Dow kept chugging & chugging, but faded at the close, not able to climb into the black for 2009 (even though S&P 500 is up 4% YTD). Dow was up 12 (needing just 14 more to break into the black), decliners ahead of advancers by 10% & NAZ was essentially even. Banks continue their sideways motion from May, down a little today.
S&P 500 FINANCIALS INDEX
| Value 164.84 | Change -2.42 | % Change -1.4% |
MLPs were higher again today, up 1 to 232s. REITs were weak but junk bond funds keep rising. Barclays Capital High Yield Bond ETF is up to the highest level in 8 months, reducing the yield to 14% (a 1000 basis point premium over the 10 year Treasury yield). Oil has been hot but not today, slipping pennies (still in the 68s).
Barclays Capital High Yield - 1 year
Markets are starting to see the disconnect between rising stock markets & rising yields on Treasuries. The 10 year Treasury yield rose 15 basis points to 3.86% which will take mortgage rates even higher. Something has to give. Traders are pricing in the possibility that the Federal Reserve will increase interest rates later in 2009. That's a logical conclusion of what to expect if the banks are recovering, letting them borrow at virtually no interest does not make sense.
• Traders Begin to Speculate Fed May Need to Raise Interest Rates This Year
Wal-Mart (WMT), Dow stock & Dividend Aristocrat, approved a massive stock buyback program & is looking to expand into Russia. WMT stock has been a laggard this year after being the best performer in the Dow last year. Today it's pretty much even, near 51.
Wal-Mart Board Approves $15 Billion Share Repurchase
Wal-Mart May Acquire or Build Stores in Russia, McMillon Says
Wal-Mart --- 1 year
That 8776 ceiling is gaining importance in preventing the Dow's advance. It remains close, but so far away.
Dow Jones Industrials --- YTD
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