Monday, April 2, 2012

Higher markets on strong manufacturing data

Dow gained 52, advancers over decliners 3-1 & NAZ jumped 28 propelled by a 19 gain for Apple (AAPL).  Bank stocks rose, taking the Financial index to the 214s, just below its 215 high last week.

The MLP index rose 1+ to the 393s & the REIT index was up 1+ to the 255s, a new yearly high.  Junk bond funds went higher as did Treasuries.  The price of oil is climbing on reports that US factories have cranked into a higher gear, suggesting greater demand for oil.  Gold went up $9, but hasn't done much in Mar.

JPMorgan Chase Capital XVI (AMJ)

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CLK12.NYM...Crude Oil May 12...105.22 ...Up 2.20  (2.1%)

Live 24 hours gold chart [Kitco Inc.]

General Motors will suspend production of the Chevrolet Volt for an extra week this summer as it tries to control the car's inventory.  But GM said sales picked up in Mar to a record of more than 2K, & it may cancel the extra week if sales remain strong.  Most auto factories close for 2 weeks starting in early Jul to get updated for the new model year but GM added a 3rd week at the Volt factory.  The plant was already closed from Mar 19-Apr 23, as the supply of Volts grew on dealer lots.  About 1300 workers at the factory have been idled.  Until Mar, sales of the car were disappointing.  Volts in its inventory at the end of Feb were enough to supply dealers for 154 days (a 60-day supply is considered optimal).  The Volt has a starting price of just under $40K, but it is eligible for a $7500 federal tax credit, as well as other credits in some states.  Auto retail sales for Mar are expected tomorrow.  GM rose 1.11.

GM adds week to Volt plant's usual summer closureAP

General Motors Company (GM)

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Avon Products Inc. Chief Executive Officer Andrea Jung
AVP CEO  Andrea Jung
Photo:   Bloomberg

Coty's offer to buy Avon Products thrust the perfume maker into the spotlight.  The $10B bid, rejected by AVP, could be raised, Coty said.  It has the backing of Germany's Benckiser group & Warren Buffett's favorite banker in its bid for the world's largest direct seller of cosmetics.  Its $800M purchase of Unilever's fragrance unit in 2005 made Coty the largest maker of perfumes & colognes in the world, giving it the licenses for prestige perfume brands such as Calvin Klein.  Coty offered $23.25 per share for AVP which was swiftly rejected.  AVP continues to search for a new CEO & deal with issues including US gov investigations into possible bribery in China & elsewhere.  AVP stockholders liked the news & the stock jumped 3.34 to 22.70 (17%).

Avon rejects $10 billion takeover bid from CotyReuter

Avon Products, Inc. (AVP)

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The price of gas at the pump is almost $3.93 & headed to top the record $4.11 reached in 2008.

National Unleaded Average
Current Avg.$3.925$4.068$4.197$4.164$3.366$4.429
Yesterday Avg.$3.925$4.066$4.197$4.164$3.367$4.431
Week Ago Avg. $3.897$4.043$4.173$4.159$3.304$4.348
Month Ago Avg. $3.757$3.899$4.032$4.071$3.205$4.218
Year Ago Avg. $3.645$3.782$3.912$3.978$3.074$4.045

source:    AAA

Buyers returned at lunchtime to bid up the markets.  Late Fri, Groupon (GRPN), which went public last year, said it needed to slash its Q4 revenue outlook & raised its net loss view due to higher-than-expected refunds.  The stock plunged $3.11 (17%), but that did not disturb the markets.  Auto sales tomorrow should be more of the same fairly good news & the jobs report on Fri could be a plus for the markets.  However, the absolute number will be less important than whether it beats the estimates which are optimistic.  With return of the bulls, markets should have a good week.  But the high price of gas is a dark cloud moving over the stock  market.

Dow Industrials

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