Dow soared another 187, advancers over decliners almost 6-1 & NAZ shot up 64. The Financial Index jumped 4 to 199, near the highs of its recent trading range. The MLP index was flat at 393 & the REIT index rose 2½ to the 267s. Junk bond funds were mixed to higher & Treasuries sold off big time, with the yield on the 10 year Treasury vaulting 13 basis points to 1.56% (losing appeal as a safe haven investment). Oil rose for a 4th day on speculation that the ECB & the U.S. Federal Reserve will ease monetary policy next week to boost economic growth & curb the debt crisis. Its chart below shows gold has also been climbing this week.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Confidence among US consumers dropped in Jul to the lowest level this year as the labor market & broader economy showed few signs of improvement. The Thomson Reuters/University of Michigan final index of sentiment declined to 72.3 from 73.2 in Jun. The gauge was projected to hold at the preliminary reading of 72. A slowdown in hiring in Q2, which may reflect companies’ concerns about demand as Europe's economy falters, is damping moods of consumers whose spending accounts for about 70% of the economy. This comes after a drab GDP firgure was reported earlier today, showing household purchases also grew at a 1.5% annual rate (the weakest in a year).
U.S. Consumer Sentiment Gauge Falls to Lowest This Year
Photo: Yahoo
Chevron, a Dow stock, EPS fell nearly 7% to $3.66 which beat expectations thanks to a strong performance from its refinery business. The oil giant is struggling to find & replace its sources of petroleum & the world's slowing economy has also pushed down prices for the crude it sells. But lower prices has benefits. Profits at the refining & marketing business rose 80%. Its refineries paid less for oil while selling gasoline at higher prices on the US west coast. Pump prices there remained well above the national average because of supply problems in the region. The business also sold about $200M in assets, including its stake in a South Korean energy business. But the help that lower oil prices gave the refineries hurt its other business, finding & selling crude& natural gas. Earnings from exploration & production business fell 18% to $5.6B. CVX sold oil for lower prices in the US & overseas. Natural gas fetched only half as much in the US as it did a year earlier. Production from its global network of oil & natural gas wells declined 2.6%. The stock gained 1.09.
Chevron 2Q net income slips 7 percent AP
Photo: Bloomberg
Facebook sank to a record low after its first earnings report showed a slower sales gain & narrower profit margins, failing to allay concerns over growth that have dragged down the shares. Executives issued no growth forecasts & said little else to reassure investors who fret that the company is overvalued. The largest social network is adding users faster than it can generate ad sales, the company said, reiterating remarks it made in the run-up to the IPO. Sales increased 32% to $1.18B, topping the forecast of $1.16B. Monthly active users rose to 955M, exceeding the 950M predicted. The revenue increase was dwarfed by a surge in spending on marketing & sales, which ballooned to $392M. The company reported a net loss 8¢ per share & profit excluding certain costs of 12¢. Q2 operating margin, excluding certain costs, was 43%, a drop from 53% a year earlier, amid a fourfold surge in sales & marketing expenses. The stock sank 3.16 & has an awful chart.
Facebook Falls to Record as Earnings Report Fails to Quell Growth Concerns
Hopes are riding high that the ECB & Federal Reserve will pull a lot of magic tricks at their meetings next week. The Federal Reserve is not expected to make many major change until the Sep meeting, but the bulls are praying for sooner. After yesterday's announcement, a major move is expected from the ECB. Talk is cheap & we've heard a fair amount over the last 2 years. But Europe remains bogged down by its debt messes & the US economic recovery as stumbled (today's GDP figures were a reminder). With the latest rally, markets are overbought again. 13.4K on the Dow is an important technical ceiling which may be tested next week (while the meetings take place).
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Treasury yields:
U.S. 3-month | 0.101% | |
U.S. 2-year | 0.246% | |
U.S. 10-year | 1.548% |
| CLU12.NYM | Crude Oil Sep 12 | 90.13 |  0.74 (0.8%) |
Confidence among US consumers dropped in Jul to the lowest level this year as the labor market & broader economy showed few signs of improvement. The Thomson Reuters/University of Michigan final index of sentiment declined to 72.3 from 73.2 in Jun. The gauge was projected to hold at the preliminary reading of 72. A slowdown in hiring in Q2, which may reflect companies’ concerns about demand as Europe's economy falters, is damping moods of consumers whose spending accounts for about 70% of the economy. This comes after a drab GDP firgure was reported earlier today, showing household purchases also grew at a 1.5% annual rate (the weakest in a year).
U.S. Consumer Sentiment Gauge Falls to Lowest This Year
Chevron, a Dow stock, EPS fell nearly 7% to $3.66 which beat expectations thanks to a strong performance from its refinery business. The oil giant is struggling to find & replace its sources of petroleum & the world's slowing economy has also pushed down prices for the crude it sells. But lower prices has benefits. Profits at the refining & marketing business rose 80%. Its refineries paid less for oil while selling gasoline at higher prices on the US west coast. Pump prices there remained well above the national average because of supply problems in the region. The business also sold about $200M in assets, including its stake in a South Korean energy business. But the help that lower oil prices gave the refineries hurt its other business, finding & selling crude& natural gas. Earnings from exploration & production business fell 18% to $5.6B. CVX sold oil for lower prices in the US & overseas. Natural gas fetched only half as much in the US as it did a year earlier. Production from its global network of oil & natural gas wells declined 2.6%. The stock gained 1.09.
Chevron 2Q net income slips 7 percent AP
Chevron (CVX)
Photo: Bloomberg
Facebook sank to a record low after its first earnings report showed a slower sales gain & narrower profit margins, failing to allay concerns over growth that have dragged down the shares. Executives issued no growth forecasts & said little else to reassure investors who fret that the company is overvalued. The largest social network is adding users faster than it can generate ad sales, the company said, reiterating remarks it made in the run-up to the IPO. Sales increased 32% to $1.18B, topping the forecast of $1.16B. Monthly active users rose to 955M, exceeding the 950M predicted. The revenue increase was dwarfed by a surge in spending on marketing & sales, which ballooned to $392M. The company reported a net loss 8¢ per share & profit excluding certain costs of 12¢. Q2 operating margin, excluding certain costs, was 43%, a drop from 53% a year earlier, amid a fourfold surge in sales & marketing expenses. The stock sank 3.16 & has an awful chart.
Facebook Falls to Record as Earnings Report Fails to Quell Growth Concerns
Facebook (FB)
Hopes are riding high that the ECB & Federal Reserve will pull a lot of magic tricks at their meetings next week. The Federal Reserve is not expected to make many major change until the Sep meeting, but the bulls are praying for sooner. After yesterday's announcement, a major move is expected from the ECB. Talk is cheap & we've heard a fair amount over the last 2 years. But Europe remains bogged down by its debt messes & the US economic recovery as stumbled (today's GDP figures were a reminder). With the latest rally, markets are overbought again. 13.4K on the Dow is an important technical ceiling which may be tested next week (while the meetings take place).
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