Wednesday, November 23, 2011

Markets extend weekly losses

Dow fell 194 (its lows), decliners over advancers 9-1 & NAZ dropped 51.  Bank stocks led the way lower as the Financial Index is just a few points away from reaching a new multi year low.

S&P 500 Financials Sector Index

Value 158.40 One-Year Chart for S&P 500 Financials Sector Index GICS Level 1 (S5FINL:IND)
Change    -3.72    (-2.3%)

The MLP index dropped 4 to 360 & the REIT index was off 4 to 209.  Junk bond funds were weaker & Treasuries were little changed.  Oil pared losses after the Energy Dept reported a decline of more than 6M barrels in inventories.  Gold continues under pressure, falling below $1700, lowest level in more than a month.

AMZ  Alerian MLP Index

DJR  Dow Jones Equity REIT Index

Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLF12.NYM....Crude Oil Jan 12...95.59 .....Down 2.42  (2.5%)

GCX11.CMX...Gold Nov 11....1,681.80 ...Down 20.40  (1.2%)

Get the latest market update below:

The Thomson Reuters/University of Michigan final index of consumer sentiment rose to 64.1 in Nov  from 60.9 in Oct, the highest since Jun,. But it it was below the estimate of 64.5.  The index of current conditions, which reflects Americans’ perceptions of their financial situation & whether they consider it a good time to buy big-ticket items like cars, increased to 77.6 from 75.1 in Oct.  The index of consumer expectations for 6 months from now, which more closely projects the direction of consumer spending, climbed to a 4-month high of 55.4 from 51.8.  Consumers expect an inflation rate of 3.2% over the next 12 months, the same as in the prior survey.  Over the next 5 years, the range tracked by the Federal Reserve, Americans expect a 2.7% rate of inflation, the same as in Oct.  

University of Michigan Survey of Consumer Confidence Sentiment

Value 64.10 One-Year Chart for University of Michigan Survey of Consumer Confidence Sentiment (CONSSENT:IND)
Change   -0.10   (-0.2%)

  • <p>An employee works on circuit boards at an electronic component factory in Hefei, Anhui province August 1, 2011. REUTERS/Stringer</p>
Photo:   Yahoo

In Nov, China's factory sector shrank the most in 32 months on signs of domestic economic weakness, a preliminary survey showed, reviving worries that China may be slipping toward a hard landing adding to fears of a global recession.  The steep fall in the purchasing managers' index to 48 in Nov from 51 in Oct largely reflected domestic weakness as both output & new orders shrank even as export orders continued to grow.  The earliest readout of China's industrial activity, was the lowest since Mar 2009 & suggests the factory sector contracted during the month.  A reading of 50 demarcates expansion from contraction.  Beijing has already announced selective steps, geared to small business, to support the economy.  The sub-indices for input & output prices dropped around 10 points each to below 50 (last seen in Apr 2009).  China could be hurt by flooding in Thailand where components for some of their products are made. 

Manufacturing in China May Contract Most in Three Years as Housing Falters

The number seeking unemployment benefits ticked up slightly last week after 2 months of steady declines.  But the increase isn't enough to reverse the downward trend. The 4-week average of applications fell to its lowest level since Apr. The decline in the average signals that companies are laying off fewer workers.  Weekly applications rose 2K to 393K according to the Labor Dept, the 2nd increase in 6 weeks.  The 4-week average fell to 394K. the 8th drop in the past 9 weeks.  Even so, weekly applications would need to stay below 375K consistently to push down the unemployment rate significantly.  The pace of hiring over the past few months has been mixed.  Call this mildly good news.

  • <p>               In this Aug. 31, 2011 photo, young attendees to the Farm Progress Show, in Decatur, Ill., inspect and climb aboard a new John Deere 4940 Self-Propelled Sprayer, in Decatur, Ill.  Deere & Co. said Wednesday, Nov. 23, 2011, strong demand for its farm equipment helped boost the company's fourth quarter profit by 46 percent, and next year should be better because Deere expects demand will remain robust.(AP Photo/Seth Perlman)
Photo:   Yahoo

Deere had good sales for its farm equipment which boosted Q4 profit 46% & says it expects robust demand will lead to better results next year.  Sales were up 20% & EPS rose to $1.62 from $1.07 last year.  Analysts expected EPS of $1.43 on revenue of $7.9B.  DE said equipment sales will increase about 15% next year & profit will grow to $3.2B from this year's $2.8B.  "We are proud of the company's performance in 2011 and look forward to building on these gains in 2012 and beyond," CEO Samuel Allen said.  "We have great confidence in the company's future and our role in helping feed, clothe and shelter the world's growing population."  In a down market, the stock rose 2.69 (4%).

Deere Profit Jumps as Flush Farmers Spend

DE   Deere & Co.

Europe remains a collection of debt messes, China's economy is slowing  The US is facing reduced growth from less gov spending.  No surprise, markets continue to sell off.  A 2 month chart for the Dow is shown below.  At 11.3K, the Dow is less than 1K away from cracking thru to a 14month low.  Charts & market sentiment are gloomy, not the usual uneventful pre-holiday week with slow trading. 

Dow Jones Industrial Average

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