Monday, July 18, 2011

Banks lead markets lower

Dow tumbled 94 (but 90 above the lows in the AM), decliners ahead of advancers 5-1 & NAZ fell 24 (again off the lows). Bank stocks led the way down once again & also saw buying in the PM which limited losses for the Financial Index.

S&P 500 Financials Sector Index

Value	197.17
Change	-2.76 (-1.4%)

MLPs dropped & the REIT index fell 2 to 244 (where it has been for 3 months). Junk bond funds slipped & Treasuries were flattish, not far from 2011 highs. Oil fell on bets that Europe's worsening debt crisis will slow the economy & as the € tumbled the most in a week to 4 month lows. Gold climbed for a 10th day, going over $1,600. The last time gold rallied this many days straight, the US was in the final month of a recession in Jul 1980 when inflation was 13.1%,

Alerian MLP Index

Value	371.98
Change	-1.11 (-0.3%)

Treasury yields:

U.S. 3-month	0.005%
U.S. 2-year	0.355%
U.S. 10-year	2.915%

CLQ11.NYM

...Crude Oil Aug 11

...95.99

...

1.25

(1.3%)

The latest daily market update below:

Bank of America, a Dow stock, hit a 2-year low on fears about the effect of a potential US gov debt default. Banks hold Treasuries as liquid assets to use almost like cash on hand. However BAC stock has suffered from substantial selling. In the past year BAC fell 35%, making it the 3rd worst performing stock in the S&P 500 Index. The stock had traded as low as $2.53 in early 2009 during the throes of the financial crisis. The nation's largest bank has had to deal with multiple crises in the last year, most related to mortgage problems stemming from the bank's 2008 purchase of Countrywide Financial. The stock close at 9.72, down 28¢.

Bank of America shares at two-year low below $10 AP

Bank of America Corporation (BAC)

Photo: Bloomberg

Halliburton saw profits rise 54% in Q2 as revenue set a record for the period. HAL reported EPS of 80¢, ahead of 53¢ last year. Revenue increased 35% to $5.94B. Oil companies scoured the planet for untapped fields as oil prices reached 3 year highs. Many focused on North America's vast underground rock formations, which are rich in oil & gas. HAL specializes in tapping those formations, & the surge in activity has boosted its financial results. CEO Dave Lesar said there's more demand for HAL services than the company can provide, & "we expect this imbalance to continue going forward." "There's still so many wells that haven't been completed," Weiss said. The stock was up 4¢ not bad on this kind of day.

Halliburton Profit Rises 54% on North American Oil Spending

Halliburton Company (HAL)

IBM (IBM), a Dow stock, reports after the close & expectations are for a rise in EPS of 42¢ to over $3. Optimists are looking for a beat. The market's reaction will be interesting because the focus for markets is on the debt messes in DC & Europe which keep going from bad to worse.