S&P 500 FINANCIALS INDEX
The Alerian MLP Index pulled back 6½ to the 327s, a very big drop by its standard & closing at its low. After its record run in the last 2 months, unit holders won't complain. The REIT Index fell a ½ to the 207s, pretty much sideways kind of trading. Junk bond funds continued flat to higher while the VIX was up a fraction to the 23s. The yield on the 10-year Treasury bond rose over 5 basis points to 3.05% & the € reached $1.30 (up more than 10¢ from its recent lows).
Alerian MLP Index -- 3 months
Dow Jones REIT Index -- 3 months
VIX -- 3 months
10-Year Treasury Yld Index -- 3 months
Oil prices dropped on disappointing reports about consumer confidence & manufacturing. But oil remains in the upper end of its sideways trading in the 70s. Gold had a bad day as Asian & other foreign buyers have been holding back lately.
|CLU10.NYM||..Crude Oil Sep 10||..77.60 ||.. 1.38 |
|GCN10.CMX||..Gold Jul 10||..1,158.00 ||.. 25.00 |
DuPont (DD), a Dow stock, the 3rd-largest US chemical maker producing basic products used throughout the economies in the world, reported Q2 profits nearly tripled & offered a positive read on global economic health. It now expects 2010 EPS of $2.90-$3.05, excluding one-time items, up from a previous forecast of $2.50-$2.70 per share. Analysts had expected 2010 earnings of $2.64. But CEO Ellen Kullman said she expects the economic recovery to be "more moderate" in H2. "We continue to hit our productivity and cost-control targets, and remain highly disciplined in creating operating leverage to further grow the company," Kullman said. Sales in emerging markets jumped 33%, with Asia alone up 47%. US & Europe saw sales increase 18% & 24%, respectively. The agricultural & nutrition unit, which sells hybrid seeds under the Pioneer brand & is by far the company's breadwinner, saw sales jump 16% to $3B. DD expects seed sales to be "moderately higher" in H2, but said seasonal losses would likely increase. Since DD produces products which are included in final products manufactured by others, it represents a barometer of business activity in the US & around the world. The stock liked the news, up 1.39 to 40.38 (& still yields 4%).
DuPont --- 2 years
Stocks continue to lumber along. The retreat by the MLP index was the most exciting event of the day. Its recent run can only be described as stellar, helped by the new MLP funds coming to market. The next week or so will see ex-distributions included which will be a drag, but all that much. Cumulative annual distributions for the index (based on its yield) are 21.60. A qtr is 5.40 which will be factored into the index over a couple of weeks, not all that painful. The MLPL is getting more attention. This is the new doubler fund from UBS, designed to double price swings (UP & DOWN) & double the index yield to around 12% (after fees). Those interested should STUDY & UNDERSTAND the risks before investing. Those risks generally put the interests of the fund manager over investors. Ordinary tracking funds (like AMJ), not including the doubling feature, should do a good job of tracking.
Dow Jones Industrials -- 3 months