Tuesday, November 1, 2011

Markets tumble on Greek turmoil

Dow sank 297 finishing near its lows, decliners over advancers 6-1 & NAZ sold off 77.  On Greek debt worries, banks led the decline with the Financial Index falling 10% in the last 2 days. 

S&P 500 Financials Sector Index

Value173.02One-Year Chart for S&P 500 Financials Sector Index GICS Level 1 (S5FINL:IND)
Change   -6.56    (-4.7%)

The MLP & REIT indices eached dropped over 6 on a very bad day for the markets.  The VIX, volatility index, went up 6 to 36.  Junk bond funds were lower while Treasury prices jumped on growing anxieties from Greece.  Oil dropped with the stock market as a surprise referendum in Greece threatened to derail a plan to bolster Europe's banks.  Gold also suffered from selling, but buying in the PM reduced its losses.

Alerian MLP Index

Value366.20One-Year Chart for Alerian MLP Index (AMZ:IND)
Change     -6.83   (-1.8%)

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CLZ11.NYM...Crude Oil Dec 11...91.02 ....Down 2.17  (2.3%)

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Chrysler October Total Group U.S. Sales Up 27%

Photo:   Bloomberg

General Motors & Ford US deliveries in Oct increased less than forecasts that called for the best sales month since Feb.  GM sales increased 1.7% to 187K & Ford light-vehicle deliveries gained 6.2% to 167K, below a 6.6% estimate.  Oct light-vehicle sales may have risen to an annual rate of 13.2M but that pace may be challenged due to floods in Thailand.  GM estimates a 13.7M industry sales rate for Oct, including medium-duty & heavy-truck deliveries.  Chrysler Group, controlled by Fiat, boosted sales 27% to 114K, shy of the 28% estimate.  Sales of the Jeep Compass rose more than sixfold from a year earlier to 5K but Grand Cherokee deliveries dropped 13% to 11K.  Honda US sales grew but it may lose US & Canadian output thru yearend because of parts shortages caused by Thailand floods.  Nissan US sales rose 18% in Oct, beating estimates for a 16% increase.  Deliveries of Versa & Sentra cars rose by more than 40% & Juke crossover sales gained 37%.  GM fell 2.52 & Ford was down 60¢.

General Motors Company (GM)

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Ford Motor Credit Company (F)

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Papandreou Grip on Power Weakens as Lawmakers Rebel on Vote

Photo:   Bloomberg

Greek Prime Minister Papandreou’s grip on power weakened ahead of a confidence vote later this week.  His decision to call a referendum on a new bailout package provoked a lawmaker rebellion.  One said she will defect from Papandreou’s socialist Pasok which means he would only control 151 seats in the 300-seat chamber.  6 members of the party called on the premier to resign in a joint letter!  He has been ruling with thin margins, his last major vote on austerity measures passed by 154 votes to 144 on Oct 20.  The Greek debt mess remains far from being resolved.

Papandreou’s Power Weakens as Lawmakers Rebel

Yahoo Said to Lean Toward Dividend, Not Sale

Photo:  Bloomberg

Yahoo! stock dropped after the company was said to be leaning toward selling its Asian assets & redistributing the proceeds to shareholders, rather than selling itself to a group of buyers.  This scenario is the most likely option & would let YHOO pay a special dividend or buy back shares.  YHOO has been exploring options while searching for a new CEO.  Co- founder Jerry Yang said on Oct.20 that the company isn’t necessarily on the block. “The intent going in is not to put ourselves up for sale,” Yang said.  “The intent is to look at all options. There’s plenty of options for the board, and plenty of options for our shareholders to realize value.”  But it could still sell to a group of investors.  The stock fell 71¢.

Yahoo Dips as Company Said to Lean Toward Dividend, Not Sale

Yahoo! Inc. (YHOO)

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The FOMC is meeting held & getting little attention because no great surprises are expected.  Interest rates will not be raised & there is no room left for cuts.  Clearly Europe, especially Greece, is receiving the bulk of investor attention.  The 3 month chart for the Dow was encouraging last month, but the large amount of selling in the last 2 days changed all that.  Greece & Europe are divided, not good for the markets.  The Oct jobs reports comes on Fri & then eyes will turn towards DC to see what a divided super committee comes up with to reduce massive federal deficits.  There is the potential for the Oct gains in the stock market to be lost very quickly.  With  today's decline, Dow is barely positive YTD.

Dow Industrials (INDU)

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