Tuesday, March 30, 2010

Markets struggle for direction

Stocks hardly budged from break even all day. Dow ended with a gain of 11, advancers were slightly ahead of decliners & NAZ was up 6. Inconclusive economic reports along with more European debt problems failed to attract buyers. Banks slipped back but the Financial Index remains near its 2010 highs.

% Change__-0.7%

The Alerian MLP Index is recovering lost territory from the last 2 weeks, up 1.82 to 301.87. REITs were soft, the REIT index slipped back pennies in the 200s. Junk bond funds were a little soft, not really significant. The yield on the 10-year Treasury bond was flatish at 3.87%, but at a worrisome high level.

On this uneventful day, oil was up a little while gold pulled back slightly. Traders consider oil holding above 82 to be important (for the bulls).

Crude Oil May 10__82.40__0.23 (0.3%)

Gold Apr 10___1,103.90___6.40 (0.6%)

The Conference Board’s consumer confidence index rose in Mar to 52.5, from 46.4 in Feb & exceeding forecasts. However, the increase was greeted with a muted response by the markets. Rising stock prices, a stabilizing housing market & fewer layoffs may be giving hope that the recovery will be sustained. The measure averaged 45 in 2009 & 97 during the expansion period ending in 2007.

Consumer Confidence in U.S. Improves, Home Prices Climb Amid Job Optimism

Ireland’s banks, just another European country with major debt problems, may need at least $42B in new capital after a severe real estate slump brought on a substantial number of bad loans. Greek debt problems linger on while Portugal & Spain, with their own problems, may be looking for bailout money soon. The € is worth a shade above $1.34, little changed from its low level of recent days & down from a high of $1.51 last year. Economic data today was bland. Dow eked out another 2010 high but these gains are not coming easily. It's up just 19 in the last 5 trading days. However Dow is up 6% this month, encouraging for the bulls who are still hoping to see 11K very soon.

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