Mixed stock markets while MLPs and gold reach new records

Dow was up 22, decliners barely ahead of advancers but NAZ dropped a big 19 (almost 1%).  Tech shares were hit by a downgrades in the chip sector: Xilinx (XLNX) & Altera (ALTR), each down about 3%, & investors weighed the prospects for more stimulus measures following a weak reading on private-sector hiring.  Bank stocks were little changed, the Financial index was essentially flat.

S&P 500 FINANCIALS INDEX

Value        198.27
Change        -0.07      (-0.0%)






The Alerian MLP Index did it!!!

The index made it official, blasting thru to a new record, rising 2.44 to 344.08.  Even Apple (AAPL) is almost 6 (2%) below its record reached 2 weeks ago.  The Dow Jones REIT Index fell 1½ to the 215s.  Junk bond funds were mixed (stocks with high yields) at or near yearly highs.  Treasuries are also red hot.  The 2 year Treasury yield is at a new record low & the 10 year Treasury yield dropped a very big 7 basis points to 2.40%, its lowest since the financial crisis in Jan 2009.  Even then, it was below 2.4% for only a few weeks.  Excluding that, this would be a record low yield.


Treasury yields:


U.S. 3-month        0.11%
U.S. 2-year            0.38%
U.S. 10-year          2.40%

 
Alerian MLP Index   ---   YTD




DowJones REIT Index   ---   YTD




10-Year Treasury Yld Index  --  YTD





Oil rose to a 5 month high as the dollar declined on speculation the Federal Reserve will act to revive the US economy by buying Treasuries.  Gold was popping to new record highs from momentum buying & currency fears. It traded as high as $1351 & as low as $1340.


CLX10.NYM ...Crude Oil Nov 10 ...83.30  ...0.48  (0.6%)
GCV10.CMX Gold Oct 10        ...1,346.40  ...7.50  (0.6%)

$$ Gold Super Cycle $$

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GLD   (ETF)   ---   1 month






General Electric (GE), a Dow stock, is buying closely held Dresser, an energy equipment maker, for about $3B to capitalize on the boom in natural gas.  GE builds natural gas-fired turbines for power generation & provides services like water treatment and recycling for oil & gas drilling operations.  Dresser's products include small gas engines, control & relief valves, measurement, regulation & control systems used in gas pipelines, liquid natural gas facilities & power plants.  Dresser is based in Addison, Texas. It had earnings of $318M on revenue of $2B last year according to the company.  GE was up 39¢ but has done little this year in the market rally.

GE to Buy Dresser for $3 Billion to Bolster Oil, Gas


General Electric  --  2 years






The Mortgage Bankers Association’s index of of mortgage applications decreased 0.2% in the week ended Oct 1, the 5th straight weekly decline even though mortgage rates fell to a record low. Refinancing fell to an 8 week low, while purchases increased by the most since April.  The average rate on a 30-year fixed mortgage fell to 4.25%, the lowest on record going back to 1990.  The average rate on a 15-year fixed loan fell to 3.73%, also the lowest on record.   The share of applicants seeking to refinance a loan fell to 78.9% from 80.7%.

U.S. Mortgage Applications Fall for Fifth Week Led by Drop in Refinancing


Mortgage refinacing - 1 year




Pending home sales - 1 year





There was not a lot happening on thin trading (NYSE floor volume was below 1B shares).  Popular averages did little following the weak reading on private-sector hiring in the AM.  But new records made gold, MLP & Treasury holders very happy.  Tomorrow is the day prior to the big jobs report.  Chances are the markets will continue to muddle along while worrying about getting a reminder that the high unemployment rarte is not going away soon.   In the meantime, Alcoa (AA), a Dow stock, is scheduled to kick off Q3 earnings season after the closing bell tomorrow. The company is expected to report EPS of 7¢ on revenue of $4.9B which will compare with 4¢ on revenue of $4.6B last year.

DowJones Industrials  --  YTD

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