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Stocks post fifth straight week of losses
Stocks extend losing streak after government job report shows weak hiring in May
Friday June 3

A weak employment report sent stocks sharply lower, closing out the fifth straight week of losses for the Dow Jones industrial average and the S&P 500 index.

Employers added only 54,000 new workers in May, the fewest in eight months and well below what analysts had expected, the Labor Department reported Friday. Private companies hired the fewest new workers in nearly a year, and the unemployment rate inched up to 9.1 percent from 9 percent.

The Dow fell 97 points, or 0.8 percent, to close at 12,151. The S&P 500 fell 13, or 1 percent, to 1,300. The Nasdaq composite fell 41, or 1.5 percent, to 2,733.

More than two stocks fell for every one that rose on the New York Stock Exchange. Trading volume was 3.6 billion shares.

Iraq finalizes 2 promising gas deals
Iraq inks 2 deals to develop promising gas fields as demand for power grows

Associated Press, On Sunday June 5, 2011
BAGHDAD (AP) -- Iraq on Sunday finalized deals with a pair of international consortiums to develop two promising natural gas fields, the latest step by the war-ravaged country to tap its own resources to fuel its growing power demands.

Iraqis have been struggling to rebuild their damaged electricity grid and improve power stations and lines. Blackouts are still common. Last summer, power shortages spurred demonstrations that turned deadly when security forces fired into crowds.

Turkey's TPAO-led consortium will develop the 4.6 trillion cubic feet Mansouriya field in eastern Iraq for $7 per barrel of oil equivalent. It plans to reach a peak production of at least 320 million cubic feet per day.

State-run Kuwait Energy and Korea Gas Corp., KOGAS, are teaming up with TPAO.

The second consortium that groups Kuwait Energy with TPAO will develop the 1.1 trillion cubic feet Siba field in the south. They will be paid $7.50 per barrel of oil equivalent to what they produce, with a peak production level estimated at 100 million cubic feet.

Peak production from the two fields must be sustained for 13 years. The first commercial gas to come on stream must be at least 25 percent of the planned peak production and must be achieved within the first three years.

"The ministry has drawn an ambitious plan to meet the needs for electricity, to meet the needs of gas-dependent industries and to make Iraq one of the leading countries that export gas," said Oil Minister Abdul-Karim Elaibi.

Since the 2003 U.S.-led invasion, Iraq has struggled to develop its oil and gas industry. The sector, which had been ravaged by years of sanctions-induced neglect and damage, saw development efforts move fitfully as looting and sabotage added to the damage it sustained during the war to oust Saddam Hussein. Demand has also exploded as Iraqis can buy appliances never available under Saddam's government.

Insurgents have often attacked oil facilities to undermine the government. Mansouriya field is located in one of the country's most volatile provinces, Diyala, which is east of Baghdad along the Iranian border. Siba field is in southern Iraq, which has generally been more stable than the rest of the country.

However late Saturday an oil storage tank was attacked in the southern province of Basra, two Iraqi oil officials said Sunday. The attack occurred near the Zubair oil field. No casualties were reported and firefighters controlled the blaze. Authorities were investigating whether rockets or bombs caused the attack.

The officials spoke on condition of anonymity because they were not authorized to release information.

Both deals signed Sunday were snatched during Iraq's third energy bidding round last October that offered three gas fields. The third field was the 5.6 trillion-cubic foot Akkas field near the Syrian border in western Iraq. That deal was initialed with South Korea's KOGAS last Wednesday and still must be approved by the Cabinet before it is finalized.

Iraq produces about 7,000 megawatts of electricity daily -- about half its actual need. That includes about 1,000 megawatts imported from Iran and Turkey.

Last month, Iraq signed a tentative deal with Iran to import 25 million cubic meters of natural gas daily to feed two power plants in the northeastern suburbs of Baghdad for five years. It still needs the backing of Iraq's Cabinet and parliament.

The 20-year deals offer Kuwait its first foothold in Iraq since Saddam invaded the tiny emirate in 1990, sparking the first Gulf War. Since then the two neighbors have argued over border and debt issues.

Turkey's TPAO has now secured three oil and gas deals in Iraq.

Iraq has awarded 15 oil and gas deals since 2008 to international energy companies in the first major investments in the country's energy industry in more than three decades.

The country, which sits atop the world's fourth-largest proven reserves of crude, also holds 126.7 trillion cubic feet of undeveloped gas reserves. For years, Iraq flared -- or burned off -- the gas largely because it lacked adequate facilities to process it.

China shops for Latin American oil, food, minerals
China on Latin American buying spree to lock in long-term needs in oil, minerals, food

Associated Press, On Sunday June 5, 2011
CARACAS, Venezuela (AP) -- Latin America is blessed with a wealth of natural resources such as oil, copper and soy, and seeks investment and loans to capitalize on them. China needs the commodities to keep its economy growing and has about $3 trillion in reserves to burn.

Those interests have come together in a burgeoning and unorthodox partnership, as China lends and invests tens of billions of dollars in countries around Latin America in return for a guaranteed flow of commodities, particularly oil.

Recent deals have made China a key financier to the governments of Venezuela and Argentina. At the same time, Chinese companies have secured a decade's worth of oil from Venezuela and Brazil, and steady supplies of wheat, soybeans and natural gas from Argentina.

China is breaking new ground by aggressively locking down commodities around Latin America through large loans, investments and other financial arrangements, said Orville Schell, director of the Center on U.S.-China Relations at the Asia Society in New York.

"I don't know of any other government which has done this sort of securing of rights for commodities and natural resources so systematically around the Third World as China, and they've used a whole host of new financial instruments to do this," Schell said.

"China's been very, very prolific in spreading its investments around Africa and Latin America, even though the terms aren't ideal."

Ernesto Fernandez Taboada, director of the Argentine-Chinese Chamber of Production, Industry and Commerce, said China is simply making sure it has the resources it needs to continue growing its economy, which, by some accounts, is projected to surpass the U.S.'s by 2020.

"For China, this is a strategic, long-term investment," Fernandez Taboada said. "They're thinking in the future, not just in the moment. These oil investments, for example, are for 15 to 20 years."

Some of the largest investments have gone to Brazil and Argentina, but China has extended even bigger loans to Venezuela, agreeing to provide more than $32 billion to President Hugo Chavez's government.

Venezuela will pay its debt in oil, and in increasing amounts of it during the next decade. The infusion of cash has swiftly made China Venezuela's biggest foreign lender, enabling Chavez to boost spending ahead of next year's presidential election.

"Viva China!" Chavez exclaimed during a televised meeting with business leaders from Beijing, thanking them for helping set up mobile phone factories and build railways and public housing in Venezuela. He gushed: "I'm in love with China."

The relationship is driven in part by Chavez's eagerness to form alliances that exclude the U.S. But it's also good business for Chinese companies: Venezuela says it has been exporting to China about 460,000 barrels a day, about 20 percent of its oil exports, according to official figures. It hopes to double that soon.

