Time for the overdo relief rally

Out of the gate, Dow rose 100 following the lead of higher markets around the world. But it's fighting to hold onto the gains. Dow is up 144, advancers over declines almost 3-1 & NAZ is up 33.


Banks continue weak on the div cut by US Bancorp (USB) as S&P 500 FINANCIALS INDEX hits another new low:

Value 92.30

Change- 0.46

% Change -0.5%

Probably not helping financials is General Electric (GE), the only Dow stock remaining from the original 30, dropping to an 18 year low at $6. It may not be included in the S&P 500 FINANCIALS INDEX, but fears keep growing about it's ability to ride out this credit crisis.

•GE Drops Below $6 for First Time Since 1991 Amid Concern Over Finance Unit

General Electric --- YTD





High yield stocks are bouncing back from the drubbing they've taken recently. The Alerian MLP Index is up 5 taking back to 176 (its starting point for 2009). The Dow Jones REIT Index is up 1 (swell) & junk bond funds are mixed back at their very depressed levels. VIX is down 2½ to 48½.


Oil is participating in the rally ahead of the weekly inventory report which will be released shortly but gold is only flat.

CLJ09.NYM

...Crude Oil Apr 09

...44.30

... 2.65 .......(6.4%)

Over 8M householders are under water. That means the mortgage is larger than the lowered value of the home. Another 2+M are very near the water line. The danger is these people have incentive to walk away from their homes. The administration has a plan to help homeowners, who can document hardship, avoid foreclosure. This is a very touchy area because the gov is helping those who have gotten in over their heads while others who struggle to pay their mortgages are being ignored (not to mention part of their taxes is helping the ones who are in over their heads). The idea is that this is "for the good of the country." Uh huh!

•More Than 8 Million U.S. Mortgage Holders Are Under Water as Prices Tumble
•U.S. Mortgage-Modification Rules to Require Proof of `Financial Hardship'


US Bancorp, the last bank Dividend Aristocrat, made it official by cutting their div to a nickel per quarter. It's difficult to think of any major bank which hasn't had a div cut recently.

• US Bancorp cuts dividend 88 percent- AP

Dividend news has been ugly for some time & will continue that way, but some companies can weather this financial storm in good shape. A few of such remaining Dividend Aristocrats (off the top of my head) are:

3M (MMM)
Coca Cola (KO)
Exxon Mobil (XOM)
Johnson & Johnson (JNJ)
McDonald's (MCD)
Procter & Gamble (PG)
Walgreen (WAG)
Wal-Mart (WMT)


Markets are awaiting the jobs report on Fri. It's expected to be awful or even worse.