-to-Door. Store-to-Door enables store associates to sell any item available online to an in-store customer in a single transaction. The Company accepts PayPal and Bill Me Later as a means of payment from its ae.com, aerie.com and 77kids.com customers.

Advisors' Opinion:

• [By Andrew Marder]

  Yesterday, teen apparel retailer American Eagle (NYSE: AEO  ) posted its first-quarter results. The company has struggled over the last year as it tries to find its niche. Recently, management has tried to shift from supplying just basics to a wider range of fashion items. Apparently, it hasn't caught on just yet.

• [By Traders Reserve]

  One name that you can probably count on becoming a target is American Eagle Outfitters (AEO). Like Abercrombie, shares of American Eagle have fallen over the last year. Fashion-fickle teens and a challenged consumer economy have made for a tough go of it. That said, the company is an iconic brand that will be in favor again. A private equity or hedge fund manager is likely to acquire shares at these levels before they take off similarly to Abercrombie.

• [By Douglas A. McIntyre]

  The Old Navy decision is not a direct threat to full service retailers, but for niche clothiers, particularly targeting young people, the sweepstakes could trigger problems. Shares of Abercrombie & Fitch (NYSE: ANF) have already been bludgeoned due to a forecast of�falling sales and a plan to close stores. Its shares trade at $33, near the 52-week low and well off the 52-week high of just above $55.� And, smaller rival American Eagle Outfitters�(NYSE:AEO) recently revised its earnings forecasts higher for the current quarter due to�better margins. Its shares, however, remain near one year lows.

• [By Johanna Bennett]

  Meanwhile, Barclays Capital analyst Matthew McClintock expects to get �� good read��on the teen category from both Aeropostale (ARO) and American Eagle (AEO) when they report results on Wednesday and Friday, respectively. Meanwhile, November sales for Gap (GPS), L Brands (LB), and Costco Wholesale (COST) are slated to be released on Thursday.

Top 10 Warren Buffett Companies To Own In Right Now: LivePerson Inc.(LPSN)

LivePerson, Inc. provides online engagement solutions that facilitate real-time assistance and expert advice in the United States, Canada, Latin America, Europe, and the Asia-Pacific region. The company facilitates real-time online interactions, such as chat, voice/click-to-call, email, and self-service/knowledgebase for corporations of various sizes; and connects businesses and independent service providers with individual consumers seeking help on its hosted software platform. Its products and services comprise LP Chat that creates real-time connections for businesses to connect with consumers through Websites, social media, and mobile devices; LP Voice, which provides customers a connection between a Website and the voice channel to engage prospects and consumers online; and LivePerson Expert Platform, a marketplace platform that allows users to chat live with independent experts in various categories. The company?s products and services also include LP Marketer that o ffers a real-time data-driven targeting solution that delivers personalized digital user experiences; and LP Insights, which provide customers with a text analytics tool that enables them to data mine for ?Voice of the Customer? and ?Voice of the Agent? content. In addition, it offers provides professional services and value-added business consulting services. The company sells its products through direct and indirect sales channels to small and mid-sized businesses, Internet businesses, online merchants, universities, libraries, government agencies, and not-for-profit organizations, as well as to financial, retail, telecommunications, technology, and travel/hospitality industries. LivePerson, Inc. was founded in 1995 and is headquartered in New York, New York.

Advisors' Opinion:

• [By GURUFOCUS]

  LivePerson, Inc. (LPSN) provides online engagement solutions (e.g., chat, marketing campaigns) and analytics. LivePerson's stock pulled back following first quarter results that missed management's expectations due to several enterprise customers cancelling the service. While we had been patient with the company's challenging transition from single product (chat) company to an engagement platform provider, we decided to exit our position as the large customer cancellations were inconsistent with our investment thesis. (Gilad Shany)

• [By Brendan Byrnes]

  The following video excerpt was taken from an interview with Robert LoCascio, founder and CEO of LivePerson (NASDAQ: LPSN  ) , as he talks about what was behind the company's incredible success story. In this segment, he discusses how his company survived the bursting of the dot-com bubble burst.

• [By Brendan Byrnes]

  The following video excerpt was taken from an interview with Robert LoCascio, founder and CEO of LivePerson (NASDAQ: LPSN  ) , as he talks about what was behind the company's incredible success story. In this segment, he�explains how his line of products and services uses predictive technology to move beyond a basic chat company. A transcript follows the video.

