The Dow Jones Industrial Average advanced to a new two-year high
yesterday, gaining for the 10th time in 11 sessions. Blue-chip
stocks led the broad market with financials the strongest
performing sector, up 1.6%.
Financial stocks started strong following the takeover of
Chrysler Financial by
) for $6.3 billion.
Bank of America Corporation
) rose 2.9%, and
JPMorgan Chase & Co.
) was up 2.6%.
American Express Company
) rebounded 1.7% after several down days due to the Federal
Reserve's proposed investigation into debit card issuers.
Traders seemed relaxed due to reassuring statements from China
regarding support of the euro zone's handling of its debt problems,
signs of an improving world economy, and a lack of economic and
corporate news. Volume is light as the Christmas holiday
approaches, and many traders have already taken the week off.
In corporate news,
Martek Biosciences Corp.
) spiked 36% after agreeing to be purchased by Royal DSM. And
Adobe Systems Incorporated
rose 6.01% after beating analysts' Q4 earnings estimates and
projecting a gain of 10% in 2011.
Jabil Circuit, Inc.
) both delivered better-than-expected earnings. But
) fell 3% even after reporting Q4 earnings that were 6 cents above
Treasury yields were off slightly with the 10-year note at
3.322%. The euro fell to a record low versus the Swiss franc, and
the lowest level in three weeks against the U.S. dollar. In late
trading, the euro was quoted at $1.3096 versus $1.3126 on
At the close, the Dow rose 55 points to 11,533, the S&P 500
gained 8 points at 1,255, and the Nasdaq was up 18 points to 2,668.
The NYSE traded just 810 million shares with advancers over
decliners by 2.4-to-1. The Nasdaq crossed 399 million shares with
advancers ahead by 2.6-to-1.
Crude oil for February delivery rose 45 cents to $89.82, and the
Energy Select Sector SPDR
) jumped to a new two-year closing high at $66.99, up 67 cents.
February gold settled at $1,388.80 an ounce, up $2.70. The
PHLX Gold/Silver Sector Index
) gained 0.34 points to 220.8.
What the Markets Are Saying
The traditional "Santa Claus rally" has taken off with gusto as
light volume and a trader-controlled market took the Dow, the
S&P 500 and the Nasdaq to new closing highs. The new round of
buying confirms that the breakout from the November highs is
genuine. And this week's surge puts the near-term trend back into
With many absentees on the exchange floors, the lack of
institutional volume is obvious. And when this happens, groups that
have been under pressure, like the financials, drug stocks, etc.,
tend to attract bargain hunters. And some sectors that have
recently been getting a lot of buyers are taking off with renewed
vigor, like the coal group and base metals, both of which broke to
new highs with trading gaps a common occurrence. (See the
Trade of the Day
Traders should check the daily action with their brokers to
catch what is hot during the day. Be prepared for periods of sharp
profit-taking, and then renewed buying as the markets swing back
and forth. Both the S&P 500 and Nasdaq have advanced for 13 of
15 days this month, and volatility has picked up sharply. If you
play in this market, you had better be nimble and be content with
smaller but more frequent gains since whipsawing will become
Santa has arrived with a bag full of toys - just be careful that
you don't get run over by the reindeer.
Today's Trading Landscape
To see a list of the companies reporting earnings today,
For a list of this week's economic reports due out,
If you have questions or comments for Sam Collins, please
e-mail him at