Thursday, August 22, 2013

Higher markets on jobless report

Dow rose 58, advancers ahead of decliners better than 4-1 & NAZ had a big gain of 36.  The MLP index jumped 4+ to 444 & the REIT index added a fraction to 262.  Junk bond funds were higher while Treasuries had little movement.  Oil was about even & gold crawled higher.

AMJ (Alerian MLP Index tracking fund)

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Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLV13.NYM....Crude Oil Oct 13...103.82 Down ...0.03  (0.0%)

GCQ13.CMX...Gold Aug 13.......1,368.80 Down ...1.80  (0.1%)

<p> In this Wednesday, Aug. 14, 2013 photo, job seekers check out companies offering more than 2,000 job opportunities at a job fair in Miami Lakes, Fla. The number of people seeking U.S. unemployment benefits rose 13,000 the week of Aug. 12, to a seasonally adjusted 336,000, but the level remains consistent with solid job gains, according to information released by the Labor Department, Thursday, Aug. 22, 2013. (AP Photo/Alan Diaz)

Photo:   Yahoo

The number of Americans applying for unemployment benefits rose last week after reaching the lowest level in 5½ years.  But the broader trend suggests companies are laying off fewer workers.  The Labor Dept said that applications for benefits rose 13K to 336K last week, up from 323K in the previous week (the lowest since Jan 2008).  The 4-week average fell 2K to 330K, the 6th straight decline & the lowest for the average since Nov 2007.  At the depths of the recession in Mar 2009, applications numbered 670K.  Applications for unemployment benefits generally reflect layoffs.  The 4-week average has fallen 5% in the past month, suggesting employers added 200K or more jobs in Aug, an improvement from the 162K in Jul.  The drop in layoffs helps explain why job growth has increased this year to an average of 192K net jobs a month, even while overall economic growth has stayed sluggish.  The weak economy has made employers hesitant to hire freely.  In addition, many of the new jobs are part time or low paying work.

U.S. Jobless Claims Fell to Five-Year Low Over Past Month

A Hewlett-Packard logo is seen at the company's Executive Briefing Center in Palo Alto, California January 16, 2013. REUTERS/Stephen Lam/Files

Photo:   Yahoo

Hewlett-Packard, a Dow stock, shuffled its top ranks, shifting a star executive to a role identifying acquisition targets after a disappointing performance from the division he oversaw curtailed the PC maker's 2014 outlook.  The company reported a 9% decline in Enterprise Group revenue, the company's 2nd-largest division & a critical component of CEO Meg Whitman's plan to transform HPQ into a provider of enterprise computing services.  She replaced Dave Donatelli with Bill Veghte at the helm of the Enterprise Group, calling the unit's performance "very disappointing."  That, plus a persistent decline in PC sales as tablets & smartphones revolutionize computing, led her to backpedal from when she said in May that 2014 revenue growth was still possible.  "What has changed about 2014's outlook is a couple of things - Enterprise Group's performance especially during the quarter," she told analysts.  "Weak execution has amplified the market challenges we know exist."  "It's unlikely ... that we'll see the growth in 2014 that I had hoped."  Whitman, who took the reins at HP in Sep 2011, is trying to revive the company after years of board turmoil & a backdrop of rapidly declining global PC sales, but has not yet halted revenue declines.  In all, the company recorded revenue of $27.2B in the fiscal Q3, down from $29.7B a year earlier, missing the $27.3B forecast.  EPS was 71¢, compared with a loss last year when the company swallowed a big writedown of the IT outsourcing business .  Excluding one-time items, the company earned 86¢, matching the average forecast.  The stock tumbled 3.38 (13%).

HP’s Slumping Businesses Signal Long Road for Turnaround

Hewlett-Packard (HPQ)

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House Prices in U.S. Rose 7.7% in Year Through June, FHFA Says

Photo:   Bloomberg

US house prices rose 7.7% in the year thru Jun, extending a recovery that’s spurring more homeowners to list their properties for sale.  Prices climbed 0.7% from May, according to the Federal Housing Finance Agency.  The estimate called for a 0.6% gain.  Price increases are drawing more sellers to a market.  The inventory of unsold homes was a 5 month supply in Jun, up from 4.7 months in Jan, according to data from the National Association of Realtors.  Price gains may slow to 4% for 2014, down from 8% this year.  Higher mortgage rates could be encouraging buyers to complete deals before borrowing costs rise further.  Sales of previously owned US homes climbed 6.5% last month to the fastest pace in 4 years & the median price jumped to $213K, up 13.7% from Jul 2012.  The FHFA’s report showed prices increased 17% from a year earlier in the Pacific area, which includes California & Washington.  In the Mountain region, including Nevada & Arizona, the gain was 11%.  The Middle Atlantic area, NY, NJ & PA, had the smallest increase at 2.5%.

House Prices Rose 7.7% in Year Through June, FHFA Says

Once again there is not a lot going on in the stock market.  Trading is quiet.  The HPQ news was not surprising as the PC business is mature with tablets eating their lunch.  The high yielding stocks are finding bargain hunters.  But all rates are going higher as the yield on the 10 year Treasury is pushing towards 3%.  The stock market will probably continue to slosh round this week & next.

Dow Jones Industrials

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