Markets erase early losses on hopes the Federal Reserve will buy Treasuries soon

Stocks sold off but managed to recover much of these losses.  A sense that the Federal reserve will begin buying Treasuries encouraged stock buying.  Dow fell 1, decliners ahead of advancers 3-2 & NAZ was down 5.  Banks led the way down on increased worries about the foreclosed mortgage mess.  Late day buying reduced losses as the Financial Index closed 2 above the intra day lows. 

S&P 500 FINANCIALS INDEX

Value	196.27
Change	-3.53  (-1.8%)

The Alerian MLP Index suffered its 5th decline the in the last 7 weeks, down 1½ to 350.  The REIT index fell almost 1 to the 219s.  Junk bond funds were mixed to lower from their yearly highs.  Treasuries sold off.  The yield on the 10 year Treasury bond shot up 6 basis points to almost 2.50%, possibly hurt by news that Pimpco, the largest bond holder, sold Treasuries recently.


Treasury Yields

U.S. 3-month		0.13%
U.S. 2-year		0.37%
U.S. 10-year		2.49%

Alerian MLP Index   ---   2 months



Dow Jones REIT Index   ---   2 months



10-Year Treasury Yield Index   ---   2 months




Oil fell after a gov report showed US petroleum demand dropped to the lowest level in more than 10 months as the economy struggled to recover.  But gold reached new highs as investors piled into the safe-haven asset as the US dollar weaken again. The € is near $1.41, a 9 month high.

CLX10.NYM

....Crude Oil Nov 10

....82.43

..... 0.58

(0.7%)

GCV10.CMX

....Gold Oct 10

.......1,377.20 ..

... 7.70 (0.6%)

$$$ Gold Super Cycle $$$ 

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Apple (AAPL), with the 2nd largest market cap in the world, will unveil an update to the operating system for its Macintosh computers next Wed & will post its FY Q4 earnings on Mon.  The company is expected to report sales of nearly $19B & earnings of $4.05 a share (excluding items) in the Sep-ended quarter. Last year, its Q4 revenue was $9.87B with EPS of $1.82.  The qtr results will be the 2nd to include sales of the iPad tablet. AAPL sold more than 3M in its first qtr of availability, but rivals are preparing competing devices for the holiday season & beyond.  The stock gained 2 to 302 for another record high.

• Apple's stock tops $300 ahead of earnings, event- WSJ

Apple   ---  1 year





Enterprise Products (EPD), the largest MLP, declared an increase in the quarterly distribution rate to $0.5825 per unit ($2.33 annualized).  This distribution rate, which represents a 5.4% increase over $0.5525 ($2.21 annualized) in Q3, the 34th increase since its IPO in 1998 & the 25th consecutive increase.  The units were up pennies in a soft market.

Enterprise Increases Quarterly Cash Distribution RateBusiness Wire

Enterprise Products   ---   1 year





Banks plunged, on escalating concerns that faulty handling of home loans & foreclosures will fuel costs.  The declines reflect uncertainty about costs that banks might bear on so-called mortgage put-backs from investors or insurers who challenge the loans as well as uncertainty about the potential costs of legal challenges to foreclosures.  Yesterday, JPMorgan, a Dow stock & the 2nd-biggest US bank by assets, said it was adding $1B to reserves set aside for repurchasing mortgages & also expanded a review of foreclosures to about 115K files in 41 states, from at least 56K loans in 23 states on Sep 23. CEO Jamie Dimon said the review will cost more money, though expenses will probably be “incremental.”  The stock was down 1.12 (3%).

U.S. Bank Stocks Slide on Concern Over Foreclosure Inquiry

JPMorgan   ---   1 years





Dow finished essentially even as following winds remain in force.  But gold reached new heights & the MLP index finally backed off from setting another record high.  Google (GOOG) reports after the close which may help set the tone for earnings season that has just begun.

Dow Jones Industrials   ---   2 months

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