Markets end stellar week, mixed

Dow gained all 5 days & had a very impressive week. Dow ended up 32, decliners slightly ahead of advancers while NAZ fell 1. Volume was only mediocre.

The Financial Index slipped today but had an exceptional week, up 14 (almost 10%), when earnings from some of the biggest banks were reported.

S&P 500 FINANCIALS INDEX

Value 163.39

Change -1.28

% Change -0.8%

The Alerian MLP index is on a tear. After gaining 1½ today to the 238s, it's up a startling 35% in 2009. In the last 7 trading days, it popped 19. But REITs sold off while junk bonds were mixed & the VIX came down to 24, another new low since the Lehman collapse last Sep. Treasuries continue to sell off with the yield on the 10 year Treasury jumping 9 basis points to 3.65% (at the beginning of the week it was under 3.30%). Risk takers looking for high yields are focusing their interest on MLPs.

Alerian MLP Index --- 2 years




Oil befitted from higher stock markets, it's also up 10% from its 2 month lows

CLQ09.NYM

..Crude Oil Aug 09

..63.57

.. 1.55 ......(2.5%)

CIT (CIT) is struggling to stay live. They need upwards of $6B & Pimco, their largest bondholder, is working with them. Adventuresome investors are interested in their bonds which bob wildly on every rumor. There is also late breaking news that Goldman Sachs & JPMorgan are talking with them. Unfortunately, their interest is in post Chapter 11 financing. Speculators were encouraged, the stock more than doubled to over 80¢, but settled back to a more modest gain of 29¢ (closing at 70¢) .

CIT Seeks Lenders After US Balks at Guaranteeing Its Bonds
•CIT Group's Banks Said to Weigh Debtor-in-Possession Financing for Lender


Dow had one its best weeks in history gaining amost 600 or 7%. The major driver was the first wave of earnings reports including those for some of the biggest banks. But substantial headaches remain. Nobody fully understands how CIT bankruptcy will play out. California, which has been under many radar screens, is running out of time. The end of the month is just 2 weeks away & that's when the goodwill they've been living off is expected to expire. Resolving their $26B budget gap looks hopeless. The recession with unemployment getting worse won't go away soon. In the next week, retailers will start pushing "back to school" sales, their 2nd most important selling season. Current trends indicate this will be another tough period for retailers (like last year).

Dow Jones Industrials --- 1 week