Tag Archives: DJI

Market Minute: An August Rally for Stocks? Exxon Misses on Earnings

By DailyFinance Staff

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Wednesday, July 31, 2013. U.S. stocks erased an earlier rally after the Federal Reserve refrained from indicating when it will reduce the pace of stimulus and data showed the economy grew more than projected in the second quarter. Photographer: Scott Eells/Bloomberg via Getty Images

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Stocks are set to rally this morning, but history offers a warning to investors. That and more is what’s in market news Thursday

The Dow industrials (^DJI) lost 21 points Wednesday, and the S&P 500 (^GPSC) was virtually flat, but the Nasdaq (^IXIC) gained nearly 10 points.

Scott Eells/Bloomberg via Getty Images

All three major averages posted solid gains for all of July. For the Dow, it was the seventh increase in eight months. So what can we expect from August? Well, since 1987, it’s been the worst month of the year for the market.

In earnings news, Exxon Mobil’s (XOM) quarterly earnings appear to have badly missed Wall Street expectations.

Procter & Gamble’s (PG) net fell by nearly half from a year ago, but still edged past expectations.

Animated filmmaker DreamWorks Animation (DWA), biotech company Affymetrix (AFFX), and the online review company Yelp (YELP) are all set to rally on better-than-expected earnings news.

But Whole Foods Market (WFM) and Marriott International (MAR) both issue disappointing results.

Ford (F), General Motors (GM), Toyota (TM) and other carmakers report sales for last month. Industry watcher Edmunds.com forecasts a double-digit gain from a year ago.

Shares of J.C. Penney (JCP) tumbled Wednesday on a report that a leading commercial lender has stopped backing deliveries to the chain. But the stock is set to rebound Thursday after J.C. Penney said those reports are false.

The dispute between J.C. Penney and Macy’s (M) over the rights to sell Martha Stewart (MSO) branded products could come to an end today. The two department stores are set to deliver closing arguments in their long-running case, and the judge could issue an immediate ruling.

The International Trade Commission is expected to rule today on Apple’s (AAPL) patent-infringement case against Korean rival Samsung. The companies have filed suit and countersuit against each other, with both sides claiming some victories in court.

And Starbucks (SBUX) has enlisted Google (GOOG) to make the Internet connection at its coffee shops up to 10 times faster than it is now.

Produced by Drew Trachtenberg.


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Zombie Economy Overshadows Fed Meeting


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APFederal Reserve Chairman Ben Bernanke

By Patti Domm

GDP data Wednesday is expected to show a slow-moving, zombie-like economy, as the Fed meets for a second day.

Many economists expect second quarter growth to be paltry, less than one percent, and some think that data could help shape the Fed’s thinking if it’s even weaker than expected. The first quarter grew at a 1.8 percent rate.

The Fed meanwhile, isn’t expected to say much new when its meeting ends. The 2 p.m. Eastern time statement isn’t seen altering what Fed Chairman Ben Bernanke has already said about the Fed’s plans to taper bond purchases before the end of the year. But it may adjust its comments to reflect a temporary slowing of the economy. The Fed, and many economists, expect a stronger growth rate in the second half of the year.

“[Wednesday] is an action-packed today. It’s one of those weird ones where it’s so action-packed, what if it is a dud?” said George Goncalves, Treasury strategist at Nomura Americas. “We have all these high expectations — GDP, revisions to GDP, ADP, the Treasury going to announce at 8:30 their intentions for borrowing. We have the Fed later on.”

It is also the end of the month, and that could make markets more volatile as traders square positions. For July, the S&P 500 is up five percent, bringing its year to date gain to 18.2 percent, The Dow was up four percent in July so far. Markets Tuesday were in a wait-and-see mode ahead of the Fed’s announcement Wednesday. The Dow Jones industrial average (^DJI) edged 1 point lower to 15,520 and the S&P 500 (^GSPC) rose less than a point to 1,685.

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The 10-year Treasury note was at 2.61 percent Wednesday. Traders are watching that yield level, as a move higher could take the market to a potential nervous zone for stocks.

“We’ve had a little bit of a backup in yields. [Month end] could amplify whatever’s happening toward the end of the day,” Goncalves said.

