Another Year

NEW YORK (AP) -- The stock market ended a tumultuous year right where it started. In the final tally, despite big climbs and falls, unexpected blows and surprising triumphs, all the hullabaloo proved for naught. On Friday, the Standard & Poor's 500 index closed at 1,257.60. That's exactly 0.04 point below where it started the year. "If you fell asleep January 1 and woke up today, you'd think nothing had happened," says Jack Ablin, chief investment officer of Harris Private Bank. "But it's been up and down all year. It's been crazy." It was a year when U.S. companies were supposed to run out of ways to make big profits. But they didn't, and in fact generated more than ever. It was a year when the U.S. lost its prized triple-A credit rating, which should have spooked buyers of its bonds. Instead investors bought more of them and made Treasurys one of the best bets of 2011. It was a year when stocks caught fire, then collapsed to near bear-market lows. Among stocks, there were some surprising winners. Scaredy-cat investors who bought the most conservative and dullest of stocks — utilities — gained 15 percent this year, the biggest price rise of the ten industry sectors in the S&P 500. Other winning groups were consumer staples, up 11 percent, and health care companies, 10 percent. Other market curiosities: — Bad year, great quarter. Despite disappointing returns in 2011, the last three months of the year were impressive, which could bode well for the new year. The S&P 500 rose 11 percent. The Dow Jones industrial average, comprising 30 big stocks, climbed 1,344 points, or 12 percent. That was the largest quarterly point gain in its history. The Dow closed up 5.5 percent for the year. — Best of the bad. U.S. stocks delivered little this year, but other markets did even worse, including ones in fast-growing economies. Brazil's Bovespa index fell 18 percent in 2011. Hong Kong's Hang Seng dropped 20 percent. In Europe, many of the biggest markets ended down in 2011. Britain's FTSE 100 lost 5.6 percent, Germany's DAX 14.7 percent. — Buy American is back. A broad index of the Treasury market gained 9.6 percent, despite the fact that the U.S. government is now slightly less likely to repay its debt, at least according to Standard & Poor's. In August, the rating agency stripped the U.S. of its triple-A rating, citing mounting U.S. debt and political squabbling over what to do about it. For stock investors, 2011 wasn't supposed to end this way. At the start of the year, the Great Recession was officially 1½ years behind us and the recovery was finally gaining momentum. The economy added an average of more than 200,000 jobs a month in February, March and April. And U.S. companies kept reporting big jumps in profits, defying naysayers. The stock market roared in approval. On April 29, the S&P closed at 1,363, double its recessionary low of March 2009. Then manufacturing slowed, companies stopped hiring and consumer confidence plummeted, taking with it those hopes of big stock gains for the year. Adding to the misery, Japan was rocked by an earthquake and tsunami. That shut down factories run by crucial parts suppliers to U.S. firms, in particular auto makers. Gridlock in Washington didn't help. After much squabbling, politicians eventually decided to raise the cap on how much the federal government can borrow in early August. But the heated debate took its toll. The Dow Jones industrial average swung more than 400 points four days in a row — down and up and down and up. Overhanging it all was fear that the debt crisis in Greece had spread to Italy and Spain, countries too large for other European nations to bail out. Talk of another blockbuster year for stocks turned to dark musings about the possibility of another U.S. recession. And so stocks kept falling. On Oct. 3, stocks had dropped 19 percent from their April high. That was just one point short of an official bear market. Since then, U.S. housing starts have increased, factories are producing more, unemployment claims fell and U.S. economic growth rose. And companies are still generating impressive profits. Those in the S&P 500 have increased profits by double-digits percentages for nine quarters in a row. The good news pushed stocks up in the closing months of the year. The biggest winner in the Dow was McDonald's Corp, up 31 percent for the year. Bank of America Corp. was the worst performing stock, down 58 percent. Including dividends, the S&P 500 returned 2.11 percent for 2011. That means investors lost money after inflation, which was running at 3.4 percent in the 12 months ending in November. At least they're getting more than investors in the benchmark 10-year Treasury note, which currently pays a yield of just 1.88 percent. The outlook for stocks in the new year is either great or grim, depending on your focus. Italy has to repay holders of $172 billion worth of it national bonds in the first three months of 2012. It will do so by selling new bonds. The question is how much interest they will demand to be paid to compensate for the risk they're taking on. If they demand too much, fear could spread that the country will default. That could sink stocks. After Italy was forced to pay unexpectedly high rates in a bond auction earlier this month, stocks fell hard around the world. There are also questions about whether China's economy is slowing too much and whether the U.S. politicians will agree to raise the debt ceiling again in 2012 or extend Bush-era tax cuts. On the bright side, stocks seem to be well-priced. The S&P 500 is trading at 12 times its expected earnings per share for 2012 versus a more typical 15 times. In other words, they appear cheaper now. Partly based on that many strategists, stock analysts and economists expect the index to end next year at 1,400 or more, up 10 percent or so. The Standard & Poor's 500 index rose 5.42 points, or 0.4 percent on Friday. The Dow Jones industrial average lost 69.48 points, or 0.6 percent, to 12,217.60. The Nasdaq composite index fell 8.59 points, or 0.3 percent, to 2,605.15 The Nasdaq is down 1.8 percent for the year. Trading has been quiet this week with many investors away on vacation. Volume on the New York Stock Exchange has been about half of its daily average. Markets will be closed Monday in observance of New Year's Day.

Another Year another NOTHING

S&P range in 2011 was +9% to -14% and we closing the year flat at 0%. Nothing happening. I have been under the weather due to the weather always a bad time for me with my sinuses. Next week after the three day holidays it will be interesting to see how they will try and put a positive spin for the 2012. You will no doubt here that where ever the first five trading days go so will the year, oh really! they got it wrong this year but they will use it again and again no matter what. Commodities look like they are in sell mode still. Nailed that Silver short a couple weeks ago but anything stock wise just looks like a yo-yo to me - Happy New Year!

50% of profits and 3% wow-

The guy who is killing it at SAC Capital By Matthew Goldstein Move over Steve Cohen. The trader who is killing it at Cohen’s $14 billion SAC Capital Advisors this year is Gabriel Plotkin. The portfolio manager, who specializes in consumer products and the gaming and lodging industry, is one of the top producers this year at Cohen’s hedge fund, say several people familiar with the Stamford, Conn. hedge fund. Plotkin, who joined SAC Capital in late 2006 from North Sound Capital, is emerging as on Cohen’s most reliable money men. At SAC Capital, where most portfolio managers run books that range from as little as $250 million to $500 million, Plotkin manages one of the largest. His team of half-dozen traders and analysts manages about $1.2 billion of the firm’s money, say sources. And this year, Plotkin has delivered, producing a return of about $150 million from his trades. In October, Plotkin was a featured panelist at a Wharton Investment Management Conference along with Adam Cohen of Caspian Capital, BlackRock’s Rick Rieder and Michael Karsch of Karsch Capital. Plotkin works with SAC Capital’s Sigma Capital division. Overall, it’s been a generally strong year for SAC Capital. As of the end of November, the firm is telling investors its flagship fund is up about 8 percent after fees. By comparison, the average hedge fund is down 4 percent for the year. The reported 8 percent gain is impressive when you consider that Cohen still manages to charge some of the highest fees in the industry–charging a 3 percent asset management fee and then collecting 50 percent of the firm’s profits. Industry analysts and people who know SAC Capital well say using a back-of-the envelope calculation, SAC Capital is looking at taking in about $1.4 billion from fees alone. Then again, with some 900 employees, Cohen “has a lot of mouths to feed,” as one industry observer put it. But still there’s been some misses at Cohen’s empire this year. Most notably, the firm is said to have absorbed some significant losses on Dendreon and Green Mountain Coffee Roaster, sources say. Green Mountain is a favorite short of hedgie David Einhorn, who recently talked about his “big short” with Reuters editor and UF co-founder Jenn Ablan. Einhorn’s short bet on Green Mountain saved the Greenlight Capital manager’s year. Then again, Greenlight Capital is up about 5 percent on the year. By that measure Cohen is still out front.

