Monday, May 9, 2011

Markets mixed on Greek debt worries

Dow slipped 14, advancers barely ahead of decliners & NAZ fell 2. Banks were weak, taking the Financial Index to its lowest level since mid Mar.

S&P 500 FINANCIALS INDEX

Value	215.65
Change	-1.04 (-0.5%)

The MLP index was flat at 371 as investors roemain concrened about the threat of changing the tax advantage status for MLPs while the REIT index was down a fraction in the 242s. Junk bond funds were flattish but Treasuries rose. The yield on the 10 year Treasury bond edged down to its lowest level this year. Oil is trying to get back over $100 after a brutal sell-ff last week & gold remains strong under the circumstances. Silver found buyers & is back at $36.

JPMorgan Chase Capital XVI (AMJ)

Treasury yields:

U.S. 3-month		0.01%
U.S. 2-year		0.55%
U.S. 10-year		3.15%

CLM11.NYM

Crude Oil Jun 11

99.80

2.61 (2.7%)

GCK11.CMX

Gold May 11

1,504.50

13.30 (0.9%)

S&P cut Greece’s credit rating 2 levels to B from BB- & said further reductions are possible as the risk of default rises. Another cut would make Greece the lowest-rated country in Europe. The yield on Greek 10- year bonds rose 12 basis points to 15.6%, more than twice the level of a year ago when Greece accepted a bailout following a major crisis over the quality of its debts. The decision came on the first business day after an unannounced Fri evening meeting of European finance ministers at which they agreed Greece needed more help to avoid a restructuring. Extended repayment terms & demands for collateral may be part of a new aid plan. A year after Greece received a bailout, the nation’s debt is rising & it faces record borrowing costs. Its 2-year bonds yield more than 25%, indicating investors are betting Greece won’t be able to return to markets as planned under the bailout next year, when it is due to sell €25-30B of bonds. The drama plays on & its consequences are serious

Greek Debt Rating Cut to B by S&P on Restructuring Concerns

McDonald’s April Sales Rise 6% as Drinks Lure U.S. Diners

Photo: Bloomberg

Strong sales of McDonald's McCafe drinks & breakfast items in Apr drove a key revenue measurement up 6% worldwide. McDonald's (MCD), a Dow stock & Dividend Aristocrat, reported that in the US revenue at company-owned & franchised restaurants open at least 13 months climbed 4% in Apr. Same store sales figure rose 6.5% for Europe & Asia/Pacific, the Middle East & Africa. The stock gained $1.05.

McDonald’s April Same-Store Sales Exceed Estimates as Drinks Lure Diners

McDonald's Corporation (MCD)

Not much going on in the markets, but eyes are on Europe to see if the Greek debt drama will play out again this year. Considering the turmoil in markets last week, especially commodities, there should have been a relief rally today, but there wasn't. Back in the US, Congress has to debate raising the debt limit & time is getting short. Then it will work on the FY2012 budget which begins in 5 months. Economic worries have not been priced into the stock market