Dow lost 129, decliners over advancers 3-1 & NAZ dropped 47. The Financial Index remained lower, down 2+ to the 234s. The MLP index gave up almost 2 to below 430 (from its record high) & the REIT index slipped 1+ the 277s. Junk bond funds were higher & Treasuries rose, pushing the yield on
the 10-year note down from almost 10-month highs, as levels
above 2% attracted buyers skeptical about the pace of the
US. Oil had a big loss after months of strength & gold rebounded 5 to its best level in more than a week.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
The housing rebound in the US is broadening to other parts of the economy & could lend impetus to growth through 2013 & beyond. Climbing home prices are lifting household wealth & boosting the purchasing power of consumers. Declining mortgage delinquencies & foreclosures are buttressing bank balance sheets, giving them greater leeway to lend. And rising property- tax revenue is fortifying the finances of state & local govs, alleviating pressure to cut budgets. The spreading impact of housing will help the economy weather looming federal gov spending cuts & tax increases. Rising residential construction & its knock-on economic effects may boost GDP by 0.75 percentage point this year which could offset much of the drag from the fiscal squeeze. Housing has helped lead the economy out of every recession since 1950 except for the last one in 2007-2009. Homebuilding climbed 12% in 2012, the first annual increase since 2005. As Americans move into new homes, they buy appliances & furniture, giving growth an added lift. Construction-equipment makers to paint- & building-materials businesses also benefit.
Housing Packs Punch for U.S. Growth in 2013 and Beyond
Photo: Yahoo
The Greek gov said its painful austerity drive is paying off, with the budget deficit reduced to the target of 6.6% of annual output in 2012 from 9.4% a year earlier. The finance ministry said that, not counting the cost of servicing Greece's debt mountain, the gov posted a modest budget surplus of €434M ($588M) last year. "These positive developments ... show that efforts at fiscal adjustment and discipline are bearing fruit, which creates the necessary conditions to stabilize and gradually restart the economy," Deputy Finance Minister Christos Staikouras said. However, popular anger at repeated income cuts remains high, with striking seamen keeping island ferries tied up for the past 5 days & unions planning a general strike & protests in 2 weeks. Finance Minister Yiannis Stournaras sent a threatening letter containing a bullet that warned of "severe consequences" if Greeks have their property confiscated for debts. The conservative-led coalition has promised to reduce the budget deficit to 5.2% of annual output this year, down from a peak of more than 15% when the Greek economy started to implode in 2009.
Greece says it met deficit-cutting targets in 2012 AP
Photo: Bloomberg
The FTC corrected a statement that erroneously said Herbalife was the subject of a law-enforcement probe after a report about the non-existent investigation sent the company’s shares down the most in a month. The FTC, in responding to a request from the New York Post, should have said that it withheld some information from documents posted online because it can’t disclose consumer complaints obtained from foreign sources if they request confidentiality, the agency, said. The FTC’s correspondence with the newspaper, posted on the agency’s website, originally explained the redaction by erroneously citing an exemption for information obtained in a law-enforcement investigation. The report sent Cayman Islands-based HLF shares down 12% today, the biggest intraday decline since Dec 21. HLF has been fighting allegations from hedge fund manager BIll Ackman, who said in Dec that the company uses inflated pricing, misleading sales information & a complicated incentive structure to hide a pyramid scheme. Ackman said he thought the FTC or the SEC would look into allegations he made about the company during a Dec 20 presentation in New York. The company said today that it was unaware of any regulatory interest or investigation other than a voluntary dialogue it was having with regulators. “For a direct-selling company of our size, we have had a relatively low number of complaints to the FTC,” the company said. “However, we take every one of them seriously and stand by our record of doing right by our distributors and all consumers of our products.” HLF has repeatedly denied the allegations that it operates a pyramid scheme, saying it is a retail-oriented business that sells products with unique ingredients. The stock ended the day up 47¢ to $35.54 after being under pressure for a couple of months (with extraordinary volume).
