Friday, October 8, 2010

Dow closes above 11,000, highest since May

Stocks gained on hopes the Federal Reserve will provide more easing to jump start the lagging economic recovery. Dow was up 57 to 11006, advancers over decliners 3-1 & NAZ gained 17. Bank stocks rose modestly, lifting the Financial Index which has made little progress in the Sep rally.

S&P 500 FINANCIALS INDEX

Value	197.62
Change	+0.20 (+0.1%)

The Alerian MLP Index inched up a small fraction, good enough for yet another record close near 347. MLP holders are happy campers, but this can't go on forever. The REIT gained ½ to the 216s, near the 219 high in 2010. Junk bond funds were mixed to higher. Treasuries continue hot. The yield on the 10 year Treasury bond dropped 1½ basis points to 2.38% while shorter term Treasury yields are at record low levels..

Treasury yields

U.S. 3-month		0.11%
U.S. 2-year		0.34%
U.S. 10-year		2.38%

Alerian MLP Index --- 2 months

Dow Jones REIT Index --- 2 months

10-Year Treasury Yld Index --- 2 months

Oil climbed above $83 amid speculation the Federal Reserve will buy more debt to stimulate the economy. Gold rose, rebounding from the biggest drop since Jul, as the dollar’s slump boosted the appeal of gold as an alternative asset. It has also has an impressive chart in recent weeks.

CLX10.NYM

....Crude Oil Nov 10

.....82.63

....

0.96

(1.2%)

GCV10.CMX

.......Gold Oct 10

.......1,344.20 ..

10.30 (0.8%)

$$ Gold Super Cycle $$ Click Here

GLD (ETF) --- 2 months

IBM (IBM), a Dow stock, reached a new record price since it went public in 1915, topping 139. Apple (AAPL), a different technology company, is also at records level, rising almost 5 to 294, despite increased competition for some its hottest new products .

IBM Hits Record as Palmisano Focuses on Software, Services

IBM --- 30 years

Apple -- 30 years

Dow tops 11K for the first time since May is making headlines. But its real first time was 10 years ago shown in the graph below. Now it needs to top the 11.2K high for 2010. Meanwhile, other investors looking for safe haven investments, are bidding up prices of gold & Treasuries to new records. Those not looking for safe haven investments are pushing MLPs to record highs. Not sure how long this divergence will last.

Dow Jones Industrials --- 10 years