Markets seasaw ahead of Alcoa earnings

Stocks traded sideways after big gains in the last 2 days. Among other worries, fears that Congress will not extend a tax credit for first-time homebuyers. Dow fell 5, advancers were slightly ahead of decliners & NAZ gained 6. The Financial Index continued to rebound but has to reach 207 to set a new 2009 high (& still far below 500+ reached 2 years ago).

S&P 500 FINANCIALS INDEX

Value 203.03

Change 2.01

% Change 1.0%

The Alerian MLP Index is at its 2009 highs in the 252s, but today slipped back 0.39. The chart below shows how important the 250+ ceiling has been in blocking its advance this year. REITs pulled back, the index just fell pocket change today after sailing into headwinds 3 weeks. Junk bond funds were a little weak, but nothing serious. Meanwhile Treasuries were strong & rose. The yield on the 10-year Treasury bond fell a big 7 basis points to 3.18%, trying to go below its recent low (see the chart below). As a reminder, when yields fall, prices rise making those investors happy.


Alerian MLP Index --- 3 months




Dow Jones REIT Index --- 3 months




10-Year Treasury Yld Index - 6 months




Oil declined taking it back below 70, still in the sideways band it has been trading in for several months. Gold reached another record high. If the economy slips back into a recession it's a safe haven & if the economy continues to recover it's an inflation hedge, thoughts from the gold bulls.

CLX09.NYM

..Crude Oil Nov 09

..69.62

.. 1.26 ......(1.8%)

GCV09.CMX..

Gold Oct 09

..1,044.00

.. 5.40 ......(0.5%)

The Federal Reserve said consumer debt fell in Aug $12B (at a 5.8% annual rate). This follows a downwardly revised drop of $19B (9.1% decline in Jul). Economists expected a $10B decline in August. Most of the decline was in credit card & other revolving debt, which dropped $9.9B (13.1%). Auto loans & other debt fell $2.1B (1.6%). Consumers are spending less & saving more in response to widespread job losses, stagnant wages & dwindling home values. Stores are preparing for another bleak holiday sales season making it difficult to think the recession is"over."

Consumer Debt - 12 months





ConocoPhillips (COP), 3rd largest US oil company, announced it raised the quarterly div from 47¢ to 50¢ & will sell off $10B in assets. The stock rose 1.29 to 49.70. They also reduced capital expenditures next year by 10% to $11B. As is the case with most of the big oils, it has been left behind in this year's market surge. It's only selling at 15X this year's slashed earnings & about 9X next year's earnings.

Conoco raises dividend, to sell $10B of assets

ConocoPhillips --- 1 year





Stocks were mostly marking time today, awaiting the first major earnings report of the season. Alcoa (AA) reported a profit in Q3 vs an expected loss of 33¢ per share. However sales plunged from $7B to $4.6B. The stock gained 31¢ in regular trading, the gut reaction after hours took it up another 85¢.

Alcoa --- 1 day




Dow Jones Industrials --- 3 months