Markets rises after Greek vote

Stocks continue their winning ways this week. Dow rose 140, advancers over decliners better than 3-1 & NAZ is up 30.  Banks are leading the markets higher again with the Financial Index at its highest level in what had been a dreary Jun.

S&P 500 Financials Sector Index

Value	207.21
Change	1.13     (0.5%)

The MLP index hardly budged but the REIT index rose 1½ to 242 & has been able to recover much of its earlier losses in Jun.  Junk bond funds were higher while Treasuries continue to sell off.  The yield on the 10 year Treasury has risen 30 basis points this week (a big move) as the QE2 Treasury buying program winds down (although it will continue buying Treasuries as its holdings mature).  Oil & gold dont' know what to make of the economic data, not to mention end of month & qtr adjusting that is taking place.

JPMorgan Chase Capital XVI (AMJ)

Treasury yields:

U.S. 3-month	0.020%
U.S. 2-year	0.485%
U.S. 10-year	3.186%

CLQ11.NYM

...Crude Oil Aug 11

...95.12

... 0.35

(0.4%)

GCN11.CMX...

Gold Jul 11

.......1,509.70

... 0.20

(0.0%)

The latest daily market update below:

Photo:   Bloomberg

The number seeking unemployment benefits was littler changed last week, as the weak economy is struggling to generate jobs.  Unemployment applications ticked down 1K to 428K according to the Labor Dept.  Applications have topped 400K for 12 straight weeks after applications had fallen to 375K in Feb, a level that signals sustainable job growth.  The 4-week average has been stuck at about 426K for a month.  The number receiving unemployment benefits fell 12K to 3.7M, the fewest in about 2 months. But that doesn't include millions who are receiving extended benefits under emergency programs put in place during the recession. All told, about 7.5M are receiving unemployment benefits.  More evidence that the recovery is only sputtering.

 Jobless Claims in U.S. Decline, Top Estimates


Greece bought some time to deal with its debt crisis.  Parliament cleared the final hurdle for crucial bailout funds to be released to prevent the country from defaulting next month.  The EU & IMF had demanded that 2 bills be passed, an austerity law & a 2nd bill detailing how it will be implemented, before approving a €12B ($17B) installment from the €110B ($159B) package of rescue loans.  The 2nd law was passed with a majority vote.  But austerity measures have been met with resistance, 2 days of rioting in the lead-up to the vote.

Greece clears final hurdle to get bailout funds AP


Apple shares dropped 4% this month, capping their worst first-half performance in 3 years, as investors await new products & worry that rivalry from Google (GOOG) will slow growth.  Investors are wary of the stock amid evidence that GOOG is gaining ground in smartphones. It’s also been more than a year since AAPL introduced the original iPad tablet & the next iteration of the iPhone isn’t due until Sep.  Adding to AAPL woes, Verizon (VZ) will probably say sales of its iPhone dropped when it reports Q2 results (according to a leading analyst). AAPL is up a fraction in the 334s & up $12 YTD (thanks to a rally in the last week).

Apple Stock Has Worst First Half Since ’08

Apple Inc. (AAPL)

HomeAway, the darling IPO yesterday that vaulted $13, is slipping back.  It's rated as one of the 10 best IPOs this year, but most of them have drifted lower after the initial surge.  The stock is down 74¢ today.

10 Best-Performing IPOs of 2011at TheStreet

HomeAway, Inc. (AWAY)

Jun had been a dismal month but the last week allowed the markets to recover losses.  Dow limited its losses in Jun & is up in Q2.  YTD it has a gain of over 800.  The Alerian MLP is down 9 in Q2 following a rough 2 months, but is up 7 YTD. Traders are evening out positions today with it being the end  of month & qtr.  All told, markets have held up well given all the uncertainties they have had to deal with, between Greek debt problems & economies that are not rebounding as many had forecasted.  But the jobless data is another reminder about a cheerless economy.

