Dow slid 2, advancers & decliners were equal & NAZ lost 9. The Financial Index was up a fraction in the 231s, good enough for a new multi year high. The MLP index shot up another 3+ to 424 for a new record & the REIT index was up a fraction to the 278s, a new multi year high. Junk bond funds rose & Treasuries slipped a little lower. Oil & gold are fluctuating.
AMJ (Alerian MLP Index tracking fund)
Sales of previously occupied homes in the US rose in 2012 to the highest level in 5 years, spurred higher by record-low mortgage rates & steady hiring. The National Association of Realtors said that sales reached 4.65M last year, up 9.2% from 2011 & the most since 2007. However sales are still below the roughly 5.5M that are consistent with a healthy market. Sales dipped in Dec to a pace of 4.94M, down from a 4.99M rate in Nov. The Nov figure was revised lower, but was still the highest in 3 years. The supply of available homes is shrinking as sales rise. That's pushing up prices. The inventory of homes for sale dropped to 1.8M in Dec, the lowest in 12 years. Still, the housing market is recovering & should continue this year. More news that housing is on the mend.
Sales of U.S. Existing Homes Drop on Lowest Supply in a Decade
Photo: Bloomberg
Johnson & Johnson, a Dow stock & Dividend Aristocrat, provided a full-year earnings forecast that was below estimates & said it is exploring a possible sale of a diagnostics unit. EPS will be $5.35-$5.45, under the $5.49 estimate. JNJ started reviewing options for the Ortho Clinical Diagnostics business, $2.1B in sales, about 3.3% of the total. The division has not been doing well. “We are initiating the first steps of an exploratory process, there is much more work to be done, in the meantime it will be business as usual,” CEO Alex Gorsky said today at a meeting with analysts. But it isn’t certain that any transaction may occur, the company said in a separate statement. Sales of new drugs, which also included therapies for psoriasis & hepatitis C, helped Q4 EPS excluding one-time items of $1.19 beat by 3 pennies the average estimate. Sales of medical devices & diagnostics, the biggest division, rose 14% after it exited the market for drug-coated stents. JNJ took $800M in charges during Q4, mainly litigation losses; money set aside for the DePuy hip recall; & costs related to the acquisition of Synthes. The company, which is fighting more than 10K lawsuits over its recalled hip implants, is negotiating a potential settlement that could eventually total more than $2B. The stock fell 65¢.
Johnson & Johnson (JNJ)
Photo: Bloomberg
18 months after taking over from Steve Jobs, Tim Cook is facing rising production costs, competition from Samsung & slowing growth in smartphones, threatening profits for the world’s most valuable company. An earnings report tomorrow may show that fiscal Q1 net income slipped 2% to $12.8B with EPS of $13.48. In all except one qtr since 2003, profit has jumped more than 10%. Sales are projected to rise 18% to $54.8B, the slowest growth rate since 2009. Cook overhauled most of the company’s product line ahead of the holiday shopping season, & results for the period will show for the first time whether the effort paid off. In all fairness, AAPL often reports results that surpass optimistic projections. Yet, in a sign that investors are turning more bearish, the company is trading at a 52% discount compared with the P/E ratio for the average stock on NAZ. Many analysts have reduced their estimates amid signs, such as a drop in component purchases, that demand may be weaker than projected for the iPhone (more than half of total sales & profits). The stock was up a nickel at $500 ($205 below the Sep peak).
