Dow gained 55, advancers over decliners 5-2 & NAZ added 21. The Financial Index rose 1+ to the 201s, a new 3 month high. The MLP index was off 1 to the 391s & the REIT index fell 2½ to the 265s. Junk bond funds were mixed again & Treasuries sold off, taking the yield on the10 year Treasury up a very big 8 basis points to 1.63%. Crude climbed to the highest level in more than 2 months after better-than-estimated corp earnings bolstered optimism that the economy will expand. Gold trading was flattish.
Photo: Yahoo
Italy's recession deepened in Q2, when the economy shrank for the 4th qtr in a row. The economy contracted 0.7% compared with Q1, more than the 0.6% drop expected. The ISTAT statistics agency said activity fell in all sectors: industry, services & agriculture. The gov, which is trying to reduce debt, has made spending cuts & tax increases that are hurting businesses & households. Fear that Italy will need a sovereign bailout if its borrowing rates rise further has created economic uncertainty. Compared with Q2 of 2011, the economy shrank 2.5%, the worst year-on-year contraction since Q4 2009, when the economy shrank 3.5%. Car production alone was down 22.5% in Jun compared with a year earlier. Premier Mario Monti has recently been courting other European leaders seeking permission to slow down the pace of Italy's promised budget cuts, which tend to hurt the economy. Experts say growth is a key element in bringing down the country's high public debt, which stands at 123% of GDP. The gov expects the economy will contract 1.2% this year. More negative news from the eurozone.
Italy Economy Shrinks for a Fourth Quarter as Slump Deepens
Photo: Bloomberg
US. employers posted the most job openings in 4 years in Jun, a positive sign that hiring may pick up. The Labor Dept said job openings rose to 3.8M in Jun, up from 3.7M in May, the most since May 2008. Layoffs also fell. The data follow Fri's report that said employers in Jul added the most jobs in 5 months. A rise in openings could signal better hiring in the coming months. It typically takes 1-3 months to fill a job. But even with the increase, hiring is competitive. There were 12.7M unemployed in Jun, or an average of 3.4 unemployed people for each job. In a healthy job market, the ratio is usually around 2 to 1.
Job Openings in the U.S. Increased in June, Hiring Dropped
Photo: Yahoo
CVS Caremark Q2 net income jumped 18%, as new business for its drugstore chain & expansion of its pharmacy benefits management segment pushed revenue higher. Adjusted earnings topped estimates & the company raised its forecast for 2012. The company said a recently settled split between rival drugstore chain Walgreen (WAG) & Express Scripts Holding (ESRX) sent customers to CVS drugstores, & it aims to keep them. The split added 6½-7M prescriptions in Q2 & contributed about 3.5¢ to EPS. CVS is forecasting a gain of about 5¢ to EPS in Q3 & Q4. In this year's Q4, it expects to keep at least 50% of the business it gained since the split began. CEO Merlo said, "We've had the better part of nine months now to introduce these new customers to the CVS brand." In Q2, EPS was 75¢, up from 60¢ a year ago. Adjusted EPS came to 81¢, topping expectations of 79¢. Revenue grew 16% to $30.7B from $26.4B last year & above the forecast of $31B. Revenue from its PBM business climbed 28% to $18.4B, helped in part by the acquisition of Universal American's Medicare prescription drug coverage business. Retail pharmacy revenue rose 7% to $15.8B, despite taking a hit from some generic drug introductions. CVS expects 2012 adjusted EPS of $3.32-$3.38, up from its previous guidance of $3.23-$3.33 & analysts expect $3.33. The stock fell 28¢.
