Global stock slide extends to US

Dow dropped at the start & remained near the lows for most of the day, closing near the lows. It was off 187, decliners over advancers more than 5-1 & NAZ dropped 42. Banks participated in today's sell-off.

S&P 500 FINANCIALS INDEX

Value 162.61

Change -4.93

% Change -2.9%

The high yield sector continued weak (Alerian MLP Index weekly chart is shown in the Yahoo Finance widget on the right). The MLP index dropped 3, REIT index sank 7 & junk bond funds were weak.

Oil recovered some of the AM losses, but ended down.

CLN09.NYM

..Crude Oil Jul 09

..70.53

.. 1.51 ......(2.1%)

They're giving erudite reasons why the Treasuries had a such a strong day, but I think the reasons are simple. This is a reaction to an oversold (Treasury bond) market along with money flowing out of stocks into Treasuries. Today's gains took the 10 year yield down 8 basis points to 3.71% (shown in the chart below).

10-Year Treas Yld Index - 2 weeks




The president wants a major overhaul of the financials. It may sound good, but guys on the inside don't want too much gov meddling. Gung-ho politicians will push hard for reform to make themselves look good after missing the boat on the financial meltdown last year. Stocks may have a tough time advancing with these thoughts in the air.

• Scaled-back financial overhaul could still face stiff opposition- CNBC

Stocks had a rough day, some said they deserved it. There was even talk that a 1/3 pullback (based on the 3 month advance) would be good, something this overbought market needs before another leg up. I worry more about higher interest rates. An exec from Toll Brothers (TOL), the largest luxury home builder, was talking on TV about reaching the bottom. The big question is about the climb back, for them & the economy.

Dow Jones Industrials --- YTD