Dow slid 8, decliners ahead of advancers 2-1 & NAZ was fell 9. The Financial Index lost a fraction to the 209s. The MLP index was up 1 to the 394s & the REIT index fell 1 to the 256s. Junk bond funds slipped & Treasuries gained again, bringing the yield on the 10 year Treasury near a 4 month low. Demand has been rising for safe haven investments. But oil & gold were lower today.
Photo: Bloomberg
BFA-Bankia & 3 other Spanish nationalized lenders won EU approval for gov bailouts, paving the way for them to receive recapitalizations next month. Bankia, Novagalicia Banco & Catalunya Banc will reduce balance sheets by more than 60% by 2017 compared with 2010, exit real-estate lending & limit their wholesale businesses, the European Commission said. The restructuring plans agreed with EU regulators will create a healthier financial system & “a solvent base to play an active role in the growth of Spain from now on,” EU Competition Commissioner Joaquin Almunia said. The EU decision will allow Spain’s rescue fund, the FROB, to receive as much as €100B ($130B) of aid from the EU to help stabilize its banking system in the first half of Dec. The FROB will recapitalize the banks “once the necessary corporate operations have been completed,” it said. Spain has pledged to sell Novagalicia Banco & Catalunya Banc within 5 years or wind them down. Banco de Valenciawas bought by CaixaBank SA for 1€. This is what a debt mess looks like, not pretty. Salvaging anything from this rescue plan will be difficult.
Bankia Among Spanish Lenders Winning EU Approval for Rescue
Photo: Yahoo
New single-family home sales fell slightly in Oct & the gov revised sharply lower its estimate for the prior month's sales, casting a small shadow over what has been one of the brighter spots in the US economy. The Commerce Dept said sales dropped 0.3% last month to 368K annual rate. Gov data for new home sales are subject to substantial revisions & the Commerce Dept cut its estimate for sales in Sep by 20K to a 369K rate. The data leaves the pace of new home sales just below the pace reported in May, suggesting little upward momentum in the market for new homes. Still, the report gave some upbeat signals that reinforced the housing sector as a point of strength in an economy beset by flagging business confidence & cooling demand abroad. The median price of a new home rose 5.7% from a year ago. The forecast was for sales rising to a 390K rate last month from the previously reported 389K rate. Superstorm Sandy at the end of last month probably had a "minimal" effect on sales activity, & did not affect collection of data.
Costco declared a special div of $7 a share payable Dec 18. The special payout comes on top of the regular div of 27½¢ declared a month ago. Separately, COST reported that Nov same-store sales rose 6%, including increases of 6% in the US & 7% internationally. Total sales for the month rose 9% to $8.15B from $7.51B in the year-earlier month. The $7-a-share payment reflects the company’s “strong balance sheet and favorable access to the credit markets,” CFO Richard Galanti said as COST reported a 10% increase in its fiscal Q1 sales. The stock jumped $4.29.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.096% | |
U.S. 2-year |
0.258% | |
U.S. 10-year |
1.601% |
| CLF13.NYM | ....Crude Oil Jan 13 | ...85.68 | ... 1.50 | (1.7%) |
| GCX12.CMX | ...Gold Nov 12 | ....1,739.80 | ... 2.40 | (0.1%) |
Photo: Bloomberg
BFA-Bankia & 3 other Spanish nationalized lenders won EU approval for gov bailouts, paving the way for them to receive recapitalizations next month. Bankia, Novagalicia Banco & Catalunya Banc will reduce balance sheets by more than 60% by 2017 compared with 2010, exit real-estate lending & limit their wholesale businesses, the European Commission said. The restructuring plans agreed with EU regulators will create a healthier financial system & “a solvent base to play an active role in the growth of Spain from now on,” EU Competition Commissioner Joaquin Almunia said. The EU decision will allow Spain’s rescue fund, the FROB, to receive as much as €100B ($130B) of aid from the EU to help stabilize its banking system in the first half of Dec. The FROB will recapitalize the banks “once the necessary corporate operations have been completed,” it said. Spain has pledged to sell Novagalicia Banco & Catalunya Banc within 5 years or wind them down. Banco de Valenciawas bought by CaixaBank SA for 1€. This is what a debt mess looks like, not pretty. Salvaging anything from this rescue plan will be difficult.
Bankia Among Spanish Lenders Winning EU Approval for Rescue
New single-family home sales fell slightly in Oct & the gov revised sharply lower its estimate for the prior month's sales, casting a small shadow over what has been one of the brighter spots in the US economy. The Commerce Dept said sales dropped 0.3% last month to 368K annual rate. Gov data for new home sales are subject to substantial revisions & the Commerce Dept cut its estimate for sales in Sep by 20K to a 369K rate. The data leaves the pace of new home sales just below the pace reported in May, suggesting little upward momentum in the market for new homes. Still, the report gave some upbeat signals that reinforced the housing sector as a point of strength in an economy beset by flagging business confidence & cooling demand abroad. The median price of a new home rose 5.7% from a year ago. The forecast was for sales rising to a 390K rate last month from the previously reported 389K rate. Superstorm Sandy at the end of last month probably had a "minimal" effect on sales activity, & did not affect collection of data.
Costco declared a special div of $7 a share payable Dec 18. The special payout comes on top of the regular div of 27½¢ declared a month ago. Separately, COST reported that Nov same-store sales rose 6%, including increases of 6% in the US & 7% internationally. Total sales for the month rose 9% to $8.15B from $7.51B in the year-earlier month. The $7-a-share payment reflects the company’s “strong balance sheet and favorable access to the credit markets,” CFO Richard Galanti said as COST reported a 10% increase in its fiscal Q1 sales. The stock jumped $4.29.
Costco Gains on $3 Billion $7-a-Share Special Dividend
Stocks are meandering again with a downward bias. It's not business as usual. Dragging out the biudget debate hurts businesses. Holiday retail sales will probably have a respectable showing. But that will be followed by next year with a serious threat of higher taxes & federal budget cuts. There is no shortage of talk out of DC, but both sides have dug in & neither shows a sign of compromising to resolve the budget debate. Now, raising the debt ceiling is getting more attention. Even after pulling a few tricks, the Treasury will not be able to pay all bills by the end of Feb. Stocks continue weak but so far have taken this uncertainty fairly well. That attitude may not last.
Costco (COST)
Stocks are meandering again with a downward bias. It's not business as usual. Dragging out the biudget debate hurts businesses. Holiday retail sales will probably have a respectable showing. But that will be followed by next year with a serious threat of higher taxes & federal budget cuts. There is no shortage of talk out of DC, but both sides have dug in & neither shows a sign of compromising to resolve the budget debate. Now, raising the debt ceiling is getting more attention. Even after pulling a few tricks, the Treasury will not be able to pay all bills by the end of Feb. Stocks continue weak but so far have taken this uncertainty fairly well. That attitude may not last.
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