"Venezuela has what we need," said Chen Ping, political counselor at the Chinese Embassy in Caracas. "And we also have what they need, for example technology ... Therefore we can help each other mutually."

The loans are typically secured against revenues from oil sales to Chinese companies, purportedly at market prices, though there could be discounts in some cases, said Erica Downs, an expert at the Brookings Institution think tank in Washington. She wrote a March report on the China Development Bank's energy deals worldwide.

In many cases, financing is being channeled through the state-controlled China Development Bank, which has worked with Chinese companies to lock in commodity supplies.

Downs said such loans give Chinese state oil companies an edge by allowing them special access to local projects. In some cases, she said, such as in Venezuela and Argentina, the loans appear tied to hiring Chinese companies that carry out public works projects for the borrowing government.

China's financing has also been unique, she said, in that in recent years "virtually no other financial institutions were willing to lend such large amounts of capital for such long terms."

Countries such as Venezuela and Ecuador would otherwise have few options for obtaining such large lines of credit, in part due to their presidents' hostility toward traditional lenders such as the World Bank and the International Monetary Fund, Downs said.

The China Development Bank has become a convenient "lender of last resort," Downs said, and Venezuela's government, in fact, has become the bank's biggest foreign borrower.

In Ecuador, the Chinese oil company PetroChina agreed in 2009 to lend $1 billion to state company PetroEcuador in exchange for oil deliveries. The China Development Bank also agreed to lend $1 billion last year to Ecuador's government, to be repaid through oil shipments.

The Chinese stake appears set to grow exponentially.

Direct Chinese investments totaled more than $15 billion in Latin America and the Caribbean last year -- 9 percent of the region's foreign direct investment, according to a May report by the U.N. Economic Commission for Latin America and the Caribbean.

The report said that while the U.S. is still Latin America's largest investment source, China has climbed to third place, behind the Netherlands.

In Argentina, Chinese companies have even replaced U.S. and British corporations in controlling lucrative natural gas and oil resources.

Last year, the state-owned Chinese oil company CNOOC entered into a 50-50 joint venture with Bridas Energy Holdings Ltd., a family owned Argentine company. The joint venture then bought out British company BP's shares in Argentina-based Pan American Energy, giving it 18 percent of Argentina's oil and natural gas production. This year, the venture also purchased U.S.-based Exxon Mobil Corp.'s interests in Argentina, Paraguay and Uruguay, including a refinery and more than 700 service stations.

"Clearly, the U.S. remains the significant actor in Latin America and will remain so for the foreseeable future," said Eric Farnsworth, vice president of the Council of the Americas, a U.S.-based business group. "But China's a huge part of the scene now. It was commodities exports to China over the last five years that allowed Latin America to weather the economic turmoil."

One Chinese company not only locked in a long-term supply of commodities, but also set a more stable price for years to come and circumvented market rates, which have soared in part because of Chinese demand.

China and Chile created a $2 billion sales, finance and investment joint venture in 2005 that guaranteed China 836,250 metric tons of copper over 15 years, at rates partially fixed on what was then the market price of $2.07 a pound. Chile's state-owned Codelco mining company had to put up its entire 49 percent interest in the venture as collateral, and give China Minmetals Corp. an option to purchase 100 percent of one of the world's most promising copper mines.

Chileans criticized the deal as a threat to their patrimony as they became aware of its details and copper prices soared. Both sides backed off the Chinese purchase option in 2008 to fend off the criticism, but with copper now trading above $4 a pound, Chile's top client is still getting thousands of tons of copper at far below market prices.

China also controls 50 percent of Argentina's largest oil field, Cerro Dragon, and all the oil and gas reserves in the far southern Argentine province of Santa Cruz over the next 40 years, deals that became anti-government campaign issues in provincial elections.

During recent visits to Brazil, Schell said he has heard wariness from businesspeople about a system in which "Brazil sends their natural resources and China sends their flip-flops and consumer goods."

Rubens Barbosa, Brazilian ambassador to the U.S. from 1999 to 2004 and now a business consultant, said Brazilian officials have complained that cheap Chinese exports have destroyed domestic industries such as shoe and textile manufacturers. Brazil this year imposed antidumping tariffs on imports of some Chinese fibers within months of China becoming Brazil's biggest trading partner.

"With trade, we have a problem because the aggressiveness of Chinese companies is very strong," Barbosa said. "But the government still has a lot of interest in these relations with China. China is now the principal partner of Brazil."

China's commercial ties with Brazil continue to grow. About 14 percent of the South American country's oil production went to China in 2009, and that portion is expected to expand because Brazilian oil company Petrobras signed a 10-year deal with Chinese-owned Unipec Asia to export 150,000 barrels of oil a day in the first year. The deal calls for exports of 200,000 barrels a day for the next nine years. At the same time, Petrobras secured a $10 billion, 10-year loan from the China Development Bank.

Petrobras says the deals were separate and that the oil is not being used to pay back the loan. Still, the agreements ensure Chinese access to Brazil's booming oil production, which promises to skyrocket after vast offshore reserves discovered in 2008 come online.

China has also been active across Argentina. The China Development Bank has offered a $2.6 billion, 10-year loan to revive a freight train system connecting Buenos Aires to much of Argentina's central heartland. In the country's Rio Negro province, the Metallurgical Corporation of China has invested $80 million to reactivate an iron ore mine, and China's Beidahuang Group company has promised $1.4 billion in irrigation infrastructure in exchange for a 20-year contract to grow corn, wheat, soy and dairy on otherwise dry land for Chinese consumers.

And in remote southern Tierra del Fuego, near the tip of South America, Chinese companies are investing $1 billion, not only to produce fertilizer, but to build an energy plant, for which Argentina has promised China natural gas for 25 years.

"Two weeks ago, the Chinese commerce minister visited us with 60 business executives, and they showed great interest in investing in other sectors," Fernandez Taboada said. "There is a fundamental expansion of China in Latin America. In all the countries, from Mexico on south."

According to Schell, China is just getting started.

"This is a real tipping point moment, of which the Chinese investments in commodities and extractive resources of Latin America is just the opening bell," he said. "Who's got the money? And it's not the United States any longer. It's China. This is the next great pool of (foreign investment) that the world is going to reckon with in myriad ways."

Potential Longs to Watch This Week...

While the fundamental landscape remains dire, I remind myself that some of the best market movement comes when the hordes are ready to throw in the towel. The March 2009 bottom is a classic example of catching many flat-footed. But instead of relying on the talking heads and pundits to let me know the coast is all clear, I will continue to mine the charts for technically sound patterns that allow great risk/reward. Agnico-Eagle Mines, (AEM), Integrated Silicon Solution (ISSI), KBR Inc (KBR), Korn/Ferry Intl (KFY), and Power-One (PWER) make my short list of potential longs to watch this week. While I will not attempt to time a bounce from these levels, I have no problem going long when the setups present themselves.

