Friday, July 29, 2011

Lower markets on increased debt concerns

Stocks were weak all day with selling in the last hour.  Dow fell 96, decliners over advancers almost 2-1 & NAZ was off 9. Bank stocks were hit with selling in the last hour.

S&P 500 Financials Sector Index

Value 199.18 One-Year Chart for S&P 500 Financials Sector Index GICS Level 1 (S5FINL:IND)
Change   -0.51     (-0.3%)

MLPs pulled back from earlier highs, but the index managed a gain for the day while the REIT index was essentially even in the 248s.  Junk bond funds sold off amid the chaos in DC.  There was demand for Treasuries with the yield on the 10 year plunging below 2.8%.  Oil was under pressure but the storm in the Gulf could be a boost next week. Gold rose to a record on demand for a safe haven investment.

Alerian MLP Index

Value 362.97 One-Year Chart for Alerian MLP Index (AMZ:IND)
Change    1.56    (0.4%)

Treasury yields:

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CLU11.NYM...Crude Oil Sep 11...95.80 ...Down 1.64  (1.7%)

Live 24 hours gold chart [Kitco Inc.]

Shares of C&J Energy Services, provider of services to the oil & natural gas industries, shot up in its market debut.  It priced 11½M shares at $29 & closed at $30.65, up $1.65.  CJES is selling 4.3M shares & shareholders are selling 7.2M.  The net proceeds of approximately $113M will be used to pay off debt & buy new equipment.  On a dismal day, it's good to see a successful offering, especially from a non technology company.

C&J Energy shares jump in their market debut AP

Photo:   Yahoo

Amgen, the biotech drugmaker, reported Q2 earnings slipped 3% on increased research spending & sales costs for product launches plus falling revenue from a key drug.  But the results beat estimates & AMGN expects to reach the upper end of its guidance for 2011.  EPS was $1.25 which compares with $1.25 last year.  Adjusted EPS was $1.37, beating estimates of adjusted earnings at $1.29.  Revenue climbed 4% to $3.96B & ahead of $3.77B forecasted.  R&D costs rose 26% to $808M to pay for late-stage clinical trials. AMGN expects to reach the upper end of its 2011 guidance (EPS ranging from $5.00-$5.20) on revenue of $15.1-$15.5B.  The stock liked the news & rose 1.27 following a lackluster year.

Amgen's 2Q profit falls 3 pct on rising R&D costs AP

Amgen Inc. (AMGN)

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Earnings season is wrapping up.  I guess it is getting fairly good grades although I've seen a lot of misses & warnings.  But this weekend that means little.  Eyes will be on DC where votes will be taken with a lot of posturing.  But the votes may not mean a lot until Mon arrives & these guys get serious.  There is a huge amount riding on the outcome of raising the debt ceiling & how that will affect the stock markets.  At a minimum, any upward spike in interest rates will affect all securities.  Dow took all the uncertainty reasonably well, falling about 500 this week.  But next week could be a very big test.

Dow Industrials (INDU)

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