Wednesday, June 13, 2012

Markets sell off on growing Euro wories

Dow fell 77 (closing near the lows), decliners over advancers 5-2 & NAZ gave up 24.  The Financial Index remained down 1 to the 188s.  The MLP index fell a fraction to 364 & the REIT index dropped 2+ to the 247s.  Junk bond funds fell back but Treasuries gained after the stock market sold off.  Oil lost ground, near 8 month lows, but gold managed a modest gain of $4.

JPMorgan Chase Capital XVI (AMJ)

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CLN12.NYM...Crude Oil Jul 12...82.49 ...Down 0.83  (1.0%)

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  • <p>               Greek conservative leader Antonis Samaras of New Democracy visits an elections kiosk in Syntagma square in central Athens, Monday, June 11, 2012. Greeks go to the polls again on Sunday, June 17. (AP Photo/Petros Karadjias)
Antonis Samaras
Photo:   Yahoo

The new French president warned Greeks that if they vote to move away from intl bailout commitments in the upcoming election, they could be pushed out of the eurozone.  A repeat election will be held on Jun 17 to form a new gov.  Voters deserted the 2 formerly main parties in favor of smaller, mostly anti-bailout groups on the right & left of the political spectrum.  "I respect the Greek people. They will decide what they want on the occasion of the election" Francois Hollande said.  "But I must warn them, because it is my duty, because I am a friend of Greece, that if the impression is given that the Greeks want to move away from the commitments that were taken and abandon all prospects of revival, then there will be countries in the Eurozone that will want to end the presence of Greece in the eurozone."  Antonis Samaras' conservative New Democracy party has been running neck-and-neck in recent opinion polls with the radical left Syriza, which came in a surprise 2nd on May 6.  Samaras has pledged to stick to Greece's pledges for further cutbacks & reforms, with some adjustments to improve the position of poorer Greeks & boost growth, while Syriza's leader, Alexis Tsipras, has vowed to cancel Greece's bailout commitments.  Hollande, who won the French elections also held on May 6, said that while he wants Greece to remain part of Europe's joint currency, Greeks "must know that this presupposes a relationship of trust."  As I said last year at this time, the Greek drama plays on.

French president warns Greeks over euro AP

  • <p>               FILE-In this Wednesday, May 9, 2012, file photo, David Lee holds on to his carts while shopping at a Costco Wholesale in Portland, Ore. A steep drop in gasoline costs drove down a measure of U.S. wholesale prices in May by the most since July 2009. But outside the food and energy categories, prices increased moderately. (AP Photo/Rick Bowmer, File)
Photo:   yahoo

A steep drop in gasoline costs drove down a measure of wholesale prices in May by the most since Jul 2009.  But outside the food & energy categories, prices increased moderately.  The producer price index fell 1%, after dropping 0.2% in Apr according to the Labor Dept.  Gasoline prices dropped nearly 9%, the most in almost 3 years.  Food costs also fell.  Excluding food & energy, the "core" index increased 0.2%, the same as in Apr.  In the past 12 months, wholesale prices are up only 0.7%, the smallest gain since Oct 2009.  The core index has risen 2.7% in the same period, the same pace as last month & down from a 12-month change of 3.1% in Jan.  Food costs fell 0.6%, the biggest decline since Dec, a 2.2% drop in meat prices drove most of the decline. The cost of fresh fruits & melons fell 7.1%, the most in a year.  Core prices were pushed up by more expensive pharmaceuticals & a big rise in the cost of commercial furniture, which jumped 1.8%.  That was the biggest increase for commercial furniture since Feb 1981.  At least inflation remains tame.

Wholesale Prices in U.S. Fell 1% in May on Cheaper Energy

The Caterpillar, a Dow stock, board approved a 13% increase in the div for Q3, the biggest percentage increase since the financial crisis of 2008.  The div was increased 6¢ to 52¢ ($2.08 annualized).  It was the biggest increase since an increase of 16.7% in Aug 2008 (just prior to the Lehman collapse).  The company is the world's largest maker of construction & mining equipment.  The stock dropped $1.88 on the good news.

Caterpillar OKs 13 percent increase in dividendAP

Caterpillar, Inc. (CAT)

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AM trading was quiet, but sellers returned after lunch.  Jamie Dimon, JPMorgan (JPM) CEO, said that the proposed ban on proprietary trading may have limited massive trading losses at JPMorgan when testifying before Congress.  JPM was up 53¢ (77¢ below the AM high), but the stock market sold off when it sounded like an endorsement of increased bank regulation.  Of course, Europe is the big unknown presently & it's getting more confusing by the day.  Dow has lost 700 in Q2 & could be heading lower on the Euro debt mess.

Dow Industrials

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