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In a brilliant article in The New York Times, the paper points out that of all the mistakes that Starbucks (NASDAQ: SBUX) made in its expansion, picking real estate locations may have been the worst. Much of the analysis for the piece came from talking to real estate brokers. The paper writes, "In some cases, brokers say, Starbucks misjudged the risks of putting stores close to each other, leading to the decline in same-store sales."

It is astonishing that Starbucks would make such basic errors and speaks to what happened to management during the period when founder Howard Schultz was absent from the CEO job. The team that replaced him said it believed the company would eventually have 40,000 store worldwide. It clearly cut corners in terms of planning to get there.

The real trouble with the real estate location decisions is that it may take a very long time to fix. Closing stores may be easy, but finding better spots, negotiated for the space, and building out new stores will be time consuming and, perhaps, expensive.

Schultz and his minions are paying for rampant growth, and the poor souls who worked for him are paying more. Almost 12,000 will lose their jobs.

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

Japan's Nikkei Index, the weighted average of 225 stocks in major companies, fell for the 10th day. That has not happened since 1965.

According to the FT, "Rising fears about the impact of inflation on slowing economies took their toll on Japanese and other Asia-Pacific markets." That sounds a bit like the current trouble in the US.

A number of other indicies have had sharp declines lately. The Shanghai Composite has fallen by more than half since late last year. Rising energy and food costs in China have not helped it. Neither have concerns that a recession in the West could cut demand for its exports.

The Nikkei news says two things. The first is that the economies in other large nations may be as troubled as that in the US. Traders often look out several quarters when they make their buying or selling decisions. But, the second, more ominous sign from the Nikkei's decline is that it says that the smart money in Japan believes that the price of oil is not likely to fall. Japan is relies more on imports of crude that the US does.

The tough run for the Nikkei is not restricted to Japan. US and EU markets are likely to set records of their own, and not the kind that traders look forward to.

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

Abbott Laboratories (NYSE: ABT) got approval for its new drug-coated stent. The products are used to open clogged arteries, often in the place of by-pass surgery. The field has been dominated by deeply troubled medical device company Boston Scientific (NYSE: BSX). It looks that the weakened company is in for much more pain.

According to The Wall Street Journal, ABT "received regulatory approval for its Xience V drug-coated stent, which is expected to be the top seller in the roughly $2 billion U.S. market because it appears to be more effective than rival devices." Boston Scientific will sell the new Abbott product, but with 40% of the revenue going to its rival, it is hard to see how that is a good deal.

BSX has been beaten by competition at almost every turn. It took on tremendous debt when it bought medical device company Guidant. It faced trouble when some Guidant products hit quality control issues. Boston Scientific stents came under criticism a year ago, when medical research questioned how effective they were.

BSX traded at almost $45 in 2004. It is now at about $12. With new competition and a bad balance sheet, that is not likely to change much.

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

One of Yahoo!'s (NASDAQ: YHOO) plays for showing that it does not need a deal with Microsoft (NASDAQ: MSFT) is to find another large partner for a merger or joint venture. It is becoming more likely that the partner may be either Time Warner's (NYSE: TWX) AOL or News Corp (NYSE: NWS), which owns MySpace.

The structure of a deal with AOL might look very much like the one the firms discussed earlier in the year. According to The Wall Street Journal, "The two companies are talking about a structure they began discussing several months ago -- an arrangement whereby Time Warner would fold AOL into Yahoo and take a minority stake in the combined venture."

A transaction with AOL would give Yahoo! three important advantages. First, it would nearly double the size of its user base, giving it by far the largest audience of any company in the US. Yahoo! would also get AOL's Advertising.com network, the biggest display ad network in the nation. Finally, Yahoo! would get a substantial set of new customers for its search and search advertising businesses.

Wall Street wants to see Yahoo! sold. Any other alternative, including a deal with AOL, is likely to drive its shares down. But, if it wants any chance of staying independent, a transaction with Time Warner may be its only viable alternative.

