Down stocks on last day of the year

Gloomy day, stocks down on last day of the year. Dow declined 101 but decliners only beat advancers by 20%. NAZ slipped 22. New 52 week NYSE lows dominated news for me, over 264 on the list. Because I don't type well, here are a few symbols of stocks I recognize on the list: C, WM, F, BAC, CC, AMD, S, WB, WYE, MAT, LIZ, ANN, VFC, and on & on. This includes banks & retailers plus clothing, drugs, cell phone providers. Groups I follow saw financials up, REIT's down while junk bond funds muddled along.

Dow started at about 12½ & ended about 700 (or .7) points higher. As said last time, the second half saw a bumpy ride. Tomorrow I'll try to get in a review of the year

Stocks closing 2007 on a down note

Stocks pulled back on the last day of 2007. Volume is light but decliners outnumber advancers 2-1. A lot of NYSE stocks are hitting new lows:

new highs 24
new lows 223

On the new lows list look for: Citigroup (C), Washington Mutual (WM), Macy's (M), Ann Taylor (ANN), etc. Banking & retail remains very weak.

The Dow had a great first half, but after reaching new highs early in the second half of 2007 flattened. For much of the last 6 months it has been kicking around the mid 13s, going nowhere. It probably will continue this pattern (at best) into 2008.

Markets mixed following negative housing news

Stocks were essentialy even, little changed & advancers equaled decliners. Negative housing news continues. That took minds off sluggish retail sales & credit crunch worries.

For the month, Dow is trying to eak out a gain. It's slightly under water. Mon, the last day, will determine the outcome in what will be the worst quarter in a few years. Have a good weekend.

New home sales plunge in Nov

Stocks started out on an up tone but are holding about even, although advancers are ahead of decliners 2-1. New home sales declined 9% last month to the lowest level in 12 years. Gas prices are back to $3 a gallon & forecasted to go up 10-20% by spring. Crude oil is over 97 & the Treasury bond yield declined to 4.10% as bond prices rose. Trading in stocks remains light, chances are stocks may slip by the close. The new year will be starting with a bunch of grim statistics, something to think about.

I'm adding graphics. On the right is market data on DIA (it emulates the Dow Jones Industrials) & stocks I follow, statistics supplied by SeekingAlpha. In addition, on the street I was given a copy of the Wall Street Journal. To check their website, click on their name.

Markets decline on Bhutto assassination & durable goods orders

Stock markets pulled back on negative international news & weak durable orders data. Dow declined 192, decliners outnumbered advancers more than 3-1 while NAZ was down 48. Treasury bond yields declined 8 basis point to 4.20% (bonds found many buyers). Banks & REIT's sold off while MLPs held about even after their nice run up in recent days.

The early buzz on retail sales is pretty ugly. They're talking about the worst season in 5 years. Just looking at ads in the papers, the stores appear to be pressing hard for sales gains spelling lower margins on sales. Housing remains in a slump & the mortgage mess continues. Citigroup (C) is widely expected to cut their dividend to keep more cash on the balance sheet. This month the Dow is struggling to record a gain. Today it's touch & go.

Stocks decline after Benazir Bhutto Assassination in Pakistan

The assassination of Bhutto in Pakistan brought out sellers today. Dow is down 139, decliners are ahead of advancers almost 3-1 and NAZ is down 31. The killing raises concerns about oil, a lot comes from this part of the world. Oil is up 1.16 to 97.13 & the Treasury bond rose (flight to safety) reducing it's yield from 4.29 to 4.23%. Not helping was the report for durable goods, up only 0.1% (below expectations of a 2.2% figure).

Banks & REITs were weak among the many losses. The MLP index pulled back 2 points to 300 after a big run up in the last few days. Volume continues low. Tax loss selling for individuals is over, one good thing in this market.

Little movement in stocks, but plenty of retail worries

Stocks hardly moved in very light trading, many investors & traders were away on holiday. Dow was essentially even with advancers equaling decliners, but NAZ was up 10. Tech looked good today. Target (TGT) & Macy's (M) declined by more than 1 each. Retail sales were not strong & margins look to be weak, investors worry final numbers may not be pretty. The next 3 days should feature light volume. Junk bond funds & REIT's pulled back while MLPs were up (less affected by tax loss selling). At least tax loss selling should be over although year end portfolio adjustments (i.e. selling) is an unknown always out there.

Poor retail sales, stocks pull back

Stocks declined on poor retail sales. Dow is down 40, decliners ahead of advancers 3-2 and NAZ is down 9. Retail sales came in sluggish at best, pretty much in line with expectations. Target (TGT) announced it expects lower same store sales in Dec, down 1.45. Another big retailer, Macy's (M) was off 1.67. Master Card said holiday spending rose a modest 3.6%. Not good. Repayment of credit card debt has slipped in recent months. The home mortgage mess continues. And oil is back over $95. But volume continues light as many are away.

Big Rally Day

This was some kind of big rally day. Dow was up 99 but advance/decliners were up almost 3-1 (sort of medium for a rally day). I guess sellers were away holiday shopping, buyers were the only ones around. The MLP index (Master Limited Partnerships) was up 5 (up more than 8 in two days). REIT's were up nicely. Even junk bond funds were up, maybe tax loss selling is finished for them. But this was a holiday shortened day, volume was not heavy. The rest of the week will be up if the sellers remain away. However, fundamental problems remain in the US economy.

I sense retailers are pressing hard for sales. Good for shoppers, not for them. They are giving many discounts which will probably continue. Sales should be up with margins down making for not so good results. Housing remains in the dumps and credit crunch is not over. If this proves to be an up week, enjoy. We all need them.

Happy Holidays to ALL!!

Merrill Lynch rally

The rally today is due to Merrill Lynch, not Santa Claus. Asian (4 markets including Japan were closed) & European markets were up in light trading. Rally enthusiasm extended to NY. Dow is up 88 & advancers beat declines almost 4-1 on light volume (as in foreign markets). Interesting that new lows beat new highs 99 to 88, not a happy time for every investor.

The only major news item is Merrill Lynch (MER) is getting an investment of over $6B from Singapore's Temasek Holdings & U.S. money manager Davis Selected Advisers, to help it through it's financial crisis. The news came out last week, MER is down fractionally.

The rest of the week should be quiet.

Happy Holidays again

Happy Holidays!!

I also like Bassets. These guys wish everybody a joyful holiday season.

Big up day!!

Dow Jones bounced in a sideways fashion until today. It gapped up on the opening, today's 200 point gain gave it a 1% gain for the week. Not bad. Even banks did well today. The big ones I follow were up a good 1% each. But Washington Mutual (WM) was down. The largest S&L in the country is being investigated, sounds bad. The stock has cut the dividend sharply, 14 is it's lowest price in 11 years. Countrywide (CFC), still below 9, the country's largest owner of mortgages, is also being investigated on many fronts.

Next week should be good for the markets, time for the year end rally. Can't wait to see!

Walgreen brings out buyers

Walgreen (WAG) brings out buyers. Walgreen reported earnings ahead of estimates, they're up $2.72. I always liked them, among other things, my mother was a big customer. They're a member of the S&P 500 Dividend Aristocrats, only wish they had a nicer yield. Circuit City is the leading decliner, down $1.83. Dow is up 209, but advancers beat decliners "only" 3-1. Now traders will decide what to do in the next 1/2 hour when closing out their options.

Research in Motion & Merril Lynch reports send stocks higher

Research in Motion (RIMM, up 12) & Merrill Lynch (MER, up $1.50) reports brought out buyers. RIMM (maker of the BlackBerry) had a great third quarter and MER is expected to get a $5B infusion of capital after facing large write downs from losing bets on subprime mortgages. The investment is expected from Singapore state-owned investment agency, Temasek Holdings. I still remember their old ads, "Merrill Lynch, Merrill Lynch is bullish on America!" It turns out those ads were made in Mexico.

Dow is up 153, advancers are 4-1 ahead of decliners and NAZ is up 31. NYSE had record volume in the first 1/2 hour due to "quadruple witching" marking the simultaneous expiration of contracts for stock index futures, stock index options, stock options & single stock futures. The Treasury bond yield is 4.11%, little changed in recent days.

Circuit City (CC) reported a larger than expected loss, down $1.40. With witching and going into the end of month (also year end), the rest of today's market is up in the air.

