Wednesday, October 5, 2011

Markets gain, closing at session highs

Dow shot up 131 following the enormous late day rally yesterday, advancers over decliners 5-2 & NAZ gained 55.  Bank stocks were bid up in the late day advance, bringing the Financial Index into the black.  But the chart remains dismal.

S&P 500 Financials Sector Index

Value159.98One-Year Chart for S&P 500 Financials Sector Index GICS Level 1 (S5FINL:IND)
Change    1.90    (1.2%)

MLPs had a big day (although the index finished 2½ below the high) following the enormous late day rally yesterday, but the REIT index fell back 2 to 200.  Junk bond funds found bargain hunters after recent selling.  Treasuries dropped, on optimism European leaders are stepping up efforts to resolve the region’s debt crisis which sapped demand for Treasuries.  Oil  extended gains after an unexpected decline in inventories.  Gold rose, still looking for footing to mount another advance.

Alerian MLP Index

Value336.78One-Year Chart for Alerian MLP Index (AMZ:IND)
Change    5.68     (1.7%)

Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLX11.NYM...Crude Oil Nov 11...79.67 ...Up 4.00  (5.3%)

Live 24 hours gold chart [Kitco Inc.]

Click below for the latest market update:

ADP Estimates U.S. Companies Added 91,000 Jobs in Sept

Photo:   Bloomberg

US companies added 91K jobs in Sep, according to ADP Employer Services, ahead of 75K forecasted.  The increase follows a revised 89K gain in the prior month.  Fri, the big jobs report will come from the Labor Dept.  Over the previous 6 reports, ADP initial figures were closest to the Labor Dept first estimate of private payrolls in Mar, when it understated the gain in jobs by 29K. The estimate was least accurate in Jun, when it overestimated the increase in employment by 100K.  Labor market conditions remain tepid & disappointing,

ADP Estimates U.S. Companies Added 91,000 Jobs in September

Merkel Signals More Greek Investor Losses

Chancellor Angela Merkel
Photo:   Bloomberg

German Chancellor Merkel said that Europe’s rescue fund will only be used as a last resort to save banks & that investors may have to take deeper losses as part of a Greek rescue.  This is realism after yesterday's late day surge in stock prices.  “Time is running out” to establish if recapitalization is necessary, Merkel said.  Troubled banks need to first seek capital on their own & national govs will help if that’s not possible, she added.  “If a country cannot do it using its own resources and the stability of the euro as a whole is put at risk because the country has difficulties, then there’s the possibility of using the EFSF,” the European Financial Stability Facility, she said.  Using the rescue fund is “always tied to a certain conditionality.”  Signals that European politicians may step up efforts to aid banks & push investors to accept bigger losses as part of a Greek bailout reflect intl pressure to end the debt crisis & domestic opposition to expanding rescues.  Merkel said that “if needed, there will be an adjustment” in investors’ share of a €159B ($212B) 2nd aid package for Greece, pending a report by intl auditors on Greece’s finances due next month.  She said that she supports recapitalizing European banks “if there is a joint assessment that the banks aren’t adequately capitalized” & finance officials develop “uniform criteria.” Germany is ready to discuss possible bank aid at this month’s EU summit, she said.  European financial reform remains a "work in progress."

Merkel Signals More Greek Investor Losses

Microsoft, a Dow stock, has struck more than 40 deals with TV & entertainment companies, making it possible for owners of its Xbox gaming console who are also paying cable subscribers to watch live television through the devices.  The greatly expanded range of TV content on the gaming device effectively makes the Xbox a cable TV set-top box, but stops short of speculation that MSFT would encourage Xbox owners to drop their pay-TV subscriptions. The new Xbox deals announced is part of a bid by MSFT to make its gaming console a major media hub in the living room & took years to sort out, said Ross Honey from MSFT. The stocks rose 55¢ but has remained near $25 for years.

Microsoft to Offer TV on Xbox Via Verizon, Comcast

Microsoft Corporation (MSFT)

stock chart

Dow is up an amazing 500 from the lows prior to yesterday's close.  Not sure that changing financial conditions in Europe deserve that kind of gain, but optimism has gotten the better of the stock market.  The chart below shows it has had a choppy time in the last month & is closer to the lower end of its range.  The bulls will point to the rebound of the Dow off the lows on Tues which were at a 20% decline from its 2011 highs (one signal of a bear market).  I'm still bothered by a cloudy situation in Europe & a US economy which is only sputtering.  The Fri jobs report will give more data on the recovery & expectations are for only about 60K jobs being added.  This economy needs at least 200K to make a dent in unemployment.  Then there's the super committee in congress which is supposed to come up with $1½T savings & their report is due next month, or else (mandatory budget cuts).

Dow Industrials (INDU)

stock chart

Get your favorite symbols' Trend Analysis TODAY! 

Find out what's inside Trend TV  

No comments: