(REUTERS) — Brent futures slipped below $109 on Thursday, hitting a fresh four-month low, as investors avoided riskier assets due to the deepening turmoil in Greece and fears of contagion spreading to other stressed euro zone economies.

Nat Gas rises, other raw Commodities decline

Crude Oil saw volatility in today’s pit trade as it continued its decline for a 4th consecutive session Wednesday.

By Eric Bleeker | More Articles
May 16, 2012 |

At The Motley Fool, we poke plenty of fun at Wall Street analysts and their endless cycle of upgrades, downgrades, and “initiating coverage at neutral.” Today, we’ll show you whether those bigwigs actually know what they’re talking about. To help, we’ve enlisted Motley Fool CAPS to track the long-term performance of Wall Street’s best and worst.

Laugh at the pain
If the news late last and early this week was all JPMorgan Chase (NYSE: JPM  ) , all the time, then the latter part of this week appears to be seeing a shift in focus away from banks (and their $2 billion blunders) and toward a more predictable business: Retail.

This morning, investors in Dick’s Sporting Goods (NYSE: DKS  ) were treated to heightened expectations, as analysts at Needham & Co. raised their target price on the stock by 13.5%, to $59 a share (making for a pricey 26 P/E on a company that earned just $2.25 over the past year).

A discount on Groupon?
Yesterday saw a surge in the value of shares of electronic couponier Groupon (Nasdaq: GRPN  ) , as the company came this close to actually booking a profit. Analysts at Citigroup and Sterne Agee moved quickly to upgrade Groupon on the news. Admittedly, some investors will question their suggestion that we buy a company that’s lost more than $180 million over the past year and that, when all was said and done, still did fail to turn a profit last quarter as well.

I’m skeptical, too — but less so than I’ve been in the past. Whatever the GAAP numbers might say, the fact remains that Groupon generated more than $70 or so million in free cash last quarter, a 10-fold increase over their Q1 2011 performance. At an enterprise value-to-free cash flow ratio of less than 17 today, and a projected growth rate of close to 29% for the next five years, I honestly can’t say Groupon is overvalued anymore. At barely half the price it cost on IPO Day, Groupon may finally have become a steal of a deal.

Amazon’s all washed up
Not so with the other big retail stock that’s garnering headlines this week, however. At the same time as Sterne and Citi were starting to key in on the value at Groupon, a second pair of analysts decided to pull a Henry Blodget and make improbably optimistic predictions about the future of Amazon.com (Nasdaq: AMZN  ) .

First up, Credit Suisse upgraded the stock to “buy” on the theory that rising costs of operation are not the threat to Amazon that everyone thinks they are. Rather, they’re indicative of “increased activity delivering orders for third parties.” CS thinks these costs will moderate as all the new warehouses Amazon has been building “mature,” leading to “gross margin upside” and “an extended run” in the stock.

How far will Amazon run? CS argues for a $270 price target on the stock, but Topeka Capital quickly did CS one better, repeating Henry Blodget’s famed number: “$400.” That’s a good $100 north of the second-best price target outstanding today (from Goldman Sachs).

It’s also dead wrong.

Valuation matters
Listen, Fools. I’ve got nothing against Amazon. To the contrary, it’s probably my favorite retail company out there — as a business. But as a stock, Amazon is already woefully overpriced at 187 times earnings, and Topeka’s assertion of a $400 value on the stock — 330 times earnings — just makes matters worse.

I mean, is Amazon a superior business, top dog in e-commerce, and a lightning-fast grower? Yes, yes, and yes. Analysts on average — those who have more realistic expectations for the stock, at least — estimate that over the next five years, Amazon will grow its profits at close to 30% per year. But even when viewed in the most charitable light, that’s way too much to pay, even for a 30% grower.

Meanwhile, the company faces an increasing risk of losing momentum as more and more states slap sales taxes on Amazon’s business.

