Markets sell off on weak economic data

Glowing earnings reports were not good enough to take markets higher. Dow declined 50 (but still above 10K), decliners over advancers 2-1 & NAZ slipped 12. Banks were weak on soggy earnings reports


S&P 500 FINANCIALS INDEX

Value 204.30

Change -1.39

% Change -0.7%

MLPs keep flying in contrast to the REITs. The Alerian MLP Index was up pennies heading for 265, another high since the big sell-off in early Sep 2008. Meanwhile REITs have been treading water, today down 3. Junk bond funds were higher taking them to new highs for the last 12+ months. Oil touched 80 but couldn't hold it, slipping back to the 78s. It's had a 10 point pop in the last week as speculators have been pushing it hard. But there is also growing demand from China, world's 3rd biggest economy, which needs more & more oil. Gold was flat at 1057, near its yearly high


Alerian MLP Index --- 2 weeks




Dow Jones --- 2 weeks





Applications for home building permits fell in Sep, by the steepest decline since Apr -- a very discouraging sign for the housing industry. This signals that construction could weaken further in the coming months. The industry wants the $8K tax credit for first-time buyers to be extended & expanded so the housing sector can emerge from the recession. But the administration has not decided whether to support any extension. The Commerce Dept said construction of homes & apartments rose 0.5% last month to an annual rate of 590K units, weaker than the 610K that was expected. In the good old days, that number exceeded 1M. The industry also faces other challenges, including record levels of home foreclosures & unemployment that is currently at a 26-year high of 9.8%.

Meanwhile, wholesale prices fell 0.6% last month on a drop in energy costs. Excluding food & energy, core inflation edged down 0.1%. In the 12 months ending in Sep, core wholesale prices rose a modest 1.8%.

US Economy: Housing Starts Are Lower Than Forecast


The Dow chart for the last 2 weeks shows it wants to go higher even though it's coming off greatly overbought conditions. Strong earnings reports from heavyweights should have carried the day. Apple (APPL) was up 9, BlackRock (BLK) gained 6 & Caterpillar rose almost 2. In a bull market, that would have brought out buyers in droves. But the economic data carried the day & that was largely gloomy. And all the earnings weren't so hot. Coca Cola (KO), another Dow stock & Dividend Aristocrat, was off on a so-so report & State Street (STT), a major bank & former Dividend Aristocrat, had a weak report. KO slid 72¢ & STT fell 4½. The Dow will have to decide if it wants 10K to be a floor or ceiling.

Dow Jones Industrials --- 2 weeks