The Dow closed up 26 points Tuesday at 12,582, despite a 1.4% drop for Exxon Mobil (XOM), due to slipping oil prices.
The S&P 500 increased a mere 0.1%, while the Nasdaq dropped 0.2%. Symantec (SYMC) dropped over 13% after earnings came in below expectations.
The Dow Jones Industrial Average gained 41 points to close at 12,556, a new record., closing the week 1.3% up. Exxon Mobil (XOM) was the Dow’s biggest gainer, posting a 2.4% gain, despite the week’s 6% decline in oil prices.
Despite a nearly 10% loss by chip producer AMD, the Nasdaq closed at 2,502, a six-year high, and the S&P 500 logged a five-year high, closing at 1,430.
The bull market that has been in effect for the past couple years has not seen such consistent gains across the indices, and many are talking as if the real surge is yet to come.
The Dow Jones Industrial Average gained 72 today to close higher than ever before, at 12,514.
25 of the 30 stocks in the index were up on the day, with tech stocks Intel (INTC), Hewlett Packard (HPC), and Microsoft (MSFT) leading the way.
Lower oil prices and overall commodities costs have largely been seen to fuel the rally, but the first earnings reports of the year (spearheaded by Alcoa’s 60% rise in year-over-year quarterly profits) have been very promising.
The Nasdaq closed at 2,484, its highest level in six years. Aside from the usual tech suspects, pharmaceutical giants Genentech (DNA), Astrazeneca (AZN), and Bristol-Myers-Squibb (BMY) reacted strongly to positive news.
All the talk from NAIAS is about GM right now: the electric hybrid Volt (possibly to be released in two years’ time),the Saturn Aura and Chevy Silverado winning North American Car and Truck of the year, respectively…
All of this led to Friday’s 3% drop for Toyota (TM) and GM’s 2% rise. This sort of short-term attack (or boost, if you’re a GM investor) on your portfolio is just the kind of thing market-timers look for, and everyone is calling TM a buy right now, with after hours trading showing Toyota up and GM down.
Toyota’s market leadership is not likely to be toppled within the next two quarters, and GM’s financial troubles are going to linger on long after the last severance is paid.
Toyota should recover, and quick. Those investors savvy enough to get in on Friday will likely see gains within the next two weeks, while those riding GM’s high tide are taking a far greater risk.
The new year always brings forth a multitude of prognosticators on every sector of the market and, typically, there is no shortage of market bears, citing recent job growth, impending Fed rate hikes, or any number of economic indicators.
This January it’s no different, and the housing bubble, the credit crunch and the weak dollar join the usual suspects of Fed rates and weak corporate profits.
I don’t expect the big market crash to come this year, though. While housing and mortgage related stocks should pull back over the coming quarters,
I expect an average- to above-average year for banks and the energy sector.
Worldwide markets are the key here, and everyone needs the financiers and the energy to plow through the year, not just the US.
That said, I’m not afraid of the S&P, though I don’t expect it to match the 13% it brought home in 2006.
The bottom line is, stay the course. The naysayers are always out this time of year, when the first quarterly profits are about to be announced and everyone is questioning why last year’s prognosis was so far off.