Sharelord® Stock Market Report January 6, 2012

Enjoy this FREE Stock Market Business Report, compliments of Sharelord®, The Most Powerful CashFlow Strategy On The Planet… To find out more about this Best Selling Stock Market Education, Visit http://BeneficialCashflowTips.com/

A better than expected monthly employment report helped to boost U.S. stock futures briefly after it was released an hour before stocks began trading on Friday. The Labor Department said that the number of nonfarm payroll jobs increased by 200,000 in December. Wall Street was expecting a more modest increase of 150,000. The November gain of 120,000 was revised lower to 100,000.

The unemployment rate dropped to 8.5 percent in December, which was near a three-year low. It was expected to remain at 8.7 percent. The November number, originally reported at 8.6 percent, was revised upward to 8.7 percent.

The enthusiasm about the payroll report wore off quickly amid more worrying news from Europe. The euro hit a 16-month low against the dollar. Fitch ratings service reduced Hungary’s credit rating to “junk” status, because of the government’s reluctance to change its policies in return for aid to help fight off a financial crisis. Shares of banks in the euro zone fell due to fears about the ability of financial companies to raise cash in the market at affordable rates. There were also ongoing concerns due to the large sovereign debt refinancing needs of the countries in the region.

After opening flat, the major U.S. stock indexes fell to their lows for the day during the first 25 minutes. They turned around and by 11:45 a.m. Eastern Time had reached the best levels they would see for the rest of the day.

Afternoon trading was unexciting, with the indexes drifting sideways to slightly lower. When the session ended the Nasdaq Composite was 4.36 points higher. The Dow settled with a loss of 55.78 points. The S&P 500 had its three-day winning streak broken when it fell by 3.25 points.

Despite the mixed finish on Friday, the indexes produced good results for the week. The Nasdaq did the best with a gain of 2.65 percent. The S&P 500, which was basically flat in 2011, recorded a 1.61-percent gain during the week. The Dow rose by 1.17 percent during the holiday-shortened first week of the year.

The focus in the U.S. will turn to earnings. Aluminum producer Alcoa Inc. (AA) will unofficially kick off the reporting season after the stock market closes tomorrow. On Thursday afternoon the company announced that it will reduce its global smelting capacity by 12 percent due to lower metal prices. Restructuring-related charges for the fourth quarter will result in a reduction of earnings by 15 to 16 cents a share.

Sharelord® investors who want to be in the market can insure themselves against any possible declines by owning one put option for every 100 shares of stock they are using in their trades.

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3 comments

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