Markets stumble

Dow fell 109 taking it back below 10K, decliners ahead of advancers 3-1 & NAZ was off 10. For the 2 weeks of earnings season, Dow has hovered around that line. Banks suffered with the markets, the Financial Index fell all day.

S&P 500 FINANCIALS INDEX

Value 203.18

Change -3.08

% Change -1.5%

The MLP Index fell 1+ & REIT Index dropped 2. Junk bond funds were little changed. But the VIX, Volatility Index, shot up 1.79 to the 22s (still near its yearly low of 20). Treasuries continued weak, the yield on the 10-year Treasury bond rose 5 basis points to 3.48%. Oil dropped 1 to 80 & gold was off 3 to 1054.

Alerian MLP Index --- 1 year




Dow REIT Index --- 1 year





Housing is still stuck in a quagmire. Freddie Mac said its defaults rose to another record high last month as its portfolio of residential mortgages grew at an annualized rate of 7.3%. Mortgages at least 90 days late or in foreclosure rose to 3.33% in Sep up from 3.13% in Aug (up 1.22% from last year). Defaults have climbed for 28 straight months, starting to set records last year. Its holdings expanded by $4.8B to $784B, after declining in 4 of the previous 5 months & is down from $867B in Mar. These problems loans will bleed thru to lending banks.

Freddie Mac Defaults Set Record as Holdings Rise



Microsoft (MSFT), Dow stock, reported lower sales in the last qtr (partially attributable to deferring some Windows sales) but their profits of 40¢ per share beat estimates taking the stock up 1.46. The good showing in profits was from cost cutting, a common theme in earnings reports.

Microsoft Profit Beats Estimates After Cost Cuts

Microsoft --- 1 year




This was an important earnings week with many of the big heavyweights reporting. Revenue gains were largely missing. Dow should have had a better week than just treading sideways & finishing down 24 for the week.


Dow Jones Industrials --- 1 week




Dow Jones Industrials --- 1 year