msft

It wasn't all that long ago that Microsoft Corporation (NASDAQ: MSFT) eyed Yahoo, Inc. (NYSE: YHOO) with an eye towards acquisition. Yahoo fought it off, spending a great deal of money and lawyer's time, and filling any tech-oriented new outlets with headlines for quite a while.

Now the smell of acquisition is once more in the air thanks to Microsoft honcho Steve Ballmer saying a deal would "make sense." Yahoo is even cheaper than the $19/share level that first got Microsoft interested. In a shaky economy, giants like Microsoft can afford to go hunting for small companies to snap up.

Now this is so far just an off-hand statement (in appearance). Ballmer could just be testing the waters to see how Yahoo! and its shareholders react. So far today, the market reacted by bidding the share price of Yahoo up.

While many investors may have been stunned by last week's major sell offs, the start of this week shows that where some sold off and ran away from the market, others saw the opportunity to get a good deal on stocks forced lower than they otherwise might have been. As a result the market rebounded, the DJIA moving from the low 8,000s to the low 9,000s, a roughly 8.5% move upward today.

This won't be the last correction, the markets are vulnerable and in turmoil. However most investors should remember that is exactly in this sort of turmoil in which opportunity lies. Stocks that have been knocked down below their natural values can be snapped up.

What's your favorite company with good valuations that has been hit by this sell off? Sound off in the comments...

Americans are using less oil, 5.3% less than a year ago. That is having an impact on oil prices, when combined with the fact that post-hurricane production in the U.S. is coming back to pre-hurricane levels in the Gulf Coast. As a result, relief at the pump during a period where customers are seeing a lot of bad news about everything else.

From a high of roughly $147 a barrel, oil has slid down to just under $89, a price not seen since early last year. This has a direct effect on what you'll pay at the pump, which you may have already been noticing. Gas is down to a national average of $3.447 a gallon. Experts believe it may edge back down to the $3 a gallon area.

The reversal is striking enough that OPEC is having an emergency meeting to figure out how to handle the slide in prices and how to shore it back up, though so far their production cuts haven't halted the change.

The global slowdown is helping this slide, however when and if economies begin to stabilize, one should expect to see prices start a regular march upward once more.

In a sign that Americans are bracing themselves for hard times, or at least taking a break and holding their breath while they see what direction things go in, apparel chains reported September sales, which usually rise at this time of year, were not at all where stores expect them to be.

In a sign that customers are looking toward frugality, WalMart Stores, Inc. (NYSE: WMT) saw a small gain in sales, though not as much as analysts would have liked.

Look for this effect to hit other retail environments, not just apparel, if the market continues to be the top headline and spook customers.

Apple, Inc's (NASDAQ: AAPL) lineup of Macbooks hasn't been updated in quite a while. A refresh in the line has been speculated about for a long while, and now Apple has invited the media to an October 14th event in San Francisco, as our sister blog The Unofficial Apple Weblog points out.

Rumors online have flown about aluminum laptops coming out from Apple that look similar on the outside to the Macbook Air, the popular small form factor laptop. The Air, while expensive, proved to be a more popular form factor than critics expected during its launch. The second internet rumor is that the laptops will have an $800 price tag, a smart move for Apple as the financial crisis keeps people nervous. Offering a laptop with a price tag under the $1,000 magic point can't hurt.

It may not be the best environment for a new line of laptops, but bringing the price down is a solid first step for Apple in keeping its momentum going. And with its stock down to yearly lows due to the worries about consumer spending and economy, it'll be interested to see if this keeps Apple notebook sales going as strong as they have been.

[Disclaimer: I own Apple stock]

Usually, at the bottom of my posts I disclose that I own Apple Inc. (NASDAQ: AAPL) stock. Over the past couple years, it's been a nice fundamental stock with easy to read technical indicators that have allowed me to add to my retirement account.

But if you're using technicals to get in and out of a stock, you have to pay close attention to what is going on, and my attention was elsewhere during a recent project deadline. Behind my back, the stock dropped from the $170s to the $130s in the space of my busy single month.

