Markets move higher in new quarter

Stocks began the new month & qtr strong. Dow gained 63, advancers over decliner 3-1 & NAZ was up to 8. Banks continue to lead markets higher with the Financial Index essentially at its high since the financial meltdown.

S&P 500 FINANCIALS INDEX

Value 216.51

Change 1.76

% Change 0.8

MLPs are hot again as the Alerian MLP Index shot up 2+ to the 305s, another high since the middle of 2007. The REIT index has been treading water around 200 recently, up 1 today to 199. Higher stock prices bring higher prices for junk bonds (stocks with high yields). After a decline yesterday, the yield on the 10-year Treasury bond jumped 4 basis points to 3.87% heading for 3.9% & maybe higher.

Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks




10-Year Treasury Yld Index - 6 months





Commodities have been very strong recently. Oil is extending its 2 month rally as it approaches the high end of its trading range 85 (comparable to about 26 in the graph) over the last year. Gold is also doing well, but still off its record highs made last year.

CLK10.NYM

...Crude Oil May 10

...84.64

... 0.88 .......(1.1%)

GCJ10.CMX...

Gold Apr 10

...1,124.80

... 11.50 .......(1.0%)

Oil (ETF) --- 1 year

Photo: Bloomberg

The Labor Dept reported new jobless claims dropped 6K to 439K for the 4th drop in 5 weeks. The 4-week average of claims fell 7K to 447K, the lowest since Sep 2008 (just prior to the Lehman collapse). The report suggests the job market is slowly healing with an improving economy. However, millions are still receiving extended benefits for up to 73 extra weeks, paid for by the federal gov, on top of the 26 weeks customarily provided by the states. More than 6M were on the extended benefit rolls, about 270K higher than the previous week. A total of nearly 11.4M people are claiming unemployment benefits.

Jobless Claims in U.S. Decreased by 6,000 to 439,000


Weekly jobless claims - 1 year





The Commerce Department reported that spending on construction projects fell by 1.3% to $846B, the lowest level since Nov 2002, & weakness was widespread. Spending fell for home building, commercial ventures, including hotels & motels, and big gov public works projects, such as highways & streets. Can you spell "stimulus package?" The 1.3% drop followed a 1.4% decline in Jan. This was the 4th month in a row that construction spending fell, just another reminder of the deep hole builders are struggling to emerge from.

• Construction spending at lowest point since 2002- AP

Dow had a very good qtr after a soggy start in Jan. It was up 4% in Q1 & today is trying to finally top 11K. The jobless reports continue to give mixed & muddled messages. New jobless claims have dropped dramatically from the awful days last year. But new hirings are not taking place in a meaningful way. The census worker labor force will blur the real story for several months this year. The very important monthly jobs comes out tomorrow when the markets are closed. Anticipation of that report & what it will say will affect trading in the PM.


Dow Jones Industrials --- 2 weeks

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