Markets mixed on inflation concerns

Dow was down 19, decliners ahead of advancers 4-3 & NAZ fell 9.  Bank stocks did little, the Financial Index remains near its highs as it wants to take out the highs from late last Apr.

S&P 500 FINANCIALS INDEX

Value	227.51
Change	-0.93  (-0.4%)

The MLP index was up pocket change to 370, still only 4 below its recent record highs.  The REIT index was off pennies but has been in new 2½ high territory for more than a week.  Junk bond funds were a smidgen lower.  Treasury yields did little ahead of the 10 year auction note later today.

Treasury yields:

U.S. 3-month		0.14%
U.S. 2-year		0.82%
U.S. 10-year		3.71%

Alerian MLP Index   ---   2 weeks



Dow Jones REIT Index   ---   2 weeks



10-Year Treasury Yield Index   ---   2 weeks




Oil pared gains after a gov report showed inventories of gasoline rose to the highest level since 1990.  After climbing in the last week, gold is taking a rest.

CLH11.NYM

...Crude Oil Mar 11

...87.71

... 0.77

(0.9%)

GCG11.CMX

...Gold Feb 11

......1,365.20

... 1.80

(0.1%)

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Photo:  Yahoo

Unemployment remains too high for policymakers' comfort despite signs of strength in the economic recovery, according to Ben Bernanke.  In testimony to the House Budget Committee, Bernanke also warned about the dangers of unsustainable budget deficits.  But he cited a number of encouraging hints from the labor market, including a drop in the jobless rate to 9% in Jan from 9.8% in Nov, the biggest 2-month drop since 1958. At the same time, Bernanke expressed concern at the anemic pace of hiring.  "The job market has improved only slowly," he said, noting the economy had only made up just over 1 million of the more than 8 million jobs lost during the deepest recession in generations.  "This gain was barely sufficient to accommodate the inflow of recent graduates and other new entrants into the labor force and, therefore, not enough to significantly erode the wide margin of slack that remains in our labor market."  He said inflation remains quite low, a tough message to deliver amid headlines of rising food & commodity costs across the globe.  He also said expectations of future inflation had remained "stable," suggesting little worry that inflationary psychology was building despite rising gasoline costs.  "Inflation is expected to persist below the levels that Federal Reserve policymakers have judged to be consistent" with their mandate, Bernanke repeated.  He had much the same message that has been offered repeatedly: either legislators bring the budget under control or the markets will force them into it.  "Creditors would never be willing to lend to a government with debt, relative to national income, that is rising without limit," he said. If unheeded, the adjustment could "come as a rapid and painful response to a looming or actual fiscal crisis."

Bernanke Says Unemployment to `Remain Elevated' Even After Drop




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Coca-Cola (KO), Dow stock & Dividend Aristocrat, Q4 net income more than tripled, helped by the acquisition of a bottler & selling more drinks in North America, the 3rd consecutive qtr of rising sales. It had been relying on emerging markets such as China & India for growth as weakened consumer spending & increased interest in healthier drinks sapped soda demand in developed markets.  EPS in Q4 was $2.46, up from 66¢ in the prior year.  Removing a $5B gain tied to the buyout of Coca-Cola Enterprises' North American operations (CCE) & other items, EPS was 72¢ (meeting expectations).   Revenue in Q4 rose 40% to $10.5B, beating estimates of $10.16B.  North American beverage volume increased 8% in Q4 while worldwide volume climbed 6%.  Juices & teas remained critical in North America.  The biggest volume gain overseas came in Eurasia & Africa, which rose 14%. Latin America posted a 5% increase, while Europe climbed 2% & the Pacific 1%.  For 2010, EPS was $5.06, compared with $2.93 in 2009.  Adjusted EPS was $3.49 on volume of $35.1B.  The div increase should be announced next week.

Coca-Cola Profit More Than Triples on One-Time Gain

Coca Cloa   ---   1 year




Markets are taking a rest after their almost 10 week run.  Dow is up more than 10% since the beginning of Dec.  At other times, that would be considered a "good" year.  But optimists want it to continue rising.  The MLP index has been lagging, up only 4% in the last 2 months.  After its extraordinary rise, it can be expected to a laggard in 2011.  More earnings reports are due.

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