Stocks refuse to budge

Markets continue to fumble around as they try to eke out gains. Dow is up 10, advancers ahead of decliners 4-3, & NAZ is essentially even. Banks continue strong with AIG (AIG) leading the charge, up 46¢. The Financial Index needs just 2 more points to reach a new 2009-10 high.


S&P 500 FINANCIALS INDEX

Value 210.19

Change 0.39

% Change 0.2%

As the chart below shows, MLPs are hot again. The index is up 0.47 to the 304s. Next stop may be the all time high of 342 from Jul 2007. Of course when the value goes up the yield falls. It's about 7%, falling lower can hurt its yield attraction. REITs were also climbing with the index gaining another 1 to 193s. Junk bond funds edged higher, generally to new highs relative to the last 2 years. The yield on the 10-year Treasury bond inched up a fraction of a basis point to 3.71%.


Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks





With stock markets in the doldrums, commodities are still drifting.

CLJ10.NYM

...Crude Oil Apr 10

...82.35

.. 0.24 .......(0.3%)

Gold

...1,108.90

__0.70__

0.1%

Consumer sentiment declined slightly in early Mar as Americans were less positive about the job outlook. However, the reading stayed close to its 6-month average & was significantly above the year-ago level. The preliminary Mar reading on consumer sentiment was 72.5, down from 73.6 in late Feb & below the 73.6 forecast. Consumers were expecting no change in unemployment, which stands at 9.7%, for the rest of 2010, & were losing confidence in help from gov economic policies. The reading was just below the 6-month average & up strongly from last year.

•U.S. Consumer Confidence Falls for Second Month on Concern Over Job Market


Consumer sentiment - 1 year






Retail sales increased 0.3% to $355.5B in Feb, despite 3 major snow storms in the East. The gains were led by a big gain in electronics. Sales have risen in 4 of the past 5 months & were up 3.9% compared with a year earlier. However, auto & truck sales were one exception, falling 2% compared with Jan. Excluding autos & trucks, retail sales increased 0.8% to $297.7B, the largest gain since Nov.

•Retail Sales in U.S. Unexpectedly Rose in February as Shoppers Braved Snow


Sales excluding autos & trucks - 1 year

Find out what's inside Trend TV Click Here

This is another quiet day with mixed & unclear economic messages. The healthcare changes being kicked around in DC are still in limbo. With an unclear economic background, the rest of the day should continue dull on low volume.


Dow Jones Industrials --- 2 weeks

GDP has biggest shrinkage in 27 years

Dow is down 119, decliners over advancers 3-1 & NAZ is down 23. Grim economic news, highlighted by the GDP report is turning off buyers.

S&P 500 FINANCIALS INDEX continues sliding after yesterday's decline, down 1. The Alerian MLP Index fell 2½ taking it pennies under the 200 floor, dangerous territory for those watching technical indicators. REITs are weak while junk bonds are mixed. VIX, volatility index, is up 1 but in the flattish range where it's been for the last week (low 40s). Oil is slightly higher.


The US economy shrank at its fastest rate since 1982, sinking deeper into a recession. Gross domestic product (GDP), which measures total goods and services output in the U.S., plummeted at a 3.8% annual rate in Q4, after falling at a 0.5% rate in Q3. These were the first consecutive declines in GDP since 1990-91.

•U.S. Economy Shrinks at 3.8% Pace, Most in 26 Years, as Spending Crumbles


Exxon Mobil, a Dow stock & recent addition as an S&P 500 Dividend Aristocrat, earned a record profit for any company, $45B last year. Q4 EPS was down from the prior year, but beat forecasts. The stock was up 89¢. Chevron (CVX), Dow stock & 2nd largest US oil company, also had an excellent report for last year thanks to high oil prices for much of the year. Royal Dutch Shell (RDSA), 2nd largest oil company in the world, reported a loss in Q4, but still achieved record annual profits for a European company. Oil stocks are strong today.

• Exxon Mobil shatters US record for annual profit- AP
• Chevron earnings rise on asset swap gain- Reuters

Caterpillar (CAT), another Dow stock, after reporting dreary earnings along with layoffs, just announced more than 2K additional workers were to be laid off. This brings total layoffs to 20K out of a workforce of more than 110K. I consider CAT as representative of many companies.

