Wednesday, November 17, 2010

Markets muddle along on European debt worries

Stocks wanted to recover at  least some of yesterday's losses & tried, but ended little changed.  Dow fell 15, advancers ahead of decliners 3-2 & NAZ gained 6.  Bank stocks were being held back by a host of worries, from the US to Europe to Asia, taking the Financial Index further under 200.


Value196.96One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change  -1.14  (-0.6%)

The Alerian MLP Index tried for a rebound today, but gave up early gains, ending with a fractional gain to 355.  The REIT index finished with a gain of almost 2 to 211.  Junk bond funds found buyers & were up 1-2%.  Treasuries had a tough time finding buyers even though the Federal Reserve was in the market to buy.  The yield on the 10 year Treasury bond rose 2 basis points to 2.86%, remaining about 50 basis points above its recent low.

Treasury yields:

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

Alerian MLP Index   ---    YTD

Dow Jones REIT Index   ---    YTD

10-Year Treasury Yield Index   ---    YTD

Oil declined for a 4th day on speculation that China will raise interest rates, slowing economic growth.  Gold is resting after its fall from record highs above 1400.

CLZ10.NYM...Crude Oil Dec 10...80.48 ....Down 1.86  (2.3%)

GCX10.CMX...Gold Nov 10.....1,341.80 ...Up 3.50  (0.3%)

$$ Gold Super Cycle $$  

Last week Cisco (CSCO), a Dow stock, reported an outlook which took the stock down $5 & back to the levels of Aug 2009.  In the last week it has been learning to live at lower, sub 20, levels.  Today it's down 3¢ to 19.40.  Attached is an article discussing recent results for high profile tech companies.

A look at recent tech-industry earningsAP

Cisco   ---   2 years

Bank of America (BAC), another Dow stock, has been under pressure all year, mirroring the Financial Index trudging along but in contrast to the rising stock averages.  The stock had a nice bounce off its very depressed levels around 4, but has only returned to where it was in the middle of 2009 highlighted by 6 months of a continual slide   

Bank of America   ---   2 years

Citigroup (C) had a nice bounce off its depressed lows of 1 at the start of 2009 but has been pretty much trading sideways near 4 in the last 6 months. However its modest rise in recent months is impressive when the the flat performance of the Finance Index & the Treasury's sale of billions of shares are kept in mind.  For the very brave, its bulls see the shares doubling from these levels. 

Citigroup   ---   1 year

Speaking of the very brave, Apple (AAPL), with the 2nd largest market cap in the world, has been one of the best performing stocks in the last year.  But after reporting great earnings last month & a host of new products, its has slipped back.  Today it fell 1+ to just above 300 (what could be a very significant technical support level) & down 19 from its highs last month.  AAPL is a darling of the bulls.  When it falls back, that becomes worrisome for their argument.  

Apple   ---   1 year

Markets huffed & puffed but couldn't climb the mountain today.  Dow is only 7 above the important 11K support line with selling (even though it was minor) into the close.  Markets have to cope with questioning about the QE2 decision, sovereign bank loan problems in Europe & a possible slowdown  in Asian economies.  This has the making of another difficult week for the markets. 

Dow Jones Industrials   ---    YTD

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