Mixed markets

Dow was up 8, remaining under 8K. Advancers are about 25% ahead of decliners & NAZ is down 15 (hurt by Intel's earnings).

S&P 500 FINANCIALS INDEX was even. Banks which had been leading the charge up are losing their steam.


Reality is cutting into recent enthusiasm for banks. UBS (UBS), Switzerland's largest bank, had an ugly quarter in Q1. They lost 2B Swiss francs as customers withdrew 23B francs from their wealth unit. They will have more layoffs, bringing the total layoffs to 20% of their former workforce. The stock had been 65, now is just below 11. Banking problems are global, American banks may have similar gloomy problems to report.

•UBS to Eliminate Another 7,500 Jobs as Loss Widens on Flood of Withdrawals


UBS ---- 2 years




The Alerian MLP Index is down 2 to 200, giving back gains from the last 2 days. But the Dow Jones REIT Index is up 2 to 115, bargain hunters are being attracted by the high yields. Junk bond funds are mixed.


Intel (INTC), a Dow stock, reported earnings that beat estimates but gave meager guidance, stock down 60¢. They did say revenue would be flat in Q2, some view that as good & others view it as bad. The future of the PC market is in question. Sales of the new netbooks are strong, but they are low priced. Other computers sales are pretty much lower this year.

• Intel shares fall despite bullish PC predictionAP(Wed 10:07am)

Dow will need significant help to break thru 8K. It won't be coming from Q1 earnings reports.

Dow Jones Industrials --- 1 month

Oversold rally

Markets are up on an oversold rally. After declining over 400 in 2 days, Dow is up 43, advancers ahead of decliners almost 2-1 & NAZ is up 15. Oil continues to dominate the news as it reached 135 in overseas trading, here it's trading in the 133s. Gas at the pump rose to 3.83 according to AAA. Higher prices are bleeding into the the US economy as well as the rest of the world which imports oil. Ford (F), down 43¢, had risen on an optimistic forecast about returning to profitability, now says they will not break into the black by next year. More such announcements are to be expected.

UBS (UBS) announced a huge rights offering aimed at raising more than $15B. They will sell shares to stockholders via a rights offering priced at a 31% discount to the market. This move to increase equity on the balance sheet follows selling $22B of low grade mortgages to Blackrock for only $15B.

Oil soars & stocks go higher

Oil reached new record levels, nearing 123 but settled up 1.87 at 121.86. Despite the strong commodities markets (gold is back at 876), stocks had a good day. Dow was up 51, advancers ahead of decliners almost 2-1 & NAZ up 19. FNM, DHI, UBS & WB all had negative financial reports but the markets ignored them. Dow is back over 13K & S&P500 is solidly above the important 1400 level although NYSE volume continues to drag along at 1¼B. Energy was strong on higher oil prices & financials did well. In energy, MLPs after sticking around 293 for a couple of weeks picked up another 2 today to 297. Because this is the time of the year MLPs go ex-distribution, a "real" figure ignoring that effect would be a little higher.

After hours, Disney (DIS), a Dow company, & Cisco (CSCO) had excellent reports sending each up about 57¢ in after hours trading. This activity should be a good omen for trading tomorrow.

Negative housing news sinks stocks again

Another ugly day of negative housing & mortgage problems is sinking stocks. Dow is down 45, decliners over advancers 2-1 while NAZ is essentially even. There are so many problems, tough to decide where to begin. Fannie Mae (FNM), a government-sponsored company & largest holder of mortgages, reported a $2+B loss. They are cutting the div & seeking $6B in outside financing. But the stock is taking the news well, little changed after falling sharply on the opening. They give a very gloomy outlook for housing & mortgages for the rest of 2008. UBS (UBS), the Swiss bank, was down 91¢ on news about laying off 5½K staff after writing down billions in mortgages & loans. They claim the mortgage market is recovering because they feel good about selling $22B in mortgages to BlackRock (BLK), down 3.06, for (only) $15B.

D.R. Horton (DHI), the nation's largest home builder, reported a 1.3B loss in Q2 (quarter just ended) as revenue plunged 40% from the prior year's qtr. Much of their loss was related to write down of assets. Analysts had been forecasting a loss of 39¢ vs the $4.14 loss. Their backlog of homes under contract declined to 2.1B down from 4.8B in the prior year.

Meanwhile oil reached another record, going over 122. Commodities have gotten a new breath of life after last week's fall as the dollar weakens again. In just a few days, the value of the Euro declined to about 1.53 and is now nearing 1.55 after a recent high of 1.60+. Economists are talking about further weakening in the dollar, not good for stocks. Some of the strength in commodities will mean money is taken out of stocks.