Dow slid 5, advancers over decliners 2-1 & NAZ was up 2. The Financial Index rose 2+ to the 219s, a new yearly high (but still substantially under the 500+ record highs before the crash).
The MLP index rose 2+ to the 414s, a new record, & the REIT index slipped pocket change in the 264s. Junk bond funds wee mixed to higher & Treasuries had a major sell-off, raising the yield on the 10 year Treasury 8 basis points to 1.81%. Oil was even & gold crawled higher.
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Spain kept its investment grade credit rating from Moody’s, which said the ECB's willingness to buy the nation’s debt reduces the risk of the country losing market access. But Moody’s assigned a negative outlook on its Baa3 rating, one step above junk, as it concluded a review for a possible further downgrade of Spain initiated in Jun. Creditworthiness concerns have grown since Prime Minister Rajoy requested as much as €100B ($131B) in EU aid to shore up Spanish lenders amid signals the nation may miss its budget-deficit goals. S&P downgraded Spain on Oct 10, saying it doubted the loans will be mutualized among euro-region nations. Spain’s 10-year bonds advanced after the Moody’s decision, pushing borrowing costs to the lowest in more than 6 months. The 10-year bond yield fell 27 basis points to 5.54%, considerably below the intraday record of 7.75% on Jul 25, a day after Spain signed a document fixing the conditions for the bank aid. Even with those bond gains, Spain still pays 394 basis points more than Germany to borrow for 10 years. So far, Rajoy has held off on a decision about whether to request ECB and EU bond-buying to further lower borrowing costs.
Spain Retains Investment Grade Credit Rating From Moody’s
Chinese Premier Wen Jiabao said the country’s economic situation in Q3 was “relatively good,” a signal tomorrow’s report on GDP may show the country’s slowdown ebbing. “China’s economic growth has started to stabilize,” the official Xinhua News Agency said, citing meetings Wen held Oct 12-15 with industry leaders, company executives & local government officials. The gov is confident of achieving annual targets & the economy will continue to show “positive changes,” Wen said. Exports exceeded forecasts in Sep & money supply grew at the fastest pace in 15 months. Even so, the forecast tomorrow’s data should show growth decelerated for a 7th qtr, putting pressure on the ruling Communist Party to add stimulus ahead of a once-a-decade leadership transition. Wen has refrained from easing monetary policy since cutting interest rates in Jun & Jul. GDP probably expanded 7.4% in Q3 from a year earlier after growing at a 7.6% in Q2.
Wen Says China’s Economy ‘Relatively Good’ Ahead of GDP Report
Abbott Labs, a Dividend Aristocrat, reported a higher Q3 profit, edging past analyst expectations, even as revenue slipped. The company, which is in the process of spinning off some of its businesses, also laid off 550 employees globally & said it plans to eliminate several hundred additional positions next year in the nutrition, medical devices, established pharmaceuticals & molecular diagnostics divisions. The company recorded a $478M pretax restructuring charge in Q3 for costs tied to earlier job cuts & those anticipated for 2013. In Q3 EPS was $1.21, up from 19¢, a year ago. 2011,results included expenses from litigation, acquisitions & cost-cutting efforts. Excluding one-time items, EPS was $1.30 & revenue fell less than 1% to $9.77Bfrom $9.82B. Analysts predicted EPS of $1.28 & higher revenue of $9.94B. Results benefited from a 31% reduction in sales & administrative expenses ($2.92). Revenue would have increased 4% without the negative impact of changes in currency exchange rates. Stripping out the effect of currency changes, revenue from the branded drugs business rose 6.4%, while for the division that sells products including nutritional formula, revenue rose 6.3%. Those are the largest divisions by revenue. On the same basis, quarterly sales of the company's top seller, the anti-inflammatory drug Humira, rose 15.7% to $2.33B. The company plans to spin off its pharmaceutical business into a separate company by the end of 2012. The new company, AbbVie, will focus solely on branded drugs, including Humira. The split is meant to free the company from the risks & obligations of developing innovative pharmaceutical drugs, leaving it with a more predictable business built around nutritional formula, generic drugs & heart stents. The company narrowed its full-year 2012 profit forecast to $5.06-$5.08 per share from $5-$5.10 per share & analysts expect $5.06. The stock fell $3.16 today but has had a good run after announcing the company split last year.
Markets are back to not sure where to go after a few strong days. Bank stocks are doing well. The Financial Index (see above) is up 40 since the interim low of 179 on Jun 1. MLPs are flying again, with the index at a new record high. Even Apple (AAPL) can't make that claim. AAPL fell again today with news about more problems from its supplier Foxconn. I hope its fans recognize, this company is mortal like all others & is subject to major headaches. Meanwhile Dow is lumbering along at 13,557, stuck in a rut.
