Friday, August 16, 2013

Markets drift lower on weaker consumer confidence data

Dow fell 30 with a little selling into the close, decliners over advancers almost 2-1 & NAZ lost 3.  The MLP index was off 2 to the 437s & the REIT index plunged 5+ to 260.  Junk bond funds were mixed & Treasuries fell, taking yields to the highest levels in 2 years.  Oil did little after a weekly gain, as clashes in Egypt raised concern that MidEast supply will be cut & as some energy companies evacuated non-essential personnel in the Gulf of Mexico ahead of a storm.  Oil had another up while interest rates rose.

AMJ (Alerian MLP Index tracking fund)

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Treasury yields:S

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLU13.NYM...Crude Oil Sep 13....107.44 Up ......0.11 (0.1%)

GCU13.CMX...Gold Sep 13........1,376.80 Up ...15.70 (1.2%)

U.S. Manufacturing

Photo:   Bloomberg

The productivity of US workers rose more than projected in Q2 as the economy expanded.  The measure of employee output per hour increased at a 0.9% annualized rate, after a 1.7% decline in Q1, according to the Labor Dept.  The forecast called for a 0.6% advance.  Expenses per worker rose at a 1.4% rate, greater than estimated.  Even with the Q2 pickup, productivity was unchanged in year ended in Jun, below the average 2.4% annual gain in the 2000-2011 period.  Businesses are reaching the limit of how much efficiency they can squeeze from their existing staff, a sign they may take on more workers once they see faster sales growth.

Productivity in U.S. Rises Above Forecast as Output Grows

Investor Carl Icahn speaks at the Wall Street Journal Deals & Deal Makers conference at the New York Stock Exchange in this June 27, 2007 file photograph.REUTERS/Chip East/Files

Photo:   Yahoo

Carl Icahn's legal effort to derail a $25B takeover of Dell stalled after a judge refused to fast-track his lawsuit against the company, an integral part of his months-long opposition campaign.  Delaware Court of Chancery Judge Leo Strine waved off Icahn's request to accelerate the lawsuit, dismissing claims that the company & its board wronged shareholders by accepting an undervalued offer from CEO Michael Dell.  Icahn had hoped to head off a Sep 12 special shareholders' vote on a takeover proposal he & other major investors argue undervalues the company.  He wanted the company to hold its annual general meeting, at which he intends to try to replace the board, at the same time as the vote, hoping that will force the CEO to put his best & final offer on the table.  Icahn holds 8.9% of the stock, making him the 2nd-largest shareholder behind Michael Dell, with about 16%.  DELL argues its special committee has done everything it can to safeguard shareholders' interests, & has said the decision to hold the annual general meeting on Oct 17 means it will take place swiftly after the special vote.  The stock went up 11¢ to $13.81.

Icahn Loses Bid to Fast-Track Dell Lawsuit

Dell (DELL)

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Stocks are clearly playing defense.  Dow dropped 300+ this week & is down 550 from the Aug 2 peak.  Rising interest rates are disturbing all investors.  Too many have gotten used to virtually free financing,  The MLP index is off 28 from its record high & the REIT index is down 54 from its yearly high.  More selling is ahead, especially for yield securities.

Dow Jones Industrials

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