Tuesday, March 22, 2011

Mixed markets after 3 days of gains

Stocks are digesting the recent rise in prices. Dow fell 13, decliners over advancers 4-3 & NAZ was off 7. Bank stocks did not participate much in yesterday's rally & are weak today.

S&P 500 FINANCIALS INDEX

Value	219.62
Change	-0.72 (-0.3%)

After yesterday's big pop, MLPs continue in demand. The index rose ½ to the 373s. The REIT index pulled back 1½ to the 231s & junk bond funds were slightly lower. Treasuries were a tad weaker as the yield on the 10 year Treasury bond dropped 1 basis point to 3.34%

JPMorgan Chase Capital XVI (AMJ)

Treasury yields:

U.S. 3-month		0.09%
U.S. 2-year		0.65%
U.S. 10-year		3.34%

Oil declined on speculation that supply disruptions from political unrest in North Africa & the Mideast will be confined to Libya. Gold fluctuated with unrest in Libya & the Mideast & a weaker dollar.The chart below shows gold has been flattish around 1430 since Sun evening.

CLJ11.NYM

Crude Oil Apr 11

102.09

0.27 (0.3%)

Home prices in the US fell 3.9% in Jan from a year earlier according to the Federal Housing Finance Agency & prices fell 0.3% from Dec. Mounting foreclosures are depressing values & bloating the inventory of properties for sale. The number of previously owned homes on the market rose 3.5% in Feb to 3.49M, the biggest gain in almost a year according to the National Association of Realtors. The number of homes in foreclosure in Jan rose to a record 2.2M according to Lender Processing Services. About 23% of homeowners with mortgages had negative equity in Q4 (their home-loan balances were higher than the value of their properties) according to CoreLogic. At the current sales pace, the inventory of homes on the market in Feb would take 8.6 months to sell compared with 7.5 at the end of the prior month & about 39% of the sales were properties with mortgages in default. Dreary news about housing will probably with us all year.

U.S. Jan. Home Prices Fall 0.3% Vs Previous Month, FHFA Says

Photo: Yahoo

Walgreen (WAG), a Dividend Aristocrat, fiscal Q2 earnings climbed 10%, boosted by prescription sales growth & a later onset to the cold & flu season. However, gross profit margin fell below expectations. Gross margin stayed steady at 28.8% in Q2, but there were expectations for an increase because WAG reported strong sales from stores open at least a year, especially in the non-pharmacy or front end category. EPS was 80¢, in fiscal Q2 (ended Feb 28) which compares with 68¢ in the previous year. Revenue climbed 9% to $18.5B. Sales & prescription sales at stores open more than a year rose about 4%. WAG filled 205M prescriptions in Q2, up 6.9% from the prior year & increased its retail prescription market share to 20.1%. Frond-end, or non-pharmacy, sales rose 4.3%, helped in part by a strong Dec holiday season & Valentine's Day performance.The stock dropped 2.77, to below 40, but has risen nicely from the summer lows in the mid 20s.

Walgreen fiscal 2Q net income climbs 10 percent AP

Walgreen Company (WAG)

This is one of those quiet days following a very big 3 day rally taking Dow back above 12K. There are more sobering thoughts about AT&T (T) becoming the biggest cell phone provider & a realization that the approval might take at least a year & throws clouds over the relationship Apple (AAPL) has with AT&T. In the meantime, Libya & the Mideast are a mess & getting worse. But MLPS are finding buyers.