Friday, August 19, 2011

Markets hesitate after foreign markets sink

Dow fell 32, decliners ahead of advancers almost 3-2 but NAZ was up 5.  Bank stocks tried for gains, but are selling off again taking Financial Index within 2 of its lows last week..

S&P 500 Financials Sector Index

Value 165.65 One-Year Chart for S&P 500 Financials Sector Index GICS Level 1 (S5FINL:IND)
Change    -0.53     (-0.3%)

The Alerian MLP Index dropped another 4+ to 240 (off 15 in 2 days) while the REIT index was about even at 215.  Junk bond funds were mixed as were Treasuries with the yield on the 10 year Treasury near the 2.1% accepted at the auction last week.  Oil advanced, reversing an earlier decline of 4%.  Gold reached new heights, soaring as high as $1881 as investors anxious about the uncertain global economy snapped up the precious metal.


Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLU11.NYM....Crude Oil Sep 11...82.77 .....Up 0.39 (0.5%)

GCQ11.CMX...Gold Aug 11.....1,850.00 ...Up 31.10  (1.7%)

Get the latest market update below:

Hewlett-Packard, a Dow stock & the world’s largest personal-computer maker, fell the most in 31 years after unveiling strategic changes, including a possible spinoff of the PC business.  HPQ dropped $6.09, 21%, to $23.42.  Yesterday HPQ said it may spin off the PC business & plans to close its tablet & smartphone hardware unit.  It also agreed to acquire the enterprise software provider Autonomy for about $10.3B.  In addition, HPQ issued sales & profit forecasts for Q3 that missed analysts’ estimates.  Obviously, investors lost confidence in HPQ.

Hewlett-Packard Falls Most in 31 Years After Plan to Spin Off PC Business

Hewlett-Packard Company (HPQ)

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Carl Icahn Seeks to Join Clorox Board

Photo:   Bloomberg

Carl Icahn will seek to install himself & 10 other directors on CLX board after his offer to buy the company was rejected.  He has offered twice since mid-Jul to buy the company, first at $76.50 & then at $80 for about $10.7B.  CEO Don Knauss said earlier this month that Icahn's bids were not credible & undervalued the company.  Icahn has criticized the company's performance & suggested that it accept his bid, shop for competitive offers or take his higher bid to shareholders for a decision.  Earlier this month, CLX reported Q4 net income fell 1% to $169M, or $1.29 per share, as it spent more on advertising but beat most expectations on both profit & revenue.  The stock rose 68¢.

Clorox Company (The) (CLX)

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Bank of America Said to Plan 3,500 Job Cuts This Quarter

Photo:   Bloomberg

Bank of America, a Dow stock & the biggest US lender, will eliminate about 3500 jobs in Q3 amid a “challenging time” for the firm & its investors, said CEO Brian Moynihan.  Some already were informed of the firings, which are in addition to 2500 reductions made earlier this year, Moynihan said.   BAC is under pressure to reduce expenses, with a market value that has plunged by about half this year, as losses tied to the 2008 takeover of subprime lender Countrywide Financial mount & revenue shrinks amid signs of a US slowdown.  The stock was up a penny & has a chart that looks dismal (as do most bank stocks).

Bank of America CEO Moynihan Says Expect 3,500 Job Reductions This Quarter

Bank of America Corporation (BAC)

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In pre-market trading Dow was off triple digits, but that pessimism did not last.  Buyers returned & took the Dow into the black, then selling returned.  At least it's doing a lot better than was predicted by the dreary reading during Asian trading last night.  There is nothing new happening & we're going into the 2 weeks prior to Labor Day which are traditionally slow with little movement.  After all, the pres is vacationing at Martha's Vineyard as if he didn't have a care in the world.  With gold reaching new record highs (it wasn't long ago that 1600 was a target for the bulls) & so many financial issues unresolved in the US & Europe, this could be a wild time for the markets.  I have a feeling it won't be dull.  So far Dow fell 1.2K this month, enough to qualify for a bear market reading.

Dow Industrials (INDU)

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