Santa Claus Comes to Wall Street

We all knew this was coming.

Good news or bad, there was going to be a Santa Claus Rally, and today was the day.

Any attempt to quantify or qualify this massive uplift on slightly positive news (really, there was nothing earth-shattering) would be foolhardy. Suffice it to say that the powers that be got the HFT computers cranked up at the open and didn't change the algorithms all day long.

It wasn't as though Europe was fixed for good, or that seven million people went back to work today, or that retail sales have been robust (anecdotally, the malls and the post office aren't especially busy). The top news - and it's suspect, at best - was that housing starts rose 9.3 percent to a 685,000 annual rate, though most of the gains were in multi-family units (rental apartments), which were up 25%, while new construction of single-family houses rose just 2.3 percent from the prior month, so, apparently, the fact that most people in America can't qualify for a mortgage and thus, must rent, qualifies as blockbuster good news.

Today's moves were somewhat misleading, as Santa Claus rallies often are. The closing prices on the major indices got them back to where they were about a week ago.

Merry Christmas. It was the feel-good rally for the season. By the time we hit January, this will be all but forgotten, so don't make a big thing out of it, OK?

Meanwhile, the markets actually should be a little bit uneasy over what's happening (or not happening, as the case may be) on Capitol Hill, where House Republicans refuse to pass the two-month social security payroll contribution reduction that was overwhelmingly passed by the Senate over the weekend.

Majority leader John Boehner took the extraordinary step of calling the Senate's bluff, saying they should come back to Washington to work out a better, longer deal. Most Senators have already exited the capitol, en route to a two-week vacation, while the nation stumbles on, without a comprehensive package.

Boehner, in calling out the Senate and President Obama, said, "President Obama needs to call on Senate Democrats to go back into session ... and resolve this bill as soon as possible."

Failure to pass a bill in the House will also curtail unemployment benefits to about two million Americans and Medicare payments to doctors will also be cut short.

The House did pass a bill, 229-193, that sends the legislation back to the Senate. However, with the Senate already out of town for the holidays, House Republicans have set up a perfect stalemate, just in time for the holidays.

Of course, none of this drama means anything to Wall Street, which had donned blinders for the session. Stocks closed at or ear their highs of the day on extremely light volume. All sectors and nearly all asset classes gained on the day, including gold, oil and silver, which had been beaten down mercilessly over the past two weeks.

Not to throw cold water on the festivities, but after the bell, Oracle (ORCL) missed on their quarterly numbers, coming in at 54 cents per share on expectations of 57 cents and missing revenue estimates of $9.2 billion by a mile, at $8.8 billion.

Also, the National Association of Realtors (NAR) will announce tomorrow that they are revising, downward, existing home sales from the past five years, dating back to 2007, when the housing boom went bust. It may not mean a thing to the 1%ers on Wall Street, though the data will show that housing was - and is - in worse shape than previously reported.

Dow 12,103.43, +337.17 (2.87%)
NASDAQ 2,603.73, +80.59 (3.19%)
S&P 500 1,241.30, +35.95 (2.98%)
NYSE Composite 7,357.14, +214.69 (3.01%)
NASDAQ Volume 1,751,316,750
NYSE Volume 4,002,632,750
Combined NYSE & NASDAQ Advance - Decline: 4943-862
Combined NYSE & NASDAQ New highs - New lows: 183-106
WTI crude oil: 97.22, +3.34
Gold: 1,617.60, +20.90
Silver: 29.54, +0.66