Weekend Linkfest

Despite free-falling energy prices and favorable economic news, markets could not string together much progress this week. The Dow Jones Industrial Average and the S&P 500 were flat for the week, while a string of earnings disappointments from big tech names weighed down the tech-heavy Nasdaq, which gave up 2.1%, to 2451.

The University of Michigan's consumer sentiment index jumped to its highest level in three years. Both PPI and CPI were confusing, and housing data was mixed at best. Oh, and Ben Bernanke said we need to get our collective acts together.

It's about that time...

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INVESTING & TRADING

• Getting Picky on Tech: Is Sector a Bargain or a Trap? "The tech sector remains plagued by tepid corporate spending. Goldman Sachs and Forrester Research, among others, have issued surveys recently showing that CIOs, the corporate gatekeepers of tech purchases, are feeling gloomy about their budgets this year -- they will likely reduce spending from 2006 levels. Forrester notes global information-technology spending will grow 5% this year, down from 8% in both 2005 and 2006, making it the lowest growth rate since 2003." (Also, IBM Shares Decline as Hardware Sales Add to Concerns.)

Cramer adds: "Tech's to be sold, not bought, right here. It can be traded. Not owned. Not until the dog days of August." (Video)

And Herb Greenberg weighs in on tech, too: How Expensing for Options Throws Analysts Off Course. (The Wall Street Journal)

• Margin Debt Up 22%. While that's pretty big, it's still below the 2000 peak, although not by much.

• The Return of the Day Trader: Although day trading activity doesn't resemble the frenzy of the late 1990s, it is heating up again as rising stock prices renew interest. (Los Angeles Times)

• Who Is Hurt By Oil's Fall? (WSJ) "Oil companies that have generated the most enthusiasm during the past two years, such as those based in the Canadian oil-sands region, like Suncor Energy Inc. and Western Oil Sands, could be at risk."

• Is Yahoo! an acquisition target? (Video)

• Defense Reloads: (WSJ) "Defense contractors have enjoyed surging profits in recent years as the government spent heavily to fight wars in Iraq and Afghanistan and combat terrorism in other parts of the world. Recently, some investors have worried that ballooning federal deficits could bring the flush times to an end. The latest Pentagon plans suggest that the long-expected spending plateau is still another year away."

• Market performance relative to "Earnings Season" over the past 17 quarters. It's quite surprising how much this matters.

• Earlier this week, we recommended two drug stocks as part of a defensive investment in an underloved sector. (Email me for the report.) This week in Barron's, Mike Santoli tips the sector, while Motley Fool picks Pfizer(PFE Quote) as The Best Drug Stock for 2007.

• Hussman: Overvalued, overbought, and overbullish.

• Companies are rushing to pay top dollar to put their names on new stadiums and arenas. Three deals in the New York area alone have been announced in the past few months with the sponsorship dollars totaling nearly $1 billion. And potentially the biggest deal, naming rights for the new shared home of New York's Giants and Jets football teams, is yet to come: A stadium name bubble?

• Chet Currier says Strange Things Happen in the Era of Small Returns.

• A Financial Times twofer:

The unease bubbling in today's brave new financial world: "I don't think there has ever been a time in history when such a large proportion of the riskiest credit assets have been owned by such financially weak institutions ... with very limited capacity to withstand adverse credit events and market downturns."

Should Atlas still shrug? The threat that lurks behind the growth of complex derivative and debt deals.

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ECONOMY

The Wall of worry continues to build:

• The Sordid Truth About Inflation: The Bank of England raised rates to 5.25% to cope with rising inflation, while inflation was reported on the decline in the U.S. The reality is that inflation is on the rise in both countries, but the U.S. CPI has been perverted.

• Euro displaces dollar in bond markets.

• Are Economic Gains Just Hot Air? The economy has benefited from warm weather. Energy prices have tumbled on reduced demand, ground-breaking on new homes increased in November and December. Fewer construction workers are losing their jobs. While some of the boost from the weather is real, much of it is economic activity that's just been borrowed from the spring months: Economy is stronger, but is it just the weather?

• Signs of Economic Resilience Seen and Q1 and 2007 Growth.

• I have no idea why this got so popular: Countries' GDP as U.S. States. It's just a cool little graphic, but it got picked up by everyone from DIgg to Reddit to who knows what.

• What Boosted Consumption on a Temporary Basis in Q4.

• David Leonhardt of The New York Times on What $1.2 Trillion Can Buy.

• Workers' Ire Mounts, Share of GDP Shrinks During a Profit Boom. Also: Upper Class: Why the Rich Are Heading Back to School. (free WSJ)

• Invented Silicon Valley Employment "Statistics."

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HOUSING

Housing remains the Achilles heel of the economy. The data and news are mixed to poor:

• Weak Forecasts Mount In Housing Industry. See also: Pulte Homes pre-announces, takes a huge charge for 2006 Q4.

• The high end of the market wasn't immune, as evidenced by the lackluster sales of the homes highlighted in the Wall Street Journal's "House of the Week." Given the free advertising, you would have thought that of the 46 houses featured between October 2005 and September 2006, more than 18 would have sold (14 closed, 4 in contract). Most moved at steep discounts -- an average of 16% below the asking price published in the WSJ. (free)

• Recent News About Housing. Score: 3 Good Ones Versus 19 Bad Ones.

• Foreclosure rates up big in December. See also: For foreclosures, Nevada No. 2 (after Colorado).

• Which naturally leads us to Mortgage-Trapped: Homeowners With New Exotic Loans Aren't Always Aware Of the Risk Involved.

• Condo prices reveal housing trends: One follower of San Francisco real estate advises to watch prices on the same building six or eight months after the first sales were made. With condos, you can't add floor space or make other big improvements. If you see a price change, it's appreciation -- or depreciation. See also Buyers Scarce, Many Condos Are for Rent.

• Sales of New and Existing Homes Will Continue Their Slide in 2007.

• Fixed-Mortgage Rates Expected Rise to 6.5%.

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FEDERAL RESERVE

Lots of Fed-speak this week, and commentary also:

• Fed Chair Ben Bernanke kicked up storm this week: ...