Wednesday, April 28, 2010

Markets try to climb as Europeans attempt to calm debt fears

Dow rose 22, taking it barely above 11K once again. Advancers were ahead of decliners 2-1 but NAZ fell 8. After starting the day lower, buyers came back to bid up the prices of bank stocks. The Financial Index fell 11 in 2 days, this is the rebound.


% Change

Profit taking continues for MLPs as the index fell 3+ to the 309s (down 10 from the highs on Mon). But the REIT index rose 1+ to the 210s. Junk bond funds were mixed as demand for junk bonds continues very strong. Treasuries sold off after yesterday's big rally. The yield on the 10-year Treasury bond rose 6 basis points to 3.75%.

Alerian MLPIndex --- 2 weeks

Dow Jones REIT Index -- 2 weeks

Crude oil has been falling as brimming stockpiles & rising OPEC investment in production capacity eases concern of shortages. Gold is edging higher on its flight to safety quality.

CLM10.NYM...Crude Oil Jun 10...82.23 ...Down 0.21

GCJ10.CMX...Gold Apr 10...1,163.00 ...Up 1.30

Gold Super Cycle!!
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Greece could receive more aid than initially expected after a briefing with the IMF as Europeans tried to calm market fears. IMF chief, Dominique Strauss-Kahn, told policy makers the aid package for debt-crippled Greece would be worth €100-120B ($133-160B) over 3 years, above the €45B already pledged. The 10-year Greek/German gov bond yield spread narrowed to ONLY 828 basis points after earlier peaking at more than 1,000 bps, while the €, which hit a one-year low against the dollar on Wed, rose slightly (but still under $1.32). CNBC is reporting the 2-year Greek bond passed a 23% yield! Confusion persists on how to solve this troubling issue but the US markets are taking all this fairly well.

Trichet in Berlin as Germans Balk at Greek Rescue (Update1)

Dow Chemical (DOW) reported strong quarterly results as it benefited from growing demand & price increases. Net income rose to $466M from just $24M last year. Dow said the results show that demand is growing in developed markets, which were hit hardest by the recession. In addition, consumer spending has strengthened in areas such as electronics, appliances & automotive. "Overall the global economic environment is on a stronger footing and there are signs that this will continue for the foreseeable future," according to CEO Andrew Liveris. However, no earnings or sales guidance was given. EPS rose to 41¢ per share from 3¢ last year. Excluding certain items, Dow earned 43¢ per share. Revenue rose 48% to $13.42B. Dow gained 1.72 (6%).

Dow Chemical Profit Surges, Tops Analysts’ Estimates

Dow Chemical --- 2 years

Comcast (CMCSA) reported consumers signing up for digital cable TV & high-speed internet services led to a 12% increase in Q1 profits. In addition, advertising on its cable channels rebounded in the qtr, indicating that an economic upturn is taking hold. But the largest cable TV provider still sounded cautious. It said growth could be hampered in future qtrs because the jobless rate remains high & the housing market still is under duress. Such factors could lead fewer people to sign up for service. CMCSA earned 31¢ per share in Q1 compared with 27¢ last year. Revenue rose 3.8% to $9.2B. Their free cash flow (a key metric for cable TV companies that manage high amounts of debt) rose 38% to $1.89B as Comcast spent 19% less on capital expenditures. Advertising revenue rebounded in the qtr, rising 23.5%. The stock was up 30¢.

Comcast First-Quarter Profit Beats Analyst Estimates

Comcast --- 2 years

The Greek debt drama plays on. But the markets are digesting the uncertainty very well. Banks recovered, maybe the Goldman Sachs (GS) guys had something to do with bringing back buyers. The banking bill with more regulation is in limbo. It looks like the Reps will just say no. But in DC minds can change quickly. Bulls have to be encouraged that the Dow is back over 11K, an important psychological level.

Dow Jones Industrials -- 2 weeks

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