Dow inched up 13, advancers over decliners 3-2 & NAZ gained 4. The Financial Index was up a fraction to 216. The MLP index slipped a fraction to 403 & the REIT index was off 1 to 270. Junk bond funds were mixed to higher & Treasuries found buying after selling took yields to 4 month highs. Oil prices fell for a 3rd day on concerns that a recent run-up to $100 may have been overdone. Gold was flattish.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
The central bank of Japan ramped up its efforts to spur economic growth, following similar steps by central bankers in the US & Europe. The Bank of Japan announced it would boost the size & duration of a gov bond-buying program that's intended to encourage borrowing & spending & make Japan's exports more competitive. Purchases of gov bonds keep downward pressure on interest rates & the ¥, whose rise has made Japanese products more expensive. The BOJ said it would spend an additional ¥10T on short & long-term gov bonds & bills. It will make the purchases thru the end of 2013, a 6 month extension. The bank also eliminated a minimum required interest rate on the gov bonds it buys. "There remains a high degree of uncertainty about the global economy," the bank said. "The pick-up in economic activity has come to a pause," it added, forecasting that activity will remain flat. The Federal Reserve & ECB have made similar moves in recent weeks.
Japan's central bank joins Fed in easing policy AP
Spain is breathing a little easier after the ECB said it would buy unlimited amounts of gov debts to help countries that are being strangled by their borrowings. After the ECB pledged 2 weeks ago to rescue countries that seek the bank's help, Spanish borrowing costs have fallen sharply as investors are more confident the gov can pay its bills. But Spain isn't out of the danger zone. Prime Minister Rajoy said last week that Spain may not need outside help now that the interest rates on its bonds have fallen to more manageable levels, although this reprieve may not last. The economy is shrinking, its banks are struggling under the weight of a collapsed real estate market & debts of its regional govs are piling higher. With unemployment at 25%, social unrest is rising as further austerity measures loom. It isn't clear if financial markets have eased up on Spain simply because the ECB stands ready to act as the so-called lender of last resort, or whether bond investors expect Spain to seek a financial lifeline (& if so, how soon). If Spain doesn't request a bailout, it is only a matter of time before its borrowing costs rise to unhealthy levels again. Bottom line, this debt mess drags on.
Spain has space, but limited time to seek bailout AP
Photo: Bloomberg
Yahoo is returning to shareholders most of the proceeds from the sale of half its stake in Alibaba Group Holding. It will return $3B after using $646M for buybacks in recent months. Alibaba’s repurchase reduces Yahoo’s potential to benefit from growth in China, but it assuaged speculation that CEO Marissa Mayer would use the proceeds instead to pay for risky acquisitions. The company didn’t specify how it would distribute the funds, whether thru share repurchases or a div. Mayer said last month that she was embarking on a strategic review that might result in a reversal of plans to return the proceeds to shareholders. With the announced move, YHOO is returning 85% of the $4.3B in net proceeds. Alibaba Group said yesterday that it completed the initial part of its repurchase thru transactions valued at $7.6B. YHOO lost 4¢.
Yahoo Rises on Plan to Return $3.65 Billion From
Even after today's gains, markets are just marking time. Limited financial data coming out is mildly favorable. But there are plenty of ugly stories on the back burner. The BOJ move to buy more debt was expected. However throwing money at fundamental economic & financial problems is not good longer term. Dow is not disturbed as it lingers near 4 year highs, although there was a little selling into the close.
AMJ (Alerian MLP Index tracking fund)
Click below for the latest market update:
Treasury yields:
U.S. 3-month |
0.106% | |
U.S. 2-year |
0.254% | |
U.S. 10-year |
1.779% |
| CLV12.NYM | Crude Oil Oct 12 | 91.48 |  3.81 (4.0%) |
The central bank of Japan ramped up its efforts to spur economic growth, following similar steps by central bankers in the US & Europe. The Bank of Japan announced it would boost the size & duration of a gov bond-buying program that's intended to encourage borrowing & spending & make Japan's exports more competitive. Purchases of gov bonds keep downward pressure on interest rates & the ¥, whose rise has made Japanese products more expensive. The BOJ said it would spend an additional ¥10T on short & long-term gov bonds & bills. It will make the purchases thru the end of 2013, a 6 month extension. The bank also eliminated a minimum required interest rate on the gov bonds it buys. "There remains a high degree of uncertainty about the global economy," the bank said. "The pick-up in economic activity has come to a pause," it added, forecasting that activity will remain flat. The Federal Reserve & ECB have made similar moves in recent weeks.
Japan's central bank joins Fed in easing policy AP
Spain is breathing a little easier after the ECB said it would buy unlimited amounts of gov debts to help countries that are being strangled by their borrowings. After the ECB pledged 2 weeks ago to rescue countries that seek the bank's help, Spanish borrowing costs have fallen sharply as investors are more confident the gov can pay its bills. But Spain isn't out of the danger zone. Prime Minister Rajoy said last week that Spain may not need outside help now that the interest rates on its bonds have fallen to more manageable levels, although this reprieve may not last. The economy is shrinking, its banks are struggling under the weight of a collapsed real estate market & debts of its regional govs are piling higher. With unemployment at 25%, social unrest is rising as further austerity measures loom. It isn't clear if financial markets have eased up on Spain simply because the ECB stands ready to act as the so-called lender of last resort, or whether bond investors expect Spain to seek a financial lifeline (& if so, how soon). If Spain doesn't request a bailout, it is only a matter of time before its borrowing costs rise to unhealthy levels again. Bottom line, this debt mess drags on.
Spain has space, but limited time to seek bailout AP
Photo: Bloomberg
Yahoo is returning to shareholders most of the proceeds from the sale of half its stake in Alibaba Group Holding. It will return $3B after using $646M for buybacks in recent months. Alibaba’s repurchase reduces Yahoo’s potential to benefit from growth in China, but it assuaged speculation that CEO Marissa Mayer would use the proceeds instead to pay for risky acquisitions. The company didn’t specify how it would distribute the funds, whether thru share repurchases or a div. Mayer said last month that she was embarking on a strategic review that might result in a reversal of plans to return the proceeds to shareholders. With the announced move, YHOO is returning 85% of the $4.3B in net proceeds. Alibaba Group said yesterday that it completed the initial part of its repurchase thru transactions valued at $7.6B. YHOO lost 4¢.
Yahoo Rises on Plan to Return $3.65 Billion From
Yahoo (YHOO)
Even after today's gains, markets are just marking time. Limited financial data coming out is mildly favorable. But there are plenty of ugly stories on the back burner. The BOJ move to buy more debt was expected. However throwing money at fundamental economic & financial problems is not good longer term. Dow is not disturbed as it lingers near 4 year highs, although there was a little selling into the close.
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