Markets rise on upbeat economic reports

Stocks were a little higher encouraged by the latest earnings & corp buyouts. However, initial gains are slipping away. Dow gained 21, advancers over decliners 3-2 & NAZ moved up 5. Banks also had limited gains which are fading.

S&P 500 FINANCIALS INDEX

Value 192.25

Change 0.62

% Change 0.3%

MLPs keep charging forward. The index rose 1½, breaking into the 290s & up 10 in the last 2 weeks. The REIT index has gained 1½ aided by talk of a "bidding war" for General Growth Property which is still in bankruptcy. REITs own hard assets, buildings & property, with value that doesn't go away over time. Junk bond funds were a little higher. The yield on the 10-year Treasury bond gained 3 basis points to 3.69%, remaining in a sideways pattern.


Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks










Commodities traded sideways after yesterday's big run up.

CLH10.NYM

...Crude Oil Mar 10

...77.22

... 0.21 .......(0.3%)

Gold

_1,120.30__

0.50

_0.0%

Gold Super Cycle Link! Click Here


Housing starts posted a better-than-expected increase in Jan, pushing construction activity to the highest level in 6 months. The Commerce Dept said that construction of new homes & apartments rose 2.8% last month to an annual rate of 591K units, above the 580K annual pace that was forecasted. But applications for building permits, considered a good barometer of future activity, fell 4.9% to a rate of 621K (not shown in the graph).

Housing Starts in U.S. Rose in January, Permits Fell


Housing starts - 1 year




Housing permits - 1 year

Photo: Bloomberg



Walgreen (WAG), a Dividend Aristocrat, will buy Duane Reade for $618M in cash. Duane Reade is owned by private equity firm Oak Hill Capital Partners & operates 257 drugstores in the New York metropolitan area. Its sales totaled $1.8B last year & has the highest sales per square foot in the US industry (according to Walgreen). The deal also includes the assumption of $457M in debt. Duane Reade will continue to operate under its brand name & Walgreen expects to retain its employees. Duane Reade will dampen earnings in the first 12 months after closing, expected by Aug 31, & then add to earnings in the years following, seeing potential savings of $120-$130M in the 3rd year after closing. WAG was up 13¢.

Walgreen to Acquire Duane Reade, Add New York Stores


Walgreen --- 2 years







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Markets are back to trying to figure out where to go, no conviction in yesterday's rally. Abby Joseph Cohen, the Goldman Sachs strategist who called the bull market well in the last decade, sees the S&P 500 going to 1250-1300 (up from 1100 today). In all fairness she also called for a 10% increase in the S&P 500 going into the financial meltdown. Greece is lumbering along with its financial mess & other Mediterranean countries are watching with interest. The € is under $1.37 where it's been in recent days. Stocks may slip & slide in the PM.


Dow Jones Industrials --- 2 weeks