Dow inched up 16, advancers ahead of decliners 5-4 & NAZ lost 22 hurt by Apple's decline. The Financial Index was even at 191. The MLP index fell 3 to 390 while the REIT index was flat at 261. Junk bond funds were little changed & Treasuries slipped back from their record highs yesterday. Oil marked time while gold finally has a good rebound.
Photo: Bloomberg
Caterpillar, a Dow stock, raised 2012 profit forecast & said that despite pockets of weakness, the global economy was improving. The strong outlook came after profits easily beat expectations. Fiscal improvement is still needed in Asia, Latin America & North America, but steps toward a healthier global economy have already begun, CEO Oberhelman said. "While we're expecting a record year in 2012, we understand the world is facing economic challenges, and if it becomes necessary, we are prepared to act quickly," Oberhelman said. "The good news is, this doesn't feel like 2008." EPS was $2.54, sharply ahead of $1.52 last year & beat the forecast of $2.28. Revenue rose 21% to $17.4B, better than the $17.11B expected. The company expects to EPS of $9.60 in 2012, up from a previous forecast of $9.50 & a head of $9.54 projected by analysts. The stock rose 1.73.
Photo: Bloomberg
Sales of new single-family homes fell 8.4% in Jun to an annual rate of 350K after reaching a 2-year high in May, according to the Commerce Dept. This was below expectations of 375K. Sales in May were revised up to 382K from an initial reading of 369K, the best month since Apr 2010. The median price of new homes fell 1.9% to $232K, the lowest level since Jan. The supply of new homes on the market would last 4.3 months if they were all sold before any others were built, up from 4.0 months in May. Sales of new homes rose the fastest in the Northeast & fell the most in the South. The housing recovery keeps giving mixed messages.
Sales of New U.S. Homes Unexpectedly Fall from Two-Year High
Photo: Bloomberg
Boeing, a Dow stock, surprised expectations on strong sales of commercial airplanes & the company raised its earnings forecast for the year. This performance highlighted strong growth in the commercial airplane unit which has been rapidly increasing the pace of production to meet demand. EPS rose to $1.27, compared with $1.25 last year. Revenue jumped 21% to $20B from $16.5B a year ago. Analysts expected EPS of $1.13 on revenue of $19.28B. Defense revenue rose 7%, while revenue in the commercial airplane division jumped 34%. The divisions are roughly the same size, but they tend to go in opposite directions. The commercial airplane unit is speeding production of its new 787. BA is also booking firm orders for its new 737 Max, a redesigned version of its classic 737. Higher costs somewhat overshadowed strong results in both segments as expenses rose 30%. For 2012, BA expects EPS of $4.40-$4.60, up from previous guidance of $4.15-$4.35. Still, that new forecast is mostly under analysts' predictions of $4.57. The stock rose 1.25.
Markets should have been encouraged by favorable earnings reports from big industrials. But Apple (AAPL) had a big miss last night. Sales & earnings were great year over year, but sequential sales, especially for iPhone, came in below expectations. It also raised fears about markets maturing (to some extent). The stock dropped 29 which has a big impact on NAZ & also sends a bearish signal for the over all markets. Fundamental problems in Europe, China & a mushy US economy are weighing more heavily on the markets.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month | 0.096% | |
U.S. 2-year | 0.215% | |
U.S. 10-year | 1.399% |
| CLU12.NYM | ...Crude Oil Sep 12 | ...88.60 | ..... 0.10 | (0.1%) |
| GCN12.CMX | ...Gold Jul 12 | .......1,602.50 | ... 26.50 | (1.7%) |
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Caterpillar, a Dow stock, raised 2012 profit forecast & said that despite pockets of weakness, the global economy was improving. The strong outlook came after profits easily beat expectations. Fiscal improvement is still needed in Asia, Latin America & North America, but steps toward a healthier global economy have already begun, CEO Oberhelman said. "While we're expecting a record year in 2012, we understand the world is facing economic challenges, and if it becomes necessary, we are prepared to act quickly," Oberhelman said. "The good news is, this doesn't feel like 2008." EPS was $2.54, sharply ahead of $1.52 last year & beat the forecast of $2.28. Revenue rose 21% to $17.4B, better than the $17.11B expected. The company expects to EPS of $9.60 in 2012, up from a previous forecast of $9.50 & a head of $9.54 projected by analysts. The stock rose 1.73.
Caterpillar (CAT)
Sales of new single-family homes fell 8.4% in Jun to an annual rate of 350K after reaching a 2-year high in May, according to the Commerce Dept. This was below expectations of 375K. Sales in May were revised up to 382K from an initial reading of 369K, the best month since Apr 2010. The median price of new homes fell 1.9% to $232K, the lowest level since Jan. The supply of new homes on the market would last 4.3 months if they were all sold before any others were built, up from 4.0 months in May. Sales of new homes rose the fastest in the Northeast & fell the most in the South. The housing recovery keeps giving mixed messages.
Sales of New U.S. Homes Unexpectedly Fall from Two-Year High
Boeing, a Dow stock, surprised expectations on strong sales of commercial airplanes & the company raised its earnings forecast for the year. This performance highlighted strong growth in the commercial airplane unit which has been rapidly increasing the pace of production to meet demand. EPS rose to $1.27, compared with $1.25 last year. Revenue jumped 21% to $20B from $16.5B a year ago. Analysts expected EPS of $1.13 on revenue of $19.28B. Defense revenue rose 7%, while revenue in the commercial airplane division jumped 34%. The divisions are roughly the same size, but they tend to go in opposite directions. The commercial airplane unit is speeding production of its new 787. BA is also booking firm orders for its new 737 Max, a redesigned version of its classic 737. Higher costs somewhat overshadowed strong results in both segments as expenses rose 30%. For 2012, BA expects EPS of $4.40-$4.60, up from previous guidance of $4.15-$4.35. Still, that new forecast is mostly under analysts' predictions of $4.57. The stock rose 1.25.
Boeing (BA)
Markets should have been encouraged by favorable earnings reports from big industrials. But Apple (AAPL) had a big miss last night. Sales & earnings were great year over year, but sequential sales, especially for iPhone, came in below expectations. It also raised fears about markets maturing (to some extent). The stock dropped 29 which has a big impact on NAZ & also sends a bearish signal for the over all markets. Fundamental problems in Europe, China & a mushy US economy are weighing more heavily on the markets.
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