Dow lost 242, decliners over advanvers a very big 7-1 & NAZ was off 33. The Financial Index fell 4 to 213. The MLP index was off 4 to the 405 & the REIT index fell 4 to below 260. Junk bond funds were mixed & Treasuries rose. Oil dropped to a 3 month low as companies reported earnings results that missed
forecasts, bolstering concern that the global economy & fuel demand will slow. Gold was also lower, heading back down to $1700.
Photo: Bloomberg
Spain's economy contracted for a 5th qtr, adding pressure on Premier Rajoy to seek more European aid even as the euro area’s 4th-largest economy met a bill-sales target. GDP fell 0.4% in Q3 from Q2, matching the contraction of Q2, the Bank of Spain said. The forecast was for a 0.7% contraction. Spain’s bonds have declined since EU leaders last week failed to discuss further aid for the nation at thier summit. Rajoy has struggled to trim a 2011 budget deficit that was more than 3 times the EU limit, after the country’s deepening recession pushed the jobless rate over 25%, sapping demand & tax revenue. Spain’s economy probably contracted 1.7% in Q3 from a year ago, as job losses continued, households ate into their savings & low disposable income reduced their ability to pay down debt, the Bank of Spain said. Spain’s 10 year bond yield was at 5.4% after the nation sold €3.5B ($4.6B) of 3 & 6-month bills, in line with its maximum target for the auction. That compares with an intraday record of 7.75% on Jul 25, a day after Spain signed a document fixing the conditions for a €100B EU credit line for its banks. Even with those bond gains, Spain still pays 392 basis points more than Germany to borrow for 10 years. The bill sale took place after Moody’s lowered the credit rating on Catalonia, the biggest contributor to GDP, along with 4 other Spanish regions. This debt mess is not getting better anytime soon.
Spain Output Shrinks Fifth Quarter Amid Bailout Talk: Economy
Photo: Yahoo
3M, a Dow stock & Dividend Aristocrat, reduced its profit expectations for this year because of what it calls "current economic realities." MMM makes everything from Post-it notes & Scotch tape to roofing granules, coatings for LCD screens, & traffic sign coatings. The variety of its businesses & its worldwide footprint make it an economic bellwether & CEO Inge Thulin said what it's seeing right now is a "slow-growth economy." "Q3 market conditions were challenging, and we expect this through the end of the year," Thulin said. The company expects EPS of $6.27-$6.35 for the year, versus its previous expectation of $6.35-$6.50. Analysts had been expecting $6.40. Revenue will be roughly flat because currency exchange rates will wipe out any increase. In Q3, net income rose 6.7% to $1.16B, from $1.09B a year ago & revenue fell slightly to $7.5B. EPS of $1.65 matched expectations, but revenue fell short of $7.63B. The revenue shortfall was mostly because foreign exchange rates worked against the company . All 6 business units reported at least small increases in sales, not counting foreign exchange or acquisitions. But revenue in dollars in some units declined. The stock fell 3.12.
3M cuts 2012 guidance, citing "economic realities' AP
Photo: Bloomberg
DuPont, another Dow stock, will eliminate 1.5K jobs after posting a smaller-than-estimated Q3 profit & cutting its forecast on declining demand for paint pigment & solar cells. EPS dropped to a penny from 48¢ a year earlier. EPS excluding earnings from the auto-paint unit & one-time items was 32¢, trailing the 47¢ estimate. CEO Ellen Kullman plans to save $450M with the job cuts & other actions as a weak global economy challenges her 12% profit-growth target. About half the reductions are tied to the auto-paint business, which DD previously agreed to sell to Carlyle Group for $4.9B. EPS this year from continuing operations will be $3.25-$3.30, which excludes one-time costs & about 41¢ from the auto-paint unit that’s being sold, down from the company’s prior forecast of about $4.20, or $3.79 adjusted to exclude auto paint. The analyst estimate was for $3.91. Revenue fell 9.2% to $7.4B as sales volumes dropped 5% & average prices climbed 1%. Currency exchange reduced the value of sales by 4 percentage points. The stock sank 4.08.
