Monday, May 2, 2011

Markets wobble after the death of bin Laden

Dow slipped 3, decliners ahead of advancers 3-2 & NAZ dropped 9. Bank stocks were a little lower, taking the Financial Index back below 220.

S&P 500 FINANCIALS INDEX

Value	219.67
Change	-0.82 (-0.4%)

The MLP index dropped 5½ to the 384s, a very big drop by its standards, while the REIT index was flat. Junk bond funds edged higher & Treasuries also rose. Treasury yields traded at almost 6- week lows on thoughts the economic recovery will be gradual. Oil dropped for the first time in 4 days after bin Laden was killed & a report showed US manufacturing cooled in Apr. Silver futures plunged the most since Jan as the CME raised the cash deposit required for trading after prices reached a 31-year high last week. Silver dropped 3.30 to 45.28 while gold remained near record highs in the 1560s (greeen line is today & red is last night overseas).

ALERIAN MLP INDEX

Value	384.59
Change	-5.20 (-1.3%)

Trasury yields:

U.S. 3-month		0.03%
U.S. 2-year		0.60%
U.S. 10-year		3.29%

CLM11.NYM

...Crude Oil Jun 11

...113.33 T

...

0.60

(0.5%)

Live 24 hours silver chart [ Kitco Inc. ]

Corn Products Intl income in Q1 nearly tripled because of higher prices for its products & a payment to settle a trade dispute. EPS was $1.97 (including about 75¢ related to the NAFTA, settlement), compared with 57¢ last year. Revenue jumped 56% to $1.46. Excluding items, EPS rose to $1.28 from 63¢, surpassing expectations for 89¢ on $1.4B in revenue. The company expects EPS for 2011 of $4.85-5.15 on revenue of $6B (including the impact of the NAFTA settlement). Revenue was increased in part from higher prices for its ingredients, which helped gross profit double. The company makes products from milling corn that are used to make everything from food sweeteners to chicken feed. The stock rose $1.04.

Corn Products Intl 1Q net income nearly triples AP

Corn Products International, Inc. (CPO)

Honda Motor warned US dealers that it will run short of popular models such as the Civic compact later this summer because of parts shortages caused by Japan's earthquake & normal production may not return until the end of the year. Production will be cut significantly of the new 2012 Civic, the 6th most popular car in the US. In addition, the 2012 version of the CR-V small SUV will be delayed by at least a month this fall. To make up for shortages, HMC will keep making the 2011 version. Nearly every major auto company has had to idle factories due to shortages, but HMC, Toyota (TM) & Nissan have been hit particularly hard. "Our goal remains to normalize overall production sometime around the end of the year," John Mendel, executive VP of sales for American Honda, wrote. The stock was up 79¢.

Honda to cut production of new Civic, other models- AP

Honda Motor Company, Ltd. (HMC)

Gas at the pump is over $3.95, $4 is predicted by week's end.

Source: AAA

The could have been a much more exciting day for the stock market after the death of bin Laden. Traders held back, maybe because some were still away on long holiday weekends. Volume was light, NYSE floor volume was below 1B shares. Tomorrow, auto sales for Apr should be released. The thinking is that Apr could be the last "good" month before the reality of high gas prices works thru to them. Dow is has had another tremendous run from mid Mar with only one modest correction along the way. Today looks like a pause without great meaning.