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Saturday, February 9, 2013

Will Stocks end higher ? $AAPL $GOOG $FB $DELL $GM $F

The Nasdaq composite stock index closed at a 12-year high and the S&P 500 index at a five-year high, boosted by gains in technology shares and stronger overseas trade figures. Volume was roughly 5.6 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion. The S&P 500 also posted a sixth straight week of gains for the first time since August. The technology sector led the day's gains, with the S&P 500 technology index (.SPLRCT) up 1.0 percent. Gains in professional network platform LinkedIn Corp (LNKD) and AOL Inc (AOL.N) after they reported quarterly results helped the sector. Dow Jones Industrial Average (^DJI) briefly lurching over 14,000. It's also a decent description of an experienced stock veterans' reaction to the hype about a new bubble in equities. People who lived through two different horrific crashes in the last 15 years know what bubbles look like, and this isn't it. Scoffing at the notion that one month of $77 billion in equity inflows (January) somehow trumps $1 trillion of outflows, Brown says the most that can be said of individual investors is that they are once again considering equities. "Becoming curious" is how he puts it. Usually the curiosity takes the form of a question followed by a quick assertion that stocks are way too high and certain to plunge at some point in the near, but unknowable, future. Brown has three things to say to those paralyzed by fear given the rumored flood into stocks by the masses. 1. Whether or not individuals are buying stocks doesn't matter. Stocks are up 127% since 2009 with outflows every month. It will take much more than one month of investing to move the needle on the price of a stock market valued at $14 trillion, give or take. Only on the extremes are the inflows or outflows of individual investors of any value in predicting future stock moves. 2. There's real money buying. Endowments and institutions are the ones coming back into stocks, they're just too embarrassed to say so. Instead the punditry couches their buying in phrases like "increasing our equity allocation" or "adding risk." Pros talking like that may as well be wearing a sandwich board announcing that they missed the rally. 3. Market timing is for suckers. "I know people who play market timers on TV," he says, "but in reality it's a very tough game to play." Amen. The question for those all in cash is what burning bush or lightning strike was their omen of a crisis to come. Being 100% in cash makes investors literally insane, he insists. Even people otherwise brilliant and successful start hunting for reasons to justify why they've been so cautious. Staying half invested at least wards off the lunacy of timing and Doomsday scenarios Shares of LinkedIn jumped 21.3 percent to $150.48 after the social networking site announced strong quarterly profits and gave a bullish forecast for the year. AOL Inc (AOL.N) shares rose 7.4 percent to $33.72 after the online company reported higher quarterly profit, boosted by a 13 percent rise in advertising sales. Data showed Chinese exports grew more than expected, a positive sign for the global economy. The U.S. trade deficit narrowed in December, suggesting the U.S. economy likely grew in the fourth quarter instead of contracting slightly as originally reported by the U.S. government. "That may have sent a ray of optimism," said Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon. Trading volume on Friday was below average for the week as a blizzard swept into the northeastern United States. The U.S. stock market has posted strong gains since the start of the year, with the S&P 500 up 6.4 percent since December 31. The advance has slowed in recent days, with fourth-quarter earnings winding down and few incentives to continue the rally on the horizon. "I think we're in the middle of a trading range and I'd put plus or minus 5.0 percent around it. Fundamental factors are best described as neutral," Dickson said. The Dow Jones industrial average (^DJI) ended up 48.92 points, or 0.35 percent, at 13,992.97. The Standard & Poor's 500 Index (^GSPC) was up 8.54 points, or 0.57 percent, at 1,517.93. The Nasdaq Composite Index (^IXIC) was up 28.74 points, or 0.91 percent, at 3,193.87, its highest closing level since November 2000. For the week, the Dow was down 0.1 percent, the S&P 500 was up 0.3 percent and the Nasdaq up 0.5 percent. Shares of Dell (DELL) closed at $13.63, up 0.7 percent, after briefly trading above a buyout offering price of $13.65 during the session. Dell's largest independent shareholder, Southeastern Asset Management, said it plans to oppose the buyout of the personal computer maker, setting up a battle for founder Michael Dell. Signs of economic strength overseas buoyed sentiment on Wall Street. Chinese exports grew more than expected in January, while imports climbed 28.8 percent, highlighting robust domestic demand. German data showed a 2012 surplus that was the nation's second highest in more than 60 years, an indication of the underlying strength of Europe's biggest economy. Separately, U.S. economic data showed the trade deficit shrank in December to $38.5 billion, its narrowest in nearly three years, indicating the economy did much better in the fourth quarter than initially estimated. Earnings have mostly come in stronger than expected since the start of the reporting period. Fourth-quarter earnings for S&P 500 companies now are estimated up 5.2 percent versus a year ago, according to Thomson Reuters data. That contrasts with a
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