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D-Day for Harry Reid: Can he wrangle 60 votes for Senate health bill?

Perhaps Ringo Starr should attend Saturday night's start to the debate over the health care reform bill in the Senate. After all, it was Starr who first uttered the malapropism that later became a hit song (and movie) by The Beatles - A Hard Day's Night. Saturday evening may shape up to be just that in the upper house of Congress.

For clues regarding the bill's status, look for key, early maneuvering. Bill author Senate Majority Leader Harry Reid, a Democrat from Nevada, has to retain all 60 members of the Democratic Conference (58 Democrats, two Independents) to pass a procedural vote. If even one conference member strays -- and can't be persuaded to change the vote -- the health care reform bill won't even make it to the Senate floor for debate.

Goodyear Tire now offers a buy-on-a-pullback opportunity

Goodyear Tire & Rubber Co.'s (GT) stock has meandered of late, but I'm nevertheless reiterating my buy rating for the company, first recommended on May 5, 2009 at a price of $13.30. Here's why.

Institutional investors sold GT after the company reported a 15% reduction in Q3 revenue and the view from here argues the selling was overdone. Goodyear will benefit from tire demand growth in 2010.

Leading economic indicators continue to rise, though less than expected

The Index of Leading Economic Indicators increased 0.3% in October -- its seventh straight monthly increase -- the Conference Board announced Thursday, providing more evidence that the U.S. economic recovery is progressing.

Economists surveyed by Bloomberg News had expected the index to rise 0.4% in October. The index rose a revised 1.0% in September, 0.4% in August, and 1.0% in July. The LEI index now stands at 103.8. (Base year, 2004 =100.)

Weekly jobless claims hold steady

More modest progress on the employment front, as initial jobless claims were unchanged at 505,000 for the week ending November 14, but continuing claims decreased again, falling 39,000 to 5.61 million, the U.S. Labor Department announced Thursday.

A Bloomberg News economists survey had expected initial jobless claims to fall to 504,000 this week. Meanwhile, the four-week moving average for initial jobless claims decreased 6,500 to 514,000.

A year ago, initial jobless claims totaled 533,000 and continuing claims totaled 4.02 million.

Housing starts unexpectedly plunge in October

Construction on new housing unexpectedly plummeted 10.6% in October to a seasonally adjusted annual rate of 529,000, the U.S. Commerce Department announced Wednesday, gouging a pothole on the housing sector's road to recovery. It was the lowest housing start level in six months.

A Bloomberg News economists survey had expected housing starts to total a 590,000 annualized rate in October. Housing starts totaled a revised 592,000 annual pace in September, and 587,000 annual pace in August. Housing starts hit a cycle-low 479,000 pace in April.

Further, although housing starts are still up 8% since January, analysts caution that any increases in housing sector activity stem from a very low point with depressed construction levels, following the nation's worst housing recession in more than a generation.

Inflation creeps up in October on higher energy, auto prices

A few bread crumbs for the inflation hawks in October, as consumer prices rose 0.3% in October, the U.S. Labor Department announced Wednesday. Energy prices rose for the fifth time in six months.

The core rate -- which excludes the often-volatile food and energy component -- rose 0.2%. Economists surveyed by Bloomberg News had expected consumer prices to increase 0.2% in October, and the core rate to rise 0.1%.

This stock's safety, dividend and growth are hard to beat

U.S. electric power demand may be sluggish, due to the recession, but investors should view that as a temporary phenomenon. True, increased energy efficiency across the U.S. economy will be a trend for the next decade and beyond, but relatively low-cost electric power does not go out of style, which is why I'm reiterating my buy rating for American Electric Power (AEP), first recommended on May 4, 2009 at a price of $25.38.

If you bought AEP in May, you're up about 25%. AEP's above-average total return on equity story remains intact. Look for an increase in retail electric demand in fiscal 2010 and that fact, combined with a decline in operating/maintenance costs, and little impact from greenhouse gas legislation until about 2018 or 2020, translates into a bargain stock at a P/E of 12.

October producer prices rise 0.3% on higher energy, food costs

october-producer-prices-rise-0-3-on-higher-energy-food-costsInflation remained nearly inert at the wholesale level, as producer prices rose just 0.3% in October, the U.S. Labor Department announced Tuesday, with rising food and energy prices offsetting a sharp decline in other items. Excluding the often-volatile food and energy component, producer prices fell -0.6% in October.

The consensus from the Bloomberg News survey of economists had been that producer prices would increase 0.5% in October; they fell 0.6% in September. Economists also had expected the core rate to rise 0.1% in October after decreasing 0.1% in September.

Industrial production inches up in October

The recovery in the industrial sector continues, albeit at a mild pace, as output at U.S. factories, mines, and utilities rose just 0.1% in October, following a 0.7% rise in September, the U.S. Federal Reserve announced Tuesday.

Further, most sectors registered declines in October, with the utilities sector output helping to tip the scale by rising 1.6%.

Meanwhile, the factory utilization rate, also known as capacity utilization, rose to 70.7% in October from 70.5% in September. The capacity utilization rate is still 10.2 percentage points below its average for 1972-2008, the Fed said.

U.S. business inventories continue to fall

Still cautious, businesses continue to reduce excess inventory, as they cut costs and re-align their operations with consumer demand. Business inventories fell 0.4% in September -- the 13th consecutive monthly decline, the U.S. Commerce Department announced Monday.

A Bloomberg News survey had expected inventories to decline 0.8% in September, after falling 1.5% in August, and losing 1.1% in July. Further, inventories have fallen 13.4% in the past year.

In addition, business sales fell 0.3% after rising 1.0% in August. Sales are still down 13.1% in the past 12 months.

Interest Rates

5/1 ARM4.19%APR: 3.81%
30 Yr.
Fixed Mort.
5.02%APR: 5.16%
$30K
HELOC
8.00%APR: 0.00%
30 Mo
New Car Loan
6.79%APR: 0.00%
1 Yr. CD1.57%APR: 1.58%
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