Risk averse returns to markets

Investor psychology reversed over the weekend. Enthusiasm for risk is gone, investors are looking for safety again. Dow tumbled 175, decliners over advancers a big 9-1 & NAZ plunged 50 (NAZ has been the hottest major average in 2009). Banks felt the selling pressure:

S&P 500 FINANCIALS INDEX

Value 185.21

Change -6.37

% Change -3.3%

High yield sectors took the change in investor attitude hard. MLPs sold off sharply. The storms brewing in the Atlantic didn't help, but this season arrives every year. The Alerian MLP Index & Dow Jones REIT Index each plunged more than 6. Junk bond funds were off 2-3%. The VIX, volatility index, shot up 3½ to 28+, a 5 week high. Frightened money went into Treasuries. The yield on the longer Treasuries (over 5 years) fell around 10 basis points & the yield on the 2-Year Treasury fell 6 basis points (representing a large increase in the price for that note).


Alerian MLP Index --- 2 months




Dow Jones REIT Index --- 2 months




10-Year Treasury Yld Index - 2 months




VIX --- 2 months





Oil was caught up in today's selling, taking it near the 3 month lows.

CLU09.NYM

...Crude Oil Sep 09

...65.51

... 2.00 .......(3.0%)

Markets around the world sold off badly. Worries about the US consumer are getting everybody's attention. Massive gov borrowing is another major problem bringing on the selling. Dow has given up all the Aug gains & has backed up to the Jul 30 close of 9154. Zest for stocks has been dealt a serious blow. This week should give clues if the damage can be repaired.

Dow Jones Industrials --- 2 months