Weekly Market Overview

Stocks started the week on a positive note after oil prices plunged on reports that the Gulf Coast and its oil facilities have been spared from heavy damages from Hurricane Gustav. Light sweet crude is now down more than $8 per barrel on the New York Mercantile Exchange, easing Wall Street's concerns about Gustav and inflation's impact on the broader econom. The market optimism was also boosted by news that Korea Development Bank is in talks about taking part in a possible acquisition of Lehman Brothers.

Top 10 Stocks to Watch this Week

Fundamental Analysis

1. 99 Cents Only Stores (NDN) - 99 Cents Only Stores may be getting more than they bargained for with one large investor. Akre Capital Management disclosed an 11.26 percent stake in the discount chain and recommended that it explore strategic alternatives to unlock shareholder value in a Schedule 13D/A filing with the SEC last week. These alternatives may include discontinuing certain businesses, repurchasing shares with excess cash and refocusing on maximizing profitability rather than expanding. (Read More)
2. Smith International, Inc. (SII) - Smith International shares moved marginally higher after CNBC's Jim Cramer recommended the stock on his Mad Money Lightning Round. The hedge fund manager turned television star believes the stock is a cheap oil driller that has been hammered by the market. With politicians increasingly in support of offshore drilling to relieve oil prices, Cramer believes that Smith is a winner going forward and a buy at these levels. (Read More)
3. Transocean Inc. (RIG) - Transocean shares began the week lower as oil prices dropped and the dollar strengthened. Any sustained drop in oil prices could make deepwater drilling projects less viable and decrease business for companies like Transocean. Meanwhile, a higher dollar tends to hurt pricing points for companies based in the United States. However, many experts remain bullish on the stock given their solid operating results and hefty backlog. (Read More)
4. Target Corporation (TGT) - Target shares started the week on a positive note as lower oil prices and a stronger dollar helped the recovering retailer. Oil futures dropped $7 per barrel after Hurricane Gustav hit the Gulf region with less force than initially feared. Prices were also impacted by a stronger dollar and concerns that the economic slowdown has curbed demand for energy. Retail stocks benefited as they tend to trade opposite of energy prices. (Read More)
5. Emerson Electric Co. (EMR) - Emerson shares rose marginally after CNBC's Jim Cramer recommended the stock on his Mad Money Lightning Round. The hedge fund manager turned television star is very bullish on the stock, saying that shares should be trading $5 higher. However, many analysts are bearish on the stock, citing a downturn in the U.S. industrial sector. So, where are Emerson Electric shares headed in the future? (Read More)
   

Technical Analysis

1. Syngenta Ag For Nvs (SYT) - Intermediate-term bullish continuation wedge.
2. Schnitzer Steel Industries  Inc. (SCHN) - Intermediate-term bullish continuation wedge.
3. Tele Norte Leste Partticipacoes Sa (TNE) - Intermediate-term bullish symmetrical continuation triangle.
4. Geomet Incorporated (GMET) - Intermediate-term bullish symmetrical continuation triangle.
5. Calgon Carbon Corporation (CCC) - Intermediate-term bullish ascending continuation triangle.
   

Stocks of the Week : Target Corporation Moves Higher

Target Corporation (NYSE: TGT) shares started the week on a positive note as lower oil prices and a stronger dollar helped the recovering retailer. Oil futures dropped $7 per barrel after Hurricane Gustav hit the Gulf region with less force than initially feared. Prices were also impacted by a stronger dollar and concerns that the economic slowdown has curbed demand for energy. Retail stocks benefited as they tend to trade opposite of energy prices. (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 as inflation continues to rise. Overall, the economy seems to be healing, but consumers may lag a bit behind as weakness in spending is seen for at least a couple more quarters.