Dow rose 34, decliners ahead of advancers 3-2 & NAZ was off 7. Bank stocks also slipped a little.
The MLP index fell 2 to the 373s & the REIT index was down 1 to the 221s. Junk bond funds edged higher & Treasuries were little changed. Oil fell as S&P said it may cut the credit ratings of debt issued by the European bailout fund & 15 euro nations, bolstering concern that the region’s economy will slip into recession. Gold also pulled back, to the low 1700s.
Photo: Yahoo
German leaders downplayed the S&P warning that it might cut the credit rating of 15 eurozone countries, including Germany's, because the financial crisis is worsening without any imminent fix. It came just hours after Chancellor Merkel & French President Sarkozy urged changes to the EU treaty that would centralize decision-making on spending & borrowing for the 17 countries that use the €. Tighter political & economic coordination among euro countries is seen as a precursor to further financial aid from the ECB, the IMF, or some combination. The threat to cut Germany's prized AAA rating was particularly surprising as its bonds are considered among the safest in the world. Any downgrade threatens to complicate the eurozone's bailout mechanism, since the region's rescue fund relies on AAA-rated bonds of Germany & France to cheaply raise money.
S&P Warning Good for Euro Leaders: Schaeuble
The European Financial Stability Facility (EFSF) may lose its AAA credit rating if any of the bailout fund’s 6 guarantors face a downgrade from AAA, Standard & Poor’s said. “We could lower the long-term credit rating on EFSF by one or two notches if we were to lower the AAA sovereign ratings, which are currently on creditwatch, on one or more of EFSF’s guarantor members,” S&P said. At the same time, S&P said it “could affirm the AAA ratings on EFSF and its issues if we affirm the rating on all six of EFSF’s guarantor members currently rated AAA.” Germany, France, the Netherlands, Finland, Austria & Luxembourg are the top-rated nations backing the rescue fund. The German Finance Minister said that the downgrade warning will help force Europe to ratchet up efforts to resolve the 2-year old fiscal crisis this week. The debt mess remains murky at best.
S&P Says Euro Region’s EFSF May Lose Rating If Any AAA Member Downgraded
Photo: Yahoo
Toll Brothers fiscal Q4 net income dropped 70%, partly because last year's qtr was helped by a large tax benefit. Still, it topped expectations & revenue climbed as home deliveries & net signed contracts increased. TOL also benefited from fewer cancellations. Exec Chairman Robert Toll said that the company believes its prospective customers have the ability to buy but that a lack of confidence in the US economy is holding them back from making purchases. EPS was 9¢ for the qtr ended Oct 31, down from 30¢ last year earlier (which included a $59.9M tax benefit). Analysts expected EPS of 5¢. Revenue rose 6% to $428M, beating estimates of $424M. Home deliveries climbed 8% to 757 units & signed contracts increased 15% to 644 units. The average price of its signed contracts was $606K, up from $565K a year ago. The contract cancellation rate came in at about 7.9%, down from 8.8% in the prior-year period. For the full year, TOL had EPS of 24¢, versus a loss of 2¢ in the prior year. Annual revenue dipped 1% to $1.48B from $1.49B. TOL predicts that it will deliver 2400-3200 homes in fiscal 2012 at an average price of $550K-$575K per home. The stock rose 28¢.
Toll Brothers' 4Q profit falls, tops Wall St. view AP
Last week markets had an unusually good week with little hard news to back up the gains. There was plenty of talk, but not much action. This week, the European powers have a big summit meeting at week's end which will give direction about how they want to handle the debt mess. And this is a debt mess, make no mistake about that. Until then, the markets will probably do little, awaiting developments. Dow bumped against the important 12.2K ceiling yesterday, but could not break thru. This is becoming an important barrier.
Dow Jones Industrial Average
S&P 500 Financials Sector Index
| Value | 176.44 | |
| Change | -0.34 (-0.2%) |
The MLP index fell 2 to the 373s & the REIT index was down 1 to the 221s. Junk bond funds edged higher & Treasuries were little changed. Oil fell as S&P said it may cut the credit ratings of debt issued by the European bailout fund & 15 euro nations, bolstering concern that the region’s economy will slip into recession. Gold also pulled back, to the low 1700s.
