Dow rose 96 (closing at its highs), advancers over decliners only 5-4 & NAZ slipped 1 despite good tech earnings. Bank stocks gained, taking the Financial Index over 190, to a new 3 month high.
The MLP index rose 2 to 395 (just short or its record high) while the REIT index was up a fraction in the 239s. Junk bond funds were also higher but Treasuries fell, taking the yield on the 10 year Treasury back over 2%. Oil declined for a 3rd day as Chinese manufacturing contracted & on worries about resolving Greece’s debt crisis. Those same worries brought out buyers for gold, up $10.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Portugal put into effect ambitious labor market reforms this week & carried out its biggest debt sale since seeking a €78B bailout, but the challenges for the 2nd-most risky country in Europe may be shifting up a gear. Undermining the glow of its achievements is the rapidly rising market concern that Portugal is the next potential candidate to default in the euro zone (after Greece). The concerns were clear this week as Portugal's bond yields rose virtually without interruption, to all-time highs, despite the issuance of €2½B of short-term bills on Wed at slightly lower yields. The 10-year yields rose to almost 15% on Thur & fell back only modestly on Fri. 5 year credit default swap prices implied the market was pricing in a 67% chance of a default The sharp rise in bond yields was partially triggered by the S&P downgrades of European countries last week, which left Portugal as the 2nd euro zone country to be rated "junk" (along with Greece). The key problem for Portugal is whether it has enough time to restructure its economy to grow as it enacts harsh austerity measures & faces the worst recession in decades.
Microsoft (MSFT), Intel (INTC) & IBM (IBM), all Dow socks, issued results that topped estimates. Office software from MSFT helped profits exceed projections last qtr, even as sales of Windows suffered from sluggish PC business. INTC & IBM delivered rosier sales forecasts than predicted. These reports may have allayed concerns that a slowdown in Europe, anemic consumer demand and floods in Thailand would hobble their industry. Corp customers haven’t let up on orders, lifting sales at all 3 companies, while INTC is getting an extra boost from emergng markets. Sales at MSFT business division rose 2.8% to $6.28B, beaing the estimate of $6.1B. Its Xbox video-game business also topped projections, generating $4.24B in revenue. EPS was 78¢ ahead of the 76¢ estimate. IBM, the biggest provider of computer services, reported Q4 EPS of $4.71, ahead of the the $4.62 forecast & it forecast for 2012 earnings also exceeded expectations. INTC expects sales of $12.8B, indicating that production is bouncing back after the Thai flooding. But tech companies still face long-term challenges: higher gas prices & increase in the price of raw materials. Corp buyers are showing more resiliency than consumers. MSFT was up 1.58. IBM 8.02 & INTC 77¢.
Technology’s Stalwarts Exceed Analysts’ Estimates While Google Disappoints
Talks are ongoing in Greece to come up with a debt deal so it can get another bailout. Nobody can forecast anything because talks are fluid, they change every few minutes. At least 75% of the debt owners will have to agree to haircuts on their investments of 60-75% & accept lower rates on the new debt. Some of the debt holders are banks which may have thier own problems if their bond investments are written down. Even if Greece muddles thru this mess, they are not out of the woods. And Portugal is next in line. Dow is getting near 11.8K high reached 6 months ago. Obviously, crashing thru it is what the bulls want to see. Buying at the close mist have been based on negotiations going better in Greece. However, they remain fluid.
The MLP index rose 2 to 395 (just short or its record high) while the REIT index was up a fraction in the 239s. Junk bond funds were also higher but Treasuries fell, taking the yield on the 10 year Treasury back over 2%. Oil declined for a 3rd day as Chinese manufacturing contracted & on worries about resolving Greece’s debt crisis. Those same worries brought out buyers for gold, up $10.
JPMorgan Chase Capital XVI (AMJ)
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Treasury yields:
U.S. 3-month | 0.041% | |
U.S. 2-year | 0.238% | |
U.S. 10-year | 2.026% |
| CLG12.NYM | ...Crude Oil Feb 12 | ...98.20 | ... 2.19 | (2.2%) |
Portugal put into effect ambitious labor market reforms this week & carried out its biggest debt sale since seeking a €78B bailout, but the challenges for the 2nd-most risky country in Europe may be shifting up a gear. Undermining the glow of its achievements is the rapidly rising market concern that Portugal is the next potential candidate to default in the euro zone (after Greece). The concerns were clear this week as Portugal's bond yields rose virtually without interruption, to all-time highs, despite the issuance of €2½B of short-term bills on Wed at slightly lower yields. The 10-year yields rose to almost 15% on Thur & fell back only modestly on Fri. 5 year credit default swap prices implied the market was pricing in a 67% chance of a default The sharp rise in bond yields was partially triggered by the S&P downgrades of European countries last week, which left Portugal as the 2nd euro zone country to be rated "junk" (along with Greece). The key problem for Portugal is whether it has enough time to restructure its economy to grow as it enacts harsh austerity measures & faces the worst recession in decades.
Microsoft (MSFT), Intel (INTC) & IBM (IBM), all Dow socks, issued results that topped estimates. Office software from MSFT helped profits exceed projections last qtr, even as sales of Windows suffered from sluggish PC business. INTC & IBM delivered rosier sales forecasts than predicted. These reports may have allayed concerns that a slowdown in Europe, anemic consumer demand and floods in Thailand would hobble their industry. Corp customers haven’t let up on orders, lifting sales at all 3 companies, while INTC is getting an extra boost from emergng markets. Sales at MSFT business division rose 2.8% to $6.28B, beaing the estimate of $6.1B. Its Xbox video-game business also topped projections, generating $4.24B in revenue. EPS was 78¢ ahead of the 76¢ estimate. IBM, the biggest provider of computer services, reported Q4 EPS of $4.71, ahead of the the $4.62 forecast & it forecast for 2012 earnings also exceeded expectations. INTC expects sales of $12.8B, indicating that production is bouncing back after the Thai flooding. But tech companies still face long-term challenges: higher gas prices & increase in the price of raw materials. Corp buyers are showing more resiliency than consumers. MSFT was up 1.58. IBM 8.02 & INTC 77¢.
Technology’s Stalwarts Exceed Analysts’ Estimates While Google Disappoints
Microsoft Corporation (MSFT)
International Business Machines Corporation (IBM)
Intel Corporation (INTC)
Talks are ongoing in Greece to come up with a debt deal so it can get another bailout. Nobody can forecast anything because talks are fluid, they change every few minutes. At least 75% of the debt owners will have to agree to haircuts on their investments of 60-75% & accept lower rates on the new debt. Some of the debt holders are banks which may have thier own problems if their bond investments are written down. Even if Greece muddles thru this mess, they are not out of the woods. And Portugal is next in line. Dow is getting near 11.8K high reached 6 months ago. Obviously, crashing thru it is what the bulls want to see. Buying at the close mist have been based on negotiations going better in Greece. However, they remain fluid.
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