Dow sank 243, decliners ahead of advancers 5-2 & NAZ lost 26. The Financial Index was off 3½ to the 213s. The MLP index found some buyers to reduce its loss (down 1+ to 408) & the REIT index fell 2+ to the 261s. Junk bond funds were mixed to lower & Treasuries rose as stocks declined. Oil slid lower & gold fell to a 6 week low
as the dollar’s advance curbed demand for the metal as an
alternative investment.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Bloomberg
Spanish Prime Minister Rajoy said there is a case for easing budget-deficit targets set by the EU as the recession undermines tax revenue. “I think what a lot of other people think,” Rajoy told the senate. “Things could be done more calmly, taking into account especially that we are in a recession, but in any case I can’t give up on Spain’s commitments.” Rajoy’s comments undercut Budget Minister Montoro’s insistence that Spain can stick to the path of budget consolidation demanded by the EU even after the Bank of Spain said the euro area’s 4th-largest economy contracted for a 5th qtr. “In 2012, we definitively will comply with our target,” Montoro said as he presented the 2013 budget. The EU has set Spain a goal of 6.3% of GDP this year, after overspending amounted to 9.4% last year, as much as Greece & the 2nd-highest shortfall behind Ireland. Spain’s borrowing costs rose 12 basis points to 5.6% yesterday after the Bank of Spain said the recession will worsen in coming months & called on the gov to take further measures to fulfill its commitments. Economy Minister Luis de Guindos meanwhile told lawmakers that Spain’s access to funding has improved. “We are starting to see foreign investors coming back to back Spanish debt purchases,” he said. “That is fundamentally due to two reasons: because the government is doing what it has to do, and because we are all acting to dissipate doubts on the euro’s future.” This situation remains fuzzy.
AMJ (Alerian MLP Index Tracking fund)
Treasury yields:
U.S. 3-month |
0.101% | |
U.S. 2-year |
0.291% | |
U.S. 10-year |
1.764% |
| CLX12.NYM | ...Crude Oil Nov 12... | 88.30 | ... 0.43 | (0.5%) |
Photo: Bloomberg
Spanish Prime Minister Rajoy said there is a case for easing budget-deficit targets set by the EU as the recession undermines tax revenue. “I think what a lot of other people think,” Rajoy told the senate. “Things could be done more calmly, taking into account especially that we are in a recession, but in any case I can’t give up on Spain’s commitments.” Rajoy’s comments undercut Budget Minister Montoro’s insistence that Spain can stick to the path of budget consolidation demanded by the EU even after the Bank of Spain said the euro area’s 4th-largest economy contracted for a 5th qtr. “In 2012, we definitively will comply with our target,” Montoro said as he presented the 2013 budget. The EU has set Spain a goal of 6.3% of GDP this year, after overspending amounted to 9.4% last year, as much as Greece & the 2nd-highest shortfall behind Ireland. Spain’s borrowing costs rose 12 basis points to 5.6% yesterday after the Bank of Spain said the recession will worsen in coming months & called on the gov to take further measures to fulfill its commitments. Economy Minister Luis de Guindos meanwhile told lawmakers that Spain’s access to funding has improved. “We are starting to see foreign investors coming back to back Spanish debt purchases,” he said. “That is fundamentally due to two reasons: because the government is doing what it has to do, and because we are all acting to dissipate doubts on the euro’s future.” This situation remains fuzzy.
Apple is refusing to compete on price with its rivals in the tablet market. It's pricing the new, smaller iPad well above the competition. The company revealed the iPad Mini, with a screen that's about 2/3 the size of the full-size model, & said it will cost $329 & up. Orders for the new model will be taken on Fri, Oct 26. Later, the company will add models capable of accessing "LTE" wireless data networks. The price fits into the product lineup between the iPad 2 at $399 & the latest version of the iPod touch at $299. But company watchers had been expecting AAPL to price the iPad Mini at $250-$300 to counter the threat of less expensive tablets like Kindle Fire from Amazon (AMZN), which starts at $159, Nook HD from Barnes & Noble (BKS) & Nexus 7 from Google (GOOG), both starting at $199. It also introduced upgrades across its computer product line, adding a redesigned iMac desktop with a thinner profile, a more powerful Mac mini & a 13" notebook that boasts a high definition display. The iMac, which integrates the display & components into a single unit, now is 5 millimeters thick at the edges, & includes more power computing & expanded data storage options. The 21½" iMac will sell from $1299 & the 27" from $1799. A 13" MacBook Pro with a high-definition display & thinner profile was also introduced. The stock sank $21 & is down more than $90 from its recent record high..
Apple Upgrades Mac Notebook and Desktop Computer Line
Apple (AAPL)
Xerox Q3 profit fell 12% as demand for its equipment & supplies declined. EPS dropped to 21¢ from 22¢ last year. EPS excluding some items matched the 25¢ estimate. Xerox said it faces weaker-than-expected demand in Europe amid economic turmoil & competitive pricing. Investors have been looking for increased profitability in services, where the company is making up for declining printing revenue with contracts such as automating payments for govs or processing claims for insurers. XRX & competitors are trying to redefine themselves as business-services companies as consumers choose to view documents on mobile devices rather than print them. The 2010 acquisition of Affiliated Computer Services has helped it in the transition period. Q3 sales fell 2.9% to $5.4B, which included a 2 percentage point negative currency impact. Services revenue advanced 4.8% to $2.8B. The stock dropped 36¢.
Xerox Third-Quarter Profit Falls 12% as Printing-Equipment Demand Wanes
Xerox (XRX)
Stocks continue to lose ground in what is turning out to be a very bad earnings season. Much of the weakness stems from the macro economic conditions which are not encouraging. The recession in Europe is biting hard on companies which sell products worldwide. China & other developing countries are not giving the boost that has been the case. In addition, the currency impact is negative. The US is facing a fiscal cliff that causes companies to limit expansion plans. There have been enough reports & warnings given already to tell us that this will be a rough time for the stock market. Dow may have to test the 13K floor very soon.
Dow Jones Industrials
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