S&P 500 FINANCIALS INDEX
| Value | 211.61 | |
| Change | -0.21 (-0.1%) |
Even in a one year chart the decline for the Alerian MLP Index this month is noticeable, down 35 month to date. In a weak market, the REIT index fell 1+ to the 241s. Junk bond funds were mixed whileTreasuries were higher. The yield on the 10 year Treasury bond is at a 5 month low. Oil fell after factory production & new home construction declined last month in the US. Gold is at a one-week low as signs that the US economy is slowing eroded the appeal of gold.
ALERIAN MLP INDEX
| Value | 355.19 | |
| Change | -1.75 (-0.5%) |
Treasury yields:
U.S. 3-month | 0.03% | |
U.S. 2-year | 0.52% | |
U.S. 10-year | 3.12% |
| CLM11.NYM | ...Crude Oil Jun 11 | ...96.66 | ... 0.71 (0.7%) |
| GCK11.CMX | ...Gold May 11 | ...1,491.60 | ... 1.20 | (0.1%) |
Photo: Yahoo
After a leaked memo, Hewlett-Packard, a Dow stock, warned of a rough path ahead & cut its full-year outlook citing the earthquake in Japan, soft PC sales & weakening performance in its crucial tech services business. Higher net income in Q1 overshadowed by what lies ahead. EPS was $1.05 per share, for the qtr ended Apr 30. up from 91¢ last year. Excluding special items, EPS was $1.24 per share in the fiscal Q2, ahead of $1.21 expected. Revenue climbed 3% to $31.6B, slightly above expectations. Yet HPQ expects EPS of $5.00 for 2011, short of its earlier predictions of between $5.20-5.28 & below expectations by analysts of $5.24. The company also lowered its 2011 revenue guidance range slightly, to $129-130B. The company is forecasting adjusted EPS of $1.08 & revenue of $31.1-31.3B in the current qtr, below expectations of of $1.23 & $31.8B in revenue. HP is wrestling with poor demand from consumers even as business spending has begun to recover. HPQ plunged 3.70 (9%).
HP Cuts Forecasts as Consumers Hold Back
Hewlett-Packard Company (HPQ)
Photo: Bloomberg
Growing overseas business & strict cost controls helped Wal-Mart, a Dow stock & Dividend Aristocrat, net income rise 3% in Q1, beating expectations. But business at home is still soft as WMT stores posted their 8th straight qtr of revenue declines at stores open at least a year. The company also offered a cautious Q2 earnings outlook because of worries that higher prices for gasoline & groceries could put more strain on its low-income customers. Wal-Mart has said they are having a harder time stretching their dollars to the next payday than last year. "We are monitoring the economic environment carefully, as significant changes in gas prices and inflation during the quarter will influence our actual performance," Bill Simon, Walmart U.S. CEO, said. EPS was 97¢ in the qtr ended Apr 30, above 87¢ last year. Revenue, excluding membership fees from Sam's Club warehouse stores, rose 4.4% to $103.4B. Expectations were for EPS of 95¢ on revenue of $102.7B. The US division posted a 0.3% drop in revenue at stores open at least a year, dragged down by a 1.1% drop at its namesake stores. That measure rose 4.2% at Sam's Clubs, which has drawn more customers because of its push to remodel stores & carry better-quality food & other merchandise. The stock was off 50¢.
Wal-Mart First-Quarter Profit Rises on International
Wal-Mart Stores, Inc. (WMT)
Photo: Bloomberg
US factories produced fewer goods in Apr for the first time in 10 months as a temporary parts shortage stemming from the Japanese earthquake forced automakers to cut back output. The Federal Reserve reported that manufacturing production fell 0.4%, but excluding the drop in activity at auto plants, factory production rose 0.2%. The decline in factory production blunted increases in mining & utilities output. Overall industrial activity was flat in Apr. Overall industrial production has risen 11½% since hitting a recession-low in Jun 2009 but remains 7½% below the pre-recession peak in Sep 2007. Supply disruptions from Japan will most likely be temporary & US companies couold benefit once the Japanese rebuilding effort is under way.
U.S. April Industrial Production Stalls on Autos
Dow is down to its lowest level since the last week in Apr, this continues to be a gloomy month. European debt issues show no sign of being solved. The recovery for the US economy is showing signs of slipping & sliding. High priced gas & rising food prices are proving to be a big drag. The MLP Index has fallen back to where it was 6 months ago. It had been a market leader for so long, then it flattened out pretty much matching market swings. The falling index may be a sign of things to come. Technical guys consider 350 an important line to hold & its is getting very near. There are plenty of domestic issues to keep buyers away: flooding around Louisiana, a Treasury that is not able to borrow additional money, QE2 ending in a few weeks, etc. Dow is already down 400 in May!
Dow Industrials (INDU)
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