Everybody was watching the markets to see if the Dow could close over 10K & it did! Dow gained 144 to 10,015, advancers over decliners 3-1 & NAZ gained 32. NAZ & S&P 500 also closed at new 2009 highs. All considered, the 3-1 ratio for advancers is a little disappointing. Banks led the way up, the Financial Index had a big gainer day (over 5 is good, 10 is eye popping):
The Alerian MLP Index rose 1¾ to the 261s, the highest level since it fell off the cliff in early Sep 2008. The Dow Jones REIT Index gained 6 to its best level this month. Junk bond funds were higher, many at their highest levels in a year or more. As stocks go up, bonds go down. The 10-year Treasury bond sank more than 1 point (over $10 per $1000 bond) boosting the yield 11 basis points to 3.42%. Risk is welcome & being rewarded. The VIX, volatility index, is below 23, the lowest its been since early Sep 2008. Oil popped 1 taking it over 75, another high for 2009. Gold after reaching another record ended down 3 from yesterday's close. Maybe some of those sellers used the money to buy stocks.
In Sep retail sales dropped 1.5%, smaller than the 2.1% fall which had been expected. However this was still the biggest setback since sales dropped 3.2% in Dec. Car sales plunged 10.4%, excluding autos retail sales rose 0.5%. The performance of retail sales less autos is considered only fairly modest. Going forward, limited growth rates for retail sales are expected.
•Retail Sales in U.S. Drop Less Than Forecast in Sign of Emerging Recovery
While banks are viewed as leading the markets upward this year, NAZ is up an amazing 71% from its low in Mar. Any way you cut it, markets have had a record rebound over a short period of time. Banks are able to secure financing at essentially zero borrowing costs, look for more favorable Q3 earnings reports from banks. But these favorable conditions will not last. Unemployment is expected to rise further. Not sure how far euphoria will take the markets, but they are getting ahead of the economic recovery.
On the right, I've added an ad for Ino.com & a link to learn more about investing in oil. For those who simply want to invest via the stock market, 2 ETFs for oil are available:
and gold has an easy ETF: