Dow rose 201 on strong earnings reports

Nothing like favorable earnings to bring out buyers, but stocks closed a little off their highs. Dow rose 201, advancers over decliners almost 4-1 (down from better than 8-1 earlier in the day) & NAZ was up 58. Banks were strong, a swing of 5+ in the day for the Financial Index is considered major.

S&P 500 FINANCIALS INDEX

Value	194.56
Change	5.85 (3.1%)

MLPS continue on fire! The index rose 1½ to 332, just 11 short of topping the record set 3 years ago. However, today the MLP index had only a modest gain. The Dow Jones REIT Index popped a big 8 to 200. Junk bond funds were typically up 1%, less than would be expected on such a strong day for stocks. The VIX dropped 1 to the 24s, again light compared with the gains in the markets. Treasuries sold off. The yield on the 10-year Treasury bond rose 4 basis points, not all that much & remains in a very low region. The charts are for 3 months to give an idea of how markets have behaved during a trying time. MLPs & Treasuries are the big winners! The € rose bringing it near to $1.29, still close to its short term highs.


Alerian MLP Index --- 3 months





Dow Jones REIT Index --- 3 months




VIX --- 3 months




10-Year Treasury Yld Index --- 3 months





Oil joined in the rally, heading back for its 80 high that it's traded under for more than a year. Gold had a muted rally, understandable given its defensive characteristics.

CLU10.NYM

..Crude Oil Sep 10

..79.24

.. 2.68 ......(3.5%)

GCN10.CMX

..Gold Jul 10

..1,195.60

.. 4.00 ......(0.3%)

$$$ Gold Super Cycle $$$
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Congress approved legislation to restore unemployment benefits that were cut off to more than 2½ Americans. The vote was 272-152 largely along partisan lines. The $34B measure will be forwarded to President who will sign it. This measure involved an election- year fight over whether the cost should be added to the federal deficit.

Congress Extends $34 Billion Jobless Benefits Package



Mortgage rates fell to another record low for the 4th time in 5 weeks, but these rates haven't been able to lift the struggling housing market. The average rate for 30-year fixed loans was 4.56%, down from 4.57% last week, the lowest since Freddie Mac began tracking rates in 1971. The last time home loan rates were lower was during the 1950s, when most mortgages lasted just 20-25 years. The rate on the 15-year fixed loan dropped to 4.03%, down from 4.06% last week & another low since record dating began in 1991. These low rates may continue as the yield on the 10 year Treasury bond falls to it lowest levels since early last year.

• Mortgage rates hit new record low- AP

Markets had an impressive rally. Strength was fading later in the day, but buyers returned going into the close allowing the averages to close not too far below their highs. It's been a long time since earnings news made such a big impact on the markets. Microsoft (MSFT), a Dow stock, reports after the close & hopes are high. But a strong economic recovery has not taken hold. Many companies are getting a big help in earnings gains from strong markets in Asia & Latin America while the US markets are only so-so. Even after today's gains, Dow is still drifting sideways above 10K. The stress tests results for European banks will be released tomorrow, they should dominate the news.

Dow Jones Industrials --- 3 months




Nasdaq --- 3 months

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