Thursday, May 19, 2011

Markets continue to look for direction

Dow fell 24, decliners over advancers 4-3 & NAZ was off 6. Lower bank stocks took the Financial Index down another notch.

S&P 500 FINANCIALS INDEX

Value	213.735
Change	-0.66 (-0.3%)

The MLP index was up 2+ to the 361s, the REIT slipped a fraction in the 244s & junk bond funds were mixed. Treasuries were a little lower. Oil is breathing on $100, but it only has fractional changes as with gold.

JPMorgan Chase Capital XVI (AMJ)

Treasury yields:

U.S. 3-month		0.04%
U.S. 2-year		0.56%
U.S. 10-year		3.21%

CLM11.NYM

...Crude Oil Jun 11

...99.78

...

0.34 (0.3%)

GCK11.CMX

...Gold May 11

....1,497.00

...

1.40

(0.1%)

Jobless Claims in U.S. Fall More Than Forecast

Photo: Bloomberg

Jobless claims declined 29K to 409K accoriding to the Labor Dept, below the estimate of 420 & were the lowest in a month. Claims last month surged to the highest level in 8 months due to events that seasonal variations failed to take into account, such as a late school holiday, a new emergency benefits program in Oregon & auto shutdowns caused by the disaster in Japan. But flooding in the South hasn’t been a significant influence so far on the number. The 4- week moving average rose to 439K from 438K in the prior week. The number continuing to receive jobless benefits dropped 81K to 3.7M. Those who’ve used up their traditional benefits & are now collecting emergency & extended payments increased by 4K to 4.1M. Better news on the jobs front, but not the kind that will help reduce the high unemployment rate.

Jobless Claims in U.S. Fall More Than Forecast

Existing-Home Sales in U.S. Probably Rose

Photo: Bloomberg

Fewer people purchased previously occupied homes in Apr as activity among first-time homebuyers increased & foreclosure sales declined, but those factors weren't enough to signal a recovery in the weak housing market. Sales of previously occupied homes fell 0.8% to 5.05M pace according to the National Association of Realtors. Purchases made by first-time homebuyers rose 3% to 36%, but still below the 40% figure that is consistent with better markets. The median sales price rose 2.4% from Mar, to $163K, but that's still down 5% from last year. Sales of homes at risk of foreclosure fell 3% to 37% of all purchases. Foreclosure sales declined only because a large number of those homes are backlogged in the courts. A record 1M homes were lost to foreclosures last year & 1.2M more are expected to be lost this year.There's still a glut of unsold homes, the supply rose to nearly 3.9M & at last month's sales pace, it would take more than 9 months to clear those. The housing markets continues to be stuck in the doldrums.

Sales of Previously Owned U.S. Homes Probably Rose on Distressed Purchases

LinkedIn (LNKD), the largest professional-networking website, surged to $85. The company sold 7.84M shares at $45, the proposed range on May 17 was raised to $42-45 from $32-35. Members of LinkedIn use the site to search for jobs, recruit employees & find industry experts. While users can create personal profiles for free, paid subscriptions were introduced in 2005, giving recruiters more access to candidates and providing professionals ways to communicate with one another. The company gets 70% of revenue from business subscriptions, a model that’s similar to Salesforce.com. Proceeds from the offering will be used to fund existing operations & expand the business. Including an overallotment option for underwriters to buy an additional 1.18M shares, LNKD may raise $405M. When a stock doubles immediately after its IPO, that spells trouble for the markets, speculation is running wild.

LinkedIn Surges in First Day of Trading

Just another listless day of trading on low volume. Strauss-Kahn had to give up his job of running the IMF so he could get out of jail & prepare for his criminal trial (which has the threat of years of prison time). Greek bonds keep falling, awaiting developments to save the country. The head of Citi (C) just got a multi million $ pay package (up from $1 a year), after he brought this huge financial institution back from death's door. I don't begrudge him, he deserves rewards for a job well done & stockholders will see rewards in the coming years. MLPs are recovering, but the index is still down 7% in May (Dow is down only 2%). The LNKD pop on its first day of trading is troubling.