S&P 500 FINANCIALS INDEX
| Value | 196.06 | |
| Change | -0.18 (-0.1%) |
The MLP index fell 1 to the 349s & the REIT index dropped ½ in the 220s. Junk bond funds were a little higher as were Treasuries. The yield on the 10 year Treasury bond fell 3 basis points off its interim high to 2.68%
Treasury yields:
| U.S. 3-month | 0.12% | |
| U.S. 2-year | 0.38% | |
| U.S. 10-year | 2.67% |
Alerian MLP Index --- 2 weeks
Dow Jones REIT Index --- 2 weeks
10-Year Treasury Yield Index --- 2 weeks
Oil rose after initial jobless claims declined to a 3-month low, signaling increased fuel demand, & the dollar dropped against the €. Gold gained on a weaker dollar
| CLZ10.NYM | ...Crude Oil Dec 10 | ...82.15 | ....... 0.21 | (0.3%) |
| GCX10.CMX | ...Gold Nov 10 | ......1,332.20 | .... 10.00 | (0.8%) |
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The Labor Dept reported that initial claims for jobless benefits dropped 21K to 434K last week, the 2nd-lowest number this year. But this figure was favorably influenced by the season adjustment. The only time it was lower was during the Jul 10 week & that week was affected by the Independence Day holiday when unemployment offices were closed. Claims have fluctuated around 450K for most of this year & have fallen below that level 7 times after which they rose & haven't been able to remain below 450K for longer than 2 weeks. The 4-week average fell 5K to 453K, the lowest level since Jul 24. Economists expect that the Commerce Dept on Fri will report slightly better GDP growth of 2% for Q3, but that's still sluggish after a deep recession. The economy needs to grow by at least 5% annually to bring down the unemployment rate by a percentage point. This data is slightly encouraging but the graphs remain dreary.
Jobless Claims in U.S. Unexpectedly Drop To Three-Month Low
Jobless claims -- 1 year
# continuing to receive benefits - 1 year
Royal Dutch Shell (RDS.A), Europe's largest oil company, reported Q3 net profit rose 6.5% on increased production & higher oil prices more than offset a billion dollar charge on the value of oil sand assets in Canada. Net profit of $3.46B was up from $3.25B last year as revenues rose to $90.7B from $75B. "Our results have rebounded substantially from year-ago levels, with improved earnings and cash flow, underpinned by a 5 percent increase in oil and gas production," said Chief Executive Peter Voser. "This is a better performance from Shell, achieved despite continued difficult industry conditions in refining and natural gas markets." Shell said that after stripping out one-time items in both years, earnings would have risen 88% to $4.93B from $2.62B. The stock rose 66¢ (1%) but has not participated in the stock market rally over the last 2 years.
Shell Reports Increase in Profit as Oil Prices Climb
Royal Dutch Shell --- 2 years
ExxonMobil (XOM), a Dow stock & Dividend Aristocrat, had a better than expected Q3 as profits grew 55%. XOM earned $7.35B, or $1.44 a share, compared with a profit of $4.73B (98¢) last year, beating expectations of 1.38. But revenue jumped 16% to $95.3B, below $98.1B forecasted. “Despite continuing economic uncertainty, we had strong quarterly results and continued to advance our robust investment opportunities,” CEO Rex Tillerson said. The stock gained 66¢.
Exxon 3Q Profit Jumps 55%at Fox Business
ExxonMobil --- 2 years
3M (MMM), a Dow stock & Dividend Aristocrat, reported record Q3 EPS of $1.53 (up 11%) on sales of $6.9B (up 13%). Operating income was a Q3 record of $1.6B & operating margins were 22.9%. Sales in emerging markets grew by 25% & now comprise 34% of global sales. Sales grew by 48% in Korea, 39% in India, 32% in Russia, 31% in the China/Hong Kong region & 25% in Brazil. “The 3M team posted yet another outstanding quarter, with 11 percent organic volume growth and 23 percent margins,” said George W. Buckley, 3M CEO. “We drove growth throughout the portfolio, with more than 80 percent of our operating divisions posting year-on-year sales increases. New products are fueling market share gains and filling adjacent spaces everywhere, but particularly in emerging markets, the fastest-growing area of our company. My thanks to the many 3Mers around the world who continue to make this happen.” 3M expects that full-year organic sales volume growth will be 13.5-14% & operating margins will be approximately 22.5% in 2010. Full-year EPS are expected at (excluding the Medicare Part D-related charge recorded in Q1), $5.70-5.74. But the high end of this range is down 6¢ per share versus prior expectations, due solely to anticipated earnings dilution related to the company’s Oct 2010 purchases of Attenti Holdings & Arizant along with a controlling interest in Cogent. GAAP earnings are expected to be $5.59-5.63 for 2010. The reduction in EPS guidance cost the stock dearly, down 4.85 (5%) but has a nice run off its lows 2 years ago.
3M Achieves Record Sales of $6.9 Billion on 11 Percent Organic Volume Growth
3M --- 2 years
Modestly favorable jobless figures should have been a more positive influence on the markets. But mixed messages from company earnings is hurting. The Dow chart below is showing that it's stalling out at the yearly highs of 11.2K. Q3 GDP data may not bring back the bulls tomorrow.
Dow Jones Industrials --- 2 weeks
Global Strategy Portfolio/Diversification Doesn't Work
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