Wednesday, July 14, 2010

Markets vacillate on sluggish retail sales

Dow added 3 (barely extending its winning streak to 7 days), advancers were ahead of decliners 5-4 & NAZ gained 7. Markets were hurt by weak retail sales & volume was light. Bank stocks fell, dragging down the Financial Index. Big banks will begin reporting earnings later this week.


Value198.79One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change-1.83 (-0.9%)

The Alerian MLP Index took a breather & pulled back all of 0.12 in the 323s after its spectacular run in the last month. The REIT index fell 1+ to the 197s. Junk bond funds were a little lower. The VIX was up a ½ to 25. The yield on the 10-year Treasury bond dropped 6+ basis points to 3.05%. Yields near or below 3% remain troublesome for the stock market. The € was feeling good & rose to almost $1.27½.

Alerian MLP Index --- YTD

Dow Jones REIT Index -- YTD


10-Year Treasury Yld Index - YTD

Commodities took it easy today following the drifting mode of the stock markets.

CLQ10.NYM..Crude Oil Aug 10..77.01 ..Down 0.14

GCN10.CMX..Gold Jul 10..1,206.80 ..Down 6.50

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Minutes of the Federal Reserve meeting in Jun showed officials saw no need to boost stimulus to the economy while trimming forecasts for growth & noting that risks to the recovery had increased. "The economic outlook had softened somewhat and a number of members saw the risks to the outlook as having shifted to the downside," according to the minutes. "The changes to the outlook were viewed as relatively modest and as not warranting policy accommodation beyond that already in place." The minutes also indicated that the central bankers were concerned about lingering high unemployment & risks that inflation could decelerate further.

Fed Officials Saw Rising Risks, Trimmed Growth Forecast

Oil gushes from a valve atop the failed blowout  preventer

Photo: Bloomberg

BP (BP) delayed testing its latest effort to stop the largest oil spill in US history after the administration ordered further study of the plan to seal a well. Industry & gov scientists will meet to devise procedures for a pressure test that will be done once BP stops the flow of oil with a 40-foot (12-meter) valve stack secured to the well Jul 12. The stock fell 70¢ to 36.18.

BP Delays Test of Leaking Gulf Well Until U.S. Approves

BP --- YTD

Apple IPhone 4 Recall Odds Increasing, Bookmaker  Says

Photo: Bloomberg

The chances that Apple (AAPL) will recall iPhone 4 have increased following the Consumer Reports review on Mon that said it wouldn’t recommend the phone because of its tendency to lose signal strength when held in a certain way. Estimates on the impact of an iPhone recall on the AAPL earnings range from $1.5B to less than $100M. Another solution is for AAPL to issue rubber cases to cover the phone’s bottom-left corner, which would cost the company $1 or less per phone. By their calculation is, AAPL has the 3rd largest market cap. The stock was up about 1 to the 252s.

Odds Rise for an Apple IPhone 4 Recall, Bookmaker Says

Apple --- YTD

Financial regulation reform legislation is facing a key vote today. It's close but it looks like the Senate will pass this legislation. This is the biggest reform in decades but bank stocks can't be bothered. Plugging the leak in the Gulf hit a snag. The rise in the stock markets in the last 2 weeks has coincided with a better feeling about fixing that leak. Of course, the stronger €, on optimism that Europe is taking care of its debt problems, was also helpful. Meanwhile there is an increasing sense that the recovery in the US economy may have hit a snag. Analysts used to talk about 1100 being an important support level for the S&P 500 but has been living under it since mid May, closing at 1095 today.

Dow Jones Industrials -- YTD

S&P 500 --- 2 months

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