Profit taking sell-off

Markets need a rest. Dow dropped 56, decliners ahead of advancers almost 4-1 & NAZ fell 24. Banks are feeling selling pressure, but not to any great extent given their run up this year.

S&P 500 FINANCIALS INDEX

Value 194.70

Change -1.23

% Change -0.6%

MLPs are taking it easy in Aug, today down 3+ to the 235s. The REIT Index is off 2+ & junk bonds funds are weak while the yield on the 10-year Treasury bond is flattish at 3.45%.


Alerian MLP Index --- 1 month




Dow Jones REIT Index --- 1 month





Slumping oil is following lower stock markets. Like stock markets, it is still very near recent highs for 2009.

CLV09.NYM

...Crude Oil Oct 09

...70.15

... 1.28 .......(1.8%)

The economy shrank at a 1% annualized rate in Q2, a better-than-expected showing & more evidence that the recession is drawing to a close. Many economists believe the economy is growing in Q3, but any rebound will not be accompanied by rising employment. Weekly jobless claims figures just released were better than expected, but remain well above levels associated with a healthy economy.

The new estimate for GDP was unchanged from the initial figure released last month. The drop, while representing a record 4th consecutive decline, was smaller than in the previous 2 quarters. Businesses slashed inventories more than first reported & cut back more sharply on investment in new plants & equipment. These reductions were offset by revisions that showed smaller dips in consumer spending, exports & housing construction.

Meanwhile the Labor Dept reported unemployment claims fell last week to 570K, from an upwardly revised 580K in the previous week. Those continuing to claim benefits dropped to 6.13M from 6.25M, the lowest level since early Apr. However, the weekly figures remain far above 325K consistent with a healthy economy. New claims last fell below 300K in early 2007.

•Economy in U.S. Shrank 1% in Second Quarter, Less Than Economists Forecast
Initial Jobless Claims in US Decreased Last Week Bloomberg



Toll Brothers (TOL), a large luxury home builder, reported another ugly qtr but sees buyers starting to return to the market. The stock fell 35¢.

Toll Brothers 3Q Loss Widens; Sees Signs For Optimism

Toll Brothers --- 1 year





The Shanghai stock market has been behaving better after its recent sell-off. There are concerns that gov stimulus spending may be loosing some of its punch, causing the growth rate to slow further.

Shanghai Composite --- 1 year





Lower markets today are a reaction to their enormous gains this year. In addition, many traders are on holiday.

Dow Jones Industrials --- 1 month