Markets extend gains to consecutive 2 days

Dow rose 144 (after losing almost 200 of earlier gains in the last hour), advancers were ahead of decliners 2-1 & NAZ gained 22. That performance was good enough to give the markets a 2 day winning streak.

S&P 500 FINANCIALS INDEX held the gains from the AM, up 11 to 209. The Alerian MLP Index was up 1½ to 223, digesting its recent gains which took it back over 200, The Dow Jones REIT Index rose a big 11 to 172 as bargain hunters are back in action in this extremely oversold market. High yield (junk) bond funds rallied as they found buyers (although for them rallies are measured in pennies). The VIX dropped 2½ to 60, however, as the chart shows, they remain in heavenly territory:


VIX --- 2 months




I like the article below about oil better than the used in my prior post. Oil was down 36% this month & 56% from the peak. This is the biggest monthly decline since trading began 25 years ago. Today it rallied, but it is still 80 below the July peak. The decline is predicated on a major global slowdown, not so good when you think about it.

CLZ08.NYM

Crude Oil Dec 08

....67.83

.... 1.87 (2.8%)

• Crude heads for worst monthly Nymex decline- AP

I seems like about everybody is borrowing from the Federal Reserve & they are only too anxious to be there. The chairman of the FED said in a prepared speech that the FED will be there to lend to Fannie Mae/Freddie Mac. However, a big problem is that banks are NOT lending to customers.

• Banks borrow record amount from Fed- CNNMoney.com
• Bernanke: Backing of GSE debt must be maintained- Reuter
  

Investors pulled $71B out of mutual funds in Oct (including $52B in the week prior to Oct 9), a major part of the story about the big Oct decline in stocks. In Sep the outflow was "only" $56B.

•Stock-Fund Investors Pull Record $70.7 Billion From Markets, TrimTabs Says


While Oct was a month everybody would like to forget, the dreary economic background will drag on. Investors will be getting monthly statements soon reminding them about the damage to portfolios. Macro economic problems are continuing. Banks are not lending to customers even though the capital squeeze is easing for them. More companies announced layoffs in just the last few days. Intel (INTC), a Dow stock, said today that the economic slowdown could hurt them. Ouch!! They were up pennies today.

Intel Says Financial Crisis Could Hurt Its Business (Update1)

I can't wait to see what Nov has in store for the markets.