Dow rose 60, advancers over decliners almost 3-2 & NAZ added 5. The MLP index was down a fraction to 530 & the REIT index changed little in the 312s. Junk bond funds were mixed to lower & Treasuries gained. Oil advanced
as US economic data pointed to stronger growth in the world’s
biggest oil-consuming nation. Gold fell to a 2-month low as the outlook for higher interest rates reduced the
appeal of the metal as an alternative investment.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.023713390241297927)
Photo: Bloomberg
Manufacturing activity slowed in the euro area & China as rising political tensions threaten to weaken trade & dampen the outlook for the global economy. A preliminary Purchasing Managers Index for the Manufacturing industry in the euro area fell to 50.8 from 51.8 in Jul, according to Markit Economics, the lowest level in 13 months & less than the 51.3 estimate. In China, a similar gauge from HSBC Holdings Plc & Markit dropped to 50.3 from 51.7, trailing all forecasts. Readings above 50 indicate expansion. The euro area’s recovery from its longest-ever recession stalled in Q2 & is threatened further by low inflation & a sanctions standoff with Russia. In China, a credit slowdown adds to risks that the economy will miss its growth target this year. In the euro area, a composite indicator of activity in the manufacturing & services sectors fell to 52.8 from 53.8 in Jul. While the gauge has signaled growth for more than a year, the region’s revival unexpectedly stagnated in Q2 as Germany, France & Italy, the 3 largest economies, failed to grow. With inflation below 1% since Oct, unemployment near record highs & global risks increasing, the ECB unveiled unprecedented policy measures in Jun & committed to boost stimulus if needed. Last month, the EU curbed Russia’s access to bank financing & advanced technology in response to the country’s support of separatists in Eastern Ukraine. Russia retaliated with sanctions on EU food products. Putin & Ukrainian pres Poroshenko may hold bilateral talks next week. In China, Jul weaker-than-expected credit, industrial production & fixed-asset investment data spurred speculation the gov will add to measures such as expedited fiscal spending & targeted monetary easing to aid the economy. Recoveries in the US & Europe helped accelerate Chinese export growth to 14.5% last month from a year earlier, supporting Premier Li Keqiang's 7.5% expansion target for this year. China’s GDP is projected to increase 7.4% in 2014.
Manufacturing Slows From Europe to China on Trade Risks: Economy
Hewlett-Packard CEO Meg Whitman is benefiting from a surge in PC sales. Now she needs to show she can make progress in other businesses, including software & services. The company posted its first sales growth in 12 qtrs, with revenue rising 1.3% to $27.6B for the fiscal Q3. EPS excluding certain items was 89¢ & sales were $27B, matching the estimates. Yet even as the PC business experienced a 12% revenue jump, sales across the company’s other divisions -- including services, printers & software -- either declined or clocked in at less than 2% growth. The uneven results illustrate the challenges Whitman still faces in turning around the technology giant, even after moving to rev up growth with new products & cutting jobs to trim costs since she took over as CEO in Sep 2011. Whitman said HPQ has become a stronger company because it has been forged in “the adversity of the turnaround.” She acknowledged there are some declining & flat businesses, & said there are opportunities for growth, especially in PCs where “we believe we can continue to gain share.” Whitman has stabilized HPQ & returned the company to profit over her tenure by focusing on reducing costs & introducing new products like water-cooled servers & 3-D printers. She has also pared as many as 16K more employees, on top of 34K already announced. But sustained sales growth remains elusive. EPS was 52¢, compared with 71¢ a year earlier, after the company took a $649M restructuring charge. For the current qtr, HPQ projected EPS excluding items of $1.03-$1.07, in line the estimate of $1.05. The personal-systems group, which sells PCs, saw revenue rise to $8.65B. Whitman said PCs sold strongly across the board in most regions, excluding China & Russia, though demand in China was good for commercial PCs. Revenue growth in the company’s other divisions was weaker or declined, with some sales affected by “geopolitical instability in Eastern Europe,” the CEO said. The stock jumped 1.88. If you would like to learn more about HPQ, click on this link:
club.ino.com/trend/analysis/stock/HPQ?a_aid=CD3289&a_bid=6ae5b6f7
AMJ (Alerian MLP Index tracking fund)
| CLV14.NYM | ....Crude Oil Oct 14 | ....93.79 |  ...0.34 | (0.4%) |
Manufacturing activity slowed in the euro area & China as rising political tensions threaten to weaken trade & dampen the outlook for the global economy. A preliminary Purchasing Managers Index for the Manufacturing industry in the euro area fell to 50.8 from 51.8 in Jul, according to Markit Economics, the lowest level in 13 months & less than the 51.3 estimate. In China, a similar gauge from HSBC Holdings Plc & Markit dropped to 50.3 from 51.7, trailing all forecasts. Readings above 50 indicate expansion. The euro area’s recovery from its longest-ever recession stalled in Q2 & is threatened further by low inflation & a sanctions standoff with Russia. In China, a credit slowdown adds to risks that the economy will miss its growth target this year. In the euro area, a composite indicator of activity in the manufacturing & services sectors fell to 52.8 from 53.8 in Jul. While the gauge has signaled growth for more than a year, the region’s revival unexpectedly stagnated in Q2 as Germany, France & Italy, the 3 largest economies, failed to grow. With inflation below 1% since Oct, unemployment near record highs & global risks increasing, the ECB unveiled unprecedented policy measures in Jun & committed to boost stimulus if needed. Last month, the EU curbed Russia’s access to bank financing & advanced technology in response to the country’s support of separatists in Eastern Ukraine. Russia retaliated with sanctions on EU food products. Putin & Ukrainian pres Poroshenko may hold bilateral talks next week. In China, Jul weaker-than-expected credit, industrial production & fixed-asset investment data spurred speculation the gov will add to measures such as expedited fiscal spending & targeted monetary easing to aid the economy. Recoveries in the US & Europe helped accelerate Chinese export growth to 14.5% last month from a year earlier, supporting Premier Li Keqiang's 7.5% expansion target for this year. China’s GDP is projected to increase 7.4% in 2014.
