Dow gained 34, advancers over decliners 4-3 & NAZ was up 9. The Financial Index added 1 to the 214s. The MLP index rose 1+ to over 410 while the REIT index dropped 2 to the 259s. Junk bond funds edged higher & Treasuries pulled back. The yield on the 10 year Treasury is near its highest level since mid May. Oil was little changed
after giving up a gain of 1.2%. Gold rebounded, heading for the
biggest gain in 3 weeks, as Brazil & Turkey’s central
banks increased holdings of gold & amid signs
that purchases are rising in India, the world’s biggest buyer.
Photo: Bloomberg
Weekly applications for unemployment aid fell last week to 369K, a level consistent with modest hiring. The Labor Dept said that applications dropped 23K, from a revised 392K in the previous week. The 4 week average rose to 368K. The figures appear to have stabilized after being distorted in the previous 2 weeks by seasonal adjustment problems. Applications are a proxy for layoffs. When they fall below 375K, it suggests hiring is strong enough to lower the unemployment rate. Employers are hesitant to add more workers as long as growth remains tepid & Europe's financial crisis threatens to push that region into recession. Many also are holding off because they are worried about tax increases & gov spending cuts that would kick in next year if Congress doesn't reach a budget deal to avert them. The number continuing to receive unemployment aid fell to 4.9M, about 85K fewer than the previous week. Some of those no longer receiving benefits may have gotten jobs, but many have simply used up all the benefits available to them.
Firings Highest Since 2010 as Ford to Dow Face Slump
US companies remained cautious in Sep & held back on orders for long-lasting manufactured goods that signal investment plans. Weak business investment has contributed to slower economic growth. The Commerce Dept said that orders for durable goods jumped 9.9% last month. While it was the biggest gain in nearly 3 years, most of the gain was driven by a tremendous spike in aircraft orders, which are very volatile & plummeted in the previous month. When taking out transportation, orders rose just 2%. Demand for core capital goods, such as machinery and equipment, were unchanged in Sep. Core capital goods are considered a proxy for business investment plans & those orders rose only slightly in Aug after steep declines in Jul & Jun. Demand is sharply lower this year, which has weakened manufacturing & hampered economic growth. Businesses have held back on investing in machinery & equipment. And slower global growth has dampened demand for US exports.
Orders for U.S. Capital Goods Stagnate Spending Slumps
Procter & Gamble, a Dow stock & Dividend Aristocrat, fiscal Q1 net income fell 7%, as costs related to restructuring & the stronger dollar weighed on results. But adjusted results beat expectations, as it cut costs, made market share gains & commodity costs eased. PG, maker of Tide & Pampers, said it held or grew market share in businesses representing over 45% of sales, up from 30% in the prior qtr. That jumped to nearly 60% in the US, up from 15% in the prior qtr. Its market share is still slightly down globally, but it expects global market share gains by H2 of the year. In May PG announced a plan to focus on its 40 top businesses, 20 biggest new products & 10 most profitable emerging markets, as it is undergoes a cost-cutting plan aimed at saving $10B by fiscal 2016. "We're confident that this strategy will enable P&G to generate superior levels of shareholder return in both the short and long term," CEO McDonald said. EPS fell to 96¢, down from $1.03 last year. Excluding restructuring & European legal charges, core EPS was $1.06, beating expectations of 96¢. Revenue fell 4% to $20.7B & analysts expected $20.8B. The stronger dollar, which cuts into the value of overseas sales, hurt revenue by 6 percentage points. For fiscal Q2, PG predicts adjusted core EPS of $1.07-$1.13 with revenue ranging from -1% to -1%, implying revenue $21.9B-$22.3B. Analysts expect $1.09 on revenue of $21.8B. For the full year PG kept its guidance for adjusted core earnings of $3.80-$4 on flat revenue growth to +1%. The stock rose $2.45.
