Dow shot up 240, advancers ahead of decliners almost 7-1 & NAZ gained 55. As usual, banks are leading the way higher with the Financial Index rising 5+ to 181 (over 5 is a big gain).
The MLP index was up a relatively modest 1, good enough for a new record, & the REIT index rose almost 5 to the 236s. Junk bond funds were a little higher & Treasuries pulled back as buying went into the stock market. Oil climbed to a 6-week high after manufacturing in the US & Asia expanded in Dec & as concern persisted that further sanctions against Iran may disrupt shipments. Gold also joined in the rally, trying to extend its streak of annual gains to 13.
Photo: Bloomberg
Manufacturing across the globe showed improvement in Dec, suggesting production is weathering strains from the sovereign debt crisis. Purchasing manager indices for the UK, Switzerlamd, China, India & Australia all rose in Dec, while German unemployment fell more than forecasted as exports of cars & machinery rose. In addition, US manufacturing growth accelerated more than forecasted to the fastest pace in 6 months. The factory production data indicate some resilience in the industry while European leaders work to end the debt turmoil that’s threatening to drag the region back into recession. The IMF may cut its 2012 global growth forecast this month after lowering it to 4% in Sep, when it predicted “severe” repercussions if Europe fails to contain its crisis. A manufacturing purchasing managers’ index for India rose to the highest level in 6 months & China, manufacturing rebounded last month from a contraction in Nov. Australian factory production expanded for the first time since Jun, driven by gains in basic metals, transport & publishing. Manufacturing in Singapore rose 6.5% from a year earlier in Q4, after climbing a revised 13.4% in the previous qtr. In Europe, a gauge of Swiss manufacturing rose to 50.7 in Dec from 44.8 in Nov, the first reading above 50, which divides contraction from expansion, since Aug. A UK index rose to 49.6 from a revised 47.7 & a measure of new export orders increased for the first time in 5 months, led by demand from customers in Germany, Eastern Europe & China. All this sounds good, but the debt mess in Europe drags on.
Photo: Yahoo
Construction spending in the US jumped in Nov as builders spent more on single-family homes, apartments & remodeling projects. The Commerce Dept said that spending on construction projects rose 1.2% in Nov, following a revised 0.2% drop in Oct. The increase was the 3rd in 4 months & the largest since a 2.2% rise in Aug. The Nov increase pushed spending to an annual rate of $807.1B, still barely half the $1.5T that is considered healthy & it could be 4 years before construction returns to health levels. Home construction has begun a gradual rebound & likely added to GDP growth in 2011, because apartments are being built almost twice as fast as 2 years ago. For Nov, private residential construction increased 2% to a $522B rate, the 5th consecutive gain. Single-family construction rose 1.5% while multi-family construction including apartments rose 1.3% & the category that covers home remodeling rose 9.5%. Nonresidential construction was unchanged at an annual rate of $243B. Spending on gov projects rose 1.7 % to an annual rate of $285B, following a 1.8% drop in Oct. State & local construction gained 1.3% & federal building activity increased 5.3%. But even with those gains, activity in the gov sector was down 5.3% from a year ago. More favorable data.
Construction Spending in U.S. Climbs 1.2%
All news is not good. Greece's gov warned that it will have to ditch the € if it fails to finalize the details of its 2nd, €130B ($169B) bailout & that more austerity measures may need to be implemented. A key component of the package, which was agreed last Oct, is that Greece has to persuade its creditors to take a 50% reduction on the face value of their holdings of Greek debt. A spokesman said that negotiations in the next 3-4 months with intl debt monitors will "determine everything," including whether Greece escapes a disastrous bankruptcy. Greece is being kept afloat by a first, €110B ($142B) bailout agreed in May 2010. An additional rescue package was agreed in Oct but that deal has yet to be finalized. Sorting out the details of the bailout, which also depends on banks & other big financial firms forgiving Greece a substantial part of its debt, is the main task of the coalition gov headed by former central banker Lucas Papademos, whose short mandate is expected to expire in early Apr. The Greek drama is far from over.
Greece: No Second Bailout, No Euro
Dow wants to make it 4 straight years of gains. The manufacturing data brought out buyers in force but the financial side of the markets is still a bit soggy. For the time being the bulls are happy, taking the average thru the 12.2K ceiling which has held for months. The MLP index gain is less than impressive, although it's good enough to eke out a new record, something few securities can claim.
