VerySmartInvesting: Markets advance despite only mixed earnings

Tuesday, April 20, 2010

Markets advance despite only mixed earnings

Dow gained 25, advancers over decliners almost 4-1 & NAZ was up 20. Dow began the day struggling but pushed up to a 25 advance where it stayed for the rest of the day. Banks led stocks as they have for much of this year. Today's gain for the Financial Index allowed it to recover most of the damage done in the Fri sell-off.

S&P 500 FINANCIALS INDEX

Value
225.26

Change
2.91

% Change
1.3%

The Alerian MLP Index reached another 2010 high, up 3.14 to 315, only 27 short of its record high set in Jul 2007. This is earnings season for MLPs with the usual assortment of qtr over qtr distribution increases. Again, nothing exceptional. The Dow Jones REIT Index gained 3¼ to the 204s (mostly from buying in the PM). Junk bond funds generally had a good day. When stocks do well, stocks with high yields (junk bonds) also do well. The yield on the 10-year Treasury bond fell 2 basis points to 3.80%, little changed in recent weeks.

Alerian MLP Index --- 1 month

Dow Jones REIT Index - 1 month

Commodities, especially oil, had a very good day. But oil & gold remain in the sideways trading pattern they've been in for months.

CLK10.NYM

..Crude Oil May 10

..82.99

1.54
......(1.9%)

GCJ10.CMX

..Gold Apr 10

..1,139.80

4.60
......(0.4%)

The SEC is examining the 19 largest US banks to see if any are using an accounting trick that led to the collapse of Lehman, according to Mary Schapiro, SEC Chairwoman, when she testified at a congressional hearing. The hearing probed the bankruptcy examiner's report that said the firm masked $50B in debt. Treasury Sec Tim Geithner said that Lehman's collapse highlights why the administration's proposal to reform the financial system is needed. That legislation includes a mechanism to allow the gov to wind down ailing financial companies whose collapse could take down the entire financial system & the broader economy.

SEC looking into accounting at 19 biggest banks- AP

Apple (AAPL) & Yahoo (YHOO), 2 tech heavyweights, report earnings after the close. AAPL was off 2.48 while YHOO was about even.

Apple --- 1 month

Yahoo --- 1 month

Dow lagged behind other averages. After reporting earnings, Dow stocks IBM (IBM), Coca Cola (KO) & Johnson & Johnson (JNJ) fell. IBM earnings looked good while the other 2 were weak. Banks continued strong even though they are facing more regulation. High yielders did especially well today. The potential overhaul of financials & the gov civil fraud case against GS did not deter stock buyers. But GS lost another 3.34. Traders instead looked to earnings reports.

Dow Jones Industrials - 1 month