Another day of sideways trading

Another sideways day, not a lot happening in the averages. Individual stories were interesting. Research in Motion (RIMM, the maker of the BlackBerry)) reported 3rd quarter profits more than doubled, up 5. Master Limited Partnerships (MLPs) Alerian index was down 2 , on it's low for the last five months. They're testing! Banks were weak for the usual reasons. Bank of America (BAC) is hovering just below it's critical 42 level. Testing again! Countrywide is under 9, same reasons there. Interesting fallout from the bad loan mess at banks, SunTrust (STI) sold about 10% of it's almost 50MM Coca Cola shares, it's held for almost 90 years, to protect investors of 2 of it's funds. Coke was down 57¢ & SunTrust was down $2.40. Ugh!! Year end is approaching but with uncertainty about loans, the economy, inflation, the FED, etc. being so high, I think this market will continue in Jan.

Same old story

Stocks slipping & sliding again. The Dow started out up 50, sounds good. But it has been sliding to where it's down 30, decliners are beating advancers 2-1. NAZ is up 10, helped by Oracle's (ORCL) earnings announcement after yesterday's close. They're up 1.39, nice gain. Today Bear Stearns (BSC) reported it's first quarterly loss, but it was less bad than had been feared. They're down only 1.39. FedEx fell 1.22 after posting a 6% decline in quarterly earnings due to high fuel costs & slowdown in the US economic. What's new?

Dow has been kicking around the low end of the 13-14K range all month. This range bound behavior probably will continue in the final days of Dec.

Asian markets mixed

Asian markets are mixed following that kind of day here. Dow futures are down 16, an essentially even signal for tomorrow here. I get deluxe cable service which includes CNBC Asia & Bloomberg TV giving stock market's performance during our overnight period. They just reported that Shanghai market has almost doubled this year. Their index is 5000, up 2300. Of course it is down from over 6000 two months ago. The US imports roughly $300B net imports yearly. This is a very large & fast growing economy. Many US businesses are looking to expand their presence in China. That spells growth.

Mixed up day again

This was another see-saw day. The markets ended up mixed, after ups and downs during the day. The Morgan Stanley (MS) news was important, showing that foreign investors, especially from Aisa & the middle east, are willing to invest in the US. After the close, Oracle (ORCL) reported earnings beat estimates. That may give a lift to the markets tomorrow when buyers can not get excited but sellers are not panicking. The Dow continues kicking around the low 13's. Just 6 days trading days left in the year, only 3 for tax loss selling.

MLPs

This year I learned about master limited partnerships & like their businesses. Below is the graph of the Alerian index which contains over 50 partnerships. Notice the fairly flat line centered around 300 since Aug, however since early Nov it has been slipping at a slow pace. It looks like it wants to test the closing low of 291.

Mixed up stocks

Stocks are mixed although decliners lead advancers almost 2-1, nothing dramatic. Investors were disappointed by Morgan Stanley's larger than expected quarterly loss of $3.6B (down from a profit of 2.2B last year) but encouraged by China's $5 billion investment in MS. Morgan Stanley had to write down $9.4 billion (remember when that was a big deal?) from bad bets on mortgage loans, the stock was up 1.57. Even in tough economic times, US firms are increasingly finding buyers by government agencies overseas, Citigroup (C) recently sold $7.5 billion in shares to Abu Dhabi Investment Authority. Expect more of these type deals in the future.

Crude oil supplies dropped more than expected last week, oil was up 1 to over 91. Ugly stories keep coming out about the mortgage mess here which affects banking institutions all over the world. Let's see how this negative news, tax loss selling and year end adjustments play out.

Markets recover by end of day

Stocks rebounded in the afternoon. Dow ended up 65, advancers beat decliners 3-2 & NAZ was up 21. In the afternoon the European Central Bank's $500B loan & profit gains at Goldman Sachs and Best Buy looked better to the market. Best Buy (BBY) ended up 48¢ while Goldman (GS) was down "only" 7. Go figgah! Problems such as credit crunch, terrible housing market, sluggish retail sales & high price oil remain.

Bank of America (BAC) remains just under 42, a sensitive point in recent years. It's still trying to make up it's mind which way to go.

Down again

Early this morning I turned on Bloomberg TV to find Dow was up 99 in pre-market trading, sounds like an up day. Not so far. Dow started with a nice gain but fell to down 54. Advancers are ahead of decliners about 3-2 & NAZ is down 12. The Treasury bond yield declined to 4.10% (defensive buying of Treasuries). Oil slipped back to 89, not much help for the stock market.

Big news items are European Central Bank will issue of $500B in bonds for help with the credit crunch plus profit gains at Goldman Sachs (GS) and Best Buy (BBY). Unfortunately Goldman Sachs is down 8 while Best Buy is down 1 (down 2 earlier). They're worried about the quality of Goldman earnings & Best Buy has a confusing picture about better results which are only so-so. Housing starts fell 4% to the lowest level in more than 16 years & building permits fell 1.5%. This news brings out sellers.

Tax loss selling is punishing stocks selling near their lows. Housing related, REIT's, junk bond funds, etc. keep slipping. MLPs are down from mid year highs, but have stayed in a narrow flat range for a few months (310-290). Now they're testing the low end of the range. Bank of America (BAC) is below 42, a level that had support for over 3 years. They may see more selling. Tough markets provide opportunities to buy beaten up stocks at attractive prices. Now is the time for homework

Stocks keep slipping

Stocks down again. Dow declined 173, decliners beat advancers 4-1 and NAZ was down 61. Ouch! Pretty much the same story. Caterpillar (CAT) was downgraded by Morgan Stanley & slipped 2.23. Retail sales are forecasted to come in with gains of 4-6% depending on who you read, so-so. Plenty of economic worries to keep the market nervous. Since this is a period pre holiday period, these conditions may drag on for the rest of the week.

Happy Holidays!!

Happy Holidays brings a picture of joy!!




OK the picture is a little old, but an excellent one. Maybe I feel that way because I took it. Look for the mother Bichon under my friend's arm plus 4 puppies in front. Now the puppies are in their middle years. My friend still has the mother & one of the four.

They're all saying: HAPPY HOLIDAYS!!

Declines continue

Dow is down 78, decliners beat advancers 5-2 & NAZ is down 33. Oil slipped to 90 and the long bond yields 4.2% or down .03%. NY is following declines in Asian & European markets. Credit crunch worries and the ability to save are keeping buyers away. Interestingly the dollar has strengthened against foreign currencies in the last couple of weeks, i.e. the Euro pulled back to $1.43 & the yen is now over 113.

In corporate developments, Ingersoll-Rand (IR down 4.50) is buying Trane (TT up 8.50). It's nice to see some corps have cash to buy other corps. Leveraged buyouts, so popular earlier this year, are pretty much history today.

Retail sales seem to be coming in so-so. Online retailers are now maturing, rapid growth rates are diminishing. Stores are probably doing OK but not great. Cold weather in the east will help clothing sales, but the remaining business may be nothing special. Cold weather hurts home sales which don't need more problems.

Asian weakness

Damage in our markets on Fri is pulling Asian markets broadly, down 1-3%. They're worried that the FED might slow rate cuts after inflation data reported last week. Dow futures down 52 already, looks like a weak opening tomorrow morning a few hours away.

Down week again

Tax loss selling or the tough economy gave us another down week. Junk bond funds & REIT's declined, tax loss selling may have contributed. The Alerian MLP index is hanging in there flat at 295. I don't watch the S&P 500 Dividend Aristocrats specifically, each one has a different story. However Coca Cola (KO) & Pepsi (PEP) are included, they reached new 52 week highs. Other housing related ones like Masco (MAS) & Stanley Works (SWK) were down. This should be another tough week given the underlying news stories about credit crunch, declining housing & retail sales not to mention high oil prices. Have a Diet Coke to relax!

Out of the gate on Mon AM - Australia, New Zealand & Tokyo stock markets are down - Asian markets are set for a weak start after Fri in NY.

Grrr, rough week again

Another rough week. Dow dropped 178, advancers beat decliners about 4-1 today. Looks like it dropped about 300 this week. I think traders read my blog this morning & sold off. They are worrying abut the FED's ability to cut interest rates with threats of inflation. Banks had a bad week as did REIT's & housing related stocks. However MLPs index is pretty much glued to 295 although some are doing better than others. Coke (KO) and Pepsi (PEP) reached 52 week highs, that's where the money is going.

I think Dow will be testing 13K next week, i.e. down. Bank of America is testing 42. I'm not a big technical guy, but hard not to notice. That's been it's floor in the last 3 years. The year prior, that was roughly it's ceiling. Next week we'll find out if goes thru the floor.

