Dow fails again to end higher for the year

Late day selling hurt again. Dow tried & tried but couldn't hold onto its gains. At the close Dow was up only 32, 9 short of taking it into the black for 2009, advancers over decliners 2-1 & NAZ was up 9.


Banks were also hurt by the late day sell-off, the index continues to slug it out in the 160+ sideways zone:

S&P 500 FINANCIALS INDEX

Value 166.39

Change 1.47

% Change 0.9%

The MLP Index rebounded ½ in the 228s (shown in the Yahoo widget on the right), but many companies were up fractions (also shown in the widget on the right). The REIT index fell 3, junk bond funds continue their slow climb & the VIX fell 1 to low 27s (another 2009 low).


The $11B sale of 30-year Treasury bonds drew the highest yield in almost 2 years, luring investors concerned about excessive gov spending. Yields fell as indirect bidders bought the biggest percentage of long bonds at auction since 2006. Ten-year note yields fell after earlier touching 4% (the first time since Oct). The 30-year bond yield fell six basis points to 4.70% after touching 4.84%, the highest since October 2007. The bonds were sold at a yield of 4.72%, the highest since August 2007 & below the 4.80% forecast. The prior sale of 30-year bonds drew a yield of 4.288% on May 7 (showing how far interest have risen in recent weeks). Indirect bidders bought 49% of the bonds, up from 33% in May. However, they bought 65.4% at the Feb 2006 sale, when the Treasury brought back the bond after a five-year hiatus. The bid-to-cover ratio was 2.68X, higher than 2.14X last month. It has averaged 2.21X at the past 10 sales. Overall, this auction was evaluated as "going well." There will be no auctions next week, but many more will follow.

•Treasuries Climb After 30-Year Bonds Yield Most at U.S. Auction Since 2007


The 10 year note yield rallied sharply, taking the yield down to 3.80% at auction time. In the PM it fell back bringing the yield back up to 3.86%, down 7 basis points for the day:

10-Year Treasury Yield Index -- 2 weeks




Meanwhile oil continues to rise, nearing 73. This rise is troubling, especially with the large overhang of supply sitting in tankers waiting to be sold. That alone should limit price advances.

CLN09.NYM

..Crude Oil Jul 09

..72.73

.. 1.40 ......(2.0%)

Watching those congressional clowns grilling Ken Lewis of Bank of America (BAC) showed how they operate as Mon morning quarterbacks. These are the same guys who who went to conventions of BOTH parties 2 weeks before the Sep meltdown without uttering one word about the sorry state of the economy, let alone the financials. Now they're brilliant after approving record deficits (which they didn't have time to read) & find Ken Lewis an easy guy to beat up on. They show how bad they are when their questions take up 80% of the time allotted for the question period! For what it's worth, BAC, a Dow stock, was up 99¢.

All the Dow needs is 6 more to go positive for the year, so close but so far away:

Dow Jones Industrials --- YTD