Economic worries weighed on the markets today. Today's inflation numbers & weak housing numbers caused investors to pull back fearing the FED will not be as aggressive in cutting interest rates. The tension always exists between stimulating growth versus fighting inflation. Oil pulled back 1 to 99, largely on worries about the economy slowing. Dow is down 76, decliners over advancers 2-1 & NAZ down 9. On Bloomberg TV, I hear more analysts talking about recession. There seems to be a sense we are in one already & we haven't seen the bottom for loan problems in the credit crunch.
Hewlett-Packard (HPQ), a Dow company, rose after yesterday's earnings announcement, up 3.24. Junk bond funds have been selling off in recent days on fears that a recession will cause more bonds to default. With yields over 11%, this decline gives an even larger spread of their yields over the Treasury bond yield of 3.87%. REITs have also been pulling back. Even MLPs have generally slipped. Their index, after falling below 300 early this year, has not been able to return to that level. While off the low of 275, at 293 it remains near the bottom of a trading range for 8 months.
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