Markets muddle along, looking for direction

Mixed economic news leaves stocks unsure where to go. Dow is down 30, decliners ahead of advancers by 25% & NAZ slipped 17 (Cisco earnings did not give it strength). Banks were up, then gave up their gains. The Financial Index went over 190 at its high, a 9 month high.


S&P 500 FINANCIALS INDEX

Value 188.49

Change -0.88

% Change -0.5%

MLPs pulled back again, this time the Alerian MLP index is down 5¼ to the 240s. The index is off 11 from its high at the start of the week, although distributions account for a portion of the decline. Some of that money may be going into REITs. The Dow Jones REIT Index is up again today with a 2.65 gain bringing it to 160 (an eye popping 25 gain in just a week). Junk bond funds were mixed. The yield on the 10 year Treasury bond went up another 2 basis points to 3.75%. A higher yield looks like it shooting for the 4% recent high. This yield is unusually troubling because it is the basis for setting many mortgages rates. Oil is down 1+ to the 70s, still high territory.

Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks




10-Year Treasury Yld Index - 2 weeks




The number of workers seeking unemployment insurance fell last week, to 550K, down from an upwardly revised figure of 588K in the prior week. The number is much lower than 580K estimate. The 4-week average dropped to 555K, its lowest level since late Jan. However, the tally of those claiming benefits rose 69K to 6.3M.

US Initial Jobless Claims Fall More Than Projected


Retail sales for Jul were sluggish with mall-based chains being hardest hit (i.e. Macy's (M) & Abercrombie & Fitch (ANF)), although their stocks were higher. Back-to-school shopping season is not going well. Retailers fear job losses are the biggest obstacle for their recovery. The International Council of Shopping Centers-Goldman Sachs tally fell 5.0% in Jul compared with last year, in line with expectations & worse than the 4.5% average decline since Feb. Jul marks the 11th consecutive monthly drop (excluding Wal-Mart).

Sluggish July Sales Show Tight-Fisted U.S. Consumers- AP


Cisco (CSCO), Dow stock, last night reported their 4th consecutive qtr of lower sales & profits. That beat forecasts, swell. Guidance for this qtr is for a 15% sales decline but they see this as the bottom of the recession related downturn. The stock is down 35¢. They are starting a partnership with Dell (DELL) which will be in addition to their partnership with IBM (IBM).

•Chambers Server Push Ends Cisco's `Cozy' Partnership With Hewlett-Packard


The Cash-for-Clunker program is being extended, but that creates problems. On the margin some of the money that would have gone to retail store sales is now spent on new cars. The latest economic news has been mid leaving stocks to meander. Tomorrow's jobs report for Jul is eagerly awaited.

Dow Jones Industrials --- 2 weeks