After a strong start, markets end mixed

Dow ran up 70 in the opening hour of trading, following the lead of foreign markets. But that was not meant to last, negative news stories prompted selling in the PM. Dow ended with gain of only 3, advancers were about equal to decliners & NAZ dropped 3. Banks led the way up & then led the way down. The Financial index came ever so close to 200, but then backed off to a significant loss. However Citigroup (C) ended up 12¢ to 4.82, another impressive gain.

S&P 500 FINANCIALS INDEX

Value 194.00

Change -1.80

% Change -0.9%

S5FINL:IND





The Alerian MLP index was up 1.18 taking it to the 242s while the REIT Index slipped .88. Junk bonds were mixed to higher as Treasuries rose. The yield on the 10-year Treasury bond dropped 6 basis points to 3.49%.

Alerian MLP Index --- 6 months




Dow Jones REIT Index --- 6 months





Oil remained over 74, a 10 month high.

CLV09.NYM

..Crude Oil Oct 09

..74.09

.. 0.20 ......(0.3%)

Israel became the first country to raise interest rate, by 25 basis points to an annual rate of ¾%. As economies show signs of repairing this becomes the next logical step, bring interest rates back to where they belong in normal times. They said:

The decision “strikes a balance between the need to moderate inflation and the need to continue to support the recent recovery in economic activity,” the bank said. “Setting the interest rate at the low level of 0.75 percent continues to represent an expansionary monetary policy.”

•Israel Raises Key Interest Rate, Becoming First to Act as Recession Eases


This is a quote from "Dr Doom" who correctly predicted the credit crisis. At question is the shape off the economic recovery, will it be be fast or slow?

Nouriel Roubini, the New York University professor who predicted the financial crisis, said the chance of a double-dip recession is increasing because of risks related to ending global monetary and fiscal stimulus.

•Roubini Says Risk of Double-Dip Global Recession Rising on Exit Strategies


Dow recovered 3K from its Mar low in less than 6 months. The first time it accomplished that run (1997-9) was about 2 years & that was with a booming economy & a very strong bull market. When markets pull back, I view that as absorbing a dose of reality. The next 2 weeks are expected to be quiet with modest amount of semi-holiday trading. Then Sep will begin in earnest, traditionally the worst month of the year (even before last year).

Dow Jones Industrials --- 6 months