Thursday, May 10, 2012

Markets struggle to advance as the Greek debt mess drags on

Dow gained 29, advancers ahead of decliners 3-2 but NAZ fell 4.  Bank stocks led what strength there is in the markets with the Financial Index up 1+ to nearly 202. The MLP index rebounded 2+ to the 384s & the REIT index was off 1 to the 258s.  Junk bond funds were little changed while Treasuries dropped.  Oil & gold were pretty much even, as gold is learning to adjust to sub $1600 levels.   

JPMorgan Chase Capital XVI (AMJ)

stock chart

Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLM12.NYM...Crude Oil Jun 12...97.42 ...Up 0.61  (0.6%)

GCK12.CMX....Gold May 12...1,592.40 ....Down 1.30  (0.1%)

Get the latest daily market update below:

Jobless Claims in U.S. Fell 1,000 Last Week to 367,000

Photo:   Bloomberg

The number applying for unemployment benefits ticked down last week after dropping sharply the prior week. Applications dropped 1K to 367K according to the Labor Dept (but.the previous week's figure was revised up slightly).  The 4-week average fell 5K to 379K, the first decline since late Mar.  A recent jump in job openings suggests hiring will pick up.  Employers advertised 3.74M job openings in Mar, the most since Jul 2008. but it usually takes 1-3 months for employers to fill openings.  The recent jobs picture has been clouded by an unseasonably warm winter which allowed construction firms & other companies to hire earlier than usual, effectively stealing jobs from the spring.  The number receiving unemployment benefits also dropped, partly because extended benefit programs are winding down.  More than 6.4M received benefits during the latest week , down nearly 175K from the previous week.  More mixed news on the jobs front.

Jobless Claims in U.S. Dropped 1,000 Last Week to 367,000

The Greek socialist party leader, began a last-ditch effort to form a coalition gov that would avert a new election & keep the country in the euro.  The mandate wants to cancel accords for intl pledges for Greece worth €240B ($311B).  The Democratic Left party is courting an attempt to forge a coalition & criticized attempts for trying to force “a break” with the euro area.  Greek political turmoil entered its 4th day, with coalition talks deadlocked, raising the possibility that another election will have to be held as early as next month.  The standoff has reignited concerns over Greece’s ability to hold to terms of its 2 bailouts negotiated since May 2010.  With Parliament split & policy makers in Berlin & Brussels urging Greece to stay the course, the country at the center of the debt crisis is again facing the risk of an exit from the euro.  The Greek debt mess drags on.

Cisco Third-Quarter Profit Rises as Networking Spending Gains

Photo:   Bloomberg

Cisco, a Dow stock, shares slid 9% after its disappointing outlook worsened worries about gov spending in the US & Europe.  CSCO said it was difficult to predict H2 performance.  "We continue to see the impact of the areas of concern we have discussed for the last few quarters ... Europe and the global economy, India, and conservative IT spend as reflected in the commentary of our peers," CEO John Chambers said.  He said the continued pressure on gov & business budgets was hurting sales of CSCO telepresence products — part of the video business that the company has picked as one of its new pillars of growth.  Brokerage firms cut price targets on the company's shares.  9 analysts rate CSCO "strong buy," 15 rate it a "buy," 19 have a "hold" & only 2 rate it a "sell."  The average price target for the stock is $22.58.   The stock fell 1.68 & down YTD.

Cisco Systems, Inc. (CSCO)

stock chart

Bargain hunters would like to take the markets higher but aren't having much success.  The new forecast from CSCO is chilling on its implications for the macro picture of economies.  Dreary news form Europe has sent the € to below $1.30 (only lower at the start of 2012 in recent times).  Today it's up a smidgen, but still below that important psychological level.  Rather than climbing out of hole, markets are merely drifting with a slight bias to the upside.

Dow Industrials

stock chart

Get your favorite symbols' Trend Analysis TODAY!  

No comments: