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General Motors (NYSE: GM) has just announced that it will extend warranties on may of it used cars. According to Reuters, "GM said it would begin offering a 12-month, 12,000-mile "bumper-to-bumper" warranty on all used cars and trucks certified as eligible for the repair coverage by participating GM dealers." The firm has already said it will return to the extensive use of incentives to clear out new car inventory.

GM should have a better solution than to lose more money on each new car it sells and add costs to market its used products. It turns out that is not the case. Vehicle sales in the U.S. are just too awful and Toyota (NYSE: TM) and Honda (NYSE: HMC) take more market share each month.The talk of GM doing into Chapter 11 rings a bit more true as the time passes.

GM is now out of options. It still makes money overseas, but that is overwhelmed but its North American deficit. GM says it will stick to supporting all of its brands except the Hummer. That may end up not being true. GM did say it was moving away from incentives. It did not work out terribly well.

GM has a couple of brands that still sell only a modest number of cars. Saab is one. Saturn in another. Saab could be sold. Saturn could be closed. Saturn might not even be missed.

If GM has to continue using incentives, it will get to the point where it cannot support the marketing and product development costs of all of its brands. That point is probably coming in the next quarter.

Douglas A. McIntyre is an editor at 247wallst.com.

Intel (NASDAQ: INTC) is beginning to offer its new "Atom" chip, which is designed to work in "low-end "netbooks" and other mobile computing devices, " according to the FT.

The trouble is that it is a chip for devices that no one wants.

Intel is trying to drive a wedge between low-end laptops that weigh only a couple of pounds and new smartphones like the products from RIM (NASDAQ: RIMM) and just about every other large handset company. The new smartphones can access the internet and use WiFi hotspots instead of the cellular system, access 3G broadband wireless, and read e-mail and attachments. Cheap laptops now cost as little as $500.

Intel is up against a PC market that is growing more slowly each year, especially in large markets like North American and Europe. It has decided to launch a product in the hope the new devices will come along because the chip is available.

Unfortunately, no one wants the products that Atom would drive. The niche is already crowded.

Douglas A. McIntyre is an editor at 247wallst.com.

Palm (NASDAQ: PALM) is dead. That has been written before, but now the company needs an official funeral mass. According to The New York Times, "Palm's chief executive, will announce the debut of a new smartphone primarily for business customers - the Treo Pro." The company also has several other handsets in development.

Palm is now up against smartphone products from much larger companies like Samsung and Nokia (NYSE: NOK). Not to mention the Apple (NASDAQ: AAPL) iPhone.

In the last year, Palm had an operating loss of $105 million on a shrinking revenue base that fell to $1.32 billion. The company has $398 million in current and long-term debt.

Palm is not going to make it as an operating company, but it might be a good licensing entity. That would involve cutting almost all of the company's staff and licensing its brand and product designs to another company, perhaps Samsung or LG. The Palm name still carries some modest weight in the U.S.

Palm's revenue might drop to $100 million, but its costs would be negligible. It would, at least, make a profit, which is something that is out of the question with the company in its current form.

Douglas A. McIntyre is an editor at 24/7 Wall St.

With all of the success of the Apple (NASDAQ: AAPL) iPhone and the RIM (NASDAQ: RIMM) BlackBerry, investors would think cellphone sales in the U.S. are booming. That assumption is wrong.

In the second quarter, handset sales in the U.S. fell 13% according to NPD Group, dropping to 28 million units. According to The Wall Street Journal, "That is the lowest number of phones sold in a quarter since NPD began tracking the category in 2005."

Motorola's (NYSE: MOT) market share fell from 32% last year to 21% in the second quarter this year.

The news shows the extent to which handset companies will have to rely on sales in emerging markets like China if they are going to continue to growing. Although recent figures for Europe are hard to come by, it is likely that sales growth there has slowed or has gone negative. In both the U.S. and EU there are almost as many cellphones as there are people and the economy is making it harder to sell replacement handsets.

While the new numbers say more a great deal about the near-term future of the major handset companies and the challenges they face for earnings, the data speaks volumes about Motorola. The company has modest market share outside the U.S. and its domestic market has been its salvation. That is clearly no longer the case.

Motorola plans to spin-off its handset unit next year. But its revenue is falling at the rate of about a third compared to last year and it loses several hundred million dollars a quarter. If the U.S. market turns against the company, shareholders have to ask if the unit has any value at all.

