Dow plunges 376, worst day in a year

Stocks sank at the opening & remained in the dumps all day. Dow ended with a loss of 376 (over 300 below the close on that memorable day 2 weeks ago), decliners ahead of advancers 10-1 & NAZ dropped 94. Even worse, stocks closed at their lows! Banks also had a bad day, the Financial Index closed at its lows. Grrr!

S&P 500 FINANCIALS INDEX

Value 191.56

Change -9.48

% Change -4.7%

This was one very ugly day for the high yielders while Treasuries soared. The Alerian MLP Index plunged another 10½ to the 274s (down 12 YTD). The yield when it peaked last month was 6¾, since then it has risen about 100 basis points. The Dow Jones REIT Index sank 9½ to the 188s (219 was its 2010 high). Junk bond funds dropped 3-5% (very big by their standards) while Treasuries soared. The yield on the 10-year Treasury bond plunged again, down 9½ basis points to 3.26% (its low in over a year). The thinking today was bailout of everything & buy Treasuries. The VIX, volatility index, shot up an eye popping 10½ to the 45s (not seen in 14 months when stocks were climbing out of the sinkhole they had been in).


Alerian MLP Index --- 2 months




Dow Jones REIT Index -- 2 months




VIX --- 2 years





Commodities also sold off badly, oil had been down 5 (taking it to 65, lowest level in 8 months) but then it bounced back. Gold should have done better given its status as a home for investors seeking safety. Instead all that money went into Treasuries.

CLM10.NYM

..Crude Oil Jun 10

..69.26

.. 0.61 ......(0.9%)

GCK10.CMX

..Gold May 10

..1,191.80

.. 11.40 ......(0.3%)

Gold Super Cycle!!
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The Senate is expected to approve a sweeping overhaul of financial regulations by the end of the week after the measure just cleared a procedural hurdle with a 60 - 40 vote. This starts the process of wrapping up debate on the most comprehensive rewrite of rules for financial firms since the 1930s.

•Senate Agrees to Move Toward Final Vote on Financial-Overhaul Legislation



Instead of dragging out more dreary news, I wanted to show show charts for some of the biggies during the last month. Apple (AAPL) & Kinder Morgan (KMP, the largest MLP) are included along with 3 Dow stocks: Exxon Mobil (XOM, also a Dividend Aristocrat), JPMorgan (JPM) & AT&T (T). The 10% sell-off by the Dow has done damage to just about every stock (& units of MLPs). This is what is called a broad based retreat (although high yielders have seen more selling).


Apple --- 1 month




Exxon Mobil --- 1 month




JP Morgan --- 1 month




Kinder Morgan --- 1 month




AT&T --- 1 month





Believe it or not, the € rallied to $1.25 (but was sinking at the end of trading). That deserves a "go figgah" response. Maybe shorts had to close out positions. Despite the dreary report on jobless claims, Europe & its growing financial mess was at the heart of the sell-off. Unfortunately, solutions appear to be a long way off. One sign of hope, BP (BP) is finally getting a handle on plugging one its leaks in the Gulf. Swell!


Dow Jones Industrials -- 2 months




Nasdaq -- 2 months

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