Dow surged 211 to close near its highs, advancers over decliners a modest 3-1 & NAZ gained 39. The Financial Index rose 3 to 195 after trading sideways for more than a month. The MLP index was up 4 to the 393s & the REIT index added 2+ to the 263s. Junk bond funds were mixed. & Treasuries pulled back from record high prices (bringing record low yields). Oil had been over $90 but gave up most of those gains in the PM. Gold rose for a 2nd day after the ECB said it will do whatever is needed to preserve the € & amid increasing expectations of further stimulus measures in the US.
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EU Commission President Jose Manuel Barroso told Greece's new gov to "deliver, deliver, deliver" on promises for cost-cutting reforms. The country depends on the reforms for continued financial support from other eurozone members. Barroso met conservative Greek Prime Minister Samaras. Meanwhile, the heads of an inspection team from the EU, the IMF & the ECB also arrived in the Greek capital to inspect the country's shaky public finances & the future of its rescue loan program. Parties in the month-old Greek gov have finalized proposals to slash €11.5B ($14.1B) in gov spending over 2 years. And the Greek drama plays on & on & on...
EU tells Greece to deliver on promised reforms AP
Contracts to purchase previously owned homes unexpectedly dropped in Jun for the 2nd time in the last 3 months, a sign of limited momentum in housing. The index of pending home resales decreased 1.4% to 99.3 after a revised 5.4% gain in May that was less than initially reported, according to the National Association of Realtors. The forecast called for a 0.3% increase. Slower job growth that’s holding down confidence & strict lending standards are restraining housing even with cheaper properties & mortgage rates at all-time lows. While acknowledging the improvement in housing, Big Ben said last week that the Federal Reserve is ready to take further action to boost an economy that faces a headwind from Europe's debt crisis.
Pending Sales of U.S. Homes Unexpectedly Fell 1.4% in June
Photo: Bloomberg
Companies cut back on orders for long-lasting factory goods in the US last month, outside volatile aircraft & other transportation equipment, suggesting businesses are losing confidence in the economy. Orders for durable goods rose 1.6% in Jun from May, according to the Commerce Dept. Excluding transportation equipment, orders fell 1.1%, the 3rd decrease in 4 months. Orders for core capital goods, which indicate business investment plan fell 1.4%, also the 3rd decline in 4 months. This category includes orders for computers & machinery. Manufacturing has helped drive growth since the recession ended 3 years ago. But it has slowed in recent months, along with the broader economy. Europe's financial crisis has lowered demand for US exports & the pending expiration of several US tax cuts at the start of next year, along with scheduled spending cuts, may also be weighing on growth.
Goods Orders Signal U.S. Business Spending to Cool in Second Half: Economy
Kimberly-Clark, a Dividend Aristocrat, said Q2 net income rose 22% as higher selling prices, cost cuts & strong intl results helped offset the stronger dollar. The company also raised guidance for the year due to higher sales expectations and lower commodity costs for materials like pulp. "Halfway through the year, we are tracking ahead of our 2012 plan on most key financial metrics, and I'm encouraged by our execution in a continued volatile environment," said CEO Falk. Like many businesses which have a significant amount of business overseas, it is facing the impact of the stronger dollar which lessens the value of intl sales. Changes in foreign currency rates hurt revenue by more than 3 percentage points. Still, EPS rose to $1.26, ahead of $1.03 last year. Excluding one-time items EPS was $1.30, beating expectations of $1.28. Net income was helped by sales growth, cost cuts & lower commodity costs which was partly offset by higher marketing, research & general spending & unfavorable currency exchange. Revenue was nearly flat at $5.27B versus $5.26B which was also the analysts' estimate. Personal care revenue rose 3% to $2.4B, while consumer tissue revenue fell 5% to $1.6B (hurt by restructuring & lower volume). The company is guiding EPS for 2012 of $5.05-$5.20, up from a prior target of $5-$5.15 & analysts expect $5.16. The company still expects sales to be flat to up 1%. The stock rose 2.32 & has an excellent chart over the last year.
Kimberly-Clark 2nd-quarter net income risesAP
Markets had one of the best days this year on hopes that ECB will be able to solve all eurozone problems. I'm not so sure. Corp earnings have been fairly good although at the bigger picture level they paint a picture of a global economy that is only doing so-so. Next week, Big Ben will host the FMOC meeting but few are expecting anything new coming from it. Dow continues in its sideways trading range, it would not take much to break thru the 12.950 ceiling. Tomorrow could be the day if the bulls are serious. But modest market breadth during the up days looks worrisome.
