Dow closes in on 12,000

Dow began the day higher & kept climbing.  It ended with a triple digit gain (up108), advancers over decliners a more modest 5-2 & NAZ was up 28 (helped by a div hike at Intel).  The Financial Index shows bank stocks were about even.

S&P 500 FINANCIALS INDEX

Value	221.49
Change	-0.19  (-0.1%)

Recovery day for MLPs. The Alerian MLP Index gained 5 to 369, taking it with 5 of a new record.  The REIT was up 1+  to the 226s.  Junk bond funds added almost 1%.  Treasuries did little ahead of the FOMC meeting .  The yield on the 10 year Treasury bond fell 1 basis point to 3.41%.

Treasury yields:

U.S. 3-month		0.15%
U.S. 2-year		0.62%
U.S. 10-year		3.41%

Alerian MLP Index   ---   YTD



Dow Jones REIT Index   ---   YTD



10-Year Treasury Yield Index   ---   YTD




Oil is at its lowest level in more than a month despite the cold weather around the US & Europe.  Gold is suffering from more selling by those hedge fund guys. 

CLH11.NYM

...Crude Oil Mar 11

...87.69

... 1.42

(1.5%)

GCF11.CMX

...Gold Jan 11

........1,335.00

......6.00

(0.5%)

$$ Gold Super Cycle $$  

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Banks, insurers & asset managers in the S&P 500 Index trade at 12.3X estimated earnings, close to the lowest level since the bull market began almost 2 years ago. The group is the 2nd-cheapest among 10 industries even though analysts forecast profits will rise 18% in 2011 (exceeding the S&P 500). The latest estimates for GDP in Q4, are that it will show an annual growth rate of of 3.5% in Q4.  But that may not be enough to boost bank shares because investors are still trying to gauge how much profits will be reduced by last year’s financial reform law.  Earnings for S&P 500 companies rose 30% in 2010, the fastest growth since 1995, according to recent estimates. Profits for financial companies almost doubled, aided by the Federal Reserve's decision to keep interest rates near zero (which also helps boosts bank earnings). Investors don't believe these earnings are for real, which could be a negative sign for the stock market rally. Banks have been traditional leaders in the stock markets, because their businesses reach all sectors of the economy. The Financials Index (above) is still struggling to top the 230 interim highs reached last Apr & remains far below the record highs above 500 achieved in early 2007.

Bank Valuations Stuck at 2009 Lows Shows No Recovery


Apple (AAPL) will start selling the iPad 3G model in China “in the first quarter,” according to the Shanghai Daily.  The source was unidentified (i.e. AAPL).  The stock also had a mention in Barrons.& rose almost 11 to the 337s, recovering some of last week's loss.

Apple to Sell IPad 3G in China This Quarter, Shanghai Daily Saysat Bloomberg

Apple   ---   YTD




Dow is building a good advance in Jan with a monthly gain of 400.  It's breathing on 12K, not seen since mid 2008.  MLPs are back in favor, up 1% YTD.  Following winds (all news is good or at least good enough) are in control of the markets.  But bank stocks are only bumbling along & should be particpating in the rally (as they did last month).  Maybe they will regain favor next month. 

Dow Jones Industrials   ---   YTD

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