Monday, February 7, 2011

Dow pushes ahead to new 2½ year highs

Stocks began the day higher & kept rising.  Dow is up 86, advancers ahead of decliners better than 3-1 & NAZ gained 22. The Financial Index rose to a 9 month high & is near the 230 peak last Apr.


Value 226.62 One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change   2.20  (1.4%)

The MLP index was up a fracton to the 372s while the REIT index shot up 2½ to the 233s, inches from setting as new 2½ yearly high. Junk bond funds inched higher but Treasuries declined for the 6th straight day in the longest losing streak for the 10-year securities in 3 months, ahead of the $72B auction of notes this week.  The yield on the 10 year Treasury bond was up a smidgen at 3.67%.

Treasury yieldds:

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

Alerian MLP Index   ---   2 weeks

Dow Jones REIT Index   ---   2 weeks

10-year Treasury Yield Index   ---   2 weeks

Oil declined for a 3rd day on skepticism that a rebounding US economy will reduce surplus inventories in the world’s biggest oil consuming country. Gold is still not attracting attention during trying times in the Mideast.

CLH11.NYM...Crude Oil Mar 11...88.41 ...Down 0.62  (0.7%)

GCG11.CMX...Gold Feb 11.....1,349.00 ...Up 0.70  (0.1%)

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Homeowners in the foreclosure process were an average of 507 days late on payments at the end of last year as lenders handled a record rate of mortgage delinquencies, according to Lender Processing Services.  The average grew 25% from 406 days at the end of 2009.  The high jobless rate is increasing loan defaults & weighing down prices as foreclosed properties sell at a discount.  Homeowners with 6.87M loans, 13% of all mortgages, were at least 30 days behind on payments as of Dec 31.  The number of homes receiving a foreclosure filings may climb 20% this year as banks step up the pace of seizure. A record 2.87 million properties received notices of default, auction or repossession last year, according to RealtyTrac.  Dreary housing numbers are hard on the economic recovery & making it difficult for the high unemployment rate to be reduced.

U.S. Homeowners in Foreclosure Process Were 507 Days Late Paying

Loews (L); Loews hotels, the property insurer CNA Financial & a drilling company; Q4 EPS rose 16%, helped by lower expenses & higher net investment income.  EPS was $1.12 in Q4, ahead of 94¢ in 2009 & beat expectation of lower earnings at 84¢.  However, revenue slipped 3% to $3.72B.  Net investment income rose to $711M from $591M inQ4 while total expenses declined to $2.77B from $2.94B.  For the year, EPS was $3.07, sharply ahead of $1.30 in 2009.   Results included a $328M charge related to a loss portfolio transfer agreement under which its CAN Financial subsidiary ceded legacy asbestos & environmental pollution liabilities to National Indemnity.  Annual revenue increased 4% to $14.6B.  The stock liked the news, up $2.37 to a 2½ year high. 

Loews Gains as Profit Beats Estimates, Insurer Unit CNA Restores Dividend

Loews   ---   1 year

Stocks returned to their winning ways (Dow has a 6 day winning streak).  The report on Fri that Asian money is investing in US stocks, a new safe haven investment, could explain this rise.  Gold & Treasuries are not getting much attention even though intl worries are at high levels.  MLPs have been flattening out in recent days, maybe from competition of higher yields on Treasuries.  The 3 Treasury auctions this week will be lower than the $100B acutions last year, but their success is uncertain.

Dow Jones Industrials   ---   2 weeks

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