It's difficult to keep track of all the stories, mostly on the negative side. Bank of America (BAC) will buy Countrywide (CFC) for roughly $7 in stock (85% below it's peak). Merrill Lynch (MER) will take a $15B hit related to mortgages, it needs more investors. JP Morgan (JPM) is buying mortgages from Northern Rock (UK's version of Washington Mutual) to help Northern Rock repay $50B in loans. JP Morgan & Washington Mutual (WM) are holding preliminary merger talks. Let's not forget, American Express (AXP) last night warned about lower estimates for Q4 earnings & gave a cautious outlook for this year. This one worries me the most because consumers use their cards for retail sales.
Dow is down 135 & NAZ declined 25 with decliners beating advancers 2-1 (not that bad considering this news). Gold hit another record of 900, that's where frightened money goes.
I guess the market is holding up fairly well given this news. However, the Dow is getting used to being under 13K (today it's 12.7K). For the nibblers, junk bond funds still yield a good 700 basis points above the Treasury 3.84% and some REITs have high yields. S&P's Dividend Aristocrats are a favorite of mine. The attached list is not from them, S&P tries to keep it secret so I went to another web site. The stocks are arrayed in order of yield, but be aware of the highest, First Horizon National (FHN). They did not increase the dividend last year & probably are facing a cut this year due to their expose in mortgages. The others have track records of higher divs year over year for 25-50+ years. Check this list for buying ideas.
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