Markets fluctuate ahead of a long weekend

Dow eked a gain of 8, decliners ahead of advancers 3-2 & NAZ lost 4. The MLP index was off 1+ to the 463s while the REIT index slipped 1+ to 301.  Junk bond funds slid lower & Treasuries were flattish.  Oil & gold also sold off.

AMJ (MLP Index tracking fund)

Start and monitor your own portfolio...Free!

Trend Analysis

Free Stock Trend Analysis

Free ETF Trend Analysis!

Treasury yields:

U.S. 3-month	0.04%
U.S. 2-year	0.25%
U.S. 10-year	2.01%

CLN13.NYM

Crude Oil Jul 13

94.18 2:35PM EDT

0.07 (0.07%)

Photo:   Bloomberg

German business confidence increased in May for the first time in 3 months.  The Ifo institute’s business climate index climbed to 105.7 from 104.4 in Apr, the first gain since Feb.  Expectations were for the sentiment to remain unchanged.  The German economy, Europe’s largest, grew just 0.1% in Q1 after a 0.7% contraction in Q4 as an unusually long winter damped construction & investment.  While risks stemming from Europe’s debt crisis persist, the economy will gather pace in the current qtr, the Bundesbank said this week.  Factory orders surged for a 2nd month in Mar & exports increased.  Ifo’s gauge of executives’ expectations remained unchanged at 101.6, while a measure of current business conditions increased to 110 from 107.3.  Q1 growth in Germany was driven mainly by household spending, which rose 0.8% from the Q4 of 2012, the Federal Statistics Office in Wiesbaden said.  At the same time, construction fell 2.1% & capital investment dropped 1.5%.

German Ifo Sentiment Rises for First Time Since February




Photo:   Yahoo

Sears reported a steeper-than-expected loss for its Q1 on slumping sales.  It also announced that it is considering selling its protection-agreement business in an ongoing effort to raise cash as it struggles to reverse its fortunes.  The unit runs the part of the business that sells customers service contracts that guarantee to fix or replace appliances if they break within a certain timeframe.  Like many retailers, its business was hurt by poor weather & new economic pressures on its customers, including rise in the payroll tax.  But the latest results show that the path toward profitability will be more elusive than the chain may have thought.  "I do not subscribe to the view that the macro factors are the sole reason for our poor performance," Sears Chairman Eddie Lampert said.  "They have an impact. But even with that impact, we should have been doing a lot better than we are," Lampert said.  Last year, the company announced plans to restore profitability by aggressively cutting costs, reducing inventory, selling off some assets & spinning off others.  Those moves helped it reduce net debt by $400M & generated $1.8B in cash from the asset sales in the latest fiscal year.  But the company has struggled with its stores.  Middle-income shoppers have been hit hard by a slowly recovering economy.  SHLD shares had a loss of $2.63, compared with a profit of $1.78 a year earlier.  Not including one-time items, the company lost $1.29 per share, worse than the 60¢ expected.  Revenue fell 9% to $8.45B, above the $8.37B expected.  The company said that the decrease in revenue was due primarily because it has fewer Kmart & Sears full-scale stores in operation and lower revenue at stores opened at least a year.  Revenue at stores open at least a year fell 3.6%, with the company noting that much of the country experienced a cooler spring than last year.  The stock plunged 7.94 after rebounding in 2013.

Sears reports bigger-than-expected 1Q lossAP

Sears Holdings (SHLD)

Yahoo submitted an offer for Hulu, the online video site, expanding the number of suitors for the service to at least 7.  YHOO, which said this week it’s buying Tumblr for $1.1B, made the offer today but the value of the offer wasn’t immediately known.  The stock rose 31¢.

Yahoo Said to Make Offer for Hulu as Bidding Escalates

Yahoo! (YHOO)

Stocks did little going into a long holiday weekend.  There was no significant news to excite investors.  After weakness late in the week, Dow finished the week with a loss of less than 100.  There are concerns the Federal Reserve could reduce its monthly bond purchases, but those worries are fading.  Dow is still up 460 in May (& a massive 2.2K YTD), hardly chump change.  As long as ugly scandals in DC & sluggish retail sales in the US are of no concern, buyers could continue to bid stocks higher.

