Thursday, April 14, 2011

Markets gain after House passes revised budget for FY2011

Dow ended up 14 after being down 150 at its lows, advancers ahead of decliners 5-4 & NAZ slipped 1 (hurt by Apple falling 3). Bank stocks continued weak anticipating not quite good enough earnings.

S&P 500 FINANCIALS INDEX

Value	217.13
Change	-1.87 (-0.9%)

The MLP index was up pennies & the REIT index shot up 3½ to the 234s. Junk bond funds were a penny or 2 higher while Treasuries did little. Oil climbed for a 2nd day on reports that Saudi Arabia reduced output this month. Gold rose the most in a week (in record high territory) on speculation that higher raw-material costs & record-low interest rates will spur demand for an inflation hedge.

ALERIAN MLP INDEX

Value	378.19
Change	0.06 (0.0%)

Treasury yields:

U.S. 3-month		0.06%
U.S. 2-year		0.76%
U.S. 10-year		3.49%

CLK11.NYM

...Crude Oil May 11

...108.40

...

1.29

(1.2%)

Greek borrowing costs surged to new highs & pressure rose on other financially weak euro zone countries after Germany suggested for the first time that Greece may need to restructure its massive debt load. Central bankers & European Union officials warned a restructuring would lead to economic "catastrophe" for Greece & the gov vowed to deliver on the ambitious fiscal goals set out for it by the EU & IMF in last year's €110B ($160B) rescue. But doubts are growing. With a debt mountain that is expected to approach 160% of annual output by 2013 & EU/IMF money due to run out that same year, some move to reduce Greece's debt burden such as reducing or postponing repayments to its bond investors looks increasingly unavoidable! German Finance Minister Wolfgang Schaeuble became the first senior euro zone official to acknowledge that restructuring was a possibility. Last year, Greek debt problems brought on the severe stock market decline in May.

Greek, Portuguese Yields Surge to Record as Schaeuble Raises Restructuring

Zipcar (ZIP) stock is soaring after the IPO priced at $18 a share, above the $14-16 projection. That led investment groups to cash out more shares than originally planned, about 3M shares versus 1.7M. In addition, ZIP is selling another 6.7M shares. At $18, the IPO is be worth nearly $175M, 40% more than original predictions. The stock, under the ticker ZIP on Nasdaq, was up $10 to $28. The success of this offering was a plus for the overall markets.

Zipcar shares soar in market debut- AP

Zipcar, Inc. (ZIP)

Enterprise Products Partners (EPD) increased the quarterly distribution to 59.75¢ unit ($2.39 annualized). This rate, which represents a 5.3% increase over the Q1 distribution & is the 36^th distribution increase since the IPO in 1998 & the 27^th consecutive quarterly increase. EPD is the the largest MLP & this sends a positive signal for more distribution increases in the next few weeks. Duncan Energy (DEP), a related company which is merging with EPD, also increased its distribution. EPD rose 4¢.

Enterprise Announces 27th Consecutive Quarterly Distribution Rate IncreaseBusiness Wire

Enterprise Products Partners L.P. (EPD)

Price for gas at the pump rose to over $3.81 yesterday.

12onth Average

The House.passed the resolution cutting $38B from the budget so the federal gov will remain open, at least for a few months. The Senate will vote later today, then the pres will sign it into law. The good feeling after this bill was passed helped the Dow gain into the black (150 above its lows for the day) although it only returned to where its was on Mar 29. Big banks will be reporting earnings in the next few trading days & investors are nervous that they will be mildly disappointing.