With the Dow Jones Industrial Average on its way to a 26 percent
gain this year, many investors are wondering if the market is
beginning to overheat.
However, bargain shares with relatively low valuations have been
posting larger than average gains, which some take as a sign of the
market's health. Following the Federal Reserve's decision to cut
back on its stimulus spending, interest rates are on the rise and
investors are taking more risks.
Stocks with relatively low P/E ratios have been driving the
market's current rally and giving investors reason to remain
optimistic about 2014.
In other news around the markets:
Google and Apple are poised to begin 2014 battling for the top spot
in a new area: the automobile industry. The two technology giants
are lining up allies to integrate their software technology and
develop in-car entertainment and information systems. At next
week's Consumer Electronics Show, Google and German auto partner
Audi AG plan to unveil their latest collaboration, a system that
will allow drivers to access services available on Android
smartphones. An audit released on Monday showed that China's local
government had racked up $2.95 trillion by the end of June. The
report claimed that local debt remained within controllable limits,
although the nation's communist party has put together a group
which will oversee reforms to government spending in order to keep
the nation's economy healthy. Blackstone Group will make a $200
million investment in the shoe company Crocs Inc. The investment
will give Blackstone a 13 percent stake in the company, while Crocs
plans to use the cash for a $350 million stock repurchase expected
in the first quarter. On the last day of trading in 2013, Japanese
shares posted their highest closing level in six years, ending an
impressive yearly performance that took the Japanese Nikkei Stock
Average up 57 percent. The nation's market has been helped by a
weak yen coupled with Prime Minister Shinzo Abe's expected economic
Asian markets were mostly higher, the Japanese NIKKE was up 0.69
percent and the South Korean KOSPI gained 0.45 percent. Australia's
ASX 200 was up 0.61 percent and Indonesia's JSX composite gained
European markets were moderately lower, the UK's FTSE lost 0.11
percent and the eurozone's STOXX 600 was down 0.06 percent. The
Spanish IBEX was down 0.15 percent and the German DAX lost 0.12
Energy futures were slightly lower, Brent futures lost 0.02
percent and WTI futures were down 0.08 percent. Gold fell 0.99
percent and silver was down 2.04 percent. Industrial metals were
higher with aluminum posting the largest gains, up 2.96
Currency markets were quiet, the euro gained 0.17 percent
against the dollar and the pound to dollar ratio was flat. The
dollar gained 0.03 percent against the yen and lost 0.12 percent
against the Australian dollar.
Stocks moving in the Premarket included:
Carnival Corp (NYSE:
) gained 0.90 percent in premarket trade after rising 2.68 percent
over the past five days. The Coca-Cola Co (NYSE:
) rose 0.37 percent in premarket trade after gaining 1.55 percent
over the past week Perrigo Company PLC (NYSE:
) fell 0.50 percent in premarket trade after slipping 0.03 percent
on Friday Citigroup Inc. (NYSE:
) fell 0.48 percent in premarket trade after losing 0.17 percent on
Friday General Electric Co (NYSE:
) lost 0.43 percent in premarket trade after gaining 1.72 percent
over the past five days.
No notable earnings releases expected on Monday.
Notable economic releases expected on Monday include US pending
home sales, Italian business confidence and Spanish retail
For a recap of Friday's market action, click .
Tune into Benzinga's pre-market info show with Dennis Dick and
(c) 2014 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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