S&P 500 tops 1000, first time since November

Markets were higher on favorable news about improvement in US manufacturing, the Jul rally is being extended into Aug. Dow rose 87, advancers over decliners 3-1 & NAZ was up 16 (but still short of 2K). The S&P 500 rose above 1K (the first time in 9 months), then slipped back taking it below that important resistance level. Banks are doing well as the Financial Index reached a new 2009 high (but still far below the "good old days" when it topped 500). In the last 3 weeks, it has shot up from 150 to 178 for an impressive 19% gain.


S&P 500 FINANCIALS INDEX

Value 178.58

Change 3.70

% Change 2.1%

After slipping last week, the Alerian MLP Index is back on its winning streak taking it to a new 2009 high of 251. REITs have been left behind in this year's rally, but did better in the last 2 weeks (up fractionally today). Junk bond funds continue strong, reaching new highs for 2009. Treasuries sold off badly, taking the yield on the 10 year Treasury bond up 14 basis points top 3.64%.


Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks




Oil has fought its way back from the lows 3 weeks ago when it was in the low 60s. Now it's breathing on its yearly high of 73. Higher oil prices can damage global economic recovery.

CLU09.NYM

...Crude Oil Sep 09

...71.58

... 2.13 .......(3.1%)

U.S. manufacturing activity declined last month at the slowest rate in a year as production rose to its highest level in more than 2 years. Manufacturers were working to restock customers' bare shelves. The Institute for Supply Management's manufacturing index rose to 48.9 in Jul, up from 44.8 in the prior month. It has to rise above 50 to signify growth (last happened in Jan 2008). Moderating decline in U.S. manufacturing mirrors improvements in the industrial sectors in China & Europe.

•U.S. Manufacturing Shrinks at Slowest Pace in 11 Months as Recession Eases


Bulls are in charge of the markets for stocks & commodities (i.e. oil). Risk is being pushed aside in pursuit of gains. Aug has the potential for being another up month which could take the Dow back over 10K as dreary low levels of economic activity & massive gov borrowing are being pushed aside.

Dow Jones Industrials --- 2 weeks