Friday, January 16, 2015

Higher markets after 5 declining days

Dow soared 190 (closing near the highs), advancers over decliners 4-1 & NAZ shot up 63.  The MLP index advanced an enormous 13+ to the 438s (high volatility for this index continues) & the REIT index rose 2+ in the 349s.  Junk bond funds went up & Treasuries lost some of their recent gains.  Oil advanced after the International Energy Agency lowered forecasts for supplies from outside OPEC & an industry report showed US companies reduced drilling activity (see below).  Gold rose to the highest since Sep after holdings in NY contracts gained by the most in 5 years.

AMJ (Alerian MLP Index tracking fund)

3 Stocks You Should Own Right Now - Click Here!

CLG15.NYM....Crude Oil Feb 15....48.45 Up ...2.20 (4.8%)

Live 24 hours gold chart [Kitco Inc.]

Ukraine's President Petro Poroshenko
Photo:   Bloomberg

Pro-Russian militants resumed their assault on Ukrainian gov soldiers at Donetsk airport as pres Petro Poroshenko sent more troops to the country’s eastern conflict zone.  Ukrainian soldiers were holding their positions at the airport, repelling a “full-scale storm” from the separatists, a military adviser to Poroshenko said.  The fighting was continuing in the evening.  Ukraine said yesterday that cease-fire violations had surged to a record since the beginning of the year, while the nation’s security council warned the unrest may spark a “continental war.”  The upsurge in violence recalls the peak of the 9-month conflict, which has killed more than 4800 & poisoned Russia’s ties with its former foes.  Russia rejects accusations by Ukraine, the US, EU & NATO that it’s meddling in the conflict by sending troops & weapons.  Poroshenko & German Chancellor Merkel have called for an immediate meeting of the contact group that includes Ukraine, Russia & the Organization for Security & Cooperation in Europe.  A gathering of the contact group, which failed to take place today should be followed by meeting of French, German, Ukrainian & Russian foreign ministers, Poroshenko said.  The key pre-conditions for further peaceful talks are closure of the Ukrainian-Russian border, the withdrawal of heavy weaponry & the release of all hostages.  Merkel said on Jan 14 there is insufficient agreement between Russia & Ukraine to hold a multi-nation summit.

Ukrainian Separatists Attack Airport as Kiev Sends Troops

Intel's mobile division reported an operating loss of $4.2B for 2014, an amount that would erase profits at all but 2 of the 30 companies on the Philadelphia Stock Exchange Semiconductor Index.  The world’s largest chipmaker racked up those losses in a business that reported negative sales in Q4.  Rather than generate revenue, INTC has been paying customers to use its chips in tablets, trying to build a market presence while it brings out new models that they’ll want to buy.  In 2014 it got processors into 46M handhelds.  The extent of that loss hasn’t put off investors, who made INTC the best performer in the Dow Jones Industrials last year.  The server business has put INTC into a profitable niche among companies providing the gear that underpins the explosion for mobile data and services.  Its 98% market share in servers built on PC chips helped that division generate an operating profit of $7.28B on sales of $14.4B in 2014.  The company plans to reduce costs at its mobile unit, which is being folded into its PC-chip division, by $800M in 2015 as it begins offering cheaper, more capable chips for tablets & phones & pays less in subsidies.  “We’re proud that the company reached these milestones, but we have more work ahead of us in 2015,” CEO Brian Krzanich said.  “A key goal for mobility is to improve profitability.”  The stock went up pocket change today.  If you would like to learn more about INTC, click on this link:

Intel’s $4.21 Billion Mobile Loss Would Have Sunk Most Rivals

Intel (INTC)

Schlumberger tackled the “uncertain environment” of plummeting crude prices head-on by cutting 9K jobs & reducing costs.  Anticipating lower spending by customers this year, SLB is decreasing its workforce by 7.1% & seeking to lower operating costs at a unit that helps producers find oil & natural gas.  Coping with oil prices near 5½-year lows, energy producers are expected to cut spending in the US by as much as the number of rigs drilling may fall by 40% this year.  SLB sees an opportunity to increase its market share.  CEO Paal Kibsgaard told said on Fri, the company would pursue “other opportunities we have on our list” if the drop in commodity prices makes bigger acquisitions more attractive.  “In this uncertain environment, we continue to focus on what we can control,” Kibsgaard said.  “We have already taken a number of actions to restructure and resize our organization.”  The company, which had doubled its workforce in the past 10 years, took a $1.77B one-time charge associated with the job cuts & restructuring of its seismic unit as well as the devaluation of Venezuela's currency & a lower value for production assets it owns in Texas.  EPS for Q4 dropped to 23¢ from $1.26 a year earlier.  “Our market share has been limited by glass ceilings,” Kibsgaard said.  “This glass ceiling has been put in place by customers to make sure that there is enough work to make a third player viable. If the other two players were to combine into one, then I think this glass ceiling can easily be broken.”  The stock advanced 4.70.  If you would like to learn more about SLB, click on this link:

Schlumberger Records Charge, Cuts 7.1% of Workforce Amid Collapse in Oil

Schlumberger N.V. (SLB)

An oversold market rebounded strongly today.  After falling almost 600 in 5 days, the Dow recovered about 1/3 of previous losses.  Oil had a strong advance, but it remains under 50 as it is under selling pressure.  The first earnings reports were not pretty & that suggests on balance earnings season will a disappointing time in the stock market.

Dow Jones Industrials

No comments: