The markets started the day higher & never looked back. Dow finished up 181 closing near its highs (but still shy of 13K), advancers over decliners almost 5-1 & NAZ added 39. Bank stocks led the way in this broad rally, taking the Financial Index up 4 to the 208s. The MLP index was up 3+ to the 386s & the REIT index gained 3+ to the 249s. Junk bonds funds slipped & Treasuries pulled back. Oil rose with the stock market & gold also had a good day, up $19.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Bill Dudley, Chairman of the Federal Reserve Bank of New York, said the economy may be gaining strength even as the weakest job growth in 5 months highlights risks to growth. “The incoming data on the US economy has been a bit more upbeat of late, suggesting that the recovery may be getting better established,” Dudley said. Yet “it is still too soon to conclude that we are out of the woods, as underlined by the March labor-market release,” he added although he still supports holding the main interest rate close to zero through late 2014. The FOMC meets on Apr 24-25 to debate policy for an economy described as growing at a “modest to moderate” pace in the Beige Book survey released yesterday. In response to a question, he said he agrees with the Mar 13 statement backing low rates through at least late 2014. “I haven’t seen any set of information that would suggest to me we should change that view,” he said. He also said it’s “not free to do another round of quantitative easing,” noting that bond purchases would expand the Fed’s balance sheet & “create more anxiety on the part of some that it would lead to future inflation.” While asset purchases by the Fed shouldn’t be considered inflationary, some people may hold such a view, he said. In a separate question he said the Fed might “reconsider” additional stimulus measures if the economy got worse. He described the conditions that would prompt this: “If we get back into a situation where the US economy is faltering & we’re not having the kind of economic growth putting the unemployment rate on a clearly downward trajectory. If inflation is well behaved or if inflation expectations are starting to falter.” These words brought out stock buyers today.
Photo: Yahoo
Mighty Sony has big problems. Faced with mounting losses, SNE will slash 10K (6%) of its global workforce) as it tries to turn around its money-losing TV business over the next 2 years. New CEO Kazuo Hirai pledged to revive the electronics & entertainment company. SNE earlier this week more than doubled its annual net loss projection for the fiscal year thru Mar to ¥520B ($6.4B), its 4th straight year of red ink & worst loss ever. After being battered by competitors & for years, it has been struggling to regain the swagger & innovative flair that made it a dominant force in the 1980s & early 1990s. Hirai is committed to strengthening the company's mainstay electronics business — which includes digital cameras, games & smartphones — by concentrating investment & technological development in this division. He aims to boost its share of overall company sales to 70% by 2015 from the current 60%. To cover the job cuts & restructuring efforts, SNE will take a ¥75B charge this fiscal year. The company aims for ¥8½T in sales by 2015, up from a forecast of ¥6.4T for the just-ended fiscal year. With a dismal chart, the stock was flat today.
Sony Tunes Out Televisions as CEO Hirai Sees Future in Imaging, Portables
Meg Whitman
Photo: Yahoo
All the tech news is not downbeat. Hewlett-Packard, a Dow stock, is showing signs of recovery as it strengthened its position as the world's largest maker of PCs & gained back some of the business it lost while weighing whether to dump its PC division. HPQ is is turning around under CEO Meg Whitman. After taking over she decided to keep the PC unit, despite the growing competitive challenge the industry faces from smartphones & tablets. The company lost market share during that period of uncertainty. According to IDC, HPQ worldwide market share dropped to 16% in Q4, after HP signaled in Aug that it might shed the PC business (its share had been at least 18% earlier in the year). IDC just estimated that HP's worldwide share in Q1 was back to 18%. In the US, IDC said, its Q1 share was 28%, nearly back to what it had been last summer (after dropping in the holiday qtr to 23%). Stockholders liked the news, taking it up 1.69 (7%).
Hewlett-Packard Gains Most in 5 Months on PC Shipment Jump
In addition to hopes for a QE3, lower Italian bond yields & rumors about a strong GDP growth figure for China encouraged risk takers to buy stocks. But these look like temporary factors. I'm in the camp that says QE3 is unnecessary. The markets forgot about high gas prices which were still $3.91 yesterday. Earnings will begin in the next few days which can define where the markets are going. Google (GOOG) reported after hours. Revenue was $10.1B with EPS of $10.08. The stock is up another $3 on the gut reaction to the news.