Douglas A. McIntyre is an editor at 247wallst.com.

HSBC upgrades KLA-Tencor (NASDAQ: KLAC) to Overweight from Neutral, according to Briefing.com. The news services also reports that Caris initiates Eli Lilly (NYSE: LLY) with a Below Average rating.

Comverge (NASDAQ: COMV) was cut to Neutral at Broadpoint Capital, according to 247wallst.com. DISH Network (NASDAQ: DISH) was cut to Market Perform at Bernstein.

When should the FDA pull a drug off the market? When one person dies from side-effects? How about two or three?

Eli Lilly (NYSE: LLY) and Amylin Pharmaceuticals (NASDAQ: AMLN) produce a highly successful diabetes drug called Byetta. According to The Wall Street Journal, "The Food and Drug Administration on Monday said it has received six new reports of patients developing a dangerous form of pancreatitis while taking Byetta."

Two of the patients died.

The drug makers said that the poor results were very rare. The people who got sick probably view it a little differently.

There have been questions for some time about whether the FDA does an effective job of regulating drug companies. The problems with Byetta say that the answer is "no." A drug, which causes even one death, yet stays on the market speaks volumes about how the consumer's interests are cast aside.

Douglas A. McIntyre is an editor at 247wallst.com.

One of the few hopes the U.S. car companies have had is that they have been perceived as closing the quality gap with Japanese models. Recent JP Power data shows Detroit running in a dead heat with imports in the consumer satisfaction race.

That bubble has been at least partially burst due to new information from the University of Michigan's American Customer Satisfaction Index. According to the AP, "U.S. car buyers are growing less satisfied with their purchases from domestic automakers while their Asian and European competitors continue to improve."

In the new survey, BMW and Lexus tied for the top spot followed by Honda (NYSE: HMC) and Toyota (NYSE: TM). Several brands from GM (NYSE: GM) and Ford (NYSE: F) dropped down the rankings.

At the risk of stating the obvious, Detroit is in such deep trouble that a perceived drop in the quality of its cars can only make its recovery more difficult. There are several ways around that, but none of them are very palatable.

GM yesterday introduced buyer incentives across most of its brands. That means its margins on those vehicles will be lower. It may pick up some market share, but any victory there will be costly. The U.S. car companies are cutting their marketing budgets, so they cannot "advertise" their way out of the problem.

Effectively giving cars away can certainly help hurdle the quality barrier, but losing a lot more money could sink a large U.S. auto company.

Douglas A. McIntyre is an editor at 247wallst.com.

Several independent economists have said they expect a big U.S. bank to fail. It may be easy to ignore them because they are not affiliated with any of the large institutions that monitor financial companies. But now the former chief economist of the IMF says one of America's big banks will probably not make it.

According to Reuters, "The worst of the global financial crisis is yet to come and a large U.S. bank will fail in the next few months as the world's biggest economy hits further troubles, former IMF chief economist Kenneth Rogoff said." Rogoff is currently an economist at Harvard.

The analysis pointing to the bank failure is based on the facts that the credit markets and housing situation will get much worse. Current earnings from banks and brokerage houses indicate that the prediction may well be true.

Analyst Shaw Wu of American Technology Research said his firm's checks with suppliers indicate some weakness in HP's (NYSE: HPQ) inkjet sales and consumer PCs in the U.S, according to the AP.

UBS downgraded Darden Restaurants (NYSE: DRI) to Neutral from Buy, according to Briefing.com. The news service also writes that Calyon initiated MEMC Electonic (NYSE: WFR) as a "Buy".

Goldman Sachs upgraded Mastercard (NYSE: MA) from "Hold" to "Buy", according to StreetInsider.com.

Douglas A. McIntyre is an editor at 247wallst.com.

Investors in shares of Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) went wild on speculation today that the government would put new funds into the mortgage agencies and wipe out common shareholders. The market was dragged down over 200 points at some point on a ripple of concerns about the financial sector:

Dow: 11,479.88 -1.54%
NASDAQ 2,416.98 -1.45%
S&P 500: 1,278.71 -1.50%
52-Week Lows

Early in the day, the chance of a hurricane moving into the Gulf of Mexico pushed oil up and knocked equities down. Once the storm moved over Florida and away from deep-water rigs, oil went back down.

The trading was so bleak and depressing that most traders probably went home to watch the last few events of the Olympics. Those who stayed saw a few notable moves:

The FCC is looking at using part of the TV signal spectrum to provide wireless high-speed internet. It is a brilliant idea that is being opposed by a large part of the television industry.

