Dow gains 86 on oversold rally

Dow rose for technical reasons, after going down for 6 straight days it's expected to rise. The strongest are: Chevron (CVX), Exxon Mobil (XOM) & Home Depot (HD) which reported lower earnings that beat expectations. Dow gained 86, advancers ahead of decliners 3-2 & NAZ recovered 22.

Financials were up, if you can call it that. S&P 500 FINANCIALS INDEX was up 2½ trying to get back to 99, swell! A major news story was JPMorgan (JPM), Dow stock, cut the div to a nickel per qtr, tying to keep gov regulators at arms length. US Bancorp (USB), the last bank on the Dividend Aristocrat list, is now widely viewed as having a div waiting to be cut.

The Alerian MLP Index was hit with more selling. The index ended 2008 at 176 (followed by an eye popping 12 point gain the first day of trading in 2009), today it's down 2 to 175. REITs & junk bond funds are up today, but still selling at drab levels. Junk bond funds are back to 20-25% yields & 10-20% yields are common for REITs. VIX was down 3, remaining at an elevated reading of almost 50.


Alerian MLP Index --- 2 weeks





Oil was up pennies in the 38s while gold pulled back 10 to 985 on technicals (after its recent rally to 1000, this was expected).

The Conference Board reported that consumer confidence fell in Feb to an abysmal 25 (expectations were for 35½) from a revised 37.4 last month. By way of comparison, a year ago it was 76. Their Present Situation Index & Expectations' Index sank to similar dreary levels. These readings signal more very tough times ahead for retailers.

• Consumer Confidence Plummets to New Low in Feb.- AP

Home Depot had sharply lower earnings (after adjusting for special charges) but they beat expectations sending the stock up 1.50. They expect 2009 will be as a challenging as was last year. Macy's (M) reported similar dreary results, but beat expectations sending the stock up 35¢ (it's a $7 stock). Their CEO said last year reflected the worst economic situation in a generation, they are working to maintain profitability & conserve cash.

• Home Depot reports 4th-quarter loss of $54M- AP
• Macy's reports 59 percent drop in 4Q profit- AP

Bernanke is testifying before Congress, no great revelations. The contraction in the economy & stock markets is still out of control. AIG will need more $B to stay alive, the gov will have to work that out. Gov is providing large sums of money for many financials, but they are learning about the strings tied (more gov interference). Markets are already pricing that worry into valuations.