Weekly Market Overview

The U.S. stock markets continued to exhibit volatility today as investors sorted through a range of reports on how companies are handling a slumping economy and tightened credit markets. The top story was Elliot Spitzer's ironic admission to participating in a prostitution ring that may end in his resignation. Meanwhile, rumors about liquidity concerns at Bear Stearns caused a sell-off that continued throughout the day despite the fact that it was proven false. Financials led the decline amid concerns about margin calls at brokerages while McDonald's announced some positive news for restaurants and retailers with rapid same-store growth. In the end, the future of the economy is still uncertain and leading to substantial volatility that will likely continue.

Top 10 Stocks to Watch this Week

Fundamental Analysis

1. Select Comfort (SCSS) - Shareholders have definitely been losing sleep over this stock, which has declined nearly 80% during the past 52 weeks. This prompted activist hedge fund Clinton Group to suggest several changes aimed to turning the company around and restoring profitability. (Read More)
   
2. Wal-Mart Stores (WMT) - Wal-Mart may not be the latest hot pharmaceutical company, but it does have solid earnings that appear to be improving. The company reported posted strong quarterly numbers that an more and more customers are looking for bargains. (Read More)
3. Kraft Foods (KFT) - Warren Buffett was a buyer of this company back when it was trading 5% higher. Now, investors have the chance to invest alongside the legendary investor at an even lower price! This company is cheap by all standards and ready for a turnaround. (Read More)
4. Spanish Broadcasting Systems (SBSA) - Activist shareholders are pressuring this small company to unlock value through a sale, suggesting that it could obtain a price more than 100% higher than where it's trading now. Apparently, the company has many interested suitors but a stubborn management. (Read More)
5. Yahoo (YHOO) - Yahoo is continuing to play hard to get as it attempts to ward off an acquisition by cash-heavy Microsoft. The company continues to insist that it the current offer substantially undervalues the company given its international holdings in high-growth Asian markets. (Read More)
   

Technical Analysis

1. BMC Software (BMC) - Intermediate-term bullish symmetrical continuation triangle.
2. Casella Waste Systems (CWST) - Intermediate-term bullish continuation wedge.
3. Suntech Power Holdings Corporation (STP) - Intermediate-term bullish continuation wedge.
4. Amphenol Corporation (APH) - Intermediate-term bullish continuation wedge.
5. Altria Group (MO) - Intermediate-term bullish continuation diamond.
   

Stock of the Week : Countrywide Financial (CFC)

Countrywide Financial Corp (NYSE: CFC) shares are down significantly on reports it is being investigated by the Federal Bureau of Investigation for securities fraud, specifically whether it didn’t disclose its true financial condition and the poor quality of its mortgage loans in required regulatory filings. This new FBI investigation is in addition to SEC and Congressional probes already looking into the company. (Read More)

Article of the Week : Has the Fed Lost Control?

The Federal Reserve is set to cut interest rates yet again after recent reports suggested that the economy significantly worsened. The move comes conveniently after a weaker than expected employment report that essentially put the nail in the coffin for the US economy. (Read More)

Final Words

The future of the U.S. economy remains uncertain with more problems in the financial markets. Meanwhile, some pressure is being relieved with an increase in consumer spending and strong earnings by Wal-Mart and McDonald's. In the end, the only thing certain at this point is more volatility as investors sort out the good from the bad.