Tuesday, August 4, 2015

Lower markets on earnings and Apple slump

Dow dropped 47 (above the lows), decliners over advancers 5-4 & NAZ was off 9.  The MLP index sank another 5+ to the 366s & the REIT index lost 1+ to the 318s.  Junk bond funds rose & Treasuries also sold off.  Oversold oil finally had a recovery day & gold drifted lower.

AMJ (Alerian MLP Index tracking fund)

CLV15.NYM....Crude Oil Oct 15....46.09 Up ...0.53 (1.2%)

Live 24 hours gold chart [Kitco Inc.]

Allstate's quarterly profit missed the estimate by a wide margin as the company paid out more in claims.  CEO Thomas Wilson said the company's operating income was lower due to increased frequency & severity of auto accidents.  "More people have started driving and as more people drive and drive further, they have more accidents. We see this as a continuation of a trend that started last fall," Wilson said.  Claims & claims-related expenses linked to property-liability insurance rose 8.7% to $5.59B in Q2.  EPS fell 47% to 79¢.  On an operating basis, ALL reported EPS of 63¢, below the estimate of 97¢.  Its underlying, or adjusted, combined ratio was 87.7%, compared with 83% a year earlier.  A combined ratio is the percentage of premium revenue an insurer has to pay out in claims.  A ratio below 100% means an insurer earns more in premiums than it pays out in claims.  Revenue from property-liability premiums rose about 4.4% to $7.88B.  The company reported a 14.9% fall in catastrophe losses.  The stock tumbled 7.04 (10%).  If you would like to learn more about ALL, click on this link:

Allstate Profit Falls 47% as Claims Rise

Allstate (ALL)

CVS Health's profit beat estimates for the 4th straight qtr, boosted by higher pharmacy claims & strong sales in its business that provides medication & services for serious diseases such as multiple sclerosis & cancer.  Revenue from the pharmacy services business rose about 12%.  The business, which includes the specialty pharmacy segment, accounts for 2/3 of company revenue.  The number of pharmacy claims processed rose 8.7%, helped by growth in Medicaid customers.  Same-store sales rose 0.5%.  Analysts had expected a 0.3% rise.  Pharmacy same-store sales rose 4.1%, higher than the estimate of 2.9%.  Same-store prescription count rose 4.8%.  CVS raised the lower end of its 2015 adjusted EPS forecast range to $5.11 & cut the higher end to $5.18.  The company had earlier forecast adjusted EPS of $5.08-$5.19.  EPS was $1.12 & net revenue rose 7.4% to $37.17B.  Excluding items, EPS was $1.22, ahead of the estimate for $1.20 on revenue of $37.18.  The stock tumbled 2.86 (10%).  If you would like to learn more about CVS, click on this link:

CVS Health Quarterly Sales Rise 7.4%

CVS Health (CVS)

Apple was added to the Dow Jones Industrial Average at a bad time.  AAPL, the world’s largest company by market value, replaced AT&T (T) after the close of trading on Mar 18.  The stock peaked on Apr 28, or about 6 weeks after going into the Dow.  Yesterday, the stock dropped to its lowest price since Jan & retreated below its 200-day moving average, a gauge of price trends, for the first time since Sep 2013.  From its debut thru yesterday, the stock cut the value of the Dow by 67 points, accounting for 14% of the DJI loss during that period.  The decline in AAPL stock price contrasted with a gain at AT&T which climbed as much as 7.7% after dropping out of the Dow average.  Today, AAPL fell 3.80 (3%).  If you would like to learn more about AAPL, click on this link:

Apple Replacing AT&T in Dow Industrials Causes Average to Suffer

Apple (AAPL)

The decline in AAPL stock, now in the Dow, is getting a lot of attention.  Technical barriers are falling, such as going below the moving average line, & its large market cap influences buying for all stocks.  Earnings are wishy-washy at best & more are coming from retailers.  The intl scene is not pretty as the Dow closes in on its lows for 2015.  The stock market remains on defense & Aug could be a very tough month.

Dow Jones Industrials

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