Friday, December 14, 2012

Markets waver on budget debate

Dow inched up 6, decliners just ahead of advancers & NAZ fell 13, again hurt by weak Apple stock.  The Financial Index slipped a fraction to 215.  The MLP index lost another fraction, going below 380, & the REIT index fell a fraction taking it below 261.  Junk bond funds were weak & Treasuries rose.  Oil rose as data showed manufacturing growth in the US & China.  Gold continued below $1700.

AMJ (Alerian MLP Inxex tracking fund)

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Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLF13.NYM...Crude Oil Jan 13...86.32 ...Up 0.43 (0.5%)

GCF13.CMX...Gold Jan 13.....1,695.70 ...Down 0.20  

Industrial Production in U.S. Jumps 1.1% on Rebound From Sandy

Photo:   Bloomberg

US factories rebounded in Nov from Superstorm Sandy, boosting production of cars, equipment & appliances.  But after factoring out the impact from the storm, the broader trend in manufacturing remained weak.  The Federal Reserve that factory output increased 1.1% from Oct which offsets a 1% decline in Oct (blamed on the storm).  Auto production jumped 4.5% last month, the first increase since Jul.  Production of primary metals, wood products, electrical equipment & appliances all showed gains.  Total industrial output at factories, mines & utilities rose also rose 1.1%, after a 0.7% decline in Oct.  However the rebound in manufacturing was almost entirely related to Sandy.  US manufacturing activity shrank in Nov to the slowest pace since Jul 2009, according to the Institute for Supply Management.

Industrial Production in U.S. Jumps on Rebound From Sandy

  • An Apple logo is seen at the Apple Worldwide Developers Conference 2012 in San Francisco, California June 11, 2012. REUTERS/Stephen Lam
Photo:   Yahoo

Apple stock fell again following another price target cut on its stock, on a day when its iPhone 5 debuted in China to a cool reception.  UBS Investment Research cut its price target to $700 from $780, saying it expects lower iPhone & iPad shipments in the next qtr.  The iPhone 5 was launched in China on Fri, a move widely expected to bring AAPL some respite from a recent slide in market share in China.. But early reports indicated that demand may not be as great as expected.  The stock sank $18 to $511 (down almost $200 from its recent highs).

Apple Falls as UBS Projects Growth Slowdown for IPhone, IPad

Apple (AAPL)

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United Technologies, a Dow stock, said that the addition of aircraft-parts maker Goodrich will help it overcome Europe's weak economy & reduced US defense spending next year.  It expects revenue next year of $64-65B, short expectations but still more than 10% higher than 2012 revenue ($58B).  CEO Louis Chenevert credited the $18B purchase, its biggest ever, of Goodrich for propelling revenue growth.  "In 2013, UTC's reshaped portfolio will be well-positioned for accelerated top-line growth," he said.  Chenevert repeated the company's pledge to resume share repurchases in 2013, spending $1B after suspending buybacks in Sep 2011 to focus on the Goodrich deal.  But he hinted that could double eventually.  "One could say that we've done certainly $2 billion or around $2 billion repeatedly. I would say that that's probably a proper expectation," he said.  UTX tightened its 2012 EPS outlook to $5.32, from a previous range of $5.25-5.35, matching expectations.  It expects EPS of $5.85-$6.15 next year, a little under the analyst forecast for EPS of $6.15 on revenue of $66.1B.  The stock was up 22¢.

United Technologies Sees Growth Below Estimates After Goodrich Deal

United Technology (UTX)

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Today's a day to take off from the markets.  Little is going on as the markets await developments on the budget debate that could be at least another week away.  MLPs continue soft as investors are sweating potential reductions in their tax advantaged status.  So far, that has not been touched but in today's tax cut environment, all taxes are on the table.  So far, uncertainties have not bothered the Dow but I'm not sure how long that attitude will last.

Dow Jones Industrials

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