Dow slid 43, advancers over decliners 2-1 & NAZ was pretty much even. The MLP index had another great day, up 1+ to the 461s for another record, & the REIT index was up a fraction just over 300. Junk bond funds edged higher & Treasuries hardly budged. Oil
jumped the most this year as a gov report showed that
US gasoline stockpiles tumbled while oil inventories rose less
than estimated. Bargain hunters bid up gold.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Bloomberg
The ECB is expected to cut its key interest rate to a record low next week as the euro-region economy slumps. Economists forecast a reduction for May after gauges of manufacturing & services activity for Apr underscored weakness in output. Germany’s Ifo index of business confidence fell more than predicted. President Mario Draghi said on Fri he hasn’t seen any improvement in economic reports, after hinting he might lower borrowing costs if the recovery falters. Executive Board member Joerg Asmussen has said that rates could fall if data show a need for it, & another member said today that the ECB is “ready to act.” A cut on May 2 would take the key rate to 0.5% from 0.75%. The euro-area composite purchasing managers’ index of manufacturing & services remained at 46.5 in Apr, Markit Economics said yesterday, below the 50 mark that divides contraction from expansion. Sounds good, but its hard to see what a cut will accomplish with the rate already slightly above zero.
ECB Rate Cut Seen Next Week by Banks From Nomura to RBS
Photo: Bloomberg
Q1 profit at Boeing, a Dow stock, beat estimates as increased deliveries for 777 & 737model jets made up for the halt in buyers picking up Dreamliners while that plane was grounded. EPS excluding some pension expenses climbed 5.3% to $1.73 from $1.40, a year earlier. Analysts projected $1.49. BA delivered 4 more 777s & 3 more 737s than a year earlier amid the pause in handing over 787 Dreamliners, which are less profitable in part because the program is new. Revenue fell 2.5% to $18.9B because of the drop in 787 deliveries & the effect of US budget cuts on the defense business. Analysts had predicted sales of $18.8B. Its commercial & defense backlog rose to a record $392B as it gained $20B of net orders. Commercial deliveries of 137 planes matched the year-earlier tally. EPS was buoyed by 19¢ because of a research-and-development tax credit. Since Jan, BA has used a profit measure called core EPS that it said gives a clearer picture by adjusting for market fluctuation in pension costs. Without the adjustment, EPS was $1.44, compared with $1.22 a year earlier. BA reaffirmed its 2013 forecast of core EPS of $6.10-6.30. Operating cash flow tumbled 37% to $524M, hurt by the inventory buildup of Dreamliners as production continued during the worldwide grounding ordered by regulators to fix faults in the plane’s lithium-ion batteries. The stock rose 2.75.
Boeing Profit Beats Estimates as Deliveries of 777 Rise
Photo: Bloomberg
Eli Lilly Q1 profit exceeded estimates as the company cut jobs & had a lower tax rate from the reinstatement of a research & development credit. EPS excluding one-time items was $1.14, beating by 9¢ the estimate. Total EPS was $1.42 a share, helped by a diabetes drug deal with Amylin Pharmaceuticals. Revenue was unchanged at $5.6B as higher prices helped offset a drop in prescriptions for the schizophrenia drug Zyprexa, which brought in $5B a year before generic copies came on the market in 2011. The company is cutting hundreds of jobs as it prepares for the patent loss of its top-seller Cymbalta at the end of the year. CEO John Lechleiter has said the company is counting on new medicines to help revive growth. LLY anounced today it has begun a rolling submission with the FDA for the stomach-cancer treatment ramucirumab & plans to seek approval for five medicines this year. Q1 results benefited from a 2012 US research tax credit that wasn’t renewed until Jan. Its effective tax rate was 20.7% when the one-time impact of the tax credit for 2012 was accounted for, compared to a rate of 24.3% a year earlier. LLY also had an additional $495M gain from transferring rights outside the US for the diabetes treatment exenatide to Amylin. LLY reaffirmed its 2013 earnings forecast calling for EPS excluding one-time items of $3.82-3.97. The stock fell 2.29.
