Thursday, February 18, 2010

Stocks advance with hesitation

Dow gained 20, advancers ahead of decliners 5-4 & NAZ was up 4. On this quiet day, the Financial Index edged higher.


% Change

MLPs needed a chance to catch their breaths. The index slipped 1 to the 290s, roughly where it's been for 2 days. The REIT index was up a fraction. Junk bond funds were little changed while the yield on the Treasury bond rose 1 basis point to 3.76%. At this level, higher interest rates are of greater concern.

Alerian MLP Index --- 2 weeks

Dow Jones REIT Index --- 2 weeks

10-Year Treasury Yield Index - YTD

Oil had another nice gain as 75 is providing more support while gold was about even.

CLH10.NYM...Crude Oil Mar 10...78.11 ...Up 0.78


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The index of leading economic indicators rose 0.3%in Jan, for a 10th straight month, but the pace of growth is slowing according to the Conference Board. That's much weaker than a 1.2% rise in Dec & a 1.1% rise in Nov. It was also was short of the 0.5% gain expected. Five of the 10 components in the index showed improvement in Jan: the interest rate spread, supplier deliveries to companies, average weekly hours worked in the manufacturing sector, stock prices & consumer expectations.

U.S. Leading Indicators Gain a 10th Month in Sign Economy to Keep Growing

Wholesale prices shot up at double the expected pace in Jan, but this is viewed as a temporary blip & not the start of inflation problems. The Labor Dept reported wholesale prices rose 1.4% last month, reflecting higher costs for gasoline & other energy products, economists had expected a 0.7% increase. Core inflation, excluding energy & food prices, rose 0.3%, above the 0.1% increase predicted. Over the past 12 months, wholesale prices are up 4.6%, the largest 12-month increase since a 5.2% rise in the 12 months ending in Oct 2008. Price pressures are coming primarily from big increases in the cost of energy.

Producer Prices in U.S. Increase More Than Forecast

Photo: Bloomberg

Wal-Mart (WMT), Dow stock & Dividend Aristocrat, posted a 21% increase in fiscal Q4 profits, international growth offset a sluggish US economy, as they earned $1.22 a share, up from 97¢ last year. Revenue came in at $112.8B, up 4.6%. On an adjusted basis, WMT earned $1.17 a share, the average estimate was $1.12 on revenue of $113.8B (WMT was a little light). Sales in the U.S. fell 0.5% to $71B. On a comparable-store basis, sales excluding fuel fell 1.6 %, but international sales rose 19.5% to $29.6B. In the U.S., same-store sales were below expectations, largely due to deflation in grocery & electronics. WMT forecast fiscal 2011 earnings from continuing operations to be in the range of $3.90-$4 a share & for Q1, earnings from continuing operations are expected to be 81¢ to 85¢. The stock dropped 1 to 53. It was best performing Dow stock in 2008 followed by a flat performance last year.

Wal-Mart Quarterly Sales Trail Forecast on Grocery, Electronics Price Cuts

Wal-Mart --- 2 years

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Stocks continue to meander. looking for direction. The dreary report by WMT for its US stores is a worrisome indicator for the rest of the economy.

Dow Jones Industrials --- 2 weeks

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