Markets fall from lower oil prices & home sales

After a higher start, Dow spent the rest of the day in the red with a modest loss. Dow was down 41 (but still within striking distance of a new 2009 high), decliners ahead of advancers 3-1 & NAZ fell 23 (down over 50 from its high reached yesterday). Banks sold off, the Financial Index slipped below the important 200 floor it went thru on its way up last week.

S&P 500 FINANCIALS INDEX

Value 198.73

Change -3.59

% Change -1.8%

MLPs were weak, the Alerian MLP Index fell 2¼ to the 247s. REITs dropped sharply, the Dow Jones REIT Index fell 6 (down 15 from the peak a week ago). Junk bond funds fell as investor interest has been migrating to gov bonds. However YTD charts for all high yield sectors still look great. The yield on the 10-year Treasury bond dropped 4 basis points to 3.38%, nearing the low of its range in the recent months.

Alerian MLP Index --- YTD




Dow Jones REIT Index --- YTD





Oil had another bad day bringing it near its interim lows. For the technical bulls, this fall is getting serious. For the rest of us, lower prices come from weaker demand by global economies. Gold also took a serious spill, bringing it below the magic 1K line.

CLX09.NYM

..Crude Oil Nov 09

..65.96

.. 3.01 ......(4.4%)

GCU09.CMX

..Gold Sep 09

..997.50

.. 15.50 ......(1.5%)

Jobless claims fell by 21K to 530K last week, from a revised 551K in the week before. The number collecting unemployment insurance fell in the prior week to 6.14M, a little under forecast. Economists had forecasted claims would rise to 550K from the previously reported 545K. The 4-week moving average fell to 554k (lowest since Jan) from 564k.

US Initial Jobless Claims Decreased to 530,000


The Treasury sold a record (it's amazing how many time that adjective is used to describe Treasury auctions) $29B of 7-year notes & it went well, completing another $112B of sales this week. The annualized yield was a shade over 3%. The bid-to-cover was 2.79X, above expectations & indirect bidders (including foreign central banks) bought 62%. Treasuries have risen in price for the last 3 days, these auctions benefited from strong demand for US securities.

•Treasuries Extend Gains After Record $29 Billion Seven-Year Note Auction


The jobless report was fairly good but housing data was sluggish. Treasuries have been strong this week while the Dow has been a little weak (another word is tired). Treasuries have picked up a modest following wind, but bull market sentimentality for stocks remains in command.


Dow Jones Industrials --- YTD