Stocks rose but down for the week

After 6 straight weekly gains, Dow tried hard to add a 7th week to its winning streak. But selling at the close limited today's gain to 119 (down 55 for the week). Advancers led decliners 4-1 & NAZ was up 42.

FED said, “most U.S. banking organizations currently have capital levels well in excess of the amounts required to be well capitalized.” That brought buyers into bank stocks. Citi, essentially even, was the only one dragging its heals.

S&P 500 FINANCIALS INDEX

Value 147.16

Change 3.47

% Change 2.4%

The high yield sector has been strong, especially in April which has been a flattish market for mainstream stocks. The Alerian MLP Index pushed thru to new highs (206) for 2009. It also has a 16% gain YTD, hard for any group to match. REITs & junk bond funds, while generally below their YTD highs, have had 2 months of sharp gains. The Dow Jones REIT Index is up 35% in Apr. During the 2 months, VIX dropped from 50 (near its yearly high) to mid 30s as fears eased. Enthusiasm is always fun, but there will be a day of reckoning, especially for REITs & junk bond funds. All yields remain very high. The Alerian MLP Index yield is 10% & the Barclays Capital High Yield Bond ETF yields 17%.

Alerian MLP Index ---- YTD




Oil broke thru 50 & got above 51. Eventually higher prices will be working there way into inflation numbers.

CLM09.NYM

..Crude Oil Jun 09

..51.61

.. 2.00 ......(4.0%)

The Treasury lent General Motors (GM), still a Dow stock, another $2B bringing the total loans to $15.4B. The Treasury is prepared to lend an additional $5B. But GM is facing the Jun 1 deadline, the clock keeps ticking.

• Treasury lends $2 billion more to GM- AP

The Federal Reserve said that the recession has hurt reserves at some of the banks. The 19 big banks are sweating results of the stress tests. Next week analysts will over analyze what the tests might say & prove. For those who like playing with fire, I think Citi (C) might be fun to play with. If they just halfway pull thru the stress test, the stock might take off to 4, maybe even 5. After getting into the 4s in the prior week, this week it's been pretty much sitting at 3.20.

•Fed Says Capital at Some Major Banks `Substantially Reduced' on Recession

Citigroup ---- 2 weeks




The S&P 500 FINANCIALS INDEX is up almost 25% in Apr with today's strong finish by banks. Next week will be dominated by stress test worries.