Dow inched up 6, advancers ahead of decliners 5-4 & NAZ fell 16. The MLP index was off 1 to the 462s & the REIT index fell fractionally in the 292s. Junk bond funds edged higher & Treasuries pulled back. Oil fell
for a 2nd day on speculation that the Federal Reserve will
pare stimulus in Sep. Gold slipped a tad after its recent mini rally.
AMJ (Alerian MLP Index tracking fund)
China's economy may be facing a period of instability & imbalance as it transitions from high-speed growth. “Growth inertia should not be underestimated, as new growth engines and patterns have not been formed,” researcher Yu Bin said in a report by China's Development Research Center released today. “Market expectations are unstable, downward pressure has increased, and existing and new structural mismatches exist. The economy has become unstable and uncertain like never before.” Growth slowed for a 2nd straight qtr to 7.5% in Q2, increasing the risk that Premier Li Keqiang will miss a full-year target for the same pace. Reports in Chinese media indicating that Li will act to support expansion if needed helped send the Shanghai Composite Index up 2% today. Yu said that if China can maintain “an appropriate macroeconomic environment,” start suitable reforms & control risks, “the growth rate for 2013 can approach 7.5 percent.” Yu added that while the global economy may strengthen in the H2, “that doesn’t mean an improvement in Chinese exports.” “Chinese exports are under pressure,” he said. Expansion below 7% won’t be tolerated because China needs to achieve a moderately prosperous society by 2020, according to the official Xinhua News Agency. Li said at a recent meeting with economists that 7% is the “bottom line” & the nation can’t allow growth below that.
Chinese Economy Facing Instability as Growth Cools, DRC Says
Photo: Yahoo
UPS reported that Q2 profit fell 4% as customers shifted from premium toward lower-priced shipped services. The company called the results disappointing & said it was adapting to the changing market. EPS was $1.13, versus $1.15 last year. Analysts were expecting the lower earnings per share after the company warned last week. Revenue rose 1.2% to $13.5B & that was lower than the expected $13.59B. The company foreshadowed the quarterly results & lowered its full-year outlook, blaming the shift toward slower but cheaper shipping services, overcapacity in the worldwide air freight business & slowing in the US industrial sector. The effect of those changes showed up in disappointing performance in the freight-forwarding & international package-delivery businesses. The supply chain & freight unit earned 21% less in operating profit than a year ago. "Market conditions and shipper preferences clearly impacted our freight forwarding and international business," CEO Scott Davis said. "UPS is adapting to these conditions to ensure we deliver a solid second half." FDX is being hurt as many customers trade down from priority shipping services to save money & officials expect the trend to continue. UPS delivered 15.7M packages a day in Q2, up 2.3%. The stock lost 68¢.
UPS Profit Drop Shows Pressure on Overnight Shipments
DuPont, a Dow stock, reported a nearly 12% decline in Q2 earnings partly because of lower pricing for titanium dioxide, a whitening pigment. It is exploring a possible sale or spinoff of its performance chemicals unit. EPS was $1.11, compared to $1.23 last year. Revenue fell 1% to $9.8B as lower selling prices & currency effects offset an overall 1% volume gain. Analysts were expecting EPS of $1.27 & revenue of $10.04B. Last summer, CEO Ellen Kullman shrugged off short-term weakness in demand for TiO2, saying that the overall fundamentals in the market were "robust." CFO Nick Fanandakis said DD was still "very bullish" on the mid & long-term prospects for titanium dioxide, which has been key profit producer for the performance chemicals unit, which generated total sales of $7.2B in 2012. But the company said today that it is reconsidering the future of the business segment. "We have been carefully weighing the strong cash generation of our performance chemicals businesses against their cyclicality and lower growth profile, as well as where the power of DuPont's integrated science can be differentiated," Kullman said. "We are evaluating options for our performance chemicals businesses as part of our ongoing plan to deliver higher growth and greater value creation for our shareholders." That appeared to offset worries about the financial performance for Q3. In Q2, the performance chemicals unit saw sales fall 9% as a 15% pricing decline offset a 6% volume gain. Operating earnings for the performance chemicals segment declined by $330M from peak levels last year, largely because of lower prices for titanium dioxide. But TiO2 volumes increased 12% compared to last year. The agriculture unit continued to lead overall performance, posting a 7% in sales on higher prices & a slight increase in volume. "Agriculture sales remained strong in the second quarter and titanium dioxide volume improved," Kullman noted. "As expected, this was largely offset by a substantial decline in performance chemicals earnings from last year's peak levels." The electronics & communications unit saw sales drop 18% on both lower prices & volume declines amid weak demand in photovoltaics markets. Investors liked the report, taking the stock 1.23 higher.