My links

While the market is down, I'll give a plug to 2 links: Joe got me started & keeps me updated on MLPs at limitedpartnerships and I also like stockblogs. Check them out, good to keep busy by studying in tough markets.

Inflation worries, stocks down

Inflation worries, that'll do it. The Dow is down 67 & decliners outnumber advancers 2-1, but no big declines. NAZ is only down 3, oil pulled back to 91.50 & the Treasury bond yield is back at 4.23% (up almost 50 basis points from a couple weeks ago). Nov CPI index was up .8% while core inflation (excluding energy & food) was up .6%. Both are bigger numbers than expected raising concerns about he FED's ability to lower interest rates.

Citigroup (C) said, get ready for this, "it plans to move assets from seven 'structured investment vehicles' onto its books and put up $49 billion to help the SIVs repay their debts." Does anybody know what that means? That's sort of assumed to be "good" by the experts, Citi's up 45 cents, OK! I guess the idea is, what's a few billion among friends? Moody's cut Citi's credit rating last night because Citi is straining it's finances. Their dividend is in question. Other banks aren't much better off, credit crunch problems drag on.

Stocks mixed (up)

Stocks ended mixed. They pulled back out of the the gate this morning but Dow finished up 44 while NAZ & S&P500 were essentially even. Decliners beat advancers 2-1, that's a down day. Wholesale prices of 3.2% touched off inflation fears partially overshadowing a strong (3.2%) increase in retail sales last month. Banks rebounded in the last hour reducing their losses but were typically still down about 1%. Honeywell, a Dow company, was up 3 after an optimistic outlook for next year.

Credit crunch seems to be one long word these days, there are still plenty of problems out there. Housing remains soggy. But the markets aren't ready to test the low end of the trading range (13-14K) they've been in since July.

Stocks decline on mixed economic data

Stocks down after mixed economic news. Dow was down 70, decliners ahead of advancers better than 3-1 while NAZ pulled back 23. Wholesale prices spiked up 3.2% & there was more uncertainty about plans to ease tightness in the credit markets. However retail sales were up 1.2%, the largest gain in 6 months. Worries about price increases may give the FED thoughts about being careful when lowering interest rates. Plus the plan by the FED & other central European banks to combat what they describe as elevated pressures in the credit markets is causing a lot to scratch their heads, i.e. more uncertainty.

Dow	13,403.50	-70.40	-0.52%

Financials continue on their bumpy road. Washington Mutual (WM), Citigroup (C), Countrywide (CFC), Bank of America (BAC), JP Morgan Chase, (JPM), Wells Fargo (WFC), Wachovia (WB) are all selling off today. Countrywide, the nation's largest mortgage lender, has a ton of problems. Today the Attorney General in Ill. announced an investigation into their lending practices. Their stock is back below 10, yielding 6% assuming the dividend continues.

Meanwhile oil pulled back to 93, still quite high. The long Treasury bond yield is up to 4.14% (bonds are being sold). It looks like the next 2 weeks will be bumpy for stocks if not down & I have a feeling Jan will not give us the traditional rally many expect.

Asian markets down

The major Asian markets (China, Hong Kong, Japan) pulled back continuing the weak performance in the US. I forgot to mention before, oil is back over 94 as supplies in US were lower than expected. Cold weather does that. Asian markets are also big buyers of oil.

Coca Cola (KO) was up again today. This is a stock in my IRA, I keep my eyes on it. Coca Cola was up while banks were hammered, telling you were money is flowing (sort of flight to safety). The 10 year treasury yields 4.08%. I think tomorrow will be another tough day in the markets.

Up, down & back up (a little)

This was some kind of day. The Dow rallied with a 272 point gain out of the gate. Then it pulled back to a 100 point loss but rallied at the close to end with a 41 point gain. Advancers equaled decliners. OK. The news from the FED about arranging liquidity with other central banks caused the market to rally. Then the markets tried to figure out what it really meant & if it would do any good. Banking news, all negative, started having it's effect on the markets causing the declines. Banks have been investing in complicated new loan products we don't understand. Given the billions that are being written off day after day, it appears they don't understand these products either. I still like financials, especially banks, but it looks like it's not a good idea buying these stocks before they get their problems sorted out (i.e. in the future).

There was good news. ATT (T) had great news yesterday. Another Dow, MMM (MMM) today had a favorable announcement about it's future. But rough times for banks is affecting the entire market.

Pullback time

Stocks are pulling back. Dow is up only 41 & advancers over decliners has fallen to 2-1. Maybe negative words from the major banks are sinking in.

Stocks like new FED plan

Stocks were up nicely after the FED announced a plan to work with global banks to prevent a financial crisis. Dow is up 155 , advancers beat decliners 3-1 and NAZ is up 43. All that sounds pretty good, except.... Bank of America (BAC), Wachovia (WB), PNC Financial Services (PNC), Sallie Mae (SLM), you get the idea, all announced much bigger provisions for loan losses not to mention dreary outlooks. In an up day, they're each down 1-2. I really like BAC because they are in the S&P Dividend Aristocrats group but the idea of accepting a very bumpy quarter or two is unnerving to say the least. Banks are the backbone of the economy. When they are doing badly, it doesn't speak well for the rest of the economy.

Disappointment

Disappointment is an understatement. After the FED cut the funds rate by "only" ¼ point, the markets sold off big. Also there were not the comforting words in their statement investors were looking for. Dow was down 294 and advancers beat decliners more than 5-1. I think they read my blog and wanted to prove me wrong, so they decided on just ¼ point cut. Bonds rose sharply, reducing their yield to 3.99%.

Tomorrow morning will probably see a big selloff first thing. After today's meeting, the rest of the year could see a lot of selling. In addition, tax loss selling may become more significant. This is the time to line up value stocks & look for buying points at lower prices.

Stocks mixed ahead of FED meeting

Stocks are mixed although decliners lead advancers 3-2. Everybody's waiting for the FED announcement on cutting interest rates. Freddie Mac (FRE) said their losses will be a good $6-7B worse than thought (down 2). H&R Block (HRB) is down a little, still trying to deal with huge losses on their mortgage portfolio. Washington Mutual (WM), the country's largest S&L, invests primarily in mortgages, sold $2.5B in stock which will add equity to the balance sheet. Can you spell "uh-oh?" There is some good news. AT&T (T) announced a big dividend increase, they are optimistic about the future making my friend happy. Now she can buy more goodies.

Hang in there. In a couple of hours we'll hear from the FED.

Asian markets up

Asian markets are up roughly 1/2 percent betting the rate cut tomorrow will be 1/4 point.

FED meeting brings out buyers

The FED meting tomorrow brings out the buyers today. The Dow was up 100 while NAZ was up 12. Advance/decline ratio was almost 2, not very exciting on a major up day. Volume was a little light, again fairly typical on the day before a meeting. They are expecting rate cuts for Fed Funds & the discount rate with hopes the Fed Funds rate will be cut ½ point. The FED seems anxious to please, I'm expecting the bigger rate cut. Largely gone unnoticed, the Treasury bond has fallen back raising the yield to 4.15% up 30 basis points from just a few days ago. Maybe some of that money has been going into stocks. About all we can do now is wait & see how the stock market plays out tomorrow.

In terms of bargains, MLPs have been trading flat for a few weeks. Nothing wrong, that's the way it is. They have nice yields & generally are quick to raise distributions. They are tax efficient but all represent tax hassle. Bargain hunters might take a look.

Keep throwing darts

It looks like all you have to do to make money is throw darts. That is working today. Dow is up 97 & NAZ is up 14. Advancers are ahead of decliners better than 2-1, not so great in today's market. Stocks I watch are all up nicely. Obviously the rate cuts tomorrow are bring out buyers from the woodwork today. Last week the market was up nicely although banks, MLPs, REITs & junk funds were flat at best. Maybe tax loss selling held them back.

UBS is writing off $10 billion in subprime loans, they're up 1. McDonalds (MCD) report same store sales up 8% last month with much of the gains from overseas. They're up 1+.

A big gain tomorrow will push the Dow near 14K, near it's record from reached a few months ago. For my money, that's too much too fast. But the Dec rally is in full swing so enjoy it.

Happy Holidays

Now you know I like beagles. When I was a kid, we had a beagle. They are cute. Even my mother got to like the dog, putting it's picture first in her wallet. This picture was saved from years ago & continues to be one of my favorites.





