Dow sinks below 8000 again

Uncertainties about the administration's plan to stabilize the bank sector dragged down stocks. Dow dropped 122 (taking it below 8K), decliners were only modestly ahead of advancers & NAZ pulled back from a nice gain in the AM to essentially even at the close.

Banks continue weak, I can't remember how many times I've said that. S&P 500 FINANCIALS INDEX slipped in the PM, from up in the AM to close at down 1.20 bringing the index under 120.

The MLP Index continues to sit on the 200 line, can't make up its mind to go up or down (similar to the Dow sitting on or just above the 8K line). Today MLPs closed at 199.39, down 1.86. REITs & junk bond funds hang in there (at very low levels) as they find a few buyers who grab the 17-20% yields. Speaking of yields, the Treasury 10 year bond yield has quietly (in all the other confusion going on) risen from just above 2% to 2.91%, mostly in 2009. Nothing like worries about financing a whopper size deficit to drive up rates.

Alerian MLP Index --- 2 weeks





Worries about General Electric (GE); Dow stock, Dividend Aristocrat & credit rating of AAA; are growing. It has an 11% yield with an 11 handle! Dow stocks aren't supposed to behave that way (especially with that AAA rating). GE Capital is the source of the anguish, they could be under-providing for bad debts & problem loans. The last time GE saw 11 was 13 years ago. The chart below shows GE has dropped in half in just the last 3 months. While they are diversified, it's difficult not to think of Bear Stearns, AIG, Lehman, etc.


General Electric --- 3 months




Ripples from closing Ciruit City stores are spreading to many sectors of the worldwide economy. Employees have been laid off & stores which will not be released soon are closed. In addition, stores within Circuit City stores, suppliers, advertising, etc. are feeling the pain. When Macy's & Kmart went under in recent years, they only reorganized. That brought a lot less pain. This shakes a lot in the economy such as neighboring stores which will have to fight harder to atttract & keep customers.

• Circuit City ripples go beyond vacancies, layoffs- AP

Citigroup (C) will retain its name & investment on the new Citi Field for the Mets in Queens. Congress is giving them grief, but, at least, it does have marketing value.

The fight in the Senate over the stimulus package drags on & has the potential to get uglier. That doesn't conjure up thoughts about really wanting to help the economy rebound.

Just out, Cisco (CSCO) just reported lower earnings which beat the low estimates out there. The gut reaction in post market trading market is up 26¢.

Cisco posts lower profit, but beats expectations