Wednesday, June 30, 2010

Markets drop on late day selling

Stocks sold off into the close (after staying close to break even for much of the day), ending a dreary qtr on negative note. Dow fell 96 taking it below 9.8K (a 10 month low), decliners ahead of advancers 3-2 & NAZ fell 25 to an 8 month low. Money going into Treasuries is taking its toll on the stock markets. Banks stock led the way down taking the Financial Index to the lows since Aug.


Value185.64One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change-2.05 (-1.1%)

The Alerian MLP closed the qtr up 1¼ to 308½ today (well off its highs) & up 5 in a very bad qtr. The REIT index dropped 2 to 188 & down 10 in the qtr. Junk bond funds were mixed & also lower in Q2. VIX was up ½ to 34½ with the selling into the close, already in a high region. Treasuries continue red hot. The yield on the 10-year Treasury bond fell almost 2 basis points to 2.95% while the annual yield on the 2 -year Treasury note was a mere 61 basis points. These low yields spell trouble for stock markets!

Alerian MLP Index --- Q2

Dow Jones REIT Index -- Q2

VIX --- Q2

10-Year Treasury Yld Index --- Q2

Oil & gold were little changed today, but they had major moves in Q2. Oil fell, mostly in May, while gold was very strong in Q2, moving up over 10% to new records!

CLQ10.NYM..Crude Oil Aug 10..75.71 ..Down 0.23

GCN10.CMX..Gold Jul 10..1,243.00 ..Up 1.00

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OIL --- Q2

GLD --- Q2

Dems postponed until mid-July a final vote in the Senate on the overhaul of financial regulations. They have to scramble for crucial support from a handful of moderate Reps. However, the House was on track to vote on the bill later today where it is expected to pass easily. Senate Dems appear closer to winning the Rep support needed after agreeing to strip out a controversial $17.9B tax on large financial institutions to cover the bill's costs.

Ford (F) will pay $3.8B to a union health-care fund, a sign it's confident it will return to profitability. Ford was required to pay $859M to the UAW Retiree Medical Benefits Trust by Jun 30. It will pay cash even though it has the option to pay as much as $610M in stock. Ford also prepaid $2.9B toward its health-care obligations. The stock was up 20¢ to 10.08.

Ford to Cut Debt by $4B in Cash Payments

Ford --- 2 years

Markets look to be in bad shape. In Q2, Dow fell more than 1K while Treasuries rose sharply taking their yields to levels not seen in months (& rarely seen in history). S&P 500 also was clobbered. Now there is the big jobs report on Fri & that is expected to be very discouraging!

Dow Jones Industrials -- Q2

S&P 500 --- Q2

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