Companies Spending Cash on Investors, Not Workers

Companies flush with cash remain reluctant to hire or make capital purchases, choosing to reward investors rather than expand their businesses.

Recent economic data exemplify the trend: Private payrolls grew by just 135,000 during May, according to ADP, while employment components both for the Institute of Supply Management's manufacturing and nonmanufacturing indexes show a flat jobs outlook.

The grim hiring prospects come as nonfinancial firms hold nearly $1.8 trillion in cash on their balance sheets. Rather than look to expand, though, they've chosen to participate in aggressive share buybacks and dividend increases to reward investors.

According to TrimTabs, companies have spent $290.7 billion this year on buybacks, which are aimed at decreasing the amount of available shares—or float—thus driving up stock prices. That effort, at least, has been a success. Read more >>

Silver Gets Slammed

The metal fell victim to heavy selling on Monday, dragging gold down with it, on U.S. dollar strength and as investors turned more cautious on precious metals as an alternate investment, said experts.

"We feel silver weakness has been a liquidation trade as investors grow increasingly wary of precious metals and traders are forced to close positions to meet margin calls elsewhere," said Stan Shamu, strategist at trading firm IG Markets.

Silver slumped over 4 percent on Monday to $21.30 an ounce, leading gold down lower by 1 percent to $1,344 an ounce. At one point silver hit a low of $20.30, down 8.8 percent from the start of trade on Monday.

Shamu is not ruling out further downside for the precious metal, noting that he sees support at $20, a key psychological barrier for investors.

Warren Gilman, chairman & CEO of investment firm CEF Holdings, agrees that silver could face further downside pressure, even below $20.

"When we have short-term volatile trends, silver acts like gold, only it's more volatile, so it's not a surprise to see it come off," he said.

According to a Citi report, if silver makes a rebound back towards the $27-28 level it will present renewed selling opportunities. Read more >>

'Run for the Hills' Now, I'm Doing It: Jim Rogers

The EU/IMF raiding bank accounts in Cyprus to bail out the country's financial system sets a dangerous precedent and investors should "run for the hills" said investor Jim Rogers, chairman of Rogers Holdings, on "Squawk on the Street" Thursday.

Rogers said that with Cyprus, politicians are saying that this is a special case and urging people not to worry, but that is exactly why investors should be concerned.

"What more do you need to know? Please, you better hurry, you better run for the hills. I'm doing it anyway," Rogers said. "I want to make sure that I don't get trapped. Think of all the poor souls that just thought they had a simple bank account. Now they find out that they are making a 'contribution' to the stability of Cyprus. The gall of these politicians."

"If you're going to listen to government, you're going to go bankrupt very quickly," he added. Read more >>

Stock exodus continues as investors yank $5.1 billion out

The stock market keeps going up, and investors keep cashing out. Mutual fund investors pulled $5.1 billion out of U.S. stock mutual funds for the week ended Sept. 26. The prior week, investors removed $4.8 billion from these funds, according to data from the Investment Company Institute.

The exodus from the stock market has picked up speed since the Federal Reserve announced another round of quantitative easing, or QE3. By buying more bonds, the Federal Reserve is hoping to push investors into riskier investments like stocks. This has succeeded on one front by boosting stock prices, but investors continue to flee the stock market.

All three major stock indexes have seen double-digit growth this year, and the S&P 500 (SPX) has gained 16%. The total 2012 outflow from U.S. mutual funds is roughly $93 billion. By comparison, those funds lost around $67 billion during the first nine months of 2010, and $83 billion during the first nine months of 2011. Read more >>

Investors pull another $2.7 billion out of stocks

The flight out of U.S. stocks continued last week, with investors yanking $2.7 billion of domestic stock mutual funds.

The retreat from the U.S. stock market continued last week, as investors refrained from making any big bets amid the market's summer doldrums.

Another $2.7 billion was pulled from U.S. stock market mutual funds during the week ended Aug. 15, according to the Investment Company Institute, bringing the 2012 outflow total to more than $69 billion.  By comparison, those funds lost in the neighborhood of $40 billion during the first seven months of 2010 and 2011.

While stock mutual funds have been bleeding money, investors have shown a voracious appetite for bonds, which are considered safe haven investments. In fact, bond funds raked in $7.2 billion last week, the most since early April, according to ICI data. Read more >>