My loss could well be your gain. Apple has leapt to a 10.6% market share in notebooks, and Piper Jaffray's Gene Munster expects Apple to show significant year-over-year sales gains with almost 3 million Macs and 11 million iPods. Recent customer surveys of people planning to buy a new computer have 34% interested in a Mac. But the recent general market, as well as fears about Google, Inc. (NASDAQ: GOOG)'s Android phone challenging the iPhone, have depressed the price. I've added to my portfolio at this price, as a result.

But don't take my word for it. Finance guru Jim Cramer also agrees that this recent drop in price makes Apple an attractive bargain:

Consumer confidence hit a five month high, according to a Reuters/University of Michigan survey. However, for those hoping for a recovery, that good news comes with a lot of negative.

General consumer spending dipped, probably in no small part to a dip in personal income of 0.7% in July, according to recent numbers. Also up, price increases that have pushed inflation to a 17-year high that has eroded consumer buying power. Both of these work to negate any impact consumer confidence might have.

Also adding weight to the market are worries and uncertainties surrounding the effect hurricane Gustav will have on oil production, ending a long run of lowering oil prices. Expect higher gas prices.

With all these worries on people's minds, here are today's unofficial closing bell levels:

DJIA: 11,543.96 -171.22 (-1.46%)
NASDAQ: 2,367.52 -44.12 (-1.83%)
S&P 500: 1,287.23 -13.45 (-1.03%)
10-Year Bond: 3.81% +0.03 (0.79%)

After a strong quarterly report, Apple, Inc. (NASDAQ: AAPL) took a dive into the low $150s, much to the surprise of many. It was largely attributed to the worry investors paying close attention to the quarterly call had about the health of Apple's CEO Steve Jobs. Jobs had been treated for a form of cancer in 2004, which he only updated the world about after he'd been successfully treated. This secrecy forced many to wonder if his recent change in physical appearance was related to a recurrence of the cancer. With posts and news stories wondering the same thing out loud, the solid quarterly report played second fiddle to people's fears about an Apple without it's iconic leader.

Although the company and man are intertwined, if Steve is really telling the truth, then Apple has a lot of positive news on the books. One great fear about Apple's profits is that the iPhone would cannibalize iPod sales in a large manner. This quarterly report showed iPod sales were up 12%!

Another reason for the drop in the price is that Apple has announced it will be throwing lots of developmental money at a new project of some sort. While that may depress the price, it does hint that Apple might well have another edgy new product being developed. Between the investment in research and Steve's health scare depressing the price, Apple investors may have a solid entry point for a long term investment play in the stock, and it stands a good chance of beginning a recovery as business as usual continues on.

Not too long ago Southwest Airlines Co. (NYSE: LUV) used fuel hedging to lock in a $2.19 average per gallon fuel price with its providers. Betting that prices were going to rise, they took a gamble and agreed to pay a set price for a large amount of fuel for their operating costs.

This isn't the first time an airline has done this. But if the cost of fuel had gone down, Southwest would have been sitting on an obligation to pay for fuel at a higher than market price. Fortunately for Southwest, the bet cashed in, and so did Southwest. The Airline company was able to buy fuel at a rate cheap enough to keep its costs lower than rival companies. Southwest reported this week that it increased revenue by 11%, earning $321 million, or 44 cents a share.

But Southwest's fuel hedging earning the company $511 million. When that sweet deal ends, Southwest will be facing fuel costs almost double what they've been paying over this last year. As a nod to that Southwest is slowing growth.

Despite the worries about the upcoming adjustments, Southwest has continued its canny ability to stay nimble and profitable. This is the company's 69th straight profitable quarter.

Another quarter of rising foreclosures has been observed.

Continental Airlines, Inc. (NYSE: CAL) is making cuts due to rising fuel costs:

In the latest BloggingStockCast, I talk about increasing sales of Apple, Inc. (NASDAQ: AAPL)'s computers in the retail space.

A new bit of research is out that shows CEOs are feeling the effects of the economy, much like everyone else...

Tax rebates are starting to arrive, and many retailers are looking for ways to get your money from you with enticing deals.