Thursday, October 29, 2015

Markets drift lower on rate hike bets

Dow was off 23, decliners over advancers 3-2 & NAZ dropped 21.  The MLP index rose 6+ to the 327s & the REIT index slid back fractionally to the 325s.  Junk bond funds were mixed to higher & Treasuries were lower on bets about raising interest rates by the Fed.  Oil was off a tad & gold fell below 1150.

AMJ (Alerian MLP Index tracking fund)

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CLZ15.NYM....Crude Oil Dec 15....45.90 Down ...0.04  (0.1%)

Live 24 hours gold chart [Kitco Inc.]

ConocoPhillips reported a quarterly loss that met expectations & the largest US independent oil company lowered its 2015 spending target in response to the lingering slump in crude prices.  The company said it would further cut its 2015 capital budget, to $10.2B from $11.0B.  "We are accelerating actions to position our company for low and volatile prices, while improving the underlying performance of the business," Ryan Lance, CEO said.  COP will divest assets & lower its cost structure in response to the more than 50% slide in crude oil prices from last year's high over $100 per barrel.  Still, the company remains committed to a "compelling" div, said Lance.  EPS was 87¢ for Q3 compared with EPS of 2.17 a year ago.  Excluding one-time items related to restructuring & the cancellation of a Gulf of Mexico drillship contract, the per share loss was 38¢.  That compares with expectations for a loss of 37¢.  Output from continuing operations, excluding Libya, was 1.554M barrels oil equivalent per day (mboed), compared with 1.473M a year ago.  The stock went up 28¢.  If you would like to learn more about COP, click on this link:

ConocoPhillips Posts Loss as Crude Prices Crash

ConocoPhillips (COP)

Aetna raised its forecast for full-year operating earnings after membership growth in its gov plans helped it report a better-than-expected profit for Q2.  The company, which is in the process of buying rival Humana (HUM), now expects full-year operating EPS of 7.45-7.55, compared with its previous estimate of at least 7.40.  Spending on medical claims as a percentage of premiums improved to 81.1% from 82.3% a year earlier.  EPS fell to 1.59 from 1.67.  On an adjusted basis, EPS was 1.90, above the estimate of 1.77.  Total revenue rose to $14.95B from $14.73B, helped by higher premium yields.  The company reported operating revenue of $14.99B, below the estimate of $15.22B, due to membership losses in its commercial business.  The stock jumped up 3.75.  If you would like to learn more about AET, click on this link:

Aetna Revenue Rises, Misses Estimate

Aetna (AET)

Time Warner Cable posted a better-than-expected adjusted profit in Q3 as it added more high-speed data customers.  The company, being bought by Charter Communications (CHTR), added 232K high-speed data subscribers compared with 172K additions in Q2.  The company lost 7K residential video subscribers, far less than the 45K it lost in Q2.  Cable companies have been grappling with declining subscriber numbers as viewers shift to cheaper and more flexible streaming services.  EPS was 1.53, down from 1.76 a year earlier.  Excluding items, EPS was 1.62, beating the estimate for 1.57.  Revenue rose 3.6% to $5.92B, slightly short of the estimate for $5.96B.  CHTR in May said it would buy TWC in a cash-&-stock deal that values the larger rival at $78B.  The deal is slated to close by the end of the year, but is also subject to a lot of regulatory scrutiny.  The stock soared 6.57.  If you would like to learn more about TWC, click on this link:

Time Warner Cable Profit Tops Estimate

Time Warner Cable (TWC)

Stocks did little today.  The glum news about GDP growth was taken with mixed emotions.  Weak data does not send a good message to the markets.  But they have gotten used to low interest rates & anything which will extend those rates is considered "good."  That's the way it is.  Tomorrow is the last day for trading in Oct.  There is no way to predict stock prices movements while money managers are adjusting their books so they can look better at the end of month.

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