“I think GDP will be constructive. I think it’s still coming in on the weak side. The Fed will react to it by not being too hawkish. Then we’re going to quickly turn our attention to [nonfarm payrolls] on Friday,” he said. The Fed has said it would base its tapering decisions on economic data , and it is particularly focused on employment so some traders expect to get more new information from the jobs data than the Fed statement.

The 8:30 a.m. Eastern time GDP release is also be important because the government will release revisions in the data going back to 1929. It last issued massive revisions in 2009. “It’s clear the level of GDP is going to be higher by …read more

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Market Minute: Merck, Pfizer Beat Earnings Forecasts; Hospital Giants Merge

By DailyFinance Staff

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Drug giants Pfizer and Merck grab the earnings spotlight. Those stocks and more are what’s in business news Tuesday.

The Dow industrials (^DJI) fell 36 points Monday, the S&P 500 (^GPSC) lost 6 and the Nasdaq (^IXIC) fell 14.

Pfizer’s (PFE) operating profit and revenue edged lower, but still beat expectations. The company has been coping for several years with the loss of patent rights on the top-selling cholesterol drug Lipitor, and sales of Lipitor tumbled 55 percent in the latest period. Pfizer also says it will reorganize, a move some analysts say could lead to another spinoff.

Matt Rourke/AP

Rival drug-maker Merck (MRK) reports net edged past Wall Street expectations, but revenue was a bit light. Sales of several key drugs fell as it too struggles with the expiration of patents.

After the closing bell we’ll hear from biotech leader Amgen (AMGN).

Community Health Systems (CYH) has agreed to buy Health Management Associates (HMA) for $3.9 billion. Both companies operate for-profit hospitals, mostly in smaller cities and rural areas.

Herbalife’s (HLF) net easily beat expectations. The nutrition supplement company has been at the center of a high-profile battle between some big-time investors during the past year, with one hedge fund manager claiming the company is run like a Ponzi scheme, and he’s been betting against its stock. So far, he’s lost more than $200 million on that bet. On the other hand, Carl Icahn has made a cool quarter of a billion by backing the company.

AIG (AIG) is getting out of the retail banking business. The company says it will return deposits because of limits placed on insurance companies under the Dodd-Frank law. Allstate Group (ALL), MetLife (MET) and Hartford Financial Services (HIG) have already backed away from retail banking.

JPMorgan Chase (JPM) reportedly has agreed to pay $400 million to $500 million to settle federal charges that it manipulated the power markets in California and other states in 2010 and 2011.

On the economic front, the Federal Reserve begins a two-day policy meeting. Everyone will be looking for clues about when and how it will taper down on its massive bond-buying program.

Produced by Drew Trachtenberg.

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Market Minute: Starbucks Milks Yogurt Deal; Apple Earnings Shine

By DailyFinance Staff

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Starbucks plans a big new product line, and a case of when bad is good. Those and more are what’s making business news Wednesday.

The Dow industrials (^DJI) rose 22 points Tuesday, enough for another all-time high. But the S&P 500 (^GPSC) lost 3 points, and the Nasdaq (^IXIC) fell 21.

AFP/Getty Images

Starbucks (SBUX) continues to expand beyond coffee. It’s joining forces with Dannon to make Greek yogurt parfaits. The fast-growing yogurt business in the U.S. is worth more than $6 billion, and analysts say there’s still plenty of room to go. Last year, Starbucks expanded its tea business by acquiring the Teavana chain.

Apple’s (AAPL) quarterly earnings fell 22 percent from a year ago, but that wasn’t as bad as most analysts had forecast. Revenue edged higher as it shipped more than 31 million iPhones. That was well above expectations and the stock is likely to climb this morning.

AT&T’s (T) net edged slightly lower, but on the positive it reported the number of new customers signing long-term service contracts nearly doubled from a year ago.

Ford (F) reported better-than-expected second quarter earnings in part due to strong domestic demand for its F-Series pickups. The automaker earned $1.2 billion in the April-June period, propelled by a $2.3 billion profit in North America. Ford shares rose 3 percent in premarket trading.

Among other big names reporting this morning: Boeing (BA), Caterpillar (CAT), Delta Air Lines (DAL) and USAirways (LCC).

