Thursday, April 3, 2014

Lower markets on weak econmic data

Dow lost 11, decliners ove advances 3-2 & NAZ was off 15.  The MLP index climbed 1+ to 473, eking out a new record, & the REIT index fell 1 to the 285s.  Junk bond funds continued strong & Treasuries saw buying as stocks sold off.  Oil & gold slid lower.

AMJ (Alerian MLP Index tracking fund)

Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLK14.NYM...Crude Oil May 14...99.50 Down ...0.12  (0.1%)

GCK14.CMX...Gold May 14.....1,285.40 Down ....5.30  (0.4%)

The number of Americans filing applications for unemployment benefits rose more than forecast last week after reaching a 6-month low, a sign that progress in the labor market remains fitful.  Jobless claims increased 16K to a 5-week high of 326K, according to the Labor Dept.  A revised 310K applications were filed in the previous week, the fewest since Sep 7.  The forecast called for 319K claims.  A slowdown in layoffs from earlier this year may set the stage for additional hiring as demand rebounds from a weather-induced soft patch.  Figures tomorrow are projected to show companies took on more workers in Mar than at any time in the last 4 months.  The 4 week average of claims was little changed at 319.5K from 319.25K the week before.  The number continuing to receive jobless benefits rose 22K to 2.84M in the prior week.  The unemployment rate among people eligible for benefits climbed to 2.2% in the latest week from 2.1% in the prior week.

Jobless Claims in U.S. Rose 16,000 Last Week to 326,000

The US trade deficit unexpectedly widened in Feb to the highest level in 5 months as exports of fuels & capital equipment dropped.  The gap widened by 7.7% to $42.3B, the biggest since Sep, from the prior month’s $39.3B, according to the Commerce Dept.  The forecast called for a reduction to $38.5B.  Imports were little changed.  The deterioration in trade will further depress economic growth in Q1, which was already suffering from slowdowns in consumer spending & manufacturing caused by unusually harsh winter weather.  The drop in exports may not be sustained as economies overseas, including the euro area, improve.  Exports decreased 1.1% to $190.4B, depressed by declining sales of refined petroleum products.  Fuel shipments to overseas customers had climbed in prior months as US energy production grew.

Trade Deficit in U.S. Unexpectedly Widened in February

Service industries picked up in Mar after the slowest pace in 4 years, showing the biggest part of the US economy was starting to thaw with the weather.  The Institute for Supply Management non-manufacturing index rose to 53.1, less than forecast, from 51.6 in Feb.  Readings greater than 50 signal expansion.  The projection called for a gain to 53.5.  American shoppers began returning to stores & auto dealers as weather conditions improved & job gains helped brighten spirits.  13 service industries reported growth, while 5 said business contracted.  “Despite the effects of weather on many of the respective businesses, the majority of respondents indicate that business conditions are improving,” the ISM said.  “The respondents also project better business activity and economic conditions as weather conditions continue to improve.”

Service Industries in U.S. Expanded at Faster Pace in March

While stocks were weak, this is still only a modest decline.  The S&P 500 & Dow are near record highs & selling today can be chalked up to profit selling.  Tomorrow' jobs report is projecting a gain of 200K jobs in Mar.

Dow Jones Industrials

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