AMZ Alerian MLP Index
DJR Dow Jones Equity REIT Index
Treasury yields:
U.S. 3-month | 0.000% | |
U.S. 2-year | 0.258% | |
U.S. 10-year | 2.065% |
| CLF12.NYM | ....Crude Oil Jan 12 | ...100.69 | .... 0.30 | (0.3%) |
| GCZ11.CMX | ....Gold Dec 11 | .....1,703.00 | ... 27.70 | (1.6%) |
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German leaders downplayed the S&P warning that it might cut the credit rating of 15 eurozone countries, including Germany's, because the financial crisis is worsening without any imminent fix. It came just hours after Chancellor Merkel & French President Sarkozy urged changes to the EU treaty that would centralize decision-making on spending & borrowing for the 17 countries that use the €. Tighter political & economic coordination among euro countries is seen as a precursor to further financial aid from the ECB, the IMF, or some combination. The threat to cut Germany's prized AAA rating was particularly surprising as its bonds are considered among the safest in the world. Any downgrade threatens to complicate the eurozone's bailout mechanism, since the region's rescue fund relies on AAA-rated bonds of Germany & France to cheaply raise money.
S&P Warning Good for Euro Leaders: Schaeuble
The European Financial Stability Facility (EFSF) may lose its AAA credit rating if any of the bailout fund’s 6 guarantors face a downgrade from AAA, Standard & Poor’s said. “We could lower the long-term credit rating on EFSF by one or two notches if we were to lower the AAA sovereign ratings, which are currently on creditwatch, on one or more of EFSF’s guarantor members,” S&P said. At the same time, S&P said it “could affirm the AAA ratings on EFSF and its issues if we affirm the rating on all six of EFSF’s guarantor members currently rated AAA.” Germany, France, the Netherlands, Finland, Austria & Luxembourg are the top-rated nations backing the rescue fund. The German Finance Minister said that the downgrade warning will help force Europe to ratchet up efforts to resolve the 2-year old fiscal crisis this week. The debt mess remains murky at best.
S&P Says Euro Region’s EFSF May Lose Rating If Any AAA Member Downgraded
Toll Brothers fiscal Q4 net income dropped 70%, partly because last year's qtr was helped by a large tax benefit. Still, it topped expectations & revenue climbed as home deliveries & net signed contracts increased. TOL also benefited from fewer cancellations. Exec Chairman Robert Toll said that the company believes its prospective customers have the ability to buy but that a lack of confidence in the US economy is holding them back from making purchases. EPS was 9¢ for the qtr ended Oct 31, down from 30¢ last year earlier (which included a $59.9M tax benefit). Analysts expected EPS of 5¢. Revenue rose 6% to $428M, beating estimates of $424M. Home deliveries climbed 8% to 757 units & signed contracts increased 15% to 644 units. The average price of its signed contracts was $606K, up from $565K a year ago. The contract cancellation rate came in at about 7.9%, down from 8.8% in the prior-year period. For the full year, TOL had EPS of 24¢, versus a loss of 2¢ in the prior year. Annual revenue dipped 1% to $1.48B from $1.49B. TOL predicts that it will deliver 2400-3200 homes in fiscal 2012 at an average price of $550K-$575K per home. The stock rose 28¢.
Toll Brothers' 4Q profit falls, tops Wall St. view AP
TOL Toll Brothers
Last week markets had an unusually good week with little hard news to back up the gains. There was plenty of talk, but not much action. This week, the European powers have a big summit meeting at week's end which will give direction about how they want to handle the debt mess. And this is a debt mess, make no mistake about that. Until then, the markets will probably do little, awaiting developments. Dow bumped against the important 12.2K ceiling yesterday, but could not break thru. This is becoming an important barrier.
Dow Jones Industrial Average
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