The puppies send their wishes for:

Happy Holidays!!

Quiet day

Stock averages barely changed by the end of the day. Advancers were a little ahead of decliners. Traders are waiting for the FED meeting on Tues, there probably will not be a lot happening on Mon. The bet is ¼ point rate cut, but I think it will be ½ point to make the financials happy. The Treasury bond yield rose to 4.12% as bond sellers cashed in profits. I wonder where their money is going.

Smith & Wesson Holding Corp (SWHC) dropped about 3 after cutting it's outlook for 2008. Want to help, buy more guns.

Quiet day, but subprime worries continue

After all the excitement in recent days, the stock markets quieted down. The markets in Asia & Europe were up following the lead of our market yesterday, they like the subprime fix announced. Today our traders were mildly disappointed by the jobs report from the Labor Department. No big news, maybe the markets need some time to digest recent gains. Dow & NAZ are about even, advancers are slightly ahead of decliners on the big board. Oil fell back to 88 while the Treasury bond remains near 4%. If the Dow holds it will be up 2% this week, not a bad start for Dec.

The subprime "fix" news is getting a lot of attention. There are about 3MM adjustable rate subprime loans, about 19% are past due. Without help more will become past due with higher resets in the coming months. The help is not a quick fix & only applies to marginal loans needing help. At the toll free phone number, callers are told there would be "lots of hoops to jump through" to obtain the five-year freeze. This program is voluntary & will vary depending on the lender. Can you spell, "uh-oh?" Reality is setting in & sounding a lot worse than many had originally thought.

The subprime mess is not only big but global in nature. Mortgages are sold in pools to financial institutions around the world. Asian & European banks have already taken big write-offs on their investments. Northern Rock, the largest lender in UK, has been struggling for weeks trying to remain alive dealing with a huge mortgage portfolio. Countrywide (CFC), our largest mortgage holder, has rebounded to 10, they're still struggling. They know & are trying to prevent more foreclosures which will add houses to an already soggy housing market.

Enjoy the up market this week. Tues, it should be up big after the FED interest rate cut announcement. Then we'll worry about the future.

Freezing mortgage rates

News stories tonight are trying to figure out how the freeze on mortgage rates will affect borrowers & lenders. There are a lot of worries that not enough borrowers will be helped. Lenders (who are now mortgage holders around the world after buying pools of mortgages) have to be biting their lips. They figure collecting payments with lower interest rates is preferable to foreclosing & reselling properties in a difficult time. Maybe, but the market values of mortgage portfolios have to be less with lower interest income. Interest rates cut by the FED on Tues will not solve these mortgage problems.

Tonight Asian markets are up following through on gains here. Oil is back at 90 and the Treasury bond rate is up to 4.0%. I think buyers will rule in tomorrow's markets here.

Up day again on freezing mortgage rates

The stock market rallied with high hopes for a Fed rate cut & the plan for freezing mortgage rates. Dow was up 175, advancers beat declines 5-1 while NAZ was up 43. Volume was only medium but it looks like the next stop will be pushing the record above 14K. Just about every stock I followed was up, second day in row.

Stocks got a boost with the announcement allowing some homeowners facing foreclosure to freeze their interest rates up to five years & refinance their mortgages. The plan created by the Treasury Department, mortgage lenders & banks could help over 1 million homeowners. I think mortgage holders may be in for a rude shock when they reprice their loans down based on low interest rates for 5 years. It looks like the stock market figures tomorrow will take of itself.

Investing for retirement

Jonathan Pond offers a discussion on PBS stations about how to grow your money for retirement, very smart investing is needed. He talks about big pictures issues which will be help those looking for assistance. Check your local PBS station to learn more.

Stocks higher again

Stocks rose modestly as sluggish retail sales did not bother the markets. Dow is up 46, advancers are 2-1 over decliners & NAZ is up 17. There is hope that another interest rate cut & a government plan to keep mortgage rates from spiking will help companies hurt by the housing crisis. They better get going soon with help for mortgages as foreclosures hit a record level of 0.78% in the third quarter.

The housing slump's impact on consumers adds to worries that the holiday shopping season is getting off to a shaky start. Target (TGT) is down 5 after announcing that Dec sales will come in below forecast. Walmart (WMT) is projecting same store sales up 1-3%. This sounds like uh-oh to me.

Hard to miss today!!

Hard to miss today, you could have thrown darts! Dow was up about 200 while NAZ rose almost 50. I'm still trying to sort this out. I guess the idea is the economy is doing well, but not so well that it does not deserve a rate cut next week. Fannie Mae (FNM) was up 97¢ with their dividend cut. Oil pulled back to under 88. Maybe this is the start of the Dec rally widely expected.

The administration worked out an agreement with industry to freeze interest rates for certain sub prime mortgages for five years to combat soaring foreclosures. Details will be announced. In the old days, that would have been called government meddling, viewed as bad. In the mean time, enjoy the up market.

Up on good economic news

Even with the Dow up 173 today, the chart below shows it's been pretty much sideways in the last 5 days after a big runup in the middle of last week. Economic data showing the economy is strong brought out the buyers today. But I'm not sure how to reconcile that with an interest rate cut next week because the economy needs help. Looks like today will be another major up day.



Fannie Mae (FNM) slipped after cutting the dividend and selling preferred stock to raise capital. OPEC met & decided not to increase oil production which generally would send oil prices down. Among other things, they are worried about sub prime problems. Oil remains around 89.

Pessimism prevails

Pessimism prevails about the stock market. The Dow closed down 66 (lows of the day) while NAZ dropped 17. Decliners beat advancers almost 2-1. Oil pulled back to "only" 88 and the Treasury bond interest rate remains at 3.89%. Nothing dramatic went on, although downgrading by JPMorgan of the financials was a kick in the head the market took seriously. Banks are giving up some of the gains from last week. Dec has been an "up" month but you wouldn't know it after the first 2 days.

Stocks slip as worries continue

Another mediocre day for stocks, Dow's down 32 while NAZ is down 8. Decliners outnumber advancers about 2-1 at NYSE. The Treasury bond is 3.89% and oil is near 88. Dow Chemical (DOW) announced it will cut 1000 jobs worldwide. Merck (MRK) reaffirmed it's optimistic outlook for next year but part of that is based on job cuts this year followed by more next year. The stock market is always waiting for more economic news but the FED meeting next week is probably drawing the most attention. The market assumes a rate cut is a given, the size is the only thing being debated. JPMorgan downgraded major Wall Street securities firms because of longer-term concerns about risk management hurting overall valuations. Big banks were included in this assessment. The market continues to drift (i.e. down).

Stocks pull back

Stocks give some of their big gains of the last few days, but nothing major. Dow was down 57 while NAZ pulled back 24. The decliners beat advancers 3-2. Traders were trying to figure out where the economy is going. GE (GE) gave a cautious outlook for next year. It looks like awaiting developments described the mood today. I watch banks closely, they gave up some of last week's gains.

This is tax selling month not to mention various funds adjusting for year end results. While Dec has been a good month, anything is possible. For the time being, next week's FED meeting on interest rates seems to be one of the big market movers. Oil is under 90 & the Treasury bond rate is under 3.90%. Who knows what's going on? On tax loss selling, financials, REITs & especially junk bond funds may decline. Watch your favorites to look for future bargains.

Mixed day again

Today's turning out to be another mixed day. It looks like traders need a breather after excitement in the last 4 days. The NYSE recovered after early morning losses, taking the Dow above break even. Advancers equal decliners, not a lot going on so far. Henry Paulson, Treasury Secretary, expects an agreement to help thousands of homeowners avoid mortgage defaults by temporarily holding their interest rates steady. Paulson also said this is the worst housing pullback in more than 20 years. The Treasury bond's interest rate is 3.94% and oil pulled back to 87. Earlier, overseas markets were mixed. Enjoy the quiet day, I think more excitement lays ahead.

Very good week

The last 4 days made for a very good week, one of the best in recent years. On Dec 11 the FED will meet to decide about interest rates. The betting is that they will cut the rate by 25 points, if not more. OK. The stock market should continue firm but...

Sub prime loans continue to be a major problem area. The Treasury plans to rescue home loan borrowers by freezing low introductory interest rates before they soar. But this "fix" may not solve fundamental loan problems which are far-reaching. It won't spare many borrowers & bankers from the pain of escalating foreclosures & defaults, borrowers will still be required to make monthly payments. The housing market's ongoing problems can drag on.