Bernanke sees stronger growth in 2nd half of year
Bernanke links slowdown to gas prices and Japan crisis, sees higher growth in 2nd half of year

Tuesday June 7, 2011, 4:25 pm
WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke noted Tuesday that the job market and the economy have weakened in recent weeks. But he said the main reasons are higher gas prices and the Japan crises -- factors that should ease in coming months-- and predicted growth would strengthen later this year.

Bernanke made no mention of any new steps the Fed might take to boost the economy. The Fed's $600 billion Treasury bond-buying program is ending this month. The program was intended to keep interest rates low to strengthen the economy. But critics said it raised the risk of high inflation.

The Fed chairman said the economy still needs the benefit of low interest rates.

Stocks fell after Bernanke began speaking. The Dow Jones industrial average erased gains made earlier in the day and close down for the fifth straight day, as did broader indexes.

Bernanke noted the May jobs report released last week was disappointing. It showed the unemployment rate rose to 9.1 percent and the economy added just 54,000 jobs, the fewest in eight months. But he said he expected job creation and overall economic growth would rebound in coming months.

"Overall, the economic recovery appears to be continuing at a moderate pace, albeit at a rate that is both uneven across sectors and frustratingly slow from the perspective of millions of unemployed and underemployed workers," Bernanke said in his remarks to an international banking conference in Atlanta.

Bernanke said the central bank would not consider the recovery to be well established "until we see a sustained period of stronger job creation."

He repeated a pledge that central bank officials have been making for more than two years: that they will keep interest rates at record lows "for an extended period."

Bernanke said that consumer inflation has jumped 3.5 percent in the six months ending in April -- well above the average of less than 1 percent over the preceding two years. But he noted that most of the increase has been caused by higher gas prices, which have been creeping down in recent weeks. Excluding food and energy, inflation has been tame, he noted.

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and if you believe anything Bernanke sees , says or does...Then I got some Ocean Front Property I can sell you real cheap located in Colorado!  

SEC suspends trading of 17 penny stocks
SEC suspends trading in 17 penny stocks for 2 weeks as part of efforts to prevent fraud

June 7, 2011, 2:02 pm EDT
WASHINGTON (AP) -- The Securities and Exchange Commission on Tuesday suspended trading for two weeks in 17 small stocks in a move it said was part of its efforts to prevent fraud in thinly traded stocks.

The 17 companies are "microcap," or penny stocks that trade over the counter rather than on a major exchange. The SEC said there were questions about the adequacy and accuracy of information the companies have publicly reported.

The trading suspensions run from 9:30 a.m. EDT Tuesday to 11:59 p.m. EDT on June 20.

Stock promoters can sometimes conduct fraud schemes by taking large positions in thinly traded stocks and artificially inflating their price by touting them.

The SEC said the suspensions arose from a joint effort conducted by several regional offices, the agency's office of market intelligence and its new microcap fraud working group. The microcap fraud working group is targeting stock promoters as well as brokers, attorneys, auditors and others who work with them, SEC Enforcement Director Robert Khuzami said in a statement.

The companies are American Pacific Rim Commerce Group (APRM), based in Citra, Fla.; Anywhere MD Inc. (ANWM), Altascadero, Calif.; Calypso Wireless Inc. (CLYW), Houston; Cascadia Investments Inc. (CDIV), Tacoma, Wash.; CytoGenix Inc. (CYGX), Houston; Emerging Healthcare Solutions Inc. (EHSI), Houston; Evolution Solar Corp. (EVSO), The Woodlands, Texas; Global Resource Corp. (GBRC), Morrisville, N.C.; Go Solar USA Inc. (GSLO), New Orleans; Kore Nutrition Inc. (KORE), Henderson, Nev.; Laidlaw Energy Group Inc. (LLEG), New York; Mind Technologies Inc. (METK), Cardiff, Calif.; Montvale Technologies Inc. (IVVI), Montvale, N.J.; MSGI Security Solutions Inc. (MSGI), New York; Prime Star Group Inc. (PSGI), Las Vegas, Nev.; Solar Park Initiatives Inc. (SOPV), Ponte Verde Beach, Fla.; and United States Oil & Gas Corp. (USOG), Austin, Texas.

Last week the SEC imposed a similar suspension against Uniontown Energy Inc. (UTOG), based in Henderson, Nev., and Vancouver, Canada.

5 Cancer Treatment Companies For Your Watch List...
June 16, 2011 

Cancer treatment is an ever-evolving business, with many potential breakthroughs and blockbusters being developed by small companies on any given day. Shareholders who are hoping to tag along as part of either an historical FDA approval or an historical share price run are always on the lookout for the next big 'mover and shaker'.

Here are five companies in the cancer sector that shouldn't be overlooked:

Immunocellular Therapeutics (IMUC.OB) - Shares of this company may very well be trading under the radar, even after having tripled in price during the past year on positive pipeline news. On light volume, shares dipped below the $1.90 mark on Tuesday, leaving the company with a market cap of $55 million. That cap is worth making note of, given the potential of the Immunocellular pipeline of immunotherapeutic cancer treatments.

The technology behind the IMUC pipeline takes the science behind Dendreon's (DNDN) Provenge a step further.

By targeting the stem cells that lead to the spreading of a patient's cancer, Immunocellular may very well be priming itself to usher in the new age of cancer treatment. The most advanced product, ICT-107, has thus far been proven to be highly effective in treating glioblastoma, and was recently featured on a CBS News broadcast in New York City.

It's expected that the company will look to be listed on a major exchange at some point in the near future, where it may draw more attention as a potential big player in the cancer immunotherapy market with a pipeline being readied to treat multiple cancer types. Keep an eye on this one.

Antigenics Inc. (AGEN) - A recent makeover left the former Antigenics and lead product Oncophage known as Agenus and Prophage, respectively. Prophage is being investigated in Phase II trials for the treatment of glioma. Three years ago this company was the first to have an immunotherapeutic cancer vaccine approved, when Russia approved Oncophage for use against kidney cancer in Russia. That approval never materialized into sales and a denial in Europe sent shares of AGEN spiraling down from its highs to level where it now trades, for under a buck.

After a long lull in relevant news, AGEN has again been making headlines.

Early results from the Phase II glioma trial indicate that those treated with Prophage are demonstrating increased overall survival, which is now the golden standard for cancer immunotherapy trials ever since Dendreon made that the goal of the Provenge Phase III.

In addition to the positive Prophage news, it was announced this week that AGEN's vaccine adjuvant, QS-21 Stimulon, was the subject of a licensing agreement with Integrated BioTherapeutics Inc. (IBT) for use in the development of a vaccine against Ebola and Marburg viruses. Per the agreement, Agenus will receive a licensing fee, potential milestone payments, and a royalty on sales of the product, should it be approved.

QS-21 is currently being used in 15 developmental vaccines and gives AGEN a potential revenue stream outside of Prophage.

While shares jumped modestly on the Stimulon news, they're still down on the year.

Dendreon (DNDN) - There's no doubt that Dendreon is already a huge winner as having received the first FDA approval for a cancer vaccine with Provenge last year, but that doesn't mean that all the gains in share price have been had; there's still more to come from this soon-to-be powerhouse.

