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Show DAILY Sunday, May 13. 2007 HERALD C7 mm THE WALL STREET JOURNAL The Weekly Guide to Managing Your Money 2007 Dow Jones WSJ.comSunday 6 Company, Inc. All Rights ResenriL U.S. Stocks Benefit From Global Growth By Greg Ip U.S. accounts for 30 The Boost from Overseas A of world's economy and it's planet's most important customer, with 20 of all imports. So when the U.S. economy stumbles, the world usually does, as well. But not now. The U.S. has been slowing for a year, with growth at an annual rate of just 1.3 in the first quarter. Yet growth in the rest of the world remains solid, and in some areas, is accelerating. Japan's economy grew 2.8 in the first quarter and the "euro zone"-count- ries that use the euro-gr- ew by according to J.P. Morgan Chase. Latin America expanded by 3.6 and Asia excluding Japan expanded by 9.8, led by double-diggrowth in China and India. Economists refer to this as "decoupling," and it has potential benefits to American investors. It's not only that they can insulate themselves from a U.S. slowdown by buying foreign stocks and currencies. They can even benefit at home: Because U.S. companies are doing more business overseas than ever, U.S. stocks are more protected from a slower-growin- g domestic market. With slow economic growth in the U.S., many U.S. companies are benefitting from sizable foreign sales. Those sales have helped the Dow Jones Industrial Average gain 24 although an index of Share of Surprising Split It's a little surprising to see the the rest of the world go U.S. and separate ways. As the International Monetary Fund notes in an April report, global markets have become more integrated and international trade more important in recent decades. That should make business cycles more synchronized across countries, rather than less. But this time is different because the U.S. slowdown is rooted mostly in housing. Houses are almost entirely built in the U.S. by so the housing U.S. workers, slump has had very little impact among our trading partners. By contrast, the collapse in technol- - sales from overseas 2005, year-en- d 34. Stocks U.S. vs. World 50 40X 40 Dow 30 20 U.S.LW Jones World Index ex 20 Qpfj 10 Industrial Average ... Mr i. 0 2, A S&P 500 stocks is up a heftier non-U- since -- '00 '99 companies that Source: Standard & Of '01 report '02 '03 '04 '05 10 ' ' ' ' i '06 ' i ' i ' ' i 2006 i i i ill 2007 overseas sales FWs ogy and telecom investment in 2000 and 2001 fell hard on companies in Canada, Asia and Europe that exported high-tec- h products to the U.S. Some countries have also become less dependent on the U.S. In 1986, Japan sent 39 of its exports to the U.S.; by last year, that had fallen to 23, according to Stephen Jen, currency strategist at Morgan In the same period, Jato the rest of Asia rose from 25 to 49 of the total. Even countries still closely linked to the U.S. are benefiting indirectly from the boom in China. The U.S. accounts for 84 of Canada's exports, but voracious Chinese demand has driven up the prices of many Canadian commodities, such as oil and nickel, buoyStanley. pan's exports ing Canada's economy, currency and stock market. U.S. investors can exploit the divergence between U.S. and overseas growth without even leaving home. Howard Silverblatt, an analyst at Standard & Poor's, notes U.S. companies for years have been expanding foreign opera- tions. Now, foreign sales represent 49 of the total sales of companies INVESTOR'S CALENDAR k index that rein the S&P port the data, up from 29 in 2001. With the rest of the world outpacing the U.S., "all those increasing sales have become significant," Mr. Silverblatt says. A Boost for U.S. All the same, investors in U.S. stocks have suffered indirectly, because the U.S. dollar has fallen 3 against a basket of its trading partners' currencies since September. That has boosted returns on foreign stocks, in dollar terms, relative to U.S. stocks. One factor weighing on the dollar is interest rates: The Federal Reserve, in response to the slow- Firms Many U.S. companies have highlighted the boost to recent profit from overseas operations. Among them: Whirlpool; Coca-Col- a and Caterpillar. That's one reason the Dow Jones Industrial Average is up 6.9 so far this year, not too far behind the 9 gain for a Dow Jones index of world stocks excluding the U.S. "The U.S. equity market has decoupled from the U.S. economy," says Morgan Stanley's Mr. , Jen. Vadim Zlotnikov, strategist at Sanford C. Bernstein, says the sectors with the largest foreign exposure are technology and consumer staples, which each get more than of their sales from overseas. 