Stocks gained on what was viewed as favorable inflation news. Dow was up 125, advancers ahead of decliners 5-2 & NAZ up 27. Inflation news from the Labor Dept, while mixed, was viewed as favorable. Consumer prices rose .2% in Apr vs .3% in Mar sending the markets higher. However energy was flat while food increased .9%, highest rate in 18 years. Fuel prices were flat because of a drop (huh!) in gas prices, which has to do with they way they compute seasonal factors. Markets call the report good, I think of it as mixed at best. The number of home foreclosures in the US rose 65% last month over the prior year. Housing continues with its ugly messages. Oil pulled back to 124+ after reaching almost 127. Gas at the pump topped 3.75 yesterday according to AAA.
Freddie Mac (FRE) reported a big loss in Q1, but was up almost 10% on this news as it came in better than forecasts. FRE beat estimates because of a change in how it accounts for the value of derivatives, complex financial instruments used to hedge against swings in interest rates. OK! They also announced a 5½B sale of stock & relaxed requirements by the federal regulator allowing FRE to play a larger role with the added capital in the battered mortgage market.
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