Thursday, February 16, 2012

Markets fluctuate on Greek aid delay

Dow edged up 55, advancers ahead of decliners 3-2 & NAZ was up 10.  The Financial Index fell a fraction to the 193s (down 6 from recent highs) on nevousness about Greek debts.  MLPs conitnue strong, taking the index up a fraction to a new record at 404 while the REIT index lost 1.  Junk bond funds were mixed & Treasuries sold off.  Oil fell from a 5 week high as European leaders pushed back a bailout for Greece, heightening concern that the region’s debt crisis will damage economic growth & curtail fuel consumption.  Gold also took a tumble.

JPMorgan Chase Capital XVI (AMJ)

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Treasury yields:


U.S. 3-month      0.097%

U.S. 2-year          0.274% 

U.S. 10-year        1.945%


CLH12.NYM Crude Oil Mar 12   101.65       0.15 (0.2%)
GCG12.CMX Gold Feb 12      1,710.70      15.60 (0.9%)



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Claims for unemployment benefits unexpectedly fell to a near 4-year low.  Initial claims dropped 13K to 348K according to the Labor Dept, the lowest since Mar 2008.  The prior week's figure was revised up to 361K from the previously reported 358K.  The forecast was for 365K.  The 4 week moving average fell 2K to 365K.  The drop pushed claims below the 350K level that is associated with sustained strength in the labor market.  New jobless claims have declined for 3 straight weeks.  But considerable slack still remains, with 23.8M either out of work or underemployed.  There are no job openings for nearly 3 out of every 4 unemployed.  The number still receiving benefits under state programs tumbled 100K to 3.43M, the lowest level since Aug 2008 (a month prior to the Lehman collapse).  Improving numbers are welcome.

Jobless Claims in U.S. Unexpectedly Decrease to Four-Year Low


Construction on single-family homes cooled off slightly in Jan after surging in the final month last year.  But a rebound in volatile apartment construction kept builders busy & pushed housing starts to their highest level in more than 3 years.  The Commerce Dept said that builders broke ground on an adjusted annual rate of 699K homes in Jan, up 1.5% from Dec & the highest level since Oct 2008.   Construction began on 508K single-family homes (annualized) last month, a 1% drop from Dec & the first decline in 4 months.  Apartment building jumped 14.4% & building permits, a gauge of future construction, rose 0.7%.  Single-family home construction rose in each of the final 3 months of last year, bringing the pace of those starts to the highest level since Apr 2010.  Modest but steady gains helped boost confidence among builders after the worst year for single-family home construction on record.  However the current pace is less than half the rate in which those homes went up during the 1990s & is only 1/4 of the 1.82M single-family homes that builders started in Jan 2006, at the peak of the housing boom.  A negative is the number of homes hit with a notice of default, auction sale, bank repossession etc. in Jan rose 3% from Dec, but it was still significantly lower than in the prior year.  Housing still needs a lot of help.

Housing Starts in U.S. Rise Above Forecasts


General Motors earned its largest profit ever in 2011, just 2 years after it nearly collapsed into financial ruin.   Strong sales in the US & China helped it turn a profit of $7.6B, beating its old record of $6.7B in 1997 when it was a vastly different company.  But problems surfaced in its latest results. GM lost $700M pre tax in Europe & its South American operations lost $100M.  Also, sales growth slowed in the US in Q4.  The gov still owns 26.5% of the stock & is waiting for the share price to rise before selling in an effort to recoup the bailout money.  Last year, GM made the bulk of its income in North America, where its pretax profit totaled $7.2B.  Intl Operations, which includes Asia, made $1.9B before taxes, but that was down.   In 2011, global sales rose 7.6% to 9M vehicles to help it reclaim the title of world's largest automaker from Toyota (TM).   "We will build on these results as we bring more new cars, crossovers and trucks to market," CEO Daniel Akerson said.  EPS for 2011 was $4.58, up 62% higher than a year earlier.  Full-year revenue rose 11% to $150B.  Stockholders liked the news & the stock jumped 99¢.

GM Earns Record $9.19B Profit; Opel Posts Loss

General Motors Company (GM)

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Apple (AAPL) continued selling off, down 7 to 490.  I don't follow it closely, but with the largest market cap, any selling can be significant for the overall markets.  Markets should twiddle their thumbs while they wait for more news about bailout II.  I'm still surprised that the nervousness related to Greek debts is not causing more selling.  Bulls would say that shows a sign of strength.

Dow Industrials

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