Dow rose 43, decliners slightly ahead of advancers & NAZ fell 8. Bank stocks are digesting recent gains with the Financial Index at 3 month highs.
The MLP & REIT indices were fractionally changed while junk bond funds gained ground. Treasuries slipped, money that went into stocks. Oil fell below $100 & gold was flattish.
Photo: Bloomberg
Greece was closing in on a deal with private bond holders that would prevent it from tumbling into a chaotic default. Private bondholders would most likely incur a real loss of 65-70%, with the new bonds having a 30-year maturity & offering a progressive coupon, or interest rate, averaging out at 4%. Greece is fast running out of time as it pushes to wrap up an agreement by Mon paving the way for a fresh injection of aid before €14½B ($18½B) of bond repayments fall due in Mar. They are hoping to get a pre-agreement tonight, but technical discussions with the lawyers will likely continue into next week. After a breakdown in talks last week over the coupon on the new bonds, talks were resumed on Thur. In a carefully choreographed series of meetings, senior euro zone finance ministers will hold a conference call & Prime Minister Papademos will meet chief EU, IMF & ECB inspectors before resuming talks. The stakes could not be higher. Greece needs to have a deal before funds are disbursed from a €130B rescue plan that lenders, the EU & the IMF, drew up in Oct. They probably will come up with a deal, but who knows what it really accomplishes?
Greece Pushes Toward Debt-Swap Deal With Private Creditors
Photo: Yahoo
Q4 earnings fell 18% as revenue declined after it sold its stake in NBC. Revenue of nearly $38B was lower than expected. EPS was 35¢, compared with 42¢ last year. Revenue fell 8%, largely due to the sale of its majority stake in NBC Universal to Comcast (CMCSA) last year. But GE also saw slower growth in Europe, & its ongoing effort to make its GE Capital financing arm more efficient reduced its revenue by 9% (GE Capital is its 2nd-largest group). Excluding discontinued businesses & certain pension costs, EPS was 39¢, topped forecasts of 38¢. But revenue fell below the $40.05B estimate. GE said infrastructure orders rose 15% in Q4, leaving it with its biggest-ever order backlog of $200B. For 2011, EPS was $1.23, up 22% compared with $1.06 in 2010. It expects to post double-digit earnings growth this year over last in its industrial & capital segments, but it still expects to see continued economic volatility. The stock fell 26¢.
GE Earnings Rise as Sales Miss Estimate
Photo: Bloomberg
Previously owned home sales rose for a 3rd month in Dec to the highest level since Jan 2011 Purchases increased 5% to a 4.6M annual rate according to the National Association of Realtors, but was less than the 4.65M forecast. The gain helped push down the inventory of homes for sale last month to the lowest level since 2005. Purchases in 2011 climbed 1.7% from a year earlier as prices fell. Low mortgage rates & a pickup in employment may be giving buyers confidence to purchase homes that have fallen in value. However, another wave of foreclosures may inhibit a faster recovery in real estate as more distressed properties come to market.
U.S. Home Sales Rise 5% in December
More biggies reported earnings. Dow stock, Microsoft (MSFT) & Intel (INTC) reports were greeted with stock rises. But GOOG revenue & profits were short of estimates, taking the high priced stock down $50. Consumers remain hurt because of unemployment problems & weak confidence. Stocks are having their best Jan for 25 years, but there's really not all that much behind the gains. Even with a bailout II for Greece, European debt issues are not going away. Instead, there is the potential for the next disaster. Pick your country, there are plenty to choose from. The US economy is doing OK, even though the recovery can not be considered robust. For the time being, bulls remain in charge.
S&P 500 Financials Sector Index
| Value | 189.27 | |
| Change | -0.15 (-0.1%) |
The MLP & REIT indices were fractionally changed while junk bond funds gained ground. Treasuries slipped, money that went into stocks. Oil fell below $100 & gold was flattish.
JPMorgan Chase Capital XVI (AMJ)
Treasury yields:
U.S. 3-month | 0.041% | |
U.S. 2-year | 0.238% | |
U.S. 10-year | 2.023% |
| CLG12.NYM | ...Crude Oil Feb 12 | ...98.42 | ... 1.97 | (2.0%) |
| GCF12.CMX | ...Gold Jan 12 | .......1,652.80 | .... 1.30 | (0.1%) |
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Greece was closing in on a deal with private bond holders that would prevent it from tumbling into a chaotic default. Private bondholders would most likely incur a real loss of 65-70%, with the new bonds having a 30-year maturity & offering a progressive coupon, or interest rate, averaging out at 4%. Greece is fast running out of time as it pushes to wrap up an agreement by Mon paving the way for a fresh injection of aid before €14½B ($18½B) of bond repayments fall due in Mar. They are hoping to get a pre-agreement tonight, but technical discussions with the lawyers will likely continue into next week. After a breakdown in talks last week over the coupon on the new bonds, talks were resumed on Thur. In a carefully choreographed series of meetings, senior euro zone finance ministers will hold a conference call & Prime Minister Papademos will meet chief EU, IMF & ECB inspectors before resuming talks. The stakes could not be higher. Greece needs to have a deal before funds are disbursed from a €130B rescue plan that lenders, the EU & the IMF, drew up in Oct. They probably will come up with a deal, but who knows what it really accomplishes?
Greece Pushes Toward Debt-Swap Deal With Private Creditors
Q4 earnings fell 18% as revenue declined after it sold its stake in NBC. Revenue of nearly $38B was lower than expected. EPS was 35¢, compared with 42¢ last year. Revenue fell 8%, largely due to the sale of its majority stake in NBC Universal to Comcast (CMCSA) last year. But GE also saw slower growth in Europe, & its ongoing effort to make its GE Capital financing arm more efficient reduced its revenue by 9% (GE Capital is its 2nd-largest group). Excluding discontinued businesses & certain pension costs, EPS was 39¢, topped forecasts of 38¢. But revenue fell below the $40.05B estimate. GE said infrastructure orders rose 15% in Q4, leaving it with its biggest-ever order backlog of $200B. For 2011, EPS was $1.23, up 22% compared with $1.06 in 2010. It expects to post double-digit earnings growth this year over last in its industrial & capital segments, but it still expects to see continued economic volatility. The stock fell 26¢.
GE Earnings Rise as Sales Miss Estimate
General Electric Company (GE)
Previously owned home sales rose for a 3rd month in Dec to the highest level since Jan 2011 Purchases increased 5% to a 4.6M annual rate according to the National Association of Realtors, but was less than the 4.65M forecast. The gain helped push down the inventory of homes for sale last month to the lowest level since 2005. Purchases in 2011 climbed 1.7% from a year earlier as prices fell. Low mortgage rates & a pickup in employment may be giving buyers confidence to purchase homes that have fallen in value. However, another wave of foreclosures may inhibit a faster recovery in real estate as more distressed properties come to market.
U.S. Home Sales Rise 5% in December
More biggies reported earnings. Dow stock, Microsoft (MSFT) & Intel (INTC) reports were greeted with stock rises. But GOOG revenue & profits were short of estimates, taking the high priced stock down $50. Consumers remain hurt because of unemployment problems & weak confidence. Stocks are having their best Jan for 25 years, but there's really not all that much behind the gains. Even with a bailout II for Greece, European debt issues are not going away. Instead, there is the potential for the next disaster. Pick your country, there are plenty to choose from. The US economy is doing OK, even though the recovery can not be considered robust. For the time being, bulls remain in charge.
Dow Industrials
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