Dow rose 58 (after losing some steam in the last hour), advancers barely ahead of decliners & NAZ lost 8 from selling in Apple (AAPL). The Financial Index was up a fraction in the 191s. The MLP index fell 4 to the 389s & the REIT index was off pocket change in the 261s. Junk bond funds were mixed (at or near yearly highs) & Treasuries retreated after a long rally bringing record low yields. Oil was flat & gold finally had a rally, taking it above $1600.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Bloomberg
China may refrain from stepping up its monetary stimulus or increasing spending because measures now in place are sufficient to support growth, the IMF said. Authorities will probably maintain the “status quo” after already shifting their monetary stance to a “more neutral or accommodating one” & may forgo expanding this year’s budget, the IMF’s senior resident representative in China. His comments reflect confidence at the IMF, which last week cut its China growth forecasts 3 months after releasing updated projections, that the pace of expansion will accelerate in H2. The gov enacted 2 interest-rate cuts in a month & accelerated approval of investment plans to stem 6 qtrs of deceleration in the world’s #2 economy. The IMF official didn’t rule out another rate cut, saying a drop in the inflation rate could prompt such a move. Meantime, the gov sees “adequate space in the existing budget to continue to adjust policies to support growth,” assuming Euope's debt crisis doesn’t worsen, he said. Revenue may come in above projections, allowing higher spending, he said.
China May Refrain From More Easing, IMF Official Says
Spain's Economy Minister Luis De Guindos
Photo: Yahoo
France & Spain called for swift implementation of the rescue plan for Spanish banks to ease concern that the country may need a full-blown sovereign bailout. In Jun, the eurozone agreed to lend Spain up to €100B ($121B) to save the banks laden with soured investments following a property sector collapse in 2008. But the deal only intensified concerns about Spain's debt levels, since the gov initially will have to repay those loans if the banks cannot. In response, investors have since been demanding exorbitantly high interest rates to lend to the country. To solve that problem, eurozone ministers agreed to give the loans directly to the Spanish banks, but only after a Europe-wide banking regulator is set up which could take months (if not years). France & Spain said this step should be sped up & completed by the end of the year. The swift implementation of the financial assistance program is essential to restore confidence & recreate conditions for growth," French Finance Minister Pierre Moscovici & Spanish Economy Minister Luis de Guindos said. The ministers said they did not think Spain's borrowing costs, which this week touched a euro-era record, reflect the country's financial position. "We believe that the current level of interest rates prevailing in the sovereign debt markets does not reflect the fundamentals of the Spanish economy, its growth potential and the sustainability of its public debt," they said. Both are confident the rates would fall back once investors were confident that the country's banks were getting the support they need.
France, Spain: Bank rescue needs to come fast AP
Photo: Yahoo
Ford forecast a smaller operating profit for 2012 compared with last year, due in part to wider losses in Europe, where the automaker expects to lose more than $1B as the deepening economic crisis hits auto sales. Ford, which also posted a better-than-expected Q2 profit said profits in North America & at Ford's finance arm, Ford Motor Credit, would offset losses in Europe, Asia & reduce profits in South America this year. The #2 US. automaker's new outlook for Europe falls in line with other estimates & is nearly double its previous forecast for an annual loss of $500M-$600M. CEO Alan Mulally said that Ford is reviewing all aspects of its business in Europe. Ford earlier said its pretax profit would be on par with the levels seen in 2011, when it earned $8.8B. In addition to steeper losses in Europe, Ford also expects profits in South America to be "substantially lower" this year. "As we look over the next five years and lay out all of our plans for our business, we just think the situation in Europe is going to be challenging," CFO Bob Shanks said. Ford relied entirely on North America & its financing arm to turn a profit in Q2. Ford commanded higher vehicle prices in its home market, boosting operating profit in North America to just over $2B. Mulally said Ford now expects US auto sales to be at the lower end of its forecast of 14.5M-15M, due to weaker-than-expected sales in recent months. Excluding one-time items, Ford earned 30¢, beating forecasted EPS of 28¢. The automaker reported Q2 EPS of 26¢, down from 59¢ a year ago. Net income fell partly due to an accounting change this year that raised its effective tax rate to 37.3% from 8.4% in 2011. Quarterly revenue fell 6.2% to $33.3B. Ford lost $404M in Europe in Q2, reported a $5M profit in South America & lost $66M in Asia. Its troubles give a flavor of business around the globe. The stock lost 9¢.
Ford Lowers 2012 Outlook as European Losses Cut Profit
Markets were mixed at best today. The advances in the Dow was related primarily to Boeing (BA), AT&T (T) & Cisco (CSCO). The rest of the Dow had only modest gains or losses. S&P 500 slipped 1, hurt by the $26 plunge for AAPL stock. The € climbed back over $1.21, hardly an accomplishment with all the gloomy news coming from that region. Dow kept above the 12.5K level, which is turning out to be an important floor. But with fluid economic conditions all over the world, anything is possible.