According to The Wall Street Journal, "The Federal Communications Commission will have the final say in the battle between the broadcasters -- which fear interference on the airwaves they'll still be using -- and the companies including Google Inc (NASDAQ: GOOG). and Motorola Inc. (NYSE: MOT) that want to share the television airwaves."

The fight is a classic example of old media not wanting to give up something that it has "owned" for years because it may help new competition.

Tough luck. Broadband adoption in the U.S. is behind several countries in Europe and Asia, and if the FCC can offer an inexpensive solution to that, it should. The new over-the-air system would have many of the benefits of Wi-Fi, but would be more broadly available.

TV broadcasters say that the new technology could interfere with their signals, but testing can demonstrate whether that is true or not. The FCC has the chance to move broadband adoption forward with one spectacular decision. It should not balk at the chance.

Douglas A. McIntyre is an editor at 247wallst.com.

There is a divide along age lines in terms of how people get their news. TV is still in the lead, but that may not last for long.

A Wall Street Journal story looks at the Pew Research Center's biannual survey on news-consumption habits. Pew's most important conclusion of the survey is that it "found that 46% of those polled have a "heavy reliance" on TV for news at all times of the day."

But the median age of the TV loving crowd was 52-years-old. Another group, with a median age of 35, relies primarily on the internet as its news source.

Just as newspapers have faltered as major providers of information, it looks like TV may be seeing its best days. The next generation of people who are moving into their forties and fifties are unlike to migrate to the Tube just because they are aging. Their "internet heavy" habits are likely to stay with them for the balance of their lives.

Over the next decade, major TV network and TV station stocks are likely to be damaged by the trend.

Sell CBS (NYSE: CBS) and buy Google (NYSE: GOOG). Google News taps 4,500 sources and that is going to grow.

Douglas A. McIntyre is an editor is an editor at 247wallst.com.

It has been almost two weeks since a Nomura analyst reported the dropped phone calls due to faulty chips were a significant problem for Apple (NASDAQ: AAPL) 3G iPhone customers.

The mainstream press has been slow in reporting the trouble, but the FT made it a major story today. According to the paper, "Over the past few weeks, customers have flocked to Apple's online support forums to complain about weak or fluctuating signals leading to dropped calls and long download times."

Since the FT prides itself on being early to market with important news, what happened?

The media, in general, seems reluctant to take on Apple's image as an almost flawless designer, manufacturer, and marketer of PCs and consumer electronics devices. The company's customers are vocal defenders of the Apple's blue chip reputation and are rabid about attacking media that try to undermine that.

Apple's obsessive need to present itself as "perfect" is beginning to backfire because of problems with its newest product, the 3G iPhone. It would be better to come clean about the troubles and offer a way to fix them

Douglas A. McIntyre is an editor at 247wallst.com.

Oil prices are moving up today because of a hurricane which may hit the Gulf of Mexico. It is a signal that it does not take much to move crude prices, which have fallen from $142 to $115, in the "wrong" direction again.

According to Bloomberg, "Crude oil rose for the first time in three days as a storm near Cuba prompted evacuations from rigs and platforms in the Gulf of Mexico, which accounts for about a fifth of U.S. production. " Any disruption in production brought on by the storm would be short-lived.

The news should remind those who see crude moving toward $100 a barrel that the system of supply and demand is fragile. OPEC is talking about cutting production now that prices have fallen. The conflict between Georgia and Russia could still disrupt the flow of oil from Georgian ports. Nigeria remains an extremely unstable country. Recent reports show that China's GDP is still growing at over 10%. That growth relies heavily on gas and diesel to transport exports to shipping facilities.

The drop in oil prices may drive a certain complacency about gas and heating oil prices. It could undercut the big move is the US toward "energy independence." But that would be a sucker play. There are too many pressure points that will keep oil prices high.

Douglas A. McIntyre is an editor at 247wallst.com.

Citigroup downgraded Hershey (NYSE:HSY) to Hold from Buy, according to Briefing.com. The news services also reports that Bank of America downgraded Ingram Micro (NYSE:IM) to Neutral from Buy.

Robert Half (NYSE:RHI) was cut to Underweight at Lehman, according to 24/7 Wall St. The financial website also reports that Comverse Tech (NASDAQ:CMVT) was cut to Neutral at JPMorgan.