Friday, March 12, 2010

Stocks fluctuated very little all day

Dow hardly budged from break-even, ending up 12 from buying in the last hour (but still was unable to crack into new high territory). Advancers were 15% ahead of decliners while NAZ was flat. The Financial Index had been higher in the AM, but ended with a loss. Since it moved up more than 10% in recent weeks, this was one its few setbacks.


% Change

The Alerian MLP Index rose another 1.40 to the 305s while the Dow Jones REIT Index was up 1.61 to the 194s. There is still hunger for high yields even though they have come down substantially in the last year. Speaking of high yields, junk bond funds keep rolling along. With recent advances, yields on junk bond funds have been reduced to the 8½-11% region (modest relative to historical standards). The yield on the 10-year Treasury bond dropped 1 basis point to 3.71%.

Alerian MLP Index --- YTD

Dow Jones REIT Index --- YTD

Commodities pulled back a little, but nothing special going on. Worries about China reducing purchases of commodities to keep inflation low may be in the back of traders' minds.

CLJ10.NYM..Crude Oil Apr 10..81.26 ....Down 0.85

GCH10.CMX..Gold Mar 10..1,101.50 ..Down 6.50

AIG (AIG) has had a big run in the last month, but that cooled off today, down 1 on profit taking. Citi (C) has had a similar story, down 21¢ today taking it back below $4.


Citigroup --- YTD

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The healthcare bill if passed may have large implications for the markets. To finance added expenses, there is talk that Medicare taxes may be raised & also applied to other income (such as dividends & interest). They're still negotiating & the pres just canceled travel next week so he can spend more time twisting arms in DC. Comparing the 2 charts below is interesting. Dow hasn't been able to break thru to a new high this year while NAZ has done quite well, especially in the last month. Speculative juices have been running high & responsible for a lot of the strength in the markets recently. I'm not sure that is what the ardent bulls want to see.

Dow Jones Industrials --- YTD

Nasdaq --- YTD

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