Markets try to take a breather

Dow began the day up 100 on optimism that the wave of selling was over. But that thinking didn't last long. Dow is down 39, decliners 30% ahead of advancers & NAZ is down 6. Markets have keep slipping off early gains.

S&P 500 FINANCIALS INDEX was down small change from the new low set yesterday. The Alerian MLP Index dropped 2 to 175 bringing it below the 176 starting point for 2009. REITs & junk bond funds were weak. Barclays High Yield Bond has fallen which has raised the yield to over 18%. Even the VIX dropped 2 today.


Barclays Capital High Yield Bond ETF - 6 months





The 700B TARP program proposed by the Federal Reserve last fall, designed to help the banks, won't be enough. Now they are looking for additional funds to provide more relief to banks in trouble.


•Bernanke Says U.S. May Need More Than Approved $700 Billion to Fix Banks


The FED is starting a new program program designed to make more money (thru loans) available for consumers & small businesses, beginning later this month. The first phase is projected at $200M.

• Fed launches new $200B consumer credit program- AP

HSBC, one of the world's major banks whose main shares are traded in Hong Kong, completed their $18B rights offering to raise more capital. The shares were priced at a 50% discount based on the market price before the announcement. Last night in Asian trading, HSBC stock was down 20% reflecting the impact of share dilution. The money will be used to shore up equity on the balance sheet & invest in good "opportunities" in Asia & emerging countries (as they put it).

•HSBC May Use Rights Offering Proceeds for Acquisitions in Emerging Markets


Toyota (TM), now the world's biggest auto company, is asking for a $2B bailout loan from the Japanese gov. This money will be for its finance arm, Toyota Financial Services. Toyota does 70% of its business in the US, that business has been suffering along with the other car makers. The stock however, is at a lofty $60 for those interested in purchasing shares.

•Toyota Seeks Loans From Japan as Carmaker Forecasts First Loss in 59 Years

Berkshire Hathaway (BRK.A) described 2008 as the worst year in its history. They are cutting back & laying off as the stock is down 50% from its peak 6 months ago.

•Buffett's Berkshire Will Cut Jobs, Close Facilities After Profit Declines


Nothing new going on in the markets, they just keep dragging along with a downward bias. 7K has become the new ceiling for the Dow in a world that looks like its financial businesses have spun out of control.