Wednesday, March 2, 2011

Markets inch higher

Dow didn't drift fat from break even & finished with a measly gain of 8, advancers ahead of decliners 3-2 & NAZ was up 10 helped by a 2+ rise for Apple (AAPL).  Banks stock were weak, taking the Financial Index 10+ below its interim high 2 weeks ago.


Value220.37One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change  -1.46  (-0.7%)

The MLP index inched up pennies in the 379s (just 2 below its record high yesterday AM) & the REIT fell another 2½ taking it 10 below its interim high (also yesterday AM).  Junk bond funds were flattish & Treasuries fell on encouraging jobs data this AM.  The yield on the 10 year Treasury bond rose a basis point to just over 3.46%.

Treasury yields:

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

Alerian MLP Index   ---   YTD

Dow Jones REIT Index   ---   YTD

10-Year Treasury Yield Index   ---   YTD

Oil climbed to a 29-month high on concern that unrest curbing exports from Libya will spread in the region. Gold rose to a record for the 2nd straight day on mounting demand for an investment haven amid surging commodity prices & turmoil in Libya.  Oil & gold contracts have shot up sharply in the last 2 weeks (see below).

CLJ11.NYM...Crude Oil Apr 11..........101.95 ....Up 2.32 (2.3%)

$$$ Gold Super Cycle $$$  

CLJ11  (oil contract)   ---   YTD

GCH11  (gold contract)   ---   YTD

Another chart, gas prices at the pump rose to $3.39 yesterday ($4.11 is the record).
State's Graph
Source AAA

Fed Says Labor Market Strengthened on Manufacturing

Photo:   Bloomberg

The US economy expanded in Jan & early Feb in all parts of the country, but businesses are under pressure to raise their prices.  A Federal Reserve (FED) survey showed that all 12 of regions reported growth at a "modest to moderate pace," though growth in the Chicago region was slower than at the end of last year.  Retail sales picked up in all regions, except for Richmond & Atlanta. Factory activity rose in all districts except St. Louis.  The survey hints at some inflationary concerns, costs are rising for manufacturers & retailers in most areas. Manufacturers in many districts said they are increasingly able to pass on those costs to customers & retailers said they have or soon will raise prices.  The FED said that overall, the economy “ continued to expand at a modest to moderate pace.”

Fed: Labor Market Strengthened on Manufacturing, Retail

Steve Jobs, CEO of Apple Inc.

Steve Jobs
Photo:   Bloomberg

Steve Jobs made a surprise return to the spotlight, taking the stage to unveil Apple's (AAPL) new iPad.  The CEO has been out on medical leave since late Jan & his reappearance bolstered AAPL shares.  Jobs took swipes at rivals & mocked competing tablet computers. He spoke passionately about the iPad 2's main features as his #2 & heir apparent Tim Cook looked on.  "We've been working on this product for a while and I just didn't want to miss today," he told a packed auditorium in San Francisco. 

AAPL is launching the next generation tablet computer just as its main adversaries are releasing their first devices.  The $499 iPad 2 is thinner than the iPhone 4, twice as fast as the last tablet, camera-equipped, & ships Mar 11 in the US (Mar 25-26 to other countries). But the fast roll-out highlights the fierce competition in the tablet market.  15M iPads were sold in 9 months, double to triple what was predicted. The company is expected to sell 30M or more this year, which would generate close to $20B despite a growing number of competitors like Motorola (MOT), Research in Motion (RIMM) & Hewlett-Packard (HPQ).  But the iPad, is priced aggressively (i.e. low margins).  Jobs also bragged that iPad has a 90% market share.  However, its share will decline with growing competition. 

Apple's Steve Jobs Appears at Event to Unveil Latest IPad in San Francisco

Apple   ---   YTD

The federal budget was extended another 2 weeks, then congress will reexamine approving a final budget for this fiscal year (which has only 6+ months left).  Next they will work on the FY2012 budget starting in Oct.  Bernanke said he is not ruling out an extension of QE2 (starting in Jul) if it is needed.  Uh, Oh!  But the major stories remain unrest in the Mideast & labor unrest in Wisc which is spreading to other states.  Today's jobs data mentioned that layoffs at the state & local level are already being felt in the numbers, a situation which will get worse in coming months.  I keep thinking defensive thoughts as gold climbs to fresh record levels.  For those interested, more information on gold as an investment is available with the button above in the discussion about gold . 

Dow Jones Industrials   ---   YTD

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