11 companies on the Brink

It was four years ago that a punishing recession officially began. The financial pressure drove many companies out of business, while the survivors generally adapted and got stronger. But some firms are still struggling, whether from delayed effects of the recession, relentless competition, fresh strategic blunders or a turnaround plan that hasn't panned out. While a double-dip recession seems unlikely in 2012, CEOs are intently watching for a financial crisis in Europe or policy mistakes in the United States that could weaken the economy. And consumer spending, surprisingly strong in 2011, could decline once again, as overspent consumers get nervous. There's plenty that could go wrong, in other words, even though the economy is supposedly recovering. To identify companies with the thinnest margin for error, I analyzed data on stock prices, expected 2012 earnings and other financial measures provided by S&P Capital IQ, a financial-information firm. The companies I've highlighted had a weak year-to-date stock performance through mid-December 2011, indicating deep investor worry. These are also firms likely to have weak earnings in the future, according to Capital IQ's summary of analyst forecasts for 2012 and beyond. There probably will not be a fresh surge of bankruptcies in 2012, but in some industries there's likely to be consolidation as weak firms succumb to stronger ones. Plus, the usual forces of competition always produce winners and losers. Here are 11 prominent firms likely to struggle in 2012: Eastman Kodak. Stock decline in 2011: 85 percent. It's never a good sign when a firm denies that it's heading for bankruptcy, as Kodak has been doing. Kodak was slow to join the revolution in digital photography, while taking several wrong turns into fields such as pharmaceuticals and document management. The firm is now seeking to sell assets and find other ways to raise cash so it can return to profitability after five consecutive money-losing years. Investors are clearly worried: Kodak stock has recently traded below $1 per share, a threshold at which companies are sometimes delisted from major exchanges. Research in Motion. Stock decline: 76 percent. The once-ubiquitous Blackberry commanded 55 percent of the U.S. smartphone market in 2009, according to research firm Canalys. Today, its market share is less than 10 percent. Blackberry-maker RIM has failed to counter ruthless competition from Apple's iPhone and the many Android phones now available, with total Blackberry shipments falling recently even though the overall smartphone market is still exploding. Plus RIM's PlayBook tablet device--meant to take on Apple's iPad--has been a flop. A key Blackberry upgrade has been pushed back until late 2012. By then, RIM might be gobbled up by a goliath such as Microsoft or Samsung. OfficeMax. Stock decline: 75 percent. If the economy were booming, maybe three office-supply chains--OfficeMax, Office Depot and Staples--would all be able to thrive. But the tough economy, plus competition from discounters like Walmart and Costco, has put pressure on the whole group. Investors seem to have the strongest doubts about OfficeMax, whose stock has fallen significantly more than its two competitors over the last 12 months. Monster Worldwide. Stock decline: 67 percent. If the economy springs back and hiring picks up, this job-placement firm could thrive. But the economic rebound, of course, is painfully slow, with CEOs basically waiting to see whether another crisis is coming. It could be 2013 or later before they're convinced the clouds have passed. Meanwhile, new competitors are going online, hoping to cash in on the same hiring boom Monster is waiting for. Bank of America. Stock decline: 61 percent The whole banking sector is beaten down due to fears of a European crisis. Bank of America is under special scrutiny because of its disastrous 2008 purchase of Countrywide Financial, which has saddled the bank with billions in losses on bad mortgages, many of which may to sour. Investors worry that B of A hasn't fully revealed its full exposure to troubled counterparties in Europe or stressed mortgage holders. But if B of A skirts disaster, it may recover sooner than expected. Netflix. Stock decline: 60 percent. This once-hot movie-rental website endured an abrupt comedown in 2011 when it tried to separate its DVD-by-mail and video streaming services into two separate companies, while hiking prices on customers who want both. The fallout halted the firm's rapid growth in subscribers, just as competition from Amazon, HBO and others was intensifying. Earnings are likely to fall sharply in 2012, and some analysts think Netflix is a takeover target. KB Home. Stock decline: 46 percent. This California-based homebuilder has lost more than $2 billion since the housing bust struck in 2007, and analysts surveyed by Capital IQ are predicting another money-losing year in 2012. The company has slashed costs, targeted higher-income buyers, and refocused on smaller homes and innovative energy-saving technologies. But KB remains concentrated in several of the hardest-hit housing markets, such as southern California, Nevada and Arizona. With a housing recovery not likely to start until 2013 or 2014, at the earliest, the next 12 months look like another grinding year. Hewlett-Packard. Stock decline: 38 percent. HP is on its third CEO in less than two years, with the turnover reflecting strategic confusion that has impaired earnings, enraged shareholders and raised concerns that HP is too unwieldy to be run effectively. With operations in many business and consumer markets, HP has numerous competitors that have been nibbling market share, leading to disappointing results likely to continue into 2012. Some analysts worry that a heavy focus on acquisitions in recent years has left holes in HP's new-product pipeline. New CEO Meg Whitman may enjoy a bit of a honeymoon, but she'll need to prove herself by the second half of 2012. Sears. Stock decline: 34 percent. The nation's fourth-largest retail chain has been slashing costs and closing unprofitable stores, but analysts still expect a loss for 2012. More worrisome: A viable turnaround strategy still isn't evident. The once-prominent retailer, which now owns K-Mart, is in a no-man's land between formidable chains like Target and Walmart and online powerhouses like Amazon. With many economists expecting a consumer pullback in 2012, Sears may be forced into deep discounts or other desperation measures. Best Buy. Stock decline: 32 percent. When Circuit City folded in 2009, Best Buy seemed like a clear victor. But the same forces that hammered Circuit City--cash-poor consumers, ruthless price pressure, tough online rivals--are now hurting Best Buy, which recently startled investors with a weaker-than-expected earnings report. The retailer's prospects may depend on whether consumers pull back in coming years, to pay down debt and build up their savings, or find new ways to keep spending. Washington Post. Stock decline: 20 percent. The storied newspaper company has offset declines in its journalism revenue with profits from its Kaplan education subsidiary, which runs the well-known test-preparation service plus dozens of for-profit colleges. But new government rules meant to cut bank on student loans spent on for-profit schools will rein in the Post's cash cow. Meanwhile, ad revenue from the company's print and online news operations has been falling--with more competitors popping up all the time.

