After losing the initial surge upward in the AM, Dow started marching upward at noon from break-even, gaining 190. Advancers were ahead of decliners almost 4-1 & NAZ rose 41. Markets were encouraged that the negative reading for the GDP growth rate came in below expectations.
S&P 500 FINANCIALS INDEX added 2 to 198, the Alerian MLP Index rose 7 to 222, at the high end of its 2 week trading range, the Dow Jones REIT index was up 6 to 161 & high yield or junk bond funds crawled their way up a very steep ladder (still offering outstanding yields). The VIX, Volatility Index, pulled back 4 to 66, however it remains in heavenly territory. A lower fear level encouraged some of the buyers.
Commodities such as oil & gold were little changed in PM session.
30-year, fixed-rate mortgages averaged 6.46% this week, up from 6.04% in the prior week. Rates on 30-year mortgages reached reached a high this year at 6.63% in July followed by a drop to a 7 month low at 5.78% in Sep. This increase was caused by the impact that the financial crisis is having on bond markets, just check high yield bonds about it affects other bonds. Investors sold Treasuries last month, willing to give up safety of Treasury bonds for other investments. As a result, Treasury bond yields rose pushing up rates on mortgages.
Times continue tough. American Express (AXP), a Dow stock, will lay off 7K or 10% of its staff to better deal with tough times ahead. The stock was up 85¢ on the news (aided by an up market).
American Express to Cut 7,000 Jobs- AP
The Dow ended Sep at 10,851. Today it's about 1700 lower, Oct has been one more tough month.
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