Stocks remained depressed all day

Dow remained weak all day. It tumbled in the first hour & then just kept drifting lower, closing down 289, decliners ahead of advancers 7-1 & NAZ fell 64. 18 Dow stocks fell 3+% including 4 which fell more than 10% each (AXP, BAC, C & GM).

This is today's bleak picture of the Dow (courtesy of Bloomberg):

DOW JONES INDUS. AVG MEMBERS

					Time
3M CO	51.96	-1.85	-3.44	4,225,322	15:57
ALCOA INC	8.35	-0.91	-9.83	33,119,032	15:57
AMERICAN EXPRESS	18.96	-2.84	-13.04	35,390,611	15:57
AT&T INC	25.33	-0.62	-2.39	23,964,596	15:57
BANK OF AMERICA	8.04	-2.56	-24.15	761,560,418	15:57
BOEING CO	36.53	-1.79	-4.67	6,445,650	15:57
CATERPILLAR INC	30.51	-1.78	-5.51	13,341,261	15:57
CHEVRON CORP	63.89	-2.12	-3.21	9,848,334	15:57
CITIGROUP INC	2.95	-0.70	-19.18	796,155,685	15:57
COCA-COLA CO	44.43	-0.59	-1.31	12,360,057	15:58
DU PONT (EI)	26.79	-1.63	-5.74	14,480,323	15:57
EXXON MOBIL CORP	65.21	-1.54	-2.31	27,101,277	15:57
GENERAL ELECTRIC	11.33	-1.06	-8.56	136,419,847	15:57
GENERAL MOTORS	1.67	-0.19	-10.22	26,951,171	15:57
HEWLETT-PACKARD	34.68	-1.62	-4.46	14,483,610	15:57
HOME DEPOT INC	25.18	-0.92	-3.52	16,307,086	15:57
IBM	100.58	-0.69	-0.68	9,578,843	15:57
INTEL CORP	15.12	-0.48	-3.08	56,752,484	15:57
JOHNSON&JOHNSON	52.50	-0.55	-1.04	13,863,636	15:57
JPMORGAN CHASE	29.79	-3.47	-10.43	95,070,036	15:57
KRAFT FOODS INC	22.50	-0.16	-0.73	9,813,838	15:57
MCDONALDS CORP	55.31	-0.78	-1.39	6,459,274	15:57
MERCK & CO	25.23	-0.50	-1.95	11,636,501	15:57
MICROSOFT CORP	18.68	-0.52	-2.71	52,293,901	15:57
PFIZER INC	13.58	-0.58	-4.10	48,155,770	15:58
PROCTER & GAMBLE	50.66	-1.00	-1.94	13,658,351	15:57
UNITED TECH CORP	45.79	-1.53	-3.23	5,212,017	15:58
VERIZON COMMUNIC	30.95	-0.83	-2.61	12,185,590	15:57
WAL-MART STORES	49.31	-0.89	-1.77	18,703,859	15:57
WALT DISNEY CO	19.44	-0.94	-4.61	13,033,985	15:57

Banks were the biggest drag following BAC reporting that it boosted reserves for loan losses. S&P 500 FINANCIALS INDEX had one of its largest losses ever, with many prominent banks falling around 20% each. BAC fell almost 25%.

Value 132.15

Change -17.03

% Change -11.4%

MLPs, REITs & junk bond funds all sold off. The 4+ drop for the Alerian MLP Index brought it back to the 200 line. Now it has to decide again whether to keep it as a floor or make it a ceiling as it has been for most of 2009. The Dow Jones REIT Index fell a very big 14 & junk bond funds sold off badly. On increased fears, the VIX shot up 5:


VIX ---- 2 weeks





Oil had one of its worst days in a long time resulting from a strong dollar & weak stock market.

CLK09.NYM

..Crude Oil May 09

..45.77

.. 4.56 ......(9.1%)

The rate on Treasury 90 day bills is falling, heading for zero (if not negative as in late 2008). China is now the biggest lending to the US gov, but they recently expressed their concern (dissatisfaction) with excessive gov borrowing. When buying gov paper, they are switching to shorter maturities with the lowest rates. Not sure how all this will play out (the big boys probably don't know much more), but worth keeping an eye on the 90 day rate which is only 12 basis points (annualized). Data courtesy of Bloomberg:

U.S. Treasuries

	COUPON	MATURITY DATE	CURRENT PRICE/YIELD	PRICE/YIELD CHANGE
3-Month	0.000	07/16/2009	0.12 / .12	-0.008 / -.008

•Zero Percent on Treasury Bills as China Demand Converges With Fed Policies


A leading economic indicator published by the Conference Board points to the recession lasting until later this year. Then the rebound may be slow, something recent stock market enthusiasm has not been counting on.

• U.S. recession seen likely to go through summer- Reuters

Dreary Mon is pointing to a very bad week for a very tired market. Dow has made virtually no progress in the last 3 weeks:


Dow Jones Industrials --- 1 month