Friday, July 22, 2011

Stock selll off on nervousness over rasing the debt ceiling

Dow dropped 52, decliners over advancers 3-2 but NAZ rose 5. Bank stocks were leaders again after the Financial Index has had a run of 10 off its lows last week.

S&P 500 Financials Sector Index

Value	205.94
Change	-1.06 (-0.5%)

The MLP index rose 1+ to the 374s, remaining in its sideways trading range in recent weeks while the REIT index was up a tad essentially at its 2011 highs. Junk bond funds rose as did Treasuries on nervousness over sovereign debts. Oil slipped but remains close to the important $100 ceiling even though industrial nations have been selling oil in Jul to hold down prices. Gold is holding just below its recent record highs.

JPMorgan Chase Capital XVI (AMJ)

Treasury yields:

U.S. 3-month	0.041%
U.S. 2-year	0.379%
U.S. 10-year	2.976%

CLU11.NYM

....Crude Oil Sep 11

...98.82

...

0.31

(0.3%)

GCN11.CMX

...Gold Jul 11

.......1,588.50

...

1.70

(0.1%)

Get the latest daily market update below:

Photo: Yahoo

McDonald's, a Dow stock & Dividend Aristocrat, reported higher-than-expected Q2 profit as its low-price focus helped drive strong sales in Europe and the US. In Jun, same store sales were up 6.9% in the US, 9.1% in Europe & 4.8% in the Asia/Pacific, Middle East & Africa unit. Europe is now the largest market for sales, contributing about 40% of revenue & the US is a close 2nd. It is also renovating restaurants in Europe & the US which has boosted business. Global same-restaurant sales increased 5.6% in Q2 & forecast good results for Jul. "As we begin the third quarter, our momentum continues with July global comparable sales expected to be between 4 and 5 percent," said CEO Jim Skinner. The stock jumped 2.70 to a new record.

McDonald’s Profit Gains 15% on McCafe Sales

McDonald's Corporation (MCD)

Euro-area leaders fanned out to persuade investors that last night’s array of crisis-fighting measures can help stop the debt turmoil. Angelea Merkel,German Chancellor,said gov chiefs had learned from “systemic effects” in the single-currency area & widened the scope of their bailout fund to allow it to buy the bonds of debt-laden nations, support banks & offer credit lines. The agreement prompted Fitch, to say it will put a default rating on Greek debt. The risk is that the package will follow the pattern of previous agreements & disappoint markets. Leaders declined to increase the €440B ($632B) fund, prompting questions whether it’s big enough to insulate Spain & Italy from contagion. In addition, Greece & other cash-strapped nations need to keep delivering on austerity measures. These good intentions are still a work in progress which is very messy.

EU Leaders Try to Persuade Investors on Rescue Deal

Let's be realistic, nobody has a clue whats going on in refinancing gov debts. NOT A CLUE!!! Bailout for Greece is iffy & other countries needing rescues are sweating bullets. Meanwhile, stocks are at or near their post recession highs. Earnings are getting some attention, but less than would be the case if the US didn't have a debt ceiling crisis. And the clock keeps ticking. This weekend, the first deadline will have passed but the debt ceiling is still frozen.