Thursday, March 29, 2012

Markets fall as gas at the pump reaches 4 year high

Dow dropped 60, decliners over advancers 4-1 & NAZ fell 19 as even Apple (AAPL) dropped from its record high. MLPs continued falling off. The index fell 5+ to the 386s (25 below its recent record highs) & the REIT index dropped 2½ to the 249s. Junk bond funds inched higher & Treasuries gained as the stock market fell. Oil declined as France said govs are moving closer to an agreement on a release of barrels from emergency stockpiles to curb price gains. Gold hardly budged.

JPMorgan Chase Capital XVI (AMJ)

Treasury yields:

U.S. 3-month	0.066%
U.S. 2-year	0.329%
U.S. 10-year	2.153%

CLK12.NYM

...Crude Oil May 12

...104.18

...

1.23

(1.2%)

GCJ12.CMX

....Gold Apr 12

.........1,659.70

...

1.80

(0.1%)

Get the latest daily market update below:

U.S. Jobless Claims Fell Last Week to Lowest Since April 2008

Photo: Bloomberg

The number seeking unemployment benefits dropped last week to the lowest level in 4 years. Applications for unemployment benefits fell 5K to 359K according to the Labor Dept, the fewest since Apr 2008. The 4-week average declined to 365K, the lowest since May 2008. The department made annual revisions to the past 5 years of data, which increased the number of applications in recent months & showed a slower decline. Still, even after revisions, applications have fallen 12% over the past 6 months. Another strong month of hiring is expected in Mar. The number receiving unemployment benefits also fell. More than 7.1M received unemployment aid in the latest week, about 130K lower than the previous week.

Jobless Claims in U.S. Decline to Lowest Since April 2008

Best Buy Profit Tops Estimates as Company Plans 50 Closings

Photo: Bloomberg

Best Buy will close 50 big box locations in the US while it launches 100 new mobile locations as it retools its domestic store format. The Q4 report sharply beat expectations on the bottom line. In Q4, revenue grew 3% to $16.6B while EPS hit $2.47. However expectations were for revenue of $17.15B. Q4 also benefited from an extra week in the company's fiscal calendar (exceeding the week would mean revenue fell 1.1%). Same-store sales declined 2.3% during the period. BBY saw weakness across the board, with sales suffering in gaming, notebooks, digital imaging & TVs. CEO Dunn said the company would vastly alter its strategy from its long time big box format to boost returns. "These changes will also help lower our overall cost structure," Dunn said. "We intend to invest some of these cost savings into offering new and improved customer experiences and competitive prices — which will help drive revenue. And, over time, we expect some of the savings will fall to the bottom line." It's targeting more than $800M in cost savings by 2015, largely expected through layoffs & store closings. The targets are roughly split between corp, retail & declines in costs of goods sold. The company will layoff 400 within its management & support channels (increasing jobless claims). The stock dropped $1.99 (7%).

Best Buy Closing 50 Large Stores After Fourth-Quarter Sales Miss Estimates

Best Buy Co., Inc. (BBY)

Gas at the pump went over $3.91, nearing last year's record & closing in on the $4.11 all time record.

Source: AAA

With a lack of exciting news, markets sold off. Jobless claims numbers are good, but that was expected. The drop in MLPs is sort of leading the market lower (after being a leader on the upside). Dow is down 20 this week & up only 108 in Mar. Of course, too much should not be read into the numbers. We are going into the end of Q1 & all kind of distortions are possible from actions by fund managers.