Wednesday, August 25, 2010

Oversold stocks had modest late day recovery

At midday, buyers returned to take markets back into the black. Dow had been down 100 (to below 10K) but finished with a gain of 19, advancers over decliners almost 3-2 & NAZ was up 17. Not really impressive, but the bulls will take any advance these days. Bank stocks also bounced off the lows bringing the Financial Index above its yearly lows.


Value182.08One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change0.52 (0.3%)

The Alerian MLP Index reduced its AM losses, finishing down only 1 to the 319s while the Dow Jones REIT Index rose almost 4 to 200+. Junk bond funds fell about 1% & the VIX slipped a fraction to the 26s. The € was up fractionally to $1.26½. Treasuries cooled off after their fabulous 5 month run. The yield on the 10 year Treasury bond rose 4 basis points to 2.54% (it had been flirting with 4% just 5 months ago)!

Treasury Securities
U.S. 3-month
U.S. 2-year
U.S. 10-year

Alerian MLP Index --- YTD

Dow Jones REIT Index --- YTD


10-Year Treasury Yld Index --- YTD

Oil advanced from an 11 week low on profit taking by the shorts. The $ slipped versus the € which may have helped gold rise, although it has been strong for 5 weeks.

CLV10.NYM..Crude Oil Oct 10..72.66 ..Up 1.03

GCQ10.CMX..Gold Aug 10..1,238.10 ..Up 7.50

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Toll Brothers (TOL), the luxury homebuilder, earned 16¢ per share for the qtr that ended in Jul, mostly on tax credits & fewer write-downs, which compares with a loss of $2.93 last year. Excluding one-time charges, Toll's pretax adjusted income more than tripled to $13.3M. However, new orders dropped 16% in the qtr to 701 units & the value of those units fell 11% to $400M. "Although the unemployment rate among our buyer profile remains at half the national unemployment rate, recent economic and political news continues to dampen our customers' confidence," said Executive Chairman Robert I. Toll. Revenue for the qtr slipped to $454M from $461M last year, beating expectations of $396M. Management had lowered expectations for new home contracts, saying in June that deposits & customer traffic were running below prior-year levels after a brief pickup in May. The stock added 94¢ on a good day for the builders.

Toll Brothers posts profit for 3rd quarterAP

Toll Brothers --- 2 years

Apple (AAPL) & Google (GOOG), 2 darlings of Wall Street, have had a rough month, but rebounded today. AAPL was up 3 while GOOG added 3+.

Apple --- 1 month

Google --- 1 month

Volume was light again, making it hard to understand intra-day swings. Dow was able to hold above 10K, encouraging for the bulls. Trading on the days before Labor Day will probably will not have major swings & volume should be light. Dismal macro economic news will make it tough to get any advance started.

Dow Jones Industrials --- YTD

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