As for Amazon’s own price, it doesn’t factor in this risk at all. Topeka’s suggestion that investors should buy it in expectation of a near-double compounds that error and is setting investors up for a fall of epic proportions. Rather than chase Amazon up the mountain and over the cliff, investors would be better advised to stick to more reasonably priced stocks, with moats less likely to evaporate overnight. (Here are a few ideas for your perusal.)

LITTLE ROCK, Ark. –  A newlywed was being held on a murder charge Wednesday after his pregnant wife staggered into a western Arkansas police station with a stab wound to her chest and collapsed.

Emergency responders rushed Celestia Duffin, who was nearly seven months pregnant, to a local hospital where doctors delivered her baby, though both she and her son died, Fort Smith police spokesman Sgt. Daniel Grubbs said.

Duffin ran to the police station from a nearby traffic accident Tuesday where officers found her husband, James Herring. The couple married a week ago Wednesday, according to court records, but Herring told investigators they were already talking about divorce, Grubbs said.

After talking to investigators, Herring was arrested on suspicion of first-degree murder and attempted murder. Those charges could change because the baby died after Herring was booked into jail, Grubbs said.

Formal charges are expected later this week.

Herring, 34, was being held without bond in Sebastian County, near the Oklahoma state border. He didn’t have an attorney listed in jail records and a message left at a phone number listed for him wasn’t returned.

A prosecutor didn’t return phone calls either.

Authorities believe that Duffin was driving with her husband when Herring stabbed her and caused her to crash. The 32-year-old woman managed to run to the nearby police station, where she asked for help before collapsing and losing consciousness.

About the same time, someone called police about the accident and found Herring, who “appeared to be in a state of shock,” Grubbs said in a statement. Herring wasn’t injured and no one else was in the car, Grubbs said.

At the hospital, doctors delivered Duffin’s son, but he died before hospital staff could fly him to Little Rock for care.

A man who answered a phone number listed for a relative of Duffin’s said her family wasn’t ready to talk.

As the health of the global economy, in lightning speed, turns from nasty to gloomier, even big spenders stop and pause to think if it ought to continue and pursue valiantly plans of improvement and expansion.

MARKET CLOSE
(4.30pm AEST)

The Australian sharemarket ended a little lower today, despite a positive start to the session. The ASX200 Index (XJO) fell 0.2 pct or 8.1 pts to 4157.4. Early in the session, investors seemed encouraged by news that the Japanese economy grew at a faster than expected pace last quarter. Japan is Australia’s second largest trading partner and accounts for around 12.3 pct of all goods and services exported overseas.

LONDON –  U.K. insurer Aviva PLC (AV.LN) Thursday said it will conduct a strategic review of all its businesses and strengthen its capital base, in what may lead to the company’s most important overhaul since 2007.

The statement comes after the dramatic departure last week of Chief Executive Andrew Moss, who left after shareholders rejected the company’s remuneration to its top executives. Shareholders have also been angry over the 60% drop in the share price since Moss became CEO in 2007.

Aviva’s strategic review also comes amid speculation that Executive Deputy Chairman John McFarlane, who took over Moss’s responsibilities until a new CEO is appointed, will be looking at a possible sale of Aviva’s U.S. business or even the break-up of its so-called “composite” model of selling both life and general insurance.

In a statement, McFarlane gave his four top priorities:

*”Firstly, a strategic review of all our businesses to ensure we are focused on the right segments; that we put in place plans to advance the performance and position of our businesses strategically, and exit sensibly those that are not part of our future,” he said.

“These will be reviewed by me and subsequently the board in June, and we will provide an update to you in July.”

*”Secondly, to build the capital base and improve the balance sheet strength of the group,” he said.

*”Thirdly, a profit and value improvement program involving the dynamic reallocation of capital across our businesses, identifying sources of segmental revenue growth, and improvement in our operating margins and return on capital.”

*”Finally a continuous advancement in the foundation of the group and our position with all stakeholders and a frank and open communication with shareholders,” McFarlane said.

McFarlane said the search for a new CEO has begun. “We expect this will take the remainder of this year, as we need to appoint the best person in the world available to us,” he said.

