Friday, November 9, 2012

Higher markets on positive economic data

Dow gained 33, advancers slightly ahead of decliners & NAZ was up 22.  The Financial Index rose 1+ to the 209s.  The MLP index sank another 4+ to the 391s & the REIT index lost a fraction to 258.  Junk bond funds were lower & Treasuries hardly budged.  Oil was flat while gold inched higher on growing uncertainties about the world economy.

AMJ (Alerian MLP Index tracking fund)

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Treasury yields:

U.S. 3-month

0.086%

U.S. 2-year

0.258%

U.S. 10-year

1.627%

CLZ12.NYM....Crude Oil Dec 12...85.12 ...Up 0.03 (0.0%)

GCX12.CMX...Gold Nov 12.....1,727.60 ...Up 2.20 (0.1%)







Disney Sinks as Sales Miss Estimates on ABC Ad Drop: L.A. Mover

Photo:   Bloomberg

Walt Disney, a Dow stock sank after it warned of challenges that would pressure results in the current qtr.  CFO Jay Rasulo said that rising sports costs & home video sales declines would hurt fiscal Q1 results (Oct-Dec).  Yesterday after the close, DIS posted net income in its fiscal Q4 that ended in Sep of $1.2B, up 14% from the year-ago period.  Analysts started trimminged their target prices on DIS shares.  CEO Bob Iger said that DIS was entering a "transition year" after making investments in projects such as the "Cars Land" expansion at Disneyland Resort in California & a new cruise ship that launched this year. The company is moving from "investment mode" into "a more compelling growth mode," he said.  DIS also plans to stimulate growth through its $4B acquisition of Lucasfilm, announced 2 weeks ago, & plans for 3 new "Star Wars" films starting in 2015. The stock sank 3.13 on the news.

Disney Declines Most in 15 Months After Sales Fall Short

Disney (DIS)


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  • A shopper walks down an aisle in a newly opened Walmart Neighborhood Market in Chicago in this September 21, 2011 file photo. REUTERS/Jim Young/Files
Photo:   Yahoo

Americans' perceptions of the outlook for the economy & for employment improved in early Nov with consumer sentiment rising to its highest level in more than 5 years, the 4rth month in a row consumers' moods have improved.  The Thomson Reuters/University of Michigan preliminary reading on the overall index on consumer sentiment rose to 84.9 from 82.6 in Oct, topping expectations for a reading of 83.  This was the highest level since Jul 2007.  The measure of consumer expectations also hit a more than 5-year high, rising to 80.8 from 79.0.  Most interviews for the survey were done before the presidential election earlier this week.  However the "fiscal cliff" of impending tax rises & gov spending cuts could be a shock to consumers if it is not quickly avoided, survey director Richard Curtin said.  The automatic spending cuts & significant tax increases set to come into effect in Jan could take $600B out of the economy & push it into recession, according to a non-partisan Congressional Budget Office's assessment.  The consumer sentiment survey is now consistent with a gain in consumer spending of 2.5% according to the report.



J.C. Penney Loss Is Wider Than Estimated as Turnaround Falters

Photo:   Bloomberg

JC Penney reported a Q3 loss that was larger than expected as CEO Ron Johnson struggles to overhaul the 4- largest US department-store company.  EPS loss of 56¢ compares with a loss of 67¢ a year earlier.  Excluding restructuring & management- transition costs, the loss was 93¢. But the estimate was for a 7¢ loss.  Johnson has lost customers as he transforms most stores into collections of branded shops & implements an everyday low pricing strategy.  He said that the old-style JC Penney, which still encompasses most stores, struggled in Q3 & faces “significant challenges,” calling it “a tale of 2 companies.”  Sales fell 27% to $2.9B, trailing average estimate of $3.3B.  Revenue declined by more than 20% in Q1 & Q2.  Same-store sales fell 26% in Q3, more than the 15% decline estimated by analysts.  Gross margin narrowed to 32.5% of sales from 37.4% a year earlier, hurt by lower-than- expected sales & an increase in clearance merchandise sales. The stock fell 88¢.

J.C. Penney Loss Is Wider Than Estimated as Turnaround Falters

JC Penney (JCP)


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This can be called a mild recovery after a lot of selling this week.  The news was better, especially on consumer confidence, but not good enough to bring out buyers in a big way.  The fiscal cliff is a dark cloud hanging over the markets & it is not going away without action from DC.  However, the pres decided to take off for a conference in Asia   This is another indication that nothing will be done about the fiscal cliff for a minimum of 1 month.  Don't worry, they will get serious about Xmas & then try to explain how a last minute political agreement is brilliant.  The new congress will worry about raising the debt ceiling, just another last minute decision coming from a DC without the will to tackle tough problems.  Markets may not as forgiving in the coming weeks as they have been in prior months.

Dow Jones Industrials

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