DNDN has dipped to below the forty dollar mark as the market as a whole has pulled back recently, but the third and fourth quarters are when the company expects to ramp-up production enough to start making a dent in the large backlog of demand for Provenge.

The FDA approved additional manufacturing stations in Dendreon's New Jersey facility earlier this year, and it's expected that work station approval at the Los Angeles manufacturing facility will be announced at the end of this month, with approval at the Atlanta facility following shortly thereafter.

It's still very much a Golden Age for Dendreon, now the grand-daddy of cancer immunotherapy companies, but the share price gains are probably not over.

As the work-station and full-site manufacturing facilities come on-line later in the year - assuming FDA approval - the DNDN train might start chugging forward once again.

CytRx Corporation (CYTR) - Already a stock to watch due to a solid pipeline of cancer treating products, CytRx Corporation issued a Monday morning press release announcing positive preliminary results from its ongoing ENABLE Phase 2 proof-of-concept trial for bafetinib in the treatment of relapsed or refractory B-cell chronic lymphocytic leukemia (B-CLL).

According to Monday's PR, bafetinib has so far proven to be "clinically active" in patients who have failed to respond to previous treatments, an encouraging indicator that only strengthens the future potential of this company and its treatments.

Eleven of the sixteen patients enrolled were eligible for preliminary evaluation, with a total of thirty patients expected to be enrolled in in the trial.

Due to the positive preliminary results and low instances of adverse effects, future patients enrolled in the trial will receive a higher dosage, which effectively increases the chances of even greater results as the trial progresses.

CytRx CEO Steven A. Kriegsman, commenting on this important milestone for the company, stated that

"These favorable initial Phase 2 clinical trial results of bafetinib's activity and safety mark an important step in our goal to become a leading oncology therapeutics company. Further, we were able to obtain these results quickly after initiating enrollment in this clinical trial, validating our strategy to rapidly and cost-effectively conduct proof-of-concept trials in patients with advanced-stage cancers prior to moving into larger clinical trials."
In addition to the positive developments on the pipeline front, it's also encouraging for investors that management has, thus far, followed through on its plans and promises. While marching forward with the aforementioned strategy of conducting cost-effective proof-of-concept trials before moving into more widespread trials, the company has also been very successful at finding non-dilutive conditions of financing.

CYTR issued a press release last month announcing the sale of the worldwide rights for its molecular chaperone assets to the privately-held Orphazyme ApS, based in Copenhagen, Denmark. This deal, should all milestones be met, could be worth up to $120 million to the company, in addition to the royalties on sales that CytRx would receive should Orphazyme bring any products utilizing the technology to market.

Management also banked $17 million for the company through the sale of RXII stock and CytRx also received 163,000 shares of ANX in exchange for its 19.1% stake in SynthRx. Bafetinib, in addition to the ongoing ENCORE trial, is also being investigated for use in treating prostate and brain cancers. Should these encouraging results continue as the products move into Phase III, then CYTR shares would have some room to appreciate in value fairly significantly.

Given the positive developments from the pipeline and pattern of non-dilutive financing, it's well worth keeping an eye on this company.

Keryx Pharmaceuticals (KERX) - makes the list for its experimental Perifisone treatment, which is currently engaged in Phase III trials as an anti-cancer agent. The company also has Zerenex in Phase III for the treatment of kidney disease.

Both products have been successful thus far in trials, and although still trading off its 52-week highs, KERX is demonstration of the leaps-and-bounds a company's stock can make as it shifts from Phase II to Phase III trials.

It wasn't that long ago when KERX, then a 'Phase II' company, was trading for right around a dollar before trial results started rolling in. Those results were positive, Phase III trials were initiated fairly quickly, and now we're looking at a five dollar stock.

Shares have dipped below that mark recently, but another move higher could be in order during the lead-in to Phase III results. Already a big winner, there might be more to come from KERX.

Cancer Vaccines and Oncothyreon: Flying Higher as Market Sinks...
June 16, 2011  

It was only a couple of weeks ago that Oncothyreon (ONTY) made headlines for spiking through the $6 mark on news that the company had initiated the Phase II portion of the Phase I/II for the anti-cancer agent PX-866. Since that time the market has taken a relative dive, with respect given to a Tuesday rebound, but ONTY shares continued trading higher, breaking through the seven dollar and topping out at $7.55 before stalling.

The only recent blip in the ONTY trading scheme came when immediately following a stock offering earlier this year, but the real catalyst that everyone is eyeballing right now revolves around Stimuvax. Partnered with Germany's Merck KGaA (MKGAF.PK), Stimuvax is being tested as an immunotherapeutic treatment for non-small cell lung cancer. Trials are currently winding down, with results expected to be released next year. It's also possible that some interim results will be released later this year, as the data is compiled and finalized for a 2012 release.

Oncothyreon doesn't begin and finish with Stimuvax. The company has put its cancer-fighting technology of kinase inihibitors behind multiple Phase II trials. Indications for which the kinase inhibitors are being tested are glioblastoma, head & neck and colorectal cancers. The rapid rise to a $7 share price -- a three-month double in price -- and $300 million market cap are solid indications that the market is starting to take notice of the potential value of this company and its treatments.

Dendreon (DNDN) is an example of what a successful cancer vaccine can do for a small company, and Oncothyreon looks to follow in those lofty footsteps set by DNDN. More importantly, the stage is being set for a huge breakthrough in the way we treat cancer, in my opinion. Did Dendreon open the floodgates for cancer vaccines? I wouldn't say there will be a "flood" of cancer vaccine approvals any time soon, but Provenge certainly set the standard by being the first to market in the United States.

The patient communities had long been looking for the likes of Provenge and other experimental vaccines to be approved, if only to have an alternative to the vicious side effects that chemotherapy and radiation treatments inflict on a patient's body and immune system. Now it looks like the immunotherapeutic approach to fighting cancer is catching on with the medical community as well.

Oncothyreon, with late-stage trials winding down and a big-named partner, looks to be among the better candidates to follow in the path set by Dendreon. Should the Stimuvax trial results prove to be successful, then expect a huge increase in ONTY share price.

While ONTY may be among the more solid late-stage picks, let's not forget about a couple of mid-stage picks that are looking to make a splash in the field of cancer immunotherapeutic medicine. Immunocellular Therapeutics (IMUC), whose technology targets the cancer stem cells that are thought to lead to cancer growth and spreading, could be the leader of the next generation of cancer vaccine companies.

Its approach to adding to the immunotherapeutic cancer treatments makes Immunotherapeutics a hot stock in a hot sector, and offers hope for patients who are always looking for the next life-saving or life-extending blockbuster. IMUC's technology also allows it to cut the logistics behind administering its new-era treatments, adding significantly more inherent value to its future than even Dendreon.

Cel-Sci Corp. (CVM) is another one that cannot be ignored. CVM's treatment for head and neck cancer, Multikine, is currently involved in a global Phase III trial and has blockbuster written all over it, should the trial come to a successful conclusion.