40 Last year, foreip sales grew substantially faster than US. sales for both. Surprisingly, he says, large and small companies tend to have similar exposure to foreign mar- kets. Small Business down, stopped raising rates last year and the market believes it may cut them this year. By contrast, the Bank of Japan, European Central Bank and Bank of England have been raising rates. inThat makes interest-bearin- g vestments overseas more attractive, helping buoy the euro and the British pound (though not the Japanese yen) relative to the dollar in recent months. Mr. Jen says that if the U.S. continues to grow more slowly than the rest of the world, the dollar will probably continue to fall and investors should favor investments denominated in the euro, pound, and Australian and Canadian dollars. However, some experts caution that the biggest profits have al ready been made on foreign stocks, and they might actually be headed for a period of underperfor-mancMichael Hughes, chief investment officer at Baring Asset in London, says Management world stocks could face a "headwind" if those countries' economies overheat and their central banks raise rates much more. An End to Decoupling? The decoupling may soon end. Economists expect U.S. growth to pick up around midyear as the housing market stabilizes. That means the first quarter may mark the low point for U.S. growth. Mr. Jen says investors might benefit by increasing holdings of riskier assets, in particular the currencies and stocks of emerging-marke- t countries, which tend to do well when the world growth outlook is improving. But what if the U.S. gets worse, and actually slides into a recession? That could happen if, for example, the contraction in the U.S. housing market spills over to consumer spending more generally, perhaps because consumers don't feel as wealthy when their homes are no longer appreciating. In that case, expect the world to recouple in a fashion that spells trouble, with the faltering U.S. economy pulling other economies down. The U.S. share of the rest of the world's exports has actually risen since the 1970s. Moreover, the IMF notes that the integration of global markets means a big move in U.S. markets is more likely to spill over to other countries. So if the U.S. stock market turns south or investors flee the riskier parts of its bond market, those shocks could quickly ripple around the world, much as the Nasdaq collapse in 2000 rippled stocks in Euthrough to high-tecrope. That would be bad for stocks everywhere. Get in Shape At the Office Attention, cubicle dwellers: swimsuit season will be easier if you incorporate some simple exercise into your workday. Start by taking the long way to your desk. Instead of vying for the best parking space in your company's lot, pick a remote spot so you have a longer walk to and TIP OF from the enTHE WEEK trance, says Marty Bruno, director of health and safety New York office of Skanska in the Sweden-base- d AB. Climb the stairs in your office in- stead of riding the elevator to your desk, adds Mr. Bruno. If you need to go up several flights, get off the elevator a few floors early. Also, walk the perimeter of the cubicles in your office rather than cut through the aisles to get to where you need to go, he says. You can put your abdominal muscles to work while you sit at your desk. Start by straightening your back so that your shoulders are touching your chair, says Seven Boggs, a personal trainer and na. tional spokeswoman in Kendall, Fla., for Bally Total Fitness. Tighten your stomach and hold for about 10 seconds, then release. Repeat the exercise at least 15 times throughout your workday, she advises. "Your abs will start to feel tighter and firmer within a short period of time," she says. To strengthen your triceps, find a lightweight object and raise it straight up to the ceiling, "like the Statue of Liberty holding the torch," says Ms. Boggs. For most women, a stapler or tape dispenser will probably do, but men may need something heavier, such as a hefty paperweight, she says. Next, bend your arm back behind your head and then return to the starting position. Do about 15 repetitions per arm, three times a day, she sug- gests. Email: forum.sunday03wsj.com By Sarah E. Needleman By Kelly K. Spors THIS WEEK Complications for Chrysler: Dairrv ACTION IN ALUMINUM: of Alcoa (AA) and its takeover target However, an offer from Canadian auto-part- s maker Magna Interna- even before the May 7 bid. tional may be in jeopardy after it agreed to