Friday, March 8, 2013

Dow rises to new record on February jobs report

Dow gained 41, advancers ahead of decliners 3-2 & NAZ was up 15.  The Financial Index was off a smidgen n the 244s (its multi year high).  The MLP index rose 2+ to the 435s, a new record, & the REIT index slipped a fraction to 282.  Junk bond funds were mixed & Treasuries fell back, taking the yield on the 10 year Treasury well above 2%.  Oil lost a fraction & gold did little.

AMJ (Alerian MLP Index tracking fund)s

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Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLJ13.NYM....Crude Oil Apr 13...91.44 ...Down 0.12  (0.1%)

GCH13.CMX...Gold Mar 13....1,581.20 ...Up 6.40 (0.4%)

Payrolls in U.S. Rose More Than Forecast; Jobless Rate at 7.7%

Photo:   Bloomberg

Job growth surged last month as auto makers, builders & retailers pushed the unemployment rate to a 4-year low, defying concerns that budget battles in DC would harm the economic expansion.  Employment rose 236K after a revised 119K gain in Jan that was smaller than first estimated, according to the Labor Dept.  The forecast projected an increase of 165K.  The jobless rate dropped to 7.7%, the lowest since Dec 2008, from 7.9%.  Hiring in construction jumped by the most in almost 6 years.  Payrolls also climbed at retailers, & professional and business services such as temporary help firms.  The participation rate, which indicates the share of working-age people in the labor force, dropped to 63.5%, matching the lowest since Sep 1981, from 63.6.  Private payrolls, don’t include jobs at gov agencies, rose by 246K in Feb after a revised gain of 140K in the previous month.  The projection for a rise of 170K following an initially reported 166K gain in Jan.

Payrolls Rise as U.S. Jobless Rate Reaches Four-Year Low

The McDonald's logo is pictured outside a McDonald's restaurant in the Fillmore District of San Francisco, California January 30, 2013. REUTERS/Robert Galbraith

Photo:    Yahoo

McDonald's, a Dow stock & Dividend Aristocrat, sales at established restaurants fell less than expected in the US & around the globe as customers continued to grapple with economic uncertainty.  US sales at restaurants open at least 13 months fell 3.3%, less than the 3.55% estimated.  Extra attention was paid to results from the US, because the Jan 1 payroll tax hike, higher gas prices & delayed federal tax returns have hurt sales at restaurant chains & retailers.  Global same-restaurant sales were down 1.5%, less than the 1.63% decline predicted.  Excluding the impact of an extra day in Feb 2012 due to the leap year, comparable sales were up 1.7% globally & rose everywhere except the US, where sales were flat.  In Europe, comparable sales fell 0.5%, roughly in line with predictions.  Asia/Pacific, Middle East & Africa (APMEA) reported a drop of 1.6%, slightly better than the 1.69% fall excepcted.  CEO Don Thompson said MCD remained confident in the "fundamental strength" of its business.  "We have the operating experience to manage through the current challenging environment and the right strategies in place to grow the business for the long term," he said.  MCD recently warned it expects sales & profit growth to be under pressure as customers spend cautiously due to a lackluster economic performance in most of its major markets.  The stock rose 1.33.

McDonald’s February Store Sales Top Estimates

McDonald's (MCD)

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As Dell minority shareholders gain momentum in their push for a sweeter takeover price, Michael Dell could boost the offer to $15 a share & still pay the cheapest multiple among large tech buyouts.  As the board seeks bids topping last month’s $13.65-a-share offer from Michael Dell & Silver Lake Management , the company has attracted interest from Blackstone (BX), Hewlett-Packard (HPQ & a Dow stock) & Lenovo. The interest in Dell’s books along with Carl Icahn amassing a stake & pushing for a special div are adding to the opposition from Dell’s 2 largest outside shareholders.  Traders have been increasingly wagering on a higher offer as the climbed yesterday to $14.22, 4.2% above the current proposal.  Today, shares rose  to $14.27.

Dell Sweetened Offer at $15 Would Still Be Cheapest Tech Buyout: Real M&A

Dell (DELL)

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Bulls are happy.  The jobs report for Feb was fairly good & buyers were able to take Dow to a new record.  However the oomph behind the rise seems to be lacking.  Other times, Dow has risen 200 or more along with a strong breadth in the markets.  The DC fiscal mess is weighing on the markets & the euro recession makes matters worse.  The bull are still in command of the markets, but I sense they have their fingers crossed with so many unknowns.

Dow Jones Industrials

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