DuPont to Cut 1,500 Jobs as Profit Misses Estimates
It's hard to find good words in these earnings reports. In short, business is crumby. OK, Europe is doing worse & China is adjusting to slower growth, that that just adds to the misery in these reports. Dow is down 400 from the 13½K trend line it has been on for more than a month.& is back to where it was in early Aug (on the way up). Bears have taken over the markets & earnings reports will give them more strength.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.101% | |
U.S. 2-year |
0.299% | |
U.S. 10-year |
1.771% |
| CLX12.NYM | ...Crude Oil Nov 12 | ...88.30 | ..... 0.43 | (0.5%) |
| GCX12.CMX | ...Gold Nov 12 | .....1,712.60 | ... 12.70 | (0.7%) |
Photo: Bloomberg
Spain's economy contracted for a 5th qtr, adding pressure on Premier Rajoy to seek more European aid even as the euro area’s 4th-largest economy met a bill-sales target. GDP fell 0.4% in Q3 from Q2, matching the contraction of Q2, the Bank of Spain said. The forecast was for a 0.7% contraction. Spain’s bonds have declined since EU leaders last week failed to discuss further aid for the nation at thier summit. Rajoy has struggled to trim a 2011 budget deficit that was more than 3 times the EU limit, after the country’s deepening recession pushed the jobless rate over 25%, sapping demand & tax revenue. Spain’s economy probably contracted 1.7% in Q3 from a year ago, as job losses continued, households ate into their savings & low disposable income reduced their ability to pay down debt, the Bank of Spain said. Spain’s 10 year bond yield was at 5.4% after the nation sold €3.5B ($4.6B) of 3 & 6-month bills, in line with its maximum target for the auction. That compares with an intraday record of 7.75% on Jul 25, a day after Spain signed a document fixing the conditions for a €100B EU credit line for its banks. Even with those bond gains, Spain still pays 392 basis points more than Germany to borrow for 10 years. The bill sale took place after Moody’s lowered the credit rating on Catalonia, the biggest contributor to GDP, along with 4 other Spanish regions. This debt mess is not getting better anytime soon.
Spain Output Shrinks Fifth Quarter Amid Bailout Talk: Economy
3M, a Dow stock & Dividend Aristocrat, reduced its profit expectations for this year because of what it calls "current economic realities." MMM makes everything from Post-it notes & Scotch tape to roofing granules, coatings for LCD screens, & traffic sign coatings. The variety of its businesses & its worldwide footprint make it an economic bellwether & CEO Inge Thulin said what it's seeing right now is a "slow-growth economy." "Q3 market conditions were challenging, and we expect this through the end of the year," Thulin said. The company expects EPS of $6.27-$6.35 for the year, versus its previous expectation of $6.35-$6.50. Analysts had been expecting $6.40. Revenue will be roughly flat because currency exchange rates will wipe out any increase. In Q3, net income rose 6.7% to $1.16B, from $1.09B a year ago & revenue fell slightly to $7.5B. EPS of $1.65 matched expectations, but revenue fell short of $7.63B. The revenue shortfall was mostly because foreign exchange rates worked against the company . All 6 business units reported at least small increases in sales, not counting foreign exchange or acquisitions. But revenue in dollars in some units declined. The stock fell 3.12.
3M cuts 2012 guidance, citing "economic realities' AP
3M (MMM)
DuPont, another Dow stock, will eliminate 1.5K jobs after posting a smaller-than-estimated Q3 profit & cutting its forecast on declining demand for paint pigment & solar cells. EPS dropped to a penny from 48¢ a year earlier. EPS excluding earnings from the auto-paint unit & one-time items was 32¢, trailing the 47¢ estimate. CEO Ellen Kullman plans to save $450M with the job cuts & other actions as a weak global economy challenges her 12% profit-growth target. About half the reductions are tied to the auto-paint business, which DD previously agreed to sell to Carlyle Group for $4.9B. EPS this year from continuing operations will be $3.25-$3.30, which excludes one-time costs & about 41¢ from the auto-paint unit that’s being sold, down from the company’s prior forecast of about $4.20, or $3.79 adjusted to exclude auto paint. The analyst estimate was for $3.91. Revenue fell 9.2% to $7.4B as sales volumes dropped 5% & average prices climbed 1%. Currency exchange reduced the value of sales by 4 percentage points. The stock sank 4.08.
DuPont to Cut 1,500 Jobs as Profit Misses Estimates
DuPont (DD)
It's hard to find good words in these earnings reports. In short, business is crumby. OK, Europe is doing worse & China is adjusting to slower growth, that that just adds to the misery in these reports. Dow is down 400 from the 13½K trend line it has been on for more than a month.& is back to where it was in early Aug (on the way up). Bears have taken over the markets & earnings reports will give them more strength.
Dow Jones Industrials
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