S&P 500 Financials Sector Index
| Value | 205.42 | |
| Change | 0.71 (0.3%) |
The MLP index fell almost 2 to under 370 but the REIT index was essentially even. Junk bond funds were little changed & Treasuries rose in their increasingly uncertain world. Oil fell on concern the US will default on its debts & gold is holding steady at its record levels
JPMorgan Chase Capital XVI (AMJ)
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Treasury yield:
U.S. 3-month | 0.061% | |
U.S. 2-year | 0.399% | |
U.S. 10-year | 2.973% |
| CLU11.NYM | ....Crude Oil Sep 11 | ...98.03 | ... 1.17 | (1.2%) |
| GCN11.CMX | ...Gold Jul 11 | ........1,613.90 | ... 1.90 | (0.1%) |
Photo: Yahoo
New single-family home sales unexpectedly fell in Jun, but a sharp rise in prices & declining supply suggested the market for new houses was starting to stabilize. The Commerce Dept said sales fell 1.0% to a 312K-unit annual rate as sales in the Northeast tumbled to a record low. Sales were also pulled down by a sharp drop in the West. May's sales pace was revised down to 315K from the previously reported 319K. Despite lean inventories, recovery in the market for new homes is being frustrated by a glut of previously owned homes, which are selling well below the cost of new construction. There were a record low 164K new homes available for sale in Jun which compares to 3.7M used homes on the market (plus properties that are in foreclosure). The median sales price for a new home increased 5.8% last month to $235K, 7.2% higher than last Jun. At this sales pace, the supply of new homes on the market fell to 6.3 months' worth, the lowest since Apr 2010, from 6.4 months' worth in May. More glum news on the housing front.
U.S. New-Home Sales Decreased 1% to 312,000 Annual Pace in June
Photo: Yahoo
UPS still expects to grow earnings this year despite an "uneven economic environment," & it's keeping its forecast for the year after reporting Q2 earnings rose 26%. EPS for Q2 was $1.07, above 84¢ last year. Revenue rose 8.1% to $13.19B. But analysts expected $1.12 on $13.26B in sales. Sales in its core US business rose 6.4% & Intl revenue climbed 13.3% led by continued strength in Asian & European exports. Revenue in UPS freight & supply chain business increased 7% mostly due to higher prices in its trucking operation. UPS shipped 957M packages in Q2 (about 15M per day). UPS expects adjusted earnings this year of $4.15-$4.40 versus an average prediction of of $4.34 by analysts. The stock fell 3.46.
UPS Profit Meets Estimates as Rates Advance
United Parcel Service, Inc. (UPS)
Netflix plummeted more than 10%, largely because the company expects its results for the current qtr to miss the estimates. The shortfall stems from an anticipated slowdown in subscriber growth amid changes to its online video & DVD rental service that will raise prices by as much as 60%, the most radical change since it began renting DVDs through the mail 12 years ago. Now NFLX will sell the 2 entertainment options as separate plans. Customers will have to pay substantially more if they want to get both DVDs & internet video NFLX expects to add fewer subscriber than 2M it has been adding. EPS was $1.26, a 57% increase from last year & revenue climbed 52% $789M. The high flying stock plunged $28 to $253.
Netflix Tumbles on Slower New Customer Growth
Netflix, Inc. (NFLX)
Markets are in a muddle, but on balance selling has been mild. Dow is only about 250 below its highs for the year, not bad all considered. There continues to be a feeling that Congress will pass something, good enough to avoid default. After all it's just money & not theirs which is why they can so easily slop around talking about $Ts. Nothing dramatic is likely to happen until Aug 1. The major worry is a possible debt downgrade which could be devastating for the markets. But markets are not worried.
Dow Industrials (INDU)
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