A Strong Yield For Templeton Income Fund and Euro Zone Stocks Dive As Debt Woes Mount

This mutual fund invests in a variety of government bonds. These are cash generators, although they typically have little upside for capital appreciation.

Templeton Global Income Fund is a closed-end investment fund that trades on the New York Stock Exchange.

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It first seeks assets with high current income, then considers capital appreciation. That means that your yield will be strong, but don’t expect to make much when you sell the shares. The fund has traded from 5.50 to 10.50 since its inception in 1988.

That could be well-suited for many income investors who don’t put a high priority on stock gains.

At least 80% of the fund is invested in income-producing securities such as debt of U.S. and foreign issuers. When Templeton looks abroad, it focuses on emerging markets.

Its top holdings are 4% and 4.75% bonds from Korea that mature in June 2012 and Dec. 2011, respectively, according to Morningstar. [Read the full article]

Investors sold off stocks in Portugal, Spain and Greece, and the euro plunged on Thursday as market fears over the fiscal problems of debt-laden southern members of the euro zone widened.

The head of the International Monetary Fund called for painful steps to cut huge fiscal deficits across Europe, saying no country should be under the illusion that it was possible to escape the financial crisis without paying the cost. [Read the full article]

A few leaders took out new highs, such as Inergy Holdings (NRGP), Perrigo (PRGO) and Estee Lauder (EL).

A four-day advance left Nu Skin Enterprises (NUS) up 11% for the week. One of four cosmetics makers on this week’s roster, the company on Thursday reported Q4 earnings well above consensus expectations.

But most others cocooned further into corrections or staged pullbacks to their 10-week moving averages — typical behavior during even brief market corrections.

The week dealt sharp blows to a number of leading stocks. Although their fundamentals still appear strong, the charts for MicroStrategy (MSTR), Spirit AeroSystems Holdings (SPR) and Citi Trends (CTRN) all suffered serious damage, wiping them off this week’s list.

A large portion of the remaining stocks are medical-sector issues. Medical stocks, particularly slow-growth plays like Health Net (HNT), are often considered defensive stocks. [Read the full article]

The dollar rose to a seven-month high against the euro on growing concerns over the fiscal health of debt-laden euro zone countries. That reinforced the selling that had returned to commodity markets on Wednesday after a two-session rise.

The 19-commodity Reuters-Jefferies CRB index — which counts U.S. crude oil as its main component — fell almost 3% to reach its lowest level since Oct 12.

Gold and copper also took big hits. Gold fell to a three-month low, while copper futures in New York slid to a 2 1/2-month bottom.

While the dollar was the prime factor for the declines, the selling was also caused partly by higher jobless claims, confirming that the world’s largest economy is not out of the woods yet.

“The underlying fundamentals are coming back to haunt us now, and oil is falling. Unemployment numbers were worse than expected and the euro came under pressure overnight,” said Gene McGillian of Tradition Energy. [Read the full article]

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