Markets higher on hope for saving AIG

After starting out down more than 100 on the opening, Dow recovered & ended with a gain of 141 taking it over 11K. Buyers may have been brought out by encouraging words about the FED coming up with a rescue package for AIG. NAZ was up 28 despite a dreary forecast by Dell (DELL). However decliners led advancers 3-2. This qualifies as a recovery, but limited in effect. The financials led the way:

S&P 500 FINANCIALS INDEX recovered nicely from the sharp fall on Mon:

Value _268.55 --- Change_up 15.73 --- % Change_up 6.2%

They had been down on the opening, then buyers snapped up bargains. The FED did not cave into trader's desires and left rates alone at their meeting. Good for them! The sick economy needs help in other forms. Instead their attention wandered over to save AIG:

•AIG Loan Package Under Consideration by Federal Reserve, Reversing Course

American International Group (AIG), still a Dow stock at only $4, is struggling to come up with a rescue package. Now the FED may get involved, uh-oh. Without a FED rate cut, the markets will take a rescue for AIG which sent stocks higher:

•AIG Loan Package Under Consideration by Federal Reserve, Reversing Course

The future for Washington Mutual (WM) is still a whopper size unknown & there are more financials that may need help. Last night Asian markets fell 5% (most were off for a holiday on Mon), financials led the way down with declines of at least 5%. They were all issuing statement about their exposure to Lehman & other loans such as sub prime mortgages. Again, these are Asian banks, the credit crisis is global!

News on oil's price decline has been little noticed. Oil dropped again to the lowest price in months:

CLV08.NYM

Crude Oil Oct 08

__91.15

_ 4.56 (4.76%)

Oil dropped 10 in the last 2 days, but gas at the pump has spiked up to 3.85 on worries about future supplies at gas stations. The Alerian MLP index dropped 4 to 232, but recovered 9 points from the severe drop early in the morning. They remain in 3 year low territory.

Dell (DELL) got hammered, down more than 10% on a very dreary announcement. This is very important, they are a huge global company & reinforces the idea about a slowdown in the US bleeding to other countries.

Dell Drops to Lowest Level in 7 Years After Predicting Slowdown ...

REITs had a great day following the lead of the financials. However, junk bond funds sold off again. Their 2 day delcine must be over 10%, but no fundamentals have changed. They invest in company bonds with below investment (BBB) ratings. These funds sold off sharply in line with the recent decline in financials & have gotten hammered in the last 2 days. Those boring bonds should work out, 14-15% yields are available for the brave who want higher income. Check out yesterday's article on high yield (junk) bonds:

http://seekingalpha.com/article/95533-why-buy-high-yield-bond-funds

Another article on: MLPs - part II should come out in the next few hours.

My computer is back working again, thanx. Cleaning out the registry & then CCleaner did wonders.