Dow eaks out another gain, staying above 9000

Higher markets in the PM reduced morning losses. Dow managed a gain of 23 giving it a weekly advance of 350, advancers ahead of decliners 3-2 & NAZ partially recovered to down only 7 (after Microsoft disappointing earnings). Banks also had a modest loss, but up almost 3 for the week. The Financial Index is at the high end of its 3 month trading range.

S&P 500 FINANCIALS INDEX

Value 167.39

Change -0.63

% Change -0.3%

S5FINL:IND




One month ago, MLPs already had a very good year with a 20% gain YTD. In the last month, the index ran up another 16% bringing the YTD gain to a record breaking 39% (plus distributions). In the same time, REITs, after a good last month, are still down 10% YTD. Some junk bond funds have soared 50% from depressed levels at the start of the year while Treasuries have plunged. The yield on the 10 year Treasury soared from about 2¼% at the start of 2009 to nearly 3¾%. On the margin, Treasuries were sold with the money going into MLPs & junk bond funds while REITs only got modest investments.

These are all yield securities. The yield for the MLP Index is below 8½%, not too far from 7% (or so) which is a traditional yield in conventional times. Yields on junk bond funds are around 13%, not too far from 9-10% area which is ordinary kind of number. Analysis of REIT yields is more complex because of the many div reductions. Current yields are typically under 10% but stocks have not benefited that much because of lower divs. In the coming months, if the recession continues, the disparity between the haves & have nots should narrow.

Today the Alerian MLP index rose 3½ to the 246s, another 2009 high. REITs were fractionally higher & junk bonds were mixed. The yield on the 10 year Treasury bond fell 4 basis points to 3.67% ahead of 4 big auctions of debt next week.


Alerian MLP Index --- 1 month




Dow Jones REIT Index --- YTD




10-Year Treasury Yield Index - YTD





Oils keeps advancing to its highest level since the start of Jul.

CLU09.NYM

..Crude Oil Sep 09

..67.86..

0.70 ......(1.0%)

OIL (ETF) --- 1 month





Dow has advanced almost 1K in 2 weeks, nothing to sneeze at. It's behaving as if the recession is over. I don't think so.

Dow Jones Industrials --- YTD