2011 Market Wrap: Lackluster With Some Light

The stock market drew to its 2011 conclusion Friday,with the major averages down just over a half percent for the week.For the year,the bellwether S&P 500 Index was virtually flat,down a meaningless 0.003.You made no money on the broad market this year,but you didn't really lose any,either.
There were individual winners and losers,however.McDonald's was the biggest winner among the Dow 30,rising 31% on the year.The biggest loser in the Dow was Bank of America,losing more than half its value at -55%.Top-rated financials in the analysts' estimates are JP Morgan Chase,Prudential Financial and Wells Fargo.
The winning sectors for 2011 were utilities and consumer staples-clearly defensive areas.The biggest losers were the financials and materials-sectors dependent on a robust economy.The CBOE VIX volatility index was up a sharp 31.83% on the year,and trading volume was pretty uniformly thin.
The new year may well hold more of the same in store,with concern over European and American deficits,and the U.S. presidential election,dominating a headline-driven market.The S&P futures slipped modestly Friday evening,down 4.80%,and bond index futures gained.
McDonald's(MCD),Bank of America(BAC),JP Morgan Chase(JPM),Prudential Financial(PRU),Wells Fargo(WFC)

Fear Returns To Market

It's been a while since fear stalked the trading floor,but that is just what happened on this one-headline Friday.With the Securities and Exchange Commission filing civil charges against Goldman Sachs,the thought of the day was just who would be next.The financial stocks are so central today,so critical to the market's welfare,any threat to them calls into question the recent rally.All of the largest firms fell big time in a session that saw the Chicago Board Options Exchange Volatility Index jump 15.54.The financials lost 44 billion dollars in value on Friday,while Goldman alone dropped 10 billion.
Nonetheless,even though the cold breath of fear breathed down traders' necks again,the Dow Jones Industrial Average closed with a 0.2 gain for the week.The NASDAQ was up 1.1,but the S&P 500 stepped down 0.2 for the week.The futures gave little hope for the resumption of equities trading on Monday,with the S&P futures down 18.20and the Dow futures off a triple digit at -112,while Treasury futures rose in contrast.
Razorback fans were comforted as Arkansas took a 3-2 lead over the Georgia Bulldogs in college baseball,while some major league fans relaxed with Philadelphia leading Florida 5-1.
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Euphoria Grips Limited Trading

A sense of euphoria got hold of the stock market on Friday when the unemployment report was better than expected.Economists had thought the snowstorms that battered much of the country in late February would have taken a toll on labor figures.When that didn't happen,a relief rally occurred,sending the S&P 500 Index up 3.1% for the week.The labor market was essentially flat,with unemployment staying at 9.7% for February.
Although the S&P surged on Friday,volume was paltry,coming in at less than a billion shares,which throws the staying power of the rally into question.The status quo job numbers hardly seem to justify today's Irish jig.As CNBC's Rick Santelli remarked,the bar for good news in employment is pretty darned low.In order for the economy to grow significantly,much more than holding the jobless line will be required.Nothing that happened this week lessened the credibility of the new normal hypothesis of slow growth and high unemployment for an extended period.
The S&P futures were nonetheless strong this evening,rising 14.20.

Bode Miller Medals Again

Bode Miller,the U.S. skier who washed out at the Torino games four years ago,won a silver medal in the Super G event at Whistler,B.C. today.Miller had previously won the bronze in the Downhill race at these games.Gold in the Super G went to Norwegian Aksel Lund Svindal,and American Andrew Weibrecht took the bronze.Svindal described it as an awesome day.Unless you live in the mountains,there's no way you can be a skier without your family helping you out,Svindal said.His mother died when he was little,but his father has been at his side since then.It was good to have him there today,jumping up and down when Aksel crossed the finish line a victor.
As for Miller,he thought his two-year old daughter was with him in spirit.He wasn't sure how she would have responded to all the drama of the race scene.She changed his life so much,surely the medals may be said to be hers also in a special way.The theme of the day seemed to be how important their families were to the skiers.The Olympics can remind us all of so many things.
The S&P futures mirrored the good skiing results,being up 0.60 early this evening.For the week,the S&P was up 33.66.The U.S. dollar is up about 4% for the year.Inflation remains very low,with the core Consumer Price Index dropping for the first time since 1982.

Technical Level Broken

A technical level on the S&P 500 Index was broken today,as the index closed below 1042.Apparently,there is now nothing to stop a free fall on Monday morning.Indeed,the S&P futures were down substantially earlier this evening,intimating just that.The VIX volatility index had spiked to an uncomfortable height today,and about 80% of stocks had crossed below their 40 day moving average.Frankly,it was a crummy end to the week.The consumer just is not there for the market,according to the economic data.It's the perfect excuse for a round of profit-taking after a 55% run-up.If it becomes a 10% correction,we could have three more days just like today.It's helpful to write and read about the situation as it actually is.Now we can put it aside and watch some football or whatever we like to do.