Dow Jones Industrial Average
The MLP index was up a relatively modest 1, good enough for a new record, & the REIT index rose almost 5 to the 236s. Junk bond funds were a little higher & Treasuries pulled back as buying went into the stock market. Oil climbed to a 6-week high after manufacturing in the US & Asia expanded in Dec & as concern persisted that further sanctions against Iran may disrupt shipments. Gold also joined in the rally, trying to extend its streak of annual gains to 13.
AMZ Alerian MLP Index
DJR Dow Jones Equity REIT Index
Treasury yields:
U.S. 3-month | 0.010% | |
U.S. 2-year | 0.251% | |
U.S. 10-year | 1.954% |
| CLG12.NYM | ...Crude Oil Feb 12 | ...102.80 | ..... 3.97 | (4.0%) |
| GCF12.CMX | ...Gold Jan 12 | .........1,597.90 | ... 32.10 | (2.1%) |
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Manufacturing across the globe showed improvement in Dec, suggesting production is weathering strains from the sovereign debt crisis. Purchasing manager indices for the UK, Switzerlamd, China, India & Australia all rose in Dec, while German unemployment fell more than forecasted as exports of cars & machinery rose. In addition, US manufacturing growth accelerated more than forecasted to the fastest pace in 6 months. The factory production data indicate some resilience in the industry while European leaders work to end the debt turmoil that’s threatening to drag the region back into recession. The IMF may cut its 2012 global growth forecast this month after lowering it to 4% in Sep, when it predicted “severe” repercussions if Europe fails to contain its crisis. A manufacturing purchasing managers’ index for India rose to the highest level in 6 months & China, manufacturing rebounded last month from a contraction in Nov. Australian factory production expanded for the first time since Jun, driven by gains in basic metals, transport & publishing. Manufacturing in Singapore rose 6.5% from a year earlier in Q4, after climbing a revised 13.4% in the previous qtr. In Europe, a gauge of Swiss manufacturing rose to 50.7 in Dec from 44.8 in Nov, the first reading above 50, which divides contraction from expansion, since Aug. A UK index rose to 49.6 from a revised 47.7 & a measure of new export orders increased for the first time in 5 months, led by demand from customers in Germany, Eastern Europe & China. All this sounds good, but the debt mess in Europe drags on.
Construction spending in the US jumped in Nov as builders spent more on single-family homes, apartments & remodeling projects. The Commerce Dept said that spending on construction projects rose 1.2% in Nov, following a revised 0.2% drop in Oct. The increase was the 3rd in 4 months & the largest since a 2.2% rise in Aug. The Nov increase pushed spending to an annual rate of $807.1B, still barely half the $1.5T that is considered healthy & it could be 4 years before construction returns to health levels. Home construction has begun a gradual rebound & likely added to GDP growth in 2011, because apartments are being built almost twice as fast as 2 years ago. For Nov, private residential construction increased 2% to a $522B rate, the 5th consecutive gain. Single-family construction rose 1.5% while multi-family construction including apartments rose 1.3% & the category that covers home remodeling rose 9.5%. Nonresidential construction was unchanged at an annual rate of $243B. Spending on gov projects rose 1.7 % to an annual rate of $285B, following a 1.8% drop in Oct. State & local construction gained 1.3% & federal building activity increased 5.3%. But even with those gains, activity in the gov sector was down 5.3% from a year ago. More favorable data.
Construction Spending in U.S. Climbs 1.2%
All news is not good. Greece's gov warned that it will have to ditch the € if it fails to finalize the details of its 2nd, €130B ($169B) bailout & that more austerity measures may need to be implemented. A key component of the package, which was agreed last Oct, is that Greece has to persuade its creditors to take a 50% reduction on the face value of their holdings of Greek debt. A spokesman said that negotiations in the next 3-4 months with intl debt monitors will "determine everything," including whether Greece escapes a disastrous bankruptcy. Greece is being kept afloat by a first, €110B ($142B) bailout agreed in May 2010. An additional rescue package was agreed in Oct but that deal has yet to be finalized. Sorting out the details of the bailout, which also depends on banks & other big financial firms forgiving Greece a substantial part of its debt, is the main task of the coalition gov headed by former central banker Lucas Papademos, whose short mandate is expected to expire in early Apr. The Greek drama is far from over.
Greece: No Second Bailout, No Euro
Dow wants to make it 4 straight years of gains. The manufacturing data brought out buyers in force but the financial side of the markets is still a bit soggy. For the time being the bulls are happy, taking the average thru the 12.2K ceiling which has held for months. The MLP index gain is less than impressive, although it's good enough to eke out a new record, something few securities can claim.
Dow Jones Industrial Average
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