Dow charges ahead to new 2009 high

Stocks had strong gains. Buyers were encouraged by relatively good earnings reports & a favorable unemployment report for last week. Dow shot up 154, advancers over decliners better than 5-1 & NAZ rose 34 taking it over 2K (not bad after starting 2009 at 1577). Banks are also having a great day. The Financial Index is trying to take out the previous high of 175 reached in May.

S&P 500 FINANCIALS INDEX

Value 174.38

Change 5.50

% Change 3.3%

MLPs are not sharing today's gains, the Alerian MLP Index is up only 1. But at 244, it's just 6 below its high on Mon. REITs are having a great day, the Dow Jones REIT Index is up 6 (one of its best days this year). Junk bonds continue strong. Risk investments are being bought up. The yield on the 10-year Treasury bond is up 4 basis points to 3.71% (Treasuries are being sold on balance).


Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks




The gains on Wall Street are being shared by oil futures which recovered half of yesterday's big drop.

CLU09.NYM

...Crude Oil Sep 09

...65.34

... 1.99 .......(3.1%)

The number of claims for jobless benefits rose last week due to seasonal distortions. However, the number remaining on the jobless rolls fell to 6.2M from 6.25M in the prior week, the lowest level since mid-April. New claims for unemployment increased 25K to 584K (above analysts' estimates of 570K). The increase comes after claims were artificially depressed earlier this month by the timing of temporary auto factory shutdowns. This week's total is below the 617K claims reported in late Jun before seasonal distortions began reflecting a trend that indicates a slowing pace of layoffs. The 4-week average fell to 559K, the lowest level since Jan. Unfortunately, jobs remain scarce & the unemployment rate, which hit 9.5%, is expected to exceed 10% by year's end. And weekly claims remain far above the 300K - 350K that is consistent with a healthy economy.

•Initial Jobless Claims in U.S. Increase; Total Rolls Unexpectedly Decline

Exxon-Mobil (XOM), Dow stock & Dividend Aristocrat, reported Q2 net income of $3.95B (81¢ per share), down sharply from $11.7B ($2.22 per share) a year earlier. Excluding one-time items, earnings were $4B (84¢ per share). Analysts expected $1.02 per share. Revenue plunged 46% to $74.5B. XOM said, "Global economic conditions continue to impact the energy industry both in the volatility of commodity prices and reduced demand for products." Q2 production fell ONLY 3% from last year. XOM will reduce stock buybacks in Q3 to $4B from $5B in Q2. The stock was down 1. Royal Dutch Shell (RDS.A), the 2nd biggest oil producer, reported a similar decline in revenues & profits. Shell stock was up fractionally. Exxon & Shell produce 1/7 of the world's oil.

•Exxon Mobil, Shell Earnings Plummet After Recession Curbs Demand for Fuel

Exxon Mobil --- 1 year

Royal Dutch Shell --- 1 year

Risk is being rewarded.s Dow is setting another high for this year & NAZ wants to top 2K. The high yield sectors are benefiting from buyers' eagerness to accept more risk.


Dow Jones Industrials --- 2 weeks