Stocks sell off on growing European debt problems

Dow sank 139, decliners over advancers 5-2 & NAZ fell 39. Markets are plunging as I write this post! Goldman Sachs (GS) is in the the hot seat causing bank stocks to sell off after their run in recent weeks. But GS is having a relatively good day, up 52¢ after its 30+ dive in the last 2 weeks.


S&P 500 FINANCIALS INDEX

Value 220.22

Change -1.09

% Change -0.9%

The Alerian MLP Index slipped a fraction to the 317s, hardly a problem after more than doubling in the last year. The REIT also pulled back, 1½ to the 214s. Profit taking is understandable. Junk bond funds were higher. European debt problems brought buyers to Treasuries, the yield on the 10-year Treasury bond fell 7 basis points to 3.75%.

Alerian MLP Index --- 2 weeks




Dow Jones REIT Index -- 2 weeks




Oil fell again but its chart shows it has been going sideways for much of this year. Gold is also flattish, near 1150.

CLM10.NYM

...Crude Oil Jun 10

...83.37

... 0.83 .......(1.0%)

GCJ10.CMX

...Gold Apr 10

...1,154.20

... 5.10 .......(0.4%)

OIL (ETF) --- YTD






Confidence in the economy rose in Apr to the highest level since Sep 2008, just as the financial crisis escalated with the collapse of Lehman. The Conference Board said its Consumer Confidence index increased to 57.9, up from a revised 52.3 in Mar, the highest since Sep 2008's 61.4. The index had been recovering since hitting an all-time low of 25.3 in Feb 2009. However, the Apr reading is still far from what's considered healthy, above 90 indicates the economy is on solid footing & above 100 signals strong growth. One component of the index, which assesses how consumers feel about the economy, rose to 28.6 in Apr from 25.2 in Mar. The other component, which measures shoppers' outlook over the next 6 months, climbed to 77.4 from 70.4. The graphs below were not updated with the Apr #s. Job growth will be necessary to continue the rally of this index.

•Consumer Confidence in U.S. Rises to Highest Level Since '08 on Job Gains


Consumer confidence - 1 year




Consumer expectations - 1 year

Photo: Bloomberg


3M (MMM), a Dow stock & Dividend Aristocrat, is benefiting from booming business in emerging markets like Asia & Latin America. It raised its outlook for the year after reporting Q1 earnings jumped 80%. MMM expects 2010 per-share earnings of $5.40 - $5.60 (excluding a charge related to the new health care law), up from a previous forecast of $4.90 - $5.10. MMM earned $1.29 per share in Q1 compared with 74¢ last year. Excluding a one-time charge related to the health care law, EPS was $1.40. Revenue rose 25% to $6.35B. Overall, sales were strongest in emerging economies, climbing 54% in the Asia Pacific region, which includes China.

•3M Profit Beats Analysts' Estimates as Sales Climb at All Main Businesses


MMM --- 2 years





DuPont (DD), another Dow stock, had a strong Q1, business improved across all operating units & regions. DD increased its 2010 guidance after reporting EPS of $1.24 per share in Q1, up from 54¢ last year. Revenue totaled $8.48B, up 23% from last year, as DD benefited from volume gains, price increases & positive currency effects. The strong Q1 performance followed a turnaround in Q4 of last year, when it swung to a $441M profit from a $629M loss in Q4 of 2008. Overall sales increased by 19%, led by a 65%increase in the Asia-Pacific region. In addition, DD increased full-year earnings guidance to $2.50 - $2.70 per share, up from $2.15 - $2.45. The stock was up 1.69.

DuPont 1Q profit more than doublesAP

DuPont --- 2 years





Goldman Sachs is getting all the press attention & they deserve it. But Greece's debt problems drone on, unable to be solved with emergency financing. Now there is talk that Portugal will be needing a bailout. Back to earnings, they have been good but they share one important theme. Earnings gains are largely from the Asian region, US results are only so-so (maybe good but not great). That signals problems about the strength of the economic recovery.


Dow Jones Industrials -- 2 weeks

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