P&G First-Quarter Profit Exceeds Analyst Estimates as McDonald Trims Costs
Stocks are doing a little better, but buying is not robust. News continues to be so-so at best. The 2 big problems with earnings reports are sluggish sales, sometimes even lower, & a negative foreign earnings impact. Weak sales is the biggest problem & that is not going away soon with Europe in recession & the US looking at the approaching fiscal cliff & its effects. Meanwhile Dow keeps lumbering along, just above 13K. If that support level gives way, look out below.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.106% | |
U.S. 2-year |
0.305% | |
U.S. 10-year |
1.835% |
| CLG13.NYM | ...Crude Oil Feb 13 | ...87.47 | ..... 0.63 | (0.7%) |
| GCV12.CMX | ...Gold Oct 12 | .....1,715.20 | ... 14.70 | (0.9%) |
Weekly applications for unemployment aid fell last week to 369K, a level consistent with modest hiring. The Labor Dept said that applications dropped 23K, from a revised 392K in the previous week. The 4 week average rose to 368K. The figures appear to have stabilized after being distorted in the previous 2 weeks by seasonal adjustment problems. Applications are a proxy for layoffs. When they fall below 375K, it suggests hiring is strong enough to lower the unemployment rate. Employers are hesitant to add more workers as long as growth remains tepid & Europe's financial crisis threatens to push that region into recession. Many also are holding off because they are worried about tax increases & gov spending cuts that would kick in next year if Congress doesn't reach a budget deal to avert them. The number continuing to receive unemployment aid fell to 4.9M, about 85K fewer than the previous week. Some of those no longer receiving benefits may have gotten jobs, but many have simply used up all the benefits available to them.
Firings Highest Since 2010 as Ford to Dow Face Slump
US companies remained cautious in Sep & held back on orders for long-lasting manufactured goods that signal investment plans. Weak business investment has contributed to slower economic growth. The Commerce Dept said that orders for durable goods jumped 9.9% last month. While it was the biggest gain in nearly 3 years, most of the gain was driven by a tremendous spike in aircraft orders, which are very volatile & plummeted in the previous month. When taking out transportation, orders rose just 2%. Demand for core capital goods, such as machinery and equipment, were unchanged in Sep. Core capital goods are considered a proxy for business investment plans & those orders rose only slightly in Aug after steep declines in Jul & Jun. Demand is sharply lower this year, which has weakened manufacturing & hampered economic growth. Businesses have held back on investing in machinery & equipment. And slower global growth has dampened demand for US exports.
Orders for U.S. Capital Goods Stagnate Spending Slumps
Procter & Gamble, a Dow stock & Dividend Aristocrat, fiscal Q1 net income fell 7%, as costs related to restructuring & the stronger dollar weighed on results. But adjusted results beat expectations, as it cut costs, made market share gains & commodity costs eased. PG, maker of Tide & Pampers, said it held or grew market share in businesses representing over 45% of sales, up from 30% in the prior qtr. That jumped to nearly 60% in the US, up from 15% in the prior qtr. Its market share is still slightly down globally, but it expects global market share gains by H2 of the year. In May PG announced a plan to focus on its 40 top businesses, 20 biggest new products & 10 most profitable emerging markets, as it is undergoes a cost-cutting plan aimed at saving $10B by fiscal 2016. "We're confident that this strategy will enable P&G to generate superior levels of shareholder return in both the short and long term," CEO McDonald said. EPS fell to 96¢, down from $1.03 last year. Excluding restructuring & European legal charges, core EPS was $1.06, beating expectations of 96¢. Revenue fell 4% to $20.7B & analysts expected $20.8B. The stronger dollar, which cuts into the value of overseas sales, hurt revenue by 6 percentage points. For fiscal Q2, PG predicts adjusted core EPS of $1.07-$1.13 with revenue ranging from -1% to -1%, implying revenue $21.9B-$22.3B. Analysts expect $1.09 on revenue of $21.8B. For the full year PG kept its guidance for adjusted core earnings of $3.80-$4 on flat revenue growth to +1%. The stock rose $2.45.
P&G First-Quarter Profit Exceeds Analyst Estimates as McDonald Trims Costs
Procter & Gamble (PG)
Stocks are doing a little better, but buying is not robust. News continues to be so-so at best. The 2 big problems with earnings reports are sluggish sales, sometimes even lower, & a negative foreign earnings impact. Weak sales is the biggest problem & that is not going away soon with Europe in recession & the US looking at the approaching fiscal cliff & its effects. Meanwhile Dow keeps lumbering along, just above 13K. If that support level gives way, look out below.
Dow Jones Industrials
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