S&P 500 FINANCIALS INDEX
| Value 222.64 | Change -1.20 | % Change -0.5% |
MLPs finally ran into profit taking, the index dropped 4½ to the 309s, following a nice run. The index was hurt by Enterprise Products (EPD) announcing a big offering of its units, taking its price down 93¢. The REIT went up 1½, but has been flattish for a couple of weeks. Junk bond funds did little at their elevated levels. Demand for Treasuries continues strong, the yield on the 10-year Treasury bond dropped 1 basis point to 3.84%.
Alerian MLP Index --- 2 weeks
Dow Jones REIT Index --- 2 weeks
Oil & gold also sold off on the gloomy earnings report from Alcoa (AA). Both have had a nice run this year, but may have to give some of that back if sluggish earnings reports suggest demand for commodities are lower than forecasted.
| CLK10.NYM | ...Crude Oil May 10 | ...82.75 | ... 1.59 .......(1.9%) |
| GCJ10.CMX | ...Gold Apr 10 | ...1,147.50 | ... 14.10 .......(1.2%) |
OIL (ETF) --- YTD
GLD (ETF) --- YTD
The Greek gov sold €780M ($1.06B) of 26-week bills at a yield of 4.55%, which drew stronger demand than at a previous sale. Yields more than doubled after Greece won a pledge of aid from the European Union. The auction attracted bids for 7.67X the securities offered. Greece also offered €780M of 52-week securities at a yield of 4.85% with a bid-to-cover ratio of 6.54X. In Jan, the 52-week bills yielded only 2.2%. The package put in place on Sun enabled Greece to fund itself but longer-term fundamentals haven’t changed. It has to put its finances in order against the backdrop of a shrinking economy.
•Greece Sells More Bills Than Planned as EU's Bailout Promise Stokes Demand
Alcoa, Dow stock which starts earnings season, reported a net loss of 20¢ per share in Q1 versus a loss of 61¢ last year (when the company struggled with weak demand in the depths of the recession). These results include 29¢ in one-time charges related to the health care reform law & closing of 2 smelters. Analysts had been looking for earnings of 10¢ (typically they exclude one-time items). Revenue rose nearly 20% to $4.9B (again, below estimates). "2010 will clearly be better than 2009 but it's going to be below historic norms in many of the markets," according to Klaus Kleinfeld, president & CEO. He expects aluminum consumption worldwide to grow 10% in 2010, driven strongly by demand from China & improving demand in the US & Europe. Their average price per metric ton of aluminum in Q1 was $2.33 up from $1.57 last year. AA fell 32¢.
•Alcoa narrows 1Q loss; sees improving demand
AP
Alcoa --- 1 year
Alcoa's earnings were viewed as lackluster. Earnings for the last qtr got poor reviews which could be repeated. Dow huffed & puffed, after struggling for 2 weeks, & finally went over 11K, but was unable to hold that line in the sand. Markets don't like that signal.
Dow Jones Industrials --- 2 weeks
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