Monday, August 26, 2013

Markets sell off on worries about fighting in Syria

Dow fell 64 with selling in the last hour, decliners 4-3 ahead of advancers & NAZ slipped pennies. The MLP index fell 2+ to the 441s & the REIT index was off a fraction to the 264s.  Junk bond funds were mixed & Treasuries fluctuated.  Oil was about even after orders for US durable goods dropped more than forecast in Jul but tensions built up in the MidEast.  Gold hardly budged.

AMJ (Alerian MLP Index tracking fund)

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CLV13.NYM....Crude Oil Oct 13....105.91 Down ...0.51  (0.5%)

Live 24 hours gold chart [Kitco Inc.]

<p> FILE - In this Monday, Sept. 10, 2012 file photo, dryers are seen from the inside of another clothes' dryer, foreground, at a Lowe's store, in Framingham, Mass. The Commerce Department reports on business orders for durable goods in July, on Monday, Aug. 26, 2013 (AP Photo/Steven Senne, File)

Photo:   Yahoo

Orders for long-lasting US factory goods fell sharply last month as demand for commercial aircraft plummeted & businesses spent less on computers & electrical equipment.  Manufacturing continues to struggle & could prevent economic growth from picking up in Q3.  Orders for durable goods plunged 7.3% in Jul, according to the Commerce Dept, the steepest drop in nearly a year.  Excluding the transportation category, orders fell just 0.6%.  Both declines followed 3 straight months of increases.  Economists focus on orders for capital goods & those orders fell 3.3%, but the drop followed 4 straight months of gains.  Core capital goods are considered a good measure of businesses' confidence in the economy & include items that point to expansion, such as machinery, computers & heavy trucks — while excluding volatile orders for aircraft & defense.  The big drop suggests Q3 is off to a weaker start than some had hoped & a few economists lowered their growth estimates for Q3 after seeing the durable goods report.

Orders for long-lasting US factory goods plunge Associated Press

Dollar Rallies as Economic Data Boosts Outlook for Fed Taper

Photo:   Bloomberg

Federal Reserve (FED) officials rebuffed intl calls to take the threat of fallout in emerging markets into account when tapering US monetary stimulus.  The risk that trimming of bond buying will hurt economies from India to Turkey by sparking an exodus of cash & higher borrowing costs was a dominant theme at the annual meeting of central bankers & economists in Jackson Hole, Wyoming, that ended on Sat.  An index of emerging-market stocks last week fell 2.7%, the steepest in 2 months, compared with a 0.5% gain in the S&P 500 Index.  FED officials said their sole focus is the US economy as they consider when to start reining in $85B of monthly asset purchases that have swelled the central bank’s balance sheet to $3.65T.  Even as they advised emerging markets to protect themselves, they were pressed by the IMF & Mexican central banker to spell out their intentions better in the interest of safeguarding global growth.  “You have to remember that we are a legal creature of Congress and that we only have a mandate to concern ourselves with the interest of the United States,” Dennis Lockhart, president of the Atlanta Fed, said.  “Other countries simply have to take that as a reality and adjust to us if that’s something important for their economies.”  But any major adjustment in US economic policy will affect China’s external environment & domestic economic development, Sheng Laiyun, a spokesman for the National Bureau of Statistics, said in Beijing today.

McDonald's CEO Thompson on Growth Strategy

Photo:   Bloomberg

McDonald's, a Dow stock & Dividend Aristcorat, will introduce bone-in chicken wings across the US next month as CEO Don Thompson revamps the domestic menu.  The Big Mac seller will start the Mighty Wings rollout Sep 9, have the items in all US stores by Sep 24 & keep them on sale until the end of Nov.  Thompson, who became CEO a year ago, has been overhauling the menu to boost sales in its home market, where it has about 14K locations.  While the chain recently removed Angus third-pounder burgers from its bill of fare, it also has added egg-white breakfast sandwiches & chicken McWraps.  The wings are flavored with cayenne & chili pepper & come with sauces including creamy ranch, honey mustard & tangy barbecue.  They will be sold in 3, 5 or 10-piece packs, starting at $2.99.  The stock rose 18¢.

McDonald's (MCD)

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Secretary of State John Kerry said the president will hold Syria's gov accountable (whatever that means) for the “moral obscenity” of using chemical weapons.  Markets had modest gains but that brought on selling in the last hour.  Generally there is not a lot going on in the stock market the week before Labor Day.  But this year Syria is explosive with its apparent use of chemical weapons.  Then there's Egypt with the Suez Canal thru which a lot of commerce flows every day.  This has the makings of an usually tough week.

Dow Jones Industrials

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