Stocks rise as Dubai debt concerns ease

Stocks spent much of the day under water. Buying returned late in the day bringing markets back into the black on what could have been a very rough day. Dow gained 34 (120 below the high for 2009 reached last Wed), advancers ahead of decliners 4-3 & NAZ was up 6. Banks had a very good day, the thinking was that banks (especially regional banks) will not be affected by any problems with Dubai debt (this also helped REITs). But the Financial Index can't get away from the 200 line. It has spent much of the last 3 months under it while the Dow gained 10%.


S&P 500 FINANCIALS INDEX

Value 197.02

Change 5.26

% Change 2.7%

The Alerian MLP Index was down pennies still in the 267s but the REITs index rose a big 6½. Junk bond funds were mixed to higher. The 10-year Treasury bond inched up, reducing its yield by 1 basis point to 3.20%.


Alerian MLP Index --- 2 months




Dow Jones REIT Index --- 2 months





Oil bounced off its 75 floor while gold eked out a gain near its record highs.

CLF10.NYM

Crude Oil Jan 10

77.28

1.23 ......(1.6%)

GCZ09.CMX

..Gold Dec 09

..1,176.00

.. 1.80 ......(0.2%)

The Federal Reserve Bank of New York said it will sell securities from its portfolio, with an agreement to buy them back later (reverse repos). Reverse repos are a tool the FED uses to drain money to ease financial troubles. They said the operations will be "extremely small" & won't affect the FED's key interest rate. This move should be viewed as testing the waters to get ready for unwinding (selling) massive amounts of Treasury debt (over $2T) which it owns.

The drab reading on BlackFriday sales along with questions raised about Dubai debt were very dark clouds overhanging the markets. But they adjusted well & ended with gains. The jobs report with the important unemployment rate for Nov is coming on Fri.

Dow Jones Industrials --- 2 months