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

Nvidia (NASDAQ: NVDA), the big graphics chip maker, warned on profits. It was an inauspicious beginning to the earnings season for tech stocks. Many of the world's PCs use Nvidia chips. One of the reasons the company gave for its trouble is slowing demand combined with lower prices. The news was considered so bad that NVDA shares fell over 20% after hours.

According to MarketWatch, the company "expects its second-quarter revenue and gross margin to be lower than its previously announced forecast. The company now expects revenue from $875 million to $950 million." The consensus among analysts was that the company would have revenue of $1.1 billion.

Because the firm's products are so closely associated with PC sales, shares in other chip companies like Intel (NASDAQ: INTC) and computer makers like Dell (NASDAQ: DELL) are almost certain to be viewed as candidates for earnings downgrades of their own.

Nvidia's forecast could be the start of a very hard quarter for tech companies. And they may have been Wall Street's last significant hope.

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

Nvidia (NASDAQ:NVDA) is down over 20% after dropping its financial guidance.

Intel (NASDAQ:INTC) is indicating down 2% after the Nvidia warning.

Yahoo! (NASDAQ:YHOO) is indicating up over 2% on news that it is looking for a new merger partner.

United Health (NYSE:UNH) is off about 4% after announcing large lay-offs.

Stocks may trade differently in the pre-market than they do in thre regular session.

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

Soleil upgraded Alcoa (NYSE:AA) to "hold" from "sell", according to Briefing.com. The news service also reports that Citigroup upgraded Peabody Energy (NYSE:BTU) to "buy" from "hold".

D.A. Davidson raised it price target on Talbots (NYSE:TLB) from $7.50 to $12.50, according to the AP.

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

The Wall Street Journal was good enough to humiliate General Motors (NYSE: GM) CEO Rick Wagoner by pointing out that he still has his job. The company's share price is down almost 85% since he took over. The newspaper writes that Mr. "Wagoner's decision a few years ago to tilt GM's product mix more toward trucks and SUVs isn't looking good."

Fair enough. But there are two critical elements to Wagoner still having his corner office. One is that the rest of the US car industry is as bad off as GM, maybe worse. The other is that no CEO in his right mind would leave a good job to take over GM. Boeing (NYSE: BA) exec, Alan Mulally, moved to Ford (NYSE: F) as the head man and he must regret the decision every day.

Wagoner is part of the "dumbing down" of the American CEO. If the man can't do well, blame it on the industry. That makes it seem that individual companies are powerless to make decisions that will put them ahead of the competition, even in tough markets.

Tell that to the guys at Honda (NYSE: HMC).

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

There ought to be a law. That would be legislation which limits what public company CEOs get when they are fired. Maybe the limit should be $1 million. How much is failure really worth?

The departing head of American International Group (NYSE: AIG), Martin Sullivan, will pick up $47 million as he hits that door. According to the FT, "Mr Sullivan's departure was deemed a resignation for "good reason", according to AIG." His "good reason" was that the board would not allow him to stay in the building. What better excuse can a man get?

Sullivan can hardly be blamed for taking the money and retiring about his yacht to hit golf balls into the ocean. The AIG board shoulders that burden. The chairman of that board, Robert Willumstad, took Sullivan's job. Maybe it was easier to move up to CEO with Sullivan fat and happy.

But, there ought to be a law.

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

It is reasonable to believe that as the cost of crude rises, demand will fall. It is in the Economics 101 textbooks. It has to to be true.

Not so, says The International Energy Agency. According to The New York Times, the think tank says "the small decline in oil demand in the industrialized countries will be more than offset by an estimated increase in demand of 3.7 percent a year from 2008 to 2013 in developing countries, particularly in Asia, the Middle East and Latin America."

The argument has the benefit of making sense. Asia, especially China, cannot keep up its GDP growth without gas to drive its transportation industry. It has cut the amount it provides to underwrite the price of diesel and gas, but it has not eliminated the practice. Driving a car or truck on the mainland is still cheap.

