Wednesday, February 9, 2011

Dow barely extends its winning streak to 8 days

Trying to continue its streak, Dow was not able to muster much support.  It managed an up day, good enough for its 8th consecutive day of gains (to a 2½ year high), helped by buying at the close.  Dow finished up 6, decliners ahead of advancers almost 2-1 & NAZ lost 7.  Bank stocks were weak.  But the chart for the Financial Index shows this was nothing more than profit taking after a 50 point run over the last 2 months.


Value226.76One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change  -1.68  (-0.7%)

The MLP index was off a fraction in the 369s & the REIT gained a fraction in the 234s, good enough to eke out a new high since Sep 2008.  Junk bond funds going nowhere were mixed. 

Alerian MLP Index   ---   2 weeks

Dow Jones REIT Index   ---   2 weeks

10-Year Treasury Yield Index   ---   2 weeks

Oil prices fell after the gov reported crude oil supplies rose last week, & new data showed OPEC production reached a 2-year high.  Supplies of oil & gasoline in the US are rising, while demand for energy products remains weak. The economy is getting stronger, but businesses have been slow to increase hiring.  The price of oil has also been affected by signs that Saudi Arabia & other OPEC nations are raising production to keep the price from going too high & slowing the global economic recovery.  According to a new report, OPEC crude oil production last month averaged 29.57M barrels per day, the highest in 2 years.  The Energy Dept just reported that crude oil supplies in the US increased 1.9M barrels last week to 345.1M. Gold slipped after rebounding 40 off its lows last month.

CLH11.NYM...Crude Oil Mar 11...86.77 ....Down 0.17 (0.2%)

GCG11.CMX...Gold Feb 11.......1,365.20 ...Down 1.80  (0.1%)

Gold Super Cycle  

Treasury 10-year bond yields fell from the highest level in 9 months as the $24B auction of new debt drew the most demand on record from a class of investors that includes foreign central banks. Indirect bidders bought 71.3% of the notes, compared with 53.6% in Jan & an average of 46.4% for the past 10 sales. Yields climbed the most in more than 2 weeks yesterday (see chart above) after the 3-year note auction yesterday attracted the lowest indirect bids since 2007 amid concern inflation is accelerating.  Today's sell-off provided value for new investors.  The yield on the 10-year note dropped a big 9 basis points to 3.65%, after touching 3.77% yesterday (the highest since Apr 29). 

Treasuries Rise as 10-Year Note Sale Draws More Foreign Central Bank Bids

Treasury yields:

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

Hewlett-Packard (HPQ), a Dow stock, unveiled its entrant in the tablet race, announcing a touchscreen device for summer release called the TouchPad to try to steal momentum from the popular Apple (AAPL) iPad.  The 9.7" tablet runs on the webOS mobile operating system, which HP acquired last summer in its $1.2B purchase of handheld device pioneer Palm.  Pricing & details for the 1.5-pound tablet will be announced later.  HPQ also announced new webOS smartphones, the Veer & the Pre3. But rivals have a huge headstart, & the company will have to spend & market aggressively if it hopes to make any headway.  Markets liked the news.  The stock gained 80¢ in the 48s.

HP Unveils Palm-Based Tablet, Phones to Bolster Mobile Sales

Hewlett-Packard   ---   1 year

Markets muddled long.  Considering the steady rise this month, bulls won't complain.  Success of the Treasury auction brought a sigh of relief as the trend of higher yields was halted (for the time being).  Earnings reports keep coming starting with Cisco (CSCO), a Dow stock, after the close.

Dow Jones Industrials   ---   2 weeks

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