Dow rose 58, advancers over decliners 5-2 & NAZ added 13. The Financial Index slipped a fraction to 231. The Alerian MLP index climbed another fraction to the 415s, setting a new record, & the REIT index was up 1 to the 276s, near its multi year highs. Junk bond funds gained again & Treasuries pulled back after recent strength. Oil advanced to a 4-month high
after US builders broke ground on more houses than forecast & jobless claims dropped to a 5-year low, bolstering
optimism in the economy. Gold fell for those same reasons.
Photo: Yahoo
The number seeking unemployment aid plummeted to a 5-year low last week. Unemployment benefit applications fell 37K to 335K according to the Labor Dept, the lowest level since Jan 2008 (just after the recession began). The 4-week average fell to 359K. But applications data can be uneven in Jan when job cuts typically spike in the 2nd week of the month as retailers, restaurants & other companies lay off temporary workers. More than 5.8M received unemployment last week, about 465K more than the previous week. The figure includes about 2M who receive extended benefits paid for by the federal gov.
Jobless Claims in U.S. Fell to Lowest Level in Five Years
Photo: Yahoo
Bank of America, a Dow stock, Q4 earnings shrank as it cleaned up old problems from its mortgage unit. The bank made only $367M after paying preferred div, down from $1.6B in the prior year. EPS was a meager 3¢. The bank had warned that it expected earnings to be only "modestly positive" after taking a settlement with the gov-backed mortgage lender Fannie Mae & a separate agreement in which it & other banks settled gov accusations of wrongful foreclosure practices. EPS was a tad better than the estimate of 2 pennies. Revenue was dragged down by the Fannie Mae settlement, falling to $19.6B after stripping out an accounting charge, down from $26.4B in the same period a year ago. CFO Bruce Thompson said the bank is much better positioned than it was a year ago, emphasizing a jump in deposits, higher fees from investment banking & shrinking debt. As for future litigation in the mortgage unit, Thompson said he couldn't be sure what might come. "I can't tell you exactly what else could be out there," Thompson said, "but what I can tell you is that we put a lot of risk behind us in 2012." Thompson said the bank expects to expand the mortgage unit, focusing on borrowers who are already bank customers. "What we're focused on is doing more with our consumers, continuing to grow this, and if we do that well, where we are with our peers will take care of itself," Thompson said. The stock dropped 36¢.
BofA Drops as Earnings Decline 63% on Shrinking Revenue
Builders broke ground on more houses than forecast in Dec, capping the best year for the industry since 2008. Starts climbed 12.1% to a 954K annual rate, exceeding all forecasts & the most since Jun 2008, according to the Commerce Dept. For all of 2012, construction began on 780K homes, up from 609K in 2011 & also the most since 2008. Low borrowing costs & rising property values are spurring homebuyer traffic for the market that triggered the latest recession. But building permits, a proxy for future construction, climbed less than starts, indicating the industry may take a breather in coming months. The number of applications climbed just 0.3% in Dec to a 903K annual rate from a 900K pace in Nov. Starts jumped by 28.1% in 2012 from the prior year, the biggest annual gain since 1983. However the market remains short of the 2+M started at the peak of the housing boom in 2005, which was 3-decade high. Construction of single-family houses climbed 8.1% in Dec from the prior month to a 616K annual rate, also the highest since Jun 2008. Work on multifamily homes, such as apartment buildings, climbed 20.3% to an annual rate of 338K.
Stocks are having a good day despite dreary earnings from the big banks. Citi (C) reported the usual mish-mash of earnings & the stock is off 1.23. The debt debate deadlock in DC is being ignored by the markets. Dow is within 100 of reaching a new 5 year high & may try by tomorrow. Thinking behind the stock buyers is to solve today's problems today, tomorrow will take care off itself. But I wouldn't be surprised if there was a downgrade of US debt tomorrow after the close.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.071% | |
U.S. 2-year |
0.250% | |
U.S. 10-year |
1.864% |
| CLG13.NYM | ...Crude Oil Feb 13 | ...95.34 | ..... 1.10 | (1.2%) |
| GCF13.CMX | ...Gold Jan 13 | ......1,672.70 | ... 10.00 | (0.6%) |
Photo: Yahoo
The number seeking unemployment aid plummeted to a 5-year low last week. Unemployment benefit applications fell 37K to 335K according to the Labor Dept, the lowest level since Jan 2008 (just after the recession began). The 4-week average fell to 359K. But applications data can be uneven in Jan when job cuts typically spike in the 2nd week of the month as retailers, restaurants & other companies lay off temporary workers. More than 5.8M received unemployment last week, about 465K more than the previous week. The figure includes about 2M who receive extended benefits paid for by the federal gov.
Jobless Claims in U.S. Fell to Lowest Level in Five Years
Photo: Yahoo
Bank of America, a Dow stock, Q4 earnings shrank as it cleaned up old problems from its mortgage unit. The bank made only $367M after paying preferred div, down from $1.6B in the prior year. EPS was a meager 3¢. The bank had warned that it expected earnings to be only "modestly positive" after taking a settlement with the gov-backed mortgage lender Fannie Mae & a separate agreement in which it & other banks settled gov accusations of wrongful foreclosure practices. EPS was a tad better than the estimate of 2 pennies. Revenue was dragged down by the Fannie Mae settlement, falling to $19.6B after stripping out an accounting charge, down from $26.4B in the same period a year ago. CFO Bruce Thompson said the bank is much better positioned than it was a year ago, emphasizing a jump in deposits, higher fees from investment banking & shrinking debt. As for future litigation in the mortgage unit, Thompson said he couldn't be sure what might come. "I can't tell you exactly what else could be out there," Thompson said, "but what I can tell you is that we put a lot of risk behind us in 2012." Thompson said the bank expects to expand the mortgage unit, focusing on borrowers who are already bank customers. "What we're focused on is doing more with our consumers, continuing to grow this, and if we do that well, where we are with our peers will take care of itself," Thompson said. The stock dropped 36¢.
BofA Drops as Earnings Decline 63% on Shrinking Revenue
Bank of America (BAC)
Builders broke ground on more houses than forecast in Dec, capping the best year for the industry since 2008. Starts climbed 12.1% to a 954K annual rate, exceeding all forecasts & the most since Jun 2008, according to the Commerce Dept. For all of 2012, construction began on 780K homes, up from 609K in 2011 & also the most since 2008. Low borrowing costs & rising property values are spurring homebuyer traffic for the market that triggered the latest recession. But building permits, a proxy for future construction, climbed less than starts, indicating the industry may take a breather in coming months. The number of applications climbed just 0.3% in Dec to a 903K annual rate from a 900K pace in Nov. Starts jumped by 28.1% in 2012 from the prior year, the biggest annual gain since 1983. However the market remains short of the 2+M started at the peak of the housing boom in 2005, which was 3-decade high. Construction of single-family houses climbed 8.1% in Dec from the prior month to a 616K annual rate, also the highest since Jun 2008. Work on multifamily homes, such as apartment buildings, climbed 20.3% to an annual rate of 338K.
Stocks are having a good day despite dreary earnings from the big banks. Citi (C) reported the usual mish-mash of earnings & the stock is off 1.23. The debt debate deadlock in DC is being ignored by the markets. Dow is within 100 of reaching a new 5 year high & may try by tomorrow. Thinking behind the stock buyers is to solve today's problems today, tomorrow will take care off itself. But I wouldn't be surprised if there was a downgrade of US debt tomorrow after the close.
Dow Jones Industrials
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