DuPont reports drop in 2Q earnings Associated Press
Stocks continue to meander as they have been doing during earnings season. There has been no exciting news on the earnings front, especially on the revenue side. It's difficult to find a report showing solid revenue gains. Apple (AAPL) is down a couple of bucks ahead of its report due after the market close. Expectation are not inspiring. In addition, the next FOMC meeting is just a week away. Dow is tired after its 1K rise in the last 6 weeks.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.03% | |
U.S. 2-year |
0.31% | |
U.S. 10-year |
2.52% |
| CLU13.NYM | ...Crude Oil Sep 13 | ...106.36 |  ...0.58 | (0.5%) |
| GCN13.CMX | ...Gold Jul 13 | .........1,327.90 | ...8.50 | (0.6%) |
China's economy may be facing a period of instability & imbalance as it transitions from high-speed growth. “Growth inertia should not be underestimated, as new growth engines and patterns have not been formed,” researcher Yu Bin said in a report by China's Development Research Center released today. “Market expectations are unstable, downward pressure has increased, and existing and new structural mismatches exist. The economy has become unstable and uncertain like never before.” Growth slowed for a 2nd straight qtr to 7.5% in Q2, increasing the risk that Premier Li Keqiang will miss a full-year target for the same pace. Reports in Chinese media indicating that Li will act to support expansion if needed helped send the Shanghai Composite Index up 2% today. Yu said that if China can maintain “an appropriate macroeconomic environment,” start suitable reforms & control risks, “the growth rate for 2013 can approach 7.5 percent.” Yu added that while the global economy may strengthen in the H2, “that doesn’t mean an improvement in Chinese exports.” “Chinese exports are under pressure,” he said. Expansion below 7% won’t be tolerated because China needs to achieve a moderately prosperous society by 2020, according to the official Xinhua News Agency. Li said at a recent meeting with economists that 7% is the “bottom line” & the nation can’t allow growth below that.
Chinese Economy Facing Instability as Growth Cools, DRC Says
Photo: Yahoo
UPS reported that Q2 profit fell 4% as customers shifted from premium toward lower-priced shipped services. The company called the results disappointing & said it was adapting to the changing market. EPS was $1.13, versus $1.15 last year. Analysts were expecting the lower earnings per share after the company warned last week. Revenue rose 1.2% to $13.5B & that was lower than the expected $13.59B. The company foreshadowed the quarterly results & lowered its full-year outlook, blaming the shift toward slower but cheaper shipping services, overcapacity in the worldwide air freight business & slowing in the US industrial sector. The effect of those changes showed up in disappointing performance in the freight-forwarding & international package-delivery businesses. The supply chain & freight unit earned 21% less in operating profit than a year ago. "Market conditions and shipper preferences clearly impacted our freight forwarding and international business," CEO Scott Davis said. "UPS is adapting to these conditions to ensure we deliver a solid second half." FDX is being hurt as many customers trade down from priority shipping services to save money & officials expect the trend to continue. UPS delivered 15.7M packages a day in Q2, up 2.3%. The stock lost 68¢.
UPS Profit Drop Shows Pressure on Overnight Shipments
United Parcel Service (UPS)
DuPont, a Dow stock, reported a nearly 12% decline in Q2 earnings partly because of lower pricing for titanium dioxide, a whitening pigment. It is exploring a possible sale or spinoff of its performance chemicals unit. EPS was $1.11, compared to $1.23 last year. Revenue fell 1% to $9.8B as lower selling prices & currency effects offset an overall 1% volume gain. Analysts were expecting EPS of $1.27 & revenue of $10.04B. Last summer, CEO Ellen Kullman shrugged off short-term weakness in demand for TiO2, saying that the overall fundamentals in the market were "robust." CFO Nick Fanandakis said DD was still "very bullish" on the mid & long-term prospects for titanium dioxide, which has been key profit producer for the performance chemicals unit, which generated total sales of $7.2B in 2012. But the company said today that it is reconsidering the future of the business segment. "We have been carefully weighing the strong cash generation of our performance chemicals businesses against their cyclicality and lower growth profile, as well as where the power of DuPont's integrated science can be differentiated," Kullman said. "We are evaluating options for our performance chemicals businesses as part of our ongoing plan to deliver higher growth and greater value creation for our shareholders." That appeared to offset worries about the financial performance for Q3. In Q2, the performance chemicals unit saw sales fall 9% as a 15% pricing decline offset a 6% volume gain. Operating earnings for the performance chemicals segment declined by $330M from peak levels last year, largely because of lower prices for titanium dioxide. But TiO2 volumes increased 12% compared to last year. The agriculture unit continued to lead overall performance, posting a 7% in sales on higher prices & a slight increase in volume. "Agriculture sales remained strong in the second quarter and titanium dioxide volume improved," Kullman noted. "As expected, this was largely offset by a substantial decline in performance chemicals earnings from last year's peak levels." The electronics & communications unit saw sales drop 18% on both lower prices & volume declines amid weak demand in photovoltaics markets. Investors liked the report, taking the stock 1.23 higher.
DuPont reports drop in 2Q earnings Associated Press
E.I. du Pont de Nemours (DD)
Stocks continue to meander as they have been doing during earnings season. There has been no exciting news on the earnings front, especially on the revenue side. It's difficult to find a report showing solid revenue gains. Apple (AAPL) is down a couple of bucks ahead of its report due after the market close. Expectation are not inspiring. In addition, the next FOMC meeting is just a week away. Dow is tired after its 1K rise in the last 6 weeks.
Dow Jones Industrials
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