Stocks slip on oil worries

Dow fell 37 & ended near its highs for the day, advancers were even with decliners & NAZ rose 14.  Bank stocks also saw buying in the PM, with the Financial Index finishing off its lows.

S&P 500 FINANCIALS INDEX

Value	222.58
Change	-0.51  (-0.2%)

The MLP index rose 1+ to 376 on favorable sentiment about higher energy prices but the REIT index fell 1½ to the 231s (lowest value in a month).  Junk bond funds inched higher (not too far from their highs last year) & Treasuries were also in demand.  The yield on the 10 year Treasury bond fell 5 basis points 3.44%.

Treasury yields:

U.S. 3-month		0.12%
U.S. 2-year		0.73%
U.S. 10-year		3.44%

Alerian MLP Index   ---   1 year



Dow Jones REIT Index   ---   1 year



10-Year Treasury Yield Index   ---   1 year




Oil fell after topping $100 on assurance that disruptions in oil shipments will be replaced.  The chart for the contract shows oil has had an usually wild 5 days (going over $100 early today).  Gold continues on its winning ways & is only about $20 away from setting a fresh record high!

CLJ11.NYM

...Crude Oil Apr 11

...97.25

.... 0.85

(0.9%)

GCG11.CMX

...Gold Feb 11.....

1,415.30

... 1.90

(0.1%)

*** Gold Super Cycle ***  

Click Here

CLJ11  (oil contract)   ---   1 week





Below are the latest prices & a chart for gas prices over the last year (courtesy of AAA).  Summer driving season is not that far away when these prices will be more acutely felt.

	Regular	Mid	Premium	Diesel	85	**E85 MPG/BTU adjusted price
Current Avg.	$3.228	$3.354	$3.485	$3.595	$2.774	$3.651
Yesterday Avg.	$3.194	$3.319	$3.450	$3.575	$2.760	$3.632
Week Ago Avg.	$3.145	$3.273	$3.405	$3.540	$2.734	$3.598
Month Ago Avg.	$3.110	$3.303	$3.421	$3.423	$2.675	$3.521
Year Ago Avg.	$2.678	$2.843	$2.946	$2.857	$2.318	$3.050

Source:   AAA

Photo:   Bloomberg

General Motors (GM) posted Q4 results that topped expectations, but its shares fell below the IPO price (at the lows) as concerns shifted to the pressure from rising oil prices & higher costs of launching & selling new cars.  Profits were $4.7B in 2010, its first full year after a bankruptcy scoured costs & debt from the balance sheet.  Its last year of profits was in 2004 & this was its largest profit since 1999.  Today's decline of $1.53 (4½%), taking it back to just above the IPO price of $33, was its largest single-day percentage decline since its IPO last Nov.  Q4 net income of $510M represented a slowdown from the previous 3 qtrs, but topped expectations after adjusting a one-time charge to buy back preferred shares held by the Treasury.  Revenue rose nearly 15%, from a year earlier, to $37B.

GM Falls Below IPO Price as Rising Oil Dims Truck Sales

General Motors   ---   4 months




The break in rising oil prices brought a sense of relief to the stock markets.  But Dow is still down 300+ from its highs on Tues. The Mideast remains unstable & the threat of political unrest spreading to other countries (assuming Libya quiets down) remains high.  Markets are nervous, a time when gold has a lot of appeal for investors. 

Dow Jones Industrials   ---   1 year

Get your favorite symbols' Trend Analysis TODAY!  

Click Here

Find out what's inside Trend TV!! 

Click Here

Markets struggle while adjusting to higher oil prices

Dow dropped another 40 (over 400 in just 3 days), but advancers ahead of decliners 4-3 & NAZ added 4.  Bank stocks were weak.  The Financial Index is down 10 from an interim high set this week.

S&P 500 FINANCIALS INDEX

Value	221.81
Change	-1.28  (-0.6%)

The MLP index was up 1 to the 375s whle the REIT index fell 1 to the 231s.  Junk bond funds were a little higher & demand for Treasuries was strong, taking the yield on the 10 year Treasury bonds down 5 basis points to 3.44%. 

