S&P 500 FINANCIALS INDEX in the first hour of trading gave up yesterday's gains:
| Value 118.42 | Change -6.39 | % Change -5.1% |
Oil still can't get no respect as worries about the global recession dragging on, dominate thinking.
| CLH09.NYM | ...Crude Oil Mar 09 | ....34.66 | ... 1.28.......(3.6%) |
The Alerian MLP index went up 1, taking it into the 200s. MLPs are not giving up ground. In contrast, the Dow Jones REIT Index fell 6 to 114. Junk bonds slipped after a nice run this year. VIX rose 2 to the 46s on the worries about the cost of the stimulus package.
The yield on the US Treasury 10 year bond has been volatile in 2009. After Treasuries had an enormous rally last year bringing the yield down to 2%, prices fell back sharply this year driving the yield up to 3%. In the last week, the yield dropped to 2.77% in response to higher bond prices. Some buying in Treasury bonds may be coming from the Federal Reserve trying to bring down rates. Yields on the Treasury bond have a great influence on mortgage rates, a key sore spot in the economy.
Jan US retail sales jumped 1% in the US reversing a 6 month declining trend & above expectations. Extensive holiday sales & higher gas prices accounted for the increase. Further increases are not expected.
Retail Sales in U.S. Unexpectedly Climb 1%, First Increase in Seven Months
The number of new jobless claims slipped 8K last week to 623K, but analysts were expecting a decline to 610K. The number collecting unemployment is 4.8M, as of Jan 31 (last week for which data is available)
Coca Cola (KO), a Dow stock & Dividend Aristocrat, reported so-so earnings (they called the 4th qtr "solid"). Earnings slipped 18% but beat forecasts & good enough for annual EPS to go up 2 pennies. To keep their higher annual div streak going, they will probably increase the div 4¢ at the next meeting. KO liked the earnings news, up 2.12 in a down market.
The stimulus package, largest gov spending program in history (much larger than the war in Iraq), should be passed & signed in the next few days. A key objective for the program is to create 3½M new jobs. Because it's so expensive, there are doubters, time will tell. Knee jerk reaction from around the world has been negative.
Dow is now below 7800, 8K is becoming its ceiling.
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