Aviva also said its first-quarter total long-term savings sales was at GBP7.47 billion, down 5% from GBP7.84 billion a year earlier.

Net written premiums for its general insurance business were GBP2.236 billion, slightly down from a GBP2.242 billion year earlier. General insurance combined operating ratio was 96%, better than the 97% posted last year.

A combined ratio is a measure of claims costs compared with premiums. A figure below 100% indicates an underwriting profit, and a lower number indicates higher profitability.

Aviva’s capital surplus was at GBP3.2 billion, up from GBP2.2 billion at end-December but down from GBP3.3 billion year earlier.

Aviva shares have fallen 35% from a year ago. On Wednesday, the shares closed at 281 pence, giving the company a market capitalization of GBP8.2 billion.

Copyright © 2012 Dow Jones Newswires

Talking Points

• Crude Oil, Copper Have Scope to Recover as Greece Fears Digest
• Gold and Silver May Rise as US Dollar Retraces Recent Advance

Commodity prices are on the upswing in early European trade, with markets beginning to show cautious signs of recovering risk appetite. A corrective bounce seems reasonable. The prospect of Greece exiting the Eurozone – the catalyst behind the latest rout across the spectrum of risky assets – appears to have run out of shocking power for the time being as traders wait for a repeat of the general election on June 15 to get their cues on the situation. In the meantime, the negative news-flow already out there has likely entered prices already, encouraging a period of profit-taking.

S&P 500 stock index futures are pointing firmly higher ahead of the opening bell on Wall Street, hinting sentiment-geared crude oil and copper prices are likely to continue to recover while gold and silver capitalize on easing safe-haven demand for the US Dollar to stage a pull-up. The US economic docket may help drive sentiment higher. Initial and continuing Jobless Claims are expected to print lower, with the former hitting the lowest in six weeks at 365K while the latter sets another four-year low at 3225K. Separately, the Philadelphia Fed business confidence gauge is forecast to rebound in May after hitting a three-month low in April. Finally, the Leading Indicators composite is seen rising 0.1 percent in April, marking the seventh-consecutive increase and hitting the highest level since June 2008.

WTI Crude Oil (NY Close): $92.81 // -1.17 // -1.24%

Prices put in a Spinning Top candlestick above support at 92.51, the December 16 low, hinting a bounce may be ahead. Initial resistance lines up at 95.41, the February 2 session low. Alternatively, renewed selling through support exposes 90.49.

Daily Chart – Created Using FXCM Marketscope 2.0

Spot Gold (NY Close): $1539.57 // -4.64 // -0.30%

Prices put in a Spinning Top candlestick above support in the 1532.45-1522.50 area, marked by the September 26 and December 29 spike lows, hinting a bounce may be ahead. Initial resistance lines up at 1561.03, the 23.6% Fibonacci retracement. Alternatively, a push through support exposes the 1500/oz figure.

Daily Chart – Created Using FXCM Marketscope 2.0

Spot Silver (NY Close): $27.22 // -0.51 // -1.84%

Prices are recovering from support at 27.06 marked by the December 28 session close, with a recovery seeing initial resistance in the 28.54-70 area marked by a former support level and the underside of a previously broken falling channel set from early March. Alternatively, a push through support exposes the 26.05-15 region marked by the September 26 and December 29 spike lows.

Daily Chart – Created Using FXCM Marketscope 2.0

COMEX E-Mini Copper (NY Close): $3.478 // -0.040 // -1.14%

Prices are mounting a shallow recovery from support at 3.459, the 50% Fibonacci retracement, with buyers seeing initial resistance at 3.584 marked by the 38.2% Fib level. Alternatively, a reversal through support exposes the 61.8% retracement at 3.334.

Daily Chart – Created Using FXCM Marketscope 2.0

— Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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COFFEE Futures closed lower on Wednesday and the lowrange close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible nearterm. If it extends the decline off January’s high, weekly support crossing is the next downside target. Closes above the reaction high crossing are needed to confirm that a shortterm low has been posted.