Friday, December 21, 2007

Santa Claus Rally At Last

Set against the backdrop of outstanding consumer spending figures for November, stocks exploded to the upside at the open on Friday and extended their gains throughout the session.

Dow 13,450.65 +205.01; NASDAQ 2,691.99 +51.13; S&P 500 1,484.46 +24.34; NYSE Composite 9,787.93 +165.66

Consumer spending was up a very healthy 1.1%, the best one-month reading since May, 2004. Naturally, with the figures coming from the Commerce Department, we take them with the appropriate dosage of salt and doubt. We may find in a month or two that the numbers are revised lower, or, worse yet, that December's figures - which are in fact much more important - were not very solid.

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Reports have been trickling out that retailers are a touch worried heading into the final weekend before the holiday. Most of what's being whispered is that sales will hold their own, may be better than last year, though nobody's betting the house on it.

Chances are good that retailers will be a mixed bag, as they usually are. Some have a better mix, some do better marketing, some have catchier ads than others. It's a fiercely competitive market at the hottest time of the year. While most of us go through the rituals of mall-walking and discount-seeking, behind the scenes it's a vein-popping stress-filled environment.

But, Americans being the generous lot that they are, many will spend beyond their means during this over-commercialized bargain hunt. Merry Christmas to anyone who works in retail. You're the last line of defense against outright mass insanity.

As one might expect, advancing issues hammered decliners on Friday, 4629-1767 (a 5-2 ratio), though new lows maintained their advantage over new highs, 392-235. Stocks broke through some upside resistance at 13,300, which could be notable as we head toward the end of 2007.

In keeping with the holiday spirit, oil priced $2.25 higher, closing at $93.31 per barrel. Gold was $12.20 stronger, to $815.40; silver was up 15 cents to $14.49. On the last full trading day before Christmas, everything was up.

Happy Holidays!

NYSE Volume 4,501,638,000
NASDAQ Volume 2,697,700,500

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