Markets higher on MLP takeover

Dow rose 84, advancers ahead of decliners almost 2-1 & NAZ gained 11. Banks are putting in a good showing:

S&P 500 FINANCIALS INDEX

Value 161.77

Change 1.42

% Change 0.9%

A relatively slow news day (except for Madoff investors) combined with a buyout vaulted MLPS onto center stage. Enterprise Products (EPD) will acquire Teppco Partners (TPP) in an all-units deal worth $3.3B to form the nation's largest publicly traded energy partnership. The partnership will own nearly 48K miles of crude & natural gas pipelines; 200M barrels of storage capacity for natural gas liquids, crude and refined products & 27B cubic feet of natural gas storage capacity. It will also control one of the largest liquid natural gas terminals in the US in the Houston Ship Channel. TPP had rejected a bid of $2.8B earlier this year, the new offer represents a 9.3% premium over TPP's close on Fri. TPP rose $1.40 or 4.8% while EPD slipped .30.

•Enterprise Products to Buy U.S. Pipeline Operator Teppco for $3.3 Billion


The Alerian MLP Index gained 1.85 to the 223s as it tries to work its way back to the low 230s reached earlier in Jun. The Dow Jones REIT Index continues in its sideways trading range near 226 (up change today). Junk bond funds are mixed after having a nice year coming off greatly depressed values at the start of 2009. The 10 year Treasury bond yield is flat near 3½%. The VIX, volatility or fear index, has fallen near its lowest level since the financial meltdown last Sep. This decline is the mirror image of what happened with high yield securities (such as MLPs).


Alerian MLP Index --- 2 weeks




VIX ---- 1 year




Oil is having another good day, making a run on its recent highs in the 72s.

CLQ09.NYM

...Crude Oil Aug 09

...71.10

... 1.94 .......(2.8%)

Today is Bernie Madoff's day in court where he will learned he will be spending the rest of his life in prison. His wife had most of her assets taken away to help recoup money for investors.

Madoff Cursed by Victims Who Scavenge for Food, Sell Recyclables


Fri night, the House passed legislation aimed at wiping out coal companies & spending more on alternative energy. There are a lot of problems, the biggest being it could amount to a huge tax on fuel bills for ordinary people. The Senate takes up the legislation where its future is unclear. Like the numerous other big bills, if passed its implications for the economy & its recovery are large.


Dow is trying to fight its way back to 8.8K, its high for the year. That level takes it into the black for 2009 (while the S&P 500 has been in the black for much of the last 2 months).

Dow Jones Industrials --- 2 weeks