Dow was up 81, advancers over decliners almost 4-1 & NAZ climbed 52. Bank stock have been hot in Oct (hotter than in Jul), taking the Financial Index near its 181 highs made at the end of Jul.
The MLP index was up 1+ to the 367s & the REIT index gained 2+ to 222. Junk bond funds were mixed to higher after recovering much of their big losses in Aug. Oil rose for a 2nd day on speculation that economic growth in China & Japan will boost energy demand, taking oil above $90. Gold rose for a 2nd day on concern that Europe's leaders won’t do enough to stem the debt crisis, boosting demand for the metal as a haven investment.
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S&P 500 Financials Sector Index
| Value | 179.86 | |
| Change | 3.27 (1.9%) |
The MLP index was up 1+ to the 367s & the REIT index gained 2+ to 222. Junk bond funds were mixed to higher after recovering much of their big losses in Aug. Oil rose for a 2nd day on speculation that economic growth in China & Japan will boost energy demand, taking oil above $90. Gold rose for a 2nd day on concern that Europe's leaders won’t do enough to stem the debt crisis, boosting demand for the metal as a haven investment.
ALERIAN MLP Index (^AMZ)
DJ REIT INDEXDJR (^DJR)
Treasury yields:
U.S. 3-month | 0.015% | |
U.S. 2-year | 0.283% | |
U.S. 10-year | 2.229% |
| CLZ11.NYM | ....Crude Oil Dec 11 | ...89.35 | ..... 1.95 | (2.2%) |
| GCV11.CMX | ...Gold Oct 11 | ......1,654.20 | ... 19.10 | (1.2%) |
Caterpillar, a Dow stock, profit rose 44% in Q3 & the company expects even stronger sales next year. EPS was $1.71, sharply ahead of $1.22 last year. Revenue surged 41% to $15.7B. Excluding its $7.6B acquisition of Bucyrus Intl, EPS was $1.93 on revenue of $14.6B, ahead of forecasts of $1.63. CAT predicts higher 2011 earnings than it forecast earlier, $6.75 on sales of $58B. Previously it forecast profit of $6.25-6.75 on revenue of $56-58B. Excluding the impact of Bucyrus, CAT expects EPS of about $7.25 on revenue of $56B. Analysts project EPS of $6.76 on sales of $56.6B. It projects revenue next year will increase 10-20% to $63.8-69.6B. CAT is continuing to add jobs, nearly 5K in Q3 alone. As of Sep 30, it had 149K employees, up more than 20% from a year earlier (including staff gained from acquisitions). About 5.6K jobs were added in the US. The stock is taking the report well, up $4.35.
Caterpillar 3Q profit soars, raises year view AP
Kimberly-Clark, a Dividend Aristocrat, net income fell 8% in Q3 because of rising costs. The revenue outlook was reduced & the high end of its earnings outlook. KMB is struggling with higher costs for oil, wood, pulp & other materials it uses in its products. Price are being raised to make up for higher costs & it is relying on fast-growing overseas markets to make up for weakness in US demand. EPS fell to $1.09 from $1.14 last year. Adjusted EPS of $1.26 was in line with expectations. But revenue rose 8% to $5.4B, beating expectations for $5.3B. The revenue jump was helped by higher prices & by currency exchange translation. Overall, it expects cost inflation to make a dent of $575-625M for the year, down from previous assumptions of $650-750M. However, the company expects revenue increase of 4-6%, down from previous predictions of 5-7% & expects EPS of $4.80-4.90 after adjusting for one-time expenses. Previously, it guided for EPS to be in the lower half of a range from $4.80-5.05. After doing well this year, the stock dropped 3.79 on the news.
