Markets nervous ahead of jobs report

Stocks started lower but buying brought them back to even. Dow is up 3, advancers over decliners 4-3 & NAZ is down 6. Banks are rallying, the Financial Index is near its high for the last month but remains in the 190-210 trading range.

S&P 500 FINANCIALS INDEX

Value 203.88

Change 1.88

% Change 0.9%

The red hot Alerian MLP Index fell back 2½ to the 293s, hurt by Enterprise Products Partners (EPD) large unit offering causing its price to fall 82¢. The REIT index was up fractionally after selling off in the last 2 weeks. Junk bond funds were higher, still in demand. The yield on the 10-year Treasury rose 1 basis point to 3.82% remaining in high territory relative to the last 2 years.


Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks








Oil & gold were off in sympathy with lower stock prices. Cold weather is still a big plus for oil & gold hopes to make 1100 a floor.

CLG10.NYM

...Crude Oil Feb 10

...82.74

... 0.44 .......(0.5%)

GCF10.CMX

...Gold Jan 10

...1,131.20

... 4.70 .......(0.4%)

The number claiming unemployment benefits for the first time barely rose last week, after 2 weeks of sharp drops. The 4-week average of claims fell for the 18th straight week to 450K, approaching the roughly 425K that could be a sign the economy will start creating jobs. The Labor Dept said initial claims for jobless benefits rose only 1K to 434K last week, lower than the 447K figure expected. The number of continuing claims dropped 179K to 4.8M. However that figure doesn't include an additional 5.4M who are receiving unemployment under federal emergency programs. A total of 10.5M were receiving unemployment benefits, an increase of about 300K from the prior week, partly due to a a decision by Congress to extend benefits for a 4th time since the recession began. The many continuing to receive benefits indicates that even as layoffs are declining, hiring hasn't picked up, leaving people out of work for longer periods of time. Initial claims for jobless aid have dropped by 100K or 19%, since late Oct.

•Initial Unemployment Claims in U.S. Climb Less Than Estimated to 434,000


Initial jobless claims - 1 year




Number receiving unemploy - 1 year

Photo: Bloomberg

Holiday shoppers brought relief to the nation's retailers, giving them modest sales gains for the season which prompted a number of chains to raise Q4 profit outlooks. But retailers may be facing chilly months ahead as consumer spending is expected to remain muted amid high unemployment & tight credit. The holiday season was considered decent but nothing to get excited about.

According to the Intl Council of Shopping Centers sales index, Dec sales rose 2.8% compared to a year ago, ending a year that averaged a 2.0% drop. For the overall holiday season, Nov & Dec, the index was up 1.8%, better than its estimate for a 1% gain. That figure, however compares with a 5.8% drop a year ago, the weakest holiday season in at least 4 decades. Costco (COST), Target (TGT & a Dividend Aristocrat), Macy's (M) & TJX (TJX) all reported increases but only TJX had a sharp gain (up 2½). Sears Holdings Corp (SHLD) eked out a small gain & offered Q4 guidance sharply above estimates, stock up 11.69 to 100.56. Other retailers were mixed to lower.

•Retailers in U.S. Boost Profit Outlooks as Kohl's, TJX December Sales Jump



Markets continue to muddle along after the big pop up on the first day of 2010. Jobless claims & retail sales were favorable, but expected. Despite strength in some sectors, Dow just can't break away from 10½K.


Dow Jones Industrials --- 2 weeks