Tuesday, August 21, 2012

Lower markets on profit taking

Dow fell 68, decliners over advancers 5-4 & NAZ was off 8.  Even Apple (AAPL) fell, down 9 from its record high.  The Financial Index gave up early gains & ended with a fractional gain in the 204s.  MLPs fell 1+ to the 394s & the REIT index was pennies lower in the 264s.  Junk bond funds rose, at or near their yearly highs, & Treasuries inched up after recent selling.  Oil continued on its winning ways & gold finally found buyers, shown in its charts below.

AMJ (Alerian MLP Index tracking fund)

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CLU12.NYM...Crude Oil Sep 12....96.67 ...Up 0.70   (0.7%)

Live 24 hours gold chart [Kitco Inc.]

Retail gasoline in the US rose to a seasonal high after refinery upsets cut fuel supplies & crude traded near a 3-month high.  The national average price for gas at the pump is $3.72, up from $3.58 a year ago.  That's the highest level for this season since at least 1990 when data was first tracked.  Retail gas has climbed for 7 weeks, advancing 38.8¢ since Jul 2, as crude prices gained more than $12 a barrel & refinery disruptions sent gasoline inventories to the lowest level for this time of year since 2008.  Process units at Chevron (CVX)'s 240K barrel-a-day Richmond refinery, the largest in Northern California, were producing at 60% of capacity after an Aug 6 blaze that shut the plant's only crude unit.  This is not good news for drivers.

Gasoline in U.S. Rises to Record High for Season

12onth Average
State's Graph
Source:  AAA

Barnes & Noble is working to navigate a shift to digital content, fell after posting a 2nd straight quarterly sales decline in Nook devices.  Sales in the Nook unit were little changed at $192M in fiscal Q1, hurt by a drop in demand for devices, after a 34% gain last year.  A 23% drop in average selling prices & production delays with the Nook Simple Touch with Glowlight hurt sales last qtr.  Sales of digital content, including e-books & applications, rose 46% after a gain of 65% in the previous qtr.  The net loss in the qtr was 78¢, compared with a loss of 99¢ a year earlier.  Analysts projected an EPS loss of 90¢.  While revenue from what it considers its growth unit were little changed, so-called same-store sales rose 4.6%, marking a 3rd straight gain.  Excluding revenue from Nook products, sales at bookstores rose 7.6%, helped by continuing to gain customers from the liquidation of rival Borders Group last year.  Total revenue rose 2.5% to $1.45B, just under the $1.49B projection.  The company is working to boost sales in the Nook unit by expanding outside the US.  It will open a website in the UK in the next few months to sell digital books & Nook devices would soon appear in retailers there.  BKS will also look to grow overseas through a proposed partnership with Microsoft (MSFT), a Dow stock.  MSFT will invest $300M for an 18% stake in a Nook subsidiary that may be spun off into a standalone company.  It has also agreed to spend $305M over 5 years on revenue sharing & capital expenditures.  The stock lost 48¢.

Barnes & Noble Falls After Second Consecutive Nook Sales Drop

Barnes & Noble (BKS)

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Whole Foods Sees Stores Tripling With Embrace of Produce

Photo:   Bloomberg

When Whole Foods announced last year opening a store in downtown Detroit, the reaction was predictable: Whole Foods? In Detroit?  The move reflects a new direction for America’s largest purveyor of natural goods, according to CEO Walter Robb.  “We’re accelerating growth,” Robb said.  “That’s going to take us places we have not been to before.”  As WFM prepares to open the Detroit store in May, it’s planning to triple its store count to 1K & boost sales by opening locations in underserved areas & smaller markets.  Supermarkets are fighting for share as Americans eat out more & grocery-store sales stagnate. Industry revenue will grow an estimated 0.4% to $491B this year, according to IBISWorld.  Sales at WFM may rise 16% to $11.7B in fiscal 2012.  Its “niche product lines and loyal customer base” will help propel continuing sales growth, IBISWorld said.  The stock stock was up 85¢ today & is up $35 in the last year.

Whole Foods Sees Stores Tripling With Embrace of Produce

Whole Foods (WFM)

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Stocks have had an excellent run since early Jun.  Dow gained 1200 with only minor setbacks along the way.  Even bulls need time to pause & rest.  There is nothing new going on.  Hopes are running high that the euro biggies will supply magic to cure the debt mess.  With all the meetings this week, anything can come from them.  But it's difficult to imagine a long term cure for fundamental problems with deep roots.  Dow is 200 below its yearly highs & may try again shortly for new highs.

Dow Jones Industrials

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