Tuesday, April 26, 2011

Dow has a triple digit rise in the heart of earnings season

Markets are feeling very good, they like the earnings reports. Dow rose 115 (taking it back to where it was in mid 2008), advancers over decliners a more modest 5-2 & NAZ was up 21. Bank stocks were higher, but continue to lag the overall markets. Traditionally bank stocks are leaders, not followers.

S&P 500 FINANCIALS INDEX

Value	217.79
Change	1.23 (0.6%)

The Alerian MLP Index was up again to new records & the REIT index rose 2½ to the 245s. Junk bond funds were mixed but Treasuries were higher. The yield on the 10 year Treasury has dropped to 3 month lows other than a spike down in mid Mar. Oil is drifting but at very high levels while gold is trying to hold above its $1500 support level.

ALERIAN MLP INDEX

Value	389.20
Change	1.75 (0.5%)

Treasury yields:

U.S. 3-month		0.06%
U.S. 2-year		0.61%
U.S. 10-year		3.32%

CLM11.NYM

...Crude Oil Jun 11

...112.09

...

0.19 (0.2%)

GCJ11.CMX

.....Gold Apr 11

.......1,500.50

...

8.10

(0.5%)

IBM (IBM), a Dow stock, approved an $8B stock buyback & a 15% boost in its div. The 75¢ div will be paid in Jun & represents the 16th consecutive yearly div increase. The stock buyback is in addition to $4.7B remaining at the end of Mar from a prior authorization. IBM's has announced a goal of $20 per share in operating earnings by 2015. The stock gained 82¢ in record high territory.

IBM lifts dividend 15%, sets $8B stock buyback- AP

International Business Machines (IBM)

Photo: Yahoo

Ford (F) had its best Q1 profit in 13 years, as more fuel-efficient vehicles reached showrooms. New arrivals such as the Ford Explorer & Fiesta small car are selling well. Ford is charging more for cars, helping offset higher commodity costs. Q1 profit jumped 22% to $2.6B, its 8th straight quarterly profit in its long climb back from near-bankruptcy 5 years ago. Revenue rose 18% to $33.1B, higher than the $30.5B forecasted. It saw especially strong growth in Asia, where revenues jumped 31% to $2.1B. Ford has seen little impact from the Mar earthquake & tsunami in Japan. "Our team delivered a great quarter, with solid growth and improvements in all regions," CEO Alan Mulally said. The average price of a Ford vehicle increased $260 to $30,463 in Q1. Some trouble spots include higher prices for commodities such as steel which cost an extra $300M in Q1. Those costs could increase by as much as $2B by year end. Ford continued making progress paying off debt. It took out a $23B loan 5 years ago to revamp its operations. By Mar 2011, it was reduced to $16.6B (down $2.5B in Q1). The stock rose 12¢.

Ford posts best 1Q profit in 13 years AP

Ford Motor Credit Company (F)

United States Steel (X) profit picture improved in Q2, as the recovering global economy sparks more demand for steel. The largest steelmaker in the US forecast higher prices & stabilizing raw materials costs for Q2. The company remained cautiously optimistic. It posted a 60¢ loss for EPS in Q1, down from $1.10 last year. The current results reflected an $81M one-time gain on foreign currency exchanges. Sales increased 25% to $4.86B. In Europe, shipments rose 17%, from Q4 2010, to 1.4M tons due to stronger demand & the average price rose $30 per ton to $823. "We expect reductions in automotive production during the quarter to be made up in 2011 as vehicle inventories, presently low compared to historical levels, will need to be replenished," CEO John P. Surm said. The stock fell 2.11 to the 49s. .

US Steel narrows 1Q loss AP

United States Steel Corporation (X)

Gas at the pump is up to $3.87 (4.11 is the record)!

	Regular	Mid	Premium	Diesel	85	**E85 MPG/BTU adjusted price
Current Avg.	$3.869	$4.008	$4.138	$4.139	$3.271	$4.305
Yesterday Avg.	$3.863	$4.004	$4.133	$4.141	$3.263	$4.295
Week Ago Avg.	$3.835	$3.974	$4.103	$4.134	$3.226	$4.245
Month Ago Avg.	$3.578	$3.723	$3.854	$3.957	$3.025	$3.981
Year Ago Avg.	$2.854	$3.031	$3.140	$3.072	$2.279	$2.999

Markets like the earnings reports which warms the hearts of the bulls. There are plenty of troubles around the world & they are being ignored. Presently Congress has to deal with increasing the debt limit for the US Treasury. The latest word is that the Treasury might be able to hold out for another 60 days before the present limit is reached. That's about the time QE2 will end. The Federal Reserve is leaking that there is no exit rush. Bulls are calling all the shots in the markets.