The MLP index rose 2+ to the 414s, a new record, & the REIT index slipped pocket change in the 264s. Junk bond funds wee mixed to higher & Treasuries had a major sell-off, raising the yield on the 10 year Treasury 8 basis points to 1.81%. Oil was even & gold crawled higher.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.106% | |
U.S. 2-year |
0.294% | |
U.S. 10-year |
1.806% |
| CLX12.NYM | ...Crude Oil Nov 12 | ....92.18 | ... 0.09 | (0.1%) |
Spain kept its investment grade credit rating from Moody’s, which said the ECB's willingness to buy the nation’s debt reduces the risk of the country losing market access. But Moody’s assigned a negative outlook on its Baa3 rating, one step above junk, as it concluded a review for a possible further downgrade of Spain initiated in Jun. Creditworthiness concerns have grown since Prime Minister Rajoy requested as much as €100B ($131B) in EU aid to shore up Spanish lenders amid signals the nation may miss its budget-deficit goals. S&P downgraded Spain on Oct 10, saying it doubted the loans will be mutualized among euro-region nations. Spain’s 10-year bonds advanced after the Moody’s decision, pushing borrowing costs to the lowest in more than 6 months. The 10-year bond yield fell 27 basis points to 5.54%, considerably below the intraday record of 7.75% on Jul 25, a day after Spain signed a document fixing the conditions for the bank aid. Even with those bond gains, Spain still pays 394 basis points more than Germany to borrow for 10 years. So far, Rajoy has held off on a decision about whether to request ECB and EU bond-buying to further lower borrowing costs.
Spain Retains Investment Grade Credit Rating From Moody’s
Chinese Premier Wen Jiabao said the country’s economic situation in Q3 was “relatively good,” a signal tomorrow’s report on GDP may show the country’s slowdown ebbing. “China’s economic growth has started to stabilize,” the official Xinhua News Agency said, citing meetings Wen held Oct 12-15 with industry leaders, company executives & local government officials. The gov is confident of achieving annual targets & the economy will continue to show “positive changes,” Wen said. Exports exceeded forecasts in Sep & money supply grew at the fastest pace in 15 months. Even so, the forecast tomorrow’s data should show growth decelerated for a 7th qtr, putting pressure on the ruling Communist Party to add stimulus ahead of a once-a-decade leadership transition. Wen has refrained from easing monetary policy since cutting interest rates in Jun & Jul. GDP probably expanded 7.4% in Q3 from a year earlier after growing at a 7.6% in Q2.
Wen Says China’s Economy ‘Relatively Good’ Ahead of GDP Report
Abbott Labs, a Dividend Aristocrat, reported a higher Q3 profit, edging past analyst expectations, even as revenue slipped. The company, which is in the process of spinning off some of its businesses, also laid off 550 employees globally & said it plans to eliminate several hundred additional positions next year in the nutrition, medical devices, established pharmaceuticals & molecular diagnostics divisions. The company recorded a $478M pretax restructuring charge in Q3 for costs tied to earlier job cuts & those anticipated for 2013. In Q3 EPS was $1.21, up from 19¢, a year ago. 2011,results included expenses from litigation, acquisitions & cost-cutting efforts. Excluding one-time items, EPS was $1.30 & revenue fell less than 1% to $9.77Bfrom $9.82B. Analysts predicted EPS of $1.28 & higher revenue of $9.94B. Results benefited from a 31% reduction in sales & administrative expenses ($2.92). Revenue would have increased 4% without the negative impact of changes in currency exchange rates. Stripping out the effect of currency changes, revenue from the branded drugs business rose 6.4%, while for the division that sells products including nutritional formula, revenue rose 6.3%. Those are the largest divisions by revenue. On the same basis, quarterly sales of the company's top seller, the anti-inflammatory drug Humira, rose 15.7% to $2.33B. The company plans to spin off its pharmaceutical business into a separate company by the end of 2012. The new company, AbbVie, will focus solely on branded drugs, including Humira. The split is meant to free the company from the risks & obligations of developing innovative pharmaceutical drugs, leaving it with a more predictable business built around nutritional formula, generic drugs & heart stents. The company narrowed its full-year 2012 profit forecast to $5.06-$5.08 per share from $5-$5.10 per share & analysts expect $5.06. The stock fell $3.16 today but has had a good run after announcing the company split last year.
Markets are back to not sure where to go after a few strong days. Bank stocks are doing well. The Financial Index (see above) is up 40 since the interim low of 179 on Jun 1. MLPs are flying again, with the index at a new record high. Even Apple (AAPL) can't make that claim. AAPL fell again today with news about more problems from its supplier Foxconn. I hope its fans recognize, this company is mortal like all others & is subject to major headaches. Meanwhile Dow is lumbering along at 13,557, stuck in a rut.
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