This is shaping up as the 3rd consecutive days of gains for stocks. Dow is up 300 in 3 days & NAZ went over 3K, a 3 month high. Dow is up 1K off its lows at the start of Jun, a very nice run. Earnings are viewed as good, although they are only beating lowered forecasts. The € is over $1.24, a 1 month high on easing concerns about euro debts. With reduced tensions in Europe, stocks look to be headed higher.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month | 0.096% | |
U.S. 2-year | 0.252% | |
U.S. 10-year | 1.623% |
| CLU12.NYM | ...Crude Oil Sep 12 | ...92.81 | ... 0.61 | (0.7%) |
| GCQ12.CMX | ...Gold Aug 12 | ....1,610.30 | ... 2.60 | (0.2%) |
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Italy's recession deepened in Q2, when the economy shrank for the 4th qtr in a row. The economy contracted 0.7% compared with Q1, more than the 0.6% drop expected. The ISTAT statistics agency said activity fell in all sectors: industry, services & agriculture. The gov, which is trying to reduce debt, has made spending cuts & tax increases that are hurting businesses & households. Fear that Italy will need a sovereign bailout if its borrowing rates rise further has created economic uncertainty. Compared with Q2 of 2011, the economy shrank 2.5%, the worst year-on-year contraction since Q4 2009, when the economy shrank 3.5%. Car production alone was down 22.5% in Jun compared with a year earlier. Premier Mario Monti has recently been courting other European leaders seeking permission to slow down the pace of Italy's promised budget cuts, which tend to hurt the economy. Experts say growth is a key element in bringing down the country's high public debt, which stands at 123% of GDP. The gov expects the economy will contract 1.2% this year. More negative news from the eurozone.
Italy Economy Shrinks for a Fourth Quarter as Slump Deepens
US. employers posted the most job openings in 4 years in Jun, a positive sign that hiring may pick up. The Labor Dept said job openings rose to 3.8M in Jun, up from 3.7M in May, the most since May 2008. Layoffs also fell. The data follow Fri's report that said employers in Jul added the most jobs in 5 months. A rise in openings could signal better hiring in the coming months. It typically takes 1-3 months to fill a job. But even with the increase, hiring is competitive. There were 12.7M unemployed in Jun, or an average of 3.4 unemployed people for each job. In a healthy job market, the ratio is usually around 2 to 1.
Job Openings in the U.S. Increased in June, Hiring Dropped
CVS Caremark Q2 net income jumped 18%, as new business for its drugstore chain & expansion of its pharmacy benefits management segment pushed revenue higher. Adjusted earnings topped estimates & the company raised its forecast for 2012. The company said a recently settled split between rival drugstore chain Walgreen (WAG) & Express Scripts Holding (ESRX) sent customers to CVS drugstores, & it aims to keep them. The split added 6½-7M prescriptions in Q2 & contributed about 3.5¢ to EPS. CVS is forecasting a gain of about 5¢ to EPS in Q3 & Q4. In this year's Q4, it expects to keep at least 50% of the business it gained since the split began. CEO Merlo said, "We've had the better part of nine months now to introduce these new customers to the CVS brand." In Q2, EPS was 75¢, up from 60¢ a year ago. Adjusted EPS came to 81¢, topping expectations of 79¢. Revenue grew 16% to $30.7B from $26.4B last year & above the forecast of $31B. Revenue from its PBM business climbed 28% to $18.4B, helped in part by the acquisition of Universal American's Medicare prescription drug coverage business. Retail pharmacy revenue rose 7% to $15.8B, despite taking a hit from some generic drug introductions. CVS expects 2012 adjusted EPS of $3.32-$3.38, up from its previous guidance of $3.23-$3.33 & analysts expect $3.33. The stock fell 28¢.
CVS Caremark (CVS)
This is shaping up as the 3rd consecutive days of gains for stocks. Dow is up 300 in 3 days & NAZ went over 3K, a 3 month high. Dow is up 1K off its lows at the start of Jun, a very nice run. Earnings are viewed as good, although they are only beating lowered forecasts. The € is over $1.24, a 1 month high on easing concerns about euro debts. With reduced tensions in Europe, stocks look to be headed higher.
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