Important rotation today, as major indices move up midday. While all the major indices are just shy of new highs, there are some standouts.
1) Banks. Trader talk that hedge fund manager John Paulson spoke at a UBS luncheon today with an argument that financials were a great buy, that they are under-followed but that earnings are recovering, with a 40 to 60 percent upside in bank stocks.
2) Utilities. New high in Dow Utility Index, as yield oriented investors are reacting to the rise in treasuries by buying higher-yielding utilities.
3) Transports are back, with the Dow Transports are poised to close at new highs on lower fuel costs...airlines leading.
The big issue: food companies have successfully raised prices on the backs of higher commodity costs...will retailers be able to say they are doing the same?
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