Late day selling sinks stock markets

Stocks were higher for much of the day, but there was little conviction behind the buying. By the PM, selling came on with heavy selling in the last hour. Dow finished down 112, decliners over advancers 3-1 & NAZ fell 34. Bank stocks were also slipping & sliding during the day. The Financial Index is only about 7 above its lows (mid 180s) in Feb.

S&P 500 FINANCIALS INDEX

Value 193.31

Change -4.11

% Change -2.1%

The Alerian MLP Index dropped 6¾ to the 185s (back to break-even YTD). The REIT index fell 4 to the 195s. Junk bond funds were mixed to a little lower. The VIX added 3½ to the 35s on more nervousness from goings on in Europe & the oil spill which is getting worse day by day. It hit the mid 40's last month, far above prior levels near 16! The yield on the 10-year Treasury bond fell a tad, just below 3.30%. There was no encouragement for buyers to jump back in today.

Alerian MLP Index --- YTD




Dow Jones REIT Index -- YTD




Selling spread to commodities, & oil felt it. However, gold rose as traders had time to digest the downgrade of Spain's debt from AAA to AA on Fri. Israel's attack on the flotilla of aid relief ships to Gaza was another factor. Gold rises when global tensions increase. Its record price is 1249, not far away!

CLN10.NYM

..Crude Oil Jul 10

..72.57

.. 1.40 ......(1.9%)

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Hewlett-Packard (HPQ), a Dow stock, & Hershey (HSY) announced plans to lay off workers to modernize. This is another reminder that high unemployment rates, necessary for a robust recovery, are some time away. HPQ fell 43¢ & HSY gained 1.20.

HP to Cut 9,000 Jobs and Take $1 Billion in Costs
Hershey May Cut Up to 600 Jobs at Historic Factory


Hewlett-Packard -- 2 years




Hershey --- 2 years






The € is back to $1.22½, near 4 year lows & probably headed lower. Markets look like they are extending May's miserable results. Almost all the selling was in the last hour when Dow dropped 100 & it's banging on the 10K floor, trying to see if it will hold. This performance has to be very discouraging for the bulls!


Dow Jones Industrials -- YTD

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As oil nears 140, stocks are mixed

Oil has another big up day, approaching 140. Today's rise is blamed on the a weaker dollar plus there is a report by CNBC that the Saudis may not be able to increase production to 10MM barrels a day. Dow is down 45, advancers about 20% ahead of decliners but NAZ is up 9. Lehman (LEH) reported earnings, delivering the $5 per share loss they forecasted last week, the stock is up 2. This AM there were doubters on TV saying this does not represent the end of their problems. Banks generally were up following the news. The Alerian MLP index rose more than 1 putting it at 291, probably following the rise in oil prices even though they aren't linked.

General Electric (GE), a Dow company & member of the S&P Dividend Aristocrat list, is down 25¢ to a 4½ year low. GE yields 4.3%, but has lost investor confidence:



Coca Cola (KO), another Dow stock & member of the S&P Dividend Aristocrat list, & Hershey (HSY), not a member of either but a whole lot of fun, were down 1.11 & 2.34 respectively. When these kind of NON FINANCIAL companies are selling off to new lows for the last few years, the markets are having big problems!

Lower oil sends stocks higher

Stocks rose on low volume. Dow was up 68, advancers 3-2 over decliners & NAZ had a very good day, up 36. While economic news remains pretty dreary, lower oil prices may have brought out the buyers, again on lowwww volume. On a holiday shortened week, a lot of action is not expected. Today's rally was broadly based. Financials (like banks), REIT's, tech & even junk bond funds did well. However, energy related stocks pulled back including the MLPs. In just 3 days the MLP index has pulled back 9 (3%) in sympathy with energy stocks even though they have different fundamentals. Oil dropped 3.85 to the low 128s, bringing a sigh of relief to many investors. If there was any reason behind the decline, it's of talk about American consumers limiting car driving over the holiday weekend. Retail gas prices continue to rise, but they are a lagging indicator.

For those with a sweet tooth, Hershey (HSY) rose 3.42 on buyout rumors (although it's tough to find a printed story). Rumors are fun especially when they taste good! The rest of the week should be fairly quiet (assuming no bombshells).