Wednesday, June 29, 2011

Markets continue rising ahead of a 2nd Greek vote

Stocks are charging ahead. Dow rose 78, advancers ahead of decliners 3-1 & NAZ gained 13. Banks are leading the way up, with the Financial Index having one of its best days in some time.

S&P 500 Financials Sector Index

Value	205.14
Change	3.29 (1.6%)

The Alerian MLP Index rose 3+ to 370, its best level in almost a month, & the REIT index gained 2+ to 240. Junk bond funds edged higher & Treasuries were weaker as investing money is embracing risk again. Oil & gold also were recovering from recent lows.

JPMorgan Chase Capital XVI (AMJ)

Treasury yields:

U.S. 3-month	0.025%
U.S. 2-year	0.461%
U.S. 10-year	3.058%

CLQ11.NYM

...Crude Oil Aug 11

...93.78

....

0.89

(1.0%)

GCN11.CMX

...Gold Jul 11

.......1,508.90

...

9.20

(0.6%)

The latest latest market update below:

Papandreou Wins Budget Vote as Risk of Default Recedes

Photo: Bloomberg

The Greek Parliament voted to back a package of deep spending cuts to help clear a path for the release of funds & potentially a 2nd bailout by the EU & IMF. The EU & IMF had made the release of a €12B ($17.3B) portion of last year's €110B bailout contingent on the passage of the bill to stave off a sovereign default. In his speech ahead of the vote, Prime Minister George Papandreou said there was "no plan B." "We must avoid the country's collapse at all costs. Now is not the time to step back," he said. A 2nd vote on the implementation of the law is due tomorrow. The main opposition party said that it would vote against the package & several members of the ruling party were known to be opposed to cuts. Unions began a 48-hour strike as protests outside the parliament building & turned violent as MPs debated the austerity package.Stayed tuned.

Papandreou Wins Budget Vote as Risk of Default Recedes

Pending Sales of U.S. Existing Homes Rise 8.2%

Photo: Bloomerg

The number of people who signed contracts to buy homes rose sharply in May, pushed higher by an influx of spring buying. The National Association of Realtors said its index of sales agreements for previously occupied homes rose 8.2%, to a reading of 88.8 following a 7-month low of 82.1 in Apr. Signings are 17% above the Jun reading of 75.9, the lowest figure since the housing market went bust nearly 4 years ago. Contract signings are typically an indicator of where the housing market is headed. But the Realtors group also said a growing number of buyers have cancelled contracts ahead of closings after appraisals showed the homes were worth less than they bid. The trade group said the report "implies that home values in many localities are or will soon be stabilizing." These days, a mixed message in housing is viewed as good.

Pending Sales of U.S. Existing Homes Rise 8.2%

Photo: Yahoo

General Mills Q4 income rose 51% on stronger sales abroad, but rising ingredient & fuel costs remain a concern as it gave a 2012 earnings outlook below expectations. GIS started raising its prices to help cope with climbing ingredient costs & escalating fuel costs. GIS anticipates 2012 EPS of $2.60-$2.62 with revenue growth in the mid single-digits. Forecasts were for EPS of $2.68. This guidance assumes "significantly higher costs for ingredients and energy," costs are assumed to rise 10-11% & the outlook assumes that developed markets will remain challenging over the next year. In Q4, GIS benefited mostly from strength overseas, with intl revenue up 16%. Its bakeries & foodservice segment also posted an 11% revenue gain. Results for the US retail division were weaker, it posted a 2% revenue decline as higher prices were offset by a 6% drop in volume. For the year, EPS was $2.70 compared with $2.24 in the prior year. Adjusted EPS climbed to $2.48 from $2.30. Annual revenue improved to $14.88B from $14.64B. The stock rose 18¢.

General Mills 4Q profit climbs on higher sales AP

General Mills, Inc. (GIS)

Monsanto said higher sales of genetically engineered seeds helped Q3 profits nearly double. EPS was $1.26 for the qtr ended May 31, compared with 70¢ last year. Revenue increased 21% to $3.6B. The results easily beat expectations of $1.10 on revenue of $3.4B. Total seeds & traits revenue rose to $2.65B from $2.36B last year. Corn seed sales jumped 10% from last year to $1.12B & soybean sales rose 10% to $605B. MON raised its 2011 outlook for ongoing EPS to $2.84-$2.88, from the prior estimate of $2.72-$2.82. The stock was up 2.33.

Monsanto posts $680 million profit in 3rd quarter AP

Monsanto Company (MON)

The IMF said the US should raise the debt ceiling to avoid a global shock. Nobody is arguing with the thought, but getting it done is another thing. Negotiations in DC are dead in the water & the clock is ticking. Greece has another big vote coming tomorrow, it's still hard to see how its debt problem will be resolved with protests in the street. However stocks are having a good day & the Dow hopes to make it 3 days in a row of triple digit gains after waffling around 12K for 3 weeks