Markets rise on hopes European debt problems will ease

Stocks started strong on hopes that Greece & Portugal can work their way out of their financial crunches. Dow rose 90 taking it within an inch of 10K, advancers over decliners 2-1 & NAZ was up 10. After a good beginning for banks, selling returned which brought the Financial Index back to near break even.

S&P 500 FINANCIALS INDEX

Value 183.86

Change 0.26

% Change 0.1%

Early gains for the Alerian MLP Index were trimmed to up just 1½, taking it to the 279s, while the REIT index is down 1¼. Junk bond funds were higher, the market is pricing in a default rate of only 0.3% this year, down from 10.2% in Dec. The neediest borrowers are raising record amounts of debt, allowing them to refinance obligations. It's not hard to wonder how long this enthusiasm for risky debt will go on! The yield on the 10-year Treasury bond edged down 1 basis point to 3.58%.

Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks








Cold temps & snow finally brought buyers to the oil market, gold is only having a modest rebound. However, both are still below their former support levels.

CLH10.NYM

...Crude Oil Mar 10

...73.23

... 1.34 .......(1.9%)

GCG10.CMX

...Gold Feb 10

...1,071.00

... 5.30 .......(0.5%)

Gold Super Cycle Link! Click Here

Photo: Bloomberg


Strong overseas growth at Coca-Cola (KO), Dow stock & Dividend Aristocrat, more than made up for a weak North American market in Q4 as profits jumped 55%. KO sold 5% more beverages worldwide, with unit case volume up sharply in emerging markets like China & India. The only region to report a decline in case volume was North America with a 1% drop-off. CEO Muhtar Kent said growth in China, India, Mexico & Brazil in Q4 is equal to adding another Germany, the company's 6th-largest market. Unit case volume in China rose 29% in Q4 & India's figure was up 20%. While North American unit case volume dipped, Coca-Cola Zero posted double-digit unit case volume growth. Q4 earnings rose to 66¢ per share. KO's stock has been fairly stable during the recession, today it's up 1.89 (3½%). KO purchased $1½B in stock last year, part of its ongoing share repurchase program. A dividend increase for 2010 should be announced shortly.

Coca-Cola Profit Rises as Sales Gain in India, China

Coca Cola --- 2 years

Photo: Bloomberg




McDonald's (MCD), another Dow stock & dividend Aristocrat, reported sales rose 2.6% in Jan. Same store sales fell 0.7% in the US while the figures for Europe & Asia were up 4.3%. The stocks was up 25¢.

•McDonald's Worldwide January Sales Rise 2.6%, Topping Analysts' Estimates


McDonald's --- 2 years





BreiBurn Energy (BBEP), an MLP which eliminated its distribution last year, has settled its legal problems & will reinstate a $1.50 annual rate distribution in Q2. The stock was up about 1.50 yesterday but is even today. It's implied yield is 10%.

Quicksilver Resources Announces Settlement of Litigation With BreitBurn Energy Partners and Provident Energy TrustMarketwire


BreitBurn Energy Partners 1 2 years





Constellation Energy, another MLP which eliminated the distribution last year, is still slugging it out in single digits. But they refinanced their loan with a larger one in Nov & is an interesting speculation assuming they get their act together. Q4 & 2009 results should be released shortly.

Constellation Energy Partners Announces New Credit FacilityBusiness Wire


Constellation Energy --- 2 years








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Stocks are trying to find footing. Dow is flirting with 10K, but this is hardly a convincing rebound. Meanwhile European countries are trying to work out messy debt problems, Toyota (TM), up 1.41, ran ads last night to help their public image. The economic recovery in the US is still sputtering, both KO & MCD continue to report weak sales in the US. The 10K level is becoming very significant for the Dow & in turn the markets in general.

Dow Jones Industrials --- 2 weeks