End of a rough month

As predicted, after being up 150 the Dow gave back some of that gain. It was up 60, but not a bad 4 days. It recovered almost half the decline from it's October record. This has been a rough month after it started near it's highs. The recent rally is betting the FED will cut interest rates in a couple of weeks and continue rate cuts hoping that will solve all problems. Maybe, maybe not. Housing continues very weak. Housing oversupply won't correct quickly.

As badly as banks performed, technology did a little worse in November. Tech is still playing defense, investors are losing interest after it's rapid runup. The best performing group was non discretionary (i.e. P&G (PG) and Altria (MO) which makes Philip Morris). Away from sexy techs into boring necessities which should weather a slowdown better. The VIX is around 23, down a bit. Over 20 suggests high volatility. Be ready for more bumps in the road.

Up, Up & Away

Looks like it's up, up & away for the markets. Dow is up 600 since the low a couple of days ago. Today it's up "only" 55, pulling back from a plus 100 gain. They're betting on another interest rate cut in Dec. Advance/decline ratio is 3-1, not bad. In the PM, traders may sell to lock in gains before the weekend making for a very good week. I think the next move should be down, but it looks like it wants to test 14K.

Some groups have not participated, selling near recent lows. MLPs (master limited partnerships) have been in a 290-310 range for a few months. Today they're up 2 to 297. REITs (real estate) have been hit hard, many offering high yields of 6-10% or more. Junk bond funds investing in speculative quality bonds have been hit hard in the current credit situation. Traditionally their yields are 4 points (400 basis points) above the treasury rate. Now it's easy to find 11% yields, a good 7 points above the 1o year Treasury rate. The last 2 groups especially will be under tax loss selling pressure in the coming weeks. But those yields are getting very nice for those willing to accept the extra risk.

Bernanke hints rate cut

Asian markets are up except for Shanghai which is down about 1%.

Federal Reserve Chairman Bernanke tonight hinted another interest rate cut may be needed to bolster the economy. That may add a couple hundred points to the Dow tomorrow. However Dell (DELL) reported earnings after the market close that disappointed investors, causing the stock to sell off 10%. I think tomorrow will be another up day after the hint about a rate cut. Dow futures are already up 75 in overnight (for us) trading. High volatility will continue.

digesting gains

The market digested gains today with little change. Decliners were a little ahead of advancers on NYSE, but nothing dramatic. The head of the FED speaks tonight, maybe his speech will influence tomorrow's markets.

One interesting news item was an oil spill from a pipeline run by Enbridge, one of the master limited partnerships. The MLP index measuring the group fell back 2 to 295, it's flirting with the recent low. That news affected many in the group not to mention helping push oil prices up after the recent pullback.

mixed day

Wall Street started out down, but recovered & is barely heading up. Oil rose partly because of a fire in a US pipeline. Sears (SHLD) declined 15 after reporting lower 3rd quarter profits. Dow is up 13 while advancers about equal decliners. NAZ is flat.

rally continues tonight

Here's what the AP said about today's move:

Wednesday's jump was also the biggest one-day percentage gain for the Dow since April 2, 2003. The broader Standard & Poor's 500 index climbed 40.79, or 2.86 percent, to 1,469.02, logging its best two-day point gain since April 19, 2001. The Nasdaq composite index shot up 82.11, or 3.18 percent, to 2,662.91, giving the technology-dominated index its largest two-day point gain since March 4, 2002.

Asian markets are following through, up 1-3% tonight. The dollar strengthened, the yen rose to "only" 110 while the Euro slipped slightly to 1.48+. Dollar's strength probably follows the strong market. Oil fell to around 90, jut a couple weeks ago it was pushing 100. Of course, this remains a high price for our economy to digest.

The market is now overbought, short term buyers who made money will sell to lock in profits. In addition, short sellers may have bought stock back to cover their short sales. Such purchases will not last. This is how volatility works. Stand by for more big swings in the rest of this week.

Dow soars

Dow soars on encouragement that the FED will continue lowering interest rates. The 2 day rally of almost 600 points recovers over 40% of the recent decline from its high above 14K. That's some kind of rally. Asian markets were weak last night, but the European ones had strong gains. Can you spell "volatility?" The long treasury declined a little to a rate of 4.03%, not really a major flight away from safety. Housing reported it's still weak. Banking problems continue. We'll see what tomorrow brings in a market that is clearly "overbought."

Another big up day

Sorry for the delay, computer problems. Maybe they're resolved. Meanwhile the stock market is up 2%, that's big like the Asian markets move in a day. Advance/decline is about 6X, wow. They are betting on a rate cut which is assumed will solve all problems. I don't think so. Home sales fell for the eighth straight month, Wells Fargo projects an 1.4B loss, etc. This has been highly volatile this week. Let's see how it plays out.

Buyers win today

Dow ended up 215 recovering most of Mon's loss while advance/decliners were 2-1, not impressive for a major rally. Dow remains under 13K, an important psychological level. NAZ also did well, up 40. Looks like Citi news dominated thinking today. But tomorrow is a new day with more news. The VIX fell, but at 26 it remains high which means high volativity. Tomorrow will be the test if today's rally has legs.

Oversold rally

US stock markets rebounded strongly after the Abu Dhabi Investment Authority said it will invest $7.5 billion in Citigroup (C). Wall Street liked that vote of confidence but I'm not so sure. While the gut reaction was a vote of confidence for the nation's largest bank, my view is Citi needed a lot of money after major mistakes were made. They suffered severe losses amid the ongoing crisis in the mortgage market, banks have announced they would have to write off $80B in bad loans - a track record not to be proud of. The Dow Jones industrials rose 162 points, advance/decline ratio is 2-1 and NAZ is up 30. That's how volatility works.

Dow	12,906.09	+162.65	+1.28%

This may be just an oversold rally, let's see how it plays out.

Asian markets down again

The Dow was down 237 bringing it's decline from the high last month to just over 10%, definition of a correction. Traders worry about continuing problems in the credit markets not to mention weakness in the housing market. The 10 year Treasury bond closed at 3.85%, the lowest level since June 2005. The yen is under 108 while the Euro is near $1.49, the dollar weakens further.

Asian markets followed the lead in NY, down 2-3%. Shanghai at 4900 is down about 20% from over 6000 just a few weeks ago. It looks like uncertainty continues to rule the markets.

Down again

Dow drops 237 & NAZ down 56, easily qualifies as another rough day. I think S&P is at a 2 year low. Some the money from selling is going into the 10 year Treasury bond dropping it's yield to a very low 3.83%. That's called, flight to safety. Financials got hit amidst worries about the FED saving (if needed) Countrywide (CFC) in a bailout. Countrywide hit a new low below 9. Uncertainty is big, the VIX (volatility index ) is at 29 indicating a lot of wide swings ahead. In all this time of uncertainty, it's time to keep your powder dry. That means do research to find the diamonds in the rough. High yields will reward the patient.

Not again?

One more tough day in the markets. Asian markets were up but European markets pulled back. In NY, stocks are sliding as investors weigh concerns about credit & banking against retail reports. Wall Street gave up modest early gains as concerns about a weakening credit market unraveled some enthusiasm over reports of strong electronics sales over the holiday weekend. Dow is down 38 & NAZ is down 12. On the big board, decliners beat advancers 3-2.

Here are 4 AP stories hitting the market today:

(1) A consortium led by Virgin Group, wants to take over Northern Rock, the battered mortgage lender, & wants to re-brand Northern Rock as part of Virgin Money business. The consortium would repay 11 billion pounds ($22.7 billion) of the 25 billion pounds ($50 billion) the Bank of England has loaned Northern Rock on completion of the transaction. The remainder of the money would be paid "in due course," Northern Rock said.

(2) HSBC Holdings (HBC), Europe's largest bank, will bail out two troubled funds it manages by transferring $45 billion of their assets onto its balance sheet. Additionally it will also inject $35 billion into the two funds,

(3) Citigroup (C), bracing for big credit-related losses in the fourth quarter, is looking to lower costs which could mean another round of job cuts at the nation's largest bank.

(4) E-Trade Shares (ETFC) fall after news potential buyers are debating mortgage portfolio's cost.

The retail news after Black Friday was considered "good" but the negative news from the financials is too much for the markets. Uncertainty continues to be the word everybody is talking about, not good. This is shaping up as another tough day as traders can not get uncertainty off their minds..

