(1)
During the bull market of the 1990s, shareholder dividends were virtually ignored by investors.
But with the S&P 500 down 30 percent since March 2000, dividends have once again gained favor among investors looking for stability and a way to boost their portfolio's sagging returns.
Dividends - income payments made by companies to their shareholders
- are an important component of an investor's return over time. In fact, such payments have accounted for nearly half of the S&P 500's total return during the past two decades.
Investors ignored that fact during the 1990s. Instead, they favored the potential for huge capital gains offered by shares of fast-growing firms.
Many of the hottest stocks during that time were shares of technology companies, which typically do not pay dividends to shareholders. As a result, the S&P 500 by 1999 yielded a mere 1.8 percent on average.
Many investors are now being reminded that dividend- paying stocks and funds deserve a place in their portfolios.
(2)
Amerigroup Corp. will finally get a chance to float its long-delayed initial public offering in what is now a strong market for health-care issues.
October emerged a good month for new issues with eight IPOs raising
$4.1 billion, less than one-third of last year's total 26 deals which raised
$8.8 billion
But this year's volume is still significantly off 2000's break neck pace.
Seventy IPOs raised $33.8 billion by the end of October 2001, compared to 400 offerings last year that raised $91.1 billion, according to John Fitzgibbon, editor of IPO Desktop.
The recent strength of health-care issues could prove a boon for
Amerigroup. The momentum is in health care. The Amerigroup offering is expected to score a first day gain of $1-to-$2.
Amerigroup, a Virginia Beach, Va.-based multistate managed health-care company, plans to sell 4.4 million shares at $17 to $19 each, up from $15-to-$17 a share, via lead underwriters Bank of America and
UBS Warburg. Amerigroup expects to price Monday and trade Tuesday under the Nasdaq symbol " AMGP ."
(3)
OECD slashed its global growth target to 1 percent next year, compared with an earlier forecast of 2.8 percent. U.S. growth is projected to be 1.1percent this year, with growth of 1.2 percent in the first half offset by a 0.6 percent contraction in the second half.
The U.S. Federal Reserve's 10 interest rate cuts to 2 percent, their lowest level since the early 1960s, should be enough to turnaround the troubled U.S. economy, the OECD said. U.S growth will shrink by 0.1 percent in the first half of next year followed by a solid pick-up of 3.8 percent second-half growth, to give 0.7 percent growth for 2002 as a whole.
The OECD said it assumed the European Central Bank would cut interest rates by another 50 basis points as inflation eased back below two percent in the currency zone in 2002 -- and that it might need to cut more aggressively if things deteriorated.
As for Japan, the economy was expected to shrink 0.7 percent this year and by 1.0 percent in 2002, with a return to growth in 2003 with a modest 0.8 percent expansion.
The Bank of Japan, with key rates barely above zero, had very little room to help activity by lowering credit costs and should focus on driving the yen lower through foreign exchange market intervention to fend off deflationary pressures, it said.
The prospect of ever more forceful action by Japanese authorities to weaken the yen may be good news for Japan's economy but, analysts say, other countries in the region are worried they may suffer as a result.
For months monetary officials in Japan, the U.S. and Asia have been debating whether a weaker yen is needed to revive Japan's economy -- a policy that would amount to exporting its way back to economic health.
That debate took a new turn on Thursday with a Financial Times report that the Bush administration had signaled it would not object if
Japanese monetary authorities tried to drive the yen lower by buying foreign bonds.
(4)
Restaurant franchise operator AFC Enterprises Inc. will make its debut on the Nasdaq this week with a $150 million offer. The company list of well-known restaurants includes Popeye's Chicken & Biscuits,
Church's Chicken, Cinnabon and Seattle's Best Coffee.
"It's a totally different kind of deal," said Corey Ostman, co-founder of
Alert!-IPO.com. "It's not a high-tech company and that's kind of a good thing."
According to analysts the IPO market is very dependent on the performance of the Nasdaq, which is suffering along with a spate of tech company warnings.
AFC has immediately recognizable franchises and 1999 revenue of nearly $700 million, but it lost more than $12 million in that year, and analysts are expecting a large first-day pop for the stock.
While revenue growth is strong for the Atlanta-based company,
McCarthy said he was concerned with the amount of debt the company has, with only half being eliminated with the money raised from the
IPO.
"They're basically paying for growth they've already had," he said.
(5)
Now, Argentina's economy, once seen as a model for emerging markets, has collapsed. Even so--outside of Argentina--this risky market segment is enjoying an upswing. International fixed-income funds in particular are one of the few bright lights in a terrible year on the performance charts.
Every international stock fund category is virtually in the red this year.
Overseas bond funds are making money. Emerging market bond funds are up an average of 10.4 percent, according to Morningstar, while the average U.S. large growth stock fund is down 23.5 percent.
Emerging markets have been going strong for the past two years, and it's one of the few bond markets in the world that hasn't corrected.
"You've had a huge run," Portera said. "In the U.S. in the last month and a half, you've never seen such a volatile interest-rate environment.
You haven't seen that in emerging markets."
That's why Portera said a pullback in emerging markets may happen in early 2002. "The volatility might be in hiding right now."
(6)
Friday's slew of reports showed that jobless claims rose at a lower level than expected, new home purchases are on the rise and that consumer confidence is up.
As conditions deteriorated earlier this year, investors flocked to so-called defensive issues, including food, health care and tobacco companies, the idea being that their profits can hold up even in a recession.
But now investors are looking ahead to better times and the companies that will lead the way.
But the big upswing in the stocks of economically sensitive companies has led some to believe though that those sectors, while probably the best positioned for a recovery, are due for a pullback.
