Thursday, February 24, 2011

Stocks slip on oil worries

Dow fell 37 & ended near its highs for the day, advancers were even with decliners & NAZ rose 14.  Bank stocks also saw buying in the PM, with the Financial Index finishing off its lows.


Value222.58One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change   -0.51  (-0.2%)

The MLP index rose 1+ to 376 on favorable sentiment about higher energy prices but the REIT index fell 1½ to the 231s (lowest value in a month).  Junk bond funds inched higher (not too far from their highs last year) & Treasuries were also in demand.  The yield on the 10 year Treasury bond fell 5 basis points 3.44%.

Treasury yields:

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

Alerian MLP Index   ---   1 year

Dow Jones REIT Index   ---   1 year

10-Year Treasury Yield Index   ---   1 year

Oil fell after topping $100 on assurance that disruptions in oil shipments will be replaced.  The chart for the contract shows oil has had an usually wild 5 days (going over $100 early today).  Gold continues on its winning ways & is only about $20 away from setting a fresh record high!

CLJ11.NYM...Crude Oil Apr 11...97.25 ....Down 0.85  (0.9%)

GCG11.CMX...Gold Feb 11.....1,415.30 ...Up 1.90 (0.1%)

*** Gold Super Cycle ***  

CLJ11  (oil contract)   ---   1 week

Below are the latest prices & a chart for gas prices over the last year (courtesy of AAA).  Summer driving season is not that far away when these prices will be more acutely felt.

National Unleaded Average
Current Avg.$3.228$3.354$3.485$3.595$2.774$3.651
Yesterday Avg.$3.194$3.319$3.450$3.575$2.760$3.632
Week Ago Avg. $3.145$3.273$3.405$3.540$2.734$3.598
Month Ago Avg. $3.110$3.303$3.421$3.423$2.675$3.521
Year Ago Avg. $2.678$2.843$2.946$2.857$2.318$3.050

State's Graph
Source:   AAA

GM Reports Smallest Profit in a Year on New-Vehicle Costs

Photo:   Bloomberg

General Motors (GM) posted Q4 results that topped expectations, but its shares fell below the IPO price (at the lows) as concerns shifted to the pressure from rising oil prices & higher costs of launching & selling new cars.  Profits were $4.7B in 2010, its first full year after a bankruptcy scoured costs & debt from the balance sheet.  Its last year of profits was in 2004 & this was its largest profit since 1999.  Today's decline of $1.53 (4½%), taking it back to just above the IPO price of $33, was its largest single-day percentage decline since its IPO last Nov.  Q4 net income of $510M represented a slowdown from the previous 3 qtrs, but topped expectations after adjusting a one-time charge to buy back preferred shares held by the Treasury.  Revenue rose nearly 15%, from a year earlier, to $37B.

GM Falls Below IPO Price as Rising Oil Dims Truck Sales

General Motors   ---   4 months

The break in rising oil prices brought a sense of relief to the stock markets.  But Dow is still down 300+ from its highs on Tues. The Mideast remains unstable & the threat of political unrest spreading to other countries (assuming Libya quiets down) remains high.  Markets are nervous, a time when gold has a lot of appeal for investors. 

Dow Jones Industrials   ---   1 year

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