Markets rally on jobless claims & earnings

Dow had its best rally in 2 months. But at lunchtime buyers went home & it drifted, just holding onto its gains for the rest of the session. Dow rose 122, advancers over decliners 3-1 & NAZ posted an impressive 40 point gain. Banks had another very good day. The Financial Index has recovered most of its 11 point loss in the first 2 days of the week, it's just 3 below where it began the week.

S&P 500 FINANCIALS INDEX

Value 223.06

Change 5.42

% Change 2.5%

The Alerian MLP Index gained 1.43, still in the 312s, but down 2 from its highs in the AM. The Dow Jones REIT Index rose an amazing 9½ to the 218s, a new yearly high. Junk bond funds were generally higher at their lofty levels. Buying returned to the 10-year Treasury bond, its yield fell 5 basis points to 3.73%.


Alerian MLP Index -- 2 months




Dow Jones REIT Index - 2 months





Oil had another good day, but once again the bulls have to show they can take it significantly above its 6 month trading range (i.e. the 85 ceiling). Gold was just resting.

CLM10.NYM

..Crude Oil Jun 10

..85.33

.. 2.11 ......(2.5%)

GCK10.CMX

..Gold May 10

..1,167.40

.. 1.70 ......(0.2%)

Germany is the main player in bailing out Greece & they are quibbling internally. A bill proposed by lawmakers for assistance would involve banks in the rescue. But Chancellor Angela Merkel is refusing to back down in her opposition, saying that would send a “fatal signal” to markets. Meanwhile the Greek Prime Minister is trying to sell the need for austerity (budget cuts which most will feel), but that is not & has not gone down well. The Greek drama plays on! The € at $1.324 is still near its its yearly lows (having reached $1.45 earlier this year).

•Merkel Is Pressed by Opposition to Enlist Banks in Greek Rescue Financing
•Papandreou Makes Austerity Pitch as Unions Slam Cuts Tied to Bailout Plan


BreitBurn Energy, an MLP which suspended its distribution in Q3 2009, restored a distribution. It will pay $.0375 ($1.50 annualized) in May. The intention had been announced recently, but unit-holders were glad to receive official word. The units gained 46¢ to 15.51.

BreitBurn Energy Partners L.P. Declares Cash DistributionBusiness Wire


BreitBurn Energy --- 2 years






Palm (PALM) agreed to be bought out by Hewlett-Packard (HPQ), a Dow stock, for about $1.4B in cash. HP will pay $5.70 for every Palm common share & certain preferred shares. Palm shot up 1.21 to 5.84 while HP was down 40¢ to 52.88.

•HP is Palm's Silicon Valley savior in $1.4B deal
AP


Palm --- 2 months




Hewlett-Packard --- 2 years






Stocks liked what they heard today. By now, they must have written off Greece & its debt problems. The jobless report wasn't all that great, especially when large numbers of laid off workers are facing expiration of their extended unemployment benefits. If Dow would have been able to extend its AM gains, it could have gone over 11.2K taking into the black for the week. It needs to do that tomorrow to keep its winning streak going (at 9). The streak feels good to stockholders, but all good things have to come to an end. And the end, after such a long run, could be unpleasant.

Dow Jones REIT Index - 2 months

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Markets rise on hopes European debt problems will ease

Stocks started strong on hopes that Greece & Portugal can work their way out of their financial crunches. Dow rose 90 taking it within an inch of 10K, advancers over decliners 2-1 & NAZ was up 10. After a good beginning for banks, selling returned which brought the Financial Index back to near break even.

S&P 500 FINANCIALS INDEX

Value 183.86

Change 0.26

% Change 0.1%

Early gains for the Alerian MLP Index were trimmed to up just 1½, taking it to the 279s, while the REIT index is down 1¼. Junk bond funds were higher, the market is pricing in a default rate of only 0.3% this year, down from 10.2% in Dec. The neediest borrowers are raising record amounts of debt, allowing them to refinance obligations. It's not hard to wonder how long this enthusiasm for risky debt will go on! The yield on the 10-year Treasury bond edged down 1 basis point to 3.58%.

Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks








Cold temps & snow finally brought buyers to the oil market, gold is only having a modest rebound. However, both are still below their former support levels.