In the Middle East and Latin America, many of the countries are net exporters of crude. Brazil recently claimed that it found one of the largest oil deposits ever discovered. The field are just off its coast in the ocean. Many of the nations with excess oil will keep some of that at home to build their own infrastructures.

Oil prices are staying high whether the US can afford that or not.

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

Apollo Group (NASDAQ:APOL) is up over 15% on strong profits.

Blockbuster (NASDAQ:BBI) is up over 10% on news it has dropped it bid for Circuit City (NYSE:CC).

Yahoo! (NASDAQ:YHOO) is up 6% on news of a possible new bid from Microsoft (NASDAQ:MSFT).

Circuit City is down over 10% due to Blockbuster walking away from a possible offer for the company.

GM (NYSE:GM) is off 5% on a brokerage downgrade.

Stocks may trade differently in the pre-market than they do in the regular session.

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

Citi Investment Research maintained its "hold" rating on Biogen Idec (NASDAQ:BIIB) saying the firm "is poised to gain from higher prices for multiple sclerosis drugs," according to the AP.

Merrill Lynch downgraded GM (NYSE:GM) to "underperform" from "buy", according to Briefing.com. Bernstein upgraded Exxon Mobil (NYSE:XOM) to "outperform" from "market perform", the news service also reported.

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

Microsoft (NASDAQ: MSFT) may try to buy Yahoo! (NASDAQ: YHOO) again, but it does not want the whole company. It finds the search business useful as part of its battle with Google (NASDAQ: GOOG). The content portal business does not have much attraction, and Redmond wants a company like Time Warner (NYSE: TWX) to pick up that piece. According to The Wall Street Journal, Microsoft "approached other media companies in recent days about joining it in a deal that would effectively lead to Yahoo's breakup."

The new deal just might work. Yahoo! dropped below $20 yesterday, putting its stock back where it traded before the first buy-out offer. The No. 2 search company's shares reached as high as $33. Investors, especially Carl Icahn, are steamed that Yahoo! did not grab all of that extra money.

Even if Microsoft cannot find a partner to take the Yahoo! content business, it may move ahead. It only has 10% of the US search business. Yahoo! has about 20% and Google around 60%.

Microsoft still needs Yahoo!, and with its stock down by a third, Yahoo! needs a buyer.

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

Everyone in the music distribution business wants to be like Apple (NASDAQ:AAPL) iTunes. No wonder. It has over 80% of the market. Rhapsody, a competing download service, said yesterday that its subscribers could play their music on the iPod. It feels that should improve their customer base. Maybe. But, probably maybe not.

Now, Nokia (NYSE:NOK) has signed up Warner Music (NYSE:WMG) to its mobile phone music service. The big handset company has done deals with three of the four largest record labels.

According to the FT, "Consumers who buy Nokia phones featuring Comes with Music will be allowed to download as many songs as they like from Universal Music, Sony-BMG and Warner for a year." Now Warner is on board.

Getting a piece of the iTunes business will be hard, but Nokia probably has a better chance than anyone else. It sells 40% of the world's handsets, over 400 million a year.

But, consumers are used to getting their music from iTunes. Nokia may have a service, and it may have distribution, but it does not have a music brand or product loyalty in the download subscription business.

The loyalty part is important.

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

Ford (NYSE:F) is going through its worst sales period in over 20 years. Its flagship during most of that period has been its F-Series pick-up. The truck has sold like mad and it is highly profitable for the car company.

The F-Series trucks are heavy and eat a lot of gas. According to The Wall Street Journal, "Ford has started searching for answers to a question it never used to pay much attention to: exactly who drives big pickups and why."

Ford figures some of the people who buy the pick-up don't need it to haul things or tow things. They are people who want to look tough and have that working man image. The car company is trying to find a way to keep these people even though they could drop down to more fuel-efficient vehicles.

If gas hits $5, and it may, the probability that people will buy pick-ups to be "cool" goes away very quickly and Ford will almost certainly lose a lot more of its F-Series customers.

Of course, if gas hit $5, Ford has much bigger problems.

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