Asia markets

Asia markets are up strongly (2-3%) on Mon (Sun evening here). Australia elected a new PM over the weekend, they started strong out of the gate. Shanghai, Korea, Hong Kong, Taiwan, Japan are all up reacting to favorable buzz from Black Friday retail sales in the US. Even the Dow futures are up 54. We'll see if this continues or another shoe drops in the sub prime market.

Bargain hunting Friday

Bargain hunting today in a shortened trading day. Not a lot happening so many are taking a long holiday weekend. The Dow is up 126 while NAZ is up 22. Advancers outnumber decliners by 4-1. Fundamental problems remain. The dollar sets new lows against foreign currencies. Monday we'll get a look at early holiday shopping. Mortgage problems will continue. Have a good weekend.

Weak dollar

Wed night, Asian markets were mixed following a difficult day in NY. But Shanghai dropped 2% to under 5000. Out of the opening gate tonight, it's down another 1% to 4940. They are concerned about a slowdown in the US market, their biggest market. Just a few weeks ago, it topped 6000. Other markets tonight are mixed, probably waiting to see US markets tomorrow.

I keep thinking about the weak dollar. The dollar keeps hitting new lows, tough to figure out. The Yen is "up to" 108+, last month it was around 115. Then they said 113 was very high. The Euro is over $1.48. Today, the head of Airbus said they're being hurt very badly by the cheap dollar (planes by Boeing cost less while theirs cost more). That's good for US business but gets complicated in a worldwide economy. Each multinational company will have it's own reaction to the weak dollar as many have divisions in other countries. In the coming months, we will learn more about how US companies are impacted by the weak dollar.

S&P 500 Dividend Aristocrats

On Thanx Day, time to take a breather from the rough market. Recently I wrote about the S&P 500 Dividend Aristocrats. S&P pulled companies from the S&P 500 which have a minimum of 25 years of higher dividends, many have records going back 30-50 years. I found a blog by Eddy listing the members & discussing their records, click on Dividend Aristocrats to learn more. These are the kind of stocks to keep in mind when planning to invest.

Enjoy today's holiday!

Grrrr, another rough day!

Another tough day as investors did want to hold stocks of the short weekend (Thursday). That means sell off big in the last hour. The Dow dropped 150 just in the last hour to the lows for the day at 12.8 (uh-oh, solidly below 13K). S&P 500 is now down YTD! NAZ was down 35. Maybe Chicken Little was right! We'll be OK, but looks like there will be rough sledding again. Have a good Thansgiving.

Down on same problems

The markets are down for the same reasons: retail sales sluggish at best, housing is weak, mortgages are a mess, oil is over 99, the treasury bond is below 4% (the flight to quality), etc., etc., etc. I forgot, it looks like the US economy is slowing which affects the whole world! Dow is down over 100 (although up from its low) placing it solidly below 13K, NYSE decliners are triple advancers, NAZ is down 32, this goes on and on. Hang in there by making plans for buying at more attractive prices.

Asian markets down again

After a very rough day, the Dow is up just above 13K. On the overnight, Asian markets are down around 2-3%. They are worried about credit problems slowing growth in Asia. Their exporters are down sharply on the weak dollar. In addition, Dow futures are down 49 (very early signal for tomorrow).

Tomorrow, last day before the holiday, should be a quiet day. But, all bets are off. VIX (volatility index) is 26, a very high level. Wednesday & Friday may be very volatile. One day, the problem is oil, now at 98 again. The next it's mortgage worries. The next day has reduced forecasts for retail sales. I think the weak dollar is hurting. It's getting difficult to keep track of all the problems.

Another rocky day

Another rocky day in the markets. Dow squeaked out a close above 13K, obviously that may not hold very long. At the extremes, Dow was up 100 & down 100. Advances & declines were about equal. NAZ was up 3. It's very difficult to explain this behavior, making the future more uncertain. VIX, the measure of volatility, is about 26, a very high level. Expect more big swings.

Countrywide (CFC) was the focus at the end. After the ugly news about the government mortgage agencies (FRE & FNM) earlier, they denied they have bancruptcy problems. I'm looking for another volatile day tomorrow.

Dow down 17 & NAZ down 7, not good. Decliners outnumber advancers, not very good. This is shaping up as another down day.

Shaping up, another tough day

I'm looking at today's graph below. The market started with a big gain, almost 150, out of the gate but slipped back to up only 22. Gainers are a little ahead of losers. Similar at NAZ, now only up 7. Problems persist. Freddie Mac (FRE) lost $2B and is looking at a dividend cut, down 12. Fannie Mae (FNM) is down 8. These semi government agencies have serious problems. Countrywide (CFC) & Washington Mutual (WM), caught up in the negative news, are at new yearly lows. Target had lower earnings & issued a gloomy forecast for this quarter. Despite a major stock back, down $.90 or 2%.

overnight

Asian stocks are down 2-3%, following the US selloff. They did not take it very well. We should keep in mind that the US is their biggest market. The Japanese yen is a little below 110 (i.e. a rise in value) which is part of the weak dollar story. I think the weak dollar hurts our stock market even if only in a small way. Can't wait to see what tomorrow brings in the stock market.

Gloomy day

Another gloomy day as the Dow closes below the important 13K level. NAZ was also down big, Google (GOOG) is down over 100 points from its high a few weeks ago. The usual suspects are at play, weak housing and plenty of banking worries, banks sold off big once again. In addition, Countrywide (CFC) is at a new low in the 10's. Earlier this year it was over 45. They are the biggest mortgage holder, if they fall that's going to be a big uh-oh! Hewlett-Packard (HPQ) reported good earnings after the close, maybe that will help tomorrow. I'm sure how much good that will do. Hang in there.

Dow Drops Below 13,000

Today AP put it very well, "Stocks slid further Monday as Wall Street absorbed a gloomy outlook for the banking sector and anticipated bleak news from the National Association of Homebuilders. The Standard & Poor's 500 index and the Dow Jones industrial average each lost more than 1 percent." Dow is down 175 (below the important 13K level) & NAZ is down 1 1/2%. Goldman downgraded Citigroup (C) because they will have to write off 15B in loans. There are worries that the bad housing market will drag more industries down. Lowes (LOW), #2 to Home Depot (HD) ,forecasted lower 4th quarter earnings in anticipation of further deterioration in housing.

I worry about the weaker dollar. The Euro is $1.46 while the Japanese yen is up to 110 (now they're forecasting 100). This is a very complex issue especially for multi nationals since they are affected in many ways. But I'm afraid on balance the weaker dollar hurts the US economy & the stock market.

I remain positive for some banks, housing related issues REITs, MLPs & the Dividend Aristocrats in the S&P 500 index. This remains homework time preparing for better buying opportunities. Remember, Chicken Little didn't prove right.

MLPs

I first learned about MLPs (master limited partnerships) only 6 months ago. They are a slightly different type of investment, offering units not shares & paying distributions rather than dividends. Their track record is tracked on the Alerian MLP index (^AMZ at Yahoo Finance):

The last 12 months started off with a major move from 260 (a plateau) to around 335. Then, the index went thru a bumpy flat period followed by a large sell off to around 300 in early August. Since then it's been in the 290-310 zone. In the last couple of weeks, it slipped back, looks like it will test the low again around 290. I like these companies. Demand for building more pipelines in the US seems unlimited in the coming years. Analysts figure growth as yield plus their growth rate. In other words, if the unit yields 6% plus the distribution is expected to grow at a 5% rate, they project investment growth of 11%. The distributions are tax efficient, unfortunately being a limited partner also means a limited amount of tax hassle.

In Asia, it's already Mon, their stock markets are mixed. We have a short trading week because of the holiday, but expect high volatility. The Dow looks like it may test the lows of its 13-14K trading range.

A little bit of buying at the end of the day, Dow up 31 & NAZ up14. Banks are off again, just can't muster a rally. Countrywide (CFC) is at its lows for the last few years. After the pullback from gains at midday, I have a feeling that buying is from shorts zeroing out their positions. They should have had a great weak. Just noticed, Starbucks (SBUX) is at a 52 week low, another uh-oh.

Slight rebound

There is a slight rebound, D0w up 65 & NAZ up 8. The banks are off their lows to near breakeven. Countrywide (CFC) continues near the lows from last month. If they don't survive, there will be more bloodshed for financials (banks). Let's see if the shorts cover (buy) going into the close.