Santa?

Oh Santa Santa where are thou???- Closing at 1200 level is not a good sign. Maybe some of the last bulls will come in to give us a extremely low volume rally soon

Silver

Bye bye Silver. All commodities getting killed here Gold especially. In the S&P the next support should be around 1195 area

FED

Well a real up and down day, see saw nothing new it seem to be how the market will be for awhile. Big surprise is we didn't have a turn around tuesday and the early strength could not hold up the news from the FED. It is almost impossible for me to think why would the FED say or do anything here. All the big money is doing nothing and the FED being the biggest have been behind the scenes trying to boost up the financials with result. The news of over 7 trillion assistance from the FED to the banks is just amazing, it makes the TARP look like a joke. Volume is low now into the end of year and Santa Claus rally is just that a figment of the imagination just like everything else. On a side note we rallied hard after thanksgiving on the great sales data but like many I would really thinking how can the retail sector show any real turnaround. I though it was just heavy sales of low margin items and sales. Today news from Best buy proved my thoughts but I must admit I was think of scared to call the retailers as a short then but a good call it would have been.

Silver

Oh yes Silver taking it on the chin early monday premarket. More to come. This is more likely be the last week of the year for most traders. It should be an up week as we have many IPO on tap but this market is so crazy who knows especially when we get whip around by the Euro news. We will see soon enough.

Silver

Could be totally wrong here but silver looks like a short here

Rollover

To add to the confusion here today it is rollover day for many futures contracts. The S&P March 2012 are trying at a negative 7 points differential and Oil is also lower. I guess he big money thinking we will be lower in the new year.

Crazy morning again

we have lost 20 S&P POINTS IN JUST 40 MINUTES with the EU news and the market is not even open yet. Crazy - Just too crazy for me

Layoffs

so Citibank announced layoffs yesterday and today BAC starts their 30k layoff process, so if the banks are so much in a better state and the unemployment now down to 8.6% why are we having this news?? It is all garbage!!! Last week I read that the FED secretly loaned big banks the same banks that got 700 million TARP money over 7.7 TRILLION of funds at zero percentage after. Now just think about it the public almost over threw the politicians for passing the TARP giving 700 million but the FED loaned over 10 TIMES that amount after the distribution of TARP funds, AMAZING how no one thinks the FED doesn't run the state of the economy. The FED is the most powerful institution in the world and I will continue to say that. In the meantime I think banks will get smaller because their is just not enough risk out there for them to make super abnormal profits like once upon a time, why do you think they want to charge $5 a month for debit cards. It is obvious the banks are struggling to make money especially the investment banks just not enough to spread out these days..... If it is tough for the banks what about the rest of us!!!!

Downgrades

S&P Put Europe's AAA Countries (Germany, France, Holland, Austria And Luxembourg) On "Creditwatch Negative"

MOnday

volatility has being sucked out for the market right now. Can't fight the trend and the breadth here but boy oh boy do we look boring

Really

unemployment rate now 8.6% really!!!! Another new way to calculate the number and we get a lower reading is NOT real- The fabrication continues