sell a hefty stake to a Russian aluminum magnate suspected of ties to organized crime. Alcan (AL) were both up strongly 60 ( Akan 50 reguarfy contribute to Your a Journal podcast updated wtri fresh persona finance advice eacn weekday. Listen 20 10 the Menu: Shareholders Steakhouse owner OSI Restaurant Partners vote Tuesday on taking the company private for $40 a share, or about $3.2 billion. of Outback Retail Earnings: After Stores reported a 3.5 decline in same-stor- e sales in April, its steepest drop in 28 years, the retail giant releases earnings Tuesday. Other retailers reporting: Winn-Dixi- e Stores, Linens 'n Things, PetSmart, J.C. Penney, Kohl's and Nordstrom. LAST WEEK Stocks Are Mixed: The Dow Jones Industrial Average rose 0.5 last week, while the Nasdaq Composite Index fell 0.4. So far this THE WALL Zjf at WSicompodcasts Paulson's Plan: Treasury Secretary Henry Paulson will outline his plan to improve the competitiveness of U.S. capital markets. Recommendations may include limiting the liability of public accountants. OSI on Vi Money " Matters, Closing prices before the bid ,n v, Jan. 2007 year, . Feb. i i March April May Source WSJ Market Data Group the 6.9 Dow industrials are up and the Nasdaq is up 6.1. Metal Merger: Alcoa offered $27 billion for Canadian rival Alcan. A successful bid would create a company accounting for about 20 of global aluminum output and reunite two firms split by antitrust concerns decades ago. I JetBlue's Captain Departs: David Neeleman is stepping down as JetBlue Airways' chief executive, three months after a service meltdown at the airline. Dave Barger, the longtime president, will succeed him. Food for Thought: Sara Lee Chief Executive Brenda Barnes rebuffed k calls for an accelerated stock and said she isn't worried about a takeover. Meanwhile, the largest institutional shareholder of Wendy's International is urging a sale of that chain. SIMM. STREET J0JJRNAL Ante: Chicago Mercantile Exchange Holdings raised Its offer for Chicago Board of Trade CME Up Divid Cmuk LawmMT Ruul Editor St:K KlIITI Kirra Dtmato Mart Eimtihi Nkw AHT Tynr DlRKiTcH 0 Telephone: (M9I email: Mindayfl:kthnu.cn 4.KKI Route Soulh Brurnwick. I North N.1 088.52 fail a mi Vki P:snir.vT. Puma Bimxhmsk (212) ftid.Brllgdnwjonmxoal DlBWTIHL ' Mark Ripe JllUYU. Tilt Srtnu RKPIHtT owner CBOT Holdings. CBCTs board favors CME over rival bidder , IntercontinentalExchange. FDA Caution: A Food and Drug Administration panel called for further limits on cancer patients' use of Amgen and Johnson & Johnson' anemia drugs amid safety concerns. The FDA also delayed approving Dendreon's experimental prostate-cancer PmumT (2121 NUrk.FViprfcooiiJonnw'oei OntnatTt HcuM urrun 100 Lihertj Stnd Ne Wk. N.Y. 10281 Uftm. C.Ui I vaccine, Provenge. I Briefly: Federal Reserve policy makers voted to leave their key Interest covered that many customers were finding the site by searching for popcorn flavors like "chocolate popcorn" and "caramel popcorn" so it boosted the use of those phrases. no denying it: How There's 70S 40 Street Journal Sunday writers Wall For the Web, Choose Your Words Carefully The stocks lerChrysler may soon announce a lead bidder for its Chrysler Group. rate unchanged at 5.25 for the seventh straight meeting....ln-vtsto-r Carl Icahn failed In his bid for a seat on the board of you're found on the days can make or break your business. And one surefire way to be found is to land near the top of the results for common searches on popular h engines like Google, com and Yahoo.com. A big factor in how high, or low, in anyone's search list your business appears is what keywords are used -t- he words and phrases a Web surfer types into a search engine when hunting for a product or service online. Search engines scan a site's content and hidden code, and the words that appear most often are probably the ones that you will rank highest for. Some businesses achieve high rankings for their chosen keywords another ing for them. way-- by pay- ads, such as Google's AdWords program, let businesses bid a price on keywords they want to rank well for. Links to their Web sites then appear, often under the header "Sponsored Links," next to the "natural" search results the search engine generates. Whenever someone clicks on their link, they pay a fee. Either way you go, using keywords to improve search rankings only helps business if you use the right ones. And that's sometimes tricky: Many larger companies can spend a fortune on firms that help them best use the short generic terms such as "insurance," or "luggage." On the other hand, longer, specific