Top 10 Warren Buffett Companies To Own In Right Now: Austin Engineering Ltd (ANG)

Austin Engineering Limited is engaged in the manufacture, repair, overhaul and supply of mining attachment products, general steelwork structures and other associated products and services for the industrial and resources-related business sectors. The Company operates in four segments: Australia, which includes mining equipment, other products and repair and maintenance services; Americas, which includes mining equipment and other products, consisting of North America and South America; Asia, which includes Indonesia for mining equipment and other products, and the Middle East, which includes aluminum smelter equipment and products. In October 2013, Austin Engineering Limited completed the acquisition of the business of Servigrut. Advisors' Opinion:

• [By Julia Leite]

  South African miners rallied after a recovery in gold prices. The FTSE/JSE Africa All-Share Index climbed 1.5 percent in Johannesburg, with Harmony Gold Mining Co. (HAR) and AngloGold Ashanti Ltd. (ANG) adding at least 5.2 percent.

Top 10 Warren Buffett Companies To Own In Right Now: Cynosure Inc.(CYNO)

Cynosure, Inc. develops, manufactures, and markets aesthetic treatment systems to the dermatology, plastic surgery, and general medical markets. Its aesthetic treatment systems incorporate a range of laser and other light-based energy sources, including Alexandrite, pulse dye, Nd:Yag, and diode lasers, as well as intense pulsed light. The company?s aesthetic treatment systems comprise the Elite product line for hair removal, treatment of facial, and leg veins and pigmentations; the Smartlipo product line for LaserBodySculpting for the removal of unwanted fat; the Cellulaze, SmoothShapes XV, and TriActive product line for the temporary and long-term reduction in the appearance of cellulite; the Affirm/SmartSkin product line for anti-aging applications, such as treatments for wrinkles, skin texture, skin discoloration, and skin tightening; the Cynergy product line for the treatment of vascular lesions; and the Accolade product line for the removal of benign pigmented lesion s, as well as multi-colored tattoos. It sells its products through a direct sales force in North America, France, Spain, the United Kingdom, Germany, Korea, China, Japan, and Mexico; and through international distributors in 84 other countries. Cynosure, Inc. was founded in 1991 and is based in Westford, Massachusetts.

Advisors' Opinion:

• [By Rich Duprey]

  Aesthetic-laser maker Cynosure (NASDAQ: CYNO  ) announced yesterday that it had completed the acquisition of rival laser specialist Palomar Medical Technologies for $146 million cash and 6 million shares for a total value of around $294 million.

• [By Seth Jayson]

  There's no foolproof way to know the future for Cynosure (Nasdaq: CYNO  ) or any other company. However, certain clues may help you see potential stumbles before they happen -- and before your stock craters as a result.

• [By John Udovich]

  On Tuesday, small cap biotech stock Kythera Biopharmaceuticals Inc (NASDAQ: KYTH) surged around 25% after announcing that its ATX-101 REFINE-1 and REFINE-2 Phase III trials met all primary and secondary endpoints for the reduction of so-called double chins; but if investors missed out on that rally, small caps Zeltiq Aesthetics Inc (NASDAQ: ZLTQ), Solta Medical Inc (NASDAQ: SLTM) and Cynosure, Inc (NASDAQ: CYNO) each have a piece of the aesthetic market as well. In the case of Kythera Biopharmaceuticals, its ATX-101 can be injected to deal with double chins���meaning its less invasive than liposuction as the drug dissolves fat cells but leaves other tissue alone. JP Morgan has noted:

Top 10 Warren Buffett Companies To Own In Right Now: Stryker Corporation(SYK)

Stryker Corporation, together with its subsidiaries, operates as a medical technology company worldwide. The company operates in three segments: Reconstructive, MedSurg, and Neurotechnology and Spine. The Reconstructive segment offers orthopaedic reconstructive (hip and knee) and trauma implant systems, as well as other related products. The MedSurg segment provides surgical equipment and surgical navigation systems; endoscopic and communications systems; patient handling and emergency medical equipment; and other related products. The Neurotechnology and Spine segment offers neurovascular products, spinal implant systems, and other related products. The company sells its products through local dealers and direct sales force to doctors, hospitals, and other healthcare facilities, as well as through third-party dealers and distributors in the United States, Europe, the Middle East, Africa, and Japan, Canada, the Pacific region, and the Latin America region. Stryker Corporat ion was founded in 1941 and is headquartered in Kalamazoo, Michigan.

Advisors' Opinion:

• [By Jake L'Ecuyer]

  Equities Trading UP
  MAKO Surgical (NASDAQ: MAKO) shot up 82.38 percent to $29.49 after the company agreed to be acquired by Stryker (NYSE: SYK) for $30 per share in cash. Shares of Ascena Retail Group (NASDAQ: ASNA) got a boost, shooting up 16.34 percent to $20.17 after the company reported upbeat fiscal fourth-quarter results.

