Dow went up 26, advancers over decliners 2-1 & NAZ added 9. MLPs continue hot & the index rose 4+ to the 521s while the REIT index was up fractinally in the 308s. Junk bond funds were mixed & Treasuries rose, seen as a safe haven investment in these times. Oil pulled back again & gold changed little.
AMJ (Alerian MLP Index tracking fund)
Applications for unemployment benefits in the US rose more than forecast last week, interrupting a steady decline to pre-recession lows. Jobless claims climbed 21K to 311K, the highest in 6 weeks, according to the Labor Dept. The forecast called for 295K. The jump represents a departure from a run of low readings that showed employers had been holding firm on staffing levels in order to keep up with demand. Janet Yellen is among policy makers who remain concerned that pockets of slack in the job market, including stagnant wages & elevated numbers of long-term unemployed workers, continue to hold back the US economy. The 4 week average of claims increased to 295K from 293K in the prior week (the lowest since 2006). Last week’s average is still well below the 318K mean so far this year. The number continuing to receive jobless benefits rose 25K to 2.54M & the unemployment rate among people eligible for benefits held at 1.9M.
Jobless Claims in U.S. Rise to Highest Level in Six Weeks
Wal-Mart, a Dow stock & Dividend Aristocrat, reported stagnant same-store sales & cut its earnings forecast for the year, hurt by higher health-care costs & slow traffic at its supercenters. EPS for the year will now be $4.90-$5.15, down from a previous range of as much as $5.45. Sales at US Wal-Mart & Sam’s Club stores open at least 12 months were little changed last qtr. CEO Doug McMillon is trying to revive US growth in the face of a slow economic recovery. The retailer hasn’t posted a same-store sales gain for 6 qtrs, & customers are making fewer trips to big-box retailers. Cuts in gov assistance also are leaving low-income shoppers with less money to spend. In cutting its forecast, teh company cited higher US health-care costs & increased spending in e-commerce, where it aims to challenge Amazon.com (AMZN) dominance. The company sees health-care expenses growing by more than $500M. It employs about 2.2M worldwide, & the company has more than 11K stores. To improve customer service, WMT increased staffing of its stores’ front ends, delis, bakeries & overnight stocking, as well as entertainment & sporting goods. Salaries & wages rose more than $200M from a year earlier. Q2 EPS from continuing operations fell to $1.21 from $1.23 a year earlier (matching the analyst estimate). Sales rose 2.8% to $120B, helped by e-commerce orders & the opening of new smaller-format stores. WMT said in Feb it was increasing capital spending by an additional $600M this year to add more Neighborhood Market & Express stores. Those smaller-format outlets have outperformed its supercenters & Sam’s Club locations. Sales at Neighborhood Market stores increased 5.6%, outpacing the growth of traditional stores & e-commerce. Total revenue at US stores rose 2.7% to $70B, while intl sales climbed 3.1% to $33.9B & Sam’s Club’s net sales gained 2.3% to $14.9B. “We wanted to see stronger comps in Wal-Mart U.S. and Sam’s Club,” McMillon said. “Stronger sales in the U.S. businesses would’ve also helped our profit performance.” The stock lost about a dime. If you would like to learn more about WMT, click on this link:
club.ino.com/trend/analysis/stock/WMT?a_aid=CD3289&a_bid=6ae5b6f7
Wal-Mart Cuts Profit Forecast Amid Slow Sales, Health Costs
Photo: Bloomberg
Sysco CEO John Chambers is struggling to revamp the world’s largest networking-equipment maker, eliminating 6K jobs & forecasting little to no sales growth. Including the latest layoffs, about 8% of the workforce of 74K, the company laid off almost 26K since Feb 2009. Revenue fell 3% to $47B in the fiscal year that ended Jul 26, the first decline in 5 years. With the CEO nearing retirement after almost 2 decades, customers are telling Chambers that they won’t keep paying for expensive hardware that shuttles data & internet traffic, when software can squeeze out more performance & make the machines more versatile. Sales in the qtr that ends in Oct will be $12.1-$12.2B, based on the company’s forecast for revenue to be unchanged or rise 1%. CSCO has been buying software companies & working on new software-based businesses for the past 3 years, with some success. Chambers also said that orders for its software-defined networking switch tripled from the previous qtr, & that 60 companies were already paying for its SDN software, which has been on sale for only 2 weeks. But sales in emerging markets won’t recover for several more quarters, Chambers said. Revenue in the period that ended Jul 26 was $12.4B, topping analysts’ estimate for $12.2B. EPS, excluding some items, was 55¢, versus a prediction for 53¢. The company will take a pretax charge of as much as $700M related to the job cuts. Orders in the US rose 5%, while those in Asia fell 7%. The stock fell 61¢. If you would like to learn more about CSCO, click on this link:
club.ino.com/trend/analysis/stock/CSCO?a_aid=CD3289&a_bid=6ae5b6f7
Cisco Cutting 6,000 Jobs as CEO Forecasts Stagnant Growth
Stock markets are grasping at straws, hoping better times will bring higher prices. Earnings continue mixed with WMT earnings less than inspiring. Intl tensions are not getting better. The Gaza truce was extended but that remains fuzzy. The Ukraine mess may be calming down, but that is difficult to tell with all the hard feelings. Then there is northern Iraq & the ISIS group which is consolidating gains & expanding its influence, including on those thousands stuck on that mountain. These are very dangerous times reflected in only mediocre earnings & slow income growth for US households. But Dow remains about 400 below its record reached last month as if it didn't have a care in the world.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLU14.NYM | ...Crude Oil Sep 14 | ...96.95 |  ...0.64 | (0.7%) |
| GCQ14.CMX | ...Gold Aug 14 | .....1,314.00 | ...1.20 | (0.1%) |
Applications for unemployment benefits in the US rose more than forecast last week, interrupting a steady decline to pre-recession lows. Jobless claims climbed 21K to 311K, the highest in 6 weeks, according to the Labor Dept. The forecast called for 295K. The jump represents a departure from a run of low readings that showed employers had been holding firm on staffing levels in order to keep up with demand. Janet Yellen is among policy makers who remain concerned that pockets of slack in the job market, including stagnant wages & elevated numbers of long-term unemployed workers, continue to hold back the US economy. The 4 week average of claims increased to 295K from 293K in the prior week (the lowest since 2006). Last week’s average is still well below the 318K mean so far this year. The number continuing to receive jobless benefits rose 25K to 2.54M & the unemployment rate among people eligible for benefits held at 1.9M.
