Tuesday, January 26, 2010

Stocks steady on improved consumer confidence

Dow rose 42, decliners over advancers 3-2 & NAZ was up 3 (helped by Apple earnings). Banks also had a mild mild gain.


% Change

The Alerian MLP Index was up pocket change in the 297s. The REIT index was also up pennies. Junk bond funds were easing lower. The yield on the 10-year Treasury bond fell 2 basis points to 3.61%, still near the 3.60% it has been near for more than a month.

Alerian MLP Index --- 2 weeks

Dow Jones REIT Index --- 1 month

Oil slipped below 75 again while gold continues flattish trying to reestablish the 1100 floor.

CLH10.NYM...Crude Oil Mar 10...74.66 ...Down 0.60

GCF10.CMX...Gold Jan 10...1,094.70...Down 0.50

Consumer confidence beat expectations & rose in Jan, the 3rd straight monthly increase. The Conference Board's Consumer Confidence Index increased to 55.9 - the highest in more than a year (but still relatively gloomy) which compares with 53.6 in Dec. Expectations were for a reading of 53.5. Since Jun, it has bounced along between 47 & 55 as rising unemployment has taken its toll. Americans are beginning to feel slightly better about business conditions & the job picture but the new figures still don't point to an end to the nation's economic woes any time soon.

Consumer Confidence in U.S. Rose More Than Forecast in January

Confidence Index --- 1 year

Present Conditions - 1 year

Expectations next 6 months - 1 year

Photo: Bloomberg

Apple (AAPL) sold a record 8.7M iPhones & 3.4M Macs in the holiday shopping season, its biggest qtr for the past 4 years. The iPhone & Mac together account for more than 60% of revenue. These figures were in line with estimates making for an excellent qtr. The company has activated more than 200K iPhones in China since the device went on sale there in late Oct. Sales in this qtr will be $11B - $11.4B & profit will be $2.06 - $2.18 a share, according to Apple. The stock was up 3 to 206 following an outstanding year.

Apple Sales Top Estimates, Investors Turn to Tablet

Apple --- 1 year

Photo: Bloomberg

Verizon (VZ), Dow stock, posted an unusual loss for Q4, as a charge for layoffs in its shrinking landline business overshadowed the growing & profitable, wireless business. VZ continues to feel the effect of the economic downturn, particularly in selling service to businesses. The company lost 23¢ per share in Q4 versus a profit of 43¢ per share last year. Excluding one-time items, mainly consisting of a $3B charge for severance & other costs associated with layoffs, Verizon earned 54¢ per share, a penny below estimates. Revenue rose 10% to $27.1B largely due to the acquisition of Alltel last Jan. VZ ended the qtr with 222K employees. The company cut 13K jobs on the wireline side last year & expects a similar number of cuts this year. Layoffs have come on the traditional phone-company side, as many customers give up their lines in favor of using only cell phones or phone service from cable companies. The stock fell 72¢.

Verizon Will Cut 10,000 Jobs in Fixed-Line Unit After Sales Miss Estimates

Verizon --- 1 year

Apple is having another great year, but ordinary companies are not seeing significant effects from any recovery. Bloomberg TV pointed out that the S&P 500 companies already reporting earnings have sales gains of over 15%. But excluding banks (coming off a terrible year) & Apple, sales are fractionally lower. This news is another signal that high unemployment rates will drone on.

Dow Jones Industrials --- 2 weeks

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