Weekend Reading

Good Sunday, and welcome to another edition of Weekend Reading. First a look back at the week that just finished, followed by a look forward to the week ahead, and finally a list of articles and papers worth reading.

One word describes the week that just finished: crummy. As a matter of fact, it was the worst first three trading days of the year on the Dow since 1932, during the Great Depression. The Dow fell 4.2%, the S&P 500 lost 4.5% and the Nasdaq Composite fell a whopping 6.4%.

A number of things came together to make last week as bad as it was. First, a weaker-than-expected U.S. employment report -- the worst since 2003 -- raised recessionary fears. Granted, recessionary worries have been with us for a while, but now they're at a high level. Many people think we're already in a recession and that the economy won't come out of it until the second half of the year.

Meanwhile, technology stocks took it on the chin last week. With growth stocks having outperformed value stocks, there had been a real shift in investor assets into technology, which is always a nervous place to be. It didn't take much to make those new growth-seeking investors skittish: An analyst at a major brokerage firm downgraded Intel(INTC Quote) (a growing favorite among many growth investors).

We likely will see considerable churning in the week ahead, but it won't take much to drive markets lower. Investors are nervous that a recession looms and that their favored sector -- technology/growth -- is going to be hurt much more than they thought. While news from the big Consumer Electronics Show in Las Vegas could help make them feel better, it won't be an easy ride for stocks next week.

It will be a fairly quiet week for earnings. There are, however, two reporting companies worth watching: KB Home(KBH Quote) on Tuesday, and Alcoa(AA Quote) on Wednesday. The former, in particular, will be heavily followed, especially the earnings conference call.

It also will be a fairly quiet week for economic news. There will be the weekly retail sales reports on Tuesday and the international trade report for November on Friday.

Finally, here are some articles and papers worth reading:

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• Barron's picks out-of-favor stocks, and pans industrial and materials sectors. (Barron's)
• Byron Wien's top 10 surprises for 2008. (BusinessWire)
• 130/30 hedge strategies are making life tougher for some managers. (The Economist)
• Skeptics abound about the XBRL financial data reporting standard. (CFO.com)
• Busted Imperium IPO lowers likelihood of alt-energy bubble. (VC Ratings)
• Bill Miller's Legg Mason Value Trust fund hopped on homebuilders and has trailed the S&P 500 for second consecutive year. (Boston Globe/Bloomberg)
• Interesting profile of NeuStar(NSR Quote), the litttle-known company that runs the North American phone numbering plan. (The New York Times)
• Data breaches and thefts are on the rise, and wireless networks are part of the problem. (washingtonpost.com/AP)
• New class-action suit charges Apple(AAPL Quote) with music monopoly (InfoWorld)
• This Week In Petroleum. (EIA)
• Who posted that $100 crude oil trade last week anyway? (New York Post)
• Despite oil being at $100, Venezuela's Hugo Chavez faces an industry slump. (Reuters)
• U.S. video game industry growth seen slowing. (Reuters)
• U.S. may avoid recession, but the prospects are dwindling. (Reuters)
• Some think worries about last week's unemployment report are overdone. (The New York Times)
• Fed ups auction amounts to aid banks. (AP)
• New study suggests lengthy U.S. home price decline. (Reuters)
• San Diego County is going from residential to commercial real estate bust. (San Diego Union-Tribune)
• Chinese sovereign wealth fund wants to hire Alan Greenspan. (Fortune)
• Are sovereign wealth funds smart, or just cash-stuffed? (Bloomberg)
• New year brings another false dawn for U.S. housing. (Bloomberg)
• Chinese telecom firm Huawei is big, getting bigger and focused on U.S. market. (washingtonpost.com)
• Why did the August 2007 hedge fund losses happen, and what do they say about the industry? (CFO.com)
• About 300 companies appearing at next week's big JPMorgan San Francisco biotech conference. (San Francisco Chronicle)
• Books: New book on Americans' love affair with their homes getting good press. (Boston Globe / Amazon)
• Books: New book on pre-currency America is getting positive comments. (The New York Times / Amazon
• Department stores are newly in vogue around the world. (Telegraph)
• Investors sticking with growth stocks, even in the current slowdown. (The New York Times)
• Digital video surveillance growth is set to drive big take-up in storage products. (Byte and Switch)
• Research: Good-looking people find it easier to get loans. (SSRN)
• Some cities are holding lenders accountable for blighted, abandoned homes. (BusinessWeek)
• Citadel hedge fund looks increasingly like it will go public. (BusinessWeek)
• Some sources for tracking news from this week's big Consumer Electronics Show in Las Vegas. (iGreed)

1 What would best describe your stance heading into the coming week of trading? Bullish Bearish Neutral 2 Which of these sectors do you think is set to move up in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities 3 Which of these sectors do you think is set to move down in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities View the results without voting