Higher markets despite worries about bailout package

Dow is up 88, advancers are only slightly ahead of decliners while NAZ is up 26 (note the NAZ graph from Bigcharts was added below the Dow graph in the button on the right). S&P 500 FINANCIALS INDEX was up 1 to 279, financials are still slugging it out in the trenches. The Dow Jones REIT Index rebounded 6 after the drubbing it took yesterday. Junk bond funds are up a little. Nibblers looking for very high yields are attracted to them.

The biggest news is on congressional hearings about the bailout package (hate to use the word plan). Years ago, Allen Sherman, famous songwriter, said a camel is horse designed by a committee. That thought may apply to the new legislation that eventually will be passed, making markets very nervous.

•Bernanke Says Failure to Pass Bank Bailout Would Threaten Markets, Economy

•Credit Default Swap Market Must Be Regulated `Immediately,' SEC's Cox Says


Meanwhile the economy continues to drag along. Early signals for the approaching holiday selling season are not good. Asian markets are off 25+% this year (much worse in China) largely on expectations of weaker sales to the US & to a lesser extent Europe, their top customers.

•Holiday Sales in U.S. May Rise 2.2%, Slowest Pace in Six Years, Group Says

Retail trade group offers weak holiday forecast- A


High oil prices continue to be a problem for the economy. The new contract for oil (now Nov oil) is down pennies in the 108s. The big spike in oil prices for Oct oil yesterday is being investigated although it looks like there was a short squeeze as the contract closed. Bigger picture, oil is off the lows in the 90s, probably resulting from tighter inventories after the hurricanes. The national average price was 3.73 yesterday, but there are spotty shortages with resulting higher prices. The Alerian MLP index is down 3 to 236 on what may be a quiet day for oil prices.

• Oil falls toward $108 as traders mull bailout plan- AP

Congressional hearings begin today & it looks like Bernanke & Paulson will have their work cut out for them. In this election year, Congress wants to put its footprint on the package (always dangerous). This package, because of its very large size, is getting attention in financial markets around the world, creating nervousness everywhere. There is also an increasing awareness that any bailout package will not cure economic ails in the US economy.