Dow dropped 117, decliners over advancers 5-1 & NAZ was off 11. Banks led the way down with the Financial Index falling 6 to the 165s. The MLP index dropped 2+ to the 248s, turned back at the important 351 ceiling, & the REIT index was down 5 to the 204s. Junk bond funds fell but Treasuries were back in demand, with the yield on the 10 year Treasury heading back towards 2%. Oil & gold also lost ground.
Photo: Bloomberg
New claims for jobless benefits were little changed last week. Initial claims for unemployment benefits dipped 1K to 404K according to the Labor Dept. The 4-week moving average fell to a 2-month low of 408K (from 415K). The number continuing to collect benefits dropped 55K to 3.67M, the fewest since Apr. The continuing claims figure does not include the number of workers receiving extended benefits under federal programs. Those who’ve used up their traditional benefits & are now collecting emergency & extended payments increased by 2K to 3.55M in the latest reporting week. The unemployment rate among people eligible for benefits fell to 2.9% from 3% in the prior week. 30 states & territories reported an increase in claims, while 23 had a decrease. Glum figures have become routine.
Initial Jobless Claims in U.S. Fell to 404,000
Photo: Yahoo
The Slovak parliament endorsed early elections in Mar, a key condition for approval of expanding the powers of an EU bailout fund by a vote of 143-3. Previously this week, the Parliament rejected the changes in the fund because a junior coalition party was against it, causing the gov to fall. But the main opposition party agreed to help the outgoing coalition approved the expanded fund in exchange for early elections. Slovakia is the last of the 17 eurozone nations to vote on increasing the size & powers of the bailout fund (for Greece). This is only another step in a long road ahead for Greece.
Slovakia to take 2nd vote on EU bailout fund AP
Photo: Yahoo
JPMorgan, a Dow stock, was the first of the big banks to report earnings, Q3 income fell 4% on weaker investment banking & trading results & a loss in its private equity division. The bank also set aside $1B for litigation tied to poorly-written mortgage loans & securities. EPS was $1.02, compared with $1.01 last year (higher because of accounting magic). Revenue edged up to $24.37B from $24.34B last year. The investment banking declines were caused by extreme volatility in stock & bond markets in Q3 leading to a slowdown in debt issuance & a record backlog in IPOs, both sources of banking fees, as companies elected to wait out the turmoil & investors pulled money out of stocks & bonds. Fees from investment banking fell 31% to $1B. Debt underwriting fees fell 37% to $496M as fewer companies raised money by selling debt. With many IPOs also shelved, stock underwriting fees fell 47%. Its private equity business lost $347M. Lawsuits against US banks for bad mortgage loans piled up in Q3, including a federal suit against 17 banks for selling risky mortgage-backed securities. However, business lending increased sharply, an encouraging sign for the US economy, according to CEO Jamie Dimon. New loans to small businesses grew 71% from last year to $12.6B, loans to middle-market businesses grew 18% to $41.5B, while loans to companies related to intl trade were up 69% to $30.1B. Meanwhile, confused protestors are complaining about huge banking profits! The stock dropped 1.87 (6%).
JPMorgan’s Earnings Decline on Slump
The chart below shows the Dow bumped against 10.6K once again & was turned back as before. JPM is the 2nd Dow stock to report earnings, both reports have been disappointing. 3 more big banks are due to report in the next few days & chances there numbers will not be a lot different than with JPM. After all, it was hurt by weak financial conditions at the macro level. Europe is muddling thru the current debt crisis, but keep in mind that there will be more problems in the weeks & months ahead. Even this one is not a done deal yet. Dow failed its first test to break into new higher ground, there could be more selling ahead.
ALERIAN MLP Index (^AMZ)
DJ REIT INDEXDJR (^DJR)
Treasury yields:
U.S. 3-month | 0.010% | |
U.S. 2-year | 0.265% | |
U.S. 10-year | 2.150% |
| CLX11.NYM | ...Crude Oil Nov 11 | ............83.61 | ..... 1.96 | (2.3%) |
| GCV11.CMX... | Gold Oct 11 | ...............1,656.80 | .... 24.50 | (1.5%) |
Below, get the latest market update:
New claims for jobless benefits were little changed last week. Initial claims for unemployment benefits dipped 1K to 404K according to the Labor Dept. The 4-week moving average fell to a 2-month low of 408K (from 415K). The number continuing to collect benefits dropped 55K to 3.67M, the fewest since Apr. The continuing claims figure does not include the number of workers receiving extended benefits under federal programs. Those who’ve used up their traditional benefits & are now collecting emergency & extended payments increased by 2K to 3.55M in the latest reporting week. The unemployment rate among people eligible for benefits fell to 2.9% from 3% in the prior week. 30 states & territories reported an increase in claims, while 23 had a decrease. Glum figures have become routine.
Initial Jobless Claims in U.S. Fell to 404,000
Photo: Yahoo
The Slovak parliament endorsed early elections in Mar, a key condition for approval of expanding the powers of an EU bailout fund by a vote of 143-3. Previously this week, the Parliament rejected the changes in the fund because a junior coalition party was against it, causing the gov to fall. But the main opposition party agreed to help the outgoing coalition approved the expanded fund in exchange for early elections. Slovakia is the last of the 17 eurozone nations to vote on increasing the size & powers of the bailout fund (for Greece). This is only another step in a long road ahead for Greece.
Slovakia to take 2nd vote on EU bailout fund AP
Photo: Yahoo
JPMorgan, a Dow stock, was the first of the big banks to report earnings, Q3 income fell 4% on weaker investment banking & trading results & a loss in its private equity division. The bank also set aside $1B for litigation tied to poorly-written mortgage loans & securities. EPS was $1.02, compared with $1.01 last year (higher because of accounting magic). Revenue edged up to $24.37B from $24.34B last year. The investment banking declines were caused by extreme volatility in stock & bond markets in Q3 leading to a slowdown in debt issuance & a record backlog in IPOs, both sources of banking fees, as companies elected to wait out the turmoil & investors pulled money out of stocks & bonds. Fees from investment banking fell 31% to $1B. Debt underwriting fees fell 37% to $496M as fewer companies raised money by selling debt. With many IPOs also shelved, stock underwriting fees fell 47%. Its private equity business lost $347M. Lawsuits against US banks for bad mortgage loans piled up in Q3, including a federal suit against 17 banks for selling risky mortgage-backed securities. However, business lending increased sharply, an encouraging sign for the US economy, according to CEO Jamie Dimon. New loans to small businesses grew 71% from last year to $12.6B, loans to middle-market businesses grew 18% to $41.5B, while loans to companies related to intl trade were up 69% to $30.1B. Meanwhile, confused protestors are complaining about huge banking profits! The stock dropped 1.87 (6%).
JPMorgan’s Earnings Decline on Slump
J P Morgan Chase & Co (JPM)
The chart below shows the Dow bumped against 10.6K once again & was turned back as before. JPM is the 2nd Dow stock to report earnings, both reports have been disappointing. 3 more big banks are due to report in the next few days & chances there numbers will not be a lot different than with JPM. After all, it was hurt by weak financial conditions at the macro level. Europe is muddling thru the current debt crisis, but keep in mind that there will be more problems in the weeks & months ahead. Even this one is not a done deal yet. Dow failed its first test to break into new higher ground, there could be more selling ahead.
Dow Industrials (INDU)
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