Tuesday, July 6, 2010

Strength at the close lifts stocks

Markets found it difficult to hold AM gains. With buying into the close, Dow gained 57 but is still lingering near 8 month lows, advancers barely ahead of decliners & NAZ gained a measly 2. The Financial Index had a modest gain, disappointing after reaching 186+ earlier. The graph is a reminder, it's struggling to get back to the former 185 low which held for so long.


Value 183.12 One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change 1.04 (0.6%)

High yielders also pulled back during trading. The MLP index was up 2 to 308 (helped by buying at the close). The REIT index fell back 4 to the 180, the lowest it's been in 4 months. Junk bond funds were flat to a tad lower. The VIX bounced off AM lows finishing down a fraction in the 29s. Treasuries were in demand. The yield on the 10-year Treasury bond dropped another 5 basis points to 3.93%, another 14 month low. I know this sounds like a broken record, but new low yields on the 10-year Treasury bond are SCARY!!

Alerian MLP Index -- YTD

Dow Jones REIT Index -- YTD


10-Year Treasury Yld Index -YTD

Oil is tied to stock market fortunes & pulled back in the PM, still in its sideways trading range. Gold had a bad day, falling thru 1200. However, it's only about 5% off its recent record highs. Few stocks can say that!

CLQ10.NYM..Crude Oil Aug 10..71.98 ..Down 0.16

GCN10.CMX..Gold Jul 10..1,192.20 ..Down 15.20

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Below are 7 Dividend Aristocrats I like. They have nice yields, at a time when 2% or less is common on many investments, & track records of increasing divs typically for well over 30 consecutive years.

Auto Data Proc (ADP)_____ 3.5%
Abbott (ABT)___________ 3.8%
Bemis (BMS)___________ 3.4%
Coca Cola______________ 3.5%
Kimberley-Clark (KMB)____ 4.4%
Leggett & Platt (LEG)_____ 5.4%
Elli Lilly (LLY)__________ 5.8%

Auto Data Prcoessing -- YTD

Abbott --- YTD

Bemis --- YTD

Coca Cola --- YTD

Kimberley-Clark --- YTD

Leggett & Platt --- YTD

Ely Lilly --- YTD

The € has rebounded off its sub $1.20 levels. Today it was $1.26¼ on lessening fears about sovereign debts, but the bears are selling into this rally

Markets couldn't hold the strong gains early in the day, very discouraging for the bulls. There is an abundance of negative news with a theme that problems on many fronts seem to be spinning out of control. European debt problems have calmed down recently. However there are greater worries about another dip for the US economy. Today's service sector data was not helpful. Unemployment goes from bad to worse as more than 2M have given looking for work so they are not counted any longer. Earnings season starts next week & the gut reaction is negative.

Dow Jones Industrials -- YTD

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