S&P 500 FINANCIALS INDEX
| Value | 195.71 | |
| Change | -0.24 (-0.1%) |
The MLP index was up 1 to the 351, still trying for a new record high but the REIT index fell 2½ to the 221s. Junk bond funds inched higher while Treasuries were weak. The yield on the 10 year Treasury bond went up 5 basis points to 2.60% taking it nearer its high of 2.80+% in the last 2 months.
Treasury yields:
| U.S. 3-month | 0.12% | |
| U.S. 2-year | 0.38% | |
| U.S. 10-year | 2.60% |
Alerian MLP Index --- 2 weeks
Dow Jones REIT Index --- 2 weeks
10-Year Treasury Yield Index --- 2 weeks
Oil & gold fell in response to a stronger dollar. In now takes almost 81½ Japanese ¥ to buy a dollar.
| CLZ10.NYM | ...Crude Oil Dec 10 | ...82.34 | ... 0.18 | (0.2%) |
| GCV10.CMX | ...Gold Oct 10...... | 1,328.30 ... | 8.70 | (0.7%) |
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Confidence in the US economy rose only slightly in Oct, hurt by consumers having to grapple with job worries. The Consumer Confidence Index from the Conference Board rose to 50.2 versus a revised 48.6 in Sep (which compares with an expected a reading of 49.2). The reading in Sep marked its lowest since Feb & was sharply down from 53.2 in Aug. A reading of 90 is needed to indicate a healthy economy, a level not approached since the recession began in Dec 2007. The index had been recovering fitfully since hitting an all-time low of 25.3 in Feb 2009. While the stock market has been on an upward path, confidence has been moving sideways. In Oct 2009, the index stood at 48.7, since then, it has mostly hovered in a tight range between the mid-40s & the high 50s with.May 2010 proving to be the only exception at 62.7. One component of the index, which measures how shoppers feel now about the economy, increased slightly to 23.9 in Oct from 23.3. The other measure, which assesses consumers' outlook over the next 6 months, improved to 67.8 from 65.5. Consumers remain nervous about the outlook for the economy.
U.S. Consumer Confidence Rose in October From 7-Month Low
Consumer confidence - 1 year
Expectations for next 6 months - 1 year
DuPont (DD), a Dow stock, Q3 net income fell as patents expired in its pharmaceuticals division, but the lower results topped expectations. DD also boosted its full-year adjusted earnings guidance, citing its performance & expectations for continued demand in certain markets. Results benefited from the improving global economy, particularly in the Asia Pacific region. DD had EPS of 40¢ in Q3, down 10% from 45¢ last year. Expiration of patents in its pharmaceuticals segment lowered net income by 13¢. However forecasts were for EPS of 34¢ (which usually remove one-time items). Revenue rose 15% to $7.1B, helped by higher volumes & better sales in emerging markets, & were above estimates of $6.76B. For the full year, DD anticipates adjusted EPS of $3.10, above previous guidance of $2.90-3.05, & excludes significant items such as 13¢ loss on early debt extinguishment. The stock fell 98¢ (2%).
DuPont --- 2 years
Kimberly-Clark (KMB), a Dividend Aristocrat, Q3 net income fell 19% on higher costs to make its tissues & diapers, prompting a cut in the guidance for 2010. Businesses in North America continued to suffer because of high unemployment, which leads to emptier offices & less demand for tissue. KMB had EPS of $1.14 in Q3, down from $1.40 last year & revenue rose only 1% to $5B. Analysts predicted KMB would earn $1.28 on revenue of $5B. Q4 could be a tough qtr because of the comparison to last year, which saw higher demand for surgical masks, tissues & other products because of the spread of the H1N1 virus. In addition, materials costs were not an issue last year. KMB narrowed its outlook for revenue this year to 3% growth, the bottom end of its prior range of 3-5%, because of the weak economy in North America. Recessionary effects in the US are still biting companies. The stock fell 3.18 (5%).
Kimberly-Clark Lowers Forecast as Profit Declines 19%
Kimberly-Clark --- 2 years
Earnings season is winding down. So far, markets are up 2-3% since the first announcements. But many reports are plagued by similar themes about US business being sluggish with higher earnings (if any) coming from the foreign earnings along with cost cuts. Low levels of consumer confidence coupled with high unemployment rates are causing the recovery to sputter. But the Alerian MLP Index hasn't given up as it pushes to set more record highs. Treasuries are lower than they have been in recent weeks (with higher yields).
Dow Jones Industrials --- 2 weeks
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