Dow dropped 122, decliners over advancers 4-1 & NAZ lost 32. Bank stocks led the way lower although the Financial Index is overbought in Oct.
The MLP index fell 1½ to the 367s & the REIT index was off 3+ to the 222s. But the charts show both are having an outstanding month. Junk bond funds were a little lower & Treasuries rose on increased worries over European debt issues. Gold also benefited from those thoughts.
Get the latest daily market update below:
Photo: Bloomberg
Consumer confidence unexpectedly dropped to its lowest level in 2½ years in Oct as consumers fretted about job & income prospects. The Conference Board said its index of consumer attitudes fell to 39.8 from a upwardly revised 46.4 the month before, the lowest level since Mar 2009 (when a dreary stock market was weighing on the minds the public). Expectations were for the index to rise to 46.0. The present situation index slipped to 26.3 from 33.3, while the expectations index declined to 48.7 from 55.1. The expectations gauge was also at its lowest since Mar 2009. "Consumer expectations, which had improved in September, gave back all of the gain and then some, as concerns about business conditions, the labor market and income prospects increased," Lynn Franco, director of the Conference Board Consumer Research Center, said. Consumers' view of the labor market was mixed. The number who said they found "jobs plentiful" fell to 3.4% from 5.6%. However, the "jobs hard to get" category eased to 47.1% from 49.4%. Later this week, when GDP is released, it should show growth at a 2½% rate. While that's not recession data, it feels like one to many.
Consumer Confidence Falls to Two-Year Low
Photo: Yahoo
3M, a Dow stock & Dividend Aristocrat, lowered its earnings expectations for the year on slowing imports from overseas, especially in products like LCD TVs & other electronics from Asia that drive its business. MMM expects EPS of $5.85-5.95 compared with $6.10-6.25 in previously guidance. Core sales are expected to grow 3-4%, compared with a previous forecast of 6-7½% growth. 3M issued the outlook as it reported Q3 EPS fell to $1.52 from $1.53 last year. Revenue rose 10% to $7.5M, mostly driven by acquisitions & gains in foreign exchange. Analysts expected $1.61 on revenue of $7.8B. A number of its customers reduced inventories during Q3, expecting slowing demand. The stock slumped $3.92 (5%).
Photo: Bloomberg
UPS reported higher quarterly profits as increased pricing, cost cutting & technology improvements helped compensate for domestic shipping volume dulled by a sluggish economy. Iit affirmed its outlook for record 2011 results. The US economy appears to have stabilized & is growing slowly, after concern about a possible double-dip recession stifled consumer demand earlier this year, UPS said. The final 2 weeks before Christmas could have a meaningful effect on Q4 results if consumer demand picks up & retailers low on inventory need fast shipment of goods, CEO Scott Davis said. "Over the last month or so, we are starting to see, I could say, better economic numbers, so there is more optimism out there, and that could turn things around," Davis said. "We are still expecting a slow-growth economy, but I don't think it is as negative as people were thinking two and three months ago." UPS has forecast record EPS of $4.15-4.40 this year as it cut costs & raised shipping rates in the face of a slowly expanding global economy. UPS & FedEx (FDX) are considered economic bellwethers because of the sheer volume of packages they handle. The value of packages handled by UPS trucks & planes each year is equivalent to about 6% of US GDP & 2% of global GDP. Domestic shipping volume averaged 12.74M packages a day, little changed from 12.73M last year. Operating margins improved on higher yields, as well as on more efficient networks. Intl shipping volume averaged 2.34M a day, up from 2.24M. Revenue in this segment rose more than 14%, twice the rate in the domestic segment, driven by 6.5% growth in export volume. Q3 EPS rose to $1.06 from 99¢ a year earlier, slightly ahead of expectations for $1.05. Revenue rose 18% to $13.17B. The stock fell 1.72 (2%).
UPS Profit Tops Estimates on Higher Rates
A meeting of European finance ministers was cancelled,adding nervousness to the fragile situation with sovereign debts. This month the stock market has soared largely on hopes that these guys would solve complicated debt issues with magic tricks. But the issues are complicated & it will take a lot to get this divided group to agree to major solutions. The earnings picture is a mixed bag, although some view it in a more positive light. The US economy is sputtering & that is shown in many of the reports from the multi-nationals. After rising 1K in Oct, Dow is entitled to a rest. Today's sell off may be nothing more than that. But I see the undercurrent as being darker.
S&P 500 Financials Sector Index
| Value | 176.76 | |
| Change | -3.66 (-2.0%) |
The MLP index fell 1½ to the 367s & the REIT index was off 3+ to the 222s. But the charts show both are having an outstanding month. Junk bond funds were a little lower & Treasuries rose on increased worries over European debt issues. Gold also benefited from those thoughts.
