Markets take a rest after yesterday's gains

Dow fell 81, decliners ahead of advancers 3-2 & NAZ was off 23. This is called profit taking after big gains yesterday. Banks are also pulling back, bringing the Financial Index back below 200. That important support level ceiling has been breached many times in the last 9 months.

S&P 500 FINANCIALS INDEX

Value 198.65

Change -3.10

% Change -1.5%

Ther are little changes in the high yielders going into a long weekend. The MLP index is up ½ in the 293s & the REIT index is down 1½ to 200. Junk bond funds are off fractionally (pretty much even) in uneventful trading. The VIX, volatility index, is about ½ lower, still in the 30s after a wild time in May. The yield on the 10-year Treasury bond fell almost 3 basis points to 3.31%.

Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks




VIX --- 2 weeks





Oil was up, staying in its trading zone while gold is resting before its next move up.

CLN10.NYM

...Crude Oil Jul 10

...74.88

... 0.33 .......(0.44%)

GCM10.CMX

...Gold Jun 10

...1,206.70

... 5.20 .......(0.4%)

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Consumer spending disappointingly was stagnant in Apr while incomes posted a tiny advance, more signs that the economic recovery is slowing. Unchanged spending came following a 0.6% rise in Mar. Flat spending level was the weakest showing in 7 months & below an expected a 0.3% rise. Personal incomes rose 0.4%, slightly off expectations. More people are holding onto money. The savings rate rose to 3.6% in Apr from 3.1% in Mar (the lowest since Oct 2008).

•Consumer Spending in U.S. Unexpectedly Stalls as Americans Rebuild Savings

Consumer income - 1 year




Consumer savings rate - 1 year

Photo: Yahoo


Royal Dutch Shell (RDS.A, commonly called Shell) will pay $4.7B to buy privately held East Resources, giving it more exposure to crucial shale gas in North America. However, the deal will put pressure on Shell's balance sheet at a time the company is already planning substantial spending. Shell's daily gas production in North America will increase about 7.5% by giving it access to Marcellus Shale, the northeastern US rock formation that is a crucial source of future US gas production. Shale gas accounts for 15-20% of US gas production & is expected to quadruple in coming years. There are worries that this acquisition by weakening the balance sheet will keep Shell from increasing its div over the next 2 years. RDS.A is down 31¢ to 51.70 & yields 6.4%.


Shell Taps Shale With $4.7 Billion East Resources Buy


Royal Dutch Shell --- 2 years





Traders have been cashing in profits to take a very long weekend holiday. Bond traders who were long 10 & 30 year Treasury bonds have a lot of profits earned in May. Dow is slipping & sliding, about ready to give it a triple digit loss & bringing it back to the important 10K level.

Dow Jones Industrials --- 2 weeks

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