Friday, June 17, 2011

Markets try for first gain in 7 weeks

Stocks started higher & were able to hold on to those gains.  Dow is up 96, advancers over decliners 5-2 & NAZ added 7. Bank stocks climbed off their depressed levels.

S&P 500 Financials Sector Index

Value 201.13 One-Year Chart for S&P 500 Financials Sector Index GICS Level 1 (S5FINL:IND)
Change    2.14    (1.1%)

The MLP index dropped another 2 to the 353s, getting near the key 350 support line, but the REITindex rebounded almost 3 to 237.  Junk bond funds were a little higher & Treasuries were soft with the yield on the 10 year Treasury rising off yesterday's low of 2.9%.  Oil fell to the lowest level in almost 4 months on doubts that a German willingness to compromise on the Greek debt crisis will settle markets & spur economic growth.  But gold found a few buyers.

JPMorgan Chase Capital XVI (AMJ)

stock chart

Treasury Yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLN11.NYM....Crude Oil Jul 11...93.57 ...Down 1.38  (145%)

GCM11.CMX...Gold Jun 11.....1,527.70 ...Down 1.10  (0.1%)

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The Conference Board said its index of leading economic indicators rebounded in May, rising 0.8% after it dropped a revised 0.4% in Apr (the first decline since Jun 2010). A string of declines would indicate that a recession was coming.  May's reading suggests the pace of growth is similar to that of the stronger readings from earlier this year & late 2010, when the economic outlook was brighter.  However, economic growth may be "choppy" in the coming months & fall because of the weak housing market & high prices for food & gas.

U.S. Consumer Confidence Drops as Rising Prices Squeeze Household Budgets

RIM Drops After Forecast Misses Estimates on BlackBerry Woes

Photo:   Bloomberg

Research in Motion posted weak quarterly results & outlook, prompting downgrades by analysts. RIMM reported lower profits & revenue missed its own limp forecast, forcing the company to slash its forecast.  It also warned that the latest models would not hit US stores until well into the valuable back-to-school shopping season.   RIMM is guiding that revenue will be $4.2-$4.8B in fiscal Q2, less than the average analyst estimate for sales of $5.47B. Profit will be 75¢-$1.05, below analysts predictions of $1.40. The stock plunged 8 to below 28 with a chart that looks about as bad as they come.

RIM Drops After Forecast Misses Estimates

Research in Motion Limited (RIMM)

stock chart

Once again there is not a lot going on in the markets.  But today, sellers went home early & buyers are carrying the day.  The Greek crisis is lumbering on.  S&P is trying to define subtleties of default.  They look to see if bonds are able to retain their value or not.  Any refinancing will likely be in a gray zone between default & no default.  MLPs have no friends these days & the chart above looks dismal..  These are yield securities & even with the rise in yields above 6.3%, the yields remain in low territory based on historical standards.

Dow Industrials (INDU)

stock chart

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