ALERIAN MLP Index (^AMZ)
DJ REIT INDEXDJR (^DJR)
Treasury yields:
U.S. 3-month | 0.005% | |
U.S. 2-year | 0.275% | |
U.S. 10-year | 2.184% |
| CLZ11.NYM | ....Crude Oil Dec 11 | ...93.51 | ..... 2.24 | (2.5%) |
| GCV11.CMX | ...Gold Oct 11 | ......1,667.00 | ... 15.50 | (0.9%) |
Get the latest daily market update below:
Consumer confidence unexpectedly dropped to its lowest level in 2½ years in Oct as consumers fretted about job & income prospects. The Conference Board said its index of consumer attitudes fell to 39.8 from a upwardly revised 46.4 the month before, the lowest level since Mar 2009 (when a dreary stock market was weighing on the minds the public). Expectations were for the index to rise to 46.0. The present situation index slipped to 26.3 from 33.3, while the expectations index declined to 48.7 from 55.1. The expectations gauge was also at its lowest since Mar 2009. "Consumer expectations, which had improved in September, gave back all of the gain and then some, as concerns about business conditions, the labor market and income prospects increased," Lynn Franco, director of the Conference Board Consumer Research Center, said. Consumers' view of the labor market was mixed. The number who said they found "jobs plentiful" fell to 3.4% from 5.6%. However, the "jobs hard to get" category eased to 47.1% from 49.4%. Later this week, when GDP is released, it should show growth at a 2½% rate. While that's not recession data, it feels like one to many.
Consumer Confidence Falls to Two-Year Low
Photo: Yahoo
3M, a Dow stock & Dividend Aristocrat, lowered its earnings expectations for the year on slowing imports from overseas, especially in products like LCD TVs & other electronics from Asia that drive its business. MMM expects EPS of $5.85-5.95 compared with $6.10-6.25 in previously guidance. Core sales are expected to grow 3-4%, compared with a previous forecast of 6-7½% growth. 3M issued the outlook as it reported Q3 EPS fell to $1.52 from $1.53 last year. Revenue rose 10% to $7.5M, mostly driven by acquisitions & gains in foreign exchange. Analysts expected $1.61 on revenue of $7.8B. A number of its customers reduced inventories during Q3, expecting slowing demand. The stock slumped $3.92 (5%).
3M Company (MMM)
UPS reported higher quarterly profits as increased pricing, cost cutting & technology improvements helped compensate for domestic shipping volume dulled by a sluggish economy. Iit affirmed its outlook for record 2011 results. The US economy appears to have stabilized & is growing slowly, after concern about a possible double-dip recession stifled consumer demand earlier this year, UPS said. The final 2 weeks before Christmas could have a meaningful effect on Q4 results if consumer demand picks up & retailers low on inventory need fast shipment of goods, CEO Scott Davis said. "Over the last month or so, we are starting to see, I could say, better economic numbers, so there is more optimism out there, and that could turn things around," Davis said. "We are still expecting a slow-growth economy, but I don't think it is as negative as people were thinking two and three months ago." UPS has forecast record EPS of $4.15-4.40 this year as it cut costs & raised shipping rates in the face of a slowly expanding global economy. UPS & FedEx (FDX) are considered economic bellwethers because of the sheer volume of packages they handle. The value of packages handled by UPS trucks & planes each year is equivalent to about 6% of US GDP & 2% of global GDP. Domestic shipping volume averaged 12.74M packages a day, little changed from 12.73M last year. Operating margins improved on higher yields, as well as on more efficient networks. Intl shipping volume averaged 2.34M a day, up from 2.24M. Revenue in this segment rose more than 14%, twice the rate in the domestic segment, driven by 6.5% growth in export volume. Q3 EPS rose to $1.06 from 99¢ a year earlier, slightly ahead of expectations for $1.05. Revenue rose 18% to $13.17B. The stock fell 1.72 (2%).
UPS Profit Tops Estimates on Higher Rates
United Parcel Service, Inc. (UPS)
A meeting of European finance ministers was cancelled,adding nervousness to the fragile situation with sovereign debts. This month the stock market has soared largely on hopes that these guys would solve complicated debt issues with magic tricks. But the issues are complicated & it will take a lot to get this divided group to agree to major solutions. The earnings picture is a mixed bag, although some view it in a more positive light. The US economy is sputtering & that is shown in many of the reports from the multi-nationals. After rising 1K in Oct, Dow is entitled to a rest. Today's sell off may be nothing more than that. But I see the undercurrent as being darker.
Dow Industrials (INDU)
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