Dow rose 72, advancers 2-1 ahead of decliners & NAZ added 26. But the Financial Index slipped a tad in the 198s. The MLP index was flat at 398 (10 week high) & the REIT index dropped 2 to the 268s. Junk bond funds rose near their 2012 highs & Treasuries were also higher with yields near record lows. Oil was even & gold pulled back, heading back to its mid 1500s floor.
Photo: Bloomberg
Construction of US. homes rose more than forecast in Jun to the fastest rate in almost 4 years, indicating a brighter outlook for the residential real estate market. Housing starts rose 6.9% to a 760K annual pace after a revised 711K rate in May (faster than initially estimated by the Commerce Dept). The forecast was for a 745K rate. Building permits fell, reflecting a drop in applications for apartment construction. Record-low mortgage rates & cheaper properties are attracting buyers, encouraging builders faced with lean inventories to boost construction. At the same time, limited employment opportunities & competition from distressed properties are challenges for the industry. The Jun pace was the fastest since Oct 2008 (just after the Lehman collapse). Ben Bernanke said yesterday the industry was on the mend. Growth in construction and “historically low mortgage rates” are among “modest signs” of a housing recovery, even as buyers show concern about personal finances & the broader economy and have difficulty meeting lending standards, Bernanke said. Construction of single-family houses increased 4.7% to a 539K rate, the fastest since Apr 2010, from 515K a month earlier. Work on apartment buildings & other multifamily units climbed 12.8% to an annual rate of 221K in Jun from 196K a month earlier.
Housing Starts in U.S. Rose in June to Highest Since 2008
Greek ministers
Photo: Yahoo
Greek coalition leaders agreed to meet next week to hammer out almost €12B worth of austerity cuts demanded by the country's lenders after a deal proved elusive at an initial round of talks today. Greek officials have spent the past week scrambling to identify €11.7B in spending cuts for 2013 & 2014 required before European & IMF officials visit Athens next week. But a final decision is expected only after much bargaining among the 3 party leaders in the new conservative-led gov, each of whom is keen to avoid appearing in favor of cuts that heap more misery on austerity-weary voters. After a 3-hour meeting, party leaders emerged to give the public the message that the gov would not impose any new spending cuts this year beyond those already agreed. "We had a very good discussion," Finance Minister Yannis Stournaras told reporters after the meeting. "We agreed on the basic direction." The new gov has said it will seek an additional 2 years to hit fiscal targets included in the bailout, but plans to make the request only after regaining lost credibility by getting its reform programm back on track. The gov must agree to almost €12B in cuts to allow the issue of the next payment, probably in Sep. EU officials have already indicated they would find the money to see it through Aug. The Greek drama plays on (as it did last year)
Greek Leaders Push Back Decision on Austerity Cuts
Photo: Yahoo
Intel, a Dow stock, reduced its growth forecast, reinforcing fears that a wavering global economy & a lack of consumer interest are dampening PC sales. Shaky economies in Europe & the US along with growing consumer preference for tablets have been taking a toll on the PC industry. The world's leading chipmaker cut its 2012 revenue growth forecast to 3-5%, down from a prior forecast of "high single-digit growth." CFO Stacy Smith said consumer spending in Europe & the US is softer than previously thought. "At the beginning of the year we would have expected, along with most economists, that economic growth would start picking up and that would lead to an increase in consumer sales. Those expectations are now more muted," Smith said. Revenue rose to $13.5B from $13.0B in the year-ago period, but fell short of the $13.56B expected. INTC forecast Q3 revenue of $14.3B, plus or minus $500B. Analysts on average had expected $14.6B. GAAP EPS was 54¢, compared to the forecast of 52¢. China & other emerging markets have been a key source of growth in recently for PC manufacturers, helping make up for weakness in the Europe & US. "Emerging markets, especially China and Brazil, are still growing nicely but are moderating due to GDP adjustments and currency fluctuations," CEO Paul Otellini said. He said global enterprise IT spending was expanding as expected, more due to the buildout of data centers powering the internet than tech infrastructure upgrades by banks or other corporations. INTC said non-GAAP gross margins in Q2 were 64% & maintained its full-year gross margin forecast of 64%. Despite the dreary forecast, the stock rose 62¢.
