Dow dropped 119 (closing at the lows), decliners over advancers 3-1 & NAZ fell 19. Banks stocks led the way lower & the Financial Index may test its 160 lows again.
MLPs found buyers in an otherwise weak market & the REIT index fell 2 to 226 (following its huge gain yesterday). Junk bond funds were mixed to lower while Treasuries were in demand, pushing the yield on the 10 year Treasury below 2%. Oil fell amid concern that the global economy is struggling to recover. Gold gained for the first time in 3 days after a rise in US jobless claims & an expected new stimulus package being announced tonight spurred demand for the metal as a haven asset.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
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S&P 500 Financials Sector Index
| Value | 169.56 | |
| Change | -3.95 (-2.3%) |
MLPs found buyers in an otherwise weak market & the REIT index fell 2 to 226 (following its huge gain yesterday). Junk bond funds were mixed to lower while Treasuries were in demand, pushing the yield on the 10 year Treasury below 2%. Oil fell amid concern that the global economy is struggling to recover. Gold gained for the first time in 3 days after a rise in US jobless claims & an expected new stimulus package being announced tonight spurred demand for the metal as a haven asset.
Alerian MLP Index
| Value | 351.15 | |
| Change | 0.99 (0.3%) |
Treasury yields:
U.S. 3-month | 0.010% | |
U.S. 2-year | 0.188% | |
U.S. 10-year | 1.980% |
| CLV11.NYM | ...Crude Oil Oct 11 | ...89.01 | ... 0.33 (0.37%) |
Ben Bernanke said the Federal Reserve (FED) would spare no effort to boost disappointingly weak growth & lower unemployment. In addition he downplayed concerns about inflation but did not mention a further easing of monetary policy at the Sep 20-21 meeting. Investors were disappointed when he offered no details of steps the FED might take. "The Federal Reserve will do all it can to help restore high rates of growth and employment in a context of price stability," Bernanke said. A widening debt crisis in Europe & collapse in consumer & business confidence in the US has raised concern the US & global economies could slide back into recession. So stark is the recent deterioration in the global economic recovery that the political debate in DC has veered in only 6 weeks from a preoccupation with how to cut US debts to a renewed urgency on lowering unemployment. Dow was at breakeven before he spoke!
Bernanke: Fed Will Weigh Stimulus at Next Meeting
Corning, a specialty glass maker, said that Q3 sales volumes of liquid-crystal-display (LCD) glass will be lower than originally expected, because of weak customer demand. CFO James Flaws was set to tell investors at a conference later today that the LCD market is being "cautious." Utilization rates remain low as the industry anticipates softer retail demand in the 2nd half of this year," Flaws said in comments released ahead of the address. "This is somewhat contrary to how retail demand has been acting to date." Worldwide retail demand for LCD TVs rose 18% thru Jun & sales still appear to be strong, so it's possible that supply chain inventories will be much lower heading into Q4. But GLW now expects volume to be flat sequentially, down from its previous expectation of an increase in the mid-to upper-single digit range. Volume at Samsung Corning Precision Materials is expected to be down 30% sequentially, due to the lower-than-expected LCD panel maker utilization rates & market share loss. GLW fell 17¢ on what is not considered surprising news.
Corning expects lower LCD sales for 3Q AP
As consumer spend less, global PC shipments will increase less than previously predicted in 2011 & 2012 according to Gartner. Shipments are expected to rise 3.8% to 364M units in 2011, below a previous projection of 9.3%. Shipments will probably increase 10.9% next year, compared with an earlier forecast of 12.8%. “An increasing pessimistic economic outlook is causing both consumer and business sentiment to deteriorate” in the US & Western Europe. Younger consumers aren’t buying PCs as their first or main device. Tablets & mobile devices have cut into PC demand, & Hewlett-Packard's (HPQ), a Dow stock, possible sale or spinoff of its PC division shows traditional business models are failing. It also shows economies around the world are weak!
