Markets fall on uneven earnings

Dow dropped 100, decliners over advancers 3-1 & NAZ fell 23.  Banks stocks were a little higher despite mushy earnings.


S&P 500 FINANCIALS INDEX

Value	197.96
Change	0.53  (0.3%)

The MLP index dropped 1½ to 349 while the REIT slipped ½ to 222, still near its yearly high.  Junk bond funds were mixed & Treasuries pulled back.  The yield on the 10 year Treasury bond rose 3 basis points to 2.52%.

Treasury Yields

U.S. 3-month		0.13%
U.S. 2-year		0.36%
U.S. 10-year		2.52%

Alerian MLP Index    ---   2 weeks




Dow Jones REIT Index    ---   2 weeks



10-Year Treasury Yield Index    ---   2 weeks




Oil tumbled the most in 7 weeks after China raised benchmark interest rates, potentially crimping demand in the world’s biggest energy-using country.  Gold declined as the dollar strengthened after China unexpectedly raised lending rates, curbing demand for bullion as an alternative investment.

CLX10.NYM

...Crude Oil Nov 10

....81.15 .....

1.93

(2.3%)

GCV10.CMX

...Gold Oct 10

........1,341.90

... 29.30

(2.1%)

Gold Super Cycle Link! Click Here

Yesterday Steve Jobs, CEO of Apple (AAPL), made a rare appearance to announce a $20B qtr for AAPL in Q4.  He said 14M iPhones were sold during the qtr, up 91% from last year.  Then he made an attack on Android, from Google (GOOG) & a forceful defense of Apple.  "In reality, we think the open versus closed argument is just a smokescreen to try to hide the real issue, which is what's best for the customer: Fragmented versus integrated," Mr. Jobs said. "We think Android is very, very fragmented and becoming more fragmented by the day."  He also said while many in the media have said that an "avalanche" of tablets are expected to compete with the iPad soon, he believes only a handful of tablets will be released this year.  In after hours trading, AAAPL sunk 18 to 300 but rebounded today to down "only" 6 to 312, still near yesterday's record.

• Jobs says Apple's approach is better than Google's- NYTimes 

Apple   ---   YTD






Bank of America (BAC), a Dow stock, posted a Q3 loss of $7.3B (77¢ per share) compared with a net loss of $1B, or 26¢ per share last year. Excluding a goodwill-impairment charge of $10.4B, BAC earned $3.1B or 27¢ per share in Q3 beating estimates of 18¢.  “We are adapting to the regulatory environment, credit quality continues to improve, and we are managing risk and building capital,” said CEO Brian Moynihan. “We are realistic about the near-term challenges and optimistic about the long-term opportunity.” Big U.S. banks are reporting higher earnings as they come to grips with massive loan losses caused by the 2008 financial crisis.  The stock slipped 4¢ after announcing foreclosures will be restarted..

Bank of America Posts $7.3 Billion Loss on Cost of New Rules

Bank of America   ---   2 years





Johnson & Johnson (JNJ), a Dow stock & Dividend Aristocrat, only managed a 2% profit increase in it Q3 as sales were down slightly, hurt by repeated product recalls & customer wariness.  Sales in the consumer products division dropped nearly 11% in the qtr to $3.57B while other divisions did much better.  EPS was $1.23, modestly ahead of $1.20 last year.  JNJ has taken a black eye over 13 product recalls in as many months, most of them involving nonprescription medicines such as Tylenol & Motrin. The most recent, involving Tylenol caplets, was just announced Mon evening. The consumer product recalls forced the closure of one factory this past spring & have cut sales of consumer products, with JNJ estimating a loss of $600M this year alone.  Total Q3 sales were almost $15B, down slightly from $15.08 last year.  However, EPS beat expectations of $1.15. JNJ raised earnings forecast for 2010, to $4.70-$4.80 per share, up from $4.65-$4.75 in Jul. The stock fell 90¢.

J&J's 3Q profit up slightly, despite lower salesAP


Johnson & Johnson   ---   YTD






Earnings are not coming in great.  AAPL was a big disappointment last night, but bulls rushed back into the stock today.  JNJ is a solid company with a AAA credit rating but can't get higher earnings from higher sales (the way it's supposed to go).  Banks are the biggest disappointment.  Improved earnings have more to do with reclaiming provisions for loan losses, not from improved business & revenues. Dow made it over 11K, but is having a difficult time reaching a new yearly high above 11.2K.


Dow Jones Industrials    ---   2 weeks

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