Other stocks likely to make big moves to the upside following earnings include video gamemaker Electronic Arts (EA) and software company VMWare (VMW); like to trade to the downside, chipmaker Broadcom (BRCM) and restaurant chain Panera Bread (PNRA).

The big report after the bell today comes from Facebook (FB). The focus will be on how much the company grew its revenue from mobile platforms.

The New York Times (NYT) reports officials in Louisiana are preparing to file suit against Exxon Mobil (XOM), BP (BP) and other oil producers, accusing them of damaging the coastal wetlands that help protect the region from hurricanes.

A new report shows that Google (GOOG) accounts for nearly a quarter of all the Internet traffic in North America. That’s more than Facebook and Twitter combined.

And Carl Icahn, one of those big time investors who can move stock prices, is offering a tease about what he’ll do next. CNBC reports that Icahn plans to give clues about his next big investment on Twitter. His handle is @Carl_C_Icahn.

Produced by Drew Trachtenberg.
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Stock Futures Point Higher Ahead of Numerous Earnings Reports

By IBTimes

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Richard Drew/AP

By Sreeja VN

U.S. stock futures point to a higher open Wednesday, ahead of the publication of new home sales data and quarterly earnings statements from major American companies, including Facebook, Ford, PepsiCo, Qualcomm, Visa and Boeing.

Futures on the Dow Jones industrial average (^DJI) were up 0.2 percent, while futures on the Standard & Poor’s 500 index (^GSPC) were up 0.3 percent and those on the Nasdaq 100 Index were up 0.9 percent.

Investors are expected to focus on new home sales data for June, to be released by the Commerce Department, at 10 a.m. Eastern time. Analysts expect new home sales — the annualized number of new single-family homes that were sold during the previous month — may probably increase to 485,000 in June from 476,000 in the previous month.

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New home sales had recorded a better-than-expected gain in May, helped by a pick-up in demand, while existing home sales data for June, which was released Monday, showed a decline. Analysts attributed the fall to a recent hike in mortgage interest rates and believe new home sales could still increase in June.

“With the NAHB current sales index still rising strongly, we have penciled in an increase in new sales from 476,000 in May to 485,000,” Paul Diggle, an economist with Capital Economics, wrote in a research note.

On the earnings front, a number of major companies, including Caterpillar (CAT), Eli Lilly & Co. (LLY), EMC Corp. (EMC), US Airways Group, (LCC), Ford (F), PepsiCo (PEP) and Boeing (BA), will announce quarterly earnings before market hours. Visa (V), Western Digital (WDC), Qualcomm (QCOM) and Facebook (FB) are to announce their earnings after markets close Wednesday.

Markit Economics’ flash Purchasing Managers’ Index, or PMI, for the manufacturing sector in the month of July, is scheduled to be released at 9 a.m. Eastern time. The index, which measures the activity level of purchasing managers in the manufacturing sector, is expected to show a reading of 52.5 in July, up from the 51.9 recorded in June. A reading below 50 indicates contraction.

European markets were trading higher Wednesday, as investor sentiments were buoyed after flash PMIs for the euro zone’s manufacturing and services sectors beat expectations. The 17-nation eurozone’s manufacturing PMI for July came in at 50.1 compared to 48.8 in the previous month. The services PMI registered a reading of 49.6 compared to 48.3 in June.

Germany’s manufacturing PMI came in at 50.3 in July, up from 48.6 in June while the nation’s services PMI was at 52.5 in July, up from 50.4 in June. Meanwhile, in neighboring France, while the …read more

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Market Minute: Netflix Growth Sours Investors; Taco Bell Nixes Kids Meals

By DailyFinance Staff

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Netflix and Apple are the stocks you want to watch today. Those and more are what’s in the news Tuesday on Wall Street.

The Dow industrials (^DJI) edged just slightly higher Monday, the S&P 500 (^GPSC) added 3 points — to mark its 23rd record high of the year — and the Nasdaq (^IXIC) rose 12.

Melinda Sue Gordon, Netflix/APActor Kevin Spacey in a scene from the Netflix series “House of Cards.”

Netflix says its quarterly profit soared nearly fivefold from a year ago, even better than Wall Street had expected. But subscriber growth to the movie streaming service was a bit off target. Last week Netflix received 14 Emmy nominations for its original series, including best drama for “House of Cards.” Now investors want to see if it can turn those nominations into new subscribers. Netflix (NFLX) shares have more than tripled in price during the past year, but they’re set to slide Tuesday morning.

Dow components DuPont (DD), United Technologies (UTX) and Travelers Cos. (TRV) are also out with quarterly numbers this morning. In addition to its earnings, DuPont says it may sell its performance chemicals business, which is the company’s second largest revenue producer.

After the closing bell, we’ll hear from Apple (AAPL) and AT&T (T). Apple’s net is likely to drop from a year ago as it’s been quite a while since the company has introduced an important new product.

On the merger front, CapitalSource (CSE) has agreed to be acquired by Pacwest Bancorp (PACW) in a deal valued at $2.3 billion dollars.

Taco Bell is taking the toy out of the taco. The Yum Brands (YUM) unit says its will stop selling kids meals and toys, probably early next year. It wants to focus on attracting young adults. The company says kids meals account for less than 1 percent of its overall sales.

Finally, how much money do you need to have to be rich? A survey by UBS (UBS) found $5 million is the magic number for most people, with $1 million of that in cash. Half of the respondents also said being rich means having “no financial constraints.”

Produced by Drew Trachtenberg.


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Stock Futures Point to a Higher Open on Wall Street

By IBTimes

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Richard Drew/AP

By Sreeja VN

U.S. stock index futures point to a higher open on Wall Street on Tuesday, ahead of the publication of the House Price Index and corporate earnings statements from tech majors Apple, AT&T and Electronic Arts.

Futures on the Dow Jones industrial average(^DJI) were up 0.3 percent, while futures on the Standard & Poor’s 500 index (^GSPC) were up 0.1 percent and those on the Nasdaq 100 index were up 0.3 percent.

Investors will also be turning their attention to the publication of the Federal Housing Finance Agency House Price Index at 9 a.m. Eastern time. The index provides the monthly average change in house prices across the country or a certain area, using data provided by Fannie Mae and Freddie Mac. The index is expected to nudge up to 0.8 percent in May, from 0.7 percent recorded in the previous month.

In addition, a number of major companies, including United Parcel Service (UPS), Altria Group (MO), Lockheed Martin (LMT), MGIC Investment (MTG), Wendy’s (WEN) will announce quarterly earnings before market hours. Altera (ALTR) and Broadcom (BRCM), along with Apple (AAPL), AT&T (T) and Electronic Arts (EA), will announce their earnings after markets close.

European markets were trading flat after climbing higher earlier Tuesday, as Asian markets rallied following recent reports from China indicating Beijing might take measures to support the country’s economic growth, and the Japanese government upgraded its outlook of the country’s economy for a third consecutive month.

The Stoxx Europe 600 index rose 0.1 percent, London’s FTSE 100 was flat, Germany’s DAX-30 was up 0.1 percent and France’s CAC-40 was trading up 0.05 percent.

In Asia, Chinese stocks led a rally in the region’s markets, with the Shanghai Composite index surging 2 percent while Hong Kong’s Hang Seng Index soared 2.3 percent. Shares jumped after several local media reported that Premier Li Keqiang, at a cabinet meeting last week, gave an assurance that the government won’t allow China’s economic growth to fall below 7 percent.

Japan’s Nikkei ended up 0.8 percent after the government said that the recovery in the world’s third-largest economy had turned self-sustaining, MarketWatch reported. South Korea’s KOSPI Composite index rallied 1.3 percent, Australia’s S&P/ASX 200 added 0.3 percent and India’s BSE Sensex was trading up 0.8 percent in late-afternoon trade.

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Market Minute: Ford Tops Latest Brand List; Goldman Profit Beats Forecasts

By DailyFinance Staff

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Big brand winners, and strong earnings from Goldman Sachs. Those and more are what’s in business news Tuesday.

The Dow industrials (^DJI) rose 20 points Monday and the S&P 500 (^GPSC) added two points — both edging further into record territory. The Nasdaq (^IXIC) gained 7.

Getty Images

What companies are being talked about the most around the water cooler? YouGov’s BrandIndex puts Ford (F) at No. 1, largely because of the automaker’s Focus model. It was followed by Amazon.com (AMZN), sandwich-maker Subway, the History Channel and retailer Lowe’s Cos. (LOW). And what about V8, the beverage that everyone belatedly remembers they could’ve had? It made No. 6 on the British market-research firm’s list.

AT&T (T) is rolling out a plan today to keep existing customers happy. Instead of the typical two-year mobile phone contract, it will allow customers to upgrade after just one year to buy the newest gadgets on the market. There are no upgrade fees and no down payments, but you will have to pay the full cost of the phone.

Coca-Cola (KO) reports flat quarterly earnings, and when you’re talking about Coke, flat is not so good. It said cool and wet spring weather in many areas hurt soft drink consumption.

But Goldman Sachs (GS) easily beat expectations on both the top and bottom line. The investment banker also sees improving economic conditions in the U.S.

After the closing bell we’ll hear from Yahoo (YHOO), the first of the big tech companies to report. Later in the week: IBM (IBM), Intel (INTC), Google (GOOG) and Microsoft (MSFT).

More than 5 million people a day wear uniforms from Cintas (CTAS) — including everyone working at McDonald’s (MCD) restaurants. Because of that, some see it as economic bellwether. But the company’s earnings still fell a bit short of expectations, and it issued a cautious outlook, citing the “uncertain” economy.

Investigators searching for the cause of the fire on a Boeing (BA) 787 Dreamliner last week in Great Britain are reportedly focused on the emergency location transmitter and its battery, made by Honeywell (HON).

And the executive search firm Heidrick & Struggles (HSII) is searching for a new boss — after its chief executive resigned.

Produced by Drew Trachtenberg


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Hike in Payroll Taxes Hasn't Halted U.S. Consumer Spending

By The Associated Press

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Spencer Platt/Getty Images


WASHINGTON — This year got off to a sour start for U.S. workers: Their pay, already gasping to keep pace with inflation, was suddenly shrunk by a Social Security tax increase.

Which raised a worrisome question: Would consumers stop spending and further slow the economy? Nope. Not yet, anyway.

On Friday, the government said consumers spent 3.2 percent more on an annual basis in the January-March quarter than in the previous quarter — the biggest jump in two years. It highlighted a broader improvement in Americans’ financial health that is blunting the impact of the tax increase and raising hopes for more sustainable growth.

Consumers have shed debt. Gasoline has gotten cheaper. Rising home values and record stock prices have restored household wealth to its pre-recession high. And employers are steadily adding jobs, which means more people have money to spend.

“No one should write off the consumer simply because of the 2 percentage-point increase in payroll taxes,” says Bernard Baumohl, chief economist at the Economic Outlook Group. “Overall household finances are in the best shape in more than five years.”

Certainly, spending weakened toward the end of the January-March quarter. Spending at retailers fell in March by 0.4 percent, the worst showing in nine months. And more spending on utilities accounted for up to one-fourth of the increase in consumer spending in the January-March quarter, according to JPMorgan Chase (JPM) economist Michael Feroli, because of colder weather.

Higher spending on utilities isn’t a barometer of consumer confidence the way spending on household goods, such as new appliances or furniture, would be.

Americans also saved less in the first quarter, lowering the savings rate to 2.6 percent from 3.9 percent in 2012. Economists say that was likely a temporary response to the higher Social Security tax, and most expect the savings rate to rise back to last year’s level. That could limit spending.

But several longer-term trends are likely to push in the other direction, economists say, and help sustain consumer spending. Among those trends:

Wealth Is Up

Home prices rose more than 10 percent in the 12 months that ended in February. And both the Dow Jones industrial average (^DJI) and Standard & Poor’s 500 (GSPC) stock indexes reached record highs in the first quarter. As a result, Americans have recovered the $16 trillion in wealth that was wiped out by the Great Recession. Economists estimate that each dollar of additional wealth adds roughly 3 cents to spending. That means last year’s $5.5 trillion run-up in wealth could spur about $165 billion in additional consumer spending this year. That’s much more than the $120 billion cost of the higher Social Security taxes.

Debt Is Down

Household debt now equals 102

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Phantom flying drone captures stunning, stable video

A new stabilization system for the Phantom remote-controlled flying drone helps it capture stunning landscapes and maneuver in tight spaces.

The two-axis Zen Muse gimbal from aerial videography company DJI allows a GoPro Hero 3 action camera to be mounted underneath a Phantom quadricopter made by the same company. The result is a camera that can be remotely controlled by the pilot and video that doesn’t suffer from the jitters and rockiness usually associated with drone footage.

To see the Phantom and new mount in action, watch a video on YouTube.

“We have all these people who have been buying Phantoms and trying to use them in these professional instances,” said Colin Guinn, CEO of DJI. “But because the camera is directly attached to the Phantom you have a lot of shake in your footage.”

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Source: FULL ARTICLE at PCWorld

Alcoa's First-Quart Profit Rises, Beats Wall Street Expectations

By The Associated Press

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Saul Loeb/AFP/Getty Images Alcoa CEO Klaus Kleinfeld gives President Barack Obama a tour of the company’s factory in Bettendorf, Iowa, in June 2011. The aluminum manufacturer Monday reported first-quarter earnings that beat analyst forecasts.

NEW YORK — Alcoa kicked off earnings season Monday by reporting a larger first-quarter profit than analysts expected, helped by strong demand for aluminum used to make airplanes and automobiles.

The company still sees demand for aluminum growing 7 percent in 2013, with gains cutting across many industries.

Alcoa Inc. (AA) is the first company in the Dow Jones industrial average (^DJI) to report first-quarter results. Because its products wind up in so many things, from cars and buildings to soda cans, investors study Alcoa’s results for hints about earnings at companies in other industries.

Alcoa said net income in the first quarter was $149 million, or 13 cents a share, compared with $94 million, or 9 cents a share, a year earlier.

Excluding special items, the company said it would have earned 11 cents a share, beating analysts’ forecast of 8 cents a share, according to FactSet.

Revenue fell to $5.83 billion from $6.01 billion a year earlier and was below the $5.91 billion that analysts predicted. Alcoa blamed lower aluminum prices and curtailed production in its European primary metals business.

Over the past decade, Alcoa has shifted more of its business away from mining and refining and into the production of parts for industry. The company is benefiting as airplanes and autos get lighter for better fuel efficiency by using more aluminum parts.

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Airlines have been ordering new planes to reduce their spending on fuel, the largest cost for many of them. That trend should continue for several years, making aerospace a growing aluminum market, chairman and CEO Klaus Kleinfeld said in a conference call with analysts.

U.S. auto sales are booming, too, as customers who put off purchases during the recession trade in their aging vehicles. In March, sales hit 1.45 million vehicles, the highest total since August 2007, according to Autodata Corp.

Alcoa believes that government fuel standards and customer demand for better mileage will push car makers to use more lighter materials like aluminum. Some drivers think heavy vehicles are safer in a crash — truck sales were a major factor in the strong March figures — but Kleinfeld argued that lighter cars can brake to a stop faster, potentially avoiding accidents.

Sales of aluminum for nonresidential construction is finally recovering in North America and will grow much faster in China, Kleinfeld said.

Alcoa released its earnings after the markets closed. Its shares rose 15 cents to close at $8.39 in the regular session. They fell 12 cents in after-hours trading.

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Americans More Financially Savvy Post-Recession, Survey Shows

By The Associated Press

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BOSTON — The frugality and investing discipline that the 2008 financial crisis imposed on Americans appear to have led to permanent changes in behavior on money matters, according to a survey by the nation’s second largest mutual fund company.

Spendthrift ways are unlikely to again become as pervasive as they were before the crisis, Fidelity Investments concluded Wednesday in releasing results of its “Five Years After” survey of nearly 1,200 investors.

Positive behaviors that appear to be now entrenched include saving more in 401(k) plans, paying down debt and taking greater care to invest wisely.

“These tend to be very sticky decisions, because you begin to budget and spend around a higher savings rate,” said John Sweeney, an executive vice president on retirement and investing with Boston-based Fidelity. “People are taking control of their financial lives, and control breeds confidence.”

Survey participants were interviewed over two weeks in February, nearly five years after the government-brokered rescue sale of Wall Street firm Bear Stearns to JPMorgan Chase & Co. (JPM). That event, in March 2008, is regarded as a tipping point for more the tumultuous upheavals that followed, including the September 2008 collapse of Lehman Brothers, which the government allowed to fail.

