Stocks market advances while gold soars over 1300

Stocks were near break even for much of the day, but late day buying gave good gains.  Dow gained 46, advancers over decliners 5-2 & NAZ added 9.  The mini rally brought the Financial Index back into the black but its remains in the lower reaches of its trading range over the last year. 


S&P 500 FINANCIALS INDEX

Value	195.00
Change	0.61 +0.3%

The MLP index was up 1½ to the 334s (near the 335 yearly high) & the REIT index was up 2 in the 211s.  Junk bond funds slipped a smidgen while the VIX was down pocket change in the 22s.  A weak dollar sent the € up 1½¢ to almost $1.36, a 5 month high.  But Treasuries (along with gold) are the main story as the yield on the 10 year Treasury bond fell 6 basis points to under 2.46% (essentially at 19 month lows)!  This strength is disturbing to say the least!

Treasury yields

U.S. 3-month		0.14%
U.S. 2-year		0.42%
U.S. 10-year		2.46%

Alerian MLP Index  --  2 months




Dow Jones REIT Index  --  2 months




VIX  --  2 months




10-Year Treasury Yld Index  --  2 months





Oil.was slumbering while gold rose to a record as investors & jewelers increased their gold holdings.There are many ways to participate in the rise of gold, a button below is provided to give ideas.

CLX10.NYM

...Crude Oil ...Nov 10

76.12....

0.40  (0.5%)

GCU10.CMX

...Gold Sep 10

...1,306.60

... 9.90

(0.8%)

$$$Gold Super Cycle$$$ Click Here

On this quiet day I took another look at Apple (AAPL) with the 2nd (or maybe 3rd) largest market cap in the world.  Today it was down 3 to 288 for no particular reason but has one of the best charts this year (even better than the Alerian MLP Index chart with reinvested income).


Apple   ---   YTD





Gold soars over 1300, Treasuries are offering record or near record low yields while stocks rose as the averages near yearly highs (but still far off record levels).  Volume continues low at 1B shares on NYSE floor.  It's difficult to make sense out of this disconnect (risk averse & lovers of risk both bidding up prices of different securities).  Dow is pretty much at the May highs & closing in on the 11.2K high for 2010 high.  But the disconnect keeps haunting me!


Dow Jones Industrials  --  2 months

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Market waffle after weak consumer confidence report

Little is going on in stock markets today.  Dow was up 17, decliners marginally ahead of advancers & NAZ fell 1.  Banks stocks were essentially flat.


S&P 500 FINANCIALS INDEX

Value	194.21
Change	-0.18  (-0.1%)

The MLP index fell a fraction in the 332s, continuing its sideways trading over the last 2 months & the REIT index was off 2+ to the 208s.  Junk bond funds were flat while the VIX, volatility index, gained a fraction to the 23s (little changed recently).  A weaker dollar sent the € up more than a penny to $1.36½.  Treasuries continue very strong.  The yield on the 10 year Treasury bond fell 4 basis points to 2.48%, very near its lows this month. 

Treasury yield

U.S. 3-month		0.14%
U.S. 2-year		0.42%
U.S. 10-year		2.48%

Alerain MLP Index   ---   2 weeks





Dow Jones REIT Index   ---   2 weeks




VIX   ---   2 weeks




10-Year Treasury Yld Index   ---   2 weeks





Oil & gold were flattish, although gold topped 1300 earlier in  trading. 

CLX10.NYM

...Crude Oil Nov 10

...76.47

... 0.05  (0.1%)

GCU10.CMX

...Gold Sep 10...

1,287.50

... 3.60   (0.3%)

Gold Super Cycle Link! Click Here

Confidence for US consumers fell in Sep to the lowest level in 7 months.  The Conference Board’s confidence index declined to 48.5 from 53.2 in Aug, below the median estimate of 52.1. By way of comparison, the index averaged 53.7 during the recession that ended last year.  The measure of present conditions decreased to 23.1 from 24.9, the lowest level in 7 months. The share of consumers who said jobs are currently plentiful declined to 3.8 this month, the smallest this year & those who said jobs are hard to get increased to 46.1% from 45.5%.  The Conference Board’s gauge of expectations for the next 6 months dropped to 65.4 from 72, also the lowest since Feb. More gloomy data (shown in the graphs below) for the markets to digest!

U.S. Consumer Confidence Fell More Than Forecast


Confidence index - 1 year




Present conditions - 1 year




Expectations - 1 year









Photo:  Yahoo


Walgreen (WAG), A Dividend Aristocrat, net income rose 8% in fiscal Q4 on higher prescription drug sales.  The results were above expectations.  The flu shot season has been brisk, since the middle of Aug it has administered more than 2M flu shots & sprays (many of those sales are not included in Q4 results since the period ended Aug 31).  WAG expects to sell 15M flu shots this year, more than twice as many last year.  EPS was 49¢ per share in Q4 (beating expectations of 44¢), up from 44¢ last year. Revenue rose 7% to $16.9B.  Results included 4¢ in expenses related to the purchase of Duane Reade which closed in Aug & gave WAG 258 stores in the NYC area.  Sales at stores open at least a year rose 1.5% during Q4, while prescription sales at those stores rose 1.6%. Overall, the company said margins for non-pharmacy business benefited from pricing, promotion & other improved efficiencies, while pharmacy margins benefited from new generic introductions.  For FY2010, WAG had EPS of $2.12, up from $2.02 in the prior year. Revenue rose to $67.4B from $63.3B.  Last month it raised the div to 70¢.  The stock jumped 2.84 to 33.19

Walgreen's Profit Rises 7.8% as New Store Format Boosts Sales



Walgreen   ----   1 month





This is another boring day.  But signals about the economic recovery are not good.  The dreary data on consumer confidence is another example of problems with the recovery.  After Dow has had a nice rise from 10K at the start of Aug, it's been struggling in recent days.  Lower rates on Treasuries are sending strong negative signals for stock market investors.



Dow Jones Industrials   ---   2 weeks

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Late day selling drags down markets

Stocks were under water for most of the day, not straying far from break-even until the last hour when selling occurred.  Dow was off 48, decliners ahead of advancers almost 3-2 & NAZ fell 11.  Banks declined, taking the Financial Index down more than 2 The Financial Index remains in the low end of its trading range over the last year.

S&P 500 FINANCIALS INDEX

Value	194.39
Change	-2.33  (-1.2%)

The Alerian MLP Index rose ½ to 333 while the REIT index fell back 2½ to 211.  Junk bond funds edged higher & the VIX was up a fraction to 22 where it's has been for the last 3 months.  The € remained near its 5 month high of $1.35. 


Alerian MLP Index   ---   YTD




Dow Jones REIT Index   ---   YTD




VIX   ---   YTD




10-Year Treasury Yld Index   ---   YTD





Oil just treaded water on this quiet day of trading.  Gold rose for a 4th straight session on speculation that slumping currencies will boost demand for precious metals as alternative investments.  But it continues to hover just under 1300.

CLX10.NYM

...Crude Oil Nov 10

...76.32

... 0.17

(0.2%)

GCU10.CMX

...Gold Sep 10

...1,296.70

... 0.70

(0.1%)

$$$ Gold Super Cycle $$$ Click Here

The Treasury auction of $36B in 2-year notes drew the highest demand in 3 years. Traders are speculating the Federal Reserve (FED) will buy more gov bonds.  The 2-year notes drew a yield of 0.441%, the lowest since the gov began selling the securities 36 years ago.  The all-time low for the 2-year note was 0.41% touched Sept. 22.  Indirect bidders, including foreign central banks, purchased 39% of the notes, compared with 29.2% on Aug. 24.  Direct bidders, placing bids directly with the Treasury, bought 10.8%.  The size of the 2-year note offering was the smallest in 2 years. The Treasury will auction $35B in 5-year notes tomorrow & $29B in 7-year debt on Thurs. Earlier Anglo Irish Bank’s senior debt was cut to the lowest investment grade rating by Moody’s, encouraging demand for safety.  The 10-year US note yield dropped 9 basis points to 2.52%.

Treasuries Gain as Two-Year Note Auction Draws Highest Demand Since 2007

Treasury yields

U.S. 3-month		0.13%
U.S. 2-year		0.42%
U.S. 10-year		2.52%

Oil resumed flowing in the Michigan pipeline of Enbridge Energy Partenrs (EEP).  Enbridge supplies the bulk of Canadian oil imports to the US.  The units were up 27¢ today & has a decent chart over the last 3 months (which have a tough time for the company).

Enbridge sees Line 6B oil pipeline starting Mondayat Reuters


Enbridge Energy   --  3 months





Stocks couldn't make up their minds which way to go on light volume (0.9B shares on the floor of NYSE).  The vote to extend personal tax cuts looks like it will be postponed until after elections.  This is another uncertainty to weigh on the markets. Dow has had a nice run in the last month, but may be getting tired.  Of course, month end trading can confound anybody.


Dow Jones Industrials   ---   YTD

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Markets edge lower on profit taking

Stocks were weak but losses are limited.  Dow fell 33, decliners over advancers 4-3 & NAZ is off 11.  Banks led the way down, but again not with serious selling.



S&P 500 FINANCIALS INDEX

Value	195.38
Change	-1.34  (-0.7%)

The Alerian MLP Index rose a fraction to 333, just 10 away from setting a record while the REIT index fell 2+ to 211.  Junk bond funds edged higher & the VIX was up a fraction to the 22s remaining in a sideways trading zone.  The € is little changed close to $1.35, a 5 month high.  But the yield on the 10 year Treasury bond fell 6 basis points to 2.55% & closing in on the lows reach a couple of weeks ago.  These low rates are very troubling for the stock markets. 



Treasury Yields

U.S. 3-month		0.13%
U.S. 2-year		0.42%
U.S. 10-year		2.55%

Alerian MLP Index   ---   2 weeks




Dow Jones REIT Index   ---   2 weeks





VIX Index   ---   2 weeks





10-Year Treasury Yld Index   ---   2 weeks





Oil futures fell as a stronger US dollar reduced the appeal of commodities as an alternative investment  But gold is hanging in just below the 1300+ record reached last week.  This alternative still has a lot of appeal.

CLX10.NYM

...Crude Oil Nov 10

...76.07

... 0.42  (0.6%)

GCU10.CMX

...Gold Sep 10

...1,297.70

... 1.70

(0.1%)

Gold Super Cycle Link! Click Here

Photo:  Yahoo


Southwest Airlines (has the cute symbol LUV) will buy AirTran (AAI) for $1.04B in cash & stock that will allow LUV to expand in major East Coast markets.  "The acquisition of AirTran represents a unique opportunity to grow Southwest Airlines' presence in key markets we don't yet serve and takes a significant step toward positioning us for future growth," said CEO Gary Kelly.  Kelly added the deal with Atlanta-based AirTran would allow Southwest to expand in markets such as New York LaGuardia, Boston Logan, and Baltimore/Washington & get access to leisure markets in the Caribbean & Mexico.  AAI shares jumped $2.75 to $7.30 & LUV rose 81¢.  LUV said excluding the impact of one-time costs, the acquisition is expected to add to its pro-forma earnings per share in the first year after the closing of the deal.

Southwest expands presence with AirTran buyReuters 


AirTran  ---  1 month




Southwest Airline   --   2 years






IBM (IBM), a Dow stock, agreed to buy closely held Blade Network Technologies to gain products that connect server computers in company data centers.  No value was given for the transaction.  Blade Network makes switches that connect servers, storage & networks in data centers, large rooms of computers that handle corporate tasks. This is the 3rd acquisition IBM has announced in Sep.  IBM was up 29¢.

IBM to Buy Blade Network to Gain Data-Center Switches


IBM   ---   2 years





Wal-Mart (WMT), Dow stock & Dividend Aristocrat, is buying a retail chain in South Africa.  But Monday merger fever is not affecting the markets.  Quarter end adjustments might be muddling the direction of the markets. 


Dow Jones Industrials   ---   2 weeks

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