Thursday, March 24, 2011

Markets rise as earnings beat expectations

Dow shot up 84, advancers ahead of decliners 2-1 & NAZ gained 38.  Bank stocks were higher with only lackluster gains.


Value219.59One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change  1.07  (0.5%)

The MLP index added another 3+ to the 376s while the REIT index was up 1+ to the 329s.  The MLP index may have its eyes on the record of 383.  Junk bond funds inched higher.  Treasuries dropped, pushing the 10-year note yield to a one-week high at 3.40+%, as corp profits beat forecasts & on speculation European bailouts will end with Portugal, buoying global stocks.  Oil slipped from the highest level since Sep 2008 on concern that demand from Europe will be slow to recover if Portugal becomes the 3rd euro country to require emergency aid.  Gold futures fell on speculation that a 6-day rally to a record was overdone.

JPMorgan Chase Capital XVI (AMJ)

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Treasury yields:

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

CLK11.NYM...Crude Oil May 11...105.47 ...Down 0.28  (0.3%)

GCH11.CMX...Gold Mar 11........1,434.80 ....Down 3.10  (0.2%)

The VIX, benchmark measure of US stock options, had for its biggest 6 day drop since Nov 2008 as concerns that the Japanese earthquake will curb global economic growth eased.  It fell 5.7% to 18.00, extending its retreat since the Mar 16 high above 30, the biggest decline in that time span.  The VIX measures the cost of using options as insurance against declines in the Standard & Poor’s 500 Index.

VIX Heads for Biggest Six-Day Drop Since '08 as Japan Quake Concerns Abate

Walgreen (WAG) will pay $429M to buy online retailer (DSCM), giving it access to 3M online customers.  The largest US drugstore chain will pay $3.80 in cash for each share (it's trading at that price now), more than double the $1.79 closing price yesterday.  The acquisition will add 60K products to online offerings at WAG & significantly speed up its online strategy. is one of the largest online health & beauty retailers.  WAG rose 12¢. 

Walgreen Company (WAG)

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The price of gas at the pump inched up a fraction of a penny yesterday & is headed higher.

National Unleaded Average
Current Avg.$3.551$3.690$3.822$3.940$3.021$3.975
Yesterday Avg.$3.548$3.688$3.820$3.935$3.017$3.971
Week Ago Avg. $3.546$3.682$3.813$3.930$2.993$3.939
Month Ago Avg. $3.171$3.304$3.436$3.564$2.750$3.620
Year Ago Avg. $2.816$2.990$3.097$2.943$2.356$3.100

Stocks liked earnings reports & buyouts.  Meanwhile attacks continue in Libya & Japan is trying to clean up around the nuclear disaster. Eyes are on EU to see what the union will do to solve Portugal's debt problems.  Dow is up 500+ from its lows last week & the MLP index rose an amazing 17 off its lows (not bad for a low beta group).  Buyers are not going to be deterred by world events.  Bulls are creating following winds & stocks are following.

Dow Industrials (INDU)

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