Friday, July 23, 2010

Mixed earnings and worries about European banks hold markets back

Stocks are doing little. They have to deal with mixed earnings reports & worries about the European bank stress tests. Dow was up 14, advancers ahead of decliners 3-2 but NAZ fell 1 (hurt by Amazon's report). Banks are taking this waiting period well, the Financial Index recovered from an early AM loss to near break-even.


Value 194.43 One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change -0.13 (-0.1%)

MLPs continue to roll along, taking the MLP index up another ½ in the 332s. The REIT index fell 2½ to the 197s. Junk bond funds were generally a little higher while the VIX was even. The yield on the 10-year Treasury bond rose 2 basis points to 2.95½%. The € fell almost a penny to $1.28 on the nervousness about the European bank stress tests.

Alerian MLP Index --- 2 weeks

Dow Jones REIT Index --- 2 weeks

VIX --- 2 weeks

10-Year Treasury Yld Index --- 2 weeks

Oil slipped but remains near its yearly highs while gold is inching back to 1200.

CLU10.NYM...Crude Oil Sep 10...78.93 ...Down 0.37

GCN10.CMX...Gold Jul 10...1,197.90 T...Up 2.40

Gold Super Cycle!! Click Here

There are doubts about the stress tests for European banks which should be released shortly. Rumors suggest 10 will fail on what may be soft standards. These banks could need to raise €38B ($49B). Transparency from these reports may not be that great, not encouraging for the markets. Meanwhile, Hungary's debt rating could be cut to junk status by Standard & Poor's.

Crunch Time for Europe's Banking Credibility
Hungary Credit Rating May Be Cut to Junk After IMF Talks Fail

Sales increased 5.3 percent to $5.95 billion

A Verizon store

Photos; Bloomberg

McDonald's (MCD) & Verizon (VZ), 2 Dow stocks, both reported good Q2 earnings. MCD lost 1.36 (hurt by good was not "good enough") while VZ gained 94¢ & yields almost 7%. Amazon (AMZN) reported EPS of 45¢, up from 32¢ last year but under 54¢ forcasted. The stock fell 8½ to the 111s. Ford (F) posted great profits, the stock advanced 42¢ in the 12s & up sharply from its lows last year.

McDonald's Profit Rises 12%, Spurred by Frozen Drinks
Verizon Beats Estimates on Demand for Droid Phones Falls Most in 21 Months After Profit Miss
Ford Posts $2.6 Billion Second-Quarter Profit on Pricier Cars

McDonald's --- 2 years

Verizon --- 2 years

Amazon --- 2 years

Ford --- 2 years

This may another another quiet Fri with traders leaving early for a long weekend. But waiting for the bank stress tests with the results likely to be discouraging weighs heavily on the markets. As the chart shows, Dow keeps lumbering along looking for direction.

Dow Jones Industrial --- 2 weeks

Find out what's inside Trend TV!
Click Here

Get Trend Analysis!!
Click Here

No comments: