Author Topic: Record Stock Market  (Read 27450 times)

0 Members and 1 Guest are viewing this topic.

sirs

  • Hero Member
  • *****
  • Posts: 27078
    • View Profile
  • Liked:
  • Likes Given: 0
Record Stock Market
« on: December 30, 2006, 02:45:23 AM »
Stocks drop, closing out record year
By JOE BEL BRUNO, AP Business Writer
Fri Dec 29, 2006


NEW YORK - Wall Street slipped lower Friday, closing out a year that will be remembered for the stock market's great comeback, a year-end rally that pushed the Dow Jones industrials past 12,000 for the first time.
 
By all accounts, 2006 ended up a very good year for stocks as bullish investors bounced back from a slumping housing market and the Federal Reserve's two-year campaign of interest rate hikes. The markets approached record levels in the spring, pulled back sharply in the summer, but found a clear direction in the fall to send the major indexes to multi-year highs.

Blue chips were the standouts of 2006. The Dow Jones industrial average, the index of 30 of the nation's biggest companies, hit record levels dozens of times since achieving its first close above 12,000 on Oct. 19; it traded as high as 12,529.87 before dipping to its close for the year.

This was the best year for the stock market since 2003, when Wall Street staged a massive recovery from levels sideswiped by a bear market. But 2006 will really be remembered for the market's soaring to heights not seen since the height of the dot-com era — this time, however, Wall Street advanced cautiously, not recklessly.

The rally was fed by investors' growing belief that the economy has withstood well the Fed's rate hikes and the impact of record high oil prices. And some analysts expect the advance to continue.

"The stock market is correct in its judgment that we are probably only in the fifth or sixth inning of the game, and that this (economic) expansion may even go into extra innings," said Stuart Schweitzer, global markets strategist for JPMorgan Asset & Wealth Management. "This was a barn-burner of a year, and I expect reasonably solid results over the course of 2007."

On Friday, the Dow fell 38.37, or 0.31 percent, to 12,463.15.

Broader stock indicators also slipped. The Standard & Poor's 500 index fell 6.43, or 0.45 percent, to 1,418.30, and the Nasdaq composite index closed down 10.28, or 0.42 percent, to 2,415.29.

The major indexes posted healthy gains for the year, with the Dow Jones industrials rising 16.29 percent, the S&P 500 adding 13.62 percent, and the Nasdaq up 9.52 percent. That's the best showing since 2003, when the Dow closed up 25.3 percent, the Nasdaq rose 50 percent, and the S&P 500 gained 26.4 percent — but those gains were the beginning of the market's recovery from the trough of three straight losing years.

It wasn't just the stock markets that made significant gains in 2006.

The bond market moved in lockstep with stocks — a rare event on Wall Street. Investors bought into equities because of a strong economy and robust corporate confidence. Meanwhile, typically more conservative bond investors used the fixed-income market as a hedge for a possible recession and interest rate cuts.

This year was also a bit of a rule bender for Treasuries. Yields on long-term Treasury notes and bonds were lower than for short-term Treasury bills. Junk bonds were in such demand that their yields were on almost on parity with those of investment-grade bonds.

Bonds slipped further in Friday's session, with the yield on the benchmark 10-year Treasury rising to 4.71 percent from 4.69 percent on Thursday. The yield stood at 4.37 percent on the first day of trading this year, and was over 5 percent just a few months ago.

The dollar, which has struggled against the euro and other major currencies, was mixed on Friday. The U.S. currency lost support in 2006 after the Fed stopped raising rates on Aug. 8 and kept them unchanged in its past three meetings.

And gold prices continued their rally; investors have sent precious metals sharply higher, viewing commodities like gold and silver as safe-haven investments instead of the greenback.

Plunging oil prices also fed the stock market's 2006 rally. Crude reached all-time highs in the summer when it briefly surpassed $78 a barrel due to the resilience of consumer demand and expectations of a bad hurricane season. But energy prices soon plummeted back to 2005 levels by the fall when traders saw that refiners in the Gulf of Mexico were untouched by hurricanes, and realized global crude inventories remained ample.

That retreat gave momentum to the stock market's rally, and enable investors to tolerate upward blips in the price of crude and gasoline.

The price of a barrel of light sweet crude on Friday rose 52 cents to settle at $61.05 on the New York Mercantile Exchange — about 22 percent below its highs of the year.

Stocks are expected to rise further in the new year, but not without some resistance. A big question still hanging over the market is whether the Fed will feel comfortable enough with the balance between inflation and a moderating economy to start lowering interest rates. If inflation seems to be accelerating, an interest rate hike could still be in the offing.

