Dow shot up 263, advancers ahead of decliners 9-1 & NAZ gained 56. Bank stocks were leading the way again with the Financial Index up almost 20 off its lows last week.
The MLP index surged an amazing 8 to over 350 & the REIT index jumped almost 4 to the 213s. Junk bond funds were up 1-2% while Treasuries dropped, extending the advance of 10-year note yields from a record low 1¾%, as speculation Europe’s leaders are moving toward agreement on measures to counter the region’s debt crisis. Oil rose a 2nd day on speculation the European debt crisis will lessen. Gold gained for the first time in 5 days as the biggest 3-day drop in 28 years spurred some investors to buy the metal on concern about economic growth & debt crises.
Greece will receive its next batch of bailout loans in time to avoid a disastrous default according to the finance minister. Reports that European leaders are considering bolder moves to relieve Greece & other countries of their debt burden have buoyed financial markets, though officials in Chancellor Angela Merkel's gov downplayed such speculation ahead of her meeting later with Greek Prime Minister Papandreou. The current plan is to have Greece implement painful debt-reduction measures in exchange for rescue loans. European leaders have agreed on a 2nd €109B bailout, although some details of that remain to be worked out. The next bailout installment is being withheld until a review of the reforms is completed in the coming days. Without the money, Greece faces bankruptcy in mid-Oct. "The decision will be made in October," Greek finance minister Evangelos Venizelos said. "The disbursement will be decided in time, in line with the course of our funding needs." Speaking above the sound of chanting from protesting ministry employees & tax office workers outside his department, Venizelos said the country had made great efforts to achieve its fiscal targets, but that a "hyper-effort" was necessary to fully meet its commitments. Some experts, however, say the current course of austerity is untenable & that Greece will need bigger debt relief. There is growing speculation in the markets that Greece's creditors will look to impose bigger losses on private bondholders as well as recapitalizing Europe's banks & boosting the size of the eurozone's rescue fund. This still is only a "work in progress." More work is needed.
Photo: Bloomberg
Consumers' confidence in the economy remained weak in Sep after dropping to a post-recession low in Aug as Americans continue to worry about high unemployment & low wages. The Conference Board said that its Consumer Confidence Index was at 45.4, up slightly from a revised 45.2 in Aug but below the expected reading of 46. The Aug reading, which was the lowest since Apr 2009 & almost 15 points below the July reading of 59.2 A reading above 90 indicates the economy is on solid footing. The data showed a measure of present conditions declined to 32.5, the lowest since Janu, from 34.3. The measure of expectations for the next 6 months rose to 54, from 52.4. The share of consumers who said jobs are currently hard to get increased to 50, the highest level since May 1983, from 48.5 in Aug. That may signal a worsening of the Sep employment data. Today’s report is in line with other figures. The Thomson Reuters/University of preliminary index of consumer sentiment rose this month. As before, all is not well in the economy.
Consumer Confidence Rose Less Than Forecast
Photo: Bloomberg
S&P 500 Financials Sector Index
| Value | 169.21 |  |
| Change | 4.79 (2.9%) |
The MLP index surged an amazing 8 to over 350 & the REIT index jumped almost 4 to the 213s. Junk bond funds were up 1-2% while Treasuries dropped, extending the advance of 10-year note yields from a record low 1¾%, as speculation Europe’s leaders are moving toward agreement on measures to counter the region’s debt crisis. Oil rose a 2nd day on speculation the European debt crisis will lessen. Gold gained for the first time in 5 days as the biggest 3-day drop in 28 years spurred some investors to buy the metal on concern about economic growth & debt crises.
