Falling Shanghai market drags US stocks lower

Dow plunged almost 100 on the opening after the China market continued its decline. But buyers returned & Dow has recovered to down 12, decliners over advancers 3-2 & NAZ was off 6. Banks are also lower:

S&P 500 FINANCIALS INDEX

Value 185.69

Change -1.26

% Change -0.7%

MLPs & REITs are settling back with the markets. The Alerian MLP Index was down fractionally in the 237s but the Dow Jones REIT Index was off 2+. However, junk bond funds were mixed. Treasuries were in demand again, the yield on the 10 year Treasury bond fell 9 basis points to 3.44%. That yield may be testing the 3¼% yield touched last month.


Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks




10-year Treasury Yld index - 2 months





After declining in early AM trading, oil rebounded to another significant gain. It's overcoming doubts created by the continued fall in the China stock market. Buyers are betting on encouraging news from the weekly inventory report coming out shortly.

CLU09.NYM

...Crude Oil Sep 09

...70.24

... 1.05 .......(1.5%)

World markets have been paying more attention to the Shanghai stock market. Last night it dropped 4.3% (following a bigger drop on Mon) to 2785 & is down 700 from its recent peak. This is the 4th largest & fasting growing economy in the world. They have a whopper stimulus package aimed at the domestic economy & is helping them get thru the global recession. But they are also a major exporter. Worries about their exports could be driving this selling.

Shanghai Composite --- 3 months





Along with the slumping China market, the ¥ was strong (seen as a safe currency). This AM it strengthened to under 94 to the dollar, up from 95+ in recent days. This is more indication of a growing attitude to be "risk averse." Bumps are getting larger in a road which should be quiet with sideways trading in late Aug.

Dow Jones Industrials --- 2 weeks