Markets plunge on worries about consumers supporting a recovery

Stocks sank on the opening & it was downhill from there. The Dow sold off 250 (ending near its lows), decliners over advancers 5-1 & NAZ dropped 52. Banks led the selling, but the selling was widespread, affecting just about all industries. The Financial Index is at its lowest levels since Aug, the chart does not look pretty.

S&P 500 FINANCIALS INDEX

Value 189.03

Change -9.44

% Change -4.8%

The high yield sectors were hard hit with selling. The Alerian MLP index was off 4½ to the 254s, where it was early in Oct. The Dow Jones REIT index was off 3, near a 2 month low. Junk bond funds felt selling pressure, declines of 3% were common. The VIX, volatility index, soared, I repeat SOARED 6.04 taking it to 30.80, a level not seen since last Jul. This is the biggest one day jump in over a year. Fears are growing quickly! Meanwhile, safer Treasuries jumped. The yield on the 10-year Treasury fell 11 basis points to 3.39%.

Alerian MLP Index --- 1 month




Dow Jones REIT Index --- 3 months




VIX --- 6 months





Oil sold off badly, gold held up better. Oil feel the strength of world economies & how they are recovering. Worries about the global economic recovery are growing. The link about buying gold in my prior post may be of more interest now.

CLZ09.NYM

..Crude Oil Dec 09

..77.10

.. 2.77 ......(3.5%)

GCX09.CMX

..Gold Nov 09

..1,039.70

.. 6.70 ......(0.6%)

Simon Property (SPG) reported its funds from operations (FFO) improved in Q3 on lowered expenses even though occupancy levels slipped. Occupancy at regional malls fell to 91.4% in Q3 from 92.5% last year. The premium outlet center occupancy dropped to 97.5% from 98.8%. Total FFO grew but per share results were lower because more shares were outstanding from stock sales ($1.38 per share this year vs $1.61 per share last year), analysts forecasted FFO of $1.32 per share. SPG boosted the low end of its full-year FFO full year guidance for FFO of $5.40 - $5.50 per share, up from a range of $5.35 to $5.50. The stock dropped 3. SPG is the largest owner of commercial properties & considered to be well run. These are very choppy times for REITs & difficult times will continue.

Simon Property Says FFO Increased in Third Quarter

Simon Property --- 1 year





Markets are ending the month on a down note. Dow is off 400 from its peak just 2 weeks ago. Some of today's decline maybe year end selling (Oct 31) by fund managers. Or maybe investors really have greater worries about the recovery. Selling of the high yields is disturbing because they have a lot at stake in a speedy recovery. The proposed health care bill in Congress which the Dems are pushing hard, is another minus because of the higher taxes that it will bring. Next week Oct auto sales will be reported & then the jobs report which could show the unemployment rate reaching the dreaded 10% figure.

Dow Jones Industrials --- 1 year