Mixed day

A down day again although Dow & NAZ are up slightly, decliners are about double advancers. The news front is not good. FedEx (FDX) lowered earnings expectations for the fiscal second quarter & full year, down 5. Starbucks (SBUX) cut its earnings forecast for fourth quarter after it reported traffic at stores open at least 13 months dropped 1 percent, down 2. I don't drink coffee but this is not a good indicator for the overall economy. Major banks are down about 1 each, more worries about even bigger problems with mortgages & the loan portfolios. Fortune said that Fannie Mae's (FNM) problems (losses) could be bigger than reported. This week, the market has sold off big in the closing hour, i.e. investors don't want to hold overnight. Because this has been a down week, short sellers might buy in the last hour to take gains by reversing out their positions. Keep in mind good stocks should be available at lower prices. Hang in there.

Another down day for Asian markets, China, Japan, Korea, etc. down 2-3%. This selling is a continuation of selling in the US near the end of trading. Asian markets have continued worries about financial problems. i.e. banks, etc., and the difficult housing market in the US.

Dow futures are down 30, a very early signal tomorrow may be a another tough day here. Use the time of declining markets for homework, to select good value stocks for investment.

Down again

Another bummer day in the market, Dow down 120 & NAZ down 26. Uh oh. Traders must have read my points from midday: JC Penney, high oil prices & financial problems are shook the market late in the day. Recently it has become common for the market to sell off near the end of the day. The Dow is back at 13.1K, near the bottom its trading range for the last few months. The VIX is around 26 indicating continued high volatility. Tomorrow can be anotehr wild day!

Down again

Another bumpy day, although the bumps just slipped into negative territory & advance/decline line is about 3-1 for the negatives. News is on the negative side. General Electric Asset Management bond fund suffered losses in mortgage-backed securities, what's new? Barclays Group took a $2.7 charge. JC Penney reported a down quarter & cut it's fourth quarter outlook. Dow is down about 47 & NAZ another 1/2%.

This is good time to mention MLPs (master limited partnerships), a recent favorite of mine. This group has emerged in the last 10 years or so to medium size. The businesses sell units (not shares) and pay distributions. Their distributions provide a good yield (around 6-7%) & are tax free. However, they also represent tax hassle. Income, 10-20% of the distribution, is reported on a K-1 form in March (i.e. late) plus income is divided among the states where it does business. Computer tax packages can handle the numbers, but it does add complications to taxes. As partnerships, they are generally not allowed in IRSs & other retirement accounts. For the venturesome, seeking income & growth, these may be interesting.

I started learning about these about 1/2 a year ago, & like them. Their index is the Alerian MLP index which is 299, up from 100 at the end of 1996. That's a nice run. The comparable index including distributions is about 650, even nicer. There is a lot to learn about these investments, a good place to start is search for:

master limited partnerships primer

A few brokerage firms have excellent 50+ page reports. There is a lot to learn about this area, I will continue discussing it in the future. This read is an alternative to more & more writedowns.

The Asian markets are mixed, only minor changes with a slight edge towards down. Keep in mind they are very plugged into the US market as we are probably their leading customer. They have sub prime loan investments plus worry about how sub prime problems will affect their business selling to US customers. The futures for US markets are little changed, as usual.

Stocks slipped to slightly down (Dow down 22 near the close), not a lot decided in the market. Bear Stearns will write off $1.2 B hoping that will be the end of major problems in the fourth quarter. Britain's HSBC Holdings is writing down another $3.4 billion from exposure to the sub-prime. Here is the closing chart showing a drop of over 100 points in the last 30 mins, for the day there was only a 76 point drop. Uh-oh!

Let's see what tomorrow brings.

Tues overnight markets

This was a strong up day in the stock market. The news from Walmart helped, the stock was up 6%. Same store sales were up 1.5% & they expect a good holiday season, forecasting same store sales will increase 2% in this quarter as sales exceed $100B. While their news is good, sub prime & other problem loans for banks remain, $90 barrel oil and the weak dollar in the foreign markets are going to affect the economy. Tech stocks which had been hammered in the last week rebounded strongly.

After the big rise in today's US markets, Asian markets are following through with gains of 2-3%. Everybody feels good, or at least now. US futures in Asia are showing little change even though Asian markets are strong.

Up 320

Well the stock market had a great day. Dow was up 320 while NAZ was up 3 ½% (after getting clobbered in the last few days). OK, enjoy the gains, Walmart & Goldman Sachs were 2 big ones helping to push the market up. Now where do we go from here as Dow remains range bound between 13-14K?

Enjoy the day

Wow!! That's some kind of gain. We're near the close & this is some kind of day. The VIX (volatility index) declined 5 to about 25, but it's still high explaining today's large swing. But the advance/decline ratio is only about 5. Considering today's gain, I would like to see this number higher. Enjoy!!

Up, Up & Away

The stock market is having a nice rally today, up 176 already putting it solidly above 13K. Interesting, this is the third day in a row the Dow has been around 13.1K, a trading zone for the short term. Walmart reported very good earnings & forecasts, always a big plus. Goldman said they didn't expect to take a big hit with write downs. BankAmerica is writing down $3B in debt to cover loan problems, so they're up 1 1/2. Even Countrywide reported mortgage business down substantially, they're still up fractionally. The buyers are back in the driver's seat, NAS is up almost 2%. Volatility continues, expect more big swings.

Mon, semi-holiday

Mon was another volatile day. Dow was up most of the day but in the last hour sold off, down 55 putting it below 13K. Credit worries continue. Countrywide's existence is being called into question again. NAS was down almost 2% as technology has taken big hits in the last few days. High flying Google pulled back over 100 from it's record levels. Apple, RIMM & other recent NAS high flyers have had similar pullbacks in the last week.

Two of my favorite stocks are Caterpillar & 3M (a member of S&P's dividend Aristocrats group), multinational Dow stocks which should do well going forward. They have low P/E ratios and decent dividend yields, good stocks to keep in mind if they decline.

Asian markets are mixed but down a little tonight. Tomorrow may be another tough day here.

Another Rough Week?

In the last 3 days of last week, Dow dropped about 600. Grrr! Expect more this week. Analysts are expecting banks to announce another $20 billion in loan writedowns for this quarter. If anything, final numbers could be even larger. I worry about Countrywide Financial (CFC), the largest mortgage lender. They squeaked by the August crisis with $12B in emergency financing plus selling $2B in preferred stock sold to BankAmerica. Now the stock is very near its recent lows. They are so big, their problems will adversely affect other financials. On the overnight market, a major Hong Kong bank just reported an addiitional $1B write-down on its loans related to sub-prime.

NAS stocks were slammed hard late in the week. Meanwhile gold is 835 while oil pushes 100, a price that will bleed thru to economies around the world. Already (Sun evening), Japan, Hong Kong & Korean markets are lower 2-3%`each. The US stocks markets will be open on the semi-holiday of Mon. Get ready for another rough week, keeping in mind that lower prices bring more attractive buying opportunities.

Dow closed down 233 & NAS down 68, even worse percentage wise as sellers roared back at the closing bell. Maybe we'll see a movie tomorrow for relief.

We're near the close of a rough week. Dow is still down about 150 at 13,100 & declines are about advances. Banks, had a terrible week, rallied at the end thanx to bargain hunters. Bank of Amer said market dislocations will impact this quarter (i.e. sounds like what I predicted earlier today). They don't have major sub prime problems, instead collateralized debt obligations (CDOs), uh-oh. This problem will affect all major banks.

The VIX index (volatility) is up to 28, very high indicating that 1-2% daily moves in the Dow are more likely. While not good or bad, this could keep the nervous types from jumping back in. Look for a bumpy ride again next week.

Another Down Day

Early this morning Dow was down 122 in pre-trading. Uh-oh again! It followed thru in regular trading, now down about 200 & flirting with 13K. For the last few months it has been stuck between 13 & 14K , this time it will test to see if it can break thru on the down side.





This morning Merck announced that they will set aside almost $5 billion for Vioxx law suites. That's considered "good" because it allows them to get on with the business & forget the past. OK! Bigger news was that Wachovia took another $1B hit on it's loans in October (note that's just October). The market is getting tired of more ugly stories from the banks. But they will continue for awhile. Chances are most will take a "big bath" in this quarter to "clean" the books making it easier to start the new year fresh. I don't mean to be knocking banks because I like them & their yields. However more tough stories will be coming in coming weeks.

REIT's are down with the rest of the market. There is fear of adverse effects from a slowing economy, but I like the fact they have hard assets (properties) and better ones have excellent track records of paying increasing dividends. Many have high yields, going higher.

