After starting higher, Dow lost 29 with decliners 3-2 over advancers & NAZ slipped 5. The MLP index fell 1 to the 407s & the REIT index was down 1 to 243. Junk bond funds continue strong on greater demand for high yields while Treasuries slipped. Oil was little changed & gold ran into selling.
The economy grew more than forecast in Q4 as companies rebuilt inventories in anticipation of growing demand. GDP grew at a revised 3% annual rate (above the 2.8% forecasted gain), the most since Q2 2010 according to the Commerce Dept. The revision reflected fewer imports & a smaller drop in non-residential investment.
Photo: Yahoo
The uneven economic recovery will have to pick up in order to quickly bring down an unacceptably high jobless rate, Ben Bernanke said. "The job market is far from normal," he said to the House of Representatives Financial Services committee. Bernanke's remarks suggested another round of Federal Reserve (FED) bond buying to stimulate growth is not off the table. The drop in the unemployment rate, which fell to 8.3% in Jan, is more rapid than would be expected given the economy's sluggish rate of growth, Bernanke said. "Continued improvement in the job market is likely to require stronger growth in final demand and production," he added. Sustaining a highly accommodative monetary policy stance is consistent with the FED's goals of achieving full employment with low & steady inflation, he said & the FED believes rates near zero will be appropriate through at least late 2014. A recent rise in oil prices due to geopolitical tensions may raise inflation for a time & curb consumption, Bernanke said. "Gasoline prices have moved up ... a development that is likely to push up inflation temporarily while reducing consumers' purchasing power," he said. At its last policy-setting meeting in late Jan, the FED said it isn't likely to raise benchmark interest rates, which have hovered near zero for 3 years, until at least late 2014.
Photo: Bloomberg
The ECB handed out €529B ($712B) in low-interest loans to banks in the 2nd round of a massive credit infusion that has helped ease the eurozone debt crisis. The volume of loans was higher than the €489B ($657B) handed out to 523 banks at the first offering 2 months ago. This time 800 banks took the money after ECB assured that there was "no stigma" associated with tapping the offering. The ECB loans, given against collateral such as bonds or other securities (code name for junky loans), cost banks the average of the ECB's benchmark rate over the life of the loan (1% presently). The first round of loans helped relieve the pressure on hard-pressed govs such as Spain & Italy, which had been struggling. Banks used the ECB loans to buy gov debt they previously wouldn't have touched because of the debt's high yield. It's believed that the 2nd credit offer was unlikely to provide much more relief to gov.
Banks in Europe Tap ECB for More Three-Year Cash Than Economists Estimated
Markets are heading for the best Feb in 14 years, although a gain of 320 for the Dow only gets a grade of C. Dow & S&P 500 went above technical barriers which has been greeted with yawns. NAZ inched over 3K, but still has a long way to go to top its 5K record made 12 years ago. Markets have had a spectacular run over 5 months & seem to be tired. They're entitled. For the time being, the European debt mess & rising gas prices are dark clouds which are not going away soon.
JPMorgan Chase Capital XVI (AMJ)
Treasury yields:
U.S. 3-month | 0.086% | |
U.S. 2-year | 0.297% | |
U.S. 10-year | 1.976% |
| CLJ12.NYM | .....Crude Oil Apr 12 | ...106.83 | .... 0.28 | (0.3%) |
| GCH12.CMX | ...Gold Mar 12 | .......1,770.80 | ... 16.20 | (0.9%) |
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The economy grew more than forecast in Q4 as companies rebuilt inventories in anticipation of growing demand. GDP grew at a revised 3% annual rate (above the 2.8% forecasted gain), the most since Q2 2010 according to the Commerce Dept. The revision reflected fewer imports & a smaller drop in non-residential investment.
The uneven economic recovery will have to pick up in order to quickly bring down an unacceptably high jobless rate, Ben Bernanke said. "The job market is far from normal," he said to the House of Representatives Financial Services committee. Bernanke's remarks suggested another round of Federal Reserve (FED) bond buying to stimulate growth is not off the table. The drop in the unemployment rate, which fell to 8.3% in Jan, is more rapid than would be expected given the economy's sluggish rate of growth, Bernanke said. "Continued improvement in the job market is likely to require stronger growth in final demand and production," he added. Sustaining a highly accommodative monetary policy stance is consistent with the FED's goals of achieving full employment with low & steady inflation, he said & the FED believes rates near zero will be appropriate through at least late 2014. A recent rise in oil prices due to geopolitical tensions may raise inflation for a time & curb consumption, Bernanke said. "Gasoline prices have moved up ... a development that is likely to push up inflation temporarily while reducing consumers' purchasing power," he said. At its last policy-setting meeting in late Jan, the FED said it isn't likely to raise benchmark interest rates, which have hovered near zero for 3 years, until at least late 2014.
The ECB handed out €529B ($712B) in low-interest loans to banks in the 2nd round of a massive credit infusion that has helped ease the eurozone debt crisis. The volume of loans was higher than the €489B ($657B) handed out to 523 banks at the first offering 2 months ago. This time 800 banks took the money after ECB assured that there was "no stigma" associated with tapping the offering. The ECB loans, given against collateral such as bonds or other securities (code name for junky loans), cost banks the average of the ECB's benchmark rate over the life of the loan (1% presently). The first round of loans helped relieve the pressure on hard-pressed govs such as Spain & Italy, which had been struggling. Banks used the ECB loans to buy gov debt they previously wouldn't have touched because of the debt's high yield. It's believed that the 2nd credit offer was unlikely to provide much more relief to gov.
Banks in Europe Tap ECB for More Three-Year Cash Than Economists Estimated
Markets are heading for the best Feb in 14 years, although a gain of 320 for the Dow only gets a grade of C. Dow & S&P 500 went above technical barriers which has been greeted with yawns. NAZ inched over 3K, but still has a long way to go to top its 5K record made 12 years ago. Markets have had a spectacular run over 5 months & seem to be tired. They're entitled. For the time being, the European debt mess & rising gas prices are dark clouds which are not going away soon.
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