Stocks fall for 4th straight day

Dow tumbled 119 (closing at the lows), decliners over advancers 7-1 (a very large spread) & NAZ dropped 56 (2.7%). Banks sold off in this decline, The Financial Index, again closing at its lows, is down 20 (10%) from its highs 2 weeks ago.


S&P 500 FINANCIALS INDEX

Value 190.23

Change -6.35

% Change -3.2%

MLPs are having a rough time of it, maybe it's just profit taking. After running 100 points from the lows, even the Alerian needs time to rest. Today it's down 9.28 to the 251s, one of its biggest daily drops ever. The Dow Jones REIT Index fell a very big 7, near its lows in recent months. Junk bonds took a nasty spill, maybe Bill Gross started selling some of his junk bonds. The Barclays Capital High Yield Bond ETF fell almost 1½% (buying near the close limited losses). Fears are growing as the VIX shot up 3.08 to 27.91. Money is flowing back into Treasuries, the yield on the 10-year Treasury dropped 5 basis points to 3.41%.


Alerian MLP Index --- YTD




Dow Jones REIT Index --- 3 months




Barclays Cap High Yield Bond ETF




VIX ---- 2 months





The weekly energy report said supplies rose by 2M barrels instead of dropping (for a 3rd week in a row) as expected. Oil had a very bad day, it's returning to the 67-75 range it had been in for much of 2009. Gold was also down (from over 1060 last week).

CLZ09.NYM

..Crude Oil Dec 09

..77.36

.. 2.19 ......(2.8%)

GCV09.CMX

..Gold Oct 09

..1,029.90

.. 4.80 ......(0.5%)

CIT (CIT), one of the nation's largest lenders to small and mid-sized businesses, received $4.5B credit from its own lenders & bondholders as it tries to avoid collapse. The loan comes as CIT has been facing pressure from Carl Icahn who was been trying to get investors to reject the company's restructuring plan. The new loan is being financed by lenders, including some bondholders, that provided CIT with a $3B lifeline over the summer. CIT is asking bondholders to swap their debt for stock & new debt that matures later in trying to reduce near-term debt maturities by $5.7B. Even if approved, it still might have to file for bankruptcy protection. It's been living on the edge for months, today the stock is up 10¢ to 1.06.

•CIT Group Obtains an Additional $4.5 Billion in Financing, Spurning Icahn

CIT --- 1 year





Earnings season has not gone well, especially in the last week, despite what the bulls say. Bulls talk about a correction being healthy after the Dow has run 3½K unchecked. But this could prove more serious. Today's sell-off by junk (high risk) bonds may be sending an important signal about where the markets are going. Dow is is off 330 from its highs 2 weeks ago while the VIX shot up 7+ points. The shorter term charts are going from dreary to ugly!


Dow Jones Industrials --- 2 months




Nasdaq --- 2 months