Dow rises on improved outlook by Caterpillar

Dow rose 43, to levels not seen since the collapse of Lehman in 2008. Advancers were over decliners a mild 3-2 & NAZ was up only 2. Banks sold off, although above their session lows, on worries about increased gov regulation. An important vote could take place in the Senate after today's market close.

S&P 500 FINANCIALS INDEX

Value 224.94

Change -1.28

% Change -0.6%

MLPs continue red hot, their index was up almost 2 to the 318s & is shooting to top the previous 342 record. REITs are also hot, gaining 2½, to the 216s, yet another interim high. Higher stocks bring higher prices for junk bond funds. Treasuries also gained, as the yield on the 10-year Treasury fell 2 basis points to 3.79%.


Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks





Oil slipped back below the important 85 level (upper region of its trading range), but not seriously. Gold was about as flat as it gets.

CLM10.NYM

...Crude Oil Jun 10

...84.50 1

... 0.62 .......(0.7%)

GCJ10.CMX

...Gold Apr 10

...1,152.70

... 0.10 .......(0.0%)

Photo: Bloomberg


Caterpillar (Dow stock) earned 36¢ per share which compares with a loss of 19¢ per share last year when the recession & layoffs weighed down results. If a $90M health care tax accounting charge is removed, CAT would have earned 50¢ per share. "Economic conditions are definitely improving, particularly in the world's developing economies," said Chairman & CEO Jim Owens. He continued "Industry activity and orders are significantly higher than last year and are at record levels in some areas. As a result, we are hard at work ramping up production to meet increasing demand from customers." Growth in Asia & Latin America prompted CAT to boost its 2010 guidance to $2.50 - $3.25 per share (up from $2.50 previously given). Its revenue forecast was also raised to $38-$42B. However, revenue in Q1 fell 11% to $8.2B, short of expectations. CAT said it's main concern related to the economy is that central banks in the US, Europe & elsewhere might raise interest rates too soon & cause another downturn, but that risk is low. The stock jumped $3.52 to a 20 month high.

•Caterpillar Profit Tops Estimates on Improving Global Economy; Shares Gain


Caterpillar --- 2 years






Financial markets upped the pressure on debt-ridden Greece. Investors remained skeptical about its long-term solvency despite assurances that a rescue loan will help pay off a chunk of its crushing debts in coming weeks. Market fears appear driven by Germany's grudging attitude toward bailing out Greece. Longer term, some think Greece's growth prospects are so weak the gov will not collect enough taxes to meet its obligations years down the road. The interest rate gap between Greek bonds & benchmark German 10-year bonds reached a record 6.5 percentage points (650 basis points) before retreating slightly. As a result, if Greece were to try to borrow, it would have to offer interest approaching 10% (triple what Germany pays). The € is still near $1.33, just above its recent low at $1.32.

Greek Bonds Tumble on Concern Germany May Hold Back on Bailout


Greek 10-year bond yield - 1 year






The Treasury is going to sell “up to” 1½B shares of Citigroup (C) as part of its plan to sell all 7.7B shares it owns. Morgan Stanley (MS) will have “discretionary authority” to sell the stock. The Treasury's cost basis is $3.25, it should recognize a handsome profit. The stock fell 13¢ to 4.73.

U.S. Treasury to Sell 1.5 Billion Shares of Citigroup Stock


Citigroup (C) --- 1 year





Dow has risen 14% from under 10K in early Feb to 19 month highs. There has a hardly been a pause on this climb. The bulls don't want to give up their control of the markets.

Dow Jones Industrials --- 2 weeks

Get your favorite symbols' Trend Analysis TODAY!!
Click Here

Find out what's inside Trend TV
Click Here