Dow shot up 140 although it pulled back 140 from its highs in the last hour of trading, advancers over decliners 5-2 & NAZ gained 40. Banks participated in the up market but the index still has a dismal chart in recent months.
The MLP index rose & the REIT index was up 1+ to the 221s. Junk bond funds were mixed & Treasuries also did little after a successful auction. Oil declined after a gov report showed that fuel inventories climbed, demand dropped & retail sales stalled in the US. Gold continues to mark time in the lows 1800s.
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![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
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The leaders of Greece, France & Germany said Greece is an "integral" part of the eurozone after their emergency teleconference aimed at calming markets & tempering talk of an imminent default by Greece. German Chancellor Merkel & French President Sarkozy also stressed to Greek Prime Minister Papandreou "that it is more indispensable than ever to fully implement the decisions adopted July 21" by the eurozone leaders "to ensure the stability of the eurozone." The main fear of a Greek bankruptcy is that it could destabilize other financially troubled European countries such as Portugal, Ireland, Spain or Italy. It would also have a knock-on effect on banks, many of which are large holders of Greek gov bonds. Merkel & Sarkozy pressed the Greek leader on the "importance they attach to the strict and effective implementation of the Greek economic redressment program." Sarkozy's office said Papandreou "confirmed his absolute determination to take all measures necessary to implement the ensemble of commitments made." The Greek reforms "are indispensable for the Greek economy to find the path of sustainable and balanced growth." So far these are just words, but they did bring out stock buyers today.
Sarkozy, Merkel Are ‘Convinced’ Greece Will Stay in Euro Amid Fiscal Woes
Photo: Yahoo
Italy's Parliament gave final approval to gov austerity measures, a combination of higher taxes, pension reform & slashed spending that sparked street protests in Rome (shown in the picture). The package was passed by a vote of 314-300 (close) after the Senate already approved the measures. Hundreds of demonstrators, some unleashing smoke bombs & others hurling paint, clashed with police in riot gear in the cobblestone squares & streets near Parliament as lawmakers were voting on the measures designed to fend off a financial crisis threatening much of Europe. Earlier, the gov, whose allies had squabbled publicly over the package, won a crucial confidence vote called to discourage debate & hasten approval. ECB & EU leaders had pressed Italy for quick passage to calm markets roiled by a crisis that could endanger the entire 17-member eurozone. But the planned cuts & taxes have angered many Italians, fueling protests similar to those in other European nations grappling with the economic crisis. The European debt crisis is far from over.
Italy gives final approval to austerity plan AP
The Treasury sold $13B of 30-year bonds at a record low yield as investors piled into the what is seen as the world’s safest securities. Bonds rallied for the first time in 3 days as the auction’s bid-to-cover ratio was 2.85X, the highest since 3.02X in Mar. The bonds drew a yield of 3.31%, below the previous record of 3.54% in Feb 2009. Indirect bidders, i.e. foreign central banks, purchased 39.4% of the bonds, compared with 12.2% at the Aug auction (lowest level since Feb 2008). Direct bidders, investors that place their bids directly with the Treasury, purchased 17.3% of the notes compared with an average of 11.6% for the past 10 auctions. The European debt crisis is increasing demand for US securities.
Stocks rallied as French & German leaders supported struggling Greece but there was substantial selling into the close. This was a fragile rally. Wholesale prices in the US were little changed in Aug, that was largely ignored. The President is asking to tax the health-insurance benefits of top earners, stirring opposition. The provision would make health plans provided by employers partially taxable for couples earning more than $250K a year & individuals earning more than $200K. Rome isn't the only place with riots by the population. The lows from last month have held for the Dow, but that's about all that can be said for the chart. The midday rally clearly got ahead of itself & the pull back late in the day calls into question what any moves really mean. With words heating up in DC, markets could find it tough to move ahead.
