Markets are wobbly after higher jobless claims

Stocks are not sure what to do after higher jobless claims. Dow was down 4, advancers barely ahead of decliners & NAZ added 7. Banks were flat, the Financial Index hardly budged from its 2010 high.


S&P 500 FINANCIALS INDEX

Value 229.78

Change 0.03

% Change 0.0%

The Alerian MLP Index was up .72 trying to reach 314. It looks like a freight train on the move, nothing can stop it. After its hot streak, the REIT ran into profit taking, down 3 from yesterday's yearly high. Junk bond funds keep flying to new heights. Some are yielding 8+% implying a yield spread over the 10-year Treasury of 450-500 basis points (a minimum figure by historical standards). The yield on the 10-year Treasury bond was flat at 3.86%, remaining at a possibly worrisome level.


Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks





Oil & gold each slipped slightly, following indecisive changes in the stock markets.

CLK10.NYM

...Crude Oil May 10

...85.79

... 0.05 .......(0.1%)

GCJ10.CMX

...Gold Apr 10

...1,155.70

... 3.30 .......(0.3%)

Initial jobless claims increased 24K to 484K last week, the highest level in 2 months & above estimates of 440K. However the Labor Dept said the rise in claims was due more to admin factors reflecting volatility around Easter than economic reasons. The 4-week moving average of initial claims increased to 458K last week from 450K. The number continuing to receive jobless benefits increased 73K in the prior week to 4.64M. Continuing claims figures do not include the number of Americans receiving extended benefits under federal programs. The number who’ve used up traditional benefits & are now collecting emergency & extended payments rose 162K to almost 6M in the week ended Mar 27. These dreary figures are not welcome by the stock markets!

Jobless Claims in U.S. Unexpectedly Rose Last Week


Weekly jobless claims - 1 year






The output at factories climbed 0.9% after a 0.2% gain in Feb (revised from a previously estimated decline). Industrial production was forecast to increase 0.7%. Manufacturing accounts for about 12% of the US economy. Companies may keep rebuilding depleted inventories & investing in new equipment as global demand rises. Other reports showed manufacturing in the New York region expanded in Apr at a faster pace than anticipated. Manufacturing is taking the lead in this recovery, but, again, improvement is bumpy.

•Factory Production Gains as U.S. Companies Boost Stockpiles Amid Recovery


Output at factories - 1 year





UPS (UPS) cited strong growth in the number of packages it ships overseas, the logistics services it provides & even improved volumes at home to post a 33% increase in Q1 EPS. They also raised guidance, saying 2010 EPS should climb 32-43%. UPS now expects full-year adjusted EPS to range from $3.05-$3.30, up from $2.70-$3.05 projected in Feb. Results for Q1 were spurred by strong performance in its international package & supply-chain businesses as revenue increased 7%. This was a pre announcement for earnings, further details, including comparable dollar figures, will be released in 2 weeks. UPS stock spiked up 4.15 to 69.60.

•UPS posts 33 percent jump in 1Q earnings per share
AP


UPS --- 2 years





Greek debt problems remain in limbo & the strong Chinese economy may get them to reevaluate their currency (upwards) which can create a host of problems. The jobless data is a constant weekly reminder than any recovery still has a long way to go before reaching the many who are unemployed or underemployed. Stocks are resting after the Dow finally managed to get over 11K earlier this week. Maybe they need a rest.


Dow Jones Industrials --- 2 weeks

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