Friday, May 20, 2011

Stock markets sank on Greek debt worries

Dow dropped 93, decliners over advancers better than 3-2 & NAZ fell 19. The Financial Index is at its lowest level of the year.

S&P 500 FINANCIALS INDEX

Value	211.36
Change	-3.15 (-1.5%)

The Alerian MLP Index had its 3rd day of rebounding & is up 15 off the lows. The REIT index fell 3 & has been flattish in the last 2 weeks. Junk bond funds inched highers at their lofty levels while Treasuries were little changed with the yield on the 10 year Treasury at its 2011 low. Oil rose for the 2nd time this week, after a report that fuel consumption increased in Apr as economic growth bolstered demand for diesel by truckers. Gold rose the most this month after Fitch cut Greece’s credit rating, boosting the appeal of the precious metal as a safe haven.

ALERIAN MLP INDEX

Value	365.90
Change	1.54 (0.4%)

Treasury yields:

U.S. 3-month		0.04%
U.S. 2-year		0.51%
U.S. 10-year		3.15%

CLM11.NYM

...Crude Oil Jun 11

...99.61

...

1.17 (1.2%)

Barnes & Noble jumped after Liberty Media offered to buy it for $1B. BKS was valued at $17, 21% higher than the Thurs close. BKS has not commented & the deal is still subject to closing conditions. Liberty Media operates 3 companies: Liberty Interactive, Liberty Starz Group &Liberty Capital Group -- through which it runs home-shopping network QVC, movie channel operator Starz & holds stakes in numerous other online, media & communications companies. BKS has 705 stores nationwide & 636 bookstores run by its Barnes & Noble College Booksellers. BKS reported growth in its online store, its stores were helped by sales of its Nook e-reader. The Nook has gained fans but has not managed to match the buzz generated by Amazon's (AMZN) Kindle e-reader. The stock gained 4.22 to the 18s (above the offering price) after drifting lower in the last year.

Barnes & Noble Jumps Higher Than Buyout Offer

Barnes & Noble, Inc. (BKS)

Gap stock price droping almost 20%, ranks as one of he worst daily performances in awhile. It's getting pinched by rising cotton prices, which have doubled in the last year & a limited ability to raise selling prices. This phenomenon can be representative for other companies & stock markets are taking this hard. The graph below shows its been range-bound between 15 & 25 for 9 years, they have other problems besides cotton.

Gap, Inc. (The) (GPS)

The price of gas at the pump has pulled back 11¢ from its highs in the last 2 weeks, this should be about the limit based on crude oil prices presently.

	Regular	Mid	Premium	Diesel	85	**E85 MPG/BTU adjusted price
Current Avg.	$3.886	$4.029	$4.157	$4.080	$3.287	$4.325
Yesterday Avg.	$3.905	$4.048	$4.175	$4.093	$3.298	$4.340
Week Ago Avg.	$3.982	$4.121	$4.248	$4.137	$3.342	$4.398
Month Ago Avg.	$3.837	$3.973	$4.102	$4.134	$3.242	$4.266
Year Ago Avg.	$2.840	$3.015	$3.124	$3.085	$2.273	$2.991

Source: AAA

Without a lot going on in the markets in the last few days (other than Stauss-Kahn getting out on a $5M bond), LinkedIn (LKDN) has been getting more than its fair share of attention. Also, speculative juices are running high. Bloomberg reported that LNKD will use some of the money just raised to rent an entire floor of the Empire State Building. Actually they could have bought the entire property. Bloomberg also reported that its market cap is comparable to Tiffany (TIF).& substantially more than other big name companies. Dow pulled back 80 this wek & is down 300 this month. Compared to last May, that shows improvement (but there is another week to go). In addition, this time another bailout will more difficult.