Dow dropped 184, decliners over advancers 6-1 & NAZ fell 47. Bank stocks are having a bad day on the depressing news from Europe. The Financial Index has been bouncing around in a sideways pattern for 2 months.
The Alerian MLP Index fell 2½ to the 372s & the REIT index was off 4½ to the 219s. Junk bond funds slipped 1% & Treasures rose from a declining stock market. Oil sank along with the stock market but gold caught fire. Frightened money is going back into the classic safe haven investment.
Get the latest market update below:
The ECB sharply cut back purchases of gov bonds to only €635B ($841B) last week, underlining its determination to limit its support for indebted govs as they try to dig out of the debt crisis. The amount compares to €3.66B from the week before & €8.58B the week before that. The purchases are a key tool in fighting Europe's debt crisis, because they lower borrowing costs faced by indebted govs (such as Italy, the recent focus of the debt crisis). But the ECB has kept the purchases limited despite calls to buy more. The bank says countries should take the politically difficult steps to get their finances under control themselves, such as cutting spending & raising taxes, & not wait for support from the central bank. Talk last week is not being translated into actions.
Greece began a talks with the EU, & IMF & banker as negotiators are facing a tight timetable, to decide key aspects of a new bailout plan. Inspectors arrived at the Greek finance ministry for talks that will also include checking on the slow progress since a first rescue plan, agreed over a year ago. Greece needs the new bailout plan, with contributions from official lenders as well as banks, to stay afloat next year & face a major bond redemption in Mar. It must also wrap up the talks before general elections scheduled for Feb19. If there is no initial deal by the end of the week, then it will be difficult to complete private sector involvement in Jan & that could delay the election. The Greek drama plays on, as I have said for months.
Photo: Bloomberg
Intel, a Dow stock, cut its Q4 revenue outlook to below expectations due to shortages of hard disk drives. INTC now expects Q4 revenue of $13.4-$14B, below the previous forecast for revenue of $14.2-$15.2B. Analysts expected revenue of $14.65B. The company expects PC sales to be up sequentially in Q4, but revenue will be lower than expected because companies are reducing inventories & microprocessor purchases because of hard drive shortages. Floods in Thailand have disrupted computer manufacturers' production since many companies have factories there. A research firm has forecasted global PC shipments of 84.2M in Q1 2012, down from a previous estimate of 88M. INTC expects hard drive supply shortages to continue into Q1. Not good for INTC & not good for the US economy. The stock dropped $1.04 (4%).
Intel Says Q4 Rev. to Miss Forecast on Shortage
Photo: Bloomberg
There is some light in the markets as Zynga & Michael Kors lead the biggest week for IPOs in 9 months. Zynga is the largest maker of games on Facebook, Kors is the luxury- clothing designer & 9 other companies are seeking up to $3.8B (the most since early Mar). Zynga’s management team that the company is working on its biggest-ever pipeline of online games. Sales more than doubled in the 9 months while Kors Holdings revenuue jumped more than 60% in its first half. Offerings dried up in Aug as the sovereign-debt crisis engulfed Europe & the US received credit downgrade. More than 200 IPOs are still on file with US regulators to raise $49B. The success (or lack of) will give a strong indicate about the health of the stock market (which seems fragile).
Zynga IPO May Cap Busy Week for U.S. Offerings
S&P 500 Financials Sector Index
| Value | 170.70 | |
| Change | -5.33 (-3.0%) |
The Alerian MLP Index fell 2½ to the 372s & the REIT index was off 4½ to the 219s. Junk bond funds slipped 1% & Treasures rose from a declining stock market. Oil sank along with the stock market but gold caught fire. Frightened money is going back into the classic safe haven investment.
AMZ Alerian MLP Index
DJR Dow Jones Equity REIT
Treasury yields:
U.S. 3-month | 0.000% | |
U.S. 2-year | 0.222% | |
U.S. 10-year | 2.007% |
| CLF12.NYM | ...Crude Oil Jan 12 | ...97.81 | .... 1.60 | (1.6%) |
| GCZ11.CMX | ...Gold Dec 11 | ...1,744.50 | ... 31.70 | (1.9%) |
Get the latest market update below:
The ECB sharply cut back purchases of gov bonds to only €635B ($841B) last week, underlining its determination to limit its support for indebted govs as they try to dig out of the debt crisis. The amount compares to €3.66B from the week before & €8.58B the week before that. The purchases are a key tool in fighting Europe's debt crisis, because they lower borrowing costs faced by indebted govs (such as Italy, the recent focus of the debt crisis). But the ECB has kept the purchases limited despite calls to buy more. The bank says countries should take the politically difficult steps to get their finances under control themselves, such as cutting spending & raising taxes, & not wait for support from the central bank. Talk last week is not being translated into actions.
Greece began a talks with the EU, & IMF & banker as negotiators are facing a tight timetable, to decide key aspects of a new bailout plan. Inspectors arrived at the Greek finance ministry for talks that will also include checking on the slow progress since a first rescue plan, agreed over a year ago. Greece needs the new bailout plan, with contributions from official lenders as well as banks, to stay afloat next year & face a major bond redemption in Mar. It must also wrap up the talks before general elections scheduled for Feb19. If there is no initial deal by the end of the week, then it will be difficult to complete private sector involvement in Jan & that could delay the election. The Greek drama plays on, as I have said for months.
Photo: Bloomberg
Intel, a Dow stock, cut its Q4 revenue outlook to below expectations due to shortages of hard disk drives. INTC now expects Q4 revenue of $13.4-$14B, below the previous forecast for revenue of $14.2-$15.2B. Analysts expected revenue of $14.65B. The company expects PC sales to be up sequentially in Q4, but revenue will be lower than expected because companies are reducing inventories & microprocessor purchases because of hard drive shortages. Floods in Thailand have disrupted computer manufacturers' production since many companies have factories there. A research firm has forecasted global PC shipments of 84.2M in Q1 2012, down from a previous estimate of 88M. INTC expects hard drive supply shortages to continue into Q1. Not good for INTC & not good for the US economy. The stock dropped $1.04 (4%).
Intel Says Q4 Rev. to Miss Forecast on Shortage
INTC Intel Corp.
There is some light in the markets as Zynga & Michael Kors lead the biggest week for IPOs in 9 months. Zynga is the largest maker of games on Facebook, Kors is the luxury- clothing designer & 9 other companies are seeking up to $3.8B (the most since early Mar). Zynga’s management team that the company is working on its biggest-ever pipeline of online games. Sales more than doubled in the 9 months while Kors Holdings revenuue jumped more than 60% in its first half. Offerings dried up in Aug as the sovereign-debt crisis engulfed Europe & the US received credit downgrade. More than 200 IPOs are still on file with US regulators to raise $49B. The success (or lack of) will give a strong indicate about the health of the stock market (which seems fragile).
Zynga IPO May Cap Busy Week for U.S. Offerings
This week is starting of on a bad foot as the outlook for the € darkens with confusion coming from Europe. The concept of confusion (versus euphoria) is getting more attention by the markets. The ECB does not have an unlimited supply of money to buy gov bonds & there is not a lot of incentive for that when the weak countries are not addressing financial problems. The news from INTC was not helpful. The gloomy day could extend to a gloomy week.
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