Friday, December 9, 2011

Markets rally on another European bailout

Dow shot 186, advancers over decliners 6-1 & NAZ gained 53.  Bank stocks led the way as the Financial Index was able to recover most of yesterday's loss.

S&P 500 Financials Sector Index

Value 176.04 One-Year Chart for S&P 500 Financials Sector Index GICS Level 1 (S5FINL:IND)
Change     3.94     (2.3%)

The MLP index rose 4 to 375 & the REIT index was up 4+  to 224.  Junk bond funds were up about 1% & have bounced back over 10% from the lows last Aug.  As in most market rallies, Treasuries sold off, taking the yield on the 10 year Treasury back over 2%.  Oil climbed the most in more than a week after a report showed that confidence among US consumers rose to a 6-month high & as Europe agreed to boost its rescue fund & tighten budget rules.  Gold keeps sloshing around the low 1700s, but still has a very nice gain YTD.

AMZ    Alerian MLP Index

DJR   Dow Jones Equity REIT Index

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CLF12.NYM...,Crude Oil Jan 12...99.43 ...Up 1.09  (1.1%)

Live 24 hours gold chart [Kitco Inc.]

  • <p>               In this Oct. 18, 2011 photo, crew members look on as containers are offloaded from the cargo ship Stadt Rotenburg at Port Everglades in Fort Lauderdale, Fla. The U.S. trade deficit narrowed in October to its lowest point of the year as Americans bought fewer foreign cars and imported less oil. Exports of American-made autos also fell. (AP Photo/Wilfredo Lee)
Photo:   Yahoo

The trade deficit narrowed in Oct to its lowest point this year after Americans bought fewer foreign cars & imported less oil.  The shrinking trade gap boosted growth over the summer & may do so again in Q4.  But that trend could reverse next year, especially if Europe's debt crisis worsens.  The Commerce Dept said the trade deficit shrank 1.6% to $43.5B, the 4th straight monthly decline.  Overall imports fell 1%, largely reflecting a 5% decline in oil imports.  The average price of imported oil fell for the 5th straight month to the lowest level since Mar.  Exports slipped 0.8% to $179.2B, the first drop after 3 months of gains.  Shipments of industrial supplies, such as natural gas, copper & chemicals, fell.  Exports of autos & agricultural goods also dropped.  The deficit is expected  to widen in the coming months.  Oil prices are increasing & Europe is likely to import fewer US goods as its economy weakens.  At the same time, US businesses are stocking up on foreign goods as consumer demand improves.  Excluding oil, the trade deficit rose to $19.1 B in Oct from $17.6B in the previous month.

U.S. Trade Deficit Shrinks To Lowest This Year

GE Boosts Dividend to 17 Cents a Share

Photo:   Bloomberg

General Electric, a Dow stock, raised its quarterly div 2¢ cents to 17¢ per share, its 4th increase in 2 years.  The former Dividend Aristocrat has begun its 25 year climb to regain that status. “Our financial performance continues to accelerate,”   CEO Immelt said. “The GE business model will continue to deliver strong earnings and cash flow growth going forward.”  This week, GE said it expects $6.3-$6.5B net income from GE Capital, evidence of a rebound from the market turmoil & economic slump of 2008.  The stock rose 53¢ in an up market & yields 4%.

GE Dividend Boost of 2 Cents a Share

GE   General Electric

Taubman Centers, a major REIT, increased the quarterly div 2.9% to 45¢.  The stock was up 1.24 & yields 3%. 

Taubman hikes quarterly dividend to 45 cents

TCO   Taubman Centers

The European Financial ministers handed out candy & the markets ate it all up.  EU leaders agreed on measures to tackle the debt crisis.  An agreement on stricter budget rules for the euro zone only went partway to address the structural problems behind the debt crisis, more is needed to relieve stress in the region's troubled debt markets.  The confidence data for US consumers helped today, but Europe is the main force driving the markets.  When all was said & done, the Dow gained 175 this week, but was not able to break thru the critical 12.2K ceiling (last seen in late Jul)..  The markets will need new inspiration for Dow to carry on with the rally.

Dow Jones Industrial Average

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