Dow Jones Industrials

Weak markets on worries over Fed bond buying program

Dow dropped 55, decliners over advancers almost 4-1 & NAZ fell 18.  The MLP index was off a fraction to 464 & the REIT index fell 3 to 299 (down a whopper 16 in just 3 days).  Junk bond funds were lower & Treasuries gained.  Oil fell, heading for its biggest weekly drop in a month, amid ample US fuel stockpiles & concern that the Chinese economy will slow.  Gold was also weak.

AMJ (Alerian MLP Index tracking fund)

Treasury yields:

U.S. 3-month	0.04%
U.S. 2-year	0.25%
U.S. 10-year	1.99%

CLN13.NYM

...Crude Oil Jul 13

....93.48

....0.77  (0.8%)

GCK13.CMX

...Gold May 13

...1,389.30

...2.70

(0.2%)

Watch Todays 1pm Market Update
Presented by 30year Market Veteran Adam Hewison

Trend Analysis

Top 50 Trending Stocks

50 Top Stocks

Free Trading Course

Photo:  Yahoo

US orders for long-lasting manufactured goods rebounded in Apr, buoyed by more demand for aircraft & stronger business investment.  Orders for durable goods rose 3.3% from Mar, according to the Commerce Dept, following a 5.9% decline in Mar.  A measure of business investment plans increased 1.2% & the gov revised the Mar figure to show a 0.9% gain, instead of a slight decrease.  Companies ordered more machinery & electronic products last month, typically signs of confidence.  Factories had been seeing fewer orders at the start of the year, in part because slower global growth had reduced demand for US exports.  Also, federal spending cuts & higher taxes might prompt businesses to cut back on orders.  The Apr increase pushed total orders to $222B, 6.5% above the level of a year ago.

Orders for U.S. Durable Goods Increase More Than Forecast


Abercrombie & Fitch reported a Q1 EPS loss of  9¢, narrower than the loss 25¢ from a year earlier & revenue fell 9% to $838M from $921M.  Analysts had expected an EPS loss of 5¢ on revenue of $938M.  The retailer said it expects Q2 EPS of 28-33¢ & full-year EPS of $3.15-$3.25, citing a "modestly more cautious view for the remainder of the year." “The first quarter proved to be more difficult than expected on the top-line due to more significant inventory shortage issues than anticipated, added to by external pressures,” CEO Mike Jeffries said.  The stock tumbled 5.59 (10%).

Abercrombie & Fitch Drops After Cutting Profit Forecast

Abercrombie & Fitch (ANF)

The Gap fell the most in a month after forecasting annual profits that were less than estimated.  CEO Glenn Murphy is working to keep sales rising with discounts meant to draw shoppers that still are holding back amid elevated unemployment & slower economic growth.  While Q1 profit rose to 71¢, exceeding the 69¢ top end of its forecast, the company maintained its projection that EPS this year would be $2.52-$2.60.  Analysts estimated $2.72.  Net income was 71¢, versus 47¢ a year earlier & analysts projected 69¢.  Same-store sales at the Banana Republic brand were little changed while the Gap & Old Navy brands gained 3% each.  “For the first time if felt like, to us, the consumer was moving in a positive direction,” Murphy said.  “I like to think that’s a good sign as we move forward.”  The stock slumped $1.04.

Gap Falls After Forecast Trails Analysts’ Estimates

Gap (GPS)

Actions by the Federal Reserve are getting a lot of attention while drab retail sales reports are not.  A stellar performance by the stock market can be largely attributable to bond buying by the FED.  Recent sluggish performance for the Dow suggests that there may not be much else propping up stocks.  The retail sales story gives a better picture of what is going on in the economy & that is not encouraging.  Even with unsettled markets in the last 3 days, Dow has only pulled back 140.  This does not qualify as a meaningful correction which is sorely needed if stocks want to go higher to new records.

Dow Jones Industrials