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Treasury yields:
U.S. 3-month | 0.096% | |
U.S. 2-year | 0.215% | |
U.S. 10-year | 1.408% |
| CLU12.NYM | ...Crude Oil Sep 12 | ...88.43 | ..... 0.07 | (0.08%) |
China may refrain from stepping up its monetary stimulus or increasing spending because measures now in place are sufficient to support growth, the IMF said. Authorities will probably maintain the “status quo” after already shifting their monetary stance to a “more neutral or accommodating one” & may forgo expanding this year’s budget, the IMF’s senior resident representative in China. His comments reflect confidence at the IMF, which last week cut its China growth forecasts 3 months after releasing updated projections, that the pace of expansion will accelerate in H2. The gov enacted 2 interest-rate cuts in a month & accelerated approval of investment plans to stem 6 qtrs of deceleration in the world’s #2 economy. The IMF official didn’t rule out another rate cut, saying a drop in the inflation rate could prompt such a move. Meantime, the gov sees “adequate space in the existing budget to continue to adjust policies to support growth,” assuming Euope's debt crisis doesn’t worsen, he said. Revenue may come in above projections, allowing higher spending, he said.
China May Refrain From More Easing, IMF Official Says
Photo: Yahoo
France & Spain called for swift implementation of the rescue plan for Spanish banks to ease concern that the country may need a full-blown sovereign bailout. In Jun, the eurozone agreed to lend Spain up to €100B ($121B) to save the banks laden with soured investments following a property sector collapse in 2008. But the deal only intensified concerns about Spain's debt levels, since the gov initially will have to repay those loans if the banks cannot. In response, investors have since been demanding exorbitantly high interest rates to lend to the country. To solve that problem, eurozone ministers agreed to give the loans directly to the Spanish banks, but only after a Europe-wide banking regulator is set up which could take months (if not years). France & Spain said this step should be sped up & completed by the end of the year. The swift implementation of the financial assistance program is essential to restore confidence & recreate conditions for growth," French Finance Minister Pierre Moscovici & Spanish Economy Minister Luis de Guindos said. The ministers said they did not think Spain's borrowing costs, which this week touched a euro-era record, reflect the country's financial position. "We believe that the current level of interest rates prevailing in the sovereign debt markets does not reflect the fundamentals of the Spanish economy, its growth potential and the sustainability of its public debt," they said. Both are confident the rates would fall back once investors were confident that the country's banks were getting the support they need.
France, Spain: Bank rescue needs to come fast AP
Ford forecast a smaller operating profit for 2012 compared with last year, due in part to wider losses in Europe, where the automaker expects to lose more than $1B as the deepening economic crisis hits auto sales. Ford, which also posted a better-than-expected Q2 profit said profits in North America & at Ford's finance arm, Ford Motor Credit, would offset losses in Europe, Asia & reduce profits in South America this year. The #2 US. automaker's new outlook for Europe falls in line with other estimates & is nearly double its previous forecast for an annual loss of $500M-$600M. CEO Alan Mulally said that Ford is reviewing all aspects of its business in Europe. Ford earlier said its pretax profit would be on par with the levels seen in 2011, when it earned $8.8B. In addition to steeper losses in Europe, Ford also expects profits in South America to be "substantially lower" this year. "As we look over the next five years and lay out all of our plans for our business, we just think the situation in Europe is going to be challenging," CFO Bob Shanks said. Ford relied entirely on North America & its financing arm to turn a profit in Q2. Ford commanded higher vehicle prices in its home market, boosting operating profit in North America to just over $2B. Mulally said Ford now expects US auto sales to be at the lower end of its forecast of 14.5M-15M, due to weaker-than-expected sales in recent months. Excluding one-time items, Ford earned 30¢, beating forecasted EPS of 28¢. The automaker reported Q2 EPS of 26¢, down from 59¢ a year ago. Net income fell partly due to an accounting change this year that raised its effective tax rate to 37.3% from 8.4% in 2011. Quarterly revenue fell 6.2% to $33.3B. Ford lost $404M in Europe in Q2, reported a $5M profit in South America & lost $66M in Asia. Its troubles give a flavor of business around the globe. The stock lost 9¢.
Ford Lowers 2012 Outlook as European Losses Cut Profit
Ford (F)
Markets were mixed at best today. The advances in the Dow was related primarily to Boeing (BA), AT&T (T) & Cisco (CSCO). The rest of the Dow had only modest gains or losses. S&P 500 slipped 1, hurt by the $26 plunge for AAPL stock. The € climbed back over $1.21, hardly an accomplishment with all the gloomy news coming from that region. Dow kept above the 12.5K level, which is turning out to be an important floor. But with fluid economic conditions all over the world, anything is possible.
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