VerySmartInvesting: Markets fluctuate, but Dow holds above 11,000

Tuesday, November 30, 2010

Markets fluctuate, but Dow holds above 11,000

Stocks sold off at the start, taking the Dow below 11K, but recovered with only limited losses. Dow fell 46, decliners over advancers 2-1 & NAZ fell a bigger 27. Banks stocks edged lower, but nothing serious. Even though Nov was a dreary month for banks, the Financial Index ended essentially where it started (while remaining stuck in its longer term sideways rut).

S&P 500 FINANCIALS INDEX

Value	194.14
Change	-1.38 (-0.7%)

The Alerian MLP Index was up fractionally to the 357s & gained 4 in Nov. The Dow Jones REIT Index fell 1½ to 215 & is down 5 in Nov. Junk bond funds slipped today & fell about 3% in the month. Treasuries lost ground even though the Federal Reserve is buying The yield on the 10 year Treasury bond fell 2 basis points to 2.80% today but is up 20 basis points in Nov.

Treasury yields:

U.S. 3-month		0.16%
U.S. 2-year		0.45%
U.S. 10-year		2.80%

Alerian MLP Index --- YTD

Dow Jones REIT Index --- YTD

10-Year Treasury Yield Index --- YTD

Oil fell today but remains where it started the month. Because of today's big gain, gold rose about 2% in the month & may be heading for its record highs above 1400.

CLF11.NYM

...Crude Oil Jan 11

...84.13

...

1.60

(1.9%)

GCZ10.CMX

...Gold Dec 10

...1,382.30

...

16.30

(1.2%)

***Gold Super Cycle***

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President Obama said he still disagreed with Reps on whether to extend Bush-era tax cuts for the wealthiest Americans, but the 2 sides agreed to negotiate a deal in the coming days. Treasury Sec Tim Geithner & budget director Jack Lew were appointed to work with congressional Reps & Dems to come up with a compromise to prevent broad tax increases from occurring next year. Finding common ground before year end will be tricky. Obama said he & many Dems continued to believe that it would be "unwise and unfair" to spend $700B to extend tax cuts for the wealthiest Americans while also trying to bring down the US deficit. Reps argued that it would be better for the economy if tax cuts for all Americans were extended. Either way, taxes will go up for all workers in Jan when new payroll tax tables based on previous tax rates are used. That means the typical worker will find the paycheck reduced because of additional federal taxers withheld.

Obama and Republicans Agree to Negotiate on Taxes- Reuters

Here's a quick look at major stocks in Nov which has been a sideways but drifting lower month. Citi (C) is about even while banks have were weak & the Treasury has been selling large amounts of stock. Bank of America (BAC) & Cisco (CSCO), both Dow stocks, lost ground with CSCO getting hit hard when it gave lower guidance going forward. Apple (AAPL), with the 2nd largest market cap in the world, gained ground although has not taken out its recent highs reached after it announced excellent earnings & a slew of sexy, new products. Overall they present a mixed picture with a negative bias (like the Dow).

Citigroup --- 1 month

Bank of America --- 1 month

Cisco --- 1 month

Apple --- 1 month

Once again, late day buying limited losses for stocks. But Euro debt concerns haunt stock buyers & Dec is shaping up as a tough month. Dow slipped 1% in the month & is sitting on the 11K support level. Bulls like to see that it held. But pressure to go lower is still in the air & the big monthly jobs report, which is not expected to be pretty, is coming on Fri.

Dow Jones Industrials --- 1 month