Dow rose 116, advancers ahead of decliners 5-2 & NAZ was up 27. The Financial Index recovered 2+, taking it to the 236s. The MLP index fell 5 (a very big drop) to the 424s after its enormous run in Jan & the REIT index was off fractionally to the 277s. Junk bond funds rose & Treasuries pulled back, taking the yield on the 10 year Treasury back over 2%. Oil was higher along with stocks, but gold slipped 5.
AMJ (Alerian MLP Index tracking fund)
Photo: Bloomberg
The ECB balance sheet shrank to the smallest in almost a year after euro-area banks started to repay emergency loans. The balance sheet dropped €159B ($215B) to €2.77T, the lowest level in almost a year. ECB lending to banks declined €140B to €1.02T. The ECB’s balance sheet is shrinking just as the Federal Reserve & Bank of Japan expand theirs through further monetary stimulus, pushing the € higher, threatening to undermine European exports & a recovery from recession. The € has gained more than 3.5% (about 4¢) since Jan 9 to over $1.35. Investor confidence has improved since ECB President Mario Draghi pledged in Jul last year to do whatever it takes to safeguard the € & as signs emerge that the worst of the sovereign debt crisis may have passed. The ECB’s balance sheet is still bigger than the Fed’s $3T & eclipses the €2.6T GDP of Germany, Europe's largest economy. While those operations have “proven to be very powerful,” they aren’t “free of pitfalls,” ECB Executive Board member Peter Praet said last week. “The use of refinancing operations with a very long maturity results in an immediate expansion of the balance sheet when implemented” & “such an expansion is not without challenges for central bank communication and for managing inflation expectations,” he said.
Photo: Bloomberg
Dell is bowing out of the stock market in a $24.4B buyout that represents the largest deal of its kind since the Great Recession dried up the financing for such risky maneuvers. The complex agreement will allow DELL management, including founder Michael Dell, to attempt a company turnaround away from the glare & financial pressures of outside investors. Stockholders will be paid $13.65 per share, 25% more than the $10.88 the stock was going for before word of the buyout talks trickled out last month (but a steep markdown from $26 less than 5 years ago). Microsoft (MSFT), a Dow stock, is lending $2B to the buyers. Michael Dell, who owns nearly 16% of the company, will remain the CEO after the sale closes & will contribute his existing stake in DELL to the new company. The stock was up a dime.
Dell Taken Private as PC Slump Hastens $24.4 Billion LBO
Dell (DELL)
Service industries in the US expanded in Jan at about the same pace as the prior month, showing the biggest part of the economy is holding up in the face of federal gov budget battles. The Institute for Supply Management's non-manufacturing index cooled to 55.2 last month from a 10-month high of 55.7 in Dec. The projection called for 55. The index, which includes industries ranging from utilities & retail to health care, housing & finance, has averaged 53.5 since the recession ended in Jun 2009. 8 non-manufacturing industries, including construction, finance & real estate, reported growth while 9 said business contracted.
ISM Services Gauge in U.S. Fell to 55.2 in January From 55.7
Buyers have returned, probably took a long weekend accounting for yesterday's decline. Earnings have been coming in "good enough" & the DELL buyout is encouraging to see by stock buyers. Now that earnings season is winding down, the goings on in DC will get more attention. The first big event is large budget cuts which are supposed to begin in 3 weeks. Then those guys have to deal with raising the debt ceiling & fund gov operations for the balance of the year ending Sep 30. In the meantime, the US economy is getting by but not really doing all that well & Dow is not disturbed.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.074% | |
U.S. 2-year |
0.260% | |
U.S. 10-year |
2.016% |
| LH13.NYM | ......Crude Oil Mar 13 | ...96.83 | ... 0.66 | (0.7%) |
| GCG13.CMX | ...Gold Feb 13 | ......1,673.10 | ... 2.20 | (0.1%) |
Photo: Bloomberg
The ECB balance sheet shrank to the smallest in almost a year after euro-area banks started to repay emergency loans. The balance sheet dropped €159B ($215B) to €2.77T, the lowest level in almost a year. ECB lending to banks declined €140B to €1.02T. The ECB’s balance sheet is shrinking just as the Federal Reserve & Bank of Japan expand theirs through further monetary stimulus, pushing the € higher, threatening to undermine European exports & a recovery from recession. The € has gained more than 3.5% (about 4¢) since Jan 9 to over $1.35. Investor confidence has improved since ECB President Mario Draghi pledged in Jul last year to do whatever it takes to safeguard the € & as signs emerge that the worst of the sovereign debt crisis may have passed. The ECB’s balance sheet is still bigger than the Fed’s $3T & eclipses the €2.6T GDP of Germany, Europe's largest economy. While those operations have “proven to be very powerful,” they aren’t “free of pitfalls,” ECB Executive Board member Peter Praet said last week. “The use of refinancing operations with a very long maturity results in an immediate expansion of the balance sheet when implemented” & “such an expansion is not without challenges for central bank communication and for managing inflation expectations,” he said.
Photo: Bloomberg
Dell is bowing out of the stock market in a $24.4B buyout that represents the largest deal of its kind since the Great Recession dried up the financing for such risky maneuvers. The complex agreement will allow DELL management, including founder Michael Dell, to attempt a company turnaround away from the glare & financial pressures of outside investors. Stockholders will be paid $13.65 per share, 25% more than the $10.88 the stock was going for before word of the buyout talks trickled out last month (but a steep markdown from $26 less than 5 years ago). Microsoft (MSFT), a Dow stock, is lending $2B to the buyers. Michael Dell, who owns nearly 16% of the company, will remain the CEO after the sale closes & will contribute his existing stake in DELL to the new company. The stock was up a dime.
Dell Taken Private as PC Slump Hastens $24.4 Billion LBO
Dell (DELL)
Service industries in the US expanded in Jan at about the same pace as the prior month, showing the biggest part of the economy is holding up in the face of federal gov budget battles. The Institute for Supply Management's non-manufacturing index cooled to 55.2 last month from a 10-month high of 55.7 in Dec. The projection called for 55. The index, which includes industries ranging from utilities & retail to health care, housing & finance, has averaged 53.5 since the recession ended in Jun 2009. 8 non-manufacturing industries, including construction, finance & real estate, reported growth while 9 said business contracted.
ISM Services Gauge in U.S. Fell to 55.2 in January From 55.7
Buyers have returned, probably took a long weekend accounting for yesterday's decline. Earnings have been coming in "good enough" & the DELL buyout is encouraging to see by stock buyers. Now that earnings season is winding down, the goings on in DC will get more attention. The first big event is large budget cuts which are supposed to begin in 3 weeks. Then those guys have to deal with raising the debt ceiling & fund gov operations for the balance of the year ending Sep 30. In the meantime, the US economy is getting by but not really doing all that well & Dow is not disturbed.
Dow Jones Industrials
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