Markets drift lower on economic concerns

Dow dropped 49, decliners 5-4 ahead of advancers & NAZ was off 11.  The Financial Index was fractionally lower in the 197s, remaining close to its 9 week high of 199.  The MLP index shot up another 3½ to 395 (not seen since early May) & the REIT index rose a fraction in the 267s (a new yearly high).  Junk bond funds were higher & Treasuries rose, taking yields to record or near record lows (see below).  Oil rose for a 4th day as manufacturing in the NY region expanded in Jul at a faster pace than anticipated.  Gold was about even, getting little help from demand for safe haven investments. 

AMJ (Alerian MLP Index tracking fund)

Click below for the latest market update:

Treasury yields:

U.S. 3-month	0.086%
U.S. 2-year	0.226%
U.S. 10-year	1.464%

CLQ12.NYM

...Crude Oil Aug 12

...88.00

... 0.90

(1.0%)

The infrastructure investment for China may double in H2 over H1, aiding efforts to reverse a slowdown in the its economy.  Full-year spending will be 448B yuan ($70B), according to the National Development & Reform Commission’s Anhui branch.  That indicates about 300B yuan of investment in H2, up from about 148.7B yuan in H1.  China’s fixed-asset investment has already started to pick up spending on railway construction would echo the stimulus rolled out during the global financial crisis.  A decline in foreign direct investment underscored the toll that Europe's debt woes & austerity measures are taking on an Asian economy.  Premier Jiabao warned that the nation doesn’t yet have the momentum for a stable recovery yesterday.  Foreign direct investment dropped 3% in H1 from a year earlier.  The Shanghai Composite Index fell to the lowest level in almost 3½ years, as concern about slumping profits overshadowed speculation the gov will do more to support growth.  A slowdown in Chinese growth is being felt around the world.

China Echoes 2009 Stimulus Planned Railway Spending Boost


Treasury 5-year note yields fell to record lows as an unexpected decline in retail sales for a 3rd straight month raised concern the economic recovery is stalling & drove investors to the refuge of gov debt.  Investors seeking the safest assets amid concern global growth is faltering & Europe's sovereign-debt crisis is worsening also drove yields to all-time lows in the UK, Canada, France, Germany & the Netherlands.  Ben Bernanke is scheduled to testify tomorrow amid speculation he will call for more economic stimulus.  The yield on the 5 year note fell to 0.60%, after touching 0.577% (below the old record of 0.5884% set 2 weeks ago).  Money going into safe haven haven investments is being diverted from the stock market.

Treasury 5-Year Note Yield Drops to Record as Retail Sales Fall


A new version of Microsoft's, a Dow stock, widely used office suite of word processing, spreadsheet & email programs is expected to be unveiled in San Francisco.  MSFT has declined to say what the afternoon event is about, but CEO Steve Ballmer will be there.  It is believed that MSFT will showcase Office 15, a widely anticipated overhaul of its popular & lucrative bundle of software programs.  Like an upcoming redesign of the Windows operating system, Office 15 is expected to respond to touch as well as commands delivered on a computer keyboard or mouse.  The addition of touch-based controls will enable Office to extend its franchise into the rapidly growing tablet computer market.  The stock was down a nickel.

Microsoft Unveils Office With Social Features for Windows

Microsoft (MSFT)

Stocks weren't sure where to go, but definitely lost the upward momentum from Fri.  Citi gave up most of its early gains, closing with an advance of a dime.  This is the beginning of earnings season & the outlook is not good.  The first 2 bank reports were sort of good, but difficult to really understand with a variety of numbers giving mixed messages.  In addition, increased earnings from reversing out loss provisions have limited value since that is not part of an ongoing business.  Dow is marking time, awaiting developments on the earnings front.

Dow Jones Industrials

Get your favorite symbols' Trend Analysis TODAY!  

Click Here