Dow fell 35, advancers ahead of decliners 5-4 & NAZ added 10 (but off the highs). The Financial Index was off a fraction to the 239s. The MLP index jumped another 3+ to 433, setting another new record, & the REIT index fell 1 to 279. Junk bond funds were mixed & Treasuries sold off as risk averse has been out of favor for months. Oil slipped lower but is still headed for $100 & gold lost ground, going below $1650.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Bloomberg
Dems & Reps are nowhere near a plan to avert $1.2T in spending cuts about 2 weeks before they are set to begin. Unless lawmakers act, the across-the-board spending reductions will begin Mar 1. Leaving the cuts in place would shave economic growth this year by 0.6% & cost 750K jobs by Q4 as projected by the CBO. About half the cuts would affect defense spending, & military leaders are pressuring lawmakers to avoid them. Pres Obama in his State of the Union address said Reps, Dems, business leaders & economists agree the automatic cuts “are a really bad idea.” “Some in this Congress have proposed preventing only the defense cuts by making even bigger cuts to things like education and job training; Medicare and Social Security benefits,” the president said. “That idea is even worse.” Obama repeated his call for a “balanced approach to deficit reduction, with spending cuts and revenue, and with everybody doing their fair share.” This is shaping up as another mess, only this time it will not be averted at the last minute. Already the Reps have dismissed the proposal to raise the minimum wage.
No Agreement on $1.2 Trillion in Cuts as Deadline Nears
Photo: Yahoo
US companies restocked their store shelves & warehouses at a slower 0.1% pace in Dec, the smallest rise since last Jun & a sign of caution as sales weakened. Total sales for wholesalers, retailers & manufacturers increased only 0.3%, down from a 0.9% clip in Nov. Slower rebuilding of inventories means factories produced less, lowering overall economic output. But if sales keep growing, companies may have to restock more quickly in Q1, boosting growth. Strong sales growth is the big unknown.
US companies restocked at slower pace in December AP
Duke Energy CEO Jim Rogers said the company is now ready to face a future in which homes & businesses will no longer consume increasing amounts of electricity. Q4 earnings beat expectations as electric rates rose & more extreme weather increased demand for power. But Rogers said underlying demand for power, not including the up-and-down effects of weather, would likely remain weak for the foreseeable future because of a slow-growing economy & efficiency programs that are making homes & businesses less energy hungry. "The growth in demand is not going to be the same as we've experienced in the past," he said. "Our industry is going to have to change its cost structure." EPS was 62¢ in Q4. Adjusted to remove the effect of costs from the recent acquisition of Progress Energy & other one-time charges, EPS was 70¢, above expectations of 65¢. For all of 2012, net income was $1.77B, up from $1.71B in 2011. Revenue rose to $19.8B from $14.6B as the company benefited from 6 months of revenue from Progress Energy after the merger. The stock was up 8¢.
Duke Energy 4Q earnings exceed expectations AP
Duke Energy (DUK)
Buyers had 2nd thoughts in the PM after reexamining economic data & thinking over what the pres had to say last night. His proposals did not settle anything, only made the deep divide in DC even worse. Now that the federal budget cuts are approaching, they are getting more attention & those thoughts are not good. Dow has been treading water just under 14K for more than 2 weeks. It remains close to setting a new high, but this delay could be ominous.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.089% | |
U.S. 2-year |
0.272% | |
U.S. 10-year |
2.016% |
| CLH13.NYM | ...Crude Oil Mar 13 | ....97.00 | ... 0.51 | (0.5%) |
Photo: Bloomberg
Dems & Reps are nowhere near a plan to avert $1.2T in spending cuts about 2 weeks before they are set to begin. Unless lawmakers act, the across-the-board spending reductions will begin Mar 1. Leaving the cuts in place would shave economic growth this year by 0.6% & cost 750K jobs by Q4 as projected by the CBO. About half the cuts would affect defense spending, & military leaders are pressuring lawmakers to avoid them. Pres Obama in his State of the Union address said Reps, Dems, business leaders & economists agree the automatic cuts “are a really bad idea.” “Some in this Congress have proposed preventing only the defense cuts by making even bigger cuts to things like education and job training; Medicare and Social Security benefits,” the president said. “That idea is even worse.” Obama repeated his call for a “balanced approach to deficit reduction, with spending cuts and revenue, and with everybody doing their fair share.” This is shaping up as another mess, only this time it will not be averted at the last minute. Already the Reps have dismissed the proposal to raise the minimum wage.
No Agreement on $1.2 Trillion in Cuts as Deadline Nears
Photo: Yahoo
US companies restocked their store shelves & warehouses at a slower 0.1% pace in Dec, the smallest rise since last Jun & a sign of caution as sales weakened. Total sales for wholesalers, retailers & manufacturers increased only 0.3%, down from a 0.9% clip in Nov. Slower rebuilding of inventories means factories produced less, lowering overall economic output. But if sales keep growing, companies may have to restock more quickly in Q1, boosting growth. Strong sales growth is the big unknown.
US companies restocked at slower pace in December AP
Duke Energy CEO Jim Rogers said the company is now ready to face a future in which homes & businesses will no longer consume increasing amounts of electricity. Q4 earnings beat expectations as electric rates rose & more extreme weather increased demand for power. But Rogers said underlying demand for power, not including the up-and-down effects of weather, would likely remain weak for the foreseeable future because of a slow-growing economy & efficiency programs that are making homes & businesses less energy hungry. "The growth in demand is not going to be the same as we've experienced in the past," he said. "Our industry is going to have to change its cost structure." EPS was 62¢ in Q4. Adjusted to remove the effect of costs from the recent acquisition of Progress Energy & other one-time charges, EPS was 70¢, above expectations of 65¢. For all of 2012, net income was $1.77B, up from $1.71B in 2011. Revenue rose to $19.8B from $14.6B as the company benefited from 6 months of revenue from Progress Energy after the merger. The stock was up 8¢.
Duke Energy 4Q earnings exceed expectations AP
Duke Energy (DUK)
Buyers had 2nd thoughts in the PM after reexamining economic data & thinking over what the pres had to say last night. His proposals did not settle anything, only made the deep divide in DC even worse. Now that the federal budget cuts are approaching, they are getting more attention & those thoughts are not good. Dow has been treading water just under 14K for more than 2 weeks. It remains close to setting a new high, but this delay could be ominous.
Dow Jones Industrials
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