The S&P 500 closed out the week at its highest level since June of 2008. Although the index made a tiny move on Friday, that little bump was enough to finish the week on a landmark high note. On the other hand, our four Miami-based companies saw their stocks sink.
The Commerce Department (Census Bureau) released good news about new home sales on Friday:
Sales of new single-family houses in January 2012 were at a seasonally adjusted annual rate of 321,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.
Sam Ro of The Business Insider noted that the 321,000 figure beat economists’ expectations of 315,000.
The Thompson Reuters / University of Michigan Consumer Sentiment Index brought more good news to investors on Friday. Nevertheless, this report from Reuters acknowledged the economic headwinds:
The Thomson Reuters/University of Michigan's final reading of the overall index on consumer sentiment came in at 75.3, edging up from 75.0 the month before. It was the highest level since February 2011.
It surpassed economists' expectations of 73.0 and recovered from a decline to 72.5 in February's preliminary reading.
“It is not that surging oil prices, instability in the Mideast, the European crisis or uncertainties about future tax and spending policies could not ultimately derail the recovery, but that consumers expect the pace of overall economic growth to continue to slowly restore lost jobs despite these potential problems,” survey director Richard Curtin said in a statement.
The Dow Jones Industrial Average lost 1.74 points on Friday to close at 12,982 for a loss of 1 basis point (0.01 percent). The S&P 500 advanced by 17 basis points (0.17 percent) to finish at 1,365. The NASDAQ Composite picked up 23 basis points (0.23 percent) to end the day at 2,963.
Miami-based corporations had a lousy day on Friday. Carnival Cruise Lines (CCL) escaped with the least damage, sinking by 63 basis points (0.63%) to close at 29.97. Ryder System (R) declined by 1.23% to finish at 52.32. Lennar (LEN) lost 1.24% to close at 22.38. Royal Caribbean (RCL) sank by 2.00% to end the day at 28.49.
Our “thought for the day” comes from Jeremy Grantham, who just released his quarterly newsletter for the fourth quarter of 2011. As always, it’s a must read:
Believe in history. In investing Santayana is right: history repeats and repeats, and forget it at your peril. All bubbles break, all investment frenzies pass away. You absolutely must ignore the vested interests of the industry and the inevitable cheerleaders who will assure you that this time it’s a new high plateau or a permanently higher level of productivity, even if that view comes from the Federal Reserve itself. No. Make that, especially if it comes from there. The market is gloriously inefficient and wanders far from fair price but eventually, after breaking your heart and your patience (and, for professionals, those of their clients too), it will go back to fair value. Your task is to survive until that happens. Here’s how. . . .
The following companies will be playing “beat