Thursday, September 2, 2010

Markets extend yesterday's gains

Stocks were higher largely due to late day buying. Dow added 50 & closed at its highs, advancers over decliners better than 2-1 & NAZ rose a bigger 23. Banks gained, giving the Financial Index a nice bounce off the yearly lows set last week.


Value191.08One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change1.78 (0.9%)

The Alerian MLP Index rose 2½ to the 325s & continues to hold up well in the face of selling in the markets in the last month. REITs were also strong. The index gained 2½ to the 211s & not far from the this year's high of 219. Junk bond funds were steady at or near 2010 highs. The VIX fell a fraction in the 23s & hasn't done much in recent weeks. The € was up a smidgen, just above $1.28. Treasuries sold off again. The yield on the 10 year Treasury bond rose almost 5 basis points to 2.62%, still at very low levels.

Treasury Securities

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

Alerian MLP Index -- 1 month

Dow Jones REIT Index -- 1 month

VIX -- 1 month

10-Year Treasury Yld Index -- 1 month

Oil rose after a platform in the Gulf of Mexico was struck by an explosion, bolstering concern that regulations will reduce output in the region. Gold climbed for a 3rd day this week on speculation that central banks will keep interest rates low for an extended period, boosting the appeal of gold as an alternative investment. Gold is nearing its record levels reached in Jun. The chart below shows gold already has a substantial gain this year (while stocks are floundering).

CLV10.NYM..Crude Oil Oct 10..74.98 ..Up 1.07

GCU10.CMX..Gold Sep 10..1,249.80..Up 3.50

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There is a new oil leaking problem in the Gulf of Mexico. The Coast Guard reported that a mile-long oil sheen is spreading from the site of a petroleum platform that exploded 90 miles off the Louisiana coast, west of where BP's (BP) massive spill occurred. The Coast Guard said no one was killed by the explosion, all 13 aboard the rig were found floating in the water in survival gear. The blast was spotted by a commercial helicopter flying over the site. The platform is owned by Mariner Energy (ME), the stock sold off 60¢.

Oil Sheen Spreading From Gulf Platform Explosion- AP

Mariner Energy --- 2 years

Volume on NYSE floor was 1B shares, low volume can magnify fluctuations of buying or selling. Tomorrow, before the markets open, the jobs report will be released & the gut reaction today is positive, although nobody is expecting a break-thru report. Dismal unemployment numbers will remain for many months. The chart shows Dow is trying to build a base at 10K (after failing to do so this year). NAZ closed just over 2200 for what it's worth.

Dow Jones Industrials -- 1 month

Nasdaq --- 1 month

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