Market advance limited by selling in biotechs

Dow shot up 125, advancers over decliners 3-2 & NAZ gained all of 1.  The MLP index jumped up 3+ to the 337s & the REIT index rose 2+ to the 308s.  Junk bond funds were mixed & Treasuries pulled back.  Oil remained strong after the report on lower stockpiles & gold fell back.

AMJ (Alerian MLP Index tracking fund)

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CLV15.NYM

...Crude Oil Oct 15

....46.57

...1.89

(4.2%)

German Chancellor Angel Merkel told the EU that it faces a long battle to help refugees flooding into the bloc as John Kerry said the US will take in thousands more fleeing the conflict in Syria.  Divisions resurfaced in the EU with Hungary & the Czech Republic reiterating their opposition to mandatory quotas that Germany & the European Commission want to set for distributing refugees.  Leaders are trying to manage an unprecedented influx of people caused by the turmoil around their borders while assuaging the concerns of their voters.  “There won’t be a solution overnight,” Merkel said. “These deliberations will be important, but they surely won’t allow us to set aside the problem. We will need patience and stamina.”  The US will admit at least 10K Syrian refugees over the next year, with the total number allowed to resettle rising to 100K in the 2017 fiscal year from 70K last year, Kerry said.  Migrants continued to stream thru the EU over the weekend, with more than 20K arriving in Austria, mostly from Hungary, where authorities are passing on migrants traveling from Croatia.  Croatian authorities suspended traffic for trucks entering from Serbia at a main highway crossing.  Serbia has become a bottleneck for refugees trying to get into EU members like Croatia & Hungary on its borders.  Hungary re-opened a crossing into Serbia over the weekend which had earlier been closed following clashes with migrants.  The EU, US & Gulf states need to come up with at least €5B ($5.7B) in the next few months to support the countries around Syria providing food, shelter & medical supplies, German Vice Chancellor Sigmar Gabriel said.  The EU share should be about €1.5B, he said.

First-time asylum requests in the European Union in the second quarter of 2015

Instead of assigning quotas, Hungary wants the EU to strengthen the bloc’s external border & help Syria’s neighbors house millions of refugees to deter them from traveling on to Europe, Prime Minister Viktor Orban said.  The foreign ministers of the Czech Republic, Hungary, Poland & Slovakia met to align their positions ahead of the EU summit.  The Czech Republic won’t support mandatory quotas while Poland official said the country should show “solidarity” as long as economic migrants are excluded & the external borders of the passport-free Schengen area are strengthened.

Merkel Demands Stamina to Help Refugees as U.S. Admits Syrians

Federal Reserve Bank of Atlanta pres Dennis Lockhart said while recent market volatility raised risks to the US economic & inflation outlook, he remains confident the central bank will raise interest rates this year.  Calling it a “close call” by the Federal Open Market Committee last week to hold interest rates near zero, Lockhart said that he had voted with the majority as “prudent risk management around recent and current market volatility.”  “As things settle down, I will be ready for the first policy move on the path to a more normal interest-rate environment,” he added.  “I am confident the much-used phrase ‘later this year’ is still operative.”  Lockhart’s comments align him with 3 other regional Fed presidents who argued over the weekend for lifting the central bank’s key interest rate before year’s end, just days after the FOMC opted to leave rates near zero.  Chair Janet Yellen, in a post-FOMC press conference to explain the decision, cited financial market turmoil & slowing growth in China as raising doubts about the outlook for US growth & inflation.  Lockhart said that the Fed had achieved its desired requirement of “further improvement in labor markets,” but the recent volatility cast doubt on the desired “reasonable confidence” that inflation will return to the Fed’s 2% target.  “Even so, I have gotten comfortable enough on the inflation question to take a first step in one of the coming FOMC meetings in what will likely be an extended process of normalization of the interest-rate environment,” he said.  Inflation expectations appear well anchored & continuing expansion of the economy should result in tightening in labor markets, Lockhart continued.  Lockhart said policy makers focused on market volatility only because it suggests the risk of impact on the US economy.  “About a month ago, uncertainties loomed larger, market volatility rose, and, from a policy maker’s perspective, risks to the domestic economy ratcheted up a little,” he added.  “It’s too early to know whether this episode amounts to a bona fide shock to the economy or just a nervous spasm in the markets.”

Fed’s Lockhart Favors Interest-Rate Liftoff Later This Year

Lennar reported better-than-expected quarterly profit & revenue as it sold more homes at higher prices.  It said that orders, a key indicator of future revenue for homebuilders, rose 10.3% across all regions, except Houston, in fiscal Q3.  Orders in Houston, 10% of its homebuilding revenue, fell 12%.  US building permits rose 3.5% in Aug to a 1.17M unit pace, after declining 15.5% in Jul, while housing starts remained above the 1M unit pace for the 5th straight month.  EPS rose to 96¢, up from 78¢ a year earlier.  Total revenue rose 24% to $2.49B.  Analysts had expected EPS of 79¢ on revenue of $2.41B.  The stock lost 16¢.  If you would like to learn more about LEN, click on this link:
club.ino.com/trend/analysis/stock/LEN?a_aid=CD3289&a_bid=6ae5b6f7

Lennar 3Q Profit Rises 26 Percent

Lennar (LEN)

Biotech shares sank after Hillary suggested drug prices were outrageous & talked about how she would fix that.  Those stocks are more heavily weighted on NAZ, resulting in a weaker performance.  After a strong opening, the rest of the market sold off by midday but buying returned in the PM.  The refugee crisis, largely in Europe, is serious & is another example of a world that is out of control.  Dow finished in the red for Sep.

Dow Jones Industrials