Friday, September 3, 2010

Dow has second straight triple digit gain

Stocks gave up some of the early advance but gained strength in the PM. Dow finished up 127 & closed near its highs, advancers ahead of decliner 3-1 & NAZ added 33. Banks had a good day, but the Financial Index is only working its way back to the middle of its year long trading range (around 200).


Value195.18One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change4.10 (2.1%)

The Alerian MLP Index rose 1¾ to the 327s (only 8 below its yearly highs) & the REIT index was up 2½ to the 214s (5 below its yearly highs). Junk bond funds did little (at their lofty levels) & the VIX dropped 1+ to the 21s, not seen since the stock markets sold off in early May. The € rose more than ½ a penny to near $1.29, a one month high. Treasuries continued weak with the yield on the 10 year Treasury bond rising 8 basis points to 2.70%.

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 & gold slipped while the stock markets were trying to make up their minds where to go.

BRENT CRUDE 76.52-0.41-0.53%

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The Institute for Supply Management’s index of non-manufacturing businesses, about 90% of the economy, fell to 51.5 in Aug from 54.3 in Jul. This was the weakest pace in 7 months, indicating the U.S. economy may be slow to strengthen in the 2nd half of the year. The index averaged 53.7 from its inception in 1997 through July. Readings above 50 signal growth. This is another reminder that the US is in a fragile recovery.

Service Companies in U.S. Expand Less Than Forecast

Index of service businesses - 1 year

One-Year Chart for Non ManNMI (NAPMNMI:IND)

This was another light volume day going into a long weekend when small orders can have a big impact on the close. The jobs report did not give new insights into a strong recovery & other measures (like the important service sector) are struggling. Next week, serious trading will resume & we will see where that takes us.

Dow Jones Industrials -- YTD

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Happy Holiday to All!!!

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