Markets rose after favorable earnings reports

Dow rose at the start & has remained about 50 points higher in the early part of the day. Dow is now up 53, advancers over decliners almost 3-1 & NAZ is up 16. Banks are also recouping some of yesterday's losses:

S&P 500 FINANCIALS INDEX

Value 186.72

Change 3.30

% Change 1.8%

The high yield sector regained some of yesterday's losses. The Alerian MLP Index & the Dow Jones REIT Index were each up 1+. Junk bond funds bounced back while the VIX or volatility index, fell .89 to 27. Treasuries continue in demand, the yield on the 10 year Treasury bond slipped 1 basis points to 3.48%.

Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks




10-Year Treasury Yld Index - 3 months





Oil benefited from the rising stock markets.

CLU09.NYM

...Crude Oil Sep 09

...67.49

... 0.74 .......(1.1%)

Construction on new homes & apartments fell 1% last month, missing expectations. Construction starts were only 581K (annualized rate) compared to an upwardly revised rate of 587K in Jun & below the forecasted rate of 600K units. The decline was led by a 13% drop in apartment building. Construction of single-family homes rose 1% to the highest level since Oct 2008. However theses numbers are still a long way from non-recession levels. Housing starts last month were 38% below the prior year.

•Housing Starts in U.S. Unexpectedly Decline; Single-Family Starts Increase


Home Depot (HD), Dow stock, reported favorable earnings for Q2, the stock was up 1.11. Earnings declined 7% while sales dropped 9% but beat expectations (a common earnings theme, lower results beat estimates). Same-store-sales were down 8½%. They raised full guidance for earnings from continuing operations.

•Home Depot's Second-Quarter Profit Falls Less Than Estimated; Sales Drop

Home Depot --- 1 year





Target (TGT), Dividend Aristocrat, reported Q2 profits fell 6.3%, but beat forecasts with cost-cutting & improvements in its credit-card business. The stock rose 2.53. It earned 79¢ per share in the qtr ended Aug. 1 compared to 82¢ per share last year. Revenue fell 2.6% to $15B.

Target Second-Quarter Profit Tops Analysts’ Estimates

Target --- 1 year





The Shanghai stock market tumbled 5% on Mon, leading the decline in global stock markets. Last night their market recovered 1.4%. Their stock market has been red hot this year, up 60% YTD & almost double its low of last year. Of course, that's after falling over 70% from its previous peak. Excitement has quieted down. Dow has been in a sideways band above 9K in Aug. Sideways trading may continue until Labor Day.

Dow Jones Industrials --- 2 weeks