The Return Of The 30-Year Treasury: What It May Mean To You
Stocks were broadly higher on news of a large tender
offer by billionaire Kirk Kerkorian.
Kirk Kirkorian’s Tracinda Corporation is making a tender offer for 28
million shares of General Motors
(
GM |
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PowerRating) at $31. Kirkorian, 87, is buying
the shares “for investment purposes” and already owns 22 million shares; after
the tender offer he will own 8.84% of GM. Trader talk: will this accelerate GM’s
restructuring?
The Treasury Department is considering whether or not to reissue the
30-year bond. The decision will be announced at the August 3 meeting. If they
decide to go ahead with it, the bonds will be reintroduced in February 2006.
10-year rates moved up slightly.
Trader talk: 30-year fixed mortgages may be slightly higher. Adjustable rate
mortgages may become more popular. Some speculate that the reissue will be
good news for taxpayers and also that pension funds will be able to increase the
yield of their portfolios. The government stopped selling 30-year bonds in
October 2001.
An FDIC study said housing booms end in stagnation, not busts. Only
17% booms led to busts which were usually related to the local economy.
The ISM non-manufacturing index was 61.7 in April vs 63.1 March. Oil and gas
inventories rose more than expected. Oil traded below $50/barrel.
Nike
(
NKE |
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PowerRating) is pulling its shoes from Sears
(
SHLD |
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PowerRating)
stores.
IBM is reducing its workforce by 10,000 to 13,000. Job cuts will be
mostly in Europe. The company will take a $1.3 to $1.7 billion restructuring
charge.
Electronic Arts
(
ERTS |
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PowerRating) posted a lower profit–down 91%.
The Lazard IPO (LAZ) is pricing tonight; 30.5 million shares between
$25-$27.
Tomorrow, look for same-store-sales as well as analyst meeting from INTC,
QCOM, MU and SEBL.
Strong sectors were: Â Brokers
(
$XBD.X |
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PowerRating) +3.68%Â Â
Insurance
(
$IUX.X |
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PowerRating) +3.27%Â Â Gold
(
$XAU.X |
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PowerRating)
+2.83
| Dow | +127.69 | 10,384.64 |
| Nasdaq | +29.16 | 1962.23 |
| S&P 500 | +14.48 | 1175.65 |
The dollar was -0.53 at
83.99
Crude Oil was +0.63 at
50.13
Gold was +0.70 at 428.60
1.89 billion on the Nasdaq.
Market breadth was positive.
| NYSE | Issues | |
| Advancing | 2547 | Up Vol 2056 |
| Declining | 773 | Down Vol 1013 |
| 2.42 | 4.19 | |
| Nasdaq |
||
| Advancing | 2073 | Up Vol 1405 |
| Declining | 989 | Down Vol 403 |
| 1.68 | 2.33 |
Stocks in the News
Devon Energy
(
DVN |
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PowerRating) missed by 0.10.
Noble
(
NBL |
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PowerRating) beat by 0.28. Q1 profits rose 29%.
Maxim Integrated Products
(
MXIM |
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PowerRating) reported a higher profit, but
missed estimates.
Cigna
(
CI |
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PowerRating) beat by a wide margin.
Beckman Coulter
(
BEC |
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PowerRating) missed and warned.
American Tower
(
AMT |
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PowerRating) is acquiring Spectrasite
(
SSI |
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PowerRating) in
a $3.1 billion stock deal.
Brice Wightman