Watching ONTY shares fly higher in the midst of a market setback just shows the strength that could be had by a good cancer stock with products in mid-to-late stage trials, regardless of market conditions. Other cancer stocks to keep an eye on are Keryx Pharmaceuticals (KERX) (perifisone), CytRx (CYTR) (bafetinib + others), Agenus (AGEN) (Prophage) and Biovest International (BVTI) (BiovaxID).

Watch this sector; when one runs, there's always the possibility of a "sympathy run" for others in the sector as well.

Stocks end another week lower on Europe worries
Stocks fall on weak tech results and new concerns about European banks
Friday June 24, 2011

If weak financial results from big tech companies are a sign of what's to come, stock indexes are in for a tough summer.

Stocks fell Friday, giving the market another losing week, after poor earnings reports from two major technology companies suggested that companies invested less in new technology as the economic recovery slowed.

Fears of a spreading European debt crisis also weighed on markets. Italian bank stocks plunged and trading in some of them was halted after Moody's warned that it might downgrade their credit ratings.

"I think it spooked a lot of people," said Frederick Rizzo, who analyzes European banks for T. Rowe Price. "The markets are really emotional right now."

The Dow Jones industrial average fell 115.42 points, or 1 percent, to 11,934.58. The Standard & Poor's 500 index fell 15.05, or 1.2 percent, to 1,268.45. The Nasdaq composite fell 33.86, or 1.3 percent, to 2,652.89.

The decline erased all of this week's gains for the Dow Jones industrial average and S&P index. The broad stock market has now fallen for seven of the last eight weeks, largely because of concerns that the U.S. economy is slowing and that Europe's debt problems may lead to another financial crisis. The S&P 500 is down 7 percent since it hit a high for the year on April 29.

Technology stocks were broadly lower. Micron Technology Inc. fell 14.5 percent after the company said lower sales of computer chips hurt its earnings, which were far less than analysts had expected. Oracle Corp. fell 4 percent after its sales of computer hardware fell sharply. Cisco Systems Inc. fell 3.5 percent, and Microsoft Corp. lost 1.3 percent.

Government bond prices rose to their highest level of the year as investors favored lower-risk assets. The yield on the 10-year Treasury dipped to 2.86 percent.

The U.S. economy has cooled since late April. Recent reports on housing, employment, manufacturing and retail sales all have been weak. The debt crisis in Greece and fears that China's growth is slowing have also pushed markets lower.

"No one is expecting good news, but if it's worse than expectations, this is really a very shaky market," said Uri Landesman, president of Platinum Partners, a hedge fund.

Landesman expects that the Standard & Poor's 500 index will fall to 1,200 this summer as more companies report second-quarter earnings next month. The last time the S&P 500 crossed that threshold was in December 2010.

Stocks fell despite the fact that the government said the economy grew at a 1.9 percent annual rate in the first quarter, slightly higher than an earlier estimate of 1.8 percent. The figure still indicated very slow growth for a post-recession recovery. Economists expect little improvement in the second quarter, which ends next week.

Still, another government report showed that businesses ordered more machinery, equipment and airplanes in May than in April. Orders of such durable goods increased by 1.9 percent in May after a sharp decline in April.

Two stocks fell for every one that rose on the New York Stock Exchange. Volume was slightly above average at 4.4 billion shares.

QCOM...On Thursday July 21, 2011, 4:55 pm EDT

In earnings news, Qualcomm (Nasdaq: QCOM), the maker of chips for mobile phones, said its fiscal third-quarter profit rose to $1.04 billion, or 61 cents per share, from $767 million, or 47 cents per share, a year earlier. Revenue climbed to $3.62 billion from $2.7 billion. Excluding one-time items, California-based Qualcomm earned 73 cents a share. Analysts were expecting a profit of 71 cents. Qualcomm raised its full-year profit forecast to $3.15-$3.20 a share from $3.05-$3.13 and its revenue outlook to $14.7-$15 billion from $14.1-$14.7 billion. Shares of Qualcomm fell -0.6%.

Futures dip as debt stalemate curbs risk appetite...

On Wednesday July 27, 2011, 8:11 am

NEW YORK (Reuters) - Stocks were slightly lower on Wednesday as concerns over a possible debt default by the United States continued to weigh on investor sentiment.

A Republican plan to cut the U.S. deficit stiff opposition, piling anxiety onto investors and ordinary Americans hoping the government would not default on its debt obligations.

Even if a default is avoided, a plan that flinches from hefty deficit cuts could result in a downgrade of the U.S. government's triple-A rating and raise borrowing costs, dealing a severe blow to the economic recovery.

Credit Suisse strategists see a 50 percent chance of a credit ratings downgrade on U.S. debt, even if the ceiling is raised as key decisions on fiscal tightening are delayed until after the 2012 elections.

"The market is poised to move higher, considering how the earnings have been coming in, but investors are being held back from risk (trade) because of all these headlines out of Washington," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

S&P 500 futures fell 2.9 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures were down 7 points, and Nasdaq 100 futures dipped 6.5 points.

Financial stocks were in focus after European banks such as Societe General (Paris:SOGN.PA - News) and Banco Santander (MCE:SAN.MC - News) fell after a downgrade by Goldman Sachs. The brokerage cut the banks to "neutral" from "overweight", saying doubts over a Greece rescue package have started to emerge.

Gold prices hit another record high at more than $1,623 an ounce, while the cost of insuring U.S. debt against a default in the next year hit a new high, according to data monitor Markit.

Dunkin' Brands Group Inc (Nasdaq:DNKN - News) has raised $422.75 million after pricing its IPO at $19 per share, well above the range set by underwriters.

Amazon.com Inc (NasdaqGS:AMZN - News) reported a surge in quarterly revenue late Tuesday, but profits slipped as the largest Internet retailer kept spending on distribution, technology and digital content. The stock was up 6 percent at $227.00 in premarket trade.

Boeing Co (NYSE:BA - News) shares rose 2.5 percent to $71.91 after the company reported quarterly results.

Dow Chemical Co (NYSE:DOW - News) shares were up 3.2 percent at $37.00 after the company said profit rose about 74 percent.

WellPoint Inc (NYSE:WLP - News) reported better-than-expected results, but its shares fell 3.9 percent to $70.70 after the company warned that costs for its Medicare plans for seniors were higher.

On the macroeconomic front, the market waited for June durable goods orders. Economists in a Reuters survey saw a rise in orders of 0.3 percent versus a 2.1 percent increase in May.

The stalemate in U.S. debt talks dragged down stocks for a second day on Tuesday, and light volume indicated that investors were reluctant to make bets despite another round of healthy earnings.

How a U.S. Debt Downgrade May Affect Consumers...

This is not yet one of those stuff-your-money-in-a-mattress moments.

Still, the talk in Washington of a federal budget crisis and possible default has given rise to all sorts of consumer fears of doomsday scenarios. Missed Social Security payments. Spikes in interest rates. Draconian cuts in government services.