Housing prices plunged, unemployment spiked and stocks tumbled more than 50 percent from the market’s October 2007 high to its March 2009 low. It wasn’t until last month that the Dow Jones industrial average (^DJI) returned to its pre-crisis high.

Key survey findings include:

  • Fifty-six percent reported their financial outlooks changed from feeling scared or confused at the beginning of the crisis to confident or prepared five years later.
  • Survey participants estimated their household had lost 34 percent of the value of their total assets, on average, at the low point of the crisis. Thirty-five percent experienced what they considered to be a large drop in income, and 17 percent said at least one head of their household lost a job.
  • Forty-two percent increased the amounts of regular contributions to workplace savings plans such as 401(k)s, or to individual retirement accounts or health-savings accounts.
  • Fifty-five percent said they feel better prepared for retirement than they were before the crisis. However, among the group of survey participants who reported they continue to feel scared, just 34 percent said they’re better prepared for retirement.
  • Forty-nine percent have decreased their amount of personal debt, with 72 percent having less debt now than they did pre-crisis. Just 31 percent of those who indicated they’re still scared reported that they have reduced debt.
  • Forty-two percent have increased the size of the emergency fund they’ve established to meet large unexpected expenses. Among those self-reporting as scared, only 24 percent have a bigger emergency fund than they had pre-crisis.
  • Seventy-eight percent of those saying they’re prepared and confident said the financial actions they’ve taken are permanent …read more
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Investors Still Like Bonds, Even as Stock Market Surges

By The Associated Press

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Richard Drew/AP


Market pros call it the Great Rotation. That’s the long-awaited scenario when investors take their money out of bonds and sink it into stocks.

It was the buzzword this month when the Dow Jones industrial average (^DJI) reached a record high. The idea was that investors were confident enough in the economy to shed their financial crisis fears and leave the safety of bonds.

But it’s not happening.

Money keeps flowing into bonds. Industry consultant Strategic Insight says U.S. bond mutual funds have attracted $64 billion in cash in the first two months of the year, just below last year’s pace of $68 billion over the same period.

Stock mutual funds had net deposits of $76 billion through February, according to the consultancy. While that is up sharply from $14 billion a year earlier, the cash for stocks is not coming at the expense of bonds, according to more recent snapshots of investment flows.

Instead, investors are withdrawing from money-market funds, which are often used as a parking spot for cash, according to EPFR Global.

“The expectations of a big exodus from bonds are way overblown,” says David Santschi, CEO of TrimTabs Investment Research, a fund-tracking firm.

A stock market crash and recession have made bonds especially appealing since 2008, when the nation was in the throes of the financial crisis. The abundance of buyers has pushed bond prices up and sent yields lower, reducing interest payments to investors.

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Even with low yields, bonds will continue to attract retiring baby boomers and others who want reliable income for daily expenses. The yield on the 10-year Treasury note — a benchmark — is hovering under 2 percent. Other types offer higher yields. Investment-grade corporate bonds yield 3 percent and riskier “junk” bonds yield just under 6 percent.

Money-market funds, meanwhile, yield 0.02 percent.

Still, the Dow’s record surge is drawing more attention to stocks.

The blue-chip index broke through its all-time high March 5 and kept climbing. It’s up nearly 11 percent this year and 122 percent from its bottom in March 2009. The broader Standard & Poor’s 500 index (^GSPC) is up 9 percent and is close to breaking its own record.

Investors added $8 billion to U.S. stock funds and exchange-traded funds in February. And they’re putting in more cash this month, as $12 billion flowed into stock funds and ETFs through Tuesday, according to EPFR Global.

Bond funds, including ETFs, have pulled in nearly $8 billion this month.

Much of the money flowing into stocks and bonds has come out of money-market funds. About $32 billion has been pulled out of money funds this month, according to EPFR Global.

Withdrawals that didn’t …read more
Source: FULL ARTICLE at DailyFinance

5 Moves to Make Before the Stock Market Rally Ends

By Dan Caplinger

Workers hang a giant American Flag on the exterior of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, May 25, 2012. U.S. stocks rose, giving the Standard & Poor’s 500 Index its first weekly rally since April, as investors were lured by the cheapest valuations since November. Photographer: Scott Eells/Bloomberg

Filed under: , , ,

(Scott Eells, Bloomberg)

With the Dow Jones industrial average (^DJI) soaring to new all-time highs, investors are enjoying the new-found prosperity reflected in their brokerage statements. But it you want to keep those paper profits, now’s the time to start making some tough decisions. Otherwise, those gains could go up in smoke when the rally ends.

