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.
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
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.
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
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.
AMJ (Alerian MLP Index tracking fund)
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 | ... 0.03 | (0.0%) |
| GCX12.CMX | ...Gold Nov 12 | .....1,727.60 | ... 2.20 | (0.1%) |
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)
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.
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)
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.
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