On Wednesday, big bird, US Airways (LCC) ascended to a 52-week high after announcing plans for an $8 billion hostile takeover of bigger-bird Deltaundefined. However, indications Friday that the object of US Air's affection is playing hard to get sent both stocks into a tailspin. Housing fits tightly in the same metaphor with new home starts nose-diving 15 percent, the lowest in 6 years, as reported by the Commerce Department this morning.
Also dropping today are commodities prices. Both crude oil and precious metals are cheaper,. But if you want to buy a piece of the place where they are traded, you're going to have to cough up a pretty penny. The IPO for the
New York Mercantile Exchange
came thundering out of the gate this morning running up to a high of $152 a share from its IPO price of $59. The New York Mercantile Exchange, Inc., is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals.
Meanwhile, the Dow struggles mightily to stay in the green and is up 12 points at the time of this writing. The S&P and NASDAQ are down 4, and 30 basis points, respectively. A basis point is 1/100 of 1 percent, which means the S&P is down 0.04%, and the NASDAQ is down 0.30%.
Positive economic news came from both the Producer Price Index and the Consumer Price Index. Both were lower than expected, indicating to market participants that the inflation boogeyman may be pinned down underneath the bed, sluggishly unable to go bump in the night. For some fun with Stock Market Game students, check out the
-- It's a great way to learn about inflation and the economy.
So once again, we have mixed news and investors feel like they're walking through a minefield in snowshoes. How to take the next step without getting blown up? Diversify.
Diversification helps investors mitigate risk by spreading their investments over different sectors of the economy. Stock Market Game teachers can login to the
and access a lesson plan on diversification. There are also lessons on mutual funds, risk tolerance, and a Stock Talk newsletter on IPOs in the publications section. All are fine accompaniments for students at this point in the competition.This week's stock idea? Everyone's gotta start somewhere. Research Assistant Larson Kusick from TheStreet.com is recommending
(AUY). He makes a credible argument and at this late point in the game, it could be a turn-around play for some down-and-out students, or it could be the cement shoes that will send them racing to the bottom. Either way, they can read Mr. Kusick's conclusions and then draw their own, which is what it's all about.
Have a happy and safe Thanksgiving.
This article was written by a staff member of The Stock Market Game.