Gartner Cuts Forecast for Global PC Unit Sales in 2011
Colgate-Palmolive expects to buy back 50M shares over the next 1-2 years. Shares will be bought on the open market or private transactions. The 50M shares would be worth roughly $4½B. Colgate makes a variety of consumer products including Colgate toothpaste, Irish Spring soap & Speed Stick deodorant. The stock fell $1.35, sinking with the markets rather than responding to the encouraging message.
Colgate to buy back up to 50 million sharesat Reuters
Bernanke spoke & the markets were disappointed not hearing that he had a new magic trick. Then this was mostly a waiting day, waiting for the presidential speech. However it was leaked, so no surprises are expected. It should call for a $300B stimulus package (sorry, not supposed to use that word this time) with some tax benefits & more gov spending. The last one, after wasting money, only added to Treasury borrowings & did not stop unemployment (& underemployment) from rising to their worst levels since the awful days 30 years ago. The 2 stories about sluggish demand for TVs & PCs around the world are more reminders that the world economy is sputtering. Asian markets will respond to the speech in real time tonight. My bet is they will sell off along with futures for the US markets.
Bernanke: Fed Will Weigh Stimulus at Next Meeting
Corning, a specialty glass maker, said that Q3 sales volumes of liquid-crystal-display (LCD) glass will be lower than originally expected, because of weak customer demand. CFO James Flaws was set to tell investors at a conference later today that the LCD market is being "cautious." Utilization rates remain low as the industry anticipates softer retail demand in the 2nd half of this year," Flaws said in comments released ahead of the address. "This is somewhat contrary to how retail demand has been acting to date." Worldwide retail demand for LCD TVs rose 18% thru Jun & sales still appear to be strong, so it's possible that supply chain inventories will be much lower heading into Q4. But GLW now expects volume to be flat sequentially, down from its previous expectation of an increase in the mid-to upper-single digit range. Volume at Samsung Corning Precision Materials is expected to be down 30% sequentially, due to the lower-than-expected LCD panel maker utilization rates & market share loss. GLW fell 17¢ on what is not considered surprising news.
Corning expects lower LCD sales for 3Q AP
Corning Incorporated (GLW)
As consumer spend less, global PC shipments will increase less than previously predicted in 2011 & 2012 according to Gartner. Shipments are expected to rise 3.8% to 364M units in 2011, below a previous projection of 9.3%. Shipments will probably increase 10.9% next year, compared with an earlier forecast of 12.8%. “An increasing pessimistic economic outlook is causing both consumer and business sentiment to deteriorate” in the US & Western Europe. Younger consumers aren’t buying PCs as their first or main device. Tablets & mobile devices have cut into PC demand, & Hewlett-Packard's (HPQ), a Dow stock, possible sale or spinoff of its PC division shows traditional business models are failing. It also shows economies around the world are weak!
Gartner Cuts Forecast for Global PC Unit Sales in 2011
Colgate-Palmolive expects to buy back 50M shares over the next 1-2 years. Shares will be bought on the open market or private transactions. The 50M shares would be worth roughly $4½B. Colgate makes a variety of consumer products including Colgate toothpaste, Irish Spring soap & Speed Stick deodorant. The stock fell $1.35, sinking with the markets rather than responding to the encouraging message.
Colgate to buy back up to 50 million sharesat Reuters
Colgate-Palmolive Company (CL)
Bernanke spoke & the markets were disappointed not hearing that he had a new magic trick. Then this was mostly a waiting day, waiting for the presidential speech. However it was leaked, so no surprises are expected. It should call for a $300B stimulus package (sorry, not supposed to use that word this time) with some tax benefits & more gov spending. The last one, after wasting money, only added to Treasury borrowings & did not stop unemployment (& underemployment) from rising to their worst levels since the awful days 30 years ago. The 2 stories about sluggish demand for TVs & PCs around the world are more reminders that the world economy is sputtering. Asian markets will respond to the speech in real time tonight. My bet is they will sell off along with futures for the US markets.
Dow Industrials (INDU)
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