Dow slipped 11, advancers ahead of decliners 2-1 & NAZ lost only 1. The Financial Index jumped another 2 to 210, a new high since the start of Apr. The MLP index lost a fraction to the 395s & the REIT index rose a fraction to the 271s, a new yearly high (barely). Junk bond funds were mixed to lower & Treasuries advanced for the first time in 4 days on Federal Reserve wagers. Oil fell for the first time in 3 days after US payrolls increased less than expected in Aug. Gold continued rising, betting on negative results after more stimulus.
Photo: Yahoo
US employers added just 96K jobs last month, a very weak figure. The unemployment rate fell to 8.1% from 8.3% in Jul because more people gave up looking for jobs. People who are out of work are counted as unemployed only if they're looking for a job. The gov also said that 41K fewer jobs were created in Jul & Jun than first estimated. The economy has added just 139K jobs a month since the start of the year, below 2011's average of 153K. Cash-short govs were a key reason the job market was weaker in Jun & Jul than first estimated. Federal, state & local govs cut 39K jobs in those months, above the earlier estimate of 18K. In previous recoveries, govs have typically added jobs, not shed them. This report was discouraging throughout. Hourly pay fell, manufacturers cut the most jobs in 2 years & the number in the work force dropped to its lowest level in 31 years.
Photo: Yahoo
Intel, a Dow stock, cut its Q3 revenue estimate & withdrew its full-year forecast, saying demand for its chips declined as customers reduced inventory & businesses bought fewer personal computers. Chip makers in the PC industry have been hit by a shaky global economy & consumers shifting toward tablets & smartphones. INTC lowered its full-year revenue forecast in Jul, saying consumer spending in Europe & the US had been weaker than what the company had previously expected. The company said on today it expects Q3 revenue of $13.2B, plus or minus $0.3B, down from its previous forecast of $13.8-$14.8B. Full-year capital spending is expected to be below the low-end of its previous forecast of $12.1-$12.9B. The company withdrew all other quarterly & full-year expectations. INTC expects gross margin of 62% for Q3, plus or minus one percentage point, down from its previous expectation of 63%, plus or minus a couple of percentage points. The stock fell 75¢.
Photo: Bloomberg
Italian Prime Minister Monti said the ECB's bond-buying plan reduced the stigma of asking for aid, as he followed Spanish counterpart Mariano Rajoy in resisting tapping the bailout program. “The drama in the word ‘help’ has been reduced,” Monti said. “Now, there are ways in the European Union, which must be used under careful conditionality and in the interest of all, to confront” unreasonable increases in borrowing costs, he added. Monti said he was trying to avoid seeking aid, & echoed Rajoy in saying it was premature to comment on the details of the plan. Rajoy said in Madrid he needed time to study the proposal, resisting pressure to say whether he would seek a rescue more than a month after saying he may consider it. ECB President Draghi handed the initiative back to govs as he said the central bank would only buy debt from nations that seek aid tied to strict conditions from Europe's gov-led rescue facilities. Rajoy, who faces a regional election next month amid a slide in popular support, may be playing for time as he tries to soften the austerity demands tied to such support. Spanish bonds rose today, pushing the benchmark 10-year yield below 6% for the first time since May 25. The yield on Italian debt of a similar maturity fell as low as 5.03%.
Monti Says ECB Bond-Purchase Plan Reduces Stigma as Rajoy Stalls on Aid
Markets aren't sure what to do. They want to go higher but in the face of a weak jobs reports & a negative outlook from INTC, buyers don't want to commit. Wait & see will probably be the main theme today. Next week brings the FOMC meeting & everybody is waiting for what comes out of that. But bulls are happy that Dow remains above 13K, near its highs for the year.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month | 0.101% | |
U.S. 2-year | 0.246% | |
U.S. 10-year | 1.601% |
| CLV12.NYM | ...Crude Oil Oct 12 | ...94.98 | ..... 0.55 | (0.6%) |
| GCU12.CMX | ...Gold Sep 12 | .....1,730.10 | ... 27.50 | (1.6%) |
Get the latest daily market update below:
US employers added just 96K jobs last month, a very weak figure. The unemployment rate fell to 8.1% from 8.3% in Jul because more people gave up looking for jobs. People who are out of work are counted as unemployed only if they're looking for a job. The gov also said that 41K fewer jobs were created in Jul & Jun than first estimated. The economy has added just 139K jobs a month since the start of the year, below 2011's average of 153K. Cash-short govs were a key reason the job market was weaker in Jun & Jul than first estimated. Federal, state & local govs cut 39K jobs in those months, above the earlier estimate of 18K. In previous recoveries, govs have typically added jobs, not shed them. This report was discouraging throughout. Hourly pay fell, manufacturers cut the most jobs in 2 years & the number in the work force dropped to its lowest level in 31 years.
Intel, a Dow stock, cut its Q3 revenue estimate & withdrew its full-year forecast, saying demand for its chips declined as customers reduced inventory & businesses bought fewer personal computers. Chip makers in the PC industry have been hit by a shaky global economy & consumers shifting toward tablets & smartphones. INTC lowered its full-year revenue forecast in Jul, saying consumer spending in Europe & the US had been weaker than what the company had previously expected. The company said on today it expects Q3 revenue of $13.2B, plus or minus $0.3B, down from its previous forecast of $13.8-$14.8B. Full-year capital spending is expected to be below the low-end of its previous forecast of $12.1-$12.9B. The company withdrew all other quarterly & full-year expectations. INTC expects gross margin of 62% for Q3, plus or minus one percentage point, down from its previous expectation of 63%, plus or minus a couple of percentage points. The stock fell 75¢.
Intel (INTC)
Italian Prime Minister Monti said the ECB's bond-buying plan reduced the stigma of asking for aid, as he followed Spanish counterpart Mariano Rajoy in resisting tapping the bailout program. “The drama in the word ‘help’ has been reduced,” Monti said. “Now, there are ways in the European Union, which must be used under careful conditionality and in the interest of all, to confront” unreasonable increases in borrowing costs, he added. Monti said he was trying to avoid seeking aid, & echoed Rajoy in saying it was premature to comment on the details of the plan. Rajoy said in Madrid he needed time to study the proposal, resisting pressure to say whether he would seek a rescue more than a month after saying he may consider it. ECB President Draghi handed the initiative back to govs as he said the central bank would only buy debt from nations that seek aid tied to strict conditions from Europe's gov-led rescue facilities. Rajoy, who faces a regional election next month amid a slide in popular support, may be playing for time as he tries to soften the austerity demands tied to such support. Spanish bonds rose today, pushing the benchmark 10-year yield below 6% for the first time since May 25. The yield on Italian debt of a similar maturity fell as low as 5.03%.
Monti Says ECB Bond-Purchase Plan Reduces Stigma as Rajoy Stalls on Aid
Markets aren't sure what to do. They want to go higher but in the face of a weak jobs reports & a negative outlook from INTC, buyers don't want to commit. Wait & see will probably be the main theme today. Next week brings the FOMC meeting & everybody is waiting for what comes out of that. But bulls are happy that Dow remains above 13K, near its highs for the year.
Dow Jones Industrials
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