Dow loses 300 in 2 day sell-off

Markets tried to recover from yesterday's steep fall & were able to break into the black at lunchtime. Then sellers returned taking the Dow down, 400 below its highs last week. Today's drop was 60, decliners over advancers more than 3-1 & NAZ dropped 21 (down 100 in 2 days). Everybody is watching the Greek bailout unfolding & it looks scary. Bank stocks joined the selling. The Financial Index is off more than 12 from its highs 2 weeks ago.


S&P 500 FINANCIALS INDEX

Value 214.50

Change -1.03

% Change -0.5%

The Alerian MLP Index plunged 10 at the opening, hurt by ex-distributions but general selling has to be in there. The index continued at the depressed levels all day, closing in the 296s (down 10). It reached that level on the way up over 2 months ago. MLPs are yield securities & when the index yield goes below 6.7%, sell-offs have to be expected. But longer term investors remain happy campers, with outstanding gains off last year's lows. The Dow Jones REIT Index fell 3+ to the 210s which is why I think there is more driving the lower prices for MLPs than just ex-distributions. Junk bond funds sold off 2-4%, big by their standards. Treasuries continue HOT as the yield on the 10-year Treasury bond fell 6 basis points to 3.55% (a 5 month low).


Alerian MLP Index --- 3 months




Dow Jones REIT Index --- YTD




10-Year Treasury Yield Index - 6 mos





Oil crashed thru the 80 floor (lowest price in 7 weeks), but remains essentially in the 80-85 longer term trading range. Pessimism about the € adds to interest in the US$ & rethinking of oil as a substitute for the dollar. Gold is doing better, attracting worried investors around the globe who like it as a store of value & traders have the Dec record highs in sight.

CLM10.NYM

..Crude Oil Jun 10

..79.76

.. 2.98 ......(3.6%)

GCK10.CMX

..Gold May 10

..1,172.90

.. 4.30 ......(0.4%)

Gold Super Cycle!!
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Enbridge Energy Management (EEQ), the sister company to Enbridge Energy Partners (EEP), has fallen below 50, raising its yield (from the stock div) to over 8% from the just increased $4.01 annual distribution on EEP. It has had a superb run off its low last year. The tax free yield (from the stock div) may be of interest for value investors. However, it just went ex-div, so the next div is almost 3 months away.

Enbridge Energy Management --- 1 year






Bear Stearns execs (really former execs) testified before Congress, with little new information. But that's the kind of day it was in the markets, blahh. The Gulf oil spill will take a few weeks to properly stop the leaking & Greek debts are getting plenty of attention. The € dropped to another low, just above $1.28, while gold is climbing higher. As long as confusion reigns in Europe over Greek debts (& possibility of bleeding to other countries), the markets will be on defense.


Dow Jones Industrials --- YTD

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