VerySmartInvesting: Higher markets on mixed economic data

Thursday, February 17, 2011

Higher markets on mixed economic data

Dow rose during the day, good enough for a gain of 29 to another multi year high. Advancers were ahead of decliners 2-1 & NAZ was up 6. Bank stocks struggled, finishing little changed but the Financial Index is at its highest levels in more than 2 years.

S&P 500 FINANCIALS INDEX

Value	230.68
Change	-0.24 (-0.1%)

The MLP index was up a fraction in the 377s (good enough for another record ) & the REIT index added a fraction in the 236s. Junk bond funds were a little lower but Treasuries were strong. The yield on the 10 year Treasury bond fell 5 basis points to 3.57%, a 2 week low.

Treasury yields:

U.S. 3-month		0.09%
U.S. 2-year		0.77%
U.S. 10-year		3.57%

Alerian MLP Index --- 3 months

Dow Jones REIT Index --- 3 months

10-Year Treasury Yield Index --- 3 months

Oil surged the most this month amid mounting Mideast tensions, narrowing a record spread between US West Texas Intermediate (in NY) & Brent (in London). Gold rose to a 1 month high as rising consumer prices boosted investor demand for an inflation hedge.

CLH11.NYM

...Crude Oil Mar 11

...86.33

....

1.34 (1.6%)

GCG11.CMX

...Gold Feb 11

.......1,384.10

...

9.40

(0.7%)

$$ Gold Super Cycle $$

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Enterprise Products Partners (EPD), the largest MLP, reported financial results for Q4 & 2010. EPD had record natural gas liquid (NGL), crude oil, refined products & petrochemical pipeline volumes as well as record natural gas pipeline volumes for 2010. Higher volume produced record net income of $1.4B, record gross operating margin of $3.3B & record distributable cash flow of $2.3 billion (used for paying distributions) in 2010. EPD invested $3.1B to develop & acquire midstream energy infrastructure to serve customers in areas such as the Haynesville/Bossier Shale & the Eagle Ford Shale as well as to accommodate petrochemical customers’ increasing demand for NGLs. In 2010, distributions increased 5.4% while the company retained a record $480M of distributable cash flow for capital projects. EPD expects to invest $3.4B in capital projects during 2011 of which approximately 85% will be deployed in the Eagle Ford & Haynesville/Bossier Shale regions. The Haynesville Extension is expected to begin operations in Sep 2011 & come in under budget. The stock gained 15¢ today & the 5 year chart looks great.

Enterprise Reports Record Results for 2010Business Wire

Enterprise Products Partners --- 5 years

Coca-Cola (KO), a Dow stock & Dividend Aristocrat, raised the quarterly dividend 7% from 44¢ to 47¢ ($1.88 annualized) per share, the 49th consecutive annual increase. KO said it returned $7.2B to shareowners in 2010, $4.1B in dividends & $3.1B in share repurchases. The stock rose 1.15 with another great looking 5 year chart.

The Board of Directors of The Coca-Cola

Coca-Cola --- 5 years

Bulls returned in the PM, giving the markets another nice advance. The chart below shows how Dow stuttered a little in Nov, but since then has risen almost non-stop. It's up an amazing 12% in less than 3 months (during other times, that would be an excellent year!). Overbought lessons are pushed far back in the minds of today's buyers. Meanwhile, tensions in the Mideast make me nervous.

Dow Jones Industrials --- 3 months