But the most likely outcome, experts said in interviews this week, is that the nation's credit rating will be downgraded a notch. And if that turns out to be the case, investors and borrowers should be able to ride out any volatility.

Over the last few days, financial advisers have tried to allay investor fears by sending notes to clients with the same message they have delivered in past periods of market uncertainty: As long as you're diversified across different investments, the best action, in this case, is inaction.

The financial markets may become more volatile in the near-term, they say. And interest rates on several types of consumer loans will probably tick modestly higher because the rates track government-issued debt. But a credit downgrade is unlikely to cause a major shock to the system.

That said, the only investment that did not plunge in the 2008 market crisis was Treasuries, and they could conceivably lose some of their luster. "Sometimes I worry that a U.S. debt downgrade could have long-term negative psychological consequences as Americans realize the greatest power on earth is, alas, a mere mortal too," said Milo Benningfield, a certified financial planner in San Francisco. But "we're still looking pretty good relative to most everyone else in the world."

That does not mean there will not be a wide ripple effect, at least in the short term. The magnitude of the deficit reductions and their effect on the broader economy are another wild card. But in the near term, here's what investors and consumers can expect, and some advice from experts.

STOCKS AND BOND INVESTMENTS Both the stock and bond markets are expected to endure a period of volatility if the nation's debt drops a notch from its AAA perch. "Once a plan is in place, we would expect the markets to return to normal, and for investors to focus on more fundamental issues like long-term earnings growth and the economic health of countries around the globe," said Gus Sauter, chief investment officer at Vanguard.

"That said, it's simply not possible to gauge precisely how the equity and fixed income markets would react and for how long, so the best course of action is to ignore the headlines and maintain a long-term approach."

That sort of advice might come as cold comfort to people on the cusp of retirement, and for whom the memories of the recent downturn are fresh. That is why many advisers suggest that people who are living off their investments set aside enough cash so that they are not forced to sell investments during a rough patch.

"This is certainly creating a lot of concern, and the games being played in Washington by Congress are increasing the stress," said Diahann Lassus, a financial planner in New Providence, N.J. "Cash reserves are very important for both retirees and pre-retirees." She suggests six months to two years in cash, depending on the investor's age and specific situation.

A downgrade may cause Treasury yields to move modestly higher, which, in turn, may cause corporate, municipal and other bond issues to follow suit. Budget cuts, though, may have a more serious effect, depending on their severity. "If they really make some severe cuts, that is deleterious to the municipal bond space," said Marilyn Cohen, chief executive of Envision Capital Management, which manages bond portfolios. "That means less trickle-down to the states, cities and counties."

But if there are not enough cuts, she said, that could also cause the broader bond market to swoon.

MONEY MARKET FUNDS These funds hold 40 to 45 percent of the shorter-term Treasury debt outstanding, according to Deborah A. Cunningham, chief investment officer for money markets at Federated Investors. But if the nation's debt rating were downgraded, these funds would not be required to sell the Treasuries they hold. In fact, a fund would not be required to sell in the event of a default, either, as long as the fund deems the securities to be safe and able to make their interest payments.

"The money market world asset flow, what comes in and goes out, has been pretty benign," Ms. Cunningham said.

And she said she would not expect a downgrade to change those flows in any significant way. "The debt that is held in money market funds is so short in maturity that a downgrade will just not be an event that causes any kind of pricing concerns. As such, there shouldn't be issues for investors."

HOME LOANS AND CREDIT CARDS Fixed-rate mortgages generally track the 10-year Treasury note, whose interest rates would rise in the event of a downgrade. "The concern behind rates rising comes from the risk that investors — foreign and domestic — would rush to sell U.S. debt," said Cameron Findlay, chief economist at LendingTree.com, noting that a sell-off would push the price of the debt lower, while causing its yield to rise. "So the question then is by what magnitude, and that remains the unanswered element everyone is struggling with."

Shortly after a downgrade, he said he would expect interest rates to spike a bit, though he said he did not expect rates on fixed-rate mortgages to rise more than half a percentage point to a full percentage point, at most. Nor did he expect a rise in rates to affect the pace of lending. After all, stricter credit standards are making lending difficult.

But once the federal debt issue is resolved, he said he expected mortgage rates to fall back to the range they are in now. Rates on a 30-year fixed mortgage averaged 4.52 percent for the week ending July 21, according to Freddie Mac. Though adjustable-rate mortgages typically do not track the 10-year Treasury note, experts said those rates could still move modestly higher.

Home equity lines of credit, meanwhile, track the prime rate, which is generally pegged to the federal funds rate. "Do we expect that to increase any time soon?" he asked. "We don't. But if the risk of inflation increases, then, of course, the risk is that you will see that index start to increase."

Credit cards are also pegged to the prime rate, so any increase in interest rates is more likely to be a result of broader economic factors or a decision by lenders to increase their profit margins.  But as Greg McBride, a senior financial analyst at Bankrate.com, said, lenders must give borrowers at least 45 days' notice before raising their interest rate, and that can be applied only to new balances.

STUDENT LOANS The interest rates on most private student loans are pegged to the London Interbank Offered Rate, or Libor, which is influenced by Treasury yields. So if the yields on government securities rise, student loan rates could rise as well, said Mark Kantrowitz, publisher of the FinAid and Fastweb Web sites. Borrowers taking out new loans, however, might see a greater increase in costs because of activity in the securities market backed by student loans.

Federal student loans are made by the government, which sells Treasuries to raise money to finance them. The government profits on the interest from the loans. If the government's cost of borrowing rose, the government's profit would decrease. But for now, since the interest rates are fixed, students would not necessarily see their costs rise unless Congress passed legislation to raise rates, he said. And then, the higher rates could apply only to new loans, he added.

The deficit reduction plan, which is likely to cut education spending,  could have a broader effect on student lending. Some proposals, for instance, would cut subsidized interest on loans to graduate and professional students.

Experts also recommended contacting local representatives in Congress. "Let your Congressional leaders know you are paying attention by writing, e-mailing or calling them," Ms. Lassus, the financial planner, said.

Stock fall as lawmakers remain at odds over debt
Stocks fall as House Speaker Boehner postpones debt limit vote; durable goods orders slip

Wednesday July 27, 2011, 10:28 am
NEW YORK (AP) -- Stocks fell Wednesday as lawmakers remained at odds over how to avoid a debt default. A weak report on orders for manufactured goods also weighed on stocks.

House Speaker John Boehner had planned to hold a vote on his debt-limit plan on Wednesday. But that was postponed after conservative lawmakers scoffed at the proposal and congressional budget officials said it would have cut spending less than advertised. The White House had also threatened to veto Boehner's plan.

The stalemate has put financial markets on edge. If an agreement is not reached by Aug. 2, the U.S. may not have enough cash to pay all its bills and could default. If that happens, the U.S. would likely lose its triple-A credit rating, pushing up interest rates on mortgages and other kinds of loans. Stocks could also plunge.

