Monday, August 29, 2011

Markets jump on reduced storm damages

Dow shot up 254 & closed at the highs, advancers over decliners almost 9-1 & NAZ had a stellar gain of 82 (3.3%).  Banks had a sharp rise after Warren Buffett made the $5B investment in Bank of America (BAC) last week.  But the Financial Index still has a soggy chart, down in the last 12 months.

S&P 500 Financials Sector Index

Value178.99One-Year Chart for S&P 500 Financials Sector Index GICS Level 1 (S5FINL:IND)
Change    7.17     (4.2%)

MLPs & REITs had an outstanding day.  The MLP index is bumping on the significant 350 barrier & the REIT index gained 7+ to 226 (up 30 from its lows 3 weeks ago).  Junk bond funds were up 1-2% on strength in the stock market but Treasuries sold off as stocks were rising. Oil rose on what was seen as strengthening consumer spending.  Gold fell, but is holding above $1800.

Alerian MLP Index

Value350.09One-Year Chart for Alerian MLP Index (AMZ:IND)
Change   7.22     (2.1%)

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CLV11.NYM...Crude Oil Oct 11...87.34 ...Up 1.97  (2.3%)

Live 24 hours gold chart [Kitco Inc.]

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Pfizer, Bristol-Myers Blood Thinner Reduced Deaths in Study

Photo:   Bloomberg

The blood thinner from Pfizer, a Dow stock, & Bristol-Myers demonstrated an impressive reduction in major bleeding in clinical trials & could emerge as the leading brand in stroke prevention.  Eliquis was approved in the European Union in May for preventing blood clots in patients who have had hip or knee replacement surgery.  PFE, the world's largest drugmaker, & partner Bristol-Myers Squibb plan to seek US approval later this year. The companies also will seek approvals for much bigger groups of patients at risk of life-threatening blood clots.  A previously released study results showed a statistically significant reduction in stroke & systemic embolism for Eliquis patients compared to those taking warfarin.  Results released at a European Society of Cardiology show the drug's risk reduction in major bleeding was a considerable improvement over competitors Xarelto & Pradaxa.  PFE is desperate to receive approval of a new drug with patent protection on its #1 drug Lipitor about to run out.  PFE rose 67¢ & BMY was up 57¢.

Pfizer, Bristol-Myers Pill Seen Leading $9 Billion Stroke Market on Safety

Pfizer, Inc. (PFE)

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Bristol-Myers Squibb Company (BMY)

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Photo:   Bloomberg

The estimated cost for Hurricane Irene to insurers fell to about $2.6B as the storm lost strength en route to NY, down from a projection last week of $14B. Total economic losses, including those that aren’t insured, may be about $7B.  The insurance industry appreciates the reduction in damage in what has already been a bad year.  Of course, these estimates ignore the loss of business to retailers who were forced to close during the all important back-to-school shopping season.

Irene’s Estimated U.S. Insurer Cost Drops to $2.6 Billion; Hartford Climbs

Stocks had a strong rally although volume was not heavy during a quiet week for the markets.  The MLP index is up 35 (11%) off its Aug 8 lows.  It rose above 350 a week later, but then fell back.  This week will be a test to see if it is serious about climbing above its former floor.  Dow is also at its highs set 2 weeks ago.  After today's gain, Dow is still down 600 in Aug.  Economic reports are coming this week which will encourage or discourage buyers. 

Dow Industrials (INDU)

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