Wall Street got a much needed boost on Tuesday, bringing the Dow Jones industrials nearly 320 points higher. The change was welcome by investors and consumers alike because the rally was sparked after reassuring news from Goldman Sachs Group Inc. quelled some of the market’s worst fears about the credit crisis and the economy. Wal-Mart Stores Inc. reported third-quarter profits which surpassed projections and suggested that consumer spending might be stronger than anticipated for this holiday shopping season. The results also showed that heavy discounting during the period did not hurt margins, which the company said bodes well for their fourth quarter earnings potential. Although the news from Wal-Mart is encouranging, it is to be taken with a grain of salt due to the fact that Wal-Mart, the world’s largest retailer, and the biggest discounter of consumer goods would have a tendency to see volume spending during times of financial uncertainty. As an indicator of this consumer trend to save money by shopping at Wal-Mart when pennies are being pinched, a quick glance at higher end retaliers such as Macy’s shows that consumers are looking for bargins, not luxury items.

Oil prices once again played a part in today’s volatile movement in the market with a plunge in the price of oil giving investors further incentive to buy. A sharp decline in energy prices also encouraged Wall Street into bullish territory. Oil prices plummeted after the International Energy Agency reduced its expectations for demand in the fourth quarter and next year and said crude supplies are growing. Light, sweet crude for December delivery fell $3.45 to settle at $91.17 a barrel on the New York Mercantile Exchange.

Today’s patterns fit a typical “Comeback Tuesday” effect and more likely than not, Wednesday will follow suit but with smaller, sheepish gains leading into Thursday’s levelling off and the market staying flat across the board. If the pattern holds, Friday will see a downturn once again because the current US Markets are on a volatile ride compared to their counterparts around the world.

Overseas, Japan’s Nikkei stock average fell 0.46 percent and Hong Kong’s Hang Seng index rose 0.50 percent. In Europe, Britain’s FTSE 100 rose 0.39 percent, Germany’s DAX index fell 0.38 percent, while France’s CAC-40 added 0.06 percent.

When you compare the other major world markets daily percentage gains and losses to the +2.46% gain in the Dow Jones industrials today and the -2% losses seen in the previous week, it seems the US markets are extremely temperamental and the lack of stability does not appeal to the average investor.

Wall Street plunged today as investors found themselves between a proverbial rock and a hard place. The rock is an end to interest rate cutsby the Fed and the hard place is a slowing economy that is teetering on the border of a full blown recession. As if it’s any suprise, that after the last week’s events in regards to the prices of both oil and gold heading near record highs, that the US stock market would be due for significant losses as seen in todays trading session. The cause and effect has seen many investors pulling out of the US markets and selling off positions in an overall flurry that has the Dow Jones down by over 300 points or 2% overall. The losses rapidly cut any gains made in Wednesday’s rally which saw the Dow up 137 points over the previous close.

The Fed, which cut interest rates a quarter point, said in a statement that inflation remained a concern, and oil’s rise to yet another record high raised the possibility not only that the Fed might stop slashing rates, but that it might even consider raising them if inflation rates accelerate.

“Wall Street is in love with the idea of a rate cut, and realized that the Fed said inflation is still a concern that lowered the chances of a cut in December,” said Ryan Detrick, a senior technical strategist with Schaeffer’s Investment Research. “We’re now feeling the pain now that investors have slept on it, and figured out what they said.”

Today oil has reached yet another high of $96 per barrel and consumers can expect the price increases to hit them at the gas pump in the near future. Quite possibly consumers could be seeing the predicted $4 per gallon prices sooner than was anticipated. Rising oil prices are led by world concerns of political conditions in the Middle East and by China’s rising dependency on oil.

Chief Investment Officer at RegentAtlantic Capital, Christopher Cordaro, stated “Wall Street remains anxious about the possibility of recession.” He also believes the market is barren of enough positive news “to have any type of sustained rally.”

  With all the talk about Google Inc’s stock pushing upwards of the $600 mark, and no split in sight, there’s been scores of people asking the inevitable question, “Is Google the Highest Priced Stock in the US”? While Google is definitely up there in terms of price (it currently ranks #9 in the US markets) there are several stocks that far exceed Google in price per share. Of course, the eternal sage of investment philosophy, Warren Buffett (pictured at the left) tops the list with Berkshire Hathaway, Inc. but do Google co-founders Larry Page and Sergey Brin, their CEO Eric Schmidt and CFO George Reyes intend to topple Warren from his post with their technological marvel ? Here’s a roll call of the 10 most costly investments available through the US markets, their exchange, basic details, website address and their current price as of 10/20/2007.

