Buying in the PM reduced earlier losses. Dow finished down 102 (80 above the lows), decliners ahead of advancers 3-1 & NAZ was off 30. Banks stocks were weak, taking the Financial Index down 1+ to below 203. After AM weakness, the MLP index edged up a fraction to 395 but the REIT index lost 3+ to 252. Junk bond funds inched higher & Treasuries rose taking the yield on the 10 year Treasury back down to 1.93%. Oil declined as manufacturing shrank in China & the euro area, bolstering concern that fuel consumption will diminish. Gold found buying strength in the PM, limiting its loss to only $13.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Wal-Mart, a Dow stock & Dividend Aristocrat, stock sank after a news report alleged executives at its Mexican subsidiary carried out a vast bribery scheme & tried to hush it up. Over the weekend, The New York Times reported that WMT executives carried out a bribery plan in order to build stores across Mexico. The article alleges that Eduardo Castro-Wright, a member of MetLife’s (MET) Governance & Corporate Responsibility Committee, was “the driving force behind years of bribery” in Mexico before befor being named vice chairman at WMT in 2008. He joined MetLife’s board in 2008, about 3 years after WMT promoted him to chief operating officer of its US stores. WMT says it is cooperating with authorities. It's too early to know what will happen, whether the news could lead to a management shakeup or keep the stock under pressure. The stock sank $2.88 (5%).
Wal-Mart Manager’s Role on MetLife Board Seen as ‘Distraction’ for Insurer
Swiss food group Nestle will buy Pfizer's baby food business for $11.85B, beating out French rival Danone in Nestle's biggest deal. The deal should add to EPS from the first year, & would allow cost synergies of $160M. The price was well above the $10B which had been expected. Nestle said it was paying 19.8 times expected 2012 core earnings, above previous Nestle deals in the sector when it paid 15.7 times for Gerber & 17.6 times for Novartis Nutrition. The unit is a high-growth business with a quarter of its sales in China. The deal is to be paid with cash and debt. It could close in 6 months at the earliest. This will give PFE liquid assets which it needs with the expiration of patents on important drugs. PFE fell 15¢ in a down market.
Nestle Agrees to Buy Pfizer’s Infant Nutrition Business for $11.9 Billion
Photo: Bloomberg
Apple (AAPL) stock lost steam in Apr on speculation that it may not be able to keep growing at the pace that made it the world’s most valuable company. Fueling the descent were reports indicating a possible shortage in key components for mobile devices & a decline in sales of the iPhone at Verizon Wireless (VZ), the top US mobile phone company. Fiscal Q2 results will be reported tomorrow evening. It's predicted to show profit rose 55% while sales increased 48% from a year earlier. AAPL is benefiting from the release of the iPhone 4S in China & 21 other countries, & the debut of a new iPad. But if results fall short, the stock decline in Apr may continue. The stock dropped 71¢ in very nervous trading.
Apple’s Share Rally Stalls on Investor Concern Mobile Growth Will Slacken
Bulls got the word to return to the markets & they came back. Buying in the PM reduced losses for the day, but it was not a pretty. Stocks are on defense. Dow is back to where it was in the middle of Feb. Macro data for the winter months was fairly good, highlighted by an increase in new jobs & strong manufacturing growth. Earnings season is coming to an end & the beneficial effects at the macro level did not make a big impact on earnings. There are worries that strength in winter months (from warm weather) may have stolen sales away from months in the spring. Dow fell below 13K once again. In addition, weakness in AAPL is not good for the markets.
JPMorgan Chase Capital XVI (AMJ)
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Treasury yields:
U.S. 3-month | 0.071% | |
U.S. 2-year | 0.254% | |
U.S. 10-year | 1.930% |
| CLM12.NYM | ...Crude Oil Jun 12 | ....102.80 | ... 1.08 | (1.0%) |
Eduardo Castro-Wright
Photo: BloombergWal-Mart, a Dow stock & Dividend Aristocrat, stock sank after a news report alleged executives at its Mexican subsidiary carried out a vast bribery scheme & tried to hush it up. Over the weekend, The New York Times reported that WMT executives carried out a bribery plan in order to build stores across Mexico. The article alleges that Eduardo Castro-Wright, a member of MetLife’s (MET) Governance & Corporate Responsibility Committee, was “the driving force behind years of bribery” in Mexico before befor being named vice chairman at WMT in 2008. He joined MetLife’s board in 2008, about 3 years after WMT promoted him to chief operating officer of its US stores. WMT says it is cooperating with authorities. It's too early to know what will happen, whether the news could lead to a management shakeup or keep the stock under pressure. The stock sank $2.88 (5%).
Wal-Mart Manager’s Role on MetLife Board Seen as ‘Distraction’ for Insurer
Wal-Mart Stores, Inc. (WMT)
Swiss food group Nestle will buy Pfizer's baby food business for $11.85B, beating out French rival Danone in Nestle's biggest deal. The deal should add to EPS from the first year, & would allow cost synergies of $160M. The price was well above the $10B which had been expected. Nestle said it was paying 19.8 times expected 2012 core earnings, above previous Nestle deals in the sector when it paid 15.7 times for Gerber & 17.6 times for Novartis Nutrition. The unit is a high-growth business with a quarter of its sales in China. The deal is to be paid with cash and debt. It could close in 6 months at the earliest. This will give PFE liquid assets which it needs with the expiration of patents on important drugs. PFE fell 15¢ in a down market.
Nestle Agrees to Buy Pfizer’s Infant Nutrition Business for $11.9 Billion
Pfizer, Inc. (PFE)
Apple (AAPL) stock lost steam in Apr on speculation that it may not be able to keep growing at the pace that made it the world’s most valuable company. Fueling the descent were reports indicating a possible shortage in key components for mobile devices & a decline in sales of the iPhone at Verizon Wireless (VZ), the top US mobile phone company. Fiscal Q2 results will be reported tomorrow evening. It's predicted to show profit rose 55% while sales increased 48% from a year earlier. AAPL is benefiting from the release of the iPhone 4S in China & 21 other countries, & the debut of a new iPad. But if results fall short, the stock decline in Apr may continue. The stock dropped 71¢ in very nervous trading.
Apple’s Share Rally Stalls on Investor Concern Mobile Growth Will Slacken
Apple Inc. (AAPL)
Bulls got the word to return to the markets & they came back. Buying in the PM reduced losses for the day, but it was not a pretty. Stocks are on defense. Dow is back to where it was in the middle of Feb. Macro data for the winter months was fairly good, highlighted by an increase in new jobs & strong manufacturing growth. Earnings season is coming to an end & the beneficial effects at the macro level did not make a big impact on earnings. There are worries that strength in winter months (from warm weather) may have stolen sales away from months in the spring. Dow fell below 13K once again. In addition, weakness in AAPL is not good for the markets.
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