Thursday, September 2, 2010

Markets do little after jobless claims report

Stocks were slightly higher with only limited trading. Dow added 1, advancers ahead of decliners 2-1 & NAZ was up 13. Bank stocks also rose as the Financial Index is up 10 off its recent yearly lows.


Value 190.54 One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change 1.25 (0.7%)

The MLP index was up a fraction in the 323s while the REIT index was up 2 to the 211s. Junk bond funds were flat & the VIX was down a fraction in the 23s (lowish territory). The € was flat at $1.28. Treasuries sold off. The yield on the 10 year Treasury bond rose 4 basis points to 2.62%.

Treasury Securities

U.S. 3-month
U.S. 2-year
U.S. 10-year

Alerian MLP Index --- 2 weeks

Dow Jones REIT Index --- 2 weeks

VIX --- 2 weeks

10-Year Treasury Yld Index --- 2 weeks

Oil was little changed but gold has been attracting interest for more than a month because of its safe haven qualities & as a long term portfolio investment.

CLV10.NYM...Crude Oil Oct 10...73.56 ...Down 0.35

GCU10.CMX...Gold Sep 10...1,249.80 ...Up 3.50

$$ Gold Super Cycle $$
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A job seeker looks at postings for jobs

Photo: Bloomberg

The requests for unemployment benefits declined for the 2nd straight week. New claims fell 6K last week to 472K according to the Labor Dept (a slight increase had been expected). The 4-week average of claims fell 2K to 485K, its first decrease after 4 straight increases. However even with the declines, claims are still at much higher levels than they would be in a healthy economy. The number continuing to receive jobless benefits fell 23K to 4.46M. More indecisive news on the unemployment front.

Jobless Claims in U.S. Decreased to 472,000 Last Week

Jobless claims - 1 year

One-Year Chart for Claims (INJCJC:IND)

# receiving benefits - 1 year

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

The number of buyers who signed contracts to purchase previously occupied homes increased in Jul but remained well below last year's levels. The National Association of Realtors said its index rose 5.2% from a month earlier to a reading of 79.4. But the index was still down 19% from the same month last year & the Jun reading (revised slightly downward to 75.5) was the lowest on records dating to 2001 . Recovery looks to be a long way off.

Pending Sales of Existing Homes Unexpectedly Increase in July

American shoppers took advantage of deep discounts & tax-free holidays, giving retailers surprisingly solid gains in Aug. The results provided a sliver of hope for the recovery amid a batch of bad news. However the retail data masks underlying weakness in consumer spending as they're being compared with declines a year ago. Shoppers remain selective & are focusing on the necessities, a trend that is expected to continue through the holiday shopping season. Cost (COST) posted a robust gain, boosted by higher gas prices & improved international revenue. Limited Brands (LTD) & Macy's (M) also had solid revenue increases. But a number of clothing stores, such as Aeropostale (ARO) & Gap (GAP), had weak results & Target (TGT), a Dividend Aristocrat, came in below expectations. Most of their stocks were up 1+%.

U.S. Retail Sales Top Estimates on Tax Holidays, Discounts

Volume is very light, not much happening. Tomorrow's jobs report for Aug may add some excitement for traders who are not taking a long weekend. Next week, serious trading will resume.

Dow Jones Industrials --- 2 weeks

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