Apple Investors Brace for First Profit Drop Since ’03 as Sales Slow: Tech
Apple (AAPL)
Earnings season is kicking into high gear but stocks are not clear on where to go because initial reports have been colorless.. Bank earnings have been drab, but all the numbers that are generated sound good enough to bring out a few buyers. MLPs continue to fly on optimism about unlimited energy projects for them to invest in. Dow continues to take everything in stride, remaining essentially at its highs since the boom days in 2008. Raising the debt ceiling is a whopper size unknown that weighs on all markets.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.063% | |
U.S. 2-year |
0.257% | |
U.S. 10-year |
1.862% |
| CLG13.NYM | ...Crude Oil Feb 13 | ...95.70 | ... 0.14 | (0.2%) |
| GCF13.CMX | ...Gold Jan 13 | ......1,691.90 | ... 5.30 | (0.3%) |
Sales of previously occupied homes in the US rose in 2012 to the highest level in 5 years, spurred higher by record-low mortgage rates & steady hiring. The National Association of Realtors said that sales reached 4.65M last year, up 9.2% from 2011 & the most since 2007. However sales are still below the roughly 5.5M that are consistent with a healthy market. Sales dipped in Dec to a pace of 4.94M, down from a 4.99M rate in Nov. The Nov figure was revised lower, but was still the highest in 3 years. The supply of available homes is shrinking as sales rise. That's pushing up prices. The inventory of homes for sale dropped to 1.8M in Dec, the lowest in 12 years. Still, the housing market is recovering & should continue this year. More news that housing is on the mend.
Sales of U.S. Existing Homes Drop on Lowest Supply in a Decade
Photo: Bloomberg
Johnson & Johnson, a Dow stock & Dividend Aristocrat, provided a full-year earnings forecast that was below estimates & said it is exploring a possible sale of a diagnostics unit. EPS will be $5.35-$5.45, under the $5.49 estimate. JNJ started reviewing options for the Ortho Clinical Diagnostics business, $2.1B in sales, about 3.3% of the total. The division has not been doing well. “We are initiating the first steps of an exploratory process, there is much more work to be done, in the meantime it will be business as usual,” CEO Alex Gorsky said today at a meeting with analysts. But it isn’t certain that any transaction may occur, the company said in a separate statement. Sales of new drugs, which also included therapies for psoriasis & hepatitis C, helped Q4 EPS excluding one-time items of $1.19 beat by 3 pennies the average estimate. Sales of medical devices & diagnostics, the biggest division, rose 14% after it exited the market for drug-coated stents. JNJ took $800M in charges during Q4, mainly litigation losses; money set aside for the DePuy hip recall; & costs related to the acquisition of Synthes. The company, which is fighting more than 10K lawsuits over its recalled hip implants, is negotiating a potential settlement that could eventually total more than $2B. The stock fell 65¢.
Johnson & Johnson (JNJ)
Photo: Bloomberg
18 months after taking over from Steve Jobs, Tim Cook is facing rising production costs, competition from Samsung & slowing growth in smartphones, threatening profits for the world’s most valuable company. An earnings report tomorrow may show that fiscal Q1 net income slipped 2% to $12.8B with EPS of $13.48. In all except one qtr since 2003, profit has jumped more than 10%. Sales are projected to rise 18% to $54.8B, the slowest growth rate since 2009. Cook overhauled most of the company’s product line ahead of the holiday shopping season, & results for the period will show for the first time whether the effort paid off. In all fairness, AAPL often reports results that surpass optimistic projections. Yet, in a sign that investors are turning more bearish, the company is trading at a 52% discount compared with the P/E ratio for the average stock on NAZ. Many analysts have reduced their estimates amid signs, such as a drop in component purchases, that demand may be weaker than projected for the iPhone (more than half of total sales & profits). The stock was up a nickel at $500 ($205 below the Sep peak).
Apple Investors Brace for First Profit Drop Since ’03 as Sales Slow: Tech
Apple (AAPL)
Earnings season is kicking into high gear but stocks are not clear on where to go because initial reports have been colorless.. Bank earnings have been drab, but all the numbers that are generated sound good enough to bring out a few buyers. MLPs continue to fly on optimism about unlimited energy projects for them to invest in. Dow continues to take everything in stride, remaining essentially at its highs since the boom days in 2008. Raising the debt ceiling is a whopper size unknown that weighs on all markets.
Dow Jones Industrials
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