• Caterpillar to slash another 2,110 jobs- AP

Asian stock markets have to endure the same problems as in the US. This is their earnings season & they also have dismal reports. Companies we all know, Sony, Toshiba, Toyota, Honda, Canon, Samsung, LG, Lenova, are all reporting the worst numbers in 2 decades (if not the worst in history) resulting in large layoffs. This week, the Shanghai stock market is closed for Chinese New Year.

While still trading in the same trading range, above 8K, Dow is on defense again. But now it's hovering near the 8K floor.

Energies lead Dow surge

Dow rose 413 closing at the high, taking it clearly above 9K. Advancers were over decliners better than 4-1 & NAZ was up 58. Today's gains were led by 2 Dow energy stocks. Chevron (CVX) & Exxon Mobil (XOM), each rose around 7 from oversold levels (lowest levels in 3 years) & with P/E ratios of 7 & 9 respectively. An expected production cut in oil is a key factor for higher prices. Following the 50+% decline from summer peaks in oil prices, gas went down, below the $3 per gallon level, one degree of help for the ailing economy. The Oil ETF shown below tracks oil, tagging along with every price swing even though the price look different:

CLX08.NYM

Crude Oil Nov 08

....74.25

...2.40 .. (3.3%)

Oil up, gasoline prices tumble despite likely OPEC cuts- AP


Oil --- 2008 YTD






Markets may have been encouraged by the rise in leading economic indicators. The Conference Board said the forecast of economic activity rose 0.3% last month, beating the 0.2% forecasted decline & following declines in Aug & July.

• Leading indicators rise in September- AP

The Alerian MLP index probably benefited from the strong day for oils. It rose 15 to 220, one of the best days in its history. This takes it almost 70 above the lows early last week, hard to believe these are low beta securities. S&P 500 FINANCIALS INDEX was up a more modest 6. Dow Jones REIT index was up 1, still depressed after the sell-off last week. Some of the vastly oversold junk bond funds had gains, but remain depressed with dividend yields above 15%.


Alerian MLP Index --- 3 months





Google (GOOG), one of investor's darlings, managed a gain of 6 after being down most of the day to the lowest levels in 3 years. Investors are worried about future growth in a slow economy, particularly how they can continue to grow at high rates with their already high share in the profitable market for searching on the internet.

Earnings season begins in force with the Texas Instruments report. This is after hours & they just reported Q3 results, EPS was down 9¢ from last year & a penny under estimates. The stock was up pennies based on gut reactions. They said revenues should decline substantially in Q4 from weak orders, so they will have to retrench. More of the biggest companies will be be reporting in the next few days.

TI reports financial results for 3Q08

Another dreary day, stocks down on low volume

Dow dropped 130, decliners over advancers almost 3-1 & NAZ dropped 32. A test of 11K for the Dow may be coming soon. NYSE volume remains at 1B, at least quiet volume does not indicate a lot of conviction. Leading the negative news in the PM was Lehman (LEH), troubled especially in recent months, dropping 2 to 13, lowest price in 10 years! There are all kinds of rumors that the 4th largest investment banking firm in the US won't survive. Nothing new, this was a $60 stock 6 months ago. This negative thinking bleeds thru to other financials. The S&P 500 FINANCIALS INDEX closed at 267.17, down 8.39 at its 30 day low. Bank of America (BAC), one of the Dow financials, is down 6 from the recent interim high of 34 just 7 trading days ago.

Meanwhile, oil bounced back to 114.53, up 1.66 helped by a weaker dollar against the Euro (up to $1.48). The dollar has been unusually strong in an 11 day winning streak. At the high for the dollar, Euro was almost $1.60. The 2 Dow oils, Exxon-Mobil (XOM) & Chevron (CVX), each rose 1½ today. The Alerian MLP index fought its way up a point nearing 265, trying to get away from the 260 yearly low area.

CNBC has interesting ideas on how to deal with gloom & doom thoughts. Unfortunately there are strong reasons for this gloom & the reasons won't go away soon. Slow & quiet late Aug is turning out to be slow but averages are not getting help from buyers to stop the downward slide.