Eli Lilly Earnings Beat Analysts’ Estimates as Sales of Cymbalta Advance
Little was decided in the markets. Apple (AAPL) earnings received the most attention as investors tried to assess what the report meant going forward. The stock finished down pocket change in the 405s as the introduction of Samsung's new S4 phone scheduled for today was postponed. Other earnings reports had a variety of messages. GDP for Q1 will be reported on Fri & a favorable 3% growth rate is baked into the market. The big gainers in the Dow were: Microsoft (MSFT), Alcoa (AA) & Boeing (BA) while P&G (PG) & AT&T (T) were the 2 big losers. The record high for the Dow is now 2 weeks old.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.053% | |
U.S. 2-year |
0.229% | |
U.S. 10-year |
1.694% |
| CLM13.NYM | ...Crude Oil Jun 13 | ....91.27 |  ...2.09 (2.3%) |
Photo: Bloomberg
The ECB is expected to cut its key interest rate to a record low next week as the euro-region economy slumps. Economists forecast a reduction for May after gauges of manufacturing & services activity for Apr underscored weakness in output. Germany’s Ifo index of business confidence fell more than predicted. President Mario Draghi said on Fri he hasn’t seen any improvement in economic reports, after hinting he might lower borrowing costs if the recovery falters. Executive Board member Joerg Asmussen has said that rates could fall if data show a need for it, & another member said today that the ECB is “ready to act.” A cut on May 2 would take the key rate to 0.5% from 0.75%. The euro-area composite purchasing managers’ index of manufacturing & services remained at 46.5 in Apr, Markit Economics said yesterday, below the 50 mark that divides contraction from expansion. Sounds good, but its hard to see what a cut will accomplish with the rate already slightly above zero.
ECB Rate Cut Seen Next Week by Banks From Nomura to RBS
Photo: Bloomberg
Q1 profit at Boeing, a Dow stock, beat estimates as increased deliveries for 777 & 737model jets made up for the halt in buyers picking up Dreamliners while that plane was grounded. EPS excluding some pension expenses climbed 5.3% to $1.73 from $1.40, a year earlier. Analysts projected $1.49. BA delivered 4 more 777s & 3 more 737s than a year earlier amid the pause in handing over 787 Dreamliners, which are less profitable in part because the program is new. Revenue fell 2.5% to $18.9B because of the drop in 787 deliveries & the effect of US budget cuts on the defense business. Analysts had predicted sales of $18.8B. Its commercial & defense backlog rose to a record $392B as it gained $20B of net orders. Commercial deliveries of 137 planes matched the year-earlier tally. EPS was buoyed by 19¢ because of a research-and-development tax credit. Since Jan, BA has used a profit measure called core EPS that it said gives a clearer picture by adjusting for market fluctuation in pension costs. Without the adjustment, EPS was $1.44, compared with $1.22 a year earlier. BA reaffirmed its 2013 forecast of core EPS of $6.10-6.30. Operating cash flow tumbled 37% to $524M, hurt by the inventory buildup of Dreamliners as production continued during the worldwide grounding ordered by regulators to fix faults in the plane’s lithium-ion batteries. The stock rose 2.75.
Boeing Profit Beats Estimates as Deliveries of 777 Rise
Boeing (BA)
Photo: Bloomberg
Eli Lilly Q1 profit exceeded estimates as the company cut jobs & had a lower tax rate from the reinstatement of a research & development credit. EPS excluding one-time items was $1.14, beating by 9¢ the estimate. Total EPS was $1.42 a share, helped by a diabetes drug deal with Amylin Pharmaceuticals. Revenue was unchanged at $5.6B as higher prices helped offset a drop in prescriptions for the schizophrenia drug Zyprexa, which brought in $5B a year before generic copies came on the market in 2011. The company is cutting hundreds of jobs as it prepares for the patent loss of its top-seller Cymbalta at the end of the year. CEO John Lechleiter has said the company is counting on new medicines to help revive growth. LLY anounced today it has begun a rolling submission with the FDA for the stomach-cancer treatment ramucirumab & plans to seek approval for five medicines this year. Q1 results benefited from a 2012 US research tax credit that wasn’t renewed until Jan. Its effective tax rate was 20.7% when the one-time impact of the tax credit for 2012 was accounted for, compared to a rate of 24.3% a year earlier. LLY also had an additional $495M gain from transferring rights outside the US for the diabetes treatment exenatide to Amylin. LLY reaffirmed its 2013 earnings forecast calling for EPS excluding one-time items of $3.82-3.97. The stock fell 2.29.
Eli Lilly Earnings Beat Analysts’ Estimates as Sales of Cymbalta Advance
Eli Lilly (LLY)
Little was decided in the markets. Apple (AAPL) earnings received the most attention as investors tried to assess what the report meant going forward. The stock finished down pocket change in the 405s as the introduction of Samsung's new S4 phone scheduled for today was postponed. Other earnings reports had a variety of messages. GDP for Q1 will be reported on Fri & a favorable 3% growth rate is baked into the market. The big gainers in the Dow were: Microsoft (MSFT), Alcoa (AA) & Boeing (BA) while P&G (PG) & AT&T (T) were the 2 big losers. The record high for the Dow is now 2 weeks old.
Dow Jones Industrials
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