Dow gains over 1200 in 3 months

Dow was strong out of the gate & remained higher all day while NAZ succumbed to selling in the PM.  Dow was up 95 (near its highs), advancers ahead of decliners 2-1 but NAZ only eked out a gain of 1 despite Apple (AAPL) gaining almost 5.  The Financial Index had a good day & a very good month.

S&P 500 FINANCIALS INDEX

Value	226.78
Change	1.05  (0.5%)

The MLP index rose almost 2 to 382+, setting another record high, which brings the index yield below 6%.  It's up 17 YTD, not too shabby after a 2 year extraordinary run.  The REIT popped 5+, to the 241s, on the announced acquisition.  Junk bond funds were a little higher as were Treasuries.  The yield on the 10 year Treasury bond fell 1 basis point to 3.41% & has fallen 35 basis points from its highs 3 weeks ago (largely related to turmoil in the Mideast). 

Treasury yields:

U.S. 3-month		0.13%
U.S. 2-year		0.68%
U.S. 10-year		3.41%

Alerian MLP Index   ---   YTD



Dow Jones REIT Index   ---   YTD



10-Year Treasury Yield Index   ---   YTD




Oil has settled "back" to the 98s, but its chart below shows it is still up substantially from the low 80s (& even high 70s) where it was recently. Gold gained capping the best monthly increase since Apr, as rising inflation & Mideast conditions boosted demand for an alternative asset.

CLJ11.NYM

....Crude Oil Apr 11

...97.08

... 0.80  (0.8%)

GCH11.CMX

...Gold Mar 11

.....1,410.00

... 1.30

(0.1%)

$$ Gold Super Cycle $$  

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CLJ11  (oil contract)  --  2 weeks




Prices for gas at the pump keep rising, a hidden tax on drivers.  Higher prices mean either less driving or cutbacks elsewhere.  The summer driving season still is 3 months away.

	Regular	Mid	Premium	Diesel	85	**E85 MPG/BTU adjusted price
Current Avg.	$3.368	$3.468	$3.613	$3.713	$2.840	$3.737
Yesterday Avg.	$3.354	$3.460	$3.595	$3.699	$2.824	$3.717
Week Ago Avg.	$3.171	$3.307	$3.436	$3.566	$2.760	$3.633
Month Ago Avg.	$3.101	$3.293	$3.411	$3.429	$2.659	$3.499
Year Ago Avg.	$2.704	$2.871	$2.975	$2.874	$2.329	$3.065

Source:   AAA


US auto sales in Feb could approach the fastest pace since the “cash for clunkers” program as rising consumer confidence spurred purchases. Data, will be released tomorrow, are estimated to show sales ran at a 12½M annual rate.  The annual rate in Jan & Dec was calculated at 12.6M, the fastest since the 14.2M rate during “cash for clunkers” in Aug 2009.  Trucks & sport-utility vehicles continue to drive sales, with increases of more than 35% in Feb, according to JD Power. But it's too early to determine how oil prices, at the highest in more than 2 years, will affect these gains going forward.

Auto Sales May Approach ‘Clunkers’ Highs as U.S. Rebounds


Bill Dudley, President of the NY Federal Reserve Bank (FED), said the “considerably brighter” economic outlook isn’t yet reason for the central bank to withdraw its record monetary stimulus. “We provided additional monetary policy stimulus via the asset purchase program in order to help ensure the recovery did regain momentum,” Dudley continued. “A stronger recovery with more rapid progress toward our dual mandate objectives is what we have been seeking. This is welcome and not a reason to reverse course.”  He said the economy is “finally showing more signs of life” because household and financial- company balance sheets are improving, monetary and fiscal policy have “provided support” and growth overseas has led to increased demand for US goods & services.  Now the FED needs to reassess its QE2 program.

Fed's Dudley Says Growth Not Reason to `Reverse' Stimulus


The high yielding sectors had an up month while Treasuries fell & then rose on unsettled global conditions with yields ending little changed in Feb.  Dow had a modest net gain in Feb, but is up a solid 1200 (11%) in the last 3 months!  That wouldn't be a bad yearly gain in other times.  Now markets enter a new month with more headwinds to face.  Rising oil prices are being felt by the public today & that will affect buying habits.  The Mideast is becoming very unstable, conditions that show no sign of early resoultion. So far markets have largely ignored these problems, encouraged by prospects of rising US & world economies lifting about all boats.  That notion will be tested in Mar.  The jobs report for Feb comes out Fri, a reminder that fundamental problems in the US economy are not going away soon.

Dow Jones Industrials   ---   YTD

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