Market Minute: Fed to Announce Which Banks Can Raise Dividends, Buy Back Stock

The Dow eked out another gain yesterday, adding five points. That's its seventh straight record high, and ninth straight gain -- the longest winning streak since November of 1996. The S&P 500 edged up two points, as did the Nasdaq.

The KeyBank branch is seen in Orange Village, Ohio on Thursday, July 22, 2010. KeyCorp reported its first quarterly profit in two years Thursday, Thursday, Luy 22,2010, with fewer soured loans, more income from fees and better cost controls. (AP Photo/Amy Sancetta)
The KeyBank branch is seen in Orange Village, Ohio. KeyCorp is likely to be one of the regional banks that become a big beneficiary from the Federal Reserves announcement this afternoon on which banks will be eligible to raise their dividends and buy back stock. (Amy Sancetta, AP)
The Federal Reserve will announce this afternoon which banks will be eligible to raise their dividends and buy back stock. Some analysts say regional banks are likely to be the big beneficiaries. Evercore Partners says Keycorp, State Street and Northern Trust are the ones most likely to raise their payouts.

Samsung is expected to unveil its new Galaxy S-4 smartphone later today, and analysts say it could leapfrog past Apple's (AAPL) iPhone in some ways. The two companies continue to battle for supremacy in the smartphone market –- one of the factors that has been driving down Apple's stock. Apple has tumbled 39% from its all-time high back in September, and is now trading near its lowest level in more than a year.

Meanwhile, Blackberry (BBRY) shares soared late yesterday after the company said it received an order for one million of its new Z-10 smartphones. It did not identify the buyer.

Men's Warehouse (MW) posted weaker than expected quarterly results, but its stock is set to jump anyway. The men's retailer has hired an adviser to explore alternatives for its K-and-G stores.

On the women's side, Vera Bradley (VRA) turned in better than expected numbers, but its stock is set to drop on disappointing guidance for the current quarter.

Five homebuilders – D.R. Horton (DHI), Pulte (PHA), Beazer (BZH), Ryland (RYL) and Meritage (MTH) – were assigned 'buy' ratings by the brokerage firm Sterne Agee. But it began coverage of Toll Brothers with an 'underperform' rating.

And the supermarket chain Whole Foods (WFM) is planning to open a health resort near its Austin, Texas headquarters. USA Today reports the upscale resort will promote a healthier lifestyle.

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Market Minute: Fed to Announce Which Banks Can Raise Dividends, Buy Back Stock

(SPLS), down 2.4 percent
Big-box office supply store Staples has fallen prey to the same trends that have hit other big retailers: Internet competition makes it harder for companies to justify big investments in store locations. Recent mergers in the office-supply space could help Staples in the short-term, but it'll have to boost its own online selling to keep up with competitors in the long run.

(DF), down 7.3 percent
The agricultural sector has done well lately, but high crop prices mean expensive feed costs for dairy-producer Dean Foods. Moreover, with milk demand having steadily fallen over the past several decades, Dean faces demographic challenges in a declining industry, threatening its future growth prospects.

(PBCT), down 7.5 percent
This Connecticut-based savings and loan makes the list largely because of a delayed reaction to the financial crisis. Unlike big banks, People's United made it through the initial phase of the financial crisis intact. But in 2010 and 2011 it finally gave in to pressure that broadly hit the regional banking sector. The stock has rebounded lately but has a long way to go to get back to its former heights.

Photo: People's United Financial / Facebook

(BBY), down 10 percent
The big-box electronic retailer's woes are well-known, as the company has seen its massive stores become merely showrooms for shoppers to see products up close and in person before buying them more cheaply online. Recent discussions of a possible buyout have lifted shares, but investors are still sitting on long-term losses as Best Buy keeps struggling to find a path to stronger growth.

(EXC), down 10.2 percent
Electric utility Exelon is the biggest producer of nuclear power in the U.S., which traditionally gave it lower costs compared to more expensive fossil-fuel-burning rivals. But with natural gas prices having fallen so far, Exelon no longer has that competitive advantage. That has squeezed margins which forced the company to cut its dividend, leading many investors to flee the stock.

(HPQ), down 10.8 percent
Hewlett-Packard has suffered from declines in the PC industry, but a string of leadership changes also hampered the company from coming up with a consistent strategy for growth in the rapidly changing tech industry. Current CEO Meg Whitman has worked hard to reverse her predecessor's miscues. But despite some promising signs recently, the progress has been slower than most investors would like.

(SAI), down 24.1 percent
Defense-contractor SAIC has had to deal with the threat of budget cuts for years. Yet with its intelligence and technology systems, including cybersecurity-related products, SAIC would seem to have a cutting-edge advantage over more traditional military contractors. Still, with bigger competitors muscling in on SAIC's turf, SAIC now hopes that plans to split itself into two separate public companies will help it perform better than it has in recent years.

(PCS), down 29.5 percent
The revolution in smartphones and mobile technology has created many winners in the telecom space, but MetroPCS has largely missed out on the boom. With a substantial presence in low-cost prepaid phones, MetroPCS hasn't gotten to enjoy the popular releases that bigger rivals have used to power their profits. Even a possible merger with T-Mobile may not be enough to let MetroPCS assume a leadership role in the industry.

(APOL), down 74.4 percent
For-profit education companies have been under intense scrutiny from regulators who are concerned about the high loan-default rates for their students. With the potential for restrictions that would stop the flow of federal student-loan money into the industry, Apollo and many of its smaller peers have seen huge share-price declines, with negative publicity helping push enrollment figures down as well.

(FSLR), down 74.7 percent
The solar industry has seen a sea change lately, as governments around the world have cut back on heavy subsidies and forced companies to survive on their own to a much greater extent. First Solar's low-cost advantages have actually give it an edge on some harder-hit rivals, but the company needs to boost the efficiency of its products in order to compete better in the cutthroat market.

Even when markets are rising, some stocks fall. The key is to look for strength among the companies you invest in, so you can avoid money traps like these losing stocks.

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