Markets settle back

Markets were fairly calm in very light, holiday trading. But this was a down day. At the low, Dow was off over 180 & came back in the PM to end down 31. Decliners were 3-2 ahead of advancers & NAZ dropped 20. Volume on NYSE was under .9M shares. The S&P 500 FINANCIALS INDEX fell 1.57.

The bleak outlook for retailing hit REITS very hard. The Dow Jones REIT Index dropped 8 to 137½ after the prediction that many stores will have to be closed this year. The index had been in a sideways pattern near 145 for most of 2 weeks. After selling today, buyers came back in the last hour to trim the loss.


Dow Jones REIT Index --- 2 weeks




The Alerian MLP Index was soft all day, ending down 1 to 169 on worries about demand destruction for oil & gas, not to mention distribution cuts coming for the weaker MLPs. Oil had a strong day on tensions in the Mideast, finally closing above 40.

CLG09.NYM

...Crude Oil Feb 09

....40.20

... 2.49 .......(6.6%)

Lehman High Yield Bond ETF pared its AM losses to down 77¢ as other junk bond funds were also weak.

The Treasury auctioned $27B of 6-month bills at a record low rate of 0.25% (annualized). They also auctioned 3-month T-bills at 0.05% (annualized), slightly higher than the prior week's auction rate of 0.04%. Frightened money easily absorbed the large supply of bills.

• Rate on 6-month Treasury bills hits record low- AP

Gloomy thoughts about corp profitability. Economists predict profit declines for the S&P 500 will continue until Q3 of 2009. Much of the weakness is caused by banks & autos which has now been extended to include ordinary companies:

•U.S. Corporate Profits Probably Fell for Sixth Quarter as Spending Plunged