Choppy day with no progress for the Dow

Markets rose modestly, not convincingly. Dow slipped another point, advancers over decliners 3-2 & NAZ gained 17 on encouraging news from Texas Instruments (TXN up 1.25). Banks were higher on news that strong ones were able to repay TARP loans. Enthusiasm was muted by the realization others did not, including some of the largest banks.


S&P 500 FINANCIALS INDEX

Value 167.52

Change 0.89

% Change 0.5%

MLPs continued weak, with the index down 2 while REITs & junk bonds funds were little changed. Oil had a very good day, taking it to almost 70 (another interim high).

CLN09.NYM

..Crude Oil Jul 09

..69.99

.. 1.90 ......(2.8%)

Treasury notes (under 10 years) gained with yields near the highest level since Nov. The Treasury had a record-tying auction of $35B 3 year notes today. However, the Treasury will sell an additional $30B in new debt (10 year & 30 year bonds) in the next 2 days. Today’s notes were sold with a yield of 1.96%, lower than forecast, as short-term Treasuries snapped a 3 day decline. Today’s auction was anticipated to draw a yield of 1.971%. The last auction, on May 5, drew a yield of 1.473%, higher interest rates force the gov to pay more interest. The bid-to-cover ratio was 2.82X, compared with 2.66X in May & an average of 2.49X for the last 7 sales. Indirect bidders, the class of investors including foreign central banks, bought 43.8% of the notes, compared with 37.3% of the notes at the May auction & an average 37.2% at the last 7 auctions. Selling longer term bonds may not go so well if inflation fears weigh on investors.

Treasuries Seven Years and Less Gain After Record-Tying Auction


JPMorgan (JPM), Goldman Sachs (GS), Morgan Stanley (MS), American Express (AXP), Bank of New York Mellon (BK), BB&T (BBT), Capital One Financial (COF), Northern Trust (NTRS), State Street Corp (SST) & U.S. Bancorp (USB) said they are repaying TARP funds. Banks not approved to pay back loans included Bank of America (BAC), Citigroup (C) & Wells Fargo (WFC), the nation’s largest mortgage lender & recipient of $25B in gov aid. Combined with repayments already received, the gov will have had $70B repaid. Banks buying back the preferred shares also have the right to repurchase warrants the Treasury holds “at fair market value."

Treasuries Seven Years and Less Gain After Record-Tying Auction

The ceiling for the Dow continues to hold while the economy only muddles along!

Dow Jones Industrials --- YTD