ALERIAN MLP Index (^AMZ)
DJ REIT INDEXDJR (^DJR)
Treasury yields:
U.S. 3-month | 0.005% | |
U.S. 2-year | 0.243% | |
U.S. 10-year | 1.994% |
| CLX11.NYM | ...Crude Oil Nov 11 | ...83.34 | ..... 3.10 | (3.9%) |
| GCU11.CMX | ...Gold Sep 11 | ......1,654.90 | ... 62.40 | (3.9%) |
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Greece will receive its next batch of bailout loans in time to avoid a disastrous default according to the finance minister. Reports that European leaders are considering bolder moves to relieve Greece & other countries of their debt burden have buoyed financial markets, though officials in Chancellor Angela Merkel's gov downplayed such speculation ahead of her meeting later with Greek Prime Minister Papandreou. The current plan is to have Greece implement painful debt-reduction measures in exchange for rescue loans. European leaders have agreed on a 2nd €109B bailout, although some details of that remain to be worked out. The next bailout installment is being withheld until a review of the reforms is completed in the coming days. Without the money, Greece faces bankruptcy in mid-Oct. "The decision will be made in October," Greek finance minister Evangelos Venizelos said. "The disbursement will be decided in time, in line with the course of our funding needs." Speaking above the sound of chanting from protesting ministry employees & tax office workers outside his department, Venizelos said the country had made great efforts to achieve its fiscal targets, but that a "hyper-effort" was necessary to fully meet its commitments. Some experts, however, say the current course of austerity is untenable & that Greece will need bigger debt relief. There is growing speculation in the markets that Greece's creditors will look to impose bigger losses on private bondholders as well as recapitalizing Europe's banks & boosting the size of the eurozone's rescue fund. This still is only a "work in progress." More work is needed.
Consumers' confidence in the economy remained weak in Sep after dropping to a post-recession low in Aug as Americans continue to worry about high unemployment & low wages. The Conference Board said that its Consumer Confidence Index was at 45.4, up slightly from a revised 45.2 in Aug but below the expected reading of 46. The Aug reading, which was the lowest since Apr 2009 & almost 15 points below the July reading of 59.2 A reading above 90 indicates the economy is on solid footing. The data showed a measure of present conditions declined to 32.5, the lowest since Janu, from 34.3. The measure of expectations for the next 6 months rose to 54, from 52.4. The share of consumers who said jobs are currently hard to get increased to 50, the highest level since May 1983, from 48.5 in Aug. That may signal a worsening of the Sep employment data. Today’s report is in line with other figures. The Thomson Reuters/University of preliminary index of consumer sentiment rose this month. As before, all is not well in the economy.
Consumer Confidence Rose Less Than Forecast
Photo: Bloomberg
Walgreen, a Dividend Ariistocrat, Q4 earnings jumped 69%, boosted in part by a gain from the $525M sale of its pharmacy benefits management business to Catalyst Health Solutions (CHSI). That deal was completed in Jun & WAG recorded an after-tax gain of 30¢. WAG also was helped by sales growth at stores open at least a year, as it earned 87¢, in the qtr that ended Aug 31, sharply ahead of 49¢ last year. Adjusted earnings, which exclude the sale gain, were 57¢, topping expectations of 55¢. Revenue climbed more than 6% to $17.96B. Sales at stores open at least a year rose 4.4%. WAG is the largest drugstore chain in the US with more than 7700 stores. For the full fiscal year, the company had EPS of $2.94 on $72.18B in revenue. WAG said when reporting Q3 results that it was ending a relationship worth $5.3B per year with Express Scripts (ESRX) because it was not paying it enough money to fill prescriptions. WAG dropped $1.27 & has been weak in the last 3 months.
Walgreen Co. (WAG)
Dow is up 535 in 2 days. Markets had been oversold, but this is an unusually strong rebound which may be getting ahead of itself. Buyers are assuming that European debt problems are all but fixed & are unconcerned with US financial problems. The US economy is still sputtering & the new fiscal year for the gov starts on Sat with no budget at a time when there is emphasis on reducing the whopper sized deficits. The VIX, volatility index, is down 3+ to below 36. That's an improvement from 40+ last week but remains far above the teens where it has been during the recent "good days" for the stock market.
Dow Industrials (INDU)
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