Stocks were lower during the session, not quite sure what to do while European debts issues linger & on the inability to raise ithe debt ceiling in the US. Dow fell 43, advancers & decliners were about equal but NAZ gained 24. Bank stocks slipped after recent gains (shown in the chart below).
MLPs edged higher & the REIT index rose 1 to its 2011 highs reached yesterday. Junk bond funds were mixed & Treasuries rose on rising uncertainties about European debts. Oil is pushing on $100, sensing the end of forced gov selling of oil next week. Gold is hovering near its record highs over $1600.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Yahoo
Continued robust demand for Caterpillar heavy equipment boosted Q2 profits 44%, but higher costs & cautious comments from CAT about China's economy caused the stock to sell off. The company even bumped up its sales outlook for the year. EPS was $1.52, up from $1.09 last year. But the Bucyrus acquisition cut into profits & weighed down the company's outlook. Without it, EPS would have been $1.72, still below expectations of $1.74 (with many investors expecting EPS above $2). Revenue grew 37% to $14.2B, topping estimates. CAT predicts 2011 sales of $56-$58B with Bucyrus. Previously it predicted sales between $52-$54B. However, overall sales growth that would have added 50¢ to EPS this year have been offset negatively by about $700M of costs associated with the Bucyrus deal ($200M higher than expected). The stock fell 6.45, one of it biggest losses in years!
Caterpillar Profit Misses Estimates on Japan
General Electric, another Dow stock, has a stake in almost every sector of the economy & its mixed bag of businesses have propped up the company since the recession. A rebound at GE Capital has offset weaker industrial business this year. The lending unit helped GE boost Q2 EPS to 35¢, 21% ahead of 28¢ last year. Revenue fell 4% to $35.6B, in part because of GE's sale of a majority stake in NBC Universal to Comcast. These results beat estimates for 32¢ on revenue of $34.7B. The lending business continues to improve after booking billions of dollars in losses & impairments during the recession. "We continue to see strong demand for credit," said CEO Jeff Immelt. Income at GE's consumer & commercial lending businesses grew 57% & 100%, respectively. GE said it is seeing "especially strong" growth internationally in India, China, Southeast Asia, Africa, Russia, Australia, Canada & Latin America as intl sales grew 23% to $13.4B. The stock fell 12¢.
GE 2Q profit up 21 percent, financial arm improvesAP
Markets are not sure what to do. Earnings are getting good reviews although some of the ones I have been reported saw stock declines. Even the good ones have a common theme (as they did in Q1) of strong business overseas while US business is only so-so. Then there are the 2 whopper debt problems. European ministers are trying to sell their program to deal with Greece & debts of other countries which looks to be getting mixed reviews at best. Raising the debt ceiling in DC is dead in the water. I watch news analysis at night & I'm not encouraged that in a few days the politicos will be able to avoid a default that could crush stocks. But the Dow chart shows it has been taking the increased uncertainty with a sense of equanimity. The question is, how long will that emotion last?
S&P 500 Financials Sector Index
| Value | 206.45 | |
| Change | -0.55 (-0.3%) |
MLPs edged higher & the REIT index rose 1 to its 2011 highs reached yesterday. Junk bond funds were mixed & Treasuries rose on rising uncertainties about European debts. Oil is pushing on $100, sensing the end of forced gov selling of oil next week. Gold is hovering near its record highs over $1600.
Alerian MLP Index
| Value | 373.63 | |
| Change | 0.39 (0.1%) |
The latest market update below:
Treasury yields:
U.S. 3-month | 0.030% | |
U.S. 2-year | 0.387% | |
U.S. 10-year | 2.962% |
| CLU11.NYM | ...Crude Oil Sep 11 | ...99.83 | ... 0.70 | (0.7%) |
Photo: Yahoo
Continued robust demand for Caterpillar heavy equipment boosted Q2 profits 44%, but higher costs & cautious comments from CAT about China's economy caused the stock to sell off. The company even bumped up its sales outlook for the year. EPS was $1.52, up from $1.09 last year. But the Bucyrus acquisition cut into profits & weighed down the company's outlook. Without it, EPS would have been $1.72, still below expectations of $1.74 (with many investors expecting EPS above $2). Revenue grew 37% to $14.2B, topping estimates. CAT predicts 2011 sales of $56-$58B with Bucyrus. Previously it predicted sales between $52-$54B. However, overall sales growth that would have added 50¢ to EPS this year have been offset negatively by about $700M of costs associated with the Bucyrus deal ($200M higher than expected). The stock fell 6.45, one of it biggest losses in years!
Caterpillar Profit Misses Estimates on Japan
Caterpillar, Inc. (CAT)
General Electric, another Dow stock, has a stake in almost every sector of the economy & its mixed bag of businesses have propped up the company since the recession. A rebound at GE Capital has offset weaker industrial business this year. The lending unit helped GE boost Q2 EPS to 35¢, 21% ahead of 28¢ last year. Revenue fell 4% to $35.6B, in part because of GE's sale of a majority stake in NBC Universal to Comcast. These results beat estimates for 32¢ on revenue of $34.7B. The lending business continues to improve after booking billions of dollars in losses & impairments during the recession. "We continue to see strong demand for credit," said CEO Jeff Immelt. Income at GE's consumer & commercial lending businesses grew 57% & 100%, respectively. GE said it is seeing "especially strong" growth internationally in India, China, Southeast Asia, Africa, Russia, Australia, Canada & Latin America as intl sales grew 23% to $13.4B. The stock fell 12¢.
GE 2Q profit up 21 percent, financial arm improvesAP
General Electric Company (GE)
Markets are not sure what to do. Earnings are getting good reviews although some of the ones I have been reported saw stock declines. Even the good ones have a common theme (as they did in Q1) of strong business overseas while US business is only so-so. Then there are the 2 whopper debt problems. European ministers are trying to sell their program to deal with Greece & debts of other countries which looks to be getting mixed reviews at best. Raising the debt ceiling in DC is dead in the water. I watch news analysis at night & I'm not encouraged that in a few days the politicos will be able to avoid a default that could crush stocks. But the Dow chart shows it has been taking the increased uncertainty with a sense of equanimity. The question is, how long will that emotion last?
Dow Industrials (INDU)
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