Dow rose 83, advancers over decliners almost 3-2 and NAZ was up 25. NYSE volume just topped 1B, a very light day. Financials led the charge, the S&P 500 Financials Index gained 2½% (a very good performance given problems announced today). Morgan Stanley (MS) & JP Morgan (JPM) agreed to pay fines of $35M & $25M respectively after agreeing to repurchase $7B of securities from a securities auction. MS was up 39¢ & JPM up 81¢. The NY Attorney General is going after additional financial companies in this matter. There is a prediction that Merrill Lynch (MER), up 39¢, will have to cut its 35¢ quarterly dividend after the recent massive write-downs. Oil helped drive markets after falling 1.30 to 114.70. The Alerian MLP Index closed even at 264.80.
Bloomberg TV had an interview with a retail analyst, talking about back-to-school selling season. She said it got off to a bad start. Consumers are being careful when going to malls & shopping. Early signals are that this will not be a good time at retail. Worse, this gives first glimpse signals about the important holiday shopping season. If trends continue (very limited sales growth at best), that could be one of the worst in several years.
Stocks shrugged off early bad news on inflation, housing, etc. Instead nervous investors wanted to buy, afraid of missing the next leg up in the markets. Volatility is still here, but no so bad. The VIX, volatility index, fell 1 to 20, still high but below the extraordinary levels seen recently.
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