Monday, May 24, 2010

Markets fall with most of the selling into the close

Stocks were weak at the start & failed to gather a head of steam during trading. Dow dropped 126, decliners ahead of advancers 3-2 & NAZ dropped 15 despite a good performance by Apple. Fri there was buying going into the close, today there was selling into the close. Bank stocks led the selling. The Financial Index was slipping & sliding all day, closing at the lows. It's heading back for the Feb lows in the mid 180s. Not a very good sign.


% Change

After being up all day, the Alerian MLP Index ended down ½ to the 279s (down 7 YTD). The Dow Jones REIT Index fell 4½ to the 190s. Junk bond funds were generally weaker. The yield on the 10-year Treasury bond rose almost 3 basis points to 3.23% as bond buyers last week cashed in profits. High yielders sold off sharply into the close.

Alerian MLP Index --- YTD

Dow Jones REIT Index -- YTD

On a nothing kind of day, oil was able to hold 70. But gold firmed, buyers may be switching some emphasis from Treasuries to gold.

CLN10.NYM..Crude Oil Jul 10..70.18 ..Up 0.14

GCK10.CMX..Gold May 10..1,184.20 ..Up 11.70

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Apple (AAPL) is becoming hot again after Morgan Stanley upped the target price to $310. There is word that Steve Jobs will introduce a new version of the iPhone next month with a camera in it (among other things). AAPL has an excellent track this decade, but I get nervous when target prices are upped & the stock blindly chases it as buyers pile on. We've seen that behavior before & it doesn't turn out for the good. APPL gained 4½ to 246 (up over 8 at its highs but also hurt by late day selling). APPL stockholders are happy campers, however I see this as a sign speculative juices are running high even in May's down market, not good for the stock market.

Apple’s Jobs May Unveil New IPhone at Developer Event

Apple --- YTD

There was not a lot going on today. Tim Geithner is in China trying to build up good will so they will keep buying Treasuries & also working on reducing the massive trade deficit with China. Good luck on the latter. Little gets done aside from the photo ops. Speaking of photos, BP (BP) has an underwater camera showing how they are trying to plug one of the leaks in the Gulf. The € is a good proxy for the financial mess in Europe & it's back down below $1.24, not encouraging. The VIX dropped about 2 to the 38s, a little below where it has just been but it still shows a lot of fear. Dow tried to hold its ground, most of the loss came in the last ½ hour. There is breathing room above 10K, but not a lot (only 66). It first broke thru 10K back in Oct!

Dow Jones Industrials -- YTD


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