Most investors still expect some kind of resolution in the coming days. But the uncertainty over possible changes to tax rates or government spending has made investors nervous, said Todd Salamone, senior vice president of research at Schaeffer's Investment Research. "Investors just want a lot of clarity," he said.

The Dow Jones industrial average fell 128 points, or 1 percent, to 12,374 in early trading. The Dow is headed for its fourth day of losses.

The Standard & Poor's 500 fell 19, or 1.4 percent, to 1,312. The Nasdaq composite index fell 59, or 2.1 percent, to 2,781.

The government said that orders for durable goods fell 2.1 percent in June because of a drop in orders for commercial aircraft, automobiles and heavy machinery. Manufacturing has been disrupted this year by parts shortages from Japan and higher energy prices.

Earnings results were mixed. Amazon.com Inc. rose 5.5 percent, the most of any company in the S&P 500, after the online retailer reported that its earnings and revenue were far higher than analysts were expecting.

Boeing Co. rose 3.1 percent after the company raised its earnings forecast for the year, even as it said it will not deliver as many of its new 787 and 747-8 long-haul planes this year.

Juniper Networks Inc. plunged 20 percent, the most of any company in the S&P 500, after the computer networking equipment maker issued an earnings forecast for the third quarter that was lower than many analysts expected. Computer networking equipment companies, including Cisco Systems Inc., have struggled this year because many Internet providers spent heavily on their products in 2010. As a result, they don't need as much new equipment now. Cisco fell 3 percent, while equipment maker JDS Uniphase Corp. fell 5.6 percent.

Delta Air Lines Inc. fell 6 percent. The airline's earnings were lower than analysts had anticipated because of higher jet fuel expenses and costs related to voluntary buyouts for 2,000 workers.

Precious metals continued to climb as investors looked for relatively safe places to park money. Gold rose $8.10 an ounce to $1,624.90. Silver edged up about 50 cents to $41.22 an ounce. Gold has risen about 1 percent this week, while silver is up nearly 3 percent.

Analysts: Senate plan saves $2.2 trillion
Budget analysts say Senate Democratic plan cuts deficits by $2.2. trillion, less than promised

Wednesday July 27, 2011, 9:54 am
WASHINGTON (AP) -- Budget analysts said Wednesday that a Senate Democratic plan to reduce the deficit and increase the nation's borrowing authority would save $2.2 trillion over a decade, more than a rival House Republican proposal but less than promised. With both bills stuck in neutral, Congress, financial markets and the public remained on edge days before the deadline for heading off a potentially calamitous default.

The Congressional Budget Office estimated that the plan by Senate Majority Leader Harry Reid, D-Nev., would result in savings of just over $2 trillion, some $500 billion less than Reid had promised. The Senate bill, however, would save more than a House Republican proposal by Speaker John Boehner, R-Ohio.

Nonpartisan congressional scorekeepers said his proposal would cut spending less than advertised, about $850 billion over 10 years, not the $1.2 trillion originally promised. The estimate, coupled with growing opposition from rank-and-file GOP conservatives, forced Boehner to postpone a scheduled vote on the bill to Thursday.

Republican and Democratic congressional leaders are scrambling to come up with an elusive compromise that could win the backing of President Barack Obama. The federal government faces a first-ever default absent a plan by Aug. 2, just six days away.

The CBO analysis of the Senate plan estimated that it would save $840 billion in non-war spending by government agencies. The analysis said it would reduce the government's interest payments by $375 billion over a decade. The bulk of the reductions would come from projected savings of $1 trillion from winding down wars in Iraq and Afghanistan.

Despite the stalled measures -- and angry partisan rhetoric -- the differences between the sides are narrowing, not widening. Boehner's plan represents significant movement from a bill the House passed last week, roughly half of its mandated spending cuts, for example. And Reid no longer is insisting on having tax increases as part of any plan to cut deficits.

Boehner needs to do more than pump up the legislation. He needs to shore up his standing with tea party-backed conservatives demanding deeper spending cuts to accompany an almost $1 trillion increase in the government's borrowing cap. Many conservatives already had promised to oppose it.

"We need more drastic cuts," said Rep. Jason Chaffetz, R-Utah. "I can't support it in its current form."

"I'm searching for a path toward yes but having a difficult time finding it," said Rep Bill Huizenga, R-Mich.

Unless he can wrestle the situation under control, Boehner risks losing leverage in his dealing with President Barack Obama and Democrats controlling the Senate.

Boehner's plan was not winning converts among some stalwart conservatives. It prompted Reid to declare that the bill was destined to fail in the Senate and it drew a White House veto threat. But it was framing the debate over how to reduce long-term deficits while raising the debt ceiling.

Tuesday's Congressional Budget Office analysis said the GOP measure would cut the deficit by about $850 billion over 10 years, not the $1.2 trillion originally promised. Even more embarrassing was a CBO finding that the measure, which would provide a $900 billion increase in the nation's borrowing cap, would generate just a $1 billion deficit cut over the coming year.

Boehner's plan would couple budget savings gleaned from 10 years of curbs on agency budgets with a two-track plan for increasing the government's borrowing cap by up to $2.7 trillion. The first increase of $900 billion would take effect immediately; the second increase could be awarded only after the recommendations of a special bipartisan congressional panel are enacted into law.

The White House says Boehner's measure would reopen the delicate and crucial debt discussions to unending political pressure during next year's campaigns and risk more uncertainty in the markets.

The White House promised to veto Boehner's measure if it were to reach Obama's desk.

It's unlikely to come to that. Reid, D-Nev., promised the measure would never make it through the Democratic-controlled Senate.

Reid held back on forcing a vote on his competing measure, which he unveiled Monday to poor reviews from Republicans like Senate Minority Leader Mitch McConnell of Kentucky. Reid appears to hope that his measure, which promises $2.7 trillion in spending cuts and would increase the debt limit enough to keep the government afloat past the 2012 elections, could emerge as the last viable option standing and could be modified with input from Republicans.

Those same Republicans blasted Reid's bill for $1 trillion in war-related savings they say are phony. But McConnell is emerging as a key figure in the endgame, and he sounded a conciliatory note in an appearance Tuesday.

"We need to get an outcome. And to get an outcome, a Republican House, a Democratic Senate and a Democratic president would have to reach an agreement," McConnell said. "So I'm prepared to accept something less than perfect, because perfect is not achievable."

One area of potential compromise could be how to treat the findings of a bipartisan congressional commission to identify further deficit reductions, especially in major health care programs such as Medicare and Medicaid. Both Reid and Boehner support the idea, though Boehner wants to make a future increase in the debt limit contingent on the proposed additional cuts being enacted into law.

Meanwhile, the clock was ticking down to next Tuesday's deadline to continue the government's borrowing powers and avert possible defaults on U.S. loans and obligations, like $23 billion worth of Social Security payments due Aug. 3. The Capitol's telephones were jammed after Obama urged the public to contact their representatives in his Monday night address.

