S&P 500 FINANCIALS INDEX
| Value | 222.31 | |
| Change | -3.07 (-1.4%) |
The Alerian MLP Index dropped 8½ to the 363s, 20 below its high at the start of the month. Daily swings of more than 2% are eye popping for a low beta index. The REIT index fell 3 to the 231s (10 below its recent highs). Junk bond funds sold off while Treasuries rose. The yield on the 10 year Treasury bond fell a relatively modest 2 basis points to 3.45%. Considering the "negative" news about the economy, there coluld have been more buying in addition to purchases by the Federal Reserve.
Treasury yields:
| U.S. 3-month | 0.07% | |
| U.S. 2-year | 0.67% | |
| U.S. 10-year | 3.44% |
JPMorgan Chase Capital XVI (AMJ)
Oil fell the most in a month after Spain's credit rating was cut & Chinese export growth slowed, bolstering concern that the global economic recovery & fuel-demand growth will slow. Gold saw selling despite continued concerns of unrest in the Mideast & growing worries about Eurozone debts.
| CLJ11.NYM | Crude Oil Apr 11 | 101.90 |  2.48 (2.4%) |
| Gold | 1407.60 | -22.00 | -1.54% |
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Photo: --- Bloomberg
The number of people seeking unemployment benefits rose last week after applications hit their lowest level in nearly 3 years, but further declines are expected with improvement in the economy. Applications increased 26K to 397K according to the Labor Dept. This report covers the week after the Presidents' Day holiday, when many gov offices were closed (applications usually rise in weeks following holiday-shortened weeks). The 4-week average rose to 392K after falling to its lowest level since Jul 2008 (2 weeks ago). Applications below 425K signal modest job growth, but they need to fall consistently below 375K to indicate a sustained decline in the unemployment rate. The number receiving unemployment benefits dropped 20K to 3.77M, the lowest level in over 2 years & fewer people are receiving benefits under emergency unemployment aid programs funded by the federal gov. An additional 4.3M unemployed received benefits under the extended programs, a drop of 200K from the previous week. Some may have found jobs, while many likely exhausted their benefits. Altogether, 8.8M were on the benefit rolls that week. The data is less gloomy then the headlines suggest, but lingering higher rates of unemployment will continue.
Jobless Claims in the U.S. Rose 26,000 Last Week to 397,000 After Holiday
Consumer confidence fell last week to the lowest level in a month as surging gasoline prices soured outlooks on finances & the economy. The Bloomberg Consumer Comfort Index dropped to minus 44.5 in the period to Mar 6, from the prior week’s minus 39.7, which was close to the highest in almost 3 years. Sentiment suffered the most among respondents who lacked work & those earning less than $50K a year. Gas costs have increased almost every day for a month, dealing a financial blow to households even though the labor market shows signs of improvement. The added burden of higher prices at the pump may restrain gains in consumer spending. The graph shows the index fell from its highs to middle ground.
Consumer Comfort in U.S. Drops to One-Month Low on Fuel
Bloomberg Consumer Comfort Index
| Current value | -44.5 -4.8 | ||
| Last week | -39.7 | ||
Markets took today's news badly following a period when all news was considered good or at least "good enough." Weak economic news from China, the US & Spain combined with a slump in oil companies dragged stocks sharply lower. Since Feb, the Dow has been muddling along in a sideways band as the bulls have given up command of the markets. But it's still up almost 500 YTD. The MLP index has had its worst decline since Nov & more selling can be expected in this overbought market.
Dow Industrials (INDU)
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