FTC Corrects Herbalife Statement After Probe Report
Herbalife (HLF)
Stocks began the day with a big loss & remained flattish for the rest of the trading session. Euro worries brought out sellers. Of course the markets are way overbought, so profit taking has to be expected. US debt mess concerns were on a backburner today, but should surface soon. While Dow is back below 14K, it remains within about 300 of setting a new record. If sellers want to take over, they will have to show more strength.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.058% | |
U.S. 2-year |
0.252% | |
U.S. 10-year |
1.968% |
| CLH13.NYM | ...Crude Oil Mar 13 | ....96.01 | ... 1.76 | (1.8%) |
The housing rebound in the US is broadening to other parts of the economy & could lend impetus to growth through 2013 & beyond. Climbing home prices are lifting household wealth & boosting the purchasing power of consumers. Declining mortgage delinquencies & foreclosures are buttressing bank balance sheets, giving them greater leeway to lend. And rising property- tax revenue is fortifying the finances of state & local govs, alleviating pressure to cut budgets. The spreading impact of housing will help the economy weather looming federal gov spending cuts & tax increases. Rising residential construction & its knock-on economic effects may boost GDP by 0.75 percentage point this year which could offset much of the drag from the fiscal squeeze. Housing has helped lead the economy out of every recession since 1950 except for the last one in 2007-2009. Homebuilding climbed 12% in 2012, the first annual increase since 2005. As Americans move into new homes, they buy appliances & furniture, giving growth an added lift. Construction-equipment makers to paint- & building-materials businesses also benefit.
Housing Packs Punch for U.S. Growth in 2013 and Beyond
Photo: Yahoo
The Greek gov said its painful austerity drive is paying off, with the budget deficit reduced to the target of 6.6% of annual output in 2012 from 9.4% a year earlier. The finance ministry said that, not counting the cost of servicing Greece's debt mountain, the gov posted a modest budget surplus of €434M ($588M) last year. "These positive developments ... show that efforts at fiscal adjustment and discipline are bearing fruit, which creates the necessary conditions to stabilize and gradually restart the economy," Deputy Finance Minister Christos Staikouras said. However, popular anger at repeated income cuts remains high, with striking seamen keeping island ferries tied up for the past 5 days & unions planning a general strike & protests in 2 weeks. Finance Minister Yiannis Stournaras sent a threatening letter containing a bullet that warned of "severe consequences" if Greeks have their property confiscated for debts. The conservative-led coalition has promised to reduce the budget deficit to 5.2% of annual output this year, down from a peak of more than 15% when the Greek economy started to implode in 2009.
Greece says it met deficit-cutting targets in 2012 AP
Photo: Bloomberg
The FTC corrected a statement that erroneously said Herbalife was the subject of a law-enforcement probe after a report about the non-existent investigation sent the company’s shares down the most in a month. The FTC, in responding to a request from the New York Post, should have said that it withheld some information from documents posted online because it can’t disclose consumer complaints obtained from foreign sources if they request confidentiality, the agency, said. The FTC’s correspondence with the newspaper, posted on the agency’s website, originally explained the redaction by erroneously citing an exemption for information obtained in a law-enforcement investigation. The report sent Cayman Islands-based HLF shares down 12% today, the biggest intraday decline since Dec 21. HLF has been fighting allegations from hedge fund manager BIll Ackman, who said in Dec that the company uses inflated pricing, misleading sales information & a complicated incentive structure to hide a pyramid scheme. Ackman said he thought the FTC or the SEC would look into allegations he made about the company during a Dec 20 presentation in New York. The company said today that it was unaware of any regulatory interest or investigation other than a voluntary dialogue it was having with regulators. “For a direct-selling company of our size, we have had a relatively low number of complaints to the FTC,” the company said. “However, we take every one of them seriously and stand by our record of doing right by our distributors and all consumers of our products.” HLF has repeatedly denied the allegations that it operates a pyramid scheme, saying it is a retail-oriented business that sells products with unique ingredients. The stock ended the day up 47¢ to $35.54 after being under pressure for a couple of months (with extraordinary volume).
FTC Corrects Herbalife Statement After Probe Report
Herbalife (HLF)
Stocks began the day with a big loss & remained flattish for the rest of the trading session. Euro worries brought out sellers. Of course the markets are way overbought, so profit taking has to be expected. US debt mess concerns were on a backburner today, but should surface soon. While Dow is back below 14K, it remains within about 300 of setting a new record. If sellers want to take over, they will have to show more strength.
Dow Jones Industrials
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