Monday, September 13, 2010

Buyers are back!!

Stocks began the day higher but midday selling reduced gains. However, late day buying brought averages back to close near their highs. Dow was up 81, advancers ahead of decliners almost 4-1 (although a little lower than the AM spread) & NAZ jumped 43 (almost 2%). Banks led the way up as the Financial Index looks like it wants to crack thru 200 as it has so many times this year.


Value199.52One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change4.42 (2.3%)

The high yield sectors haven't changed much from AM trading. The Alerian MLP Index rose 0.87 to just under 330 & the REIT index gained 3+ to the 213s. Junk bond funds were higher & the VIX dropped 0.78 to the 21s, a 5 month low. The € continued strong, up 2 pennies at $1.28½. The yield on the 10 year Treasury bond was down 5 basis points to 2.74% as buying by the FED is raising prices of medium term Treasuries.

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

The Enbridge Energy (EEP) pipeline remains shut in Ill bringing out buyers for oil, although AM gains were trimmed. Oil remains in a sideways trading pattern & still near its record highs above 1260.

CLV10.NYM..Crude Oil Oct 10..77.25 ..Up 0.80

GCU10.CMX..Gold Sep 10..1,245.10 ..Up 0.50

$$ Gold Super Cycle $$
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Wen Says China in ‘Good Shape’

China's premier Wen Jiabao
Photo: Bloomberg

China’s Premier Wen Jiabo said that China's economy is in “good shape,” a sign of his confidence China will avoid a sharp slowdown. “China’s economy is now in good shape, featuring fast growth, gradual structural improvement, rising employment and basic price stability,” Wen said. The country’s stock index rose the most in a week & the yuan advanced to the highest since a peg against the dollar was scrapped in Jul 2005. Better-than-expected economic data for Aug eased concerns that the gov may overshoot in cooling an economy that grew 11.9% in Q1. Industrial production rose 13.9% (over last year) in Aug, the most in 3 months. In addition, retail sales & lending figures exceeded economists’ estimates. This is the 3rd largest economy in the world & an important factor in global recovery.

Wen Says China Is in `Good Shape,' Signaling Confidence in Economic Growth

Apple (AAPL), with the 3rd largest market cap, has had a good run in recent weeks, taking it near its yearly highs & leading stock markets higher. Today it was up 3½ to 267.

Apple --- 2 months

Buyers were feeling good, even a midday dip did not dampen enthusiasm. Dow is looking strong & would like to take out its yearly high above 11K. 2 years ago was Lehman collapse time. We've come a long way since then!

Dow Jones Industrials --- YTD

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