"There is going to be a tug of war between the bulls and the bears as we head into next year," said Quincy Krosby, chief investment strategist for The Hartford.

"We could hit a speed bump as Treasury market yields grow higher, and that could put pressure on the stock market," she said. "We need to pay close attention to the Fed, and how they view what I believe is going to be a growth spurt that will be manifested by yields moving up."

She also pointed to fluctuations in the dollar as another greater influence on Wall Street. Rising interest rates in Europe could help the region lure foreign investment away from the United States, further pressuring the dollar next year.

There was little corporate news Friday as traders looked toward a four-day break that includes a suspension of trading for New Year's Day and the funeral of President Gerald R. Ford. And, again trading was thin — typical of the week between Christmas and New Year's.

Advancing issues outnumbered decliners by about 2 to 1 on the        New York Stock Exchange, where consolidated volume came to 1.66 billion shares, compared to 1.67 billion on Thursday.

The Russell 2000 index of smaller companies dipped 6.82, or 0.86 percent, to 787.66. For the year, the Russell rose 17 percent.

Overseas markets also soared to multi-year highs in 2006. Japan's Nikkei stock average closed up 0.01 percent on Friday. Britain's FTSE 100 was down 0.32 percent, Germany's DAX index fell 0.23 percent, and France's CAC-40 was up 0.15 percent.

The Dow Jones industrials ended the week up 121.21, or 0.98 percent, to finish at 12,463.15. The S&P 500 index was up 7.55, or 0.54 percent, to end the week at 1,418.30. The Nasdaq rose 17.07, or 0.71 percent, to finish the week at 2,415.29.

The Russell 2000 index closed the week was up 7.37, or 0.94 percent, to end at 787.66.

The Dow Jones Wilshire 5000 Composite Index — a free-float weighted index that measures 5,000 U.S. based companies_ ended the week at 14,257.55, up 79.84 points from last week. A year ago the index was at 12,517.69.


As high as 12,529.87
"The worst form of inequality is to try to make unequal things equal." -- Aristotle

Michael Tee

  • Hero Member
  • *****
  • Posts: 12605
    • View Profile
  • Liked:
  • Likes Given: 0
Re: Record Stock Market
« Reply #1 on: December 30, 2006, 06:00:54 PM »
45 million Americans without health-care insurance but the Dow broke through 12,000.  Hilarious.  Glad you got YOUR priorities straight.

sirs

  • Hero Member
  • *****
  • Posts: 27078
    • View Profile
  • Liked:
  • Likes Given: 0
Re: Record Stock Market
« Reply #2 on: December 30, 2006, 06:06:53 PM »
45 million Americans without health-care insurance but the Dow broke through 12,000.

And strangely none of those Americans prevented from getting health insurance or being denied any emergent healthcare.  Yep, priorities are straight, thank you very much. 

Now if we could just get government less involved in the private sector & decrease taxes some more, more people would have more money to purchase their own healthcare.  Gads, what a concept
"The worst form of inequality is to try to make unequal things equal." -- Aristotle

Plane

  • Hero Member
  • *****
  • Posts: 26993
    • View Profile
  • Liked:
  • Likes Given: 0
Re: Record Stock Market
« Reply #3 on: January 01, 2007, 11:59:47 AM »
It is seldom in history to have more than three good years in a row , but the record was recently set with five good years in a row during the Clinton administration.


As the economies of the world become more global is the cycle of good vs bad years fundamentally changed?

I think we are well into an era in which it is no longer valad to consider the economies of seprate nations as seprate entities , but as symbiotic interdependant mutually supporting joined at the hip entities that share a single bloodstream.


A lot of the laws of international commerce are quaint and ought to be revisited in every country.

Xavier_Onassis

  • Hero Member
  • *****
  • Posts: 27916
    • View Profile
  • Liked:
  • Likes Given: 0
Re: Record Stock Market
« Reply #4 on: January 01, 2007, 01:08:54 PM »
The next to last year of an administration has been an up[ year for the market for the past 68 years.

I am betting on commercial real estate, Latin America, China, European large cap stocks and US value stocks, wiht a 5% position in a gold mutual fund

Check these mutual funds out, out if you wish:
DODFX, DREGX, FUNDX, JAOSX, PRLAX, TRREX, UMEMX, UNWPX, WIBCX
and the ETF's IEV and FEZ.

"Time flies like an arrow; fruit flies like a banana."