• [By Maxx Chatsko]

  A costly recall of Colleague infusion pumps that forced the company to take a $588 million charge to net income in 2010 -- and tens of millions more in other years -- is now finally behind it. It isn't alone. Johnson & Johnson (NYSE: JNJ  ) and Stryker (NYSE: SYK  ) both suffered setbacks with hip implants in recent years, although few companies have a recall history that rivals Johnson & Johnson.�

Top 10 Warren Buffett Companies To Own In Right Now: C&F Financial Corporation(CFFI)

C&F Financial Corporation operates as the holding company for Citizens and Farmers Bank that provides various banking and related financial services to individuals and businesses. It operates through three segments: Retail Banking, Mortgage Banking, and Consumer Finance. The Retail Banking segment offers various types of checking and savings deposit accounts; business, real estate, development, mortgage, home equity, and installment loans; and ATMs, Internet banking, and credit cards, as well as travelers? checks, safe deposit box rentals, collection, notary public, wire service, and other customary bank services. This segment provides retail banking services at its main office in West Point, Virginia; and 17 branches in Chester, Hampton, Mechanicsville, Midlothian, Newport News, Norge, Providence Forge, Quinton, Saluda, Sandston, Varina, West Point, Yorktown, Williamsburg, and Richmond, Virginia. The Mortgage Banking segment originates conventional mortgage loans, mortga ge loans insured by the Federal Housing Administration, mortgage loans partially guaranteed by the Veterans Administration, and home equity loans. This segment provides mortgage loan origination services through 15 locations in Virginia, 4 in Maryland, and 2 in North Carolina, as well as 1 each in Wilmington, Delaware; Moorestown, New Jersey; and York, Pennsylvania. The Consumer Finance segment provides automobile loans in Virginia and in portions of Alabama, Indiana, Kentucky, Maryland, North Carolina, Ohio, Tennessee, Georgia, and West Virginia through offices in Richmond and Hampton, Virginia; Nashville, Tennessee; and Towson, Maryland. The company also offers brokerage services, and insurance and title insurance services. C&F Financial Corporation was founded in 1927 and is based in West Point, Virginia.

Advisors' Opinion:

• [By Doug Hughes]

  An example of that would be C&F Financial (CFFI) in Westport, Virginia. The CEO, Larry Dillon, has been there for 35 years, plus, the bank is trading at a p/e of 6 or 7, if you can believe it. It's only $2 over book value.

Top 10 Warren Buffett Companies To Own In Right Now: Pazoo Inc (PZOO)

Pazoo, Inc., formerly IUCSS, Inc., incorporated on November 16, 2010, is a development-stage company. The Company is an online retailer and distributer of nutritional foods/supplements, wellness goods, and fitness apparel.

As of December 31, 2011, the Company�� source of revenue was through www.pazoo.com. The Company offers a range of products through various catalogs, such as health and beauty, vitamins and supplements, apparel, accessories, food and beverages, fitness and sports equipments, gifts, videos and books, and pet wellness.

Advisors' Opinion:

• [By Bryan Murphy]

  For those traders who were lucky and smart enough to be in an Arotech Corporation (NASDAQ:ARTX) before today, then congratulations - you're up at least 38% on your position. Now it's time to get out. Conversely, if you're looking for a new name to get into (or perhaps looking for a place to park your ARTX proceeds), then you may want to consider Pazoo Inc. (OTCBB:PZOO)... a tiny online retailer of health and fitness goods. PZOO has dropped several tell-tale hints that more upside is on the way.

Top 10 Warren Buffett Companies To Own In Right Now: United States Cellular Corporation(USM)

United States Cellular Corporation operates as a wireless telecommunications service provider in the United States. The company offers wireless voice and data services to retail consumer and business customers. It provides wireless services in postpaid service plans with voice, messaging, and data services; and prepaid service plans with minutes, messaging, and data services for a monthly fee. The company also offers various additional features, including caller ID blocking, call forwarding, voicemail, call waiting, and three-way calling; and data usage features consisting of Web browsing, email services, instant messaging, text messaging, and picture and video messaging. As of December 31, 2010, it provided wireless voice and data services to 6.1 million customers in 26 states. In addition, the company operates retail stores that sell a range of wireless devices, including handsets, modems, and tablets, as well as accessories, such as carrying cases, hands-free devices, b atteries, battery chargers, memory cards, and other items to consumers and small businesses. Further, it sells wireless devices to agents and other third-party distributors for resale; operates service facilities that provide servicing and repair for wireless devices; and enables customers to activate service and purchase wireless devices online. The company?s business customers include small-to-mid-size businesses in various industries, including construction, retail, professional services, and real estate. It offers its products and services through retail sales and service centers, direct sales, and independent agents. The company was founded in 1983 and is based in Chicago, Illinois. United States Cellular Corporation is a subsidiary of Telephone and Data Systems, Inc.

