Markets muddle along

Markets rose on varied earnings reports. Dow was up 39, advancers ahead of decliners 2-1 & NAZ gained 18. Banks continue to lead the way, today they have giving up early gains:

S&P 500 FINANCIALS INDEX

Value 143.71

Change 0.74

% Change 0.5%

High yield sectors were little changed while oil slipped 70¢.


International Monetary Fund (IMF) made a gloomier assessment for the global economy. They forecast that the worldwide economy will shrink by 1.3% in 2009, far worse than the 0.5% estimate in Jan. Reviving the banking & financial sectors will be key to recovery & the recovery will be difficult with growth rates below what economies have become accustomed to.

•IMF Says Worldwide Recession Will Be Deeper, Recovery Slower Than Forecast


McDonald's (MCD), a Dow stock & Dividend Aristocrat, posted a 3½% increase in quarterly profits as global same store sales grew 4.3%. The stock was up 53¢. Global sales fell $600M due the stronger dollar (they gave a warning in Mar).

• McDonald's profit rises nearly 4 percentAP(Wed 8:52am)

Morgan Stanley (MS), now a bailout bank, reported a worse loss ($578M or 57¢ per share) than predicted in Q1. The loss is after paying preferred divs (to the gov). The common quarterly div was reduced to a nickel. The company lost $1B in real estate & $1½B from the rising value of its own debt as investors grew more confident about the bank's creditworthiness. The stock was down only 26¢.

•Morgan Stanley Posts Wider-Than-Forecast $177 Million Loss, Cuts Dividend


Dow continues hugging the 8K level. Mushy earnings are leaving investors confused. Results from the stress test at the 19 big banks may be released in the next few days. These are numbers they are really making up as we go along. Chances are they will give generally favorable conclusions which everybody wants to see. However if the the recession drags on & on, these results will be viewed down the road in retrospect as only preliminary.


Dow Jones Industrials --- 1 month