Wednesday, June 16, 2010

Markets little changed after BP suspends next 3 dividends

Stocks started lower & rallied back to break even where they stayed for the rest of the day. Dow ended up 4, decliners ahead of advancers 4-3 & NAZ was up a smidgen. Banks also waffled around break even with the bill for financial regulation looming in the background.


Value199.06One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change0.05 (0.0%)

The Alerian MLP index was up 1¼ to the 305s (up 20 YTD) on this sideways day while the REIT index fell 2 to the 206s. Junk bond funds were little changed, but down around 10% from highs last month. The VIX rose a ¼ to 26. The yield on the 10-year Treasury bond fell 3 basis points to 3.28%.

Alerian MLP Index --- YTD

Dow Jones REIT Index -- YTD


Oil rose on hopes for the economic recovery. It's bulls are hoping to take it above the 80 resistance level. Gold is hanging in there very well on all the financial uncertainties starting with Europe.

CLN10.NYM..Crude Oil Jul 10..77.66 ..Up 0.72

GCM10.CMX..Gold Jun 10..1,229.90 ..Down 3.70

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BP (BP) agreed to suspend its quarterly div as part of its commitments to compensate victims of the Gulf oil spill. BP canceled the next payment & won't declare a div for its 2nd & 3rd quarters but will consider resuming payments in 2011 when it issues results for the 4th qtr of this fiscal year. In addition, BP agreed to set aside an initial $20B to pay the victims of the oil spill. In the meantime, the leak goes on & on & on. The stock rose 45¢ to 31.85 on a sense of relief that this move is key to its survival. Other big oil stocks had small changes.

BP Cancels Dividend for First Three Quarters of This Year

BP --- YTD

Congress is weighing proposals to strengthen investor protections & the powers of the SEC. They want to create an office at the SEC to respond to whistleblower complaints. This is part of the financial regulation bill going thru congress. I hope they put limits on the amount of time SEC lawyers can watch porn on their office computers. Some had been spending 8 hours a day watching porn & downloaded so much on their computers that their hard drives crashed!

Lawmakers Weigh Changes to SEC, Investor Protections

The € is waffling around $1.23, up from a few days ago but down sharply from earlier this year reflecting uncertainties about Europe's finances. BP knuckled under to political pressure & gave in on the div issue. Dow has had a nice run in the last 7 days but remains about 10% off its recent highs at 11.2K.

Dow Jones Industrials -- YTD

Nasdaq --- YTD

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