Dow slipped 5, decliners over advancers 3-2 & NAZ lost 19. The MLP index was down pocket change in the 456s & the REIT index fell fractionally in the 271s. Junk bond funds were flattish & Treasuries pulled back. Oil prices ended little changed & gold crawled higher, still stuck in a sideways range.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Service Industries expanded more than forecast in Jan as the biggest part of the US economy overcame the effects of snow & freezing temperatures to boost hiring by the most in more than 3 years. The ISM non-manufacturing index increased to 54 from 53 in Dec (readings greater than 50 signal expansion). The employment gauge was the strongest since Nov 2010, even as a separate report showed company payrolls grew less than projected. Retailers, management companies & professional services such as accountants were among areas that improved last month, showing the recovery is on firmer footing going into 2014 as households reduce debt burdens & wealth improves. The forecast projected the ISM services index would rise to 53.7. The ISM’s measure of new orders rose to 50.9 from 50.4 while the employment gauge climbed to 56.4 in Jan from 55.6 the month before, led by retailers, wholesalers & support services.
Time Warner Q4 results surpassed estimates & it made the biggest increase to its stock-buyback fund in 7 years. Excluding some items, EPS was $1.17, beating the $1.15 estimate. Revenue jumped 5% to $8.6B, also topping estimates. Pay-TV providers are paying more to carry Time Warner’s programming, whether it’s “Girls” on HBO or professional basketball games on TNT. Subscription revenue at Turner climbed 6% & HBO’s gained 8%. CEO Jeffrey Bewkes has focused the growth strategy on cable content, which accounts for more than 70% of company operating income. It was “another very successful year for the company,” Bewkes said. “This was the result of a strategy that has served us very well, not just last year, but for the past five years.” The company added $5B to its stock repurchase fund, the most since 2007, after budgeting $4B a year for buybacks since 2011. The company repurchased $3.9B in shares in the 13 months through Jan 31. The div was increased 10% to $1.27 a year. Adjusted EPS will expand at a rate in the “low double digits” this year from $3.51 in 2013, a figure that excludes Time Inc, TWX said. The company also forecast about $150M in restructuring costs for H1-2014, related to job cuts that started yesterday at Time Inc. Sales at Warner Bros. rose 7% to $4B as “Gravity” & “The Hobbit: The Desolation of Smaug” boosted box-office receipts. But CNN had a difficult qtr in the US, losing ad sales at a rate in the “middle teens,” according to CFO Howard Averill. In 2012, CNN benefited from much higher political spending for the presidential race. As a result, ad sales increased just 1% from a year earlier. The stock went up 68¢. If you would like to learn more about TWX, click here:
http://club.ino.com/trend/?symb=TWX&a_aid=CD3289&a_bid=6ae5b6f7
Time Warner Beats Profit Estimates, Increases Buyback Plans
Eyes are on the ECB as investors grow nervous about prospects for global growth. Europe last year made a long-delayed return to growth, but the pace has been meager & ECB President Mario Draghi has continually cautioned that the expansion remains fragile, while also pointing to encouraging signs that things are slowly picking up. If the ECB doesn’t move on Thurs, the focus will turn to the Mar meeting & Draghi’s language at his news conference tomorrow will be closely watched for clues. Some strategists see room for the ECB to cut its refi rate from 0.25% to 0.1%, while other possibilities include the introduction of new long-term refinancing operations or some type of "funding for lending" program, such as that implemented by the Bank of England, designed to jumpstart lending to the private sector. The ECB could also move to effectively boost liquidity by ending the sterilization of past purchases of gov bonds. Even though expectations by analysts for a rate move seem to have risen in recent days, a move by the ECB could trigger a selloff in the €. A rate cut would show the ECB is getting closer to scrapping a “mental barrier” to rates near zero, & it would signal that the Draghi-led ECB “intends to act swiftly when the ECB is challenged on its core mandate of price stability, both on the up- and the downside,” they said.