Xavier_Onassis

  • Hero Member
  • *****
  • Posts: 27916
    • View Profile
  • Liked:
  • Likes Given: 0
Re: Record Stock Market
« Reply #5 on: January 01, 2007, 01:14:28 PM »
45 million Americans without health-care insurance but the Dow broke through 12,000.  Hilarious.  Glad you got YOUR priorities straight.

=============================================
There is nothing I can do to enact universal health care, other than vote. I have a pretty good Blue Cross Plan where I work, and it seems to me that I am going to avail myself of the opportunities of the stock market, or they will avail themselves of me. So I don't keep my money in low-rent CD's.

We really don't have a choice with regard to our priorities. You are in the game of the staock market whether you are an active buyer and seller or not.

I use mutual funds, since a good mutual fund director will know more about his field than I do. The 2% or less that a no-load MF charges is well worth the price. So is a good newsletter.


 
"Time flies like an arrow; fruit flies like a banana."

Michael Tee

  • Hero Member
  • *****
  • Posts: 12605
    • View Profile
  • Liked:
  • Likes Given: 0
Re: Record Stock Market
« Reply #6 on: January 01, 2007, 02:08:44 PM »
To me, a stock market is just a market.  Like a vegetable market.  If tomatoes are up, it's good for some people and bad for others.  Good for the farmer, bad for the housewife.  If stocks are up, it's good for the guy who already had some, bad for the guy who wants to get in on them.  If investment money goes into stocks, it goes out of bonds.  Interest rates have to rise to induce lenders to lend.  So a rising stock market is bad for new home buyers, good for mortgage lenders.

The general concept seems to be, however, that a rising stock market is good for everybody. 

I am no economist but it seems to me that there have to be better measures of how the country as a whole is doing than just a rising stock market.

sirs

  • Hero Member
  • *****
  • Posts: 27078
    • View Profile
  • Liked:
  • Likes Given: 0
Re: Record Stock Market
« Reply #7 on: January 01, 2007, 02:14:58 PM »
I am no economist but it seems to me that there have to be better measures of how the country as a whole is doing than just a rising stock market.

I'm no economist either, and yet I'm aware of many other measures, besides the stock market that indicate how well a country is or isn't doing.  GDP, Consumer Confidence, Retail sales, Misery Index, & Unemployment #'s are the ones right off the top of my head.  I don't believe anyone here has indicated that the record Stock Market was the sole indicator of how well the country was humming
"The worst form of inequality is to try to make unequal things equal." -- Aristotle

Plane

  • Hero Member
  • *****
  • Posts: 26993
    • View Profile
  • Liked:
  • Likes Given: 0
Re: Record Stock Market
« Reply #8 on: January 02, 2007, 01:59:44 AM »
To me, a stock market is just a market.  Like a vegetable market.  If tomatoes are up, it's good for some people and bad for others.  Good for the farmer, bad for the housewife.  If stocks are up, it's good for the guy who already had some, bad for the guy who wants to get in on them.  If investment money goes into stocks, it goes out of bonds.  Interest rates have to rise to induce lenders to lend.  So a rising stock market is bad for new home buyers, good for mortgage lenders.

The general concept seems to be, however, that a rising stock market is good for everybody. 

I am no economist but it seems to me that there have to be better measures of how the country as a whole is doing than just a rising stock market.


A market is a symbiosis and it can be good for all participants simultainously , or at least each in turn.
If Tomatos are up more will be planted and the supply to consumers will be dependable.
If Tomatos are down Farmers plant fewer and waste is minimised.
No artificial measure has improved on the natural selection of a free market.

Brassmask

  • Hero Member
  • *****
  • Posts: 2600
    • View Profile
  • Liked:
  • Likes Given: 0
Re: Record Stock Market
« Reply #9 on: January 02, 2007, 12:06:34 PM »
45 million Americans without health-care insurance but the Dow broke through 12,000.

And strangely none of those Americans prevented from getting health insurance or being denied any emergent healthcare.  Yep, priorities are straight, thank you very much. 

Now if we could just get government less involved in the private sector & decrease taxes some more, more people would have more money to purchase their own healthcare.  Gads, what a concept

People with pre-existing conditions are denied insurance all the time.  People without insurance rack up hundreds of thousands of dollars of bills constantly.  Your ideas of how to solve the medical crisis in America is laughable.

How is giving someone who works construction as a day laborer a tax break going to free up enough money to help him pay a $300 a month insurance bill?

