Wednesday, January 16, 2013

Markets little changed as Apple rallies

Dow slid 23, decliners ahead of advancers 5-4 & NAZ recovered 6, helped by rising Apple (AAPL) stock.  The Financial Index was up a fraction in the 231s, a new yearly high.  The MLP index slipped a few pennies in the 414s after setting a record yesterday & the REIT index lost a fraction to the 275s.  Junk bond funds were higher & Treasuries had another gain in what has started out as a good year for them.  Oil went over 94.  Gold fell from a one-week high amid concern that demand is easing while global economic growth slows. 

AMJ (Alerian MLP Index tracking fund)

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Live 24 hours gold chart [Kitco Inc.]

The IMF approved a $4.3B loan installment to Greece, following an economic review.  The decision by the IMF's board was expected following the Greek parliament's approval this week of an emergency bill ratifying dozens of conditions set by bailout lenders.  Greece also completed a loan buyback last month that reduced its debt by more than $27B.   Greece's economy is being kept afloat by intl rescue loans from other eurozone members & the IMF.  The loans were granted on condition that the country impose spending cuts & other austerity measures.  As Greece has imposed the measures, unemployment & poverty rates have shot up.  But last month, the country's crisis eased after European rescue lenders approved new installments worth $65.5B, with $45.7B paid out days later & the rest to be transferred to Greece by Mar.

IMF Approves 3.2 Billion-Euro Disbursement for Greece

Beige Book: Fed's Snapshot Shows Scuffling Economy

Photo:   Yahoo
Holiday shopping, strong auto sales & a recovering housing market helped boost the economy in most parts of the US from the middle of Nov thru Dec, according to a Federal Reserve (FED) survey.  The FED says 12 of its regional banking districts reported "modest or moderate" growth in the final weeks of 2012.   Only St. Louis said growth had slowed.  Consumers increased spending in every district.  Auto sales were steady or stronger in 10 districts.  Home sales increased in 9 districts & home building expanded in all but one.  Still, employers in some parts of the country delayed hiring because of uncertainty over the fiscal cliff.  Congress & the White House reached a deal on taxes on Jan 1, but put off decisions on gov spending cuts. 

Fed's Beige Book: Fiscal Uncertainty Has Impacted Hiring  AP

General Motors is on the verge of reporting a 12th straight quarterly profit & forecast 2013 profit rising “modestly” as it starts selling a revamped Chevrolet Silverado pickup and other new models.  GM said earnings before interest & taxes should rise this year.  “This is going to be a big year for us,” CFO Dan Ammann said.  The automaker, which will replace 70% of its US lineup by mid 2014, faces increased costs in North America related to those vehicle introductions & squeezed margins in intl operations because of increased competition in China.  The European industry is also expected to decrease around 4%.  “The second half of the year is going to be better than the first half,” said Chuck Stevens, CFO for North America.  “We’re going to be launching the Impala here later in Q1 then start the cadence with the new” pickups.  GM wants to increase North America’s EBIT to 10% eventually from 8% thru picking up increased sales from an improving market & also increased efficiencies from next-generation global platforms, he said.  The stock fell 1.29. 

General Motors (GM)

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Stocks continued on their meandering ways.  JPMorgan (JPM) was the big news story with largely good earnings & the stock posted a 47¢ gain after AM selling.  MLPs are riding high with the index at record levels.  Divided DC is weighing more heavily on the markets & there are few prospects for better days ahead.  The Reps & Dems can't agree on how to deal with large gov spending cuts to reduce deficits.  Rating agencies may force them to play their hands with cuts in credit ratings for US debt.  Prospects are dim for an agreement.  Dow remains near its multi yearly highs because it doesn't care about DC problems & how they could impact the economy.

Dow Jones Industrials

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