"The market is beginning to price in not only a significant recovery but a quick recovery. For that reason we think the market is vulnerable," says Todd Salamone, Researcher in Cincinnati.

And while consumers have certainly pulled back on their spending in the wake of this recession, Levkovich says there hasn't been a consumer collapse. So once the economy picks up, that should lead to even more robust levels of spending. All the ingredients for continued resiliency on the part of consumers are in place. "The issue is the four lowers: lower prices, lower energy costs, lower interest rates and lower taxes," Levkovich says. "These have all encouraged consumers to keep spending."
Salamone says select retailers will do well in 2002 but does not think a bet on the entire sector is a wise move. He thinks discount chains like
Wal-Mart, Target, and Kohl's, which all reported healthy levels of holiday sales, should be relatively solid performers, while department store chains will continue to struggle.
(7)
President Eduardo Duhalde on Friday asked Congress for unlimited special powers to revamp the economy, including an expected 40 percent devaluation and tricky dual currency system to avoid total economic collapse.
The government wants Congress, by the weekend, to give Duhalde a free hand to restructure the country's economy by decree, opening the way for devaluation and quick imposition of a dual-currency system that would control prices for imports and exports but let others float.
The MerVal is up over 60 percent since the beginning of December as investors, worried their cash savings could be vaporized by the devaluation, bought shares in companies with relatively little exposure to the peso.
With the apparent inevitable end of a decade-long policy that pegged the peso to the dollar one-to-one, fears rose that inflation would rekindle with a return of spiraling prices last seen in the late 1980s and early 1990s.
Analysts now see the peso-dollar peg as the central reason for
Argentina's 43-month recession, which made exports increasingly uncompetitive and raised the cost of investing in South America's second-largest economy which is virtually bankrupt. Argentina is officially in default on its $132 billion debt and frozen out of international credit markets.
(1)
1.
the bull market of the 1900s, investors preferred to put their money in stocks that could yield a lot and bring them great income.
2.
For investors, dividends can bring them (1)steady earnings (2)a return to their sagging portfolio (3)huge capital gains.
3.
Dividends provide investors with a short-term income payment that is very important to their portfolios.
4.
In 1999, the S&P500 yielded a mere 1.8 percent on average since they did not do well compared with shares of technology companies.
5.
When stock prices fall, shares that pay current income tend to hold up better than the hottest growth stocks. The dividend, in effect, serves as a cushion under shareholder returns.
(2)
6.
By floating its IPO, Amerigroup would have to let the market decide the price of its stocks.
7.
Compared with 2000, this year’s trade volume in IPO is much more significant.
8.
In general, Amerigroup is considered a potential company in the market.
9.
Which is right about Amerigroup?
(1) It is a local company at Virginia Beach.
(2) It would lead underwriters such as Bank of America.
(3) It would be listed on the Nasdaq and called AMGP.
(3)
10.
When the yen weakens, other countries in the region will have to worry that Japan’s exports would hurt their economies.
11.
Which is right?
(1) OECD expected its global growth target to have an extra 1 percent gain.
(2) Fed’s interest rate cuts have turn around the U.S. economy and brought a lot trouble.
(3) The contraction in the second half of this year undercut U.S. growth in the first half.
12.
To hold up the stability of the continent’s economy, ECB would cut interest rates more aggressively even if its inflation rate goes down next year.
13.
What can the Bank of Japan hardly do to help its economic activity?
(1) to lower credit costs (2) to drive the yen lower (3) to defend against deflationary pressures.
(4)
14.
AFC is a well-known restaurant in the market that will offer $150 million to its customers for its first appearance.
15.
A fast food deal could be just what the market needs.
16.
Analysts are expecting that AFC’s stock price would have a great gain.
17.
McCarthy expected that AFC would have a strong gain when they return their debt with the money raised from the IPO.
18.
MaCarthy believe that investors are paying for some ready growth that can be seen now.
(5)
19.
Which is not making money? (1) International stock fund category
(2)Emerging market bond funds (3)Risky market segment
(4)International fixed-income funds.
20.
There has been a lot of changes in the U.S. in the last month and a half.
21.
What does Portera think about the emerging markets? (1)It has been in its low and now has to go a little higher. (2)It has been quite volatile and will tend to become stable (3)It has been good and now will go down. (4)The volatility is not yet to come before it becomes better.
22.
Emerging market bond funds would corrected and go (1)up
(2)down.
(6)
23.
Investors flocked to defensive issues because their profits can hold up even in a recession.
24.
Investors now think the market is going to do well
25.
Todd Salamone thinks that the market will probably have a pullback.
26.
Levkovich thinks that investors have certainly pulled back on their investment due to the recession.
27.
Which is Not true? Salamone says:
(1)Some retailers will do well in 2002
(2)A bet on the entire sector is a wise move.
(3)Discount chains will certainly have solid performers
(4)Department store chains will not have a good time.
(7)
28.
President Eduardo Duhalde asked Congress to vote for a restructure project to save the country’s economy.
29.
The proposed dual-currency system would made exports increasingly uncompetitive and raised the cost of investing in
South America's second-largest economy.
30.
Since the beginning of December, investors bought shares in companies with relatively little exposure to the peso, because they worried their money would lose its purchasing power.
31.
The policy that pegged the peso to the dollar one-to-one has aroused fears that inflation would rekindle with a return of spiraling prices.
32.
Analysts now see the peso-dollar peg as the central reason for
Argentina's 43-month recession, which which is virtually bankrupt.
33.
Though Argentina would be able to return its $132 billion debt, it is now frozen out of international credit markets.