#1 Berkshire Hathaway Inc. (NYSE:BRK-A) $127,100 @ share - Berkshire Hathaway, Inc. and it’s subsidiaries primarily engage in the insurance and reinsurance of property and casualty risks business.
http://www.berkshirehathaway.com/

#2 Mechanics Bank (OTC BB:MCHB.OB) $19,300 @ share - The Mechanics Bank and its subsidiaries provide community banking products and services to individuals and businesses in California.
http://www.mechbank.com/

#3 BERKSHIRE HATH HLD B (NYSE:BRK-B) $4324 @ share - A holding company formed by Berkshire Hathaway, whereas Warren Buffett is the major holder of BRK-A, The Gates (Bill and Melinda) Foundation is the major shareholder in BRK-B.
http://www.berkshirehathaway.com/

#4 Sunwest Bank (OTC BB:SWBC.OB) $2455 @ share - Sunwest Bank provides various commercial banking products and services to small and medium sized businesses and professionals in southern California.
http://www.sunwestbank.com/

#5 First National Bank Alaska (OTC BB:FBAK.OB) $2050 @ share - First National Bank Alaska operates as a commercial bank in Alaska. It engages in generating deposits and originating loans.
http://www.fnbalaska.com/

#6 Seaboard Corp. (AMEX:SEB) $1743 @ share - Seaboard Corporation operates in the food processing and ocean transportation industries in the United States and internationally.
http://www.seaboardcorp.com/

#7 Washington Post Co. (NYSE:WPO) $790 @ share - The Washington Post Company, together with its subsidiaries, operates as a diversified media and education company in the United States and internationally.
http://www.washpostco.com/

#8 First Citizens Bancorp., Inc. (OTC BB:FCBN.OB) $666 @ share - First Citizens Bancorporation, Inc. operates as the holding company for First Citizens Bank and Trust Company, Inc. and The Exchange Bank of South Carolina, Inc., which provides commercial and retail banking services.
http://www.fcbsc.com/

#9 Google Inc. (NasdaqGS:GOOG) $644 @ share - Google, Inc. provides targeted advertising and Internet search solutions worldwide. It offers intranet solutions via an enterprise search appliance.
http://www.google.com/

#10 CME Group, Inc. (NYSE:CME) $613 @ share - CME Group, Inc. operates as a diverse financial exchange. The company brings together buyers and sellers on the CME Globex electronic trading platform and on its trading floors.
http://www.cme.com/

There you have it, the 10 Highest Priced Stocks in the US Markets. Over the next few weeks, we’ll be dissecting these entities and analyzing the reason why these companies have such a enormous valuation. Obviously the banking and financial sectors are market leaders with only Google Inc. representative of the technology sector in this list. While most or all of these stocks are out of the reach of ordinary investors, one can only learn from the biggest and take watchful eye of the emergence of new entities in these lofty arenas hoping to catch onto the next Berkshire Hathaway or Google.

If you would like to discuss this article, please feel free to visit the forum thread created for it here

* Data in this article compiled from Yahoo! Finance

It was 20 years ago today that the financial markets experienced Black Monday and by no means is this a call for celebration amongst the brokers and traders on the street. Black Monday is the name given to Monday, October 19th 1987, because on that day the Dow Jones Industrial Average (DJIA) dropped 508 points to 1739 which was an overall 22.6% loss. Similar enormous single day drops occurred across markets around the world. By the end of October 1987, the stock markets in Hong Kong had fallen by 45.8%, in Australia by 41.8%, in Spain by 31%, in the United Kingdom by 26.4%, in the United States by 22.68%, and in Canada by 22.5%. The 1987 crash has often been labeled as black swan event because there is an unprecedented degree of mystery associated with the mass panic leading to the sell-off. Whereas the markets expereiencd similar drops preceeding the outbreak of World War I and on the first day of trading following the terrorist attacks on September 11, 2001, no specific global event was seen to have triggered the imbalances and disruption witnessed on October 19th 1987. Commonly attributed factors to the 1987 crash were the rise to prevelance of computer-aided program trading, market overvaluation, financial illiquidity, and overall market psychology that was cognizant of an impending collapse. Many economists theorized the speculative boom and overvaluation leading up to the crash was caused by program trading (which is a computerized form of arbitrage trading), while others argued that the crash was merely a return to true valuation.

At time of writing, the Dow is currently down over 360 points (2.64%), however the markets have been on a rush skyward again, partially due to market overvaluation. The economic indicators are not aligning with the current prices on the street and it’s only logical that the market will see this sort of volatility as a stabalizing factor. Oil futures fell Friday, retreating from an earlier new record above $90, and many investors sold out to lock in profits which would definitely have an impact on the markets downward movement seen today. Other factors attributed to today’s losses include credit concerns, lackluster corporate earnings and an unstable housing market.

