Market losses continue on more European debt problems

Selling continued but the pressure is easing especially for the Dow. Dow dropped 29, decliners over advancers 3-1 (it had been much worse early on) & NAZ is under stress, falling 15. Banks are bouncing back to modest gains, the Financial Index is barely in the black.


S&P 500 FINANCIALS INDEX

Value 215.55

Change 0.02

% Change 0.0%

The Alerian MLP Index plunged 9½ to 297, down 22 from its peak just last week! The oil spill is very nasty & has the potential to change rules for energy companies. The REIT index fell 2½, down "only" 8 from its yearly highs last week. Junk bond funds dropped 1-3%, significant by their standards. Treasuries, "safety haven" securities, rose taking the yield on the 10-year Treasury bond down 6 basis points to 3.56%. Its graph below shows another plunge, this for the Treasury bond yields in just the last month!


Alerian MLP Index --- 1 week





Dow Jones REIT Index --- 2 weeks




10-Year Treasury Yld Index - 1 month






The oil ETF graph shows how much it has nosedived in the last couple of weeks, from the higher 80s to 80. The terrible oil spill in the Gulf is taking its toll on traders. Meanwhile, gold has held up much better, benefiting from its flight to safety quality.

CLM10.NYM

...Crude Oil Jun 10

...80.30

... 2.44 .......(3.0%)

GCK10.CMX

...Gold May 10

...1,159.60

... 9.00 .......(0.8%)

OIL (ETF) --- 1 month

Photo: Bloomberg

Greek anger over new austerity measures erupted into flaming protests in Athens. Rioters tried to storm Parliament, hurled Molotov cocktails at police & torched buildings. 3 were killed, trapped in a burning bank. Tens of thousands of people took to the streets as part of nationwide strikes to protest new taxes & gov spending cuts demanded by the IMF & other European nations before heavily indebted Greece gets a bailout to keep it from defaulting. In Berlin, Chancellor Angela Merkel urged parliament to quickly pass the country's share of the bailout, €22B over 3 years, by Fri. Moody’s placed Portugal's debt (Aa2 rating) on review for a possible downgrade, a process that will conclude within 3 months. Its short-term borrowing costs surged as it sold 6-month bills today at an average yield of 2.955%, compared with 0.592% on Jan 6. Spain is also staring at major fiscal problems. This is a European crisis which is getting ugly as the € sank below $1.29.

•Greek Protests Over Financial Bailout Leave Three Dead, Buildings Burning
•Portugal Rating May Be Cut by Moody's as Budget Woes Hurt Growth Prospects
Spain’s Borrowing Costs May Rise as Zapatero Confronts ‘Abyss’


The Treasury plans to sell $78B in notes & bonds next week, down from 100+B in recent weeks. A growing economy is allowing the gov to cut long-term borrowings for the first time since 2007. Lower interest rates on Treasuries is reducing increased borrowing costs.

. U.S. to Sell $78 Billion in Long-Term Debt Next Week



Markets are having to deal with increasingly chaotic financial markets in Europe. Today selling pressure is easing, but markets remain under pressure. The Gulf oil spill is going from bad to worse & Congress is looking to get involved, probably bad for all energy related companies (such as MLPs). Hang on for a bumpy time in the stock markets.

Dow Jones Industrials --- 2 weeks

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