Markets tread water after unemployment report

Sellers were never able to take command & a few buyers returned later in the day, bringing the averages back nearer break even. Dow was off 21, decliners over advancers almost 2-1 & NAZ slipped 9. After a big decline yesterday, banks had a difficult time deciding whether to go up or down today.

S&P 500 FINANCIALS INDEX

Value 192.07

Change -0.31

% Change -0.2%

The Alerian MLP Index rallied in the PM, bringing it back to essentially even, still in the 245s. REITs continued weak, down another 1½ to the 159s (just 2 points above the 10% decline level from the 2009 high on Sep 23). Junk bond funds continued mixed, within a shout of their recent highs. Treasuries saw selling late in the day. The yield on the 10-year Treasury bond rose 3 basis points to 3.22%, still very low based on recent values.

Alerian MLP Index --- YTD




Dow Jones REIT Index --- YTD





Oil continued lower closing under 70 while gold inched up climbing over 1K again.

CLX09.NYM

..Crude Oil Nov 09

..69.78

.. 1.04 ......(1.5%)

GCV09.CMX

..Gold Oct 09

..1,003.20

.. 3.70 ......(0.4%)

The latest speculation on CIT Group (CIT) is they may have to file for Chapter 11. This company has unusual importance to the national economy since it finances about 1M small businesses. Today the stock was up 11¢ to 1.17. The chart below shows they've been living on death's door for a few months.

CIT --- 6 months





Brazil is very excited that Rio was chosen to host the 2016 Olympics. Back to the stock markets, sellers didn't come on too strong today despite the negative economic data. One important piece of the unemployment report is that gov employment fell 53K in Sep after dropping 19K in Aug. Don't worry, federal jobs keep climbing, nothing will stop that as long as $T (that's T as in trillion) deficits continue. But state & local jobs are being lost, they were supposed to benefit from the stimulus package passed in Feb. That bill was rushed thru over the weekend because it was considered sooo important, especially to hold the unemployment rate under 8%. So much for that gov planning!

The concept of a slow recovery is being talked about more, not good for the markets.


Dow Jones Industrials --- YTD

Dow on a 2 day winning streak

Dow is on a 2 day winning streak, up 38 today! But advancers are barely ahead of decliners & NAZ is even. S&P 500 at 1290, held above the important 1270 level so far. Not much happening on this holiday kind of shortened week. A private report shows the number of private sector jobs fell 79K in June, mostly from manufacturing. This sends a signal that the next unemployment report from the Dept of Labor will not be pretty. The Commerce Dept reported that factory orders rose 0.6% in May following a 1.3% rise in the prior month. The macro story remains the same, domestic business is weak while exports are strong. Oil is even (believe it or not!) ahead of the weekly inventory report due in a few hours.

Blockbuster (BBI) pulled its offer to buy Circuit City (CC). Both are $2 stocks, CC pulled back to 2 while BBI rose 32¢. For some a big story, Starbucks (SBUX), up 14¢, is closing 600 US outlets (19% of US company stores). Either they're now a mature business or times are really tough! There should not be much news today leading to volatility, so here's some thoughts about bear markets.