Markets meander

Dow was not sure what to do as the GM bankruptcy approaches the month end deadline. It's up 29 at the moment, advancers ahead of decliners almost 3-2 & NAZ is up 3. Banks are doing well.


S&P 500 FINANCIALS INDEX

Value 159.27

Change 3.17

% Change 2.0%

MLPs are going wild. The index is up to 221, another 2009 high. REITs & junk bond funds are up modestly.


Alerian MLP Index ---- YTD





Oil keeps climbing, now it's significantly above the 62 ceiling which was considered important by traders. Early this year the contract was around 40 as traders were wondering how low it would go into the 30s.

CLN09.NYM

...Crude Oil Jul 09...

64.25

... 0.80 .......(1.3%)

The delinquency rate on mortgages increased to 9.12% while the percentage of loans entering foreclosure rose to 1.37%. Both figures are the highest going back to 1972. One in every eight Americans is late on payments or already in foreclosure. Mortgage problems have shifted from a sub-prime issue to a job-loss problem. Meanwhile the rate on a 30 year fixed rate rose to 4.81%, up 8 basis points in the last week. The rate was 5.1% at the start of the year. The recession is biting hard. The yield on the 10 year Treasury fell 4 basis points to 3.65% today, but this high rate will drive next week's mortgage rate even higher.

•Mortgage Delinquencies, Foreclosures Rise to Records in U.S. Amid Job Cuts
•Mortgage Rates on 30-Year U.S. Fixed Loans Rise to 4.91%, Freddie Mac Says


General Motors (GM) said it offered bondholders 10% of GM's stock with warrants to buy up to 15% if they agree to support selling the company's assets to a new company under bankruptcy court protection. GM said a committee of bondholders has agreed to the sweetened deal. Obviously the situation is fluid with the final outcome probably coming Sun night prior to the Jun 1 deadline.

GM Sweetens Offer to Bondholders- AP

Time Warner (TWX) will dump AOL by yearend, finally. AOL will be spun out as a separate company run by former Google (GOOG) exec, Tim Armstrong. TWX owns 95% of AOL & will buy out GOOG's 5% stake in the 3rd quarter. Then AOL will become a separate publicly traded company by year end. This will allow TWX to focus on its real businesses: movies, cable TV networks & magazines. TWX was down 22¢.

•Time Warner Will Spin Off AOL Division, Undoing Failed $124 Billion Merger


Markets keep looking for direction with GM & housing problems on center stage.

Dow Jones Industrials --- 1 month