Markets rise after Federal Reserve keeps rates low

Dow was up 43 to 10,685 & finished at its highs, nearing its yearly high of 10,725 in Jan. Advancers were almost 3-1 over decliners & NAZ gained 15. Nothing like reaffirmation by the Federal Reserve about keeping rates low (at least for several months) to bring out buyers. Banks, after being stuck in the doldrums for months, have been quietly rising to the high end of their 8 month trading range. Today's value is essentially an interim high, not seen since before their market crashed. However, it will need to get over 500 to reach a new record high.

S&P 500 FINANCIALS INDEX

Value 211.43

Change 2.65

% Change 1.3%

MLPs took the day off, the index inched up .25. But in the 304s, AMJ stockholders are happy. The Dow Jones REIT Index exploded, gaining 4.60 to the 198s (its highest level since Oct 2008). Divs have been cut & investors fret over higher vacancy rates as buyers throw caution to the wind. Junk bond funds were mixed at prices not seen since the middle of 2008. Treasuries rallied on their reaction to the Federal Reserve's announcement. The yield on the 10-year Treasury bond dropped 5 basis points to 3.65%, still in its recent sideways range.

Alerian MLP Index --- YTD




Dow Jones REIT Index --- YTD





Oil was strong all day producing a very nice gain. But it hasn't strayed far from the 80 level for months. Gold also had a good day while in a sideways pattern above 1100.

CLJ10.NYM

..Crude Oil Apr 10

..81.78

.. 1.98 ......(2.5%)

GCH10.CMX

..Gold Mar 10

..1,122.20

.. 17.10 ......(1.6%)

Photo: Bloomberg


The Federal Reserve repeated its pledge to hold interest rates at record lows to foster the economic recovery & ease high unemployment, as expected. But the FED's assessment of the economy was a bit more upbeat, saying the job market is stabilizing. It also said business spending on equipment & software has risen significantly, another upgrade from its last assessment. However spending by consumers could be dampened by high unemployment, sluggish income growth, lower wealth & tight credit. Again, no big surprises. The FED repeated its pledge to keep record-low rates for an "extended period."

•Fed Maintains Pledge to Keep U.S. Interest Rates Low for `Extended Period'



Intel (INTC), Dow stock, shot up 84¢ to $22.01 after announcing a new line of computer chips. INTC began selling the Xeon 5600 server chip today. This is the first semiconductor with 6 processing cores built onto one piece of silicon & includes new security features.

Intel Jumps Most in Seven Months on Optimism for Server Market


Intel --- 3 years





General Electric (GE), Dow Stock, said it may resume div increases next year as its finance unit is on the mend. Last year the quarterly div was cut from 31¢ to 10¢ (after maintaining it would not be cut), taking it off the S&P 500 Dividend Aristocrat list. Of course, now it will take another 25 years (after 2011) to rejoin the group. The stock rose 78¢ to 18.07, but is still far from its highs.

GE May Resume Dividend Raises in 2011, Sherin Says


General Electric --- 3 years

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All markets are at or near levels not seen since the crash related to the Lehman collapse in Sep 2008. Bulls are back in charge as shown by the today's strong market for REITs. Have fun while it lasts.


Dow Jones Industrials --- YTD