Stocks recovered nicely after the S&P call about seeing the light at the end of the tunnel. After being down 200 in the AM, Dow rose 300 points ending with a gain of 35, advancers ahead of decliners almost 3-2 & NAZ up 20. The S&P call was focused on sub-prime mortgages, not other financial debts such as Alt-A loans which have also caused major problems. It should be kept in mind that S&P's track record on calls in recent weeks has not been very good.
A technical guy evaluating charts said he is focused on a support level of 1270 for the S&P 500, same number somebody used last week. The S&P is 1315 after having held at 1270 a few days ago. He thinks that buyers aided by weak shorts who panic easily caused the move up in stocks suggesting S&P 500 will test 1270 & fail, sending the markets even lower.
Gold flirts with 1000, oil is 110 however the Treasury bond fell today sending the yield up to 3.53%. Bear Stearns (BSC), fell 4.58 & down as much as 10 at midday, as vulchers are circling. One analyst said yesterday said the FED couldn't let them go under because it would bring on a worse mess. Junk bonds offer very high yields. For example, a GM bond yields 13%. Risk is there but that should whet some appetites. Muni yields have shot up from 4% to 5% in recent weeks. The Alerian MLP index pulled back 2 to 279 another 12 month low.
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