Friday, September 9, 2011

Stocks plunges on ECB discord over bond buying program

Dow sank 303, decliners over advancers 5-1 & NAZ dropped 61.  Banks were market leaders as the Financial Index is testing the strength of the 160 floor (which doesn't look strong to me).

S&P 500 Financials Sector Index

Value 164.21 One-Year Chart for S&P 500 Financials Sector Index GICS Level 1 (S5FINL:IND)
Change      -5.35     (-3.2%)

The MLP index fell below the 350 level again & the REIT index fell 6½ to the 219s, giving up the big gain on Wed.  Junk bond funds were down about 1% & Treasuries were very strong with the yield on the 10 year Treasury going below 1.9%, another all time record low!!!  Oil dropped the most in a week as the € tumbled against the $ on concern that Greece’s deteriorating debt crisis will lead to a default.  Gold inched up, but should have done a lot better considering the rise in worries about economies around the  world.

Alerian MLP Index

Value 348.56 One-Year Chart for Alerian MLP Index (AMZ:IND)
Change    -2.59    (-0.7%)

Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLV11.NYM...Crude Oil Oct 11...87.13 ...Down 1.92  (2.2%)

Live 24 hours gold chart [Kitco Inc.]

Get the latest market update below:

Bernanke: Fed Will Weigh Stimulus at Next Meeting

Photo:   Bloomberg

Ben Bernanke warned that quick deficit reduction may hurt the recovery & said the Federal Reserve this month will consider steps to bolster growth & spur hiring.  “A substantial fiscal consolidation in the shorter term could add to the headwinds facing economic growth and hiring,”  He said policy makers have measures at hand and are “prepared to employ these tools as appropriate” but he stopped short of signaling what he believes is the central bank’s best option to aid the economy.  Previously he said that possible steps include buying more gov bonds & lengthening the duration of securities in its $1.65T Treasury portfolio.  This is called the twist.  They will sell shorter term notes & buy longer term bonds to flatten the yield curve more.  However, nobody is sure what its effects will be (beyond giving the stock market a one day rally).

Bernanke Says Tighter Budgets May Hurt Recovery as Fed Considers Stimulus

Kroger quarterly EPS was 46¢, up 7.3% over last year's quarter.  Tax adjustments increased the bottom line. Without them, profit would have been 41¢ versus 38¢ last year.  Revenue rose 11.5%, boosted by fuel sales, to $20.9B.  Revenue at stores open at least 15 months rose 5.3%, better than earlier projections. That measure  doesn't count stores that open or close during that time & also excludes gas sales.  KR expects revenue at stores open at least 15 months to rise 4-5% for the year, up from 3.5-4.5% previously forecasted.  It stuck with EPS projections of $1.85-$1.95 & is on track to reach the higher part of the range under current conditions.  Analysts are forecasting $1.96 with sales of $89.47B.  The stock fell $1.32 on a bad market day.

Kroger 2Q earnings at a glance AP

Kroger Company (The) (KR)

stock chart

Previously Ford (F) had forecast industry 2011 sales of 13-13½M vehicles, including medium- and heavy-duty trucks, in the US.  Ford now says auto sales may not reach 13M.  Analysts expect deliveries may rise to 12.7M this year (the average estimate in Apr had been for 13M).  Concerns about the economy & financial markets are further delaying purchases.  Light-vehicle sales rose 11% last year to 11.6M from the previous year’s 10.4M (the lowest since 1982), according to Autodata.  But they averaged 16.8M annually from 2000 to 2007.  Retail sales, especially for durable goods, are suffering.

Ford Says U.S. Auto Sales May End Year Below 13 Million Seen as Minimum

Dow is already down 600 in Sep with 3 more weeks left in the month.  It seems like the US & European economies are falling apart & the leaders don't know how to fix them.  Does anybody know Humpty Dumpty's phone number?  The VIX, volatility chart, shows the index has been elevated for a month & the Dow chart shows how it has affected the Dow.  The president's approach to throw more money at problems, hoping this time it will work, is not getting a good reception.  Disagreement by European financial ministers about how to fix their debt problems is sending the € lower which in turn takes the $ higher (not good for the stock market).  Next week DC will kick into action on the president's plan.  Look for more discord & that's not what the stock market wants to hear!

Volatility Index (^VIX)

Dow Industrials (INDU)

stock chart

Get your favorite symbols' Trend Analysis TODAY!  

Find out what's inside Trend TV  

No comments: