Precious Metals on the Rise Amid Economic Concerns
Gold rose for the sixth straight session this week hitting a new record high amid concerns over inflation and a weakening dollar. Gold rose to over $1,149 an ounce this week on the New York Mercantile Stock Exchange.
Meanwhile, the dollar continues to remain weak. While, the dollar rose this week against the Euro, talk of potential inflation has kept the dollar low relative to other world currencies.
Analysts say that investors always return to the security of precious metals when the economy is a concern. While the Federal Reserve has said that it will keep rates low for the near future, economists are aware of the potential for rising prices as the economy starts to grow again and this may warrant more Fed action.
In the meantime, gold investors who purchased before gold hit $1,000 an ounce are enjoying the record high. SPDR Gold Shares, the largest gold exchange traded fund, is also standing at the highest point since the summer of 2009, while records are being achieved in other precious metal funds, including funds invested in silver and copper.
Gold ended the week at $1,149; SPDR Gold ETF ended the week at $112.84.
Ann Taylor Profits on Cutting Costs
Ann Taylor reported strong profits and cost savings for its third-quarter this week. The women's suit and clothing retailer had earnings of $0.20 per share (excluding some after-tax costs), compared with earnings of $0.03 per share in the third-quarter of 2008.
Kay Krill, President and Chief Executive Officer, commented, "Our results for the quarter were a direct result of our strategy to maximize gross margin performance by tightly managing inventories, focusing on full-price selling and controlling costs. Today, we are a more efficient and effective company."
In addition to cutting costs, Ann Taylor has been working to reposition itself by offering more updated designs, as opposed to the classic black work suits and sweater separates that made the company famous. The company said that its lower-priced LOFT stores are resonating well with consumers who are looking for casual clothing and value.
Krill noted that Ann Taylor is testing out new styles with consumers to help it refine its new clothing lines. "Looking ahead, we expect to build on the product successes we've achieved to date and move forward on our objective of building sales momentum and profitable growth," said Krill.
Ann Taylor (ANN) ended the week up at $13.64.
Dell Declines on Disappointing Earnings
Shares of Dell fell this week as the PC maker disappointed investors with lower than anticipated earnings. Dell's revenue for the third-quarter was $12.9 billion, down 15% from one year ago.
Analysts say that Dell is struggling to compete against Hewlett-Packard and Apple in the PC market. While the PC market is improving, Dell appears to be losing market share to its competitors.
Dell completed the acquisition of Perot Systems in early November to expand its IT customer service. Dell's revenue results, not including results from Perot Systems, increased 2%. Integration of Perot Systems into the new Dell Services business is underway and consolidated financial information will be reported in fourth-quarter.
Michael Dell, Chairman of the Board and Chief Executive Officer said, "We are seeing improvement in overall underlying IT demand that is continuing into the fourth quarter." Dell expects seasonal demand improvement in its consumer business and anticipates fourth-quarter revenue to improve over the third-quarter.
Dell (DELL) ended the week up at $14.33.
The Dow started the week at 10,070 and ended at 10,318. The S&P 500 started the week at 1,093 and ended at 1,091. The NASDAQ started the week at 2,168 and finished at 2,146.
Long-Term Mortgages at Lowest Level
Freddie Mac reported the 15-year mortgage at the lowest level ever recorded in its weekly mortgage survey this week. The 15-year FRM averaged 4.32%, down from last week when it averaged 4.36%. One year ago at this time, the 15-year FRM averaged 5.73%.
The 30-year fixed-rate mortgage (FRM) averaged 4.83%, down from last week when it averaged 4.91%. Last year at this time, the 30-year FRM averaged 6.04%.
"Interest rate on 30-year fixed-rate mortgage loans fell for the third consecutive week to the lowest since the week ending May 21st, while 15-year fixed rates were the lowest since our records began in 1991," said Frank Nothaft, Freddie Mac Vice President and Chief Economist. "Low fixed rates throughout the third-quarter prompted an estimated $1.1 trillion in refinancing activity, saving homeowners about $10 billion in aggregate monthly payments over the first 12 months of their new loan."
Nothaft noted that new home building has shown weakness for the past few months and homebuilder confidence is at a low level. The National Association of Home Builders reported residential construction easing by 10.6% between September and October. This number was largely the result of a decline in the construction of new condominium and apartment buildings.
The money market fund finished this week at 1.04%. The 1-year CD finished at 1.57%.
Stocks - Nordstrom Falls as Demand for Luxury Goods Decline
Bonds - Treasurys Reach High Following Auction
Interest Rates - Long-Term Mortgages Hit Lowest Level
Stocks - Whole Foods Turns Corner
Bonds - Treasurys Fall on Fed Comments
Interest Rates - Long-Term Mortgages Hit New Low
Stocks - American Airlines Gains One Union's Support
Bonds - Economy Is Up, Treasurys Are Down
Interest Rates - Mortgage Rates Rise
Stocks - Whirlpool Profits Spiral Down
Bonds - Treasurys Down on Rate Concerns
Interest Rates - Mortgage Rates Flat
Stocks - GE's Profit Plunges
Bonds - Long-Term Treasurys Up, Short Term Treasurys Down
Interest Rates - 30-Year Fixed Rate Mortgage Still Below 5%
