Monday, September 13, 2010

Markets rose on favorable international news

Stocks, led by the banking sector, were higher on new global regulatory requirements & news of a strong manufacturing economy in China. Dow gained 84 (going over 10½K), advancers ahead of decliners almost 6-1 & NAZ added 36. Bank stocks rose worldwide as regulators gave firms more time than expected to comply with stiffer capital requirements aimed at preventing future financial crises. The Financial Index is trying to go over 200 once again.


Value 199.42 One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change 4.32 (2.2%)

The Alerian MLP Index rose 1+ to 330, near its 335 high in 2010 & closer to its record high of 342 in 2007. The REIT index was up almost 3 to 213 & not far from its yearly high of 219. Junk bond funds rose, near their yearly highs, & the VIX dropped ½ to the 21s, near its lows since the market sell-off in May. Today's news was good for the €, it gained almost 2 pennies to $1.28½.

Alerian MLP Index --- 2 weeks

Dow Jones REIT Index --- 2 weeks

VIX --- 2 weeks

10-Year Treasury Yld Index --- 2 weeks

Oil rose to a 4-week high after a surge in Chinese industrial output indicating demand will accelerate & a pipeline closure limited deliveries in the US. Gold is performing well along with stock markets.

CLV10.NYM...Crude Oil Oct 10...77.93 ...Up 1.48

GCU10.CMX...Gold Sep 10...1,247.00 ..Up 2.50

** Gold Super Cycle ** Click Here

Treasury 10-year note yields dropped from a 5-week high as the Federal Reserve (FED) prepared to resume purchasing gov debt. The FED will buy notes due in 2016-2020 to keep borrowing costs low. Longer-term debt fell earlier after a report showed China’s industrial output increased in Aug more than forecast. Yields on 10-year notes dropped 5 basis points to 2.79%. The FED decided at its Aug policy meeting to revive its Treasury purchases to try to encourage growth after buying $300B last year.

Treasury 10-Year Note Yield Falls From Five-Week High Before Fed's Buyback

Treasury Securities

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

Enbridge Energy Partners (EEP) estimated 6K barrels of crude oil were released from a pipeline leak in Romeoville, Ill. before it could be shut down. This was only a small amount of the oil escaped from the immediate area before crews corralled the spill with vacuum trucks & most of the oil has been recovered. EEP reported the leak on Line 6A of the Lakehead System on Thu & the line was shut down within minutes after being discovered. The oil pooled onto a roadway & then a retention bond. Line 6A was transporting 459K barrels per day of heavy crude when the leak was discovered & the line remains shut down. EEP would not give an estimate of when it would be restarted. After dropping 1% on Fri, the units rebounded 22¢. The 2 month graph below shows the plunge after the the previous oil spill into Lake Mich at the end of Jul.

Enbridge Says `Drain-Up' Completed, Most Oil Recovered After Illinois Leak

Enbridge Energy --- 2 months

HP to Buy ArcSight for $1.5 Billion to Gain Software

Photo: Bloomberg

Hewlett-Packard (HPQ), a Dow stock, will buy the security software provider ArcSight (ARST) for about $1.5B. The deal is part of a strategy begun under former CEO Mark Hurd, with the company looking to grow outside the low-margin personal computer market. ARST helps organizations keep tabs on the data flowing through their computer networks & analyze it for signs of hacking, theft or fraud. Its revenue in the most recent fiscal year was $181M. HPQ will buy ARST shares for $43.50 in cash, a 24% premium over the previous closing price, & HPQ was up a penny. ARST rose to $43.74 on hopes of an even better offer.

HP to Buy ArcSight for $1.5 Billion to Gain Security Software

ArcSight --- 2 months

Hewlett-Packard --- 2 years

Markets are doing well. US personal taxes for next year are become a hot topic which will consume DC politicos for the next few weeks going into the elections. It looks like tax breaks will be left in place for all but the wealthiest. But even those details remain fuzzy. For the time being, bulls are back in charge of the markets & Dow may make another attempt to reach 11K..

Dow Jones Industrials --- 2 weeks

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