Dow inches over 11,000

Dow broke into the black at the start of trading today, but then failed to get traction. It ended with a modest gain, good enough to break 11K (the first time in 19 months) but that was all it could manage. Dow rose only 8, advancers over decliners 4-3 & NAZ gained 3. Hardly an inspiring day! Bank stocks are still in demand. The 2 month run for the Financial Index in the chart below tells it all for bank stocks.

S&P 500 FINANCIALS INDEX

Value 223.83

Change 1.01

% Change 0.5%

The Alerian MLP) Index continued strong all day, ending with a gain of .90 to the 314s. However, the REIT index dropped 1½ to the 205s. Junk bond funds were higher to levels not seen in a very long time. Treasuries were strong, driving the yield on the 10-year Treasury down 4 basis points to 3.85%.


Alerian MLP Index --- YTD




Dow Jones REIT Index --- YTD





Like the stock markets, oil & gold had modest changes. Only in their case it was to the downside.

CLK10.NYM

..Crude Oil May 10

..84.46

.. 0.46 ......(0.5%)

GCJ10.CMX

..Gold Apr 10

..1,156.00

.. 4.40 ......(0.4%)

The Treasury said the deficit for Mar totaled $65B compared to $192B last year. However, $115B of that improvement occurred because the administration lowered its estimate of costs for TARP. The deficit through the first 6 months of this budget year totals $717B, a drop of 8.2% from the same period last year. The administration is also projecting that the deficit for all of 2010 will hit an all-time high of $1.56T, up from last year's record of $1.4T. Higher spending comes from the costs of the bailout to help financial firms, auto companies & homeowners facing foreclosure. The spending has also soared because of the economic stimulus program passed in Feb 2009 with an original price tag of $787B plus the added demands on such programs as unemployment benefits & food stamps. For the first 6 months of the current budget year, gov receipts total $954B, down 3.6% from last year. Massive gov borrowings will continue for what seems like forever!

• March budget deficit declines to $65.4B- AP

Palm (PALM) shares jumped more than 20% after announcing it hired advisers to explore several options, including a sale of the company. The company has not done well against its rivals like the iPhone & Blackberry. It is projected that PALM could fetch more than $1B. The stock, which had been under $4 on Wed, closed today up 88¢ at $6.04. Speaking of speculation, troubled Ambac (ABK), doubled today, taking it over $2. Great for speculators, but bad for the markets.

Palm --- 2 years




Ambac --- 1 week






Greece got a promise of as much as €45B ($61B) in loans from the euro-region & IMF to help cover its financing needs & avoid a default. The agreement may remove a concern that helped drive the € lower against the dollar this year. Even though the € rallied to $1.36 in recent days, it remains far below $1.51 reached months ago. Buyouts like a possible one for Palm & China Petroleum & Chemical, Asia’s biggest refiner, agreeing to buy ConocoPhillips’s stake in oil-sands producer Syncrude Canada for $4.65B, send positive signals to stock buyers. But buyers did not respond today. Alcoa (AA), Dow stock, kicks off earnings season after the close. Markets are nervous.


Dow Jones Industrials --- YTD

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