Wednesday, September 29, 2010

Markets waffle while looking for direction

Stocks are lower, but the selling is not serious. Dow fell 42, decliners ahead of advancers 4-3 & NAZ was off 8.  Bank stocks led the selling.  However this has been a good month for the Financial Index, up 12 from its yearly lows at the start of Sep.


Value 193.52 One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change  -1.48  (-0.8%)

The MLP index was flattish in the 334s while the REIT index dropped 2½ to the 209s.  Junk bond funds were mixed near their yearly highs & the VIX, volatility index, was up a fraction in the 23s.  The yield on the 10 year Treasury bond inched up 1 basis point to 2.47%, remaining at worrisome low levels.

Treasury yields

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 slipped while gold was little changed after climbing to record levels above 1300.

CLX10.NYM...Crude Oil Nov 10...75.69 ...Down 0.49  (0.6%)

GCV10.CMX...Gold Oct 10...1,307.00 ...Up 0.40  (0.0%)

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The dollar fell to an 8 month low against a basket of currencies including the € and ¥ on speculation the Federal Reserve will increase purchases of gov debt to spur the US economy.The € was up again, this time to $1.36.

Dollar index  -  1 year


Family Dollar Stores (FDO), a Dividend Aristocrat, forecast profit for the current fiscal year will beat most estimates & said it will speed up the pace of new store openings.  The retailer, with prices mostly under $10, has attracted cash-strapped consumers in a weak economy. FDO expects to reap the benefit of longer store hours & an overhaul to give more room to fast-moving items like food. The company also posted Q4 profit that beat estimates & authorized a new $750M share repurchase plan. FDO forecast fiscal 2011 EPS of $2.95-$3.15 on a same-store sales increase of 5-7%. Forecasts were for EPS of $2.96.  300 new stores will be opened during FY2011, up 50% from FY2010 which ended on August 28.  EPS in Q4 was 56¢, beating forecasts of 51¢ before one-time items & above 43¢ last year.  Earlier this month, FDO said sales rose 8% to $1.96B during Q4 & sales at stores open at least a year rose 6.1%.  The stock rose 91¢ (2%).

Family Dollar Profit Tops Analyst Estimates; Company Boosts Store Openings

Family Dollar Stores  --  2 years

Hewlett-Packard (HPQ), a Dow stock, forecasted that for the fiscal year ending Oct 2011, EPS would be $5.05-5.15, excluding certain accounting items related to its recent acquisition spree. It sees revenue of $131.5-133.5B.  Analysts had been expecting EPS of $4.99 on revenue of $131.4B.  Despite a recent slump in personal computer sales, recent sales trends have been strong.  The stock rose 63¢ (1½%).

Hewlett-Packard Forecasts Profit, Revenue Topping Estimates

Hewlett-Packard   --  2 years

Nothing dramatic going on in the markets as has been the case all week.  Dow has not strayed far from 10.8K in recent days.  Qtr end selling adjustments have not been significant this time.  The MLP index has been inching up towards its yearly high but could not get a good head of steam to carry to new 2010 highs.  More inaction can be expected until the new month & qtr start.

Dow Jones Industrials   ---   2 weeks

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