Manufacturing Slows From Europe to China on Trade Risks: Economy
Hewlett-Packard CEO Meg Whitman is benefiting from a surge in PC sales. Now she needs to show she can make progress in other businesses, including software & services. The company posted its first sales growth in 12 qtrs, with revenue rising 1.3% to $27.6B for the fiscal Q3. EPS excluding certain items was 89¢ & sales were $27B, matching the estimates. Yet even as the PC business experienced a 12% revenue jump, sales across the company’s other divisions -- including services, printers & software -- either declined or clocked in at less than 2% growth. The uneven results illustrate the challenges Whitman still faces in turning around the technology giant, even after moving to rev up growth with new products & cutting jobs to trim costs since she took over as CEO in Sep 2011. Whitman said HPQ has become a stronger company because it has been forged in “the adversity of the turnaround.” She acknowledged there are some declining & flat businesses, & said there are opportunities for growth, especially in PCs where “we believe we can continue to gain share.” Whitman has stabilized HPQ & returned the company to profit over her tenure by focusing on reducing costs & introducing new products like water-cooled servers & 3-D printers. She has also pared as many as 16K more employees, on top of 34K already announced. But sustained sales growth remains elusive. EPS was 52¢, compared with 71¢ a year earlier, after the company took a $649M restructuring charge. For the current qtr, HPQ projected EPS excluding items of $1.03-$1.07, in line the estimate of $1.05. The personal-systems group, which sells PCs, saw revenue rise to $8.65B. Whitman said PCs sold strongly across the board in most regions, excluding China & Russia, though demand in China was good for commercial PCs. Revenue growth in the company’s other divisions was weaker or declined, with some sales affected by “geopolitical instability in Eastern Europe,” the CEO said. The stock jumped 1.88. If you would like to learn more about HPQ, click on this link:
club.ino.com/trend/analysis/stock/HPQ?a_aid=CD3289&a_bid=6ae5b6f7
HP Boosted by PCs as Whitman Seeks Growth in Other Units
Hewlett-Packard (HPQ)
Sears Holdings posted a wider Q2 loss as sales decreased for the 30th straight qtr. The net loss pper share expanded to $5.39 from $1.83 a year earlier, as sales fell 9.7%. CEO Ed Lampert & the largest shareholder, called the results “unacceptable.” SHLD will reduce costs, close stores & improve pricing & promotions, among other steps, Lampert said. He has been selling & spinning off assets to raise cash as he works to bolster the retailer’s digital & rewards programs. Loyalty-program members generated 73% of eligible sales in Q2. The year-earlier results included Lands’ End, the clothing retailer spun off in Apr. Sales dropped to $8.01 B from $8.87 B. Revenue has fallen as the retailer closed stores & unloaded businesses, including the spinoff of the smaller-format Sears Hometown & Outlet Stores unit in 2012 & the sale of 5 leases in Canada last year. The spinoff of Lands’ End accounted for $330M of the revenue decline. Annual revenue has shrunk by almost a 1/3 since SHLD last had sales growth. The retailer last posted a quarterly gain, when compared to year-earlier figures, in 2007, when annual sales were $53B. The retailer generated $36B in revenue last fiscal year. The company also said the company plans to seek more long-term capital-structure flexibility from lenders in the coming 6-12 months. The company said it has had talks with third parties about options for the Sears Auto Center business, including partnerships. Also on the block is the company’s warranty business. Sales at stores open at least a year fell 1.7% at Kmart & rose 0.1% at Sears, dragged down by declining electronics sales, for a companywide decrease of 0.8%. But online sales climbed 18%. The stock sank 2.57. If you would like to learn more about SHLD, click on this link:
club.ino.com/trend/analysis/stock/SHLD?a_aid=CD3289&a_bid=6ae5b6f7
Sears Loss Widens on 30th Consecutive Sales Decline
Sears Holdings (SHLD)
Markets rose again in what is turning out to be a good week. Dow is up a massive 375 already, although volume is light as is common in the weeks prior to Labor Day. Meanwhile fighting continues in troubled areas. The Red Cross said truckloads of what Russia says is humanitarian aid may start crossing the border tomorrow to eastern Ukraine, where months of fighting has cut off water & electricity to residents of the region’s biggest cities. This could be tricky with all the fighting going on. Hamas is firing rockets into Israel & Israel is striking back. Iraq has more than its share of fighting. All this strife has its consequences with economic activity slowing down around the globe (shown above). However, Dow is very close to reaching a new record, a disconnect with the global conflicts.
Dow Jones Industrials
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