Wobbly markets despite good earnings

Dow gained 7, advancers over decliners 5-4 & NAZ was up all of 4 despite Apple (AAPL) surging to another all time record price. Banks finally had an off day, although they closed above their lows. This is easy to understand with all the pressure Goldman Sachs (GS), off 1.05 today, is under & proposed legislation for increased regulation. But the Financial Index still has had an excellent advance since Feb.


S&P 500 FINANCIALS INDEX

Value 224.05

Change -1.21

% Change -0.5%

The Alerian MLP Index was down pennies, just under 315. But the Dow Jones REIT shot up 3¾ to 208 & only 2 below the yearly highs set last week. Junk bond funds were flat to lower while the Treasury 10-year Treasury bond had a big rise, taking the yield down 7 basis points to 3.74%.


Alerian MLP Index --- YTD




Dow Jones REIT Index -- YTD





Oil fell back in the PM but gold was firmer & may want to climb back to its 1200+ record.

CLM10.NYM

..Crude Oil Jun 10

..83.63

.. 0.22 ......(0.3%)

GCJ10.CMX

..Gold Apr 10

..1,147.10

.. 8.50 ......(0.8%)

Gold Super Cycle Click Here

GLD (ETF) --- YTD






United Tech (UTX), a Dow Stock, reported Q1 profits rose 20% from its efforts to cut costs & boost productivity, the first increase in a year. UTX raised the lower end of its 2010 profit guidance to $4.50 per share from $4.40 previously given. United Tech is also benefiting from rising orders, particularly in emerging markets. As a result, business growth will resume in H2. The company earned 93¢ per share in Q1, up from 78¢ last year & ahead of the 90¢ estimate. But revenue slipped to $12.1B from $12.25B last year. UTX expects EPS in the range of $4.50-$4.65 (including $350M in expected restructuring charges & one-time gains of $100M) in 2010. The stock rose 2.73 to 76.93. The other 3 Dow stocks reporting earnings today had a mixed picture:

AT&T (T)_________-0.32
Boeing (BA)_______+2.75
McDonald's (MCD)__+0.02

United Technologies 1Q profit jumps on cost cutsAP


United Technologies -- 2 years

Photo: Bloomberg

Massive gov borrowing continues as the Treasury announced an unprecedented $128B in note auctions next week. This will be composed of $44B in 2-year notes, $42B in 5-year securities, $32B in debt maturing in 7 years along with $10B in 5-year Treasury Inflation Protected Securities (TIPS). The Treasury said in Feb that the auctions have been expanded enough to fund the budget deficit, any changes would depend on tax receipts & how fast the economy recovers. An improving economy should allow the Treasury to borrow less (what they call "modest reductions") going forward. But less still means whopper size borrowings.

Treasury May Sell Record Amount of Notes, Primary Dealers Say



Dow has been going sideways around 11.1K for a week (the height of earnings season). But it had a 10% move up from its 10K floor in Feb. Maybe it just needs a rest. Greek debt problems have not been solved & look like they could drag on for some time. Increased financial regulation is coming, probably this week. And massive gov borrowings are not going away for the foreseeable future. However Apple stockholders are happy looking at a record stock price, up 14+ to the 259s.

Dow Jones Industrials -- YTD

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