That moment may not come anytime soon, but if history is any guide, it’s wise to prepare.

The last time the Dow was at all-time highs was in 2007. After the early 2000 tech-stock bubble implosion (which sent the Nasdaq Composite (^IXIC) down more than 70 percent), the market rallied and, after a five-year run, appeared to have finally shaken off the shock.

Less than 18 months later, the Dow lost more than half its value — a plunge that it took stocks four years to recover from.

Millions of investors suffered huge losses that forced them to change their plans for retirement and postpone other life goals. Whether or not you were among them, you can still learn from their mistakes. Here are five things to do before the current rally ends.

1. Spread your wealth around, and then mix it up even more.

Having all your eggs in one investment basket greatly increases the risk of a major loss when a market rally ends. In order to prevent one particular investment from sabotaging your life savings, financial advisors recommend owning a variety of different investments in your portfolio. That way, you can survive even if one of your holdings plummets in value.

To get the full benefits of diversification, you should have portions of your money in stocks, bonds, cash, real estate, and other broad-based asset classes.

But even within those asset classes, you should further diversify among different individual holdings. Doing so will go a long way toward truly protecting yourself from massive financial harm when the market‘s advance comes to a halt.

2. Part ways with some of your winners.

Even if your investments are already diversified, the stock market‘s advance may have left you with more money in equities than you’re comfortable with. Back in 2007, many investors were surprised to find just how much risk they’d inadvertently taken on in their portfolios.

Rebalancing involves selling off some of your winning investments and putting the proceeds into investments that have lagged behind. By rebalancing, you sell high and buy low, which is always a good habit to get into as an investor.

3. Free up some spending cash for the market’s markdown madness.

When markets move straight up, being fully invested makes you the most money. But not having any additional cash to invest becomes problematic when a rally ends and new stock bargains start popping up.

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With stocks at record highs, …read more
Source: FULL ARTICLE at DailyFinance

The Dow's New All-Time High by the Numbers

By Alex Dumortier, CFA, The Motley Fool

^DJI Chart

Filed under:

We’re there! This morning, investors pushed the
Dow Jones Industrials Average
above its all-time closing high as well as its intraday record. As of 12 p.m. EST, the index is up 150 points, or 1%, to 14,278. Meanwhile, the broader
S&P 500
is up 1% to 1,542. Fittingly, the VIX index, Wall Street‘s fear gauge, is down 5%.

Breaking it down
The biggest percentage gainers in the Dow this morning belonged to “old tech” (
Cisco Systems and Hewlett-Packard), financials (American Express, Bank of America, and JPMorgan) and conglomerates (United Technologies and General Electric). However, the Dow is price-weighted, so the single biggest contributor to the index’s advance today is IBM, which is up about 1%.

The last time we were at these levels was during the heroic last gasp of a mortally wounded bull market. The U.S. financial system was teetering on the edge of a precipice that would ultimately engulf the global economy. It’s clear, with the benefit hindsight, that underlying fundamentals are sounder today than they were then, but it’s worth characterizing that observation.

The following graph, for example, displays the performance of the Dow Jones Industrial Average (blue line) between Oct. 9, 2007  and yesterday; U.S. gross domestic product (orange line), a measure of economic activity; and the Shiller P/E of the S&P 500 (red line), a long-term indicator of stock valuations:

^DJI data by YCharts.

In sum, while stock prices are flat (ex-dividends) over this period, economic activity has increased, albeit slowly, and stock valuations have come down nearly 20%. That’s a much healthier context for further stock-price gains, but risk is still present. The aforementioned Shiller P/E, which is calculated based on average trailing-10-year real earnings per share remains substantially above its long-term historical average. Investors need to stay alert.

The article The Dow’s New All-Time High by the Numbers originally appeared on Fool.com.

Fool contributor Alex Dumortier, CFA has no position in any stocks mentioned; you can follow him on LinkedIn. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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Source: FULL ARTICLE at DailyFinance