Late day rally lifts markets

Go figgah! In a day filled with plenty of negative stories, Dow remained fairly close to the break even for much of the day. In the last 2 hours buyers returned to give the Dow a gain of 172, advancers over decliners 2-1 & NAZ up 42.

S&P 500 FINANCIALS INDEX had a good day, but is still close to recent lows.

Value 160.75 .... Change up 8.51 .... % Change up 5.6%

The Alerian MLP Index was up a weak 1.68, the Dow Jones REIT Index had a stronger gain of 6 to 126 & the VIX dropped 2.26 to 60.72. SPDR Lehman High Yield Bond (JNK), an ETF which gives the general trends in the high yield or junk bond market, was even (with a yield of 16.1%). Oil was flat.

Macro economic news continues dreary. The Big 3 autos are center stage. They are pleading for help & probably will get some. The failure of any or all would be a brutal jolt to a very fragile economy which is struggling for sound footing so it can recover. Congress has to play hardball with many worrying about a future request for even more aid. Details of the rescue package have to be worked out & the clock is ticking since General Motors (GM) said they are desperate.

The bulls have the recent track record of the markets in their favor while the bears point to the possibility of hedge fund redemptions, etc. Fortress Investment Group (FIG) fell 25% to a record low of 1.87 after announcing it was halting redemptions from one of its major hedge funds. Investors had requested redemptions of $3½B by yearend. Fortress stock is down 88% since going public in Feb 07.

Fortress Halts Drawbridge Global Fund Withdrawals (Update3)


However, over the short term markets have been down only once in the last 9 trading sessions (terrible Mon). Forced redemptions & added tax loss selling remain very dark clouds overhanging the markets.