Energy stocks lead markets higher

Stocks opened weaker but picked steam by midday & remained in the black for the rest of the day, closing near the highs. Dow gained 61, advancers over decliners 3-2 & NAZ was up 13. Leading gainers in the Dow were Chevron (CVX) & Exxon Mobil (XOM) aided by higher oil prices. IBM (IBM) & Merck (MRK) also had a good day. In this mixed kind of day, banks were essentially even.

S&P 500 FINANCIALS INDEX

Value 186.85

Change -0.10

% Change -0.1%

S5FINL:IND




The Alerian MLP Index was up .60 to the 238s while the REIT index fell 1+. Junk bond funds were fractionally lower but remain near their yearly highs. Money is flowing into Treasuries. The yield on the 10-year Treasury fell another 6 basis points to 3.46%.

Alerian MLP Index --- 2 months




Dow Jones REIT Index --- 2 months




Oil had a very big day, everything is breaking right for the bulls. Last week crude oil inventories fell 8.4M barrels, very bullish. The Sep contract expires on Thurs when the contract for Oct will become the near term contract. It almost touched 74 today, a new yearly high if it holds. Bulls are back in charge.

CLU09.NYM

..Crude Oil Sep 09

..72.23

.. 3.04 ......(4.4%)

• Oil prices jump on suprise draw down of US supply- AP

Bloomberg TV reported that analysts did not do a good job of calling market lows in early Mar. They were scared, like everybody else, so they were pushing defensive stocks (i.e., foods, utilities, etc.). Thus they missed a time to be venturesome & make calls for the weaker performers which turned out to have done exceptionally well in the last 5 months. Oh well.

Following the big drop on Mon, US markets have be able to digest the weak Shanghai stock market & run up in oil prices. The chart below shows Dow has been flattish for the last month, not a bad performance after after enormous gains off the lows in Mar. The S&P 500 has been sneaking its way back to the magical 1K line, only 4 points away. Volume on the floor at NYSE was just over 1B & should remain light thru Labor Day.

Dow Jones Industrials --- 2 months




S&P 500 --- 2 months