Conservative bloggers and groups like the Club for Growth, which funds primary campaigns against Republicans it deems too squishy in their conservatism, denounced Boehner's bill as too weak. The U.S. Chamber of Commerce, closer to the GOP mainstream, urged support.

While Boehner searched for votes, some Americans seemed to edge closer to the notion that the Aug. 2 deadline might pass without a solution. The stock market fell again, although not dramatically. California planned to borrow about $5 billion from private investors as a hedge against a possible federal government default.

The White House spoke with veterans groups about what might happen to their benefits if a deal isn't reached. Obama has said he can't guarantee Social Security checks and payments to veterans and the disabled would go out on schedule.

Freshman Rep. Trey Gowdy, R-S.C., bristled at the idea that tea party-influenced newcomers are sheep-like ideologues willing to risk default.

"We're not a bunch of knuckle-dragging, mouth-breathing Neanderthals," Gowdy said. "We're interested in answering what we perceive to be the mandate, which is to stop the spending and change the way Washington handles money."

What's Wrong With America's Job Engine?

Wednesday, July 27, 2011
provided by
THE WALL STREET JOURNAL

Wary Companies Rely on Temps, Part-Timers, Hire Overseas

Over the past 10 years:

• The U.S. economy's output of goods and services has expanded 19%.

• Nonfinancial corporate profits have risen 85%.

• The labor force has grown by 10.1 million.

• But the number of private-sector jobs has fallen by nearly two million.

• And the percentage of American adults at work has dropped to 58.2%, a low not seen since 1983.

What's wrong with the American job engine? As United Technologies Corp. (NYSE: UTX - News) Chief Financial Officer Greg Hayes put it recently: "Sales have come back, but people have not.''

That's largely because the economy is growing much too slowly to absorb the available work force, and industries that usually hire early in a recovery—construction and small businesses—were crippled by the credit bust.

[More from WSJ.com: CEOs Say Don't Expect Much Hiring]

Then there's the confidence factor. If employers were sure they could sell more, they would hire more. If they were less uncertain about everything from the durability of the recovery to the details of regulation, they would be more inclined to step up their hiring.

Something else is going on, too, a phenomenon that predates the recession and has persisted through it: Changes in the way the job market works and how employers view labor.

Executives call it "structural cost reduction" or "flexibility." Northwestern University economist Robert Gordon calls it the rise of "the disposable worker," shorthand for a push by businesses to cut labor costs wherever they can, to an almost unprecedented degree.

Looking back at the percentage of Americans with jobs in the 1990s (rising) and the 2000s (falling), Princeton University economist Alan Krueger estimates that 70% of today's job shortage is simply cyclical, the result of a disappointing recovery from a deep recession. But he attributes 30% to changes in the job market that began a decade or more ago.

Consider these clues:

In the most recent recession and the previous two—in 1990-91 and 2001—employers were quicker to lay off workers and cut their hours than in previous downturns. Many also were slower to rehire. As a result, the "jobless recovery" has become the norm.

[More from WSJ.com: McDonald's Adds Apples to Kids Meals]

In the past, when business slumped, employers cut work forces and accepted less work per employee. During the deep recession of the early 1970s, the output of goods and services in the U.S. fell by 5% and employment by 2.5%. Economists puzzled over "labor hoarding," or the tendency of companies to hold on to unneeded workers.

No one talks about that any longer. Between the end of 2007 (when American employment peaked) and the end of 2009 (when it touched bottom), the U.S. economy's output of goods and services fell by 4.5%, but the number of workers fell by a much sharper 8.3%. Today's puzzle: How and why employers managed to boost productivity, or output per hour of work, like never before during the worst recession in decades?

In an earlier era, when more Americans worked on assembly lines, many layoffs were temporary. When business bounced back, workers were recalled, often because of union-contract guarantees.

At the worst of the 1980-82 recession, 1 in 5 of the unemployed were "temporary layoffs." In the recent recession, the proportion of temporary layoffs never exceeded 1 in 10. In part that's because fewer Americans work in factories, where production can be stopped and restarted; if a restaurant doesn't have enough customers, it goes out of business.

"When layoffs are temporary, subsequent recalls can take place quickly," say economists Erica Groshen and Simon Potter of the Federal Reserve Bank of New York. When layoffs are permanent, job recovery is slower, they say. If the employer wants to hire, there's the time-consuming chore of sifting through applications.

[More from WSJ.com: Post-Office Closure List Sent]

Corporate employers, their eyes firmly fixed on stock prices and the bottom line, prize flexibility over stability more than ever. The recession showed them they could do more with fewer workers than many of them previously realized.

In a survey of 2,000 companies earlier this year, McKinsey Global Institute, the think tank arm of the big consulting firm, found 58% of employers expect to have more part-time, temporary or contract workers over the next five years and 21.5% more "outsourced or offshored" workers.

"Technology," McKinsey says, "makes it possible for companies to manage labor as a variable input. Using new resource-scheduling systems, they can staff workers only when needed—for a full day or a few hours."

Temporary-help agencies are playing an ever-larger role—from providing clerical and factory workers to nurses and engineers.

Black & Veatch, a Kansas City, Mo., engineering firm, which shrank from 9,600 employees before the recession to about 8,700 today, is hiring about 100 workers a month. About 10% of its workers are temps, says Jim Lewis, the firm's human-resources chief. "That's a quick way to bring people in, and gives you a little time to see if growth is going to hold or not," he says.

It also makes it easier to cut back in tough times. Workers, in short, now can be hired "just in time." And many employers apparently don't think it's time yet. Because they can hire temps almost instantly, there's little need to hire in anticipation of a pickup in business.

When they do hire, big U.S.-based multinational companies are more able and more willing to hire overseas, both because wages are often cheaper there and because that's where the customers are.

In the 1990s, those multinationals added nearly two jobs in the U.S. for every new job overseas; in the 2000s, they cut their U.S. work forces by 2.9 million and increased them abroad by 2.4 million, according to the Commerce Department.

Hal Sirkin of Boston Consulting Group says rising wages in China are dulling its edge as a low-wage nirvana. In 2000, wages of Chinese production workers averaged 3% of what their American counterparts made. Today, they are at 9%. BCG expects the figure to reach 17% by 2015. Mr. Sirkin predicts that will prompt some manufacturers to move jobs back to the U.S.

How many? He is still working on an estimate. But one thing is clear, though, "These are $15-an-hour jobs," he says, "not $30-an-hour jobs."

Even though the government counts 4.68 unemployed workers for every job opening, some employers insist they can't find workers with the skills they need at wages they can afford.

Federal Reserve surveys of local economies find employers from Boston to Kansas City to San Francisco reporting difficulty in hiring workers "with specialized technical skills, particularly in the health-care and technology sectors."

But workers without college degrees find well-paying jobs scarce in the modern U.S. economy. The Bureau of Labor Statistics says there are 25.3 million Americans over age 25 without high-school diplomas: Only 9.8 million, or less than 40% of them, were working in June. About 1.6 million said they were looking for work; the rest weren't even looking.