Tuesday, September 30, 2014

Markets slide lower amid economic data

Dow lost 28, decliners over advancers amost 3-2 & NAZ fell back 12.  The Alerian MLP index rose 2+ to the 531s, & the REIT index fell 1+ to the 292s.  Junk bond funds went up from bargain hunting & Treasuries pulled back after its recent run.  Oil sunk below 90 & gold fell to the lowest since Jan as the outlook for higher US interest rates & a stronger dollar cut demand for precious metals as hedges against inflation.

AMJ (Alerian MLP Index tracking fund)

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CLF15.NYM....Crude Oil Jan 15....89.76 Down ...3.02  (3.3%)

Live 24 hours gold chart [Kitco Inc.]

Microsoft, a Dow stock, showed a first glimpse of its newest Windows operating system, touting new features such as a custom application store & added security, seeking to woo businesses that shunned the previous version as confusing & hard to use.  Called Windows 10, the software restores the Start menu & will let corps tailor the app store for their own users, Windows chief Terry Myerson said.  The new system, designed to run on mobile & desktop devices, will also separate corp & personal data on individual machines to bolster security, he added.  “Windows 10 embodies what our consumer and enterprise customers are demanding and what we will deliver,” Myerson said.  “It will run on the smallest Internet of things and data centers worldwide.”  The Windows group is refocusing on corp customers, seeking to revive sales growth as CEO Satya Nadella also steers the company to develop applications & services for rival operating systems & pushes more internet-based cloud-computing services.  The company will start rolling out previews of the new software tomorrow, & the system will be widely available in mid-2015, Myerson said.  MSFT wants Windows to be at the center of people’s digital lives, where all content can be portable & users can toggle easily between phones, tablets, laptops & PCs.  The stock fell pennies.  If you would like to learn more about MSFT, click on this link:
Microsoft Gives First Glimpse of Newest Windows Software

Microsoft (MSFT)

EBay is splitting off its PayPal division, throwing the business into direct competition with Apple (AAPL) & Google (GOOG) as consumers step up the use of smartphones & computers to pay for goods & services.  An independent PayPal, which could fetch about $47B based on rivals’ valuations & would have more latitude to forge alliances with retailers as other financial firms seek to turn their products into tools for digital payments.  In addition to PayPal, EBAY’s marketplaces business could also become an attractive takeover target.  EBAY bought PayPal in 2002 to add online-payment services.  The unit, which almost tripled sales in the 5 years ended in 2012, has since become a growth engine for the company.  The competitive landscape has also changed dramatically since EBay bought PayPal.  Like much of the computing industry, the business of online payments is increasingly moving to mobile devices, where PayPal isn’t as dominant.  Mobile payments in the US are projected to total $118B by 2018, up from $3.5B this year.  The split would value PayPal at $47B, applying a multiple of 1.8 times trailing 12-month revenue.  The stock shot up 3.97.  If you would like to learn more about EBAY, click on this link:

EBay Plans to Split Off PayPal, Bowing to Icahn After Clash

eBay (EBAY)

Johnson & Johnson, a Dow stock & Dividend Aristocrat, will acquire Alios BioPharma, a developer of viral disease therapies.  JNJ will pay $1.75B in cash for closely held Alios.  Alios is developing treatments for influenza, rhinoviruses & respiratory syncytial virus, which causes infections in infants & has no approved preventative therapy.  Alios’s compound “AL-8176 complements our existing early stage portfolio for RSV which aims to prevent and treat this disease, the leading cause of acute lower respiratory infection in children under the age of five,” said William Hait, JNJ global head of R&D.  JNJ has raised its earnings forecast for the year for 2 consecutive qtrs with help from its hepatitis C drug Olysio, which generated $831M in sales in Q2.  The pill has led JNJ’s drug business to become the company’s biggest unit.  The stock inched up pennies.  If you would like to learn more about JNJ, click on this link:

Johnson & Johnson Will Acquire Alios Biopharma for $1.75 Billion

Johnson & Johnson (JNJ)

Stocks were largely marking time on the last day of the month & qtr when it's difficult to analyze movements.  Money managers were adjusting portfolios to make their results look good.  In Sep, Dow was down 56 & in Q3 Dow went up 220.  YTD it's up 470, an amazing gain after the horrible Jan.  The economic demand behind this advance remains fuzzy at best with continual reminders that housing is stumbling & overseas market are not doing well along with numerous military conflicts around the world.

Dow Jones Industrials

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