Kimberly-Clark net income falls, though sales rise A
Angela Merkel supporters praised her for getting France to drop demands to use the ECB to leverage euro crisis funds, but looked like making a meal out of the German parliament's new right to be consulted on how these are used. "Merkel's Battle for our Euro," was the headline in the mass-circulation conservative paper Bild, saying she taught France's Nicolas Sarkozy "that the EFSF rescue fund cannot be used to print money" to solve the debt crisis. "The chancellor must stick to her guns -- in the interests of Germany and of Europe," said the newspaper. While her supporters in the lower house of parliament welcomed the assertiveness in the Sun summit from a leader often accused of dithering, they also risked delaying Europe's response to the debt crisis at a crucial juncture by insisting on a full debate before the 2nd summit on Wed. Her Christian Democrats' (CDU) floor leader Volker Kauder was said to want a full debate rather than just a vote by the 41-member budget committee, which would be quicker & less risky while still fulfilling new rules on consulting MPs. Some are not happy that Germany will have to bail out weaker countries which are not mending their extravagant spending habits. The European debt mess plays on with no easy solutions.
Merkel Plans to Seek German Parliamentary Approval for EU Summit Measures
The stock market is having an excellent month, what else is there to say? Dow is up almost 1K, mostly on hopes the Europeans will use magic to cure their debt problems. Earnings have been mixed as shown by the 2 reports above. One key theme is that earnings from the US business is soggy. Europeans will come up with something to help the financial mess & that may make the stock market happy, since traders only have only short term visions. But problems will are not going away. Speaking of that, the concept of reducing the US massive deficits has not been getting a lot of attention lately. The super committee in DC is supposed to come up with ways to reduce the deficit in a few weeks. Markets may not like what they hear.
Caterpillar 3Q profit soars, raises year view AP
Caterpillar, Inc. (CAT)
Kimberly-Clark, a Dividend Aristocrat, net income fell 8% in Q3 because of rising costs. The revenue outlook was reduced & the high end of its earnings outlook. KMB is struggling with higher costs for oil, wood, pulp & other materials it uses in its products. Price are being raised to make up for higher costs & it is relying on fast-growing overseas markets to make up for weakness in US demand. EPS fell to $1.09 from $1.14 last year. Adjusted EPS of $1.26 was in line with expectations. But revenue rose 8% to $5.4B, beating expectations for $5.3B. The revenue jump was helped by higher prices & by currency exchange translation. Overall, it expects cost inflation to make a dent of $575-625M for the year, down from previous assumptions of $650-750M. However, the company expects revenue increase of 4-6%, down from previous predictions of 5-7% & expects EPS of $4.80-4.90 after adjusting for one-time expenses. Previously, it guided for EPS to be in the lower half of a range from $4.80-5.05. After doing well this year, the stock dropped 3.79 on the news.
Kimberly-Clark net income falls, though sales rise A
Kimberly-Clark Corporation (KMB)
Angela Merkel supporters praised her for getting France to drop demands to use the ECB to leverage euro crisis funds, but looked like making a meal out of the German parliament's new right to be consulted on how these are used. "Merkel's Battle for our Euro," was the headline in the mass-circulation conservative paper Bild, saying she taught France's Nicolas Sarkozy "that the EFSF rescue fund cannot be used to print money" to solve the debt crisis. "The chancellor must stick to her guns -- in the interests of Germany and of Europe," said the newspaper. While her supporters in the lower house of parliament welcomed the assertiveness in the Sun summit from a leader often accused of dithering, they also risked delaying Europe's response to the debt crisis at a crucial juncture by insisting on a full debate before the 2nd summit on Wed. Her Christian Democrats' (CDU) floor leader Volker Kauder was said to want a full debate rather than just a vote by the 41-member budget committee, which would be quicker & less risky while still fulfilling new rules on consulting MPs. Some are not happy that Germany will have to bail out weaker countries which are not mending their extravagant spending habits. The European debt mess plays on with no easy solutions.
Merkel Plans to Seek German Parliamentary Approval for EU Summit Measures
The stock market is having an excellent month, what else is there to say? Dow is up almost 1K, mostly on hopes the Europeans will use magic to cure their debt problems. Earnings have been mixed as shown by the 2 reports above. One key theme is that earnings from the US business is soggy. Europeans will come up with something to help the financial mess & that may make the stock market happy, since traders only have only short term visions. But problems will are not going away. Speaking of that, the concept of reducing the US massive deficits has not been getting a lot of attention lately. The super committee in DC is supposed to come up with ways to reduce the deficit in a few weeks. Markets may not like what they hear.
Dow Industrials (INDU)
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