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)

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CLV15.NYM

....Crude Oil Oct 15

....46.09

...0.53

(1.2%)

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:
club.ino.com/trend/analysis/stock/ALL?a_aid=CD3289&a_bid=6ae5b6f7

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:
club.ino.com/trend/analysis/stock/CVS?a_aid=CD3289&a_bid=6ae5b6f7

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:

club.ino.com/trend/analysis/stock/AAPL?a_aid=CD3289&a_bid=6ae5b6f7

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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Markets fluctuate after factory orders

Dow lost 8, advancers over decliners almost 2-1 & NAZ also slid 8.  The MLP fell 1+ to 371 & the REIT index rose 1+ to the 321s.  Junk bond funds crawled higher & Treasuries ran into selling.  Oil is back in the 46s while gold is flattish under 1100.

AMJ (Alerian MLP Index tracking fund)

CLV15.NYM

....Crude Oil Oct 15

...46.44

...0.88

(1.9%)

GCQ15.CMX

...Gold Aug 15

.....1,091.60

...2.20

(0.2%)

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50 Top Stocks

Stocks in Athens trimmed a decline after their biggest slump in decades as the exchange reopened from a 5-week shutdown.  The ASE Index lost 9 to 659, paring a retreat of as much as 4.9%.  Lenders led the drop, with Piraeus Bank slumping 30%, the daily maximum allowed.  National Bank of Greece, Eurobank Ergasias & Alpha Bank also tumbled 25%, helping send a gauge tracking the nation’s lenders to a record low.  Trading is hampered because of emergency curbs put in place amid capital controls.  Stocks with extreme volatility are suspended sooner than normal, while would-be buyers have to raise money from places other than their bank accounts.  58 companies were halted or paused yesterday & fewer than 31M shares changed hands, the least since Nov.  Greek stocks have lost more than 85% of their value since 2007.  The nation’s benchmark gauge closed at its lowest level since Sep 2012 yesterday.

Greek Stocks Fall for 2nd Day, Extending Biggest Rout in Decades

New orders for US factory goods rebounded strongly in Jun on strong demand for transportation equipment & other goods, a hopeful sign for the struggling manufacturing sector.  The Commerce Dept said new orders for manufactured goods increased 1.8% after a revised 1.1% decline in May.  The increase was in line with expectations.  May factory orders were previously reported to have dropped 1.0%.  Factory activity has been stymied by a strong dollar & spending cuts in the energy sector after last year's sharp plunge in crude oil prices.  Tepid global demand also has weighed on manufacturing, which accounts for about 12% of the domestic economy.  Those factors have eroded the profits of multinational companies.  Orders for transportation equipment surged 9.3%, reflecting strong demand for aircraft.  There also were increases in orders for machinery & electrical equipment, appliances & components.  The department also said orders for non-defense capital goods excluding aircraft, seen as a measure of business confidence & spending plans, increased 0.7% instead of the 0.9% rise reported last month.  Shipments of these core capital goods, which are used to calculate business equipment spending in the GDP report, increased 0.3%.  Shipments were previously reported to have dipped 0.1%.  The upward revisions to core capital goods shipments, combined with a report showing stronger construction spending in May than previously reported, suggest Q2 GDP could be revised higher when the gov publishes its 2nd estimate. 

Factory Orders Rebound in June

China's central bank promised to "stabilize financial market expectations," saying it will head off risks in the latest show of official resolve to keep the economy on an even keel.  Without referring to the shakeout in China's stock market which has slumped about 25% since early Jun, the People's Bank of China (PBOC) said it would improve its warning system for risk.  Authorities would "pay attention to stabilizing financial market expectations," the central bank said in an online statement.  The comment follows the slump in the market & drastic measures to stop the sell-off.  The central bank would use various policy tools flexibly to sustain appropriate growth in liquidity & credit and keep policy "prudent."  The PBOC would also aim to lower borrowing costs for firms & support key areas & vulnerable sectors, while keeping the yuan "basically stable" as it tries to refine the exchange rate system.  To halt the stampede out of the market, authorities took measures that included barring some investors from selling their shares, & mobilizing the country's top 21 brokerages to buy stocks.  The moves drew criticism that China was endangering its plans to reform the economy, though the official newspaper of the Communist Party has defended the measures as necessary.

China Central Bank Vows to Stabilize Market Expectations

Stocks are waiting for more Jul data, highlighted by the jobs numbers on Fri.  The Greek stock market is trying to get settled & Chinese officials have to a lot to do in their volatile stock markets.  In the US, the slide in oil & energy securities is bleeding thru to the overall market, including tech stocks which are generally having a good year.

Dow Jones Industrials