Market Wrap-Up for Dec.28 (GM, MCP, REE, more)


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As I mentioned yesterday, we are seeing lots of trading activity in stocks that have a bit of a speculative tone to them this last week of the year.

Why are we noticing it more? Because there are many retail investors home the last week of the year (vacation time for many) and starving for action. The rare earth stocks had a crazy day of trading (MCP, REE) on news China is trimming exports of rare earth supplies. The stocks rallied big early on, but word of production delays made both names tumble off the intraday lows. You have to remember that these companies have yet to make a profit and are highly volatile trading instruments. As for other news on commodities, gold, oil, and silver are moving higher as well. I worry about the effects ramping commodity prices will have on corporate profits as the economy tries to stabilize further into 2011. Companies are not hiring now while things are going well, so what will happen if commodity costs eat into margins. The bounce-back in the jobs market is still a concern for me, because at some point, the ability for the market to ignore this key fact will certainly be tested. Everyone is clamoring for housing prices to bounce, but data out this morning paints a continued ugly picture. The S&P/Case-Shiller index of property values fell 0.8 percent from October 2009, the biggest year-over-year decline since December 2009, the group said today in New York. Economists had only expected a 0.2 percent drop. I still see homes as mostly vehicles for people that are looking for a place they want to live. The old-fashioned way and most reliable way to make money in real estate is to buy income-producing properties where the numbers work and you are actually making money each month (rents cover all the expenses and you can put some money in your pocket).

Wall Street analysts all put in a good word for General Motors ( GM ) today as many initiated positive ratings following the auto manufacturer's recent IPO. December has been a solid month for the market with very few down days. As a matter of fact, the S&P has closed higher 16 of the 19 trading sessions this month. Volume has not been as strong as previous months, so take that as a bit of caution as the new year gets set to roll in. A pullback in January would certainly be welcome for some of our higher-yielding recommendations. It would be great for investors to get into high quality dividend names at even better entry points. The key to building long-term wealth is going to be consistency when it comes to putting money to work. Avoid the temptation of shortcuts and be sure to adopt a discipline when it comes to stocks that have sustained underperformance. I will be touching on those topics in my new book that will be out in 2011. Check out for more information on the book's release.

And as always, check out our industry-leading Best Dividend Stocks List for the top dividend names to put money into right now.

Thanks for reading, and I'll see you tomorrow!

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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