Housing starts data sounded good to the markets & earnings are coming in OK (that means good enough). Meanwhile Big Ben is testifying before Congress & anything is possible after hearing his words, although shocks are not expected. Dow has climbed back within 75 of its highs set 2 weeks ago. The bulls would like to see it top that level of 12,950.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month | 0.092% | |
U.S. 2-year | 0.230% | |
U.S. 10-year | 1.486% |
| CLQ12.NYM | ...Crude Oil Aug 12 | ...89.26 | ...... 0.04 | (0.0%) |
| GCN12.CMX | ...Gold Jul 12 | ........1,570.10 | ... 19.00 | (1.2%) |
Get the latest daily market update below:
Construction of US. homes rose more than forecast in Jun to the fastest rate in almost 4 years, indicating a brighter outlook for the residential real estate market. Housing starts rose 6.9% to a 760K annual pace after a revised 711K rate in May (faster than initially estimated by the Commerce Dept). The forecast was for a 745K rate. Building permits fell, reflecting a drop in applications for apartment construction. Record-low mortgage rates & cheaper properties are attracting buyers, encouraging builders faced with lean inventories to boost construction. At the same time, limited employment opportunities & competition from distressed properties are challenges for the industry. The Jun pace was the fastest since Oct 2008 (just after the Lehman collapse). Ben Bernanke said yesterday the industry was on the mend. Growth in construction and “historically low mortgage rates” are among “modest signs” of a housing recovery, even as buyers show concern about personal finances & the broader economy and have difficulty meeting lending standards, Bernanke said. Construction of single-family houses increased 4.7% to a 539K rate, the fastest since Apr 2010, from 515K a month earlier. Work on apartment buildings & other multifamily units climbed 12.8% to an annual rate of 221K in Jun from 196K a month earlier.
Housing Starts in U.S. Rose in June to Highest Since 2008
Photo: Yahoo
Greek coalition leaders agreed to meet next week to hammer out almost €12B worth of austerity cuts demanded by the country's lenders after a deal proved elusive at an initial round of talks today. Greek officials have spent the past week scrambling to identify €11.7B in spending cuts for 2013 & 2014 required before European & IMF officials visit Athens next week. But a final decision is expected only after much bargaining among the 3 party leaders in the new conservative-led gov, each of whom is keen to avoid appearing in favor of cuts that heap more misery on austerity-weary voters. After a 3-hour meeting, party leaders emerged to give the public the message that the gov would not impose any new spending cuts this year beyond those already agreed. "We had a very good discussion," Finance Minister Yannis Stournaras told reporters after the meeting. "We agreed on the basic direction." The new gov has said it will seek an additional 2 years to hit fiscal targets included in the bailout, but plans to make the request only after regaining lost credibility by getting its reform programm back on track. The gov must agree to almost €12B in cuts to allow the issue of the next payment, probably in Sep. EU officials have already indicated they would find the money to see it through Aug. The Greek drama plays on (as it did last year)
Greek Leaders Push Back Decision on Austerity Cuts
Intel, a Dow stock, reduced its growth forecast, reinforcing fears that a wavering global economy & a lack of consumer interest are dampening PC sales. Shaky economies in Europe & the US along with growing consumer preference for tablets have been taking a toll on the PC industry. The world's leading chipmaker cut its 2012 revenue growth forecast to 3-5%, down from a prior forecast of "high single-digit growth." CFO Stacy Smith said consumer spending in Europe & the US is softer than previously thought. "At the beginning of the year we would have expected, along with most economists, that economic growth would start picking up and that would lead to an increase in consumer sales. Those expectations are now more muted," Smith said. Revenue rose to $13.5B from $13.0B in the year-ago period, but fell short of the $13.56B expected. INTC forecast Q3 revenue of $14.3B, plus or minus $500B. Analysts on average had expected $14.6B. GAAP EPS was 54¢, compared to the forecast of 52¢. China & other emerging markets have been a key source of growth in recently for PC manufacturers, helping make up for weakness in the Europe & US. "Emerging markets, especially China and Brazil, are still growing nicely but are moderating due to GDP adjustments and currency fluctuations," CEO Paul Otellini said. He said global enterprise IT spending was expanding as expected, more due to the buildout of data centers powering the internet than tech infrastructure upgrades by banks or other corporations. INTC said non-GAAP gross margins in Q2 were 64% & maintained its full-year gross margin forecast of 64%. Despite the dreary forecast, the stock rose 62¢.
Intel (INTC)
Housing starts data sounded good to the markets & earnings are coming in OK (that means good enough). Meanwhile Big Ben is testifying before Congress & anything is possible after hearing his words, although shocks are not expected. Dow has climbed back within 75 of its highs set 2 weeks ago. The bulls would like to see it top that level of 12,950.
Dow Jones Industrials
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