The financial news can be depressing in these times and probably will continue for at least a few months. This is the time to study and prepare for buying opportunities, for very smart investing.

It's near midnight & Dow futures are up 46. The Asian markets are mixed tonight after Shanghai took a 5% hit yesterday, it is off about 15% from it's recent high. I'm paying more attention to behavior of Asian markets, especially Shanghai, Hong Kong, Korea & Japan. Get a good night's sleep.

Another down day but could have been worse, as it was shaping up as the worst 2 day stretch in about 5 years. At the lows, Dow reached almost 13.1 near bottom of its trading range over the last few months (about 14K top & 13K bottom). It bounced back to close at 13266, down only 39. Tech was hit harder, down 2% or only half it's maximum loss during the day. Google, RIMM, Apple, Cisco all got slammed hard. Those investors learned about gravity, what goes up also comes down. The VIX (measures volatility) is at 26, above 20 is considered a big number suggesting more wild swings. After the close Dow futures were below the close, i.e. the last shot was negative. Let's see what tomorrow brings.

Financials including banks had a fairly mild day. But Washington Mutual yields about 11% and Countrywide is coming under a dark cloud again. Big bank stocks hung in there as sellers finally gave up after 1 EST. It's hard to remember the last time a bank reported good news!

The stock market started out on an up note, but is pulling back to slightly negative & advance/declines running about even. The banks are rebounding but that may be because sellers are running out of stock to sell while nibblers are buying. Federal Reserve Chairman Ben Bernanke is providing the big news today, looks like his testimony will not give much encouragement to buyers. The major good news is Ford had a smaller than expected loss, swell.

This is 10:45 PM EDT and Asian stocks follow through on declines at NYSE. China, Hong Kong, Japan, Korea, etc markets are each down 2-3%. Investors are worried by declines for their business, much of the business is selling to the US markets. In sympathy with these declines, Dow futures are down another 62,an early signal for another rough day on Thursday.

One Tough Day!!

This was one tough day. The down opening continued through the day with Dow down 360. GM and Washington Mutual got hammered and those are mighty big companies affecting a lot of others. Somewhat overlooked is that Countrywide, largest mortgage company, is sinking back to prior lows of a couple of weeks ago when they promised not to lose $1 billion again. It's problems will spread to others. The VIX or volatility index was up past 25, a very high & worrisome level. This is not time to panic. Right now, I kind of like this as I'm looking for more bargains & think they are coming. Hang in there, time to do homework to earn profits from future buying.

Tough day

After waking up & turning on TV, I found Dow was down 144 in pretrading, ugh!! At midway, it's still there. There are plenty of problems to worry the market. Today's biggest is that China may diversify it's stock holdings (i.e. in the US). Diversify means SELL, spelling an ugly day for the market. Other worries continue. The weak dollar is getting more attention, especially after the top model in the world says she wants to get paid in Euros not dollars. That thought speaks louder than 100 economists combined! Oil looks like it's heading for 100 very soon & the US has not felt this price pressure yet in a major way. Credit worries continue. Washington Mutual has been weak falling another 9% today as they are talking about credit losses in the last quarter. With a yield over 10%, sellers are bailing out letting buyers worry about the next dividend. This tough market can be expected to last for awhile, but it's also creating buying opportunities.

I like companies with excellent track records. Despite recent stories, some banks have done well and offer nice dividend yields. REIT's, master limited partnerships (MLPs), and selected stocks offer nice yields which will become even more attractive if the market slips further.

I've liked REIT's (real estate investment trusts) for a long time. Most have moved up nicely since early in the decade. In the past, yields have been 10-12% for higher yielding stocks. Today some offer yields around 7-8% as prices have pulled back this year. Most REITS own properties, typically apartments, malls, shopping centers, offices, etc. many specialize in one area of the country. Large ones are going international, buying properties in Europe, Japan, Mexico, etc. While this is a relatively new business compared with big companies going back over a century, some are able to point to records of 10-20 years. REITS are getting hit by worries in credit markets, but should be examined as ong term investments with nice yields. Good ones will survive rewarding the smart investor.

Flattish day today. Up vs down stocks on NYSE about even at lunch time while Dow is up about 35. Oil is up to 97. Financials continue under pressure. Citi is down 1.11, worries continue. But BankAmerica & Chase are up about 1 each. Let's see how the rest of the day plays out.

Ugh!!

The market closed lower after trying for a rally late in the last hour. Dow was donw 51 after being down 100+ early in the day. Pretty much the same story all day, financials were hammered with worries about more problems with sub-prime mortgages and other loans. These worries will probably continue plus the China market has problems.

China stocks took a big hit. Petro China after becoming the first trillion dollar company was down 12% on NYSE. I sense they are trying to tell us something which may not be good. Tonight will be a good time to watch Asian markets on cable networks to learn more about their problems, probably related to worries about their business with the US.

===================================

Today the stock market started out. Premarket Dow was down 100, but losses have been cut back at midday. Credit worries starting with Citi spread to other major financials & the rest of the market. The advance/decline ratio is over 3-1, not good. This week is shaping up as a tough week for the stock market.

Cable financial news

Recently my cable provider added additional channels at an extra cost. Some are helpful in evaluating the stock markets. Before I was limited to CNBC & Fox Business News, starting last month, but FBN has to learn how to report financial news. Now Bloomberg & Asia.CNBC have been added, I like them. When the US markets close, Asian markets are getting ready to open. During our nighttime period, they are trading and these stations give updates. Now it is easy to see if Asia markets are following thru or not from US trading. Those who stay up late (or rise early) can catch opening trading for the European markets.

The big news in Asian markets is China, the Shanghai market is near record levels. It's helpful to keep in mind that their investors are not sophisticated, their rapid rise will have it's day of reckoning. Today China stocks on NYSE are down big led by Petro China ADRs, off 10%. Petro China is in the news for becoming the first trillion dollar company. US investors should folow overseas markets to learn how they influence ours.

Asian markets react to their local business there and their exports to countries led by the US. Sub prime problems in the US affect them because their financials have invested in them forcing write-downs like in the US. Keeping an eye on these markets is important for an investor here to be a very smart investor.

Sunday, November 4, 2007

I'm starting this blog to focus on very smart investing. In 1953, Louis Engel, a partner in Merrill Lynch, wrote a popular book, How to Buy Stocks. He said, “This book is based on a very simple premise: that the stock market is going up...Why? Because it always has.” The book talks about investing for the “long pull.” In the last 50 years values for long term investing have not changed. These principals are used by Warren Buffet and he has done quite well.

When investing for the long term, the best indication for the long term future is the record of the long term past and referred to as track record. Many companies have track records demonstrating excellent long term growth, some for over 100 years. The easiest measures to follow are sales, EPS and dividends. Now with internet resources available to all, it is easy to get this information.

One excellent guide which is not well known was recently put out by Standard & Poor's. They are probably best know for the S&P 500, an index most people follow which includes 500 of the biggest and best know corporations in the US. A couple of years ago, they came out with a subset which attracted my interest, S&P 500 Dividend Aristocrats. In this elite group are members of the S&P 500 with a track record of “25 consecutive years of increased cash payments based on ex-dividend dates from January1.” Membership is very limited, only 56 qualify (such companies as Exxon, Citgroup and IBM are not included)! Many have paid higher dividends for 30 – 40 or 50+ years, a solid record of long term growth. With these track records for dividends, there is strong indication their growth will continue. But companies are not all equal.

Included are some of the biggest banks, drugs, insurance companies, foods, beverages & retailers, all with different prospects and outlooks. But starting with this list, it should not be difficult to narrow it to a few in which an investor sees continuing high growth rates for the future. S&P 500 Dividend Aristocrats is the type of list I like for getting very smart investing ideas.

Today's Market

As you can tell,I am basically a fundamental person looking at long term trends and values. But I also follow technicals or charts. The Dow had a great run recently, but maxed out in July at 14K. Since then it's had a very bumpy ride with a substantial increase in volatility. The performance of high volatility can be expected to continue as banks are adversely affected by mortgage and bad loan problems, housing in the US market is in a major recession and oil approaches $100 a barrel with implications for higher inflation rates in the future. In addition overseas markets, especially the fast growing Asian ones, run the risk of being adversely affected by a slowdown in the US market. While this does not look like a good time for investing, it is the time to study beaten up industries and stocks to identify which ones will ride out the storm. Bargains are coming, this is the time to prepare for opportunities to buy for very smart investing.