Europe debt concerns nag at the markets

Stocks are muddling along without a stimulus for the buyers. Dow is down 11, advancers over decliners 3-2 & NAZ is up 7. Banks are slipping as the Financial Index is getting used to being under the important 190 floor which had held for 6 months.


S&P 500 FINANCIALS INDEX

Value 186.77

Change -0.97

% Change -0.5%

"Bargain hunters" are coming back to MLPs after a rough time in recent days. The Alerian MLP Index is up an impressive 3 to the 279s (but still off 21 from its highs last month). The REIT index is down a fraction & junk bond funds are up. Treasuries are off, the yield on the 10-year Treasury bond is up 5 basis points to 3.58%.

Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks









Oil & gold are having a modest rebound after all the selling in recent days, But both still have their work cut out, trying to get back to former support levels at 75 & 1100. With all the cold weather, oil bulls have to be disappointed with such a small gain for oil!

CLH10.NYM

...Crude Oil Mar 10

...71.69

... 0.50 .......(0.7%)

GCG10.CMX

...Gold Feb 10

...1,064.00

... 11.80 .......(1.1%)

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Borrowings in the US were reduced for an 11th consecutive month in Dec. The record 11-month streak of lower borrowing shows consumers are still holding back, concerned more with high unemployment. The Federal Reserve said total borrowing dropped $1.8B - less than the revised $21.8B decline in Nov & also below the $9B expected. Borrowings on credit cards fell $8.5B, while other loans increased $6.8B. Consumers are more willing to take out loans for big-ticket items like cars, boats or education, but not using credit cards to augment their income as freely as in the past. This is another reminder about the dreary days for retailers. On the bright side, Dec's revised $1.8B drop in total consumer credit was the smallest drop in percentage terms since the downward trend started 11 months ago, representing an 0.8% decline in consumer credit from Nov. By contrast, Nov's revised $21.8B drop in total credit was the biggest amount in dollars terms since records began in 1943.

• Consumer credit down in Nov. for record 11th month- AP

Photo: Bloomberg


At Toyota (TM), the world's largest car company, conditions are going from bad to worse. It's difficult to remember that just recently this was one of the most highly regarded brands in the world & now the chart below tells how ugly their story has become. They're recalling the Prius hybrid car in Japan to repair a problem with the vehicle’s braking system. This negative publicity is not only hurting them, but could be bleeding over to American auto companies if all cars fall under a cloud of suspicion. TM is down another 1.28 while Ford (F) is up 39¢, befitting from the troubles at TM.

•Toyota Said to Recall Prius Cars to Fix Brake Flaw Wozniak Calls `Scary'


Toyota --- YTD




Ford --- YTD








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Markets have a lot to digest. Problems in Europe with worries about the riskiness of debt in certain countries (starting with Greece) are hurting all markets. After the G-7 meeting in Canada, which accomplished very little as usual, the € is doing a little better, up to $1.37. The situation at Toyota is getting ugly. Meanwhile following an earning season which was a flop, markets will be paying more attention to dismal unemployment numbers & a recovery in the US which is only sputtering.

Dow Jones Industrials --- 2 weeks