Cautious markets managed to climb higher

Late day buying brought the popular averages back into the black. Dow inched its way up to another interim high by gaining all of 13, advancers were only slightly ahead of decliners & NAZ gained 8. Banks were a little soft earlier on from weakness in regional banks, but the Financial Index ended flat & was able to keep its 2 month bullish trend going.

S&P 500 FINANCIALS INDEX

Value 223.83

Change 0.30

% Change 0.1%

The Alerian MLP Index fell 1½ to the 312s (limiting its AM losses) & MLPs had exciting news (see below). The Dow Jones REIT Index shot up 5 to 210, yet another new high for 2010. Junk bond funds were flat at their lofty levels. Buyers bid up Treasuries, the yield on the 10-year Treasury bond fell 4 basis points to 3.81% relieving some of the pressure on its possible surge thru the 4% ceiling.


Alerian MLP Index --- 2 months




Dow Jones REIT Index - 2 months






Oil & gold slipped on a flattish day for stocks. While oil retreated from its 85 ceiling level, it still has a bullish wind behind it.

CLK10.NYM

..Crude Oil May 10

..83.97

.. 0.38 ......(0.5%)

GCJ10.CMX

..Gold Apr 10

..1,152.20

.. 9.40 ......(0.8%)

Kinder Morgan Energy (KMP & KMR) will buy a 50% stake in Petrohawk Energy's natural gas gathering & treating business for $875M. The transaction's value of up to $1¾B makes it one of the biggest US gathering & treatment systems. The deal includes more than 170 miles of actively used pipeline in the Haynesville Shale of northwest Louisiana & is expected to reach 375 miles of pipeline by the end of the year. Petrohawk will run the business during a transition period, with a new company named KinderHawk Field Services taking over after that. Kinder Morgan said the deal won't impact its distribution this year (guided to be $4.40) & should add to cash available for unitholders in 2011. KMP fell 73¢ to 66.50 & HK went up 57¢ to 23.18.

•Kinder Morgan buying stake in Petrohawk division
AP


Kinder Morgan --- 2 years




Petrohawk --- 2 years





Enterprise Products (EPD) increased in the quarterly distribution to 56.75¢ per unit ($2.27 annualized). The new distribution represents a 5.6% increase over the previous quarterly distribution of 53.75¢. This is their 32^nd distribution increase since the initial public offering in 1998 & the 23^rd consecutive quarterly increase. EPD also announced an offering of 12M units at $35.55 each. The net proceeds of $422 million will be used to buy assets in the Haynesville Shale area on the Gulf Coast. EPD is the largest MLP with 48,700 miles of pipelines. The units fell 71¢ to 35.68.

Enterprise to boost partners' cash distributionsAP

Enterprise prices 12M unit offer at $35.55 a unitAP


Enterprise Products - 2 years





EPD & KMP had encouraging news for MLP holders. After having survived the terrible financial crisis in good shape, they are moving forward with aggressive expansion plans. Dow had stalled just over 10.9K for over 2 weeks. Following a bumpy time, its perseverance paid off & was able to go over 11K. However given its hesitancy, it still must show skeptics it is serious about establishing 11K as a floor. Q1 earnings in the next few weeks will be the principal driver.

Dow Jones Industrials - 2 months

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