So, what is the average investor to do in situations such as the present? To begin with, if you have followed an investment plan and allocated a majority percentage of your portfolio to long term, blue chips, a smaller percentage to emerging and potentially volatile stocks and the smallest to highly volatile, your best bet is to hold your positions at the moment. Unless a company you are holding stock in has really been impacted by earnings reports or other indicators, now is the time to play it safe and hold until the market rebounds in the near future. There’s no doubt the losses today will be gained back within the next few weeks or month, so as the old saying goes, “Buy low and sell high”. Now is a good time to add some of those blue chips to your portfolio.

The New Google Dance

Many developers, webmasters and SEO’s are quite familiar with the term “Google Dance” which generally refers to the search engine giant shuffling it’s results usually in combination with it’s pagerank algorithm being updated. While there hasn’t been a visible toolbar pagerank update in over four months and many experts are wondering if Google has planned to remove the popular rating system, a second “Google Dance” of a different nature has had another group of experts shuffling their feet to the backbeat of Google’s drums. The music that’s driving the new “Google Dance” is the throbbing sound of Google’s soaring stock prices. Some of those dancing in the streets put the stock north of the $800 mark. This implies an upturn of more than 20% for a stock that has already surged by 50% in the past 12 months. Realistic or not, Wall Street will take it’s profits any it can muster them and in terms of a bear or bull market following Google’s every move, there is no bear, there’s a lot of bull and an ocean full of sharks waiting to take a bite out of the already over inflated values.

The Song Remains the Same - Adsense

After seeing its stock rise above $600 per share less than two short two weeks ago, Google has exceeded forecasts by earning a profit of $1.07 billion in the third quarter of 2007, a 46% increase over the $733.3 million it earned during the same period in 2006. Google Inc. reported stronger than expected profits, with sales rising 57% to $4.23 billion. The news from Google was greeted with a number of analyst upgrades and has seen the single share price of Google stock rising to a record $650. Cheered by the earnings results, at least 16 analysts raised their price targets on Google. The changes moved Street median target price from $657.50 to $722.50 with the highest of brokers expectations coming in at $850 per share. While all this commotion and speculation by the analysts is great for those who can afford to purchase significant amounts of Google, the average long term “bear” investors are finding the stock a little to risky for their tastes. Among chief concerns is the fact 99% of Google’s earnings are derived from their Adsense advertising product. Those closely watching the webmaster community are less likely to jump on the bandwagon because word in those circles is that Google stands to lose ground in the contextual advertising business to new upstarts that offer greater compensation for webmasters. While Google has managed to hold onto their title as internet advertising kings, webmasters and publishers everywhere are looking for alternatives due to Google’s lack of support, agressive policies and general tactics used to capture the market that are definitely crossing the “do no evil” line.

Shake it Up - Where’s the Split?

While the recent earnings report from Google has encouraged many analysts to steadily bump targets higher, the meteoric stock surge has also spurred many investors to call for a split, and at least one notable analyst, Mark May of Needham & Co. has released a note to clients Tuesday advising that Google Inc. undertake a stock split in order to make its shares more accessible to small investors. May also wrote, roughly 84% of Google’s outstanding shares are owned by institutions, whereas comparable companies have an average institutional ownership of only 67%.

While the price of Google shares are keeping it out of the hands of small investors, the big money crowd is delighted to have Google stay right where it is as far as a split is concerned. It doesn’t take a math genius to figure out that any institutions and large investors who picked up Google shares at $500 each less than a month ago have earned a cool $150 per share over that period of time. Anybody with the power to have grabbed 1000 shares for a half a million dollars has walked away with $150k profit in under a month’s time, that’s if they’ve bothered to sell their shares as of yet. I’d suspect many who have jumped on the dancefloor are still dancing to the beat.

The recent year has seen the Dow Index rise and fall more often then ever before. The volatility of the current US markets has “Bull Investors” licking their chops while “Bear Investors” are saying their prayers awaiting a cessation in the volatility and a return to stability allowing for planning for the long term. The rise today to the 14K mark on the Dow Jones is merely an indicator to hedge your bets against the index and play options on the “blue chips” to all faster than a speeding bullet

Economic factors contributing to the rapid ascent of today’s market fluctuations are rooted in imaginary, marginal substantial idicators that have no base in relation to the real truth triggering the rise in the indexes, in a sense, we’re in the midst of a purely “Bull Market”. Add one word to the mix, “shit” and most experienced traders realize it’s not a “bull” market, it’s a “bullshit” market.

The broker/dealers live and die by volume trading, leading the sheep into futile pastures with false hope of “greener” pastures while there is no substantial evidence to back up today’s gains. So, how does a smart trader view today’s gains ? Knowing well enough the DOW will sink right back down to the 13K level within the next few weeks. Playing options on particular fast rising stocks to sink back to their realistic level seems to be the best bet. Just watch the biggest gainers for this week and play your cards *against* them, because next week they will sink right back to a level where they belong.