AMJ (Alerian MLP Index tracking fund)
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Treasury yields:
U.S. 3-month | 0.101% | |
U.S. 2-year | 0.223% | |
U.S. 10-year | 1.431% |
| CLU12.NYM | ...Crude Oil Sep 12 | ....89.26 | ... 0.29 | (0.3%) |
EU Commission President Jose Manuel Barroso told Greece's new gov to "deliver, deliver, deliver" on promises for cost-cutting reforms. The country depends on the reforms for continued financial support from other eurozone members. Barroso met conservative Greek Prime Minister Samaras. Meanwhile, the heads of an inspection team from the EU, the IMF & the ECB also arrived in the Greek capital to inspect the country's shaky public finances & the future of its rescue loan program. Parties in the month-old Greek gov have finalized proposals to slash €11.5B ($14.1B) in gov spending over 2 years. And the Greek drama plays on & on & on...
EU tells Greece to deliver on promised reforms AP
Contracts to purchase previously owned homes unexpectedly dropped in Jun for the 2nd time in the last 3 months, a sign of limited momentum in housing. The index of pending home resales decreased 1.4% to 99.3 after a revised 5.4% gain in May that was less than initially reported, according to the National Association of Realtors. The forecast called for a 0.3% increase. Slower job growth that’s holding down confidence & strict lending standards are restraining housing even with cheaper properties & mortgage rates at all-time lows. While acknowledging the improvement in housing, Big Ben said last week that the Federal Reserve is ready to take further action to boost an economy that faces a headwind from Europe's debt crisis.
Pending Sales of U.S. Homes Unexpectedly Fell 1.4% in June
Companies cut back on orders for long-lasting factory goods in the US last month, outside volatile aircraft & other transportation equipment, suggesting businesses are losing confidence in the economy. Orders for durable goods rose 1.6% in Jun from May, according to the Commerce Dept. Excluding transportation equipment, orders fell 1.1%, the 3rd decrease in 4 months. Orders for core capital goods, which indicate business investment plan fell 1.4%, also the 3rd decline in 4 months. This category includes orders for computers & machinery. Manufacturing has helped drive growth since the recession ended 3 years ago. But it has slowed in recent months, along with the broader economy. Europe's financial crisis has lowered demand for US exports & the pending expiration of several US tax cuts at the start of next year, along with scheduled spending cuts, may also be weighing on growth.
Goods Orders Signal U.S. Business Spending to Cool in Second Half: Economy
Kimberly-Clark, a Dividend Aristocrat, said Q2 net income rose 22% as higher selling prices, cost cuts & strong intl results helped offset the stronger dollar. The company also raised guidance for the year due to higher sales expectations and lower commodity costs for materials like pulp. "Halfway through the year, we are tracking ahead of our 2012 plan on most key financial metrics, and I'm encouraged by our execution in a continued volatile environment," said CEO Falk. Like many businesses which have a significant amount of business overseas, it is facing the impact of the stronger dollar which lessens the value of intl sales. Changes in foreign currency rates hurt revenue by more than 3 percentage points. Still, EPS rose to $1.26, ahead of $1.03 last year. Excluding one-time items EPS was $1.30, beating expectations of $1.28. Net income was helped by sales growth, cost cuts & lower commodity costs which was partly offset by higher marketing, research & general spending & unfavorable currency exchange. Revenue was nearly flat at $5.27B versus $5.26B which was also the analysts' estimate. Personal care revenue rose 3% to $2.4B, while consumer tissue revenue fell 5% to $1.6B (hurt by restructuring & lower volume). The company is guiding EPS for 2012 of $5.05-$5.20, up from a prior target of $5-$5.15 & analysts expect $5.16. The company still expects sales to be flat to up 1%. The stock rose 2.32 & has an excellent chart over the last year.
Kimberly-Clark 2nd-quarter net income risesAP
Kimberely-Clark (KMB)
Markets had one of the best days this year on hopes that ECB will be able to solve all eurozone problems. I'm not so sure. Corp earnings have been fairly good although at the bigger picture level they paint a picture of a global economy that is only doing so-so. Next week, Big Ben will host the FMOC meeting but few are expecting anything new coming from it. Dow continues in its sideways trading range, it would not take much to break thru the 12.950 ceiling. Tomorrow could be the day if the bulls are serious. But modest market breadth during the up days looks worrisome.
Dow Jones Industrials
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