Treasury yields:

U.S. 3-month		0.11%
U.S. 2-year		0.73%
U.S. 10-year		3.44%

Alerian MLP Index   ---   2 weeks



Dow Jones REIT Index   ---   2 weeks



10-Year Treasury Yield Index   ---   2 weeks



Crude oil surged to the highest level in 29 months as the uprising in Libya reduced supplies from Africa’s 3rd-biggest oil-producing country.Gold is at a 7 week high on the unrest in the Mideast.

CLJ11.NYM

...Crude Oil Apr 11

...99.15

.... 1.05

(1.1%)

GCG11.CMX

...Gold Feb 11

.....1,415.30

... 4.60

(0.3%)

Gold Super Cycle Link!! Click Here

Photo:  Bloomberg

Jobless claims fell more than expected last week to a 2-1/2-year low.  Applications for jobless aid dropped to 391K, down from 413K a week earlier according to, the Labor Dept.  The 4-week moving average dropped to 402K, the lowest since mid-2008 before the financial crisis took a turn for the worse.  Claims have been bouncing around 400K for several weeks & the break below 400K is encouraging.  The report showed the number remaining on the jobless rolls after an initial week of benefits declined by 145K to 3.79M.  The total number of recipients, including those receiving assistance under an emergency federal program, edged down but remained around 9.2M.  More encouraging news, but the figures are not low enough to have a meaningful impact on reducing the unemployment rate.

Initial Unemployment Claims in U.S. Decline More Than Estimated to 391,000

Photo:  Bloomberg

Sales of new homes fell significantly to an annual rate of 284K homes in Jan, a dismal sign after the worst year for that sector in nearly a half-century.  That's down from 325K in Dec & less than half the 600K yearly pace that is viewed as healthy. Bad winter weather likely hampered some sales.  Last year was the 5th consecutive year that new-home sales have declined after hitting record highs during the housing boom. Buyers purchased 322K new homes last year, the fewest on records going back 47 years.  Poor sales of new homes mean fewer jobs in the construction industry, which normally powers economic recoveries. About 188K new homes were for sale at the end of Jan, the lowest level since 1967. The number of homes that have received permits to begin construction has held steady over the past year while the number of those under construction & finished has plummeted.  The median sales price of a new home in January was $230K, down 1.9% from the month before.  Housing clearly remains in the dumps..

Sales of New U.S. Homes Fell More Than Forecast in January

Photo:  Bloomberg

Target (TGT), a Dividend Aristocrat, reported an 11% gain in Q4 profit, boosted by an improving credit card business & solid holiday sales.  But there are concerns that its expansion into food & its generous 5% discount offer for those paying with its store-brand credit & debit cards are eating away at profit margins.  EPS for the qtr ended Jan 29 was $1.45, above $1.24 in the prior year.  Revenue rose 2.4% to $20.66B & revenue at stores opened at least a year also rose 2.4%. During the qtr, gross margin rate slipped to 28.7% from 29.1% (considered a big problem).  The stock has been struggling for some time, but today it rose $1.

Target Fourth-Quarter Profit Rises 11%; Sales Miss Estimates

Target   ---   1 year




Jobless data is looking good, but oil is center stage.  There is an odd occurrence from the glut of oil in OK.  This is the center for oil going to the Midwest, with much shipped on Enbridge Energy (EEP) pipelines from Canada.  But this glut is not helping the rest of the country, accounting for oil bumping against $100, its highest price since the heady days of 2008.  Higher priced oil is important for the stock market, because this can crimp GDP growth rates.  Stock markets are nervous, for the time being, all news is not considered good.

Dow Jones Industrials   ---   2 weeks

Find out what's inside Trend TV! Cli

ck Here

Perfect "R" Portfolio Report. Aimed at retirement accounts  

Click Here

Get your favorite symbols' Trend Analysis TODAY!  

Click Here

Triple digit drop for Dow in 2 consecutive days

Dow fell 107, decliners ahead of advancers less than 2-1 & NAZ sank 33 in a weak tech sector.  Bank stocks were lower all day.

