Friday, February 1, 2013

Dow Clears 14,000; Money is Cheap, Markets on Fire

In the immortal words of The Great One, Jackie Gleason, "...and away we go!"

Stocks leapt out of the gate on a modest January non-farm payroll report, which showed the US economy created 167,000 new jobs in the month, but it was the revisions which really inspired a great deal of confidence going forward and propelled the Dow Jones Industrial Average above 14,000 for the first time since October of 2007.

While the headline number was nothing special, but hardly a disappointment, the revision to November - from from 161,000 to 247,000, and December - from 155,000 to 196,000 - were massive, the November revision of 86,000 alone worth roughly a half-month's worth of payroll gush.

The Dow flirted with the 14,000 mark repeatedly throughout the session, but finally pushed higher in the final thirty minutes of trading, leaving the benchmark average less than 150 points from its all-time high.

Other major indices responded in like manner, most up roughly in the range of one percent on the day.

Skeptics abound, many calling for a correction soon, others deriding the rally as nothing more than the natural outcome of relentless stimulation via zero interest rates and massive bond buying by the Federal Reserve. Still others point to the sluggish real economy, barely doddering along at two percent per annum.

Like it or not, the stock market is not the general economy, which, incidentally, is not faring all that badly. Bankruptcies are not at alarming levels, small business creation is beginning to find legs and consumer spending (much of it on credit and through government transfers) has been remarkably solid.

Though headwinds abound, Wall Street continues to sail forward. January was absolutely boffo - the best since 1997 - and February got off with a bang.

One final note heading into Super Bowl weekend: Fearless Rick says lay the points and go with the 49ers, a win will produce great delight to younger brothers worldwide.

Dow 14,009.79, +149.21(1.08%)
NASDAQ 3,179.10, +36.97(1.18%)
S&P 500 1,513.17, +15.06(1.01%)
NYSE Composite 8,966.79, +83.00(0.93%)
NASDAQ Volume 1,968,694,250
NYSE Volume 4,053,908,500
Combined NYSE & NASDAQ Advance - Decline: 4846-1644
Combined NYSE & NASDAQ New highs - New lows: 668-33 (remarkable!)
WTI crude oil: 97.77, +0.28
Gold: 1,670.60, +8.60
Silver: 31.96, +0.607

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