Weekly Market Overview

U.S. markets rose today after Ben Bernanke reiterated his belief that the economy will improve later this year. Recent interest rate cust, loans to banks and tax rebates were cited as catalysts for a recovery in the second half of the year. The confidence helped the dollar rally on the day, which sparked a much-needed drop in oil prices. Meanwhile, better-than-expected results from Toll Brothers helped to cool concerns about the troubled housing market - which remains the biggest problem with the economy. Overall, this was good news for the markets.

Top 10 Stocks to Watch this Week

Fundamental Analysis

1. Agrium Inc. (AGU) - Agrium shares continued their rally today as the agricultural chemicals industry continues to skyrocket. The global producer of agricultural nutrients is one of the few publicly traded suppliers of fertilizer, which is a product that is in extremely high demand these days.
2. NCI Building Systems, Inc. (NCS) - NCI is up significantly in midday trading Tuesday on about six times average trading volume after releasing surprising second quarter results. Houston-based NCI, a producer of metal components for commercial construction, reported second quarter net income more than double to $14.9 million, or 76 cents per share, from $6.5 million, or 31 cents per share, a year earlier – despite having a 9 cent charge on the most recent quarter’s earnings. Sales were also strong, rising 13.1% to $416.1 million.
3. Brigham Exploration Company (BEXP) -Brigham Exploration Company is up more than 22% in midday trading Monday on higher than average trading volume after announcing the completion of three new wells and an increase in available credit.
4. Foster Wheeler Ltd. (FWLT) - Foster Wheeler is one of the largest energy construction companies and is up more than 200% since the beginning of 2007. The company designs and constructs onshore and offhsre oil and gas processing facilities and related infrastructure. Despite strong growth, Foster Wheeler still trades at a reasonable 27x earnings while its return on equity stands at a strong 89.66%.
5. McDermott International (MDR) - McDermott International is another such energy construction company that has profited handsomely from the increase in energy prices and decline in the construction industry. The company has experienced some troubles with its most recent quarter, but continues to see better spending than most construction companies. Meanwhile, McDermott trades at just 25x earnings with a 59.25% return on equity.

Technical Analysis

1. Diamond Offshore Drilling Inc. (DO) - Long-term bullish continuation diamond.
2. Compania De Minas Buenaventura Sa Ads (BVN) - Intermediate-term bullish symmetrical continuation triangle.
3. Solera Holdings Llc (SLH) - Intermediate-term bullish upside breakout.
4. Ultralife Batteries Incorporated (ULBI) - Intermediate-term bullish megaphone bottom.
5. Ada-Es Inc. (ADES) - Long-term bullish diamond bottom.
   

Stock of the Week : Agrium (AGU)

Agrium Inc. (NYSE: AGU) shares continued their rally today as the agricultural chemicals industry continues to skyrocket. The global producer of agricultural nutrients is one of the few publicly traded suppliers of fertilizer, which is a product that is in extremely high demand these days. Global food prices have soared in recent months as demand for ethanol has taken up millions of acres of corn fields. The high prices can be traced all the way down to the most basic level - fertilizer. Demand is so great for fertilizer that prices have skyrocketed. As a result, farmers must charge more in order to cover costs. (Read More)

Article of the Week : Who Really Benefits from Higher Oil Prices?

Oil prices rose today to hit a new record of $126.98 per barrel as inflation continues to soar. Higher oil prices tend to hit the same groups of stocks day after day: Exploration and production companies tend to increase sharply, transportation companies rise marginally, and refiners tend to drop sharply. The rationale for this price movement is simple... (Read More)

Final Words

The future of the U.S. economy remains uncertain despite an improvement in the financial sector thanks to dealmaking. Overall, the economy seems to be heeling, but consumers may lag a bit behind as weakness in spending is seen for at least a couple more quarters.