Michael Tee

  • Hero Member
  • *****
  • Posts: 12605
    • View Profile
  • Liked:
  • Likes Given: 0
Re: Record Stock Market
« Reply #10 on: January 02, 2007, 01:12:05 PM »
<<A market is a symbiosis and it can be good for all participants simultainously >>

I don't see that as possible - - if the housewife pays more for a tomato today it means she's got less money to buy something else today, when she wants to eat it.   On that one day the rise was good for the farmer and bad for the housewife.  Sure prices MIGHT come down next year because tomatoes were overplanted following the rise, but next year a certain percentage of those housewives will be dead.

<< . . . or at least each in turn.>>

same thing.  It's just guesswork, it's not inevitable.  Some things keep rising in price over time.  Or falling.  I figure any fluctuation in price has to be bad for either a seller or a buyer and good for the opposite party.  There's no "win-win" in market fluctuations.

Xavier_Onassis

  • Hero Member
  • *****
  • Posts: 27916
    • View Profile
  • Liked:
  • Likes Given: 0
Re: Record Stock Market
« Reply #11 on: January 02, 2007, 06:04:57 PM »
No artificial measure has improved on the natural selection of a free market.

=====================================================
I suppose this depends on what you mean by a "natural selection".
The Japanese system of "just in time" delivery of auto components is far more efficient that what came before, and has greatly improved quality control as well as lowered production costs.

US auto companies tend to overproduce and then are forced to sell casr and trucks at a loss.
"Time flies like an arrow; fruit flies like a banana."

Amianthus

  • Hero Member
  • *****
  • Posts: 7574
  • Bring on the flames...
    • View Profile
    • Mario's Home Page
  • Liked:
  • Likes Given: 0
Re: Record Stock Market
« Reply #12 on: January 02, 2007, 06:51:17 PM »
The Japanese system of "just in time" delivery of auto components is far more efficient that what came before, and has greatly improved quality control as well as lowered production costs.

Actually, "just in time" inventory control does nothing for quality control.

It does, however, drastically reduce warehouse costs.
Do not anticipate trouble, or worry about what may never happen. Keep in the sunlight. (Benjamin Franklin)

sirs

  • Hero Member
  • *****
  • Posts: 27078
    • View Profile
  • Liked:
  • Likes Given: 0
Re: Record Stock Market
« Reply #13 on: January 02, 2007, 10:39:05 PM »
People with pre-existing conditions are denied insurance all the time.  People without insurance rack up hundreds of thousands of dollars of bills constantly.  Your ideas of how to solve the medical crisis in America is laughable.

And before the condition was determined to have existed??  Sorry Brass, they can still purchase insurance, it's simply going to cost more for a pre-existing condition.  The laugable part is how you'd advocate that you, I, and everyone here in the saloon & country needs to pony up additional tax dollars to pay for Rush Limbaughs' health care coverage, Bill Gates' insurance coverage, anyone and everyone.  That's the epitome of laughable


How is giving someone who works construction as a day laborer a tax break going to free up enough money to help him pay a $300 a month insurance bill?

I see.  So you're assuming someone is going to be too dumb, or too stubborn, or too focused on "gimmee gimmee gimmee" to make any effort what-so-ever to progress beyond a simple day laborer.  I've got news for you Brass...most folks, at least at one time, actually cared about taking care of themselves, and even found it demeaning to constantly rely on others.  No one is stopping simple day laborers from becoming Managers, Foremen, Supervisors, Directors, EMPLOYERS.  Bottom line remains that the more money EVERYONE can keep, means the more money EVERYONE has to purchase their own health insurance
"The worst form of inequality is to try to make unequal things equal." -- Aristotle

Plane

  • Hero Member
  • *****
  • Posts: 26993
    • View Profile
  • Liked:
  • Likes Given: 0
Re: Record Stock Market
« Reply #14 on: January 02, 2007, 11:32:12 PM »
<<A market is a symbiosis and it can be good for all participants simultainously >>

I don't see that as possible - - if the housewife pays more for a tomato today it means she's got less money to buy something else today, when she wants to eat it.   On that one day the rise was good for the farmer and bad for the housewife.  Sure prices MIGHT come down next year because tomatoes were overplanted following the rise, but next year a certain percentage of those housewives will be dead.

<< . . . or at least each in turn.>>

same thing.  It's just guesswork, it's not inevitable.  Some things keep rising in price over time.  Or falling.  I figure any fluctuation in price has to be bad for either a seller or a buyer and good for the opposite party.  There's no "win-win" in market fluctuations.

You may not see it possible because you have a lacuna in your vision. The best possible price for any item is a price that fully supports its production but does not drain the consumor unduly.

Haveing multiple consumers in competition ,and multiple producers in competition ,( simultainiously) produces the best price beter than any other method known to man.