Markets drift lower in the midst of uncertainty

Markets were encouraged out of the gate as the Dow rose more than 100. But there was no courage behind that conviction, markets slumped. Dow is down 3, decliners over advancers almost 3-2 & NAZ dropped 15.

S&P 500 FINANCIALS INDEX was down another 2, setting another record low. The Alerian MLP Index was down 3+ taking it under 168, bringing it solidly in the red for the year.


Alerian MLP Index --- YTD




REITs & junk bonds are all down in the dumps. One junk bond fund after recovering off the lows of late 2008, is down 30% in the last 4 weeks. Blindly throwing securities out the window should bring buying opportunities. Probably, but it seems like there is no rush to buy now. The VIX, volatility index, has been living around 50 for much of this year. For the new, this is astronomical territory even though it's down from the unimaginable peak in the 80s late in 2008.

VIX ---- YTD





As feared unemployment shot up last month, to 8.1% (highest rate in 25 years). The highest rate reached then was 10.8% in late 1982. The Dept of Labor reported 651K jobs were lost in Feb (almost 2M were lost in just the last 3 months). 4.4M jobs have been lost since the recession is considered to have started Dec 07. Even worse, the unemployment rate is expected to rise further towards the 10% level.

• Unemployment soars to 8.1%, highest since 1983- AP
• Worst is yet to come for job market- CNNMoney

One major insult to the markets yesterday was the new health care proposal by the pres. It shows an inability to prioritize. The nation (not to mention the world) is facing a gargantuan financial crisis. There is no light at the end of this long tunnel. Behind that comes fixing the auto & housing industries. Seemingly the auto industry is beyond repair which can bring another major downdraft for the economy. Housing will survive, but a lot more blood will be shed in the coming months. With all this negativity flying around, markets did not want to hear about another "good" idea for even more gov spending. At present, gov is trying to figure out if it's going to pass the bloated, pork spending budget which they claim is inherited from the past & that somehow forces lawmakers to pass it. Huh??

Wells Fargo (WFC), one of the major holdings of Berkshire Hathaway, cut the quarterly div to a nickel after reporting its first loss in 8 years. The stock was up 35¢ (but below a $1+ gain earlier in the day) on encouraging words about their business in 2009

•Wells Fargo Gains on Strength in Mortgage-Loan Business, 85% Dividend Cut

After yielding early gains so quickly, does not speak well for the rest of the day.