Dow rose 36, advancers ahead of decliner 3-2 & NAZ gained 24. Bank stocks also recovered, but the chart for the Financial Index looks dreary as it's near the multi year lows. The index bottomed at 85, 3 years ago.
The MLP index fell 3 to just above 340 & the REIT was down 1 to 204. Junk bond funds were mixed as were Treasuries (at historic high levels with record low yields). Oil fell below the important $80 level & gold is down about $230 from its recent record highs. Commodities across the board have been weak, a bad sign, signalling that demand will decline from another recession.
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Photo: Bloomberg
Europe's banks face a capital shortfall of hundreds of billions of €s if Greece forces them to slash the value of its debt by 50%, & other troubled euro zone countries like Italy & Ireland follow suit. Pressure on Europe to shore up its banks is building, as talk of a possible Greek default gains pace. Banks could probably cope with a Greek default but markets would then focus on bigger countries & debt writedowns right across the region. Banks could be forced to write down Greek debt holdings by half if Greece fails to get a deal for a 2nd bail-out. Worries about Europe's banks were left firmly in place after a statement from a French regulator said 15-20 banks needed more capital. The same statement ruled out any French banks needing more capital however, & other major countries such as Germany & Spain are also dragging their heels, claiming their banks are in no desperate need. Views on how much capital might be needed varies as confusion reigns.
ECB Ready to Act Next Month If Outlook Worsens
Photo: Yahoo
KB Home fiscal Q3 loss widened, as it delivered fewer homes than a year ago when a federal homebuyer tax credit helped inflate deliveries & revenue. Last year's tax credit contributed to a 40% climb in new home orders in this year's qtr. Homebuilders have been reporting annual increases in new home orders this summer, but much of that is attributed to a hangover effect from the expiration of the tax credit. New home sales plummeted last year after potential homebuyers no longer had the tax credit. Even with the credit, new home sales in 2010 fell to the lowest level on records going back 47 years. KBH reported an EPS loss of 13¢, in the qtr ended Aug 31, which compares with a loss of 2¢ a year earlier. Revenue sank 27% to $367M from $501M last year. Analysts were expecting a larger loss of 16¢ on $390M in revenue. KBH delivered 1603 homes in Q3, compared to 2320 last year. The decline in home deliveries was partially offset by a 6% increase in average selling price. New orders climbed in each of its 4 geographic regions & jumped 73% in the West Coast. The stock was up 20¢.
KB Home Reports Wider Third-Quarter Loss as House Sales Drop
Markets are taking a breather after a terrible week. Even with today's modest gain, Dow is down more than 700. The European debt mess drags on as the officials are trying to plug holes before they become even bigger. The US economy continues to struggle as shown by the KBH results. Banks aren't lending as they should because of many fears. Companies are not putting much off their excess cash to work, again because of fears. With no major new developments, the rest of the day could see relief buying. But next week should be another tough time for stocks.
S&P 500 Financials Sector Index
| Value | 157.13 | |
| Change | 1.45 (0.9%) |
The MLP index fell 3 to just above 340 & the REIT was down 1 to 204. Junk bond funds were mixed as were Treasuries (at historic high levels with record low yields). Oil fell below the important $80 level & gold is down about $230 from its recent record highs. Commodities across the board have been weak, a bad sign, signalling that demand will decline from another recession.
ALERIAN MLP Index (^AMZ)
Treasury yields:
U.S. 3-month | -0.005% | |
U.S. 2-year | 0.210% | |
U.S. 10-year | 1.758% |
| CLX11.NYM | ....Crude Oil Nov 11 | ...79.51 | .... 1.00 (1.2%) |
| GCU11.CMX | ...Gold Sep 11 | ......1,683.70 | ... 55.50 | (3.2%) |
Get the latest market update below:
Europe's banks face a capital shortfall of hundreds of billions of €s if Greece forces them to slash the value of its debt by 50%, & other troubled euro zone countries like Italy & Ireland follow suit. Pressure on Europe to shore up its banks is building, as talk of a possible Greek default gains pace. Banks could probably cope with a Greek default but markets would then focus on bigger countries & debt writedowns right across the region. Banks could be forced to write down Greek debt holdings by half if Greece fails to get a deal for a 2nd bail-out. Worries about Europe's banks were left firmly in place after a statement from a French regulator said 15-20 banks needed more capital. The same statement ruled out any French banks needing more capital however, & other major countries such as Germany & Spain are also dragging their heels, claiming their banks are in no desperate need. Views on how much capital might be needed varies as confusion reigns.
ECB Ready to Act Next Month If Outlook Worsens
Photo: Yahoo
KB Home fiscal Q3 loss widened, as it delivered fewer homes than a year ago when a federal homebuyer tax credit helped inflate deliveries & revenue. Last year's tax credit contributed to a 40% climb in new home orders in this year's qtr. Homebuilders have been reporting annual increases in new home orders this summer, but much of that is attributed to a hangover effect from the expiration of the tax credit. New home sales plummeted last year after potential homebuyers no longer had the tax credit. Even with the credit, new home sales in 2010 fell to the lowest level on records going back 47 years. KBH reported an EPS loss of 13¢, in the qtr ended Aug 31, which compares with a loss of 2¢ a year earlier. Revenue sank 27% to $367M from $501M last year. Analysts were expecting a larger loss of 16¢ on $390M in revenue. KBH delivered 1603 homes in Q3, compared to 2320 last year. The decline in home deliveries was partially offset by a 6% increase in average selling price. New orders climbed in each of its 4 geographic regions & jumped 73% in the West Coast. The stock was up 20¢.
KB Home Reports Wider Third-Quarter Loss as House Sales Drop
KB Home (KBH)
Markets are taking a breather after a terrible week. Even with today's modest gain, Dow is down more than 700. The European debt mess drags on as the officials are trying to plug holes before they become even bigger. The US economy continues to struggle as shown by the KBH results. Banks aren't lending as they should because of many fears. Companies are not putting much off their excess cash to work, again because of fears. With no major new developments, the rest of the day could see relief buying. But next week should be another tough time for stocks.
Dow Industrials (INDU)
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