Weekly Market Overview

The U.S. markets opened the week sharply lower on the heels of an additional $30 billion government package to help insurance giant AIG. Approximately 94% of the companies listed on the S&P 500 are trading lower, while the Dow Jones Industrial Average dropped to its lowest levels in 12 years. The only good news was that consumer spending edged up 0.6% for the first time in six months on higher wages, especially among government employees.

Top 10 Stocks to Watch this Week

Fundamental Analysis

1. The Walt Disney Company (NYSE: DIS) shares opened lower despite receiving a positive recommendation by CNBC’s Jim Cramer on his Mad Money Lightning Round. The hedge fund manager turned television star believes that Disney remains a strong company and suggested viewers buy it for the long-term, but cautioned that things would likely be bad for the next three to six months. Cramer also recommended that investors buy in increments as the stock drops to average in lower. (Read More)
2. ConAgra Foods, Inc. (NYSE: CAG) shares opened lower despite receiving a positive recommendation by CNBC’s Jim Cramer on his Mad Money Lightning Round. The hedge fund manager turned television star believes that ConAgra remains a strong company with a good dividend despite the peanut scare, and recommended that viewers buy in four increments as the stock moves lower. (Read More)
3. Target Corporation (NYSE: TGT) shares opened lower after a key activist announced that he would be seeking board representation. Bill Ackman’s Pershing Square disclosed a reduced stake in the retailer, but unveiled talks with Target about naming potential directors to the company’s board. (Read More)
4. PPL Corporation (NYSE: PPL) shares opened lower despite positive comments by CNBC’s Jim Cramer on his Mad Money Lightning Round. The hedge fund manager turned television star is bullish on utilities in this market and recommended PPL along with Exelon Corporation (NYSE: EXC) and Consolidated Edison Inc. (NYSE: ED), which he insists has better growth rates in recent months and years. (Read More)
5. Maximus, Inc. (NYSE: MMS) shares opened lower despite positive comments by CNBC’s Jim Cramer on his Mad Money Lightning Round. The hedge fund manager turned television star believes that the firm is a great play on Obama’s administration as it provides healthcare and human services management for the government. As a result, Cramer recommended viewers pick up some shares of the stock. (Read More)
   

Technical Analysis

1. Netease.com Inc. (NTES) - Long-term bullish continuation diamond.
2. AptarGroup Inc. (ATR) - Intermediate-term bullish continuation wedge.
3. Citigroup Capital IX (C.S) - Intermediate-term bullish continuation wedge.
4. Leap Wireless (LEAP) - Intermediate-term bullish bottom triangle.
5. Big Lots Inc. (BIG) - Intermediate-term bullish diamond bottom.
   

Stocks of the Week : Tarrant Merger Gets a lot more Likely

Tarrant Apparel Group (NASDAQ: TAGS) shares more than doubled late last week after a large shareholder announced his support of the merger proposal with Sunrise Acquisition Company. Interim Chief Executive Gerard Guez will vote his 48.3% stake of common stock in favor of the merger. This development makes it very likely that the merger agreement will be consummated. (Read More)

Article of the Week : High End Retailers Suffer during Holidays

Macy’s Inc. (M), Saks Incorporation (SKS), and other high end retailers fell after reports of a weak holiday season hit the market. Retailers’ sales fell around 4 percent during the holiday season as the weak economy took its toll on consumer spending, according to a report earlier this week by MasterCard’s SpendingPulse. Many experts have seen this holiday season as one of the most difficult on record with soaring unemployment and a sharply lower stock market eating into consumer spending. (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.