Early gains lost after Beige Book notes released

Stocks began the day higher but there was selling in the PM. Dow tried rallying into the close. That failed & it ended down 9, advancers over decliners 4-3 & NAZ was off a fraction. Banks had modest gains after pulling back in the PM. The Financial Index went over 200 but didn't hold, it was just able to eke out a gain.

S&P 500 FINANCIALS INDEX

Value 198.83

Change 0.10

% Change 0.1%

The Alerian MLP Index bumped against its 300 ceiling & then fell back. It touched 300.40 before the buyers gave up. The index fell 2¼ on the day to the 296s. This was the 2nd attempt to crash thru the barrier. The REIT index was off a fraction, once again, unable to crack thru an important barrier, this time it was the 181 Sep high. Junk bond funds were little changed. And the yield on the 10-year Treasury bond bumped up 1 basis point to 3.62%.


Alerian MLPIndex --- YTD




Dow Jones REIT Index --- YTD

Now that oil has gone above 80, it will try to make it a floor once again. But the initial call is it's still stuck in the 75-80 trading zone. However gold continues to make advances with an excellent chart over the last month.

CLJ10.NYM

..Crude Oil Apr 10

..80.78

.. 1.10 ......(1.4%)

GCH10.CMX

..Gold Mar 10

..1,142.70

.. 5.80 ......(0.5%)

GLD (ETF) --- 1 month

Gold Super Cycle!! Click Here

Photo: Reuters

Economic activity strengthened modestly across most of the 12 Federal Reserve districts during Feb & could have done better if not for heavy snowstorms that battered many areas. "Economic conditions continued to expand since the last report, although severe snowstorms in early February held back activity in several districts," said the Beige Book in a summary prepared by the Kansas City FED. However, the banking sector also was soft, with demand for loans still weak across most of the country & banks wary about lending. While banks had ample liquidity, they were reluctant to reduce cash reserves. In short, banks are not lending like they would be if the economy was robust.

Fed: Economy Stronger in February Despite Snow- Reuters



Elliott Associates LP will buy the 91½% of Novell (NOVL) it doesn't already own for $5.75 per share, valuing the company at about $2B. Novell's large cash position represents almost 60% of the market capitalization, however much of it is overseas. Jesse Cohn, Elliott portfolio manager, said Elliott is "uniquely situated to deliver maximum value to the company's stockholders on an expedited basis" and faulted a recent series of acquisitions & changes in strategic focus at Novell. NOVL gained 1.33 (almost 30%) to 6.08 (above the offering price). NOVL had been a high flyer techie when they were in vogue 10 years ago, but since then has just muddled along.

•Elliott offers $2 billion buyout of Novell AP


Novell --- 2 years

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Markets didn't have what it takes to carry on with the rally. The Novell buyout was encouraging. But its value is unclear with the stock trading above the offering price. The important part of the Beige Book report for me was that banks were not making loans like they should be. Now eyes will be focused on the jobs report coming on Fri with advance warnings that it might be disappointing. Thurs looks like it will be another lackluster day.


Dow Jones Industrials --- YTD




Nasdaq --- YTD