Advisors' Opinion:

• [By Tim Beyers]

  Low price-to-book stocks suffer from a similar problem. Who cares if the stock sells for a discount to its assets if the company can't earn a good return on said assets? United States Cellular (NYSE: USM  ) has seen its returns on assets and equity decline steadily since 2011. Thus, despite a history of trading near or below book value, the stock is down 22% since the beginning of last year.
  
  Investment strategies are just that: strategies. Recognize that every company is different. Analyze the underlying strengths and weaknesses before you buy. Because the more you understand about what drives a business to grow, the more likely it is you'll pay a fair price to own a piece of it, Tim says.
  
  Do you agree? Please watch the video to get Tim's full take, and then leave a comment to let us know which investment strategies have worked best for you.

• [By Evan Niu, CFA]

  Wireless carrier U.S. Cellular (NYSE: USM  ) will get Apple's (NASDAQ: AAPL  ) iPhone "later this year," the company has announced.

Will This Cut Hurt Baxter International (BAX) Today?

NEW YORK (TheStreet) -- Baxter International (BAX) has been removed from Goldman Sachs' Conviction Buy list due to increasing supply constraints, the investment firm said Monday. Goldman gives the healthcare company a $77 price target. 

Must Read: Warren Buffett's 10 Favorite Stocks

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

--------------------------- Separately, TheStreet Ratings team rates BAXTER INTERNATIONAL INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation: "We rate BAXTER INTERNATIONAL INC (BAX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income." Highlights from the analysis by TheStreet Ratings Team goes as follows: The revenue growth came in higher than the industry average of 3.9%. Since the same quarter one year prior, revenues rose by 16.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share. Net operating cash flow has increased to $1,083.00 million or 14.60% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 1.84%. The gross profit margin for BAXTER INTERNATIONAL INC is rather high; currently it is at 55.24%. Regardless of BAX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 7.46% trails the industry average. BAXTER INTERNATIONAL INC's earnings per share declined by 33.7% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, BAXTER INTERNATIONAL INC reported lower earnings of $3.65 versus $4.18 in the prior year. This year, the market expects an improvement in earnings ($5.14 versus $3.65). You can view the full analysis from the report here: BAX Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Stock quotes in this article: BAX 

Reporting HSA Contributions on Your Tax Return

Last year was my first with a high-deductible health plan combined with a health savings account at work. What do I need to report concerning the HSA when I file my taxes?

SEE ALSO: Is It Tax Deductible?

When you file, you'll need to include Form 8889 to report all contributions and withdrawals associated with your HSA in 2013. The form has a line for reporting your direct contributions to your HSA, and you'll carry that deduction to line 25 of your Form 1040. The form also has a line to report employer contributions, which you'll fill in if you made pretax contributions via payroll deduction or if your company contributed to your account. This can be confusing, notes Roy Ramthun, founder of HSA Consulting Services, because the IRS considers both of these to be employer pay-ins. You'll find the correct amount on your W-2 form (box 12, code W).

You should also have received a Form 1099-SA from your HSA administrator reporting withdrawals from the account. You need to report those distributions on Form 8889 and indicate which were for eligible medical expenses and which were not. Ineligible payouts are taxable, and you need to report them on line 21 of Form 1040. (HSA money withdrawn for nonmedical purposes is also subject to a 20% penalty if you're younger than age 65; that penalty is calculated on Form 8889 and carried over to line 60 of Form 1040.) See the instructions for Form 8889 for details. Also see IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans.

Withdrawals for eligible medical expenses are tax-free at any age. Unlike with flexible spending accounts, however, your HSA administrator isn't obligated to verify whether withdrawals are for eligible expenses. "All your HSA custodian knows is that it was a withdrawal, but you have to be able to show whether it was qualified or not," says Jeff Munn, vice-president of benefit policy development for Fidelity Investments, which administers HSAs for many employers. So keep receipts for qualified medical expenses -- deductibles, co-payments and unreimbursed expenses such as dental visits and vision care -- in case you are audited (but don't submit the receipts when you file your taxes).

An interesting quirk of HSAs is that you may withdraw the money for eligible medical expenses at any time -- there is no deadline for using the money. For example, some people choose to pay for their deductibles, co-pays and out-of-pocket medical costs from other savings so that they can keep more money growing in the HSA tax-free. But if you need to access some extra cash in an emergency, you can withdraw the money from the HSA at any time, as long as you have records showing that the expenses were incurred after the date you opened the account. "Once you open the account, for any qualified medical expense you have after that point, whether it's five years or 30 years later, you can reimburse yourself from the HSA and do it tax-free," says Munn. For tax purposes, you need to report the year you made the withdrawal.