Jobless Claims in U.S. Rise to Highest Level in Six Weeks
Wal-Mart, a Dow stock & Dividend Aristocrat, reported stagnant same-store sales & cut its earnings forecast for the year, hurt by higher health-care costs & slow traffic at its supercenters. EPS for the year will now be $4.90-$5.15, down from a previous range of as much as $5.45. Sales at US Wal-Mart & Sam’s Club stores open at least 12 months were little changed last qtr. CEO Doug McMillon is trying to revive US growth in the face of a slow economic recovery. The retailer hasn’t posted a same-store sales gain for 6 qtrs, & customers are making fewer trips to big-box retailers. Cuts in gov assistance also are leaving low-income shoppers with less money to spend. In cutting its forecast, teh company cited higher US health-care costs & increased spending in e-commerce, where it aims to challenge Amazon.com (AMZN) dominance. The company sees health-care expenses growing by more than $500M. It employs about 2.2M worldwide, & the company has more than 11K stores. To improve customer service, WMT increased staffing of its stores’ front ends, delis, bakeries & overnight stocking, as well as entertainment & sporting goods. Salaries & wages rose more than $200M from a year earlier. Q2 EPS from continuing operations fell to $1.21 from $1.23 a year earlier (matching the analyst estimate). Sales rose 2.8% to $120B, helped by e-commerce orders & the opening of new smaller-format stores. WMT said in Feb it was increasing capital spending by an additional $600M this year to add more Neighborhood Market & Express stores. Those smaller-format outlets have outperformed its supercenters & Sam’s Club locations. Sales at Neighborhood Market stores increased 5.6%, outpacing the growth of traditional stores & e-commerce. Total revenue at US stores rose 2.7% to $70B, while intl sales climbed 3.1% to $33.9B & Sam’s Club’s net sales gained 2.3% to $14.9B. “We wanted to see stronger comps in Wal-Mart U.S. and Sam’s Club,” McMillon said. “Stronger sales in the U.S. businesses would’ve also helped our profit performance.” The stock lost about a dime. If you would like to learn more about WMT, click on this link:
club.ino.com/trend/analysis/stock/WMT?a_aid=CD3289&a_bid=6ae5b6f7
Wal-Mart Cuts Profit Forecast Amid Slow Sales, Health Costs
Wal-Mart (WMT)
Sysco CEO John Chambers is struggling to revamp the world’s largest networking-equipment maker, eliminating 6K jobs & forecasting little to no sales growth. Including the latest layoffs, about 8% of the workforce of 74K, the company laid off almost 26K since Feb 2009. Revenue fell 3% to $47B in the fiscal year that ended Jul 26, the first decline in 5 years. With the CEO nearing retirement after almost 2 decades, customers are telling Chambers that they won’t keep paying for expensive hardware that shuttles data & internet traffic, when software can squeeze out more performance & make the machines more versatile. Sales in the qtr that ends in Oct will be $12.1-$12.2B, based on the company’s forecast for revenue to be unchanged or rise 1%. CSCO has been buying software companies & working on new software-based businesses for the past 3 years, with some success. Chambers also said that orders for its software-defined networking switch tripled from the previous qtr, & that 60 companies were already paying for its SDN software, which has been on sale for only 2 weeks. But sales in emerging markets won’t recover for several more quarters, Chambers said. Revenue in the period that ended Jul 26 was $12.4B, topping analysts’ estimate for $12.2B. EPS, excluding some items, was 55¢, versus a prediction for 53¢. The company will take a pretax charge of as much as $700M related to the job cuts. Orders in the US rose 5%, while those in Asia fell 7%. The stock fell 61¢. If you would like to learn more about CSCO, click on this link:
club.ino.com/trend/analysis/stock/CSCO?a_aid=CD3289&a_bid=6ae5b6f7
Cisco Cutting 6,000 Jobs as CEO Forecasts Stagnant Growth
Cisco (CSCO)
Stock markets are grasping at straws, hoping better times will bring higher prices. Earnings continue mixed with WMT earnings less than inspiring. Intl tensions are not getting better. The Gaza truce was extended but that remains fuzzy. The Ukraine mess may be calming down, but that is difficult to tell with all the hard feelings. Then there is northern Iraq & the ISIS group which is consolidating gains & expanding its influence, including on those thousands stuck on that mountain. These are very dangerous times reflected in only mediocre earnings & slow income growth for US households. But Dow remains about 400 below its record reached last month as if it didn't have a care in the world.
Dow Jones Industrials
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