(Photo of Jets truck on the PA Turnpike enroute to Pittsburgh – courtesy of Erika Petrozelli)

I succumbed to the temptation of attending the Steelers-Jets game in Pittsburgh. On Saturday morning, I will be departing from my warm nest in Bethlehem to trek over the river and through the woods to the more frigid side of the state, intending to stay overnight at my brother’s house outside of Indiana (Pa). On Sunday, my wife Jo Anne, my daughter Erika and her husband Matt Petrozelli, and his father and mother will descend upon the three rivers to watch one of the coldest games in NFL history. There are 2 Steelers fans and 4 Jets fans in our mini-group so there will be some happier than others by the time you read this on Monday.

UPDATE:  Steelers fans left happier than Jets fans…

“How people treat you is their karma; how you react is yours.”

-Wayne Dyer

After two months of steady gains, stocks ran out of steam last week.

The Standard & Poor’s 500 index closed at 1,283.35, down on the holiday-shortened week. It was the first weekly decline for the index in eight weeks. On Jan. 19, it fell by more than 1%, something it hadn’t done for 37 trading days, according to Bespoke Investment Group. The index retraced some of its losses as the week wore on.

The Dow Jones Industrial Average managed to eke out its eighth consecutive week of gains, climbing 0.72% to 11,871.84. General Electric (ticker: GE) was a standout among the blue chips, jumping 7% on Friday on strong fourth-quarter earnings report. The conglomerate’s profits surged 51%, helped by improved operating margins. Barry Knapp, head of U.S. equity strategy at Barclays Capital Equity Research, was heartened to see strength in GE’s infrastructure-related sales.

The tech-heavy Nasdaq Composite, for its part, was down 2.4%, to 2,689.54. A big drag on the index was Apple (AAPL), which fell 6% on the week. The technology behemoth released stellar earnings, but that was overshadowed by the announcement earlier in the week that its famed chief, Steve Jobs, is taking a medical leave.

It was also a tough week for smaller stocks, which had enjoyed nice gains until recently. The Russell 2000, which tracks small-capitalization stocks, was down 4.26%, only its second weekly decline since mid-November. And the S&P 400 Midcap Index fell 1.8% on the week. Brian Belski, chief investment strategist at Oppenheimer, predicts there “will be an unwinding of the small-cap trade, especially this year as we see bond yields go up.”

Yields did edge up as Treasuries sold off, in part because of some encouraging news about the economy. For example, new claims for unemployment benefits dropped by 37,000 to around 404,000, seasonally adjusted. The 10-year Treasury was yielding 3.413% at the end of the week, up from 3.334% a week earlier.

FINANCIAL STOCKS HAD A NOTABLY mixed time of it. Morgan Stanley (MS) saw its shares rise about 3.6%, thanks to strong fourth-quarter results. But Goldman Sachs (GS) sold off about 5% on disappointing earnings. Fourth-quarter profits fell by 52%, reflecting weaker trading results. It was also a tough week for Bank of America (BAC); its shares slid about 6% amid continued mortgage write-downs. The banking giant posted a fourth-quarter loss of $1.2 billion.

Belski maintains that this week’s up-and-down performance by the financials illustrates how “financials have taken over for tech as the quintessential stock-pickers sector.” In other words, expect banks to bumpy for a while.

But the market as a whole may still be intact. In general, Knapp says, “There is nothing to dissuade me from an overall optimistic view.” Even bulls sometimes need a breather

(Source: Barrons Online).

Returns through 1-21-2011	1-week	Y-T-D	1-Year	3-Years	5-Years	10-Years
Bonds- BarCap  Aggregate Index	-.3	-.1	4.8	5.3	5.6	5.7
US Stocks-Standard & Poor’s 500	-.8	2.1	17.3	1.2	2.5	1.5
Foreign Stocks- MS EAFE Developed Countries	0.0	1.8	7.1	– 4.4	–  .4	1.3

Source: Morningstar Workstation. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. Three, five and ten year returns are annualized. Assumes dividends are not reinvested.