For more information about health savings accounts, see Smart Strategies for Health Savings Accounts. Also see FAQs about Health Savings Accounts.

Got a question? Ask Kim at askkim@kiplinger.com.

Mid-Morning Market Update: Markets Edge Higher; FedEx Profit Misses Estimates

Related BZSUM #PreMarket Primer: Wednesday, March 19: Russia Moves Forward With Crimean Takeover Market Wrap For March 18: Markets Positive Despite Crimea Concerns

Following the market opening Wednesday, the Dow traded up 0.10 percent to 16,352.70 while the NASDAQ gained 0.01 percent to 4,333.63. The S&P also rose, gaining 0.07 percent to 1,873.48.

Leading and Lagging Sectors
Wednesday morning, the healthcare sector proved to be a source of strength for the market. Leading the sector was strength from Horizon Pharma (NASDAQ: HZNP) and Pernix Therapeutics Holdings (NASDAQ: PTX). In trading on Wednesday, telecommunications services shares were relative laggards, down on the day by about 0.39 percent. Top decliners in the sector included Shenandoah Telecommunications Co (NASDAQ: SHEN), off 3.3 percent, and CalAmp (NASDAQ: CAMP), down around 2.4 percent.

Top Headline
FedEx (NYSE: FDX) reported a 5% gain in its third-quarter profit. FedEx's quarterly profit surged to $378 million, or $1.23 per share, compared to a year-ago profit of $361 million or $1.13 per share. Its revenue climbed to $11.3 billion versus $11.0 billion. However, analysts were estimating earnings of $1.45 per share on revenue of $11.47 billion. FedEx projects current-quarter earnings of $2.25 to $2.50 per share, and full-year earnings of $6.55 to $6.80 per share.

Equities Trading UP
Prothena Corporation plc (NASDAQ: PRTA) shares shot up 21.60 percent to $45.19 after the company reported clinical data to be presented at International Symposium on Amyloidosis. Morgan Stanley raised the price target on the stock from $35.00 to $53.00.

Shares of Horizon Pharma (NASDAQ: HZNP) got a boost, shooting up 16.38 percent to $17.08 after the company announced its plans to acquire privately held Vidara Therapeutics International for around $660 million.

KB Home (NYSE: KBH) was also up, gaining 8.99 percent to $19.27 after the company swung to a profit in the fiscal first quarter. KB Home posted a quarterly profit of $10.6 million, or $0.12 per share, versus a year-ago loss of $12.5 million, or $0.16 per share.

 Equities Trading DOWN
Shares of Renren (NYSE: RENN) were down 9.54 percent to $3.41 after the company reported Q4 results. Renren expected Q1 sales of $23.0 million to 25.0 million, versus analysts' estimates of $30.20 million.

Orbitz Worldwide (NYSE: OWW) shares tumbled 9.27 percent to $8.12 after Goldman Sachs downgraded the stock from Neutral to Sell.

Oracle (NYSE: ORCL) was down, falling 2.88 percent to $37.72 after the company reported weaker-than-expected fiscal third-quarter earnings. Oracle's quarterly profit surged to $2.57 billion, or $0.56 per share, versus a year-ago profit of $2.5 billion, or $0.52 per share. Its revenue jumped to $9.31 billion versus $8.96 billion. Its adjusted profit came in at $0.68 per share.

Commodities
In commodity news, oil traded up 0.41 percent to $100.11, while gold traded down 1.03 percent to $1,345.10.

Silver traded down 0.54 percent Wednesday to $20.75, while copper fell 1.56 percent to $2.91.

Eurozone
European shares were mixed today.

The Spanish Ibex Index rose 0.47 percent, while Italy's FTSE MIB Index fell 0.11 percent.

Meanwhile, the German DAX jumped 0.58 percent and the French CAC 40 climbed 0.13 percent while U.K. shares fell 0.09 percent.

Economics
The MBA reported that its index of mortgage application activity declined 1.2% in the week ended March 14.

The US current account deficit shrank to $81.1 billion in the fourth quarter, versus a revised $96.4 billion in the third quarter.

The Federal Open Market Committee will announce its policy decision at 2:00 p.m. ET, while the Fed Chairman will hold press briefing at 2:30 p.m. ET.

Posted-In: Earnings News Guidance Eurozone Futures Forex Global Econ #s Economics Intraday Update Markets Movers Tech

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