phrases (think "honeydew-col-ore- d suitcases") may aptly describe what you sell but potential customers are unlikely to use them in a search. So, how do you strike a balance and find the best keywords for your Web site? Here's some guidance. Use the Right Tools Much of keyword selection involves trial and error and figuring out what words potential customers actually type into the search box to find your types of products, says Aaron Wall, an Oakland, Calif., consultant. A good search-marketin- g start is to use a Web . ' . , , . Moving On 1, j vacation " ' 4Sfs D2l analytics program on your site. Google Analytics and ClickTracks are two that work by installing some basic code into the script of your Web site. The programs track statistics about your Web site, such as the number of visitors, what search terms visitors use to get there and whether they actually make a purchase. Google Analytics, which is free, lets you get a geographic breakdown of where your visitors are coming from. Other Web tools help you see what search terms are most popular for your Industry. Yahoo's Keyword Selector Tool and Google's AdWords Keyword Tool let you see the search volumes for a particular phrase, and related phrases, in the past month. The goal is to find keywords with the highest search volume-b- ut the least competition-th- at describe your product or service. For Instance, typing "pillow" into Google's AdWords tool shows that while the word is searched often, it's also used by many other Web sites. But related search terms, such as "microbead pillow," "bed pillow" and "pillow cushion," are searched nearly as often, but have fewer sites vying for them. Other tools are designed to help site owners use keywords more effectively. HitTall.com, for Instance, offers a product that analyzes your Web traffic and suggests keywords to include in the content along with how to use them. Go Long A smart strategy for small businesses, especially those on a tight budget, is using longer, more specific phrases. The advantage: While fewer people search for them, those searchers are more likely to find exactly what they're looking for. So more specific keywords tend to convert to business more often, s says Matt McGee, a tle expert at Marchex, a firm. Seat- search-marketin- g "If you're a bookseller in you're not going to beat out Amazon.com or Barnes & Noble" for a general word like books, he says. But "you might be able to go after 'used books' books.'" or 'self-helChoice keywords aren't always obvious. Dale & Thomas Popcorn, an Englewood, N.J., popcorn chain, uses analytics software to track its Web traffic and search phrases. The site focuses on keywords like "gourmet popcorn" and "popcorn tins," but some of its e keywords were less apparent until it started analyzing traffic, says marketing director Deborah Krier. More people were typing "kettle corn" as two words when searching, so the site began using It as two words Instead of one. It also dis Once a business unearths the most effective keywords, those words and similar relevant phrases should be peppered into the site's text and in the site's blue bar that runs title tags-t- he on the top of the Web browser-a- nd the invisible metatags that describe each page's content. Each page of a Web site might have its own keywords: For instance, a furniture store might focus on the word "loveseats" on a page that displays sofas and loveseats and focus on "cherry oak dining room tables" on a page that sells those. But while it's important that your chosen keywords appear regularly in your site, they should appear naturally in the text and not be overly repetitive: "You have to remember that real people are reading your copy," says Ms. Krier. "It's a little bit of an art." Adding extra content to a site, such as a blog or informational guides that include those keywords, can also help boost search rankings because there's more opportunity for keywords to be used. Businesses serving a particu- lar geographic market might also fare better by using their location as a keyword. Many search engines now prominently feature businesses located in a. particular region. A dentist in Denver, for instance, might choose to focus on the keyword phrases "Denver dentist" and "Denver dental practice." The address of the business should also be displayed prominently on (he Web site, since the engines now often extract location information directly from the site. Kelly K. Spors covers small business for The Wall Street Journal. at kdry.ipore9wtj.com. Jonathan Clements'! 'Getting Going" returns next week. Write her |