CLH10.NYM

...Crude Oil Mar 10

...73.23

... 1.34 .......(1.9%)

GCG10.CMX

...Gold Feb 10

...1,071.00

... 5.30 .......(0.5%)

Gold Super Cycle Link! Click Here

Photo: Bloomberg


Strong overseas growth at Coca-Cola (KO), Dow stock & Dividend Aristocrat, more than made up for a weak North American market in Q4 as profits jumped 55%. KO sold 5% more beverages worldwide, with unit case volume up sharply in emerging markets like China & India. The only region to report a decline in case volume was North America with a 1% drop-off. CEO Muhtar Kent said growth in China, India, Mexico & Brazil in Q4 is equal to adding another Germany, the company's 6th-largest market. Unit case volume in China rose 29% in Q4 & India's figure was up 20%. While North American unit case volume dipped, Coca-Cola Zero posted double-digit unit case volume growth. Q4 earnings rose to 66¢ per share. KO's stock has been fairly stable during the recession, today it's up 1.89 (3½%). KO purchased $1½B in stock last year, part of its ongoing share repurchase program. A dividend increase for 2010 should be announced shortly.

Coca-Cola Profit Rises as Sales Gain in India, China

Coca Cola --- 2 years

Photo: Bloomberg




McDonald's (MCD), another Dow stock & dividend Aristocrat, reported sales rose 2.6% in Jan. Same store sales fell 0.7% in the US while the figures for Europe & Asia were up 4.3%. The stocks was up 25¢.

•McDonald's Worldwide January Sales Rise 2.6%, Topping Analysts' Estimates


McDonald's --- 2 years





BreiBurn Energy (BBEP), an MLP which eliminated its distribution last year, has settled its legal problems & will reinstate a $1.50 annual rate distribution in Q2. The stock was up about 1.50 yesterday but is even today. It's implied yield is 10%.

Quicksilver Resources Announces Settlement of Litigation With BreitBurn Energy Partners and Provident Energy TrustMarketwire


BreitBurn Energy Partners 1 2 years





Constellation Energy, another MLP which eliminated the distribution last year, is still slugging it out in single digits. But they refinanced their loan with a larger one in Nov & is an interesting speculation assuming they get their act together. Q4 & 2009 results should be released shortly.

Constellation Energy Partners Announces New Credit FacilityBusiness Wire


Constellation Energy --- 2 years








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Stocks are trying to find footing. Dow is flirting with 10K, but this is hardly a convincing rebound. Meanwhile European countries are trying to work out messy debt problems, Toyota (TM), up 1.41, ran ads last night to help their public image. The economic recovery in the US is still sputtering, both KO & MCD continue to report weak sales in the US. The 10K level is becoming very significant for the Dow & in turn the markets in general.

Dow Jones Industrials --- 2 weeks

Stocks & gold rise together

Dow rose at the start & stayed sharply higher for the rest of the day. Dow closed up 131 taking it within 100 of its high this year, advancers were over decliners 3-1 (down from the 6-1 ratio in the AM) & NAZ gained 35. Banks were strong although they lost some steam in the PM. The Financial Index touched 203 but fell back 2 for a more modest gain.

S&P 500 FINANCIALS INDEX

Value 201.02

Change 2.45

% Change 1.2%

The high yield sectors gave up some of their gains in the PM. MLPs remained strong, the index gained 3 to its 2009 high in the 252s. MLPs were helped by the announcement from BreitBurn (BBEP) that their borrowing base was "reaffirmed." Translated, it means bankers were happy that they were able to pay down $150M of their loans. Skipping the distribution helped them conserve money & the implication is that a distribution may return fairly soon. BBEP more than doubled from its lows in early 2009, today up 88¢ to 12.64. The Dow Jones REIT Index was essentially even, giving up AM gains. Junk bond funds were mixed near their yearly high levels. Treasury bonds slipped, the yield on the 10 year Treasury bond went up 2+ basis points to 3.25%.

• BreitBurn Energy Partners L.P. Announces Reaffirmation of Borrowing Base at $732 Million, Unchanged From Previous LevelBusiness Wire(Mon 9:00am)

BreitBurn EnergyPartners -- YTD





Alerian MLP Index --- 3 months




Dow Jones REIT Index --- 3 months





Sellers came on in the PM to reduce gains for oil but gold continued strong at its record levels. Oil was helped by a weak dollar. It takes fewer than 89 ¥ to buy a dollar and the € is over $1.47. The weak dollar will also be a factor in earnings, generally helping companies with a large portion of business outside the US. Gold reached $1045 on worries about the direction of inflation in the future.

CLX09.NYM

..Crude Oil Nov 09

..70.98 ..

0.57 ......(0.8%)

GCV09.CMX

..Gold Oct 09

..1,036.20

.. 19.50 ......(1.9%)

Stocks have had 2 nice days of gains ahead of the start of earnings season. I keep thinking they may be setting up for buy on the rumor & sell on the news (i.e. next week). Major disconnects continue, stocks & commodities (i.e. gold) rise together & bonds (quality & junk bonds) go up at the same time.

Dow Jones Industrials --- 3 months