logo
  Join        Login             Stock Quote

Bulls Gain Steam, But Euro-Zone Concerns Bear Close Watch

 January 24, 2012 04:43 PM
 


"Confusion is a word we have invented for an order which is not understood." –  Henry Miller

The Dow Jones Industrial Average (DJIA) rose by almost a full percentage point on Friday, but like so many aspects of the current market, that number is somewhat misleading.

Tech leader IBM powered the Dow to its fourth winning day in a row, which left the blue-chip index up 2.4% on the week. However, with IBM being the highest-priced component within the Dow universe, its upward move, coming in at over 4%, disproportionally raised the Dow's bottom line.

For comparison, if you take a look at the S&P 500 Index (SPX), it gained a relatively paltry 0.1% on Friday. However, the benchmark index, which offers a far more accurate read on the equity market in general, did manage to gain 2% on the week, placing it at a level not seen since late July of 2011. It now has a very minimal cushion of 1% atop the psychologically important 1,300 level, while also sitting relatively high above its own 200-day moving average.

[Related -Caterpillar Inc. (CAT) Q4 Earnings Preview: A Fifth Wheel About To Come Off?]

Rounding out the big three indexes, the Nasdaq Composite Index (COMP) lost 0.1% on Friday, suffering defeat at the hands of the bad beat investors put on Google (GOOG) following its unenthusiastically received 4Q earnings report.

Fourth quarter earnings season has, on the whole, been the prime mover for the mini Bull Run that Wall Street has experienced since the ball dropped on the New Year. Though the numbers reported by companies so far have generally met analysts' expectations, the upward trend in stocks year-to-date can be at least partially attributed to the fact that, so far for the year, domestic reports out of Washington have fallen into the "neutral-to-fair" category.

[Related -International Business Machines Corp. (IBM): More Potholes In The Road To $20 In 2015]

Probably a far greater factor in January's current upward trend has been the fact that negative noise out of the euro-zone has been minimal. And, while investors are hardly dancing in the streets due to enacted solutions geared towards solving the EU debt crisis, sentiment does seems to be leaning towards the possibility that the worst of the matter may be baked into current stock prices.

This assumption may prove to be a major flaw, at least in the long term.

While the new head of the European Central Bank (ECB), Mario Drahi, has so far managed to convey the right sentiments at the right time, helping to effectively offset some of the rumors and innuendo that have at times injected high doses of volatility into the market, the euro-zone remains a powder keg simply due to the massive debt owed by the PIIGS (Portugal, Ireland, Italy, Spain and Greece). There is only so much that Germany, France, and even the International Monetary Fund can do to stem the bleeding without inflicting wounds on themselves.


Next Page >>12
iOnTheMarket Premium
Advertisement

Advertisement


Comments Closed


rss feed

Latest Stories

article imageLevel 3 Communications, Inc. (LVLT): A Good Time To Buy Says Macquarie

On a day Wall Street is struggling to advance, Level 3 Communications, Inc. (NYSE:LVLT) is having no such read on...

article imageAbercrombie & Fitch Co. (ANF) Q2 Earnings Preview: The Unkind Quarter

Abercrombie & Fitch Co. (NYSE:ANF) will be holding its second quarter 2014 earnings conference call for all read on...

article imageWorkday Inc. (WDAY) Q2 Earnings Preview: Built In Surprise

Workday Inc. (NYSE:WDAY) plans to announce its fiscal 2015 second quarter results after market close on read on...

article imageArcelorMittal SA (ADR)(MT): Steel Stocks about to Get Red Hot

For the second consecutive day, a major broker upgraded a steel company by advancing their recommendation read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.