Stocks were under water all day on growing tensions over European debts. Dow lost 55, decliners over advancers barely ahead of decliners & NAZ rose 4. The Financial Index lost 1.
The Alerian MLP index was hit with profit taking, falling 2½ to the 394s & the REIT index was off fractionally. Junk bond funds were mixed but Treasuries rose on more nervousness about the credit mess in Europe. Oil marked time, awaiting developments around the Strait of Hormuz & gold was also little changed (although up 4% in the first week of 2012).
ALERIAN MLP Index
DJ REIT INDEXDJR
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
In 2011, the economy added 1.64M jobs, far more than the 940K created in the prior year. Hiring accelerated enough last year to make 2011 the strongest year for hiring, by far, since 2006. For 2012, there are predictions that nearly 2M jobs will be added. Yet so deep were the jobs lost during the recession & for months afterward that it will take years to recoup all the losses. The recession began in Dec 2007 & the economy began losing jobs consistently starting in Feb 2008. Over the next 25 months, employers slashed nearly 8.7M jobs. In the worst month, Jan 2009, a net 820K jobs vanished. The recession officially ended in Jun 2009. But the US still has 6M fewer jobs than when the recession began. Annual job growth is shown below:
2011 1.6M
2010 0.9M
2009 -5.0M
2008 -3.6M
2007 1,1M
2006 2,1M
US job growth for the past 6 years, at a glance AP
The Alerian MLP index was hit with profit taking, falling 2½ to the 394s & the REIT index was off fractionally. Junk bond funds were mixed but Treasuries rose on more nervousness about the credit mess in Europe. Oil marked time, awaiting developments around the Strait of Hormuz & gold was also little changed (although up 4% in the first week of 2012).
ALERIAN MLP Index
DJ REIT INDEXDJR
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Treasury yields:
U.S. 3-month | 0.010% | |
U.S. 2-year | 0.256% | |
U.S. 10-year | 1.961% |
| CLG12.NYM | ...Crude Oil Feb 12 | ...101.53 | ... 0.28 | (0.3%) |
In 2011, the economy added 1.64M jobs, far more than the 940K created in the prior year. Hiring accelerated enough last year to make 2011 the strongest year for hiring, by far, since 2006. For 2012, there are predictions that nearly 2M jobs will be added. Yet so deep were the jobs lost during the recession & for months afterward that it will take years to recoup all the losses. The recession began in Dec 2007 & the economy began losing jobs consistently starting in Feb 2008. Over the next 25 months, employers slashed nearly 8.7M jobs. In the worst month, Jan 2009, a net 820K jobs vanished. The recession officially ended in Jun 2009. But the US still has 6M fewer jobs than when the recession began. Annual job growth is shown below:
2011 1.6M
2010 0.9M
2009 -5.0M
2008 -3.6M
2007 1,1M
2006 2,1M
US job growth for the past 6 years, at a glance AP
Best Buy reported a same-store sales drop in Dec that was in line with estimates & repeated its forecast for profit this year. Sales at stores open at least 14 months fell 1.2% while total revenue was $8.4B, about the same as last year. BBY stepped up holiday discounts to keep customers from going to the competition. Its share of the US television market increased & improved its showing online, with internet sales gaining 26%. CEO Dunn said Dec results were lower than expectations, with customer traffic trailing projections until the week before Christmas. The company reiterated its forecast that EPS for 2012 would be $3.35-$3.65 & estimates by analysts are for $3.40. The stock liked the news & rose 78¢.
Best Buy Repeats Profit Forecast After December Store Sales Show Stability
Fitch downgraded Hungary's credit rating to junk status, citing a standoff between the gov & intl lenders like the IMF & the EU over possible rescue loans. Fitch kept a negative outlook on Hungary, indicating a more than a 50% chance for another downgrade within 2 years. The move followed similar action from Moody's & S&P. Hungary's shaky finances have been battered this entire week. Its currency fell to all-time lows during 2 consecutive days & the gov suffered through a rough bond auction in which the interest rates it had to paid to borrow jumped more than 2 percentage points in just a few weeks. Investors are deeply unsure about the gov's economic policies & whether it can agree upon a rescue loan with the IMF. Fitch Ratings' decision to cut Hungary's credit rating one notch, to BB+ from BBB-, triggered partly "by further unorthodox economic policies which are undermining investor confidence and complicating the agreement of a new IMF-EU deal." A gov spokesman said the downgrade was "surprising" considering gov statements confirming the country's intention to soon reach an agreement with the IMF. While not a large country, this is another debt mess that the Euro powers have to deal with. Not good.
Fitch downgrades Hungary to junk status AP
Best Buy Repeats Profit Forecast After December Store Sales Show Stability
Best Buy Co., Inc. (BBY)
Fitch downgraded Hungary's credit rating to junk status, citing a standoff between the gov & intl lenders like the IMF & the EU over possible rescue loans. Fitch kept a negative outlook on Hungary, indicating a more than a 50% chance for another downgrade within 2 years. The move followed similar action from Moody's & S&P. Hungary's shaky finances have been battered this entire week. Its currency fell to all-time lows during 2 consecutive days & the gov suffered through a rough bond auction in which the interest rates it had to paid to borrow jumped more than 2 percentage points in just a few weeks. Investors are deeply unsure about the gov's economic policies & whether it can agree upon a rescue loan with the IMF. Fitch Ratings' decision to cut Hungary's credit rating one notch, to BB+ from BBB-, triggered partly "by further unorthodox economic policies which are undermining investor confidence and complicating the agreement of a new IMF-EU deal." A gov spokesman said the downgrade was "surprising" considering gov statements confirming the country's intention to soon reach an agreement with the IMF. While not a large country, this is another debt mess that the Euro powers have to deal with. Not good.
Fitch downgrades Hungary to junk status AP
The increase in Dec retail sales came at a price, lower margins. After reporting good sales gains, retailers are reducing Q4 forecasts guidance for profits because of heavy discounting. Especially hard hit were stores that cater to middle-income shoppers. That's not my idea of a strong recovery. Mon after the close, Alcoa (AA), the first Dow stock to report, is expected to report earnings of a penny (maybe a loss). The Euro debt mess keeps going from bad to worse. Dow was up 140 in the first week of trading this year, but that was all due to the big rally on Tues. This may be another tough month for the markets.
Dow Industrials
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