Monday, March 12, 2012

Markers waver as bull market enters its fourth year

Dow added 12, decliners over advancers 3-2 & NAZ fell 14.  The Financial Index was down 1½ to the 198s & has stalled under 200 for more than a month.  The MLP index was off 1 to 404 & the REIT index was up a fraction to the 245s.  Junk bond funds were mixed & Treasuries rose.  Oil fell from the highest price in more than a week after exports grew more slowly than forecast in China, the world’s 2nd-largest crude consumer.  Gold dropped for the first time in 4 sessions on concern that a slowdown in China may crimp demand for raw materials.

JPMorgan Chase Capital XVI (AMJ)

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CLJ12.NYM....Crude Oil Apr 12...105.65 .......Down 1.75  (1.6%)

GCH12.CMX...Gold Mar 12.........1,696.00 ...Down 14.90  (0.9%)

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  • <p>               Greeces' Finance Minister Evangelos Venizelos, speaks  during a conference of PASOK socialist party at Faliro near Athens, Saturday, March 10, 2012. Greece's private creditors agreed Friday to take cents on the euro in the biggest debt writedown in history, paving the way for an enormous second bailout for the country to keep Europe's economy from being dragged further into chaos. (AP Photo/Kostas Tsironis)
Greek Finance Minister Venizelos
Photo:   Yahoo

Greece is set to swap bonds issued under Greek law with new ones worth less than half their original value, hoping that its 2nd bailout will be finalized later when the finance ministers from the 17 eurozone nations meet in Brussels.  Securing the writedown was one of the most important conditions before funds from the €130B ($172B) bailout could be released.  The bond swap plan got the support of 83.5% of private investors, even though the deal will see them face real losses of more than 70%.  Of the investors holding the €177B in bonds governed by Greek law, 85.8% accepted & the deadline for foreign-law bonds has been extended to Mar 23.  As well as being integral to the release of the 2nd bailout, the bond swap is considered essential to getting Greece's public finances back on track (although detractors think that it won't be enough).  Its budget still needs to be balanced.

Greece Poised for Bond Swap and Bailout Approval

The national average price for a gallon of gasoline rose above $3.80, resuming its advance.  The average price rose 0.9¢ yesterday, according to AAA.  This was the 3rd straight advance, with prices gaining 3.4¢ over the weekend.  The nationwide average was $3.51 a gallon a month ago & $3.77 a week ago.  Last year, the average price stood at $3.56.  It's down 31.3¢, 7.6%, from the record high of $4.11 on Jul 17, 2008.  Gas averages more than $4 a gallon in Alaska, California, Hawaii & Illinois & prices are within a nickel of $4in Connecticut, DC, Michigan, Oregon, New York & Washington.  Wyoming has the nation's lowest gas prices, averaging slightly above $3.30 a gallon.

Gas Prices Top $3.80 a Gallon

National Unleaded Average
Regular Mid Premium Diesel 85 **E85
Current Avg. $3.801 $3.950 $4.080 $4.110 $3.234 $4.256
Yesterday Avg. $3.792 $3.937 $4.069 $4.104 $3.230 $4.250
Week Ago Avg. $3.767 $3.915 $4.046 $4.083 $3.201 $4.213
Month Ago Avg. $3.506 $3.631 $3.764 $3.919 $3.101 $4.081
Year Ago Avg. $3.557 $3.693 $3.823 $3.925 $3.007 $3.957

PepsiCo, a Dividend Aristocrat, may be looking for a potential successor to CEO Indra Nooyi as it brought back a former executive to head its biggest moneymaking unit & named an insider to the newly created role of president.  Brian Cornell, who was president & CEO of Sam's Club at Wal-Mart Stores, was named CEO of PepsiCo Americas Foods (Frito-Lay, Quaker foods & the snacks businesses).  He takes over from John Compton, who was named president & will oversee the soda & snack global operations & marketing.  Cornell previously held management positions at PEP, including president of its Tropicana brand & its Europe & Africa beverage businesses, before leaving in 2004. This change comes as PEP, the #2 US cola company, has lost ground in recent years & faced speculation that Nooyi would step down amid investor dissatisfaction.  PEP said it plans to focus on regaining market share in North America by rolling out new products & significantly boosting ad spending.  The company will also cut 9K jobs (3% of the work force).  The stock has a drab chart in what has been a rising market, but gained 64¢ today.

PepsiCo lining up potential successors to Nooyi AP

Pepsico, Inc. (PEP)

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Even though the bull market has begin its 4th year &, it's not celebrating.  Markets continue to meander, not knowing what to do next.  The Greek debt mess is winding down for the time being.  The biggies have a meeting in Brussels, not sure what that will accomplish.  Rising gas prices will continue to be a drag on the markets.  Dow is stuck in neutral after its long run from last  fall.  It looks like buyers are giving up.

Dow Industrials

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