Stocks vacillate, then rise in last hour

Dow continued to hover around break even, dismal earnings reports & a decline in housing hurt. But late day buying brought markets into the green. Dow was up 70, advancers over decliners 3-2 & NAZ rose 6 ahead of Microsoft (MSFT), Dow stock, earnings released after the close. After the close MSFT reported Q3 sales slipped 6% but earnings were higher, stock up pennies after hours following a gain in regular trading.

Microsoft Reports Third-Quarter Results


Banks led a rally in the last hour as has been the case in the last month:

S&P 500 FINANCIALS INDEX

Value 143.69

Change 6.18

% Change 4.5%

MLPs & REITs were a little higher. The Alerian MLP Index was up 2 & the REIT Index popped 5.66. Oil rose to 49.67, trying to get back to 50.

Mortgage rates for the 30 year mortgage fell 2 basis point to 4.80% last week, an inch above the record low of 4.78% set 3 weeks early. However, ARM rates are relatively high compared with the fixed rate. Lower rates are welcome news to a battered industry.

• U.S. mortgage rates nudge closer to record low- Reuters

U.S. Treasuries help determine the rates on mortgages & they continue low. The 90 day T-bill is only 9 basis points (annualized). That means a $1000 T-bill will earn only 90¢ assuming it's rolled over 4 times in a year at the same measly rate. The 10 year Treasury bond yields an relatively high 2.93% even though the FED keeps buying bonds.

U.S. Treasuries

	COUPON	MATURITY DATE	CURRENT PRICE/YIELD	PRICE/YIELD CHANGE	TIME
3-Month	0.000	07/23/2009	0.09 / .09	-0.039 / -.040	16:00
6-Month	0.000	10/22/2009	0.29 / .29	-0.023 / -.023	16:00
12-Month	0.000	04/08/2010	0.45 / .46	-0.024 / -.024	16:00
2-Year	0.875	03/31/2011	99-28½ / .93	0-01½ / -.024	16:00
3-Year	1.375	04/15/2012	100-04 / 1.33	0-00+ / -.005	16:06
5-Year	1.750	03/31/2014	99-12½ / 1.88	0-02 / -.013	16:04
10-Year	2.750	02/15/2019	98-16½ / 2.92	0-04 / -.015	16:03
30-Year	3.500	02/15/2039	94-22+ / 3.80	0-03 / -.005	16:08

Angry shareholders are taking out their disappointment on management at annual meetings. These are typically quiet meetings disrupted by perhaps a gadfly. This year, many shareholders are poring out frustration. Excessive compensation is one key issue. However, a much bigger issue is the falling stock price. When many companies are selling near multi year lows, frustration will be in the air. This can be taken out by a reluctance to buy more stock in the future (limiting market advances).

• Shareholder meetings turning ugly, but change remains elusive- CNBC

Bank stress test fears are more powerful than dismal earnings in controlling the markets. If the May 4 date can be believed, markets have another week to sweat out the findings. For the adventurous, Citigroup, the call that is still a Dow stock, might be interesting. It will fly. The only problem is figuring out whether it's going up or down. I have a hunch it may take off again on a whim.


Citigroup --- 2 months