Economic data reported today was inconclusive, making the looming jobs report on Fri look more important. However macro forces driving the market are largely related to the Federal Reserve winding down its bond buying program. Rates are heading north & that negatively impacts emerging markets which rely on loans to finance growth projects. Dow is down 1.1K+ YTD with 10% of the year already completed. This could be a rough year for stocks.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.05% | |
U.S. 2-year |
0.31% | |
U.S. 10-year |
2.67% |
| CLH14.NYM | ....Crude Oil Mar 14 | ....97.27 |  ...0.08 | (0.1%) |
Photo: Bloomberg
Service Industries expanded more than forecast in Jan as the biggest part of the US economy overcame the effects of snow & freezing temperatures to boost hiring by the most in more than 3 years. The ISM non-manufacturing index increased to 54 from 53 in Dec (readings greater than 50 signal expansion). The employment gauge was the strongest since Nov 2010, even as a separate report showed company payrolls grew less than projected. Retailers, management companies & professional services such as accountants were among areas that improved last month, showing the recovery is on firmer footing going into 2014 as households reduce debt burdens & wealth improves. The forecast projected the ISM services index would rise to 53.7. The ISM’s measure of new orders rose to 50.9 from 50.4 while the employment gauge climbed to 56.4 in Jan from 55.6 the month before, led by retailers, wholesalers & support services.
Time Warner Q4 results surpassed estimates & it made the biggest increase to its stock-buyback fund in 7 years. Excluding some items, EPS was $1.17, beating the $1.15 estimate. Revenue jumped 5% to $8.6B, also topping estimates. Pay-TV providers are paying more to carry Time Warner’s programming, whether it’s “Girls” on HBO or professional basketball games on TNT. Subscription revenue at Turner climbed 6% & HBO’s gained 8%. CEO Jeffrey Bewkes has focused the growth strategy on cable content, which accounts for more than 70% of company operating income. It was “another very successful year for the company,” Bewkes said. “This was the result of a strategy that has served us very well, not just last year, but for the past five years.” The company added $5B to its stock repurchase fund, the most since 2007, after budgeting $4B a year for buybacks since 2011. The company repurchased $3.9B in shares in the 13 months through Jan 31. The div was increased 10% to $1.27 a year. Adjusted EPS will expand at a rate in the “low double digits” this year from $3.51 in 2013, a figure that excludes Time Inc, TWX said. The company also forecast about $150M in restructuring costs for H1-2014, related to job cuts that started yesterday at Time Inc. Sales at Warner Bros. rose 7% to $4B as “Gravity” & “The Hobbit: The Desolation of Smaug” boosted box-office receipts. But CNN had a difficult qtr in the US, losing ad sales at a rate in the “middle teens,” according to CFO Howard Averill. In 2012, CNN benefited from much higher political spending for the presidential race. As a result, ad sales increased just 1% from a year earlier. The stock went up 68¢. If you would like to learn more about TWX, click here:
http://club.ino.com/trend/?symb=TWX&a_aid=CD3289&a_bid=6ae5b6f7
Time Warner Beats Profit Estimates, Increases Buyback Plans
Time Warner (TWX)
Eyes are on the ECB as investors grow nervous about prospects for global growth. Europe last year made a long-delayed return to growth, but the pace has been meager & ECB President Mario Draghi has continually cautioned that the expansion remains fragile, while also pointing to encouraging signs that things are slowly picking up. If the ECB doesn’t move on Thurs, the focus will turn to the Mar meeting & Draghi’s language at his news conference tomorrow will be closely watched for clues. Some strategists see room for the ECB to cut its refi rate from 0.25% to 0.1%, while other possibilities include the introduction of new long-term refinancing operations or some type of "funding for lending" program, such as that implemented by the Bank of England, designed to jumpstart lending to the private sector. The ECB could also move to effectively boost liquidity by ending the sterilization of past purchases of gov bonds. Even though expectations by analysts for a rate move seem to have risen in recent days, a move by the ECB could trigger a selloff in the €. A rate cut would show the ECB is getting closer to scrapping a “mental barrier” to rates near zero, & it would signal that the Draghi-led ECB “intends to act swiftly when the ECB is challenged on its core mandate of price stability, both on the up- and the downside,” they said.
European Central Bank has power to disappoint U.S. investors
Economic data reported today was inconclusive, making the looming jobs report on Fri look more important. However macro forces driving the market are largely related to the Federal Reserve winding down its bond buying program. Rates are heading north & that negatively impacts emerging markets which rely on loans to finance growth projects. Dow is down 1.1K+ YTD with 10% of the year already completed. This could be a rough year for stocks.
Dow Jones Industrials
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