Markets mixed on soggy May retail sales

Stocks fell at the opening & buyers have been discouraged since then. Dow is down 47, advancers were slightly ahead of decliners & NAZ had a limited loss of only 3. Banks led the selling, the Financial Index is not able to put much distance between it & its 9 month low of 186.

S&P 500 FINANCIALS INDEX

Value 192.71

Change -1.92

% Change -1.0%

The MLP index is up fractionally to the 297s. After a bad start, it has recovered for a nice gain this week. The REIT index fell almost 2 to the 197s but also has a good weekly gain. Junk bond funds were generally a little higher while the VIX was off a fraction taking it below 30. Buying came back to Treasuries as the yield on the 10-year Treasury bond fell 6 basis points to 3.25%, still in low territory.

Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks





Oil slipped back below 75, not much going on. Oil was flat but has following winds for higher prices.

CLN10.NYM

Crude Oil Jul 10

......74.81

... 0.67 .......(0.9%)

GCM10.CMX

...Gold Jun 10

...1,221.00

... 0.20 .......(0.0%)

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Photo: Bloomberg


Retail sales dropped in May, the largest decline in 8 months. Consumers slashed spending on everything from cars to clothing raising new worries about the durability of the economic recovery. The Commerce Dept said spending sales fell 1.2%, auto sales were down 1.7% but there was also weakness in other areas. Excluding autos, sales fell 1.1%. The decline was the largest since sales fell 2.2% in Sep. The forecasts were for sales to remain in positive territory.

•Retail Sales in U.S. Unexpectedly Decrease 1.2% as Consumers Boost Savings


Retail sales - 1 year





BP (BP) has come under heavy pressure from the President to suspend its div, a possibility which initially soured investor sentiment but may be priced into the shares. "We are considering all options on the dividend. But no decision has been made," said BP's Chief Executive Tony Hayward. Suspension of the dividend would be a disappointment to investors, but could also deflect some of the intense political heat that BP is feeling. The chief executive of Britain's National Association of Pension Funds said that investors might be receptive to a suspension of divs to protect the company's long-term future, BP's "long-term" future is far more important. The stock bounce back yesterday & today suppports that belief. Today it's up 1.03.

•BP Chairman Svanberg Summoned to Meet Obama Amid Pressure to Halt Dividend

BP --- 2 weeks





After weeks of little action, the President is getting involved with the BP oil spill. Now he will do some arm twisting for BP to reduce or drop the div while the mess drags on. The € is muddling along at $1.20½, not far from recent lows. The decline in May retail sales was a bigger disappointment & may haunt the markets next week. Dow has been pretty much hugging the 10K support level, low end of its multi month range.

Dow Jones Industrials --- 2 weeks

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