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US stock market daily report (June 26, 2012, Tuesday)

Contributed by Millennium Traders

Ahead of the upcoming 4th of July holiday in the U.S. next week, good news for travelers in the continental U.S.A. revolves around a drop in regular gasoline below $3 a gallon. On Tuesday according to AAA, the average U.S. price for a gallon of regular gasoline nationwide stood at $3.397 - down 10 cents from a week ago - and the price decline has accelerated in recent days. For 14 days in a row, the price at the pump has dropped to the lowest national average price since January 27. Every state in the continental U.S. is below $4 for gasoline as of last week, per AAA. The cheapest gas prices are in the Southern states while the highest prices per gallon are in the West Coast states. In nearly a year and a half, South Carolina has become the first state to see its average gasoline price drop below $3 to $2.998 a gallon this week. Alabama, Mississippi and Tennessee see their price per gallon approaching the $3 a gallon mark. The declines in retail gasoline prices coincide with a steep drop in oil futures prices CLQ2 -0.49%, which have lost nearly 20% for the year so far.

Interior Secretary Ken Salazar said Tuesday, a new five-year drilling plan is expected to be released by the Interior Department in coming days and will include two lease auctions in the Arctic Ocean, north of Alaska. The Obama administration is poised to expand oil drilling in the Arctic Ocean, risking criticism from environmental groups that oppose drilling in the region's icy waters because of concerns over potential oil spills. The release of the plan comes as Royal Dutch Shell appears close to securing permits to drill exploratory wells in the Beaufort and Chukchi Seas. "It is highly likely that the permits will be issued," Salazar said on a call with reporters. In 2008, Shell filed for permission to drill the wells but has been hampered by regulatory hurdles along with, challenges from environmental groups and native Alaskans. First proposed last November, the five-year drilling plan identifies which federal waters the U.S. government will put up for sale between 2012 and 2017. The bulk of the oil-drilling lease auctions will be held in the Gulf of Mexico, where most U.S. production takes place. Salazar said lease auctions will be conducted in the Chukchi and Beaufort in 2016 and 2017, respectively. The total plan will make 75% of recoverable oil resources available. Salazar said his agency will take steps to make sure the areas made available for oil drilling in the Arctic take into account environmental sensitivities and native uses.

News Corp. (NASDAQ:NWS) was hosting a 8% gain into mid-afternoon trading after the media giant announced it is considering splitting itself into two separate companies, one encompassing its film, entertainment and television operations with the other its newspaper, publishing and education assets. News Corp. itself said only that it is considering restructuring into two separate, publicly traded firms.

S&P/Case-Shiller 20-city composite index released on Tuesday showed a gain of 1.3% with 19 out of 20 cities registering gains, to take the year-on-year drop from 2.6% to 1.9%. According to the data, U.S. home prices rose during April for the first monthly gain since autumn 2011. Only hard-hit Detroit took a step backward with a 3.6% reversal. In Atlanta where prices were 17% below year-ago levels, reeled in a 2.3% monthly gain. San Francisco hosted a 3.4% gain.

The Conference Board reported Tuesday that U.S. consumer confidence has declined for a fourth month, with gloomier views in June on future business conditions and income. In June, the consumer-confidence index fell to 62, striking lowest level seen since January, compared with a revised 64.4 in May with prior estimate at 64.9. "If this trend continues, spending may be restrained in the short-term," said Lynn Franco, director of economic indicators at the Conference Board, a private research group. Consumers' views on the present situation rose in June. Franco said the data suggest that there may be "little change" in the pace of near-term economic activity. Confidence readings are generally at least 90 when the economy is growing at a good clip.

According to Redbook Research's latest indicator which was released Tuesday, national chain store sales edged up 0.4% in the first four weeks of June from May. The Johnson Redbook Index also showed seasonally adjusted sales for the period were up 2.3% from 2011, compared with a 2.9% targeted gain. Redbook said both department and discount stores saw softer sales following Father's Day. The slower pace reflects a normal seasonal lull as more people enjoy the outdoors instead of shopping during the summer months. Sales for the week rose 1.9% year-over-year.

According to a monthly report from Freddie Mac (OBB:FMCC), mortgage delinquencies on multifamily homes continued to rise in May from April, while single-family home delinquencies declined. Multifamily delinquencies rose to 0.26% in May from 0.25% in April while delinquencies on single-family homes slipped last month to 3.5% from 3.51% in April. Freddie Mac's report additionally showed that its total mortgage portfolio dropped at an annualized rate of 9.4% in May to $2.016 trillion. Freddie Mac's performance has lately begun to improve as it sets aside less money to cover potential credit losses.

Apollo Group Inc. (NASDAQ: APOL) was hosting a gain of 9% into mid-afternoon trading a day after the company reported financial results for Q3 that ended May 31. The for-profit education company that runs the University of Phoenix and Apollo Global, projected full-year results in line with Wall Street estimates. Late Monday the firm reported they earned $1.20 per share - beating estimates of 97 cents - after adjusting for restructuring costs and other items. Earnings per share in Q3 2012 dropped nearly 25% from previous quarter earnings of $1.51. The decline in earnings was largely due to a decrease in revenues, which slowed by nearly 9% in Q3. Revenue was $1.13 billion, down from $1.24 billion during same period in 2011, while analysts had been estimating a figure of $1.12 billion. Principally due to lower enrollments, the decrease in revenues was primarily driven by a 9.1% drop in University of Phoenix's revenues.