S&P 500 FINANCIALS INDEX

Value	223.09
Change	-0.92  (-0.4%)

After the MLP index reached 379 (almost touching its record high) in the AM, there was major selling in the PM.  The index ended down 1½ to the 374s.  The REIT index fell 2+ to the 232s & junk bond funds were little changed.

Alerian MLP Index   ---   3 months



Dow Jones REIT Index   ---   3 months



10-Year Treasury Yield Index   ---   3 months




The chart below shows that oil touched the magic $100 mark & then pulled back in the PM.  Gold continues strong, rising more than 100 off its lows last month.

CLJ11.NYM

...Crude Oil Apr 11

...98.04

...... 2.62 (2.8%)

GCG11.CMX

...Gold Feb 11

.....1,411.70

... 11.20

(0.8%)

$$$ Gold Super Cycle $$$  

Click Here

CLJ11 (oil contract)   ---   1 day




The Treasury 10-year bonds rose earlier, pushing the yield to a 3-week low on speculation that higher oil prices will slow the economic recovery. But those gains were erased after the sale of 5-year debt drew the lowest level of participation since Nov.  Yields on current 5-year notes gained 3 basis points to 2.16%.   At today’s auction, the 5-year notes drew a yield of 2.19%, compared with a forecast of 2.17% & the bid-to-cover ratio was 2.69X, compared with an average of 2.79X at the previous 10 sales.  Indirect bidders, including foreign central banks, purchased 34%, compared with 45% at the previous sale & an average of 42% for the past 10 sales.  At yesterday’s $35B auction of 2-year notes, the bid-to-cover ratio was 3.03X, the least since May. The Treasury will sell $29B of 7-year debt tomorrow in the last note sale of the week.  Yields on 10-year bonds gained 2 basis points to 3.47% after touching 3.43%, the lowest level since Feb 2.  In addition, Philadelphia Fed President Charles Plosser said in a speech that an early end to the central bank’s plan to purchase debt $600 of Treasury debt may be required to help limit inflation pressures.

Treasury Five-Year Notes Drop on Concern U.S. Debt's Refuge Appeal Waning

Treasury yields:

U.S. 3-month		0.12%
U.S. 2-year		0.74%
U.S. 10-year		3.47%

Enterprise Products Partners (EPD) will purchase all units of Duncan Energy Partners (DEP) through a unit-for-unit exchange. EPD would offer 0.9545 EPD units for each DEP unit, representing a value of $42.00 per unit (a premium of 30%, based on the 10-day average closing price of DEP on Feb 18).  EPD is the largest MLP & will become even larger.  Its assets include over 50K miles of pipelines; 192M barrels of storage capacity for NGLs, refined products & crude oil; & 27B cubic feet of natural gas storage capacity.  The 2 companies were founded by Dan Duncan & are closely related, so no opposition is expected.  As is usual in these deals, DEP shot up 7.84 to near the value of EPD units while EPD fell 73¢ with a meager yield of 5½%.

• Enterprise Products Makes Offer to Acquire Duncan Energy PartnersBusiness Wire

Enterprise Products Partners   ---   3 months



Duncan Energy Partners   ---   3 months




2 bad days in a row is something stock markets will have to adjust to.  The chart below reminds us that many may have forgotten, markets can go down.  Techs were weak again, although Apple (AAPL) rebounded 4 to the 342s after losing 25 in recent days.  Its annual meeting gave encouragement to its investors.  But higher oil prices are starting to bite hard around the world.  The average price for auto gas in the US was $3.19 yesterday according to AAA & is heading north.  The summer driving season is still a few months away.  High prices adversely affect all countries importing oil, crimping their growth rates.  Economic forecasts may have to be lowered.

Dow Jones Industrials   ---   3 months

Get your favorite symbols' Trend Analysis TODAY!  

Click Here

Find out what's inside Trend TV!!  

Click Here

Lower markets on Libyan turmoil

The Dow dropped 59, decliners over advances 3-2 (not so bad all considered) & NAZ fell 25 on weakness by tech heavyweights.  Bank stocks are also lower, the Financial Index is down 8 from its high 2 weeks ago..

