Tuesday, October 7, 2014

Markets tumble on euro concerns & IMF global forecast

Dow plunged 272 (closing at the lows), decliners over advancers 3-1 & NAZ dropped 69.  The MLP index sank another 4+ to 516 (where it was in late Jun) & the REIT index fell 1+ to the 293s.  Junk bond funds were mixed & Treasuries continued strong, taking the yield on the 10 year Treasury down to 2.35%.  Oil ended at a 17-month low before a gov report that may show US inventories increased last week.  Gold rose for the 2nd straight day as the dollar’s decline boosted the metal’s appeal as an alternative investment.

AMJ (Alerian MLP Index tracking fund)

CLX14.NYM....Crude Oil Nov 14....88.87 Down ...1.47  (1.6%)

Live 24 hours gold chart [Kitco Inc.]

The number of jobs waiting to be filled in the US climbed in Aug to the highest level in 13 years as employers gained confidence to expand their workforces.  Openings rose to 4.84M in Aug, the most since Jan 2001, from a revised 4.61M the prior month, according to Labor Dept.  The report also showed hiring & layoffs cooled, while fewer people quit their jobs.  The upswing in openings helps explain the rebound in payrolls last month that pushed the jobless rate to a 6-year low & signaled Americans can look forward to sustained gains in hiring into 2015.  The figures form part of a package of data Federal Reserve Chair Janet Yellen & colleagues use to measure the labor market’s health, which will help determine when the central bank starts to raise its benchmark interest.  The forecast called for 4.7M openings after a previously reported 4.67M in Jul.  The number of jobs available climbed 910K in the year ended Aug, the biggest 12-month gain since records began in Dec 2000.  Today’s Job Openings & Labor Turnover Survey, known as JOLTS, showed employers hired 4.64M in Aug, down from 4.93M the month before. The hiring rate dropped to 3.3%, the lowest since Jan, from 3.6% in Jul.  The rate calculates the number of hires divided by the number of employees who worked or received pay during the month.  Yellen has been among those saying the divergence between hiring & openings could point to economic slack.

Job Openings Signal Hiring in U.S. to Be Sustained: Economy

Wal-Mart, a Dow stock & Dividend Aristocear, will cut medical benefits to about 30K workers in response to mounting health-care costs & the growth of alternatives available under Obamacare.  The company will no longer provide health coverage to employees who work less than 30 hours a week.  The change is in line with moves by fellow retailers.  “We don’t make these decisions lightly, and the fact remains that our plans exceed those of our peers in the retail industry,” Sally Welborn, senior VP of global benefits, said.  Obamacare doesn’t require companies to cover part-time workers, & offering them health plans may disqualify those people from subsidies in gov-run insurance exchanges that opened last year.  The world’s biggest retailer also is increasing premiums as it projects a more than $500M rise in health-care spending this year.  The company’s lowest-cost health plan, its most popular offering, will climb by $3.50 to $21.90 per pay period.  The stock lost a nickel.  If you would like to learn more about WMT click on this link:

Wal-Mart Will Cut Health Benefits to Some Part-Time Employees

Wal-Mart (WMT)

Time Warner's Turner Broadcasting division will eliminate 1475 positions (10% of the workforce) as part of a broader initiative to improve profitability.  Cuts will take place at 18 locations worldwide, & include news, entertainment & sports, as well as corp jobs.  Turner, which operates CNN, TNT & TBS, has about 14K full-time employees.  TWX is under pressure to improve its performance & he said the company would deliver better returns to investors.  Eliminating salaries will free up cash for new investments, such as in live sports.  “We have been in this process, and a lot of companies have, of trying to make our company more nimble and streamlined,” the company said.  Warner Bros, home to the film & television studio, also announced plans to eliminate jobs last month.  CNN’s ratings have slipped in the past year, & the channel remains a distant 2nd place.  The company said there’s too much focus on TV ratings & not enough on CNN’s digital activity, particularly with more news being consumed online & on mobile devices.  Turner’s operating income rose 15% to $940M in Q2 from a year earlier, while revenue climbed 4.7% & is TWX’s most profitable unit.  The stock was down 45¢.  If you would like to learn more about TWX click on this link:

Time Warner’s Turner to Eliminate 10% of Jobs to Boost Profit

Time Warner (TWX)

Dow is down more than 300 so far in Oct, a very negative start for this month.  Tomorrow evening, Alcoa (AA) will report earnings after the close which starts earnings season.  Expectations for earnings are high which leaves little room for upside surprises.  Meanwhile the intl scene is discouraging however it is measured.  Stocks are overbought & this may be the month for a lot of selling. 

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