Financials lead markets higher again

Stocks rose at the start & continued to climb during the day ending near their highs at the close. Dow was up 70, advancers over decliners 5-2 & NAZ was up 20. The S&P 500 gained 11 taking it thru 1K again, to 1007. Banks led the way, bringing the Financial Index with a couple of points of its recent high (shown below). The financials were helped by AIG (AIG) saying it would pay back gov loans, stock up 25%. Citigroup (C), another very troubled whopper size financial, rose 35¢ to 4.38 on optimism that it would become profitable after selling troubled assets. The very brave who bought it at 1 earlier in the year are very happy campers!

S&P 500 FINANCIALS INDEX

Value 191.70

Change 4.85

% Change 2.6%

S5FINL:IND






MLPs struggled all day while REITs took off. The Alerian MLP Index was up ½ still in the 238s while the REIT index roared ahead 6. Junk bond funds were mixed as the yield on the 10-year Treasury bond fell 3 basis points bringing the yield down to 3.44% . Bulls are in charge of the Treasury bond market, but their movements tend to be modest day by day.

Alerian MLP Index --- 2 months




Dow Jones REIT Index --- 2 months




Oil was up, bleeding over from higher stock markets. It's near its 2009 highs & looks like it wants take them out.

CLU09.NYM

..Crude Oil Sep 09

..72.54

.. 0.12 ......(0.17%)

The Shanghai market has had a wild week with daily moves of 4-5% being common. Yesterday it rebounded 4½% but is still down 7% for the week. It's longer term track record illustrates the meaning of the word volatility.

Shanghai Composite Index --- 5 years





JD Powers is predicting that more than 1M autos will be sold in Aug, largely because of the success of the Cash for Clunker program. This was written prior to the earlier story that gov is VERY slow in sending rebates to the dealers causing them to pull ads. They trimmed their forecast slightly for auto sales in 2010 to 11½M (still below the "good old days" in the past).

• J.D. Power predicts boost in August auto sales- AP

Stocks have been absorbing punches very well. The Dow started the week with a big sell-off but has climbed back to a tiny gain for the week. The S&P 500 going thru 1K is helpful but it has been lingering around the resistance line all month.

Dow Jones Industrials --- 2 months