Dow Industrials (INDU)

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Greek hopes push markets higher

Dow gained 72, advancers over decliners 5-2 & NAZ was up 11.  Banks led the way today.  The Financial Index is up 10 from its low 2 weeks ago.  However bank earnings in Q2 maybe glum.

S&P 500 Financials Sector Index

Value	206.08
Change	4.23    (2.1%)

The MLP index had an excellent day, able to reach its highest level in a month, & the REIT index rose 2½ to over 240.  Junk bond funds slid & Treasuries were lower with the yield on the 10 year Treasury rising over 3.1%.  Oil was up on a favorable inventory report (lower investories).  The swift rebound in oil means that motorists won't see as big of a discount at the gas pump as expected, after dropping to $3.54 yesterday. The chart below shows gold has been rising as investors are willing to accept more risk.

Alerian MLP Index

Value	370.91
Change	4.13    (1.1%)

Today's Market Update video below:

Treasury yields:

U.S. 3-month	0.015%
U.S. 2-year	0.465%
U.S. 10-year	3.109%

CLQ11.NYM

...Crude Oil Aug 11

...94.98

... 2.09

(2.3%)

S&P  would cut the US debt rating to D, the lowest on its scale, in the event of a default after a failure to raise the debt limit.  The US credit grade, following even a short-lived default after which the gov resumed making debt payments, would be determined by the company’s sovereign rating committee & would “be dependent on facts on the ground.”  However, S&P said, “We believe the debt ceiling will be raised and the government won’t default, otherwise we wouldn’t have a AAA rating on the U.S. government.”  S&P continued, “It’s evolving as we expected.”  The costs for insuring against default for one year have risen to 51 basis points as of yesterday, up from 24 basis points on May 16 (when the US reached its borrowing limit)  The US would risk not winning back its top Aaa credit rating soon if the nation’s debt limit causes even a short-term default, Moody’s said earlier  this month.  S&P put the US gov on notice in Apr that it risks losing its top AAA rating unless there is a plan to reduce budget deficits & the national debt by 2013.  There's little more than a month left to increase the debt ceiling & talks between the Reps & Dems are dead in the water.

 S&P Would Cut U.S. Rating to Lowest on Default, Expects Debt-Limit Rise


HomeAway (AWAY), the vacation rental website, rose more than a half on its market debut.  8M shares were priced at $27, the top end of its previously announced range, raising $216M. The company offers fully furnished, privately owned homes, condos, villas & cabins that can be rented on a nightly, weekly or monthly basis. AWAY was founded in 2005 & has more than 560K paid vacation rental home listings in more than 145 countries but has been posting losses over the past few years.  AWAY will use the proceeds to redeem shares of preferred stock, issue dividends & for corporate purposes.  The stock popped after it began trading & remained up $13, around $40 for the rest of the day (not too shabby for those who bought at the IPO price).  Speculative juices are running high in the stock market.

HomeAway shares rise in market debutat Reuters


News Corp sold social media site Myspace for about $35M to online advertising company Specific Media.  News Corp will retain a minority stake in the website that it purchased 6 years ago for $580.  "There are many synergies between our companies as we are both focused on enhancing digital media experiences by fueling connections with relevance and interest," said Tim Vanderhook, CEO of Specific Media.  NWS was up 23¢.

News Corp. selling MySpace to Specific Media: WSJat MarketWatch 

News Corporation (NWS)

Markets are feeling good.  Dow is up 325 this week, bouncing off the 12K bottom area.  But there are plenty of obstacles out there.  The Greek debt crisis is getting the most attention & that is still iffy, at best, especially with a rebellious Greek population.  There was one more reminder from S&P about the US needing to get its "debt" house in order.  Meanwhile the economy is just sloshing around.  Earnings season will start when Alcoa (AA), a Dow stock, releases earnings after the close on Jul 11.  Markets this week are betting earnings will be great.  We'll see if that optimism is justified.

Dow Industrials (INDU)

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