JPMorgan Chase Capital XVI (AMJ)
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Treasury yields:
U.S. 3-month | 0.086% | |
U.S. 2-year | 0.286% | |
U.S. 10-year | 2.053% |
| CLK12.NYM | Crude Oil May 12 | 103.62 |  0.92 (0.9%) |
Bill Dudley, Chairman of the Federal Reserve Bank of New York, said the economy may be gaining strength even as the weakest job growth in 5 months highlights risks to growth. “The incoming data on the US economy has been a bit more upbeat of late, suggesting that the recovery may be getting better established,” Dudley said. Yet “it is still too soon to conclude that we are out of the woods, as underlined by the March labor-market release,” he added although he still supports holding the main interest rate close to zero through late 2014. The FOMC meets on Apr 24-25 to debate policy for an economy described as growing at a “modest to moderate” pace in the Beige Book survey released yesterday. In response to a question, he said he agrees with the Mar 13 statement backing low rates through at least late 2014. “I haven’t seen any set of information that would suggest to me we should change that view,” he said. He also said it’s “not free to do another round of quantitative easing,” noting that bond purchases would expand the Fed’s balance sheet & “create more anxiety on the part of some that it would lead to future inflation.” While asset purchases by the Fed shouldn’t be considered inflationary, some people may hold such a view, he said. In a separate question he said the Fed might “reconsider” additional stimulus measures if the economy got worse. He described the conditions that would prompt this: “If we get back into a situation where the US economy is faltering & we’re not having the kind of economic growth putting the unemployment rate on a clearly downward trajectory. If inflation is well behaved or if inflation expectations are starting to falter.” These words brought out stock buyers today.
Mighty Sony has big problems. Faced with mounting losses, SNE will slash 10K (6%) of its global workforce) as it tries to turn around its money-losing TV business over the next 2 years. New CEO Kazuo Hirai pledged to revive the electronics & entertainment company. SNE earlier this week more than doubled its annual net loss projection for the fiscal year thru Mar to ¥520B ($6.4B), its 4th straight year of red ink & worst loss ever. After being battered by competitors & for years, it has been struggling to regain the swagger & innovative flair that made it a dominant force in the 1980s & early 1990s. Hirai is committed to strengthening the company's mainstay electronics business — which includes digital cameras, games & smartphones — by concentrating investment & technological development in this division. He aims to boost its share of overall company sales to 70% by 2015 from the current 60%. To cover the job cuts & restructuring efforts, SNE will take a ¥75B charge this fiscal year. The company aims for ¥8½T in sales by 2015, up from a forecast of ¥6.4T for the just-ended fiscal year. With a dismal chart, the stock was flat today.
Sony Tunes Out Televisions as CEO Hirai Sees Future in Imaging, Portables
Sony Corp Ord (SNE)
Photo: Yahoo
All the tech news is not downbeat. Hewlett-Packard, a Dow stock, is showing signs of recovery as it strengthened its position as the world's largest maker of PCs & gained back some of the business it lost while weighing whether to dump its PC division. HPQ is is turning around under CEO Meg Whitman. After taking over she decided to keep the PC unit, despite the growing competitive challenge the industry faces from smartphones & tablets. The company lost market share during that period of uncertainty. According to IDC, HPQ worldwide market share dropped to 16% in Q4, after HP signaled in Aug that it might shed the PC business (its share had been at least 18% earlier in the year). IDC just estimated that HP's worldwide share in Q1 was back to 18%. In the US, IDC said, its Q1 share was 28%, nearly back to what it had been last summer (after dropping in the holiday qtr to 23%). Stockholders liked the news, taking it up 1.69 (7%).
Hewlett-Packard Gains Most in 5 Months on PC Shipment Jump
Hewlett-Packard Company (HPQ)
In addition to hopes for a QE3, lower Italian bond yields & rumors about a strong GDP growth figure for China encouraged risk takers to buy stocks. But these look like temporary factors. I'm in the camp that says QE3 is unnecessary. The markets forgot about high gas prices which were still $3.91 yesterday. Earnings will begin in the next few days which can define where the markets are going. Google (GOOG) reported after hours. Revenue was $10.1B with EPS of $10.08. The stock is up another $3 on the gut reaction to the news.
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