Higher markets on service sector & jobs growth

Stocks had modest gains in the AM & were able to extend the gains in the PM. Dow rose 44, advancers over decliners 5-2 while NAZ added 20. Bank stocks were higher but the Financial Index remains in the middle of its rangebound trading zone for the last year.


S&P 500 FINANCIALS INDEX

Value	201.28
Change	0.55 (0.3%)

The Alerian MLP Index rose 1¼ to the 333s, recovering almost all of its loss in the last week (some of that loss was due to ex-distributions by MLPs). 2 more points & it will reach a new 2010 high. Its bigger goal is 343, a new record. The REIT index also gained 1¼ but to the 212s, close to its 219 high for this year. Junk bond funds were higher, most near their highs for this year as the VIX slipped a fraction in the 22s. The yield on the 10 year Treasury bond went up 4 basis points to 2.95%, it can't get away from sub 3% territory. The strong €, as of late, slipped a smidgen but is still near its interim highs of $1.32.

Alerian MLP Index --- YTD




Dow Jones REIT Index --- YTD




VIX --- YTD




10-Year Treasury Yld Index --- YTD





Oil continued its winning ways, still essentially at its yearly highs. Gold pulled back slightly from its highs earlier today when it went over 1200. Its getting more attention from foreign (i.e. Asian) investors who regard it as a store of wealth. Gold has been rising for over a week & may want to make another assault on its 1260+ records reached earlier this year.

CLU10.NYM

..Crude Oil Sep 10

..82.37

.. 0.18 ......(0.2%)

GCQ10.CMX

..Gold Aug 10

..1,196.40

.. 11.20 ......(0.9%)

$$$ Gold Super Cycle $$$
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The jobs report on Fri is expected to show the economy shed 70K jobs in Jul & unemployment rose to 9.6%, a chilly thought. The forecasts are that the private sector created about 100K jobs but gov employment fell 170K, as temp census jobs disappeared. The massive $787B stimulus package was passed in Feb 2009 with the promise that because of gov spending, unemployment would not go above 8%. So much for promises! Now a lot of those guys who voted for the spending are up for reelection. Because of added tax burdens, a lot of business, especially small ones, are holding back on expanding their businesses. Higher costs & gov hassle on about everything they do is freezing their expansion plans, producing a tepid recovery

Ahead of jobs report: Outlook dark for economy, Obama- CNBC

The Institute for Supply Management’s index of non-manufacturing businesses, covering about 90% of the economy, rose to 54.3 from 53.8 in Jun (readings above 50 signal expansion). Another report showed companies added more jobs than projected last month. Payrolls, excluding gov agencies, added 42K workers last month after a 19K increase in Jun, according to ADP Employer Services. The problem is the "good" news is not "good enough" to provide significant help for a recovering a economy.

U.S. Economy: Service Companies Expanded Faster in July


Index of non-mfg business - year






Buyers returned to the markets giving stocks a needed lift. With earnings season pretty much over, Dow is up about 900 above its lows just a few weeks ago. Without major news, markets will probably drift (higher?) tomorrow while they wait for the jobs report on Fri. However, bullish thoughts should be tempered against low Treasury yields representing a major disconnect with rising stock markets.

Dow Jones Industrials --- YTD

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Markets rise following rising European markets.

Stocks began the week on a positive note & are remaining higher. Dow is up 116, advancers over decliners 5-1 & NAZ rose 30. Traders were buying an oversold market & encouraged by news of soveriegn debts being refinanced successfully. Banks are higher taking the Financial Index to its 185 multi month low.


S&P 500 FINANCIALS INDEX

Value	185.36
Change	3.28 (1.8%)

High yielders are doing well in today's up market. The Alerian MLP Index rose 4 to 310 while the REIT Index gained 2½ to the 186s. Junk bond funds were modestly higher (about 1%). The VIX, volatility index, fell 2 to 28 as 30+ is proving to be a ceiling which is holding. Treasuries were flattish. The yield on the 10 year Treasury slipped a fraction of a basis point to 2.97% remaining in very low territory which is troubling for stock markets.

Alerian MLP Index --- 2 weeks




Dow Jones REIT Index -- 2 weeks




VIX --- 2 weeks




10-Year Treasury Yld Index - 2 weeks





Higher stock markets were a plus for oil, but it remains in its longer term sideways trading zone. Gold sold off substantially, hurt by a sense European countires are getting their financial houses in order. But gold has substantial value over the long term as more money is transferred to Asia where they have a higher regard for the commodity as a store of value.

CLQ10.NYM

...Crude Oil Aug 10

...73.47

... 1.33 .......(1.8%)

GCN10.CMX

...Gold Jul 10

...1,192.30

... 15.10 .......(1.3%)

Gold Super Cycle!!!
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The service sector grew more slowly in Jun, another sign growth could weaken in the 2nd half of 2010. The Institute for Supply Management (ISM) said its index tracking service-oriented companies dipped to 53.8 in Jun from 55.4 in May (a reading above 50 indicates expansion) & compares with expectations of 55.0. The index of new orders for non-manufacturing industries declined to 54.4 in Jun (the lowest in 2010) from 57.1 in May. ISM also said employers' plans to hire declined in Jun after growing in May, the first time in 28 months.

ISM Non-Manufacturing Index in U.S. Fell to 53.8 in June


Non-manufacturing index - 1 year





Index for new orders - 1 year






BP (BP) said it has no plans to issue new shares to help pay for the oil spill. Its shares were boosted amid rumors of interest from sovereign wealth funds. BP said it "is always happy to welcome new shareholders or existing shareholders who wish to increase their shareholdings, but there's no current plans to issue new equity to anyone." Recent reports have suggested that a number of Middle East wealth funds are considering purchasing a stake in BP, helping calm fears of a full takeover. BP is up 2.02 to 31.37.

• BP says no plans for share issue, shares rise- AP

BP --- YTD






This is a day for the stocks to have their day in the sun. Oversold markets brought out buyers. The € rose over $1.26 on more optimism about the debt problems in Europe being resolved. But the recovery in the US is only lumbering along & there is more talk about a double dip recession. Aloca (AA) Q2 earnings are coming after the market close next Mon. Treasury yields continue at very low rates, not good for the stock markets.

Dow Jones Industrials -- 2 weeks



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