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The Stock Market Game Week in Review: Sept. 10-14

A look at the mortgage crisis, Apple and McDonald's.

Despite all of the buzz regarding Britney Spears' less-than-stellar performance at MTV's Video Music Awards, the mortgage crisis continues to be the hot topic on Wall Street along with Apple (AAPL) - Get Report and McDonald's (MCD) - Get Report.

Mortgage Watch

With foreclosures and late payments soaring among homeowners, many lenders have gone out of business. Nervous financial institutions have tightened credit standards, making it harder for even creditworthy borrowers to get financing.

Many feel this has increased the chances the economy is headed into a recession. But the recent news from

Countrywide Financial Corp.

(CFC)

has others feeling a bit more optimistic. On Sept. 13, Countrywide, the largest U.S. mortgage lender, reported it has lined up $12 billion in financing to help weather a housing slowdown. The news helped stock prices as shares rose 13.9%, their biggest one-day gain since May 2000.

"It appears that this credit crunch may not be as bad as some people thought," said Charles Norton, principal and portfolio manager at GNI Capital, crediting the Countrywide news with lifting overall investor sentiment.

Apple

Apple once again topped the tech news. Even though it recently released a new iPod Nano with a bright new screen and even slimmer shape, the main focus has been on the price slashing of the iPhone.

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In June, the iPhone became Apple's most-hyped product ever, with people camping outside of stores to be the first to buy the coveted devices. Yet within only two months of its release, Apple announced it was cutting the price of the iPhone from $599 to $399. Was it due to sagging sales? Not quite.

On Sept. 10, the company announced it has sold its millionth iPhone after 74 days on the market. Looks like it is gearing up for the holiday rush: "It took almost two years to achieve this milestone with iPod. We can't wait to get this revolutionary product into the hands of even more customers this holiday season," said Steve Jobs, Apple's co-founder and CEO.

McDonald's

Your students may be also interested in McDonald's recent news. The fast-food chain rose to an all-time high on Sept. 12 after announcing that it is raising its

dividend and the cash it expects to return to

shareholders.

The company will increase it dividend by 50% as part of a plan to return up to $17 billion to shareholders through 2009, sending its shares up more than 2%. McDonald's yearly dividend is now more than six times what it was in 2002, the year before the company launched an aggressive turnaround that included halting rapid expansion to focus on improving existing locations with new menu items, extended hours and cashless payments.

For those new to The Stock Market Game this year, the recent Apple and McDonald's news is a great way to encourage your students to "buy what you know." More-sophisticated investing strategies can come later. To further assist with your implementation of the SMG program, we've recently added an Advisor's Companion to the Teacher Support Center! The Companion is divided into four sections and is a great desk reference for both new and returning SMG teachers.

To access it, log on to the

Teacher Support Center and go to Publications, which is part of the In the Classroom section. You can locate the Companion by selecting "Show all publications by name."

This article was written by a staff member of The Stock Market Game.