Up, Up & Away!

Stocks have been going wild with hardly a pause. Dow's big gains today take it near 8776, break even for the year. It only needs a 56 point gain to go into the black for 2009. Advancers were over decliners 4-1 while NAZ was up 54. With all this enthusiasm, it's easy to forget this is an economy with big problems.


Dow Jones Industrials --- 2 weeks




The financials had a tepid day. With Dow & NAZ up around 3%, they could have done a little better.

S&P 500 FINANCIALS INDEX

Value 165.31

Change 0.87

% Change 0.5%

High yield securities keep soaring. The MLP index rocketed ahead to 231 sitting at a new high all day. REITs & junk bond funds also rose nicely.

Alerian MLP Index --- YTD




Meanwhile the 10-year Treasury bond had a disastrous day. It's sharp drop caused the yield to shoot up 25 basis points to 3.72%

10-Year Treasury Yield -- 2 weeks




Oil scored another interim high. Below is a chart of OIL, an ETN tracking oil prices, which shows in a little over 3 months oil has come close to doubling. Not good for an economy trying to recover.

CLN09.NYM

..Crude Oil Jul 09

..68.39

.. 2.08 ......(3.1%)

OIL ---- YTD




Fannie Mae & Freddie Mac mortgage bond yields climbed, pushed by higher interest rates on new home loans. This came after they soared last month, adding hurdles for a recovery in housing. Yields on Fannie Mae’s 30- year fixed-rate mortgage bonds rose 20 basis points to 4.52%, up from 3.94% on May 20.

•Mortgage-Bond Yields Climb, Suggesting Increased Home-Loan Rates to Come


Stocks going straight up without pausing is good, but only while it lasts. The question becomes, "How long will this enthusiasm last?"