Jim Cramer's Mad Money Review

Wells Fargo (NYSE: WFC - News), Countrywide Financial's (NYSE: CFC - News), Washington Mutual (NYSE: WM - News), Bank of America (NYSE: BAC - News), Wachovia (NYSE: WB - News)
Thursday's dash for financials may indicate the sector will be one of the "long-term beneficiaries" of Bernanke's position, but Cramer does not think they are safe. He tacked a double sell on WM but thought BAC and WB could survive. However, he reserved the lion's share of his praise for WFC, and said, "It is the great speculative play that should prosper." He believes WFC will "own the mortgage market" and will win with investors because it offers a great dividend. Cramer would wait for WFC to drop to the $32 - $34 range.
Sell Block: VMware (NYSE: VMW - News), H&R Block (NYSE: HRB - News), Capital One Financial (NYSE: COF - News), Friedman Billings Ramsey Group (NYSE: FBR - News) Lamson & Sessions (NYSE: LMS - News), Six Flags (NYSE: SIX - News)
Cramer urged investors to "stay the course" and added "no one ever made a dime panicking." However, he added it isn't too late to sell minerals and he feels tigher consumer spending will put pressure on retail. Cramer would sell VMW after its highly successful IPO, and would stay away from HRB, COF and FBR. He would also sell LMS as well as SIX because of low attendance due to the weather. He concluded it is better to invest in long-term stocks rather than quick trades in the current environment.
KKR Financial (NYSE: KFN - News), Thornburg Mortgage (NYSE: TMA - News) and Reynolds American (NYSE: RAI - News)
Not all high dividends are good dividends, Cramer declared and used KFN and TMA as examples. He added high-dividend names KFN and TMA aren't worth the investment because as their stocks fall so will the yields. Cramer likes RAI which has a dividend of 5.5% and is a "smart play" in this environment because "nothing is more defensive than cigarettes."
Mad Mail: Bear Stearns (NYSE: BSC - News), Jones Soda (NasdaqCM: JSDA) and Google (NasdaqGS: GOOG - News)
Cramer would avoid BSC and JSDA whose climb was "how to make a million" in the market. He adds GOOG is safe and likes the tech sector for its pristine balance sheets and great products.
Published by SeekingAlpha

Labels: BAC, BSC, CFC, COF, FBR, GOOG, HRB, Jim Cramer, KFN, LMS, Mad Money, RAI, SIX, TMA, WB, WFC, WM, WMV

Wall Street fluctuated Wednesday, seeking a direction a day after concerns about faltering subprime mortgage lenders sparked a broad selloff in stocks.
The market showed its continuing nervousness about soured loans among subprime lenders. H&R Block Inc. added to unease by announcing after the closing bell Tuesday that it would increase its losses for the third quarter because of a $29 million writedown at its mortgage arm.
The anxiety over mortgage lenders, particularly the subprime lenders that make loans to people with poor credit, pushed the Dow down by more than 240 points Tuesday, its second-biggest drop in nearly four years. The pullback resembled a 416-point drop in the Dow seen two weeks ago that began in part after a nearly 9 percent drop in stocks in Shanghai and amid concerns about subprime mortgages.
In morning trading, the Dow Jones industrial average fell 7.93, or 0.07 percent, to 12,068.03.
Broader stock indicators were little changed. The Standard & Poor's 500 index rose 0.82, or 0.06 percent, to 1,378.77, and the Nasdaq composite index fell 0.24, or 0.01 percent, to 2,350.33.
U.S. stocks were more stable in the early going than overseas markets were Wednesday. Japan's Nikkei stock average closed down 2.92 percent, while Hong Kong's Hang Sang index fell 2.57 percent and the sometimes volatile Shanghai Composite Index fell 1.97 percent. In afternoon trading, Britain's FTSE 100 fell 1.57 percent, Germany's DAX index fell 2.03 percent, and France's CAC-40 fell 1.85 percent.
Bonds were little changed; the yield on the benchmark 10-year Treasury note remained flat at 4.50 percent from late Tuesday, while gold prices fell.
The dollar, which was mixed against other major currencies, rose against the yen. Some observers have fingered the ascendent yen with contributing to the volatility seen in recent weeks on Wall Street. A rise in the yen against the dollar stirred concern of a reduction in the so-called yen carry trade, which occurs when investors use the yen to acquire higher-yielding assets elsewhere.
Light sweet crude was unchanged at $57.93 per barrel on the New York Mercantile Exchange.
Following Tuesday's sobering declines in stocks, some investors might have found reassurance about the well-being of the economy in General Motors Corp. report that it turned a profit for the fourth quarter, its first since the first quarter of 2006. GM, which rose 40 cents to $30.91, benefited from a big gain from the sale of about half its stake in its General Motors Acceptance Corp. financing arm.
But trouble at GMAC's Residential Capital LLC real-estate financing business added to investor concern Tuesday after ResCap said it has struggled with a slower pace of loan originations and a further erosion in its subprime business.
H&R Block, the nation's largest tax preparer, said it would delay filing its annual report and said the reduced value of its mortgage business pushed its quarterly loss higher. The stock fell $1.05, or 5.2 percent, to $19.
In economic news, the deficit in the broadest measure of foreign trade narrowed by 14.6 percent in the final quarter of 2006 to $195.8 billion, the smallest quarterly imbalance since the summer of 2005, helped by a lower foreign oil bill. For 2006, the Commerce Department said the current account deficit, which reflects not only trade in goods and services but also investment flows between countries, set a record for the fifth consecutive year.
The Labor Department said the prices of imported goods rose 0.2 percent in February when excluding oil prices. In January, import prices fell 0.9 percent.
Weighing in again with mortgage data, the Mortgage Bankers Association said Wednesday its weekly mortgage index, which measures mortgage loan application volume, rose 2.8 percent on a seasonally adjusted basis from the prior week. On Tuesday, the group's report that new foreclosures jumped to their highest-ever level in the fourth quarter of 2006 helped touch off the day's cavalcade of sell orders.
In other corporate news, Citigroup Inc. rose 10 cents to $48.85 after announcing plans to begin a tender offer for Nikko Cordial Corp. on Thursday after raising its offer for Japan's third-largest brokerage to quell shareholder opposition.
Lehman Brothers Holdings Inc., the fourth-largest U.S. investment house, credited robust trading and an expansion overseas with driving first-quarter profits. Lehman fell $3.52, or 4.9 percent, to $68.48 as it began a conference call with analysts.
The recent volatility in the U.S. markets, while perhaps normal, still drew concern from some investors who had grown accustomed to the calm conditions since U.S. stocks began their steep climb in July. Even before Wall Street's recent unease, volatility might have been expected to increase as the week neared the expiration of contracts for stock index futures, stock index options and stock options on Friday. The confluence of events, which Wall Street has dubbed triple witching, can bring volatility as investors try to square their options and futures orders.
Declining issues outnumbered advancers by about 5 to 4 on the New York Stock Exchange, where volume came to 247.9 million shares.
The Russell 2000 index of smaller companies fell 1.65, or 0.21 percent, to 767.47.
Published by Tim Paradis, AP Business Writer

Labels: C, GM, HRB, LEH