Marc Pado Comments: Wall Street Jockeying For 2010 Finish

December 30, 2010, Quad-Cities

U.S. stock indexes climbed Wednesday, amplifying a rise that has the Dow Jones Industrial Average two days from finishing 2010 with a double-digit gain.

‘Funds are positioned as they would like to be for the end-of-the-year photo,’ said Marc Pado, U.S. market strategist at Cantor Fitzgerald, of the light volume and narrow volatility range that have marked recent sessions.

‘It would take a major bit of news to derail their plan,’ he added.

After closing Tuesday at its highest level since Aug. 28, 2008, the Dow Jones Industrial Average was up 9.84 points, at 11,585.38.

Twenty-three of the Dow’s 30 components gained, with fast-food giant McDonald’s Corp. up the most, 1.1 percent.

Up for a third straight session and by 13 percent for the year, the S&P 500 Index gained 1.27 points, or 1,259.78, with energy companies gaining the most and utilities ranking as the biggest laggard among the 10 S&P industry groups.

The Nasdaq Composite Index was up 4.05 points, at 2,666.93.

Advancers outran decliners more than two to one on the New York Stock Exchange.

The narrow range of the last week has been frustrating for both bulls and bears, with bulls watching the S&P creep to new highs but with ‘no oomph,’ and the bears tracking how the averages continue to hold their 10-day moving averages, said Elliot Spar, market strategist at Stifel, Nicolaus & Co.

But Spar expects the narrow range to be resolved next week, saying ‘new money can come in at the beginning of the year, yet old money will have a chance to cash out and not have to pay the cash bill until April 2012.’

With 2010 ending on a high note for equities, investors are now the most bullish they have been since 2004, according to Jeffrey Kleintop, chief market strategist at LPL Financial, who adds a cautionary note.

‘History tells us that when there are too many bulls the market may be due for a pullback,’ said Kleintop, who forecasts a ‘middle-of-the-road’ 2011 that he said should offer single-digit percentage gains for stocks, low to middle single-digit gains for bonds and a U.S. economy that muddles along at a 2.5 percent to 3 percent growth pace.

On Wednesday, Sears Holdings Corp. shares climbed after Sonic Solutions said the retailer was using its technology in entering the online film-downloading business.

Shares of BJ’s Wholesale Club Inc. rose 6.4 percent after the New York Post cited unnamed sources in reporting buyout firm Leonard Green & Partners might launch a hostile bid for the warehouse-club operator.

On the New York Mercantile Exchange, gold futures climbed for a third day, with the contract for February delivery rising $8, or 0.6 percent, to $1,413.50 an ounce on Comex. At Tuesday’s finish, gold was up 28 percent in 2010.

On Thursday, the Institute for Supply Management in Chicago is scheduled to release data illustrating U.S. business expansion in December. Separately, the National Association of Realtors will report on pending sales of previously owned homes in November from October.