Thursday, July 29, 2010

Markets continue wobbly after jobless claims

Stocks started higher & are losing steam. Dow is down 24, but advancers ahead of decliners 3-2 & NAZ is off 16. The Financial Index has also lost all of its earlier gains.


Value 197.33 One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change 0.01 (0.0%)

The Alerian MLP Index dropped another 1½ to the 324s as profit taking is finally hitting MLPs. Enbridge Energy (EEP) is down 2.15 while it cleans up its oil leak into Lake Michigan. The REIT index fell a fraction to below 206. Junk bond funds were up fractionally while the VIX slipped slightly to 24. Treasuries are in demand, the yield on the 10 year Treasury bond fell 4 basis points to just below 3.0%. The € continues hot as it is nearing $1.31.

Alerian MLP Index --- 2 weeks

Dow Jones REIT Index --- 2 weeks

VIX --- 2 weeks

10-Year Treasury Yield Index --- 2 weeks

Oil rose, maybe helped by Exxon's discussion of higher oil prices. Gold remains stuck in neutral (for the time being).

CLU10.NYM...Crude Oil Sep 10...78.35 ...Up 1.36

GCQ10.CMX...Gold Aug 10...1,162.50 ...Up 2.10

**Gold Super Cycle**
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Jobless Claims in U.S. Declined by 11,000 to 457,000

Photo: Bloomberg

New jobless claims fell for the 3rd time in 4 weeks but remain elevated. The Labor Dept said that first-time claims for unemployment insurance dropped 11K to 457K. The 4-week average dropped to 452K, the lowest since May, suggesting layoffs may be easing. Requests for unemployment insurance fell steadily last year from their peak of 651K in Mar 2009. But they have remained stuck above 450K for most of this year. In a healthy economic recovery, claims usually fall below 400K. The number continuing to claim unemployment benefits rose 81K to 4.57M which doesn't include an additional 3.67M of the unemployed receiving extended benefits paid for by the federal gov. More mixed news with the graphs below still looking dismal.

Jobless Claims in U.S. Declined by 11,000 to 457,000

Jobless claims - 1 year

One-Year Chart for Claims (INJCJC:IND)

# of continuing claims - 1 year

One-Year Chart for Unemployment SA (INJCSP:IND)

Exxon Mobil (XOM), a Dow stock & Dividend Aristocrat, said Q2 income nearly doubled to $7½B as oil prices increased from last year. EPS rose to $1.60 from 81¢ last year. Revenue increased 24% to $92.5B. Expectations were for EPS of $1.46 on revenue of $98.5B. XOM earned the majority of its income from exploration & production operations in foreign waters, particularly in Africa, Asia & the Middle East. Results showed a jump in profits across its exploration & production, refining & chemicals businesses. The stock was up 31¢.

Exxon Mobil Second-Quarter Profit Climbs After Oil Prices Rise

Exxon --- 2 years

Colgate-Palmolive (CL) posted revenue below expectations & said that Venezuela's currency devaluation would drag down full-year results more than expected, the 2nd straight qtr where news about the Latin American country (the company's largest market in the region) has hurt them. Venezuela's country's currency devaluation would drag down full-year EPS by 10-15¢. Elsewhere, though, things looked better. CL reported EPS of $1.17 in Q2 (ending in late June) up from $1.07 last year. Revenue rose almost 2% to $3.81B, up from $3.75B last year. The stock dropped $6 (7%).

Colgate-Palmolive Falls as Second-Quarter Sales Miss Analysts' Estimates

Colgate --- 2 years

Mortgage rates have eased to only 4.54% (following low yields on the 10-year Treasury bond) but that has not helped troubled housing. EEP's oil spill is starting to get ugly & the potential bad press has negative implications for all MLPs. Dow keeps muddling along. It's trying to blast to new highs but buyers are not following thru.

Dow Jones Industrials --- 2 weeks

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