Slow start for May

Stocks are having a tough time deciding whether to go up or down. Dow is up 10, advancers 3-2 over decliners & NAZ is down 2. Banks are off, but only slightly:

S&P 500 FINANCIALS INDEX

Value 144.63

Change -0.77

% Change -0.5%

High yield stocks are a little lower today. However, the Alerian MLP Index was up 1.72, at about 212. Eagle Rock Energy (EROC) slashed it's quarterly distribution from 41¢ to 2½¢. They said it was done to enhance its liquidity position, requiring the EROC to institute a "voluntary, temporary reduction in its quarterly distribution." The units dropped in half to the 3s. MLPs have been having an outstanding year at a time when other securities are still fighting back from severely depressed lows. I have a feeling that they have gotten ahead of themselves. Kinder Morgan's graph (for the stock equivalent KMR) is shown below. They've missed out of the bull market for MLPs in 2009. Their distribution should be $4.20, as per guidance & another record. However their Q1 report suggests that they are feeling the effects of the economic slowdown. Other MLPs may also be getting pinched in less obvious ways than reported.

• Kinder Morgan 1Q profit falls 24 pctAP(Thu, Apr 16)

Kinder Morgan (KMR) --- YTD




U.S. consumers felt more confident about the economy in Apr than at any time since the Sep failure of Lehman. The Reuters/University of Michigan Surveys of Consumers index of confidence climbed to 65.1 in Apr from 57.3 in Mar, the highest since Sep 2008 & the biggest one-month increase in over 2 years. The index of current economic conditions rose to 68.3 in Apr from 63.3 in Mar, the best reading in 4 months. The index of consumer expectations climbed to 63.1 from 53.5, another highest level since last Sept. Much of the gain can be tied to consumers' favorable assessment of U.S. President Barack Obama's stimulus spending, 65% of consumers thought the stimulus would improve the economy.

•Consumer Confidence in U.S. Advances to Highest Level Since September 2008


MasterCard (MA) said Q1 profits fell 18% from last year which included a special gain of $173M from the sale of a portion of MasterCard's investment in Redecard SA, a Brazilian credit & debit card provider. But earnings still topped analysts' expectations as revenue fell 2%. The decline was primarily due to foreign currency translation. The stock dropped 13+ (7%). This is one of the businesses that is at the heart of global consumer spending.

•MasterCard Falls Most in More Than Year After Reporting 18% Profit Decline


Stress test results are being delayed a couple of days to May 7. Banks are already quibbling about the findings (after leading one of the market's biggest 2 month rallies in history). I have a feeling markets may be less kind to stocks, banks in particular, in May.

•Stress-Tests Results Said to Be Delayed to May 7 as Banks Debate Findings