Thursday, April 29, 2010

Markets soar on favorable job data

Dow added 129, advancers 5-2 over decliners & NAZ gained 26. Banks are having a big day, the Financial Index is recovering much of the losses in the first 2 days of this week.


% Change

The Alerian MLP Index shot up 2½ to the 313s on the strength of market gains. The REIT index surged 6½ to the 215s, there is not shortage of enthusiasm here. As expected, junk bond funds were strong. The yield on the 10-year Treasury bond slipped 1 basis point to 3.76%, still in its sideways rut.

Alerian MLP Index --- 2 weeks

Dow Jones REIT Index --- 2 weeks

Oil is having a great day, but still in in its longer term trading range (80-85). Gold pulled back on greater hopes for a Greek debt bailout succeeding.

CLM10.NYM...Crude Oil Jun 10...85.07 ...Up 1.85

GCK10.CMX...Gold May 10...1,169.80 ...Down 6.20

The Labor Dept said applications for jobless benefits dropped 11K to 448K, the lowest level in 4 weeks (but slightly higher than expected). The 4-week average for claims edged up slightly to 462K, still above the level (around 425K) that signals sustained improvements in the job market. The number continuing to claim benefits fell 18K to 4.65M which doesn't include millions who have used up the regular 26 weeks of benefits typically provided by states & are receiving extended benefits of up to 73 additional weeks paid by the federal gov. About 5.4M were receiving extended benefits for the week ending Apr 10. The labor market is healing, but slowly.

Congress has extended the duration of weekly unemployment benefits 3 times since the recession began in Dec 2007. But even Congress may have reached its limit. The line is quietly being drawn at 99 weeks of aid which hundreds of thousands have already reached. In coming months, the number who will receive their final check is projected to top 1M. Dems who have pushed thru past extensions agree there’s insufficient backing to go beyond 99 weeks, largely because of mounting concern over a federal deficit projected to reach $1.5T.

Number of U.S. Jobless Claims Falls to One-Month Low
More Than a Million May Lose Jobless Aid as Congress Seeks Spending Curbs

Weekly jobless claims - 1 year

Photo: Bloomberg

Exxon Mobil (XOM), Dow stock & Dividend Aristocrat, reported quarterly profits jumped 38% as oil prices rose in Q1. In Q1 XOM earned $1.33 per share versus 92¢ per share last year. But earnings are 40% below record levels of 2 years ago. Revenue jumped 41% to $90.25B. These results were below expectations. The stock rose 17¢.

Exxon Profit Rises Less Than Estimated as Health Overhaul Increases Costs

Exxon Mobil --- 2 years

Photo: Bloomberg

Procter & Gamble (PG), another Dow stock & Dividend Aristocrat, reported profits fell 1% in its Q3, hurt by charges including those from the health care overhaul. But sales increased 7% as households around the world responded to new products, price cuts & stepped-up advertising. EPS was 83¢ per share compared to 84¢ last year, while sales rose to $19.2B. EPS came in slightly above projections of 82¢. Core EPS, excluding tax, legal & restructuring charges, were 89¢, up 10%. The company took a 5¢ per share charge for the recently passed health care reform. The low end of its guidance range for diluted EPS for the full year was lifted by 4¢ to a range of $4.06 - $4.12 (below expectations of $4.14). P&G expects sales to rise 6-7% in its Q4, with EPS in a range of 68-74¢ (below expectations of 76¢). The stock fell 1.69 after modest changes during the recession.

P&G Fourth-Quarter Profit Forecast Trails Estimates

Procter & Gamble --- 2 years

Markets are feeling very good today. Greek debt problems are being pushed aside after receiving only so-so news on jobless claims. But bulls are in charge & it looks like they want to take Dow to new 2010 heights (just a few points away).

Dow Jones Industrials --- 2 weeks

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