The Markets This Week
GO FIGURE. SEPTEMBER has long been the worst month for stocks. So it makes sense that gold, a bellwether of inflation fears and anti-stock sentiment, has jumped higher, ending at $1004.90 an ounce last week, its highest close this year. And yet, even though stocks fizzled a bit Friday, they rose in three of the week's four trading sessions (markets were closed Monday, Labor Day), with the Dow rising 1.74%, to 9605.41 and the NASDAQ, 3.08%, to 2080.90.
Last week's strong showing pushed the indexes into positive territory for the month and increased their 2009 gains. The Dow is now up 9.45% this year and the NASDAQ, 31.95%.
Friday, of course, was the eighth anniversary of 9/11. The Dow closed just 0.10 of a point below the 9605.51 that it finished on the day before the attacks. If nothing else, this shows that stock investors don't have much to show for the past eight years after all the volatility that occurred as a result of the tech bust early in the millennium and the credit crisis of recent vintage.
In the same vein, the S&P has no doubt been a star performer, rising 54.13% above its 12-year closing low of 676.53 hit on March 9. But the index is still off 33.38% from its record close of 1565.15, registered on Oct. 9, 2007. Likewise, the Dow is still 4559.12 points, or 32.19%, below its record 14,164.53 close, notched that same day.
The market's robustness reflects several factors. First, the European and Asian markets were generally strong, especially early in the week when American marts were closed for Labor Day. The announcement of Kraft Foods' (ticker: KFT) unfriendly bid for Cadbury (CBY), valued at around $17 billion in cash and stock, showed that M&A animal spirits are still stirring and that strategic buyers, at least, don't find stocks overly inflated. In addition, the economic and earnings news was generally favorable. Friday, it was reported that the U.S. consumer-sentiment index had jumped to 70.2 in early September from 65.7 in August. This was the highest reading since June and reversed a decline over the succeeding two months.
Canny market strategist Edward Yardeni, for one, is heartened by the way S&P 500's 2010 earnings forecasts are turning since they bottomed in May at $62.92 a share. He has raised his estimate to $72 and figures he will have to boost it again in response to rising consensus forecasts. At least that's what a proprietary indicator of his is saying. It includes changes in initial unemployment claims, industrial commodity prices and the Consumer Comfort Index (Source: Barrons Online).
Last week's strong showing pushed the indexes into positive territory for the month and increased their 2009 gains. The Dow is now up 9.45% this year and the NASDAQ, 31.95%.
Friday, of course, was the eighth anniversary of 9/11. The Dow closed just 0.10 of a point below the 9605.51 that it finished on the day before the attacks. If nothing else, this shows that stock investors don't have much to show for the past eight years after all the volatility that occurred as a result of the tech bust early in the millennium and the credit crisis of recent vintage.
In the same vein, the S&P has no doubt been a star performer, rising 54.13% above its 12-year closing low of 676.53 hit on March 9. But the index is still off 33.38% from its record close of 1565.15, registered on Oct. 9, 2007. Likewise, the Dow is still 4559.12 points, or 32.19%, below its record 14,164.53 close, notched that same day.
The market's robustness reflects several factors. First, the European and Asian markets were generally strong, especially early in the week when American marts were closed for Labor Day. The announcement of Kraft Foods' (ticker: KFT) unfriendly bid for Cadbury (CBY), valued at around $17 billion in cash and stock, showed that M&A animal spirits are still stirring and that strategic buyers, at least, don't find stocks overly inflated. In addition, the economic and earnings news was generally favorable. Friday, it was reported that the U.S. consumer-sentiment index had jumped to 70.2 in early September from 65.7 in August. This was the highest reading since June and reversed a decline over the succeeding two months.
Canny market strategist Edward Yardeni, for one, is heartened by the way S&P 500's 2010 earnings forecasts are turning since they bottomed in May at $62.92 a share. He has raised his estimate to $72 and figures he will have to boost it again in response to rising consensus forecasts. At least that's what a proprietary indicator of his is saying. It includes changes in initial unemployment claims, industrial commodity prices and the Consumer Comfort Index (Source: Barrons Online).
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