Dow wobbles while going over 11,000

The advance over 11K is hardly convincing. Dow rose 22, advancers over decliners 3-2 & NAZ gained all of 3. Banks are doing well, the Financial Index is at another 2010 high after advancing almost 40 in the last 2 months.

S&P 500 FINANCIALS INDEX

Value 223.83

Change 1.01

% Change 0.5%

MLPs are still on fire. The Alerian MLP Index rose 1.20 to the 314s, another 2½ year high, reducing its yield further (around 6.8%). As long as interest rates on the long Treasury bonds don't go higher, it looks like MLPs will keep running. The index needs less than a 10% gain from here to reach a new record! The comparable index including reinvested income is already at record levels. REITs are settling down after having an excellent year so far. The Dow Jones REIT Index is down a fraction, but still just below its yearly highs. Junk bond funds were higher, generally at or very near 2 year highs. The yield on the 10-year Treasury bond dropped 3 basis points to 3.87%.


Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks





Oil & gold are pretty much flattish, but oil is still above the important 85 level (it's ceiling for months).

CLK10.NYM

...Crude Oil May 10

...85.08

... 0.16 .......(0.2%)

GCJ10.CMX

...Gold Apr 10

...1,159.30

... 1.80 .......(0.2%)

Some of the biggest banks are setting aside ANOTHER $30B to cover possible losses on home-equity loans. Uh oh!! This is comparable to the estimated profits at Banks of America (BAC), JPMorgan (JPM) & Wells Fargo (WFC) for 2010. The first 2 are Dow stocks. The Financial Index (shown above) has gone up to new 2010 highs after under performing the markets for 6 months, but this is casting a shadow over earnings coming out in the next few weeks.

Bank Profits Dimmed by Prospect of Home-Equity Losses


Bank of America --- 2 years




JPMorgan --- 2 years




Wells Fargo --- 2 years





Greek problems drag on. It reported that the economy shrank 2%in 2009. Budget cuts to satisfy lenders to get a bailout can only add to its economic problems this year. This is a confusing situation, but the € is up to $1.36, a little above where it has been in recent weeks, on expectations problems will get solved. As this drama plays on, earnings for US companies will be reported but expectations are inconsistent. Dow finally made it over 11K without zest. It may have a tough time holding that gain.


Dow Jones Industrials --- 2 weeks

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