Tuesday, July 21, 2015

Weak earnings reports send stocks lower

Dow dropped 181, decliners over advancers 3-2 & NAZ lost 10.  The MLP index fell 1+ to 379 (last seen in Dec 2011 on the way up) & the REIT index was off 1+ to the 316s.  Junk bond funds ran into selling & Treasuries rose.  Oil crawled higher & gold slid below 1100.

AMJ (Alerian MLP Index tracking fund)

CLQ15.NYM....Crude Oil Aug 15....50.35 Up ...0.20 (0.4%)

Live 24 hours gold chart [Kitco Inc.]

Chesapeake Energy, the 2nd-largest US natural gas producer, will suspend divs starting in Q2 to save up to $240M a year.  The company, which like other oil & gas producers has been hurt by a drop in prices, had planned to pay an annual div of 35¢.  In suspending its payout for the first time since 1998, CHK joins other companies in the energy industry that are looking at divs as means of conserving capital.  Chevron (CVX), a Dow stock, said in May it would not raise its div in Q2 & that it would see "where things shake out long term" before raising its payout.  ConocoPhillips (COP) last week raised its quarterly payout by a smaller-than-normal 1¢, citing low oil prices.  CHK reported a Q1 loss in May & said it would raise production this year.  The money saved by not paying a div would be used to develop its "high-quality" assets.  The stocks fell  1.01.  If you would like to learn more about CHK, click on this link:

Chesapeake Energy Suspends Dividend Payments

Chesapeake Energy (CHK)

Citigroup will refund $700M to consumers & will pay $70M in fines for illegal & deceptive credit card practices.  The Consumer Financial Protection Bureau said that Citi will have to issue refunds to 8.8M affected consumers who paid for credit card add-on products & services, like credit score monitoring or "rush" processing of payments.  It said that Citi representatives allegedly told consumers there were 30-day "free" trials for some products, when there wasn't, or sold them fraud & identity theft protection when Citi wasn't performing such services at all.  Citi said it stopped illegal practices in 2013 & is in the process of issuing refunds or credit card statement credits to the affected customers.  The stock went up 25¢.  If you would like to learn more about Citi, click on this link:

Citi to refund $700 million for deceptive card practices

Citigroup (C)

Harley-Davidson posted a lower quarterly net profit as the strong US dollar hurt intl sales while the company's foreign competitors cut prices.  The company beat expectations by reporting EPS of  $1.44 in Q2, down about from $1.62 a year earlier.  Analysts had expected EPS of $1.39.  The company's operating income was negatively impacted by fewer motorcycle shipments as foreign competitors offered lower prices.  Total revenue fell to $1.82B from $2B a year ago.  Analysts had expected $1.67B.  Its worldwide retail motorcycle sales fell to 89K in Q2, from 90K last year.  The company kept its motorcycle shipment guidance unchanged at a 2-4% increase from 2014, or 276K-281K motorcycles.  The stock went up 2.73.  If you would like to learn more about HOG, click on this link:

Harley Davidson 2Q Earnings Fall, Beat Expectations

Harley-Davidson (HOG)

The disappointing earnings reports will continue.  Today's came from 3 prominent Dow stocks   The themes of unsatisfactory sales & problems with the strong $ will be repeated.  MLPs are in trouble short term, losing many friends.  Possible IRS problems & low oil prices are hurting.  Dow closed near the lows & is back under 18K.

Dow Jones Industrials

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