Markets hold gains

Stocks remained strong after the morning rally, a very important sign of strength in the markets. Dow rose 299, advancers maintained a 3½-1 lead over decliners & NAZ gained 62. Too bad Dow couldn't hold above 9K, an important psychological level. Dow has had an unsually strong 2 weeks, declining only once, on last Mon (& what a decline!):


Dow Jones Industrials --- 2 weeks





The euphoria was led by banks. The S&P 500 FINANCIALS INDEX, up 11, has recovered sharply from the 125 low on Nov 20:

Value 183.09

Change 11.73

% Change 6.8%

The Alerian MLP Index rose 6 to 174½, the Dow Jones REIT Index jumped a big 13 to 148 while Lehman High Yield Bond ETF edged up 45¢ (almost 2%, their version of a rally). The Dow Jones REIT Index is up 50% from its low reached 2 weeks ago. One that was counted out 2 weeks ago, has more than doubled from the low. The VIX dropped 2 to 58 indicating a little less fear & volatility.

Oil held its gains from the morning, giving it one its best days in a long time.

CLF09.NYM

..Crude Oil Jan 09

....43.97

.. 3.16 ......(7.7%)

The Treasury sold 90 day T-bills at a record low interest rate of .005% (essentially zero interest). They also sold 6 month T-bills at a rate of 0.3%, another record low interest rate. These auctions were greatly over subscribed, there is a lot of frightened money seeking Treasuries at any price (i.e. low yield):

•Treasury Sells Three-Month Bills at the Lowest Interest Rate Since 1929


The Tribune Company filed for bankruptcy, hardly a surprise after word of its intention went out yesterday. Ads sales at the Chicago Tribune were down 15% in the first half of the year, leading to its demise. They survived the great fire of 1871, but couldn't survive today's financial crisis:

•Zell's Tribune Files for Bankruptcy Protection as Advertising Sales Slump

Markets have ignored news that the recession is biting hard, instead they are betting on gov rescue packages. Time will tell us if that was a good bet.