S&P 500 Financials Sector Index
| Value | 169.32 | |
| Change | 2.05 (1.2%) |
The MLP index rose & the REIT index was up 1+ to the 221s. Junk bond funds were mixed & Treasuries also did little after a successful auction. Oil declined after a gov report showed that fuel inventories climbed, demand dropped & retail sales stalled in the US. Gold continues to mark time in the lows 1800s.
Alerian MLP Index
| Value | 349.52 | |
| Change | 1.19 (0.3%) |
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Treasury yields:
U.S. 3-month | 0.000% | |
U.S. 2-year | 0.189% | |
U.S. 10-year | 2.010% |
| CLV11.NYM | ...Crude Oil Oct 11 | ...88.81 | ... 1.40 | (1.6%) |
Photo: Yahoo
The leaders of Greece, France & Germany said Greece is an "integral" part of the eurozone after their emergency teleconference aimed at calming markets & tempering talk of an imminent default by Greece. German Chancellor Merkel & French President Sarkozy also stressed to Greek Prime Minister Papandreou "that it is more indispensable than ever to fully implement the decisions adopted July 21" by the eurozone leaders "to ensure the stability of the eurozone." The main fear of a Greek bankruptcy is that it could destabilize other financially troubled European countries such as Portugal, Ireland, Spain or Italy. It would also have a knock-on effect on banks, many of which are large holders of Greek gov bonds. Merkel & Sarkozy pressed the Greek leader on the "importance they attach to the strict and effective implementation of the Greek economic redressment program." Sarkozy's office said Papandreou "confirmed his absolute determination to take all measures necessary to implement the ensemble of commitments made." The Greek reforms "are indispensable for the Greek economy to find the path of sustainable and balanced growth." So far these are just words, but they did bring out stock buyers today.
Sarkozy, Merkel Are ‘Convinced’ Greece Will Stay in Euro Amid Fiscal Woes
Photo: Yahoo
Italy's Parliament gave final approval to gov austerity measures, a combination of higher taxes, pension reform & slashed spending that sparked street protests in Rome (shown in the picture). The package was passed by a vote of 314-300 (close) after the Senate already approved the measures. Hundreds of demonstrators, some unleashing smoke bombs & others hurling paint, clashed with police in riot gear in the cobblestone squares & streets near Parliament as lawmakers were voting on the measures designed to fend off a financial crisis threatening much of Europe. Earlier, the gov, whose allies had squabbled publicly over the package, won a crucial confidence vote called to discourage debate & hasten approval. ECB & EU leaders had pressed Italy for quick passage to calm markets roiled by a crisis that could endanger the entire 17-member eurozone. But the planned cuts & taxes have angered many Italians, fueling protests similar to those in other European nations grappling with the economic crisis. The European debt crisis is far from over.
Italy gives final approval to austerity plan AP
The Treasury sold $13B of 30-year bonds at a record low yield as investors piled into the what is seen as the world’s safest securities. Bonds rallied for the first time in 3 days as the auction’s bid-to-cover ratio was 2.85X, the highest since 3.02X in Mar. The bonds drew a yield of 3.31%, below the previous record of 3.54% in Feb 2009. Indirect bidders, i.e. foreign central banks, purchased 39.4% of the bonds, compared with 12.2% at the Aug auction (lowest level since Feb 2008). Direct bidders, investors that place their bids directly with the Treasury, purchased 17.3% of the notes compared with an average of 11.6% for the past 10 auctions. The European debt crisis is increasing demand for US securities.
Stocks rallied as French & German leaders supported struggling Greece but there was substantial selling into the close. This was a fragile rally. Wholesale prices in the US were little changed in Aug, that was largely ignored. The President is asking to tax the health-insurance benefits of top earners, stirring opposition. The provision would make health plans provided by employers partially taxable for couples earning more than $250K a year & individuals earning more than $200K. Rome isn't the only place with riots by the population. The lows from last month have held for the Dow, but that's about all that can be said for the chart. The midday rally clearly got ahead of itself & the pull back late in the day calls into question what any moves really mean. With words heating up in DC, markets could find it tough to move ahead.
Dow Industrials (INDU)
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