S&P 500 FINANCIALS INDEX

Value	223.05
Change	-0.96  (-0.4%)

The MLP index rose 2+ to the 368s, helped by surging oil & energy prices while the REIT index fell a fraction in the 234s.  Junk bond funds were mixed to higher & Treasuries were a little higher.  The yield on the 10 year Treasury bond fell 1+ basis point to 3.45%.

Treasury yields:

U.S. 3-month		0.12%
U.S. 2-year		0.74%
U.S. 10-year		3.45%

Alerian MLP Index   ---   2 weeks



Dow Jones REIT Index   ---   2 weeks



10-Year Treasury Yield Index   ---   2 weeks




Oil rose to the highest price since Oct 2008, as violent uprisings in Libya threatened to disrupt exports & spread to other oil producing nations in the Mideast.  Gold is, heading for the longest rally in 6 months, on mounting tensions in Libya & the Mideast, boosting demand for an investment haven. Charts for the near term contracts below show oil spiked this week & the steady rise for gold in Feb.  A link is provided to learn more information about investing in gold.

CLJ11.NYM

...Crude Oil Apr 11

...97.41

... 1.99 (2.1%)

GCG11.CMX

...Gold Feb 11

.....1,405.30

... 4.70

(0.3%)

Gold Super Cycle Link! Click Here

CLJ11 (oil contract)   --  YTD



GCG11 (gold contract)   --  YTD

Photo:  Bloomberg

More people bought previously occupied homes in Jan, but sales surged on a rising number of foreclosures & all-cash deals (not first-time home-buyers).  The rising number of distressed sales forced home prices down to the lowest level in nearly 9 years, a troubling sign for the struggling housing market.  The National Association of Realtors said that sales of previously occupied homes rose slightly in Jan to an annual rate of 5.36M, uo 2.7% from 5.22M in Dec.  The pace is still far below the 6M homes per year that represents a healthy market. And the number of first-time home-buyers shrunk to 29% of the market (a more healthy level of first-time home-buyers is about 40%).  Foreclosures represented 37% of sales in Jan & all-cash transactions accounted for 32% (double the rate from 2 years ago).  One reasons cash sales are rising is that a growing number of purchases are being made by investors (not home residents).  The median price of a home in Jan was $159K,.3.7% lower than a year earlier & the lowest point since 2002.  Housing data remains stuck in the mud & it is a key driver for continuing high unemployment.

Sales of U.S. Existing Homes Climb to Eight-Month High


Hewlett-Packard (HPQ), a Dow stock, delivered some disappointing news yesterday & it said revenue growth, will be slower in 2011 than many had envisioned. HPQ is considered a good proxy for the tech market. HPQ reported EPS jumped 16% to $1.17 in Q1, ended Jan 31, up from 93¢ in the prior year.  Excluding one-time items, it earned $1.36 per share, ahead of the $1.29 expected.  Revenue rose 4% to $32.3B but analysts expected $32.96B.  HPQ guided full-year profit forecast for EPS of $5.20-5.28, excluding items, which is in line with estimates by analyst of $5.23.  But revenue prediction fell short at $130-131.5B for fiscal 2011 ending in Oct. Analysts expected $132.9B.  The guidance raised concerns after HPQ has spent heavily in recent years on acquisitions that were expected to propel substantial growth in areas IBM (IBM), another Dow stock, found lucrative.  Markets did not take the news well, the stock sold off 5+ to 43.

HP shares slide as powerhouse faces growth fearsAP

Hewlett-Packard   ---   2 years




Markets have lost their zest & are drifting lower.  The unrest in the Mideast will not go away soon.  In addition, there is a fair amount of unrest in the US as state workers are protesting budget cuts which hurts them along with reexamining collective bargaining for civil servants.  Lower spending at the state & local level will pinch the economic recovery.  Uncertainty is finally attracting more buyers for gold (when they sell stocks).




Dow Jones Industrials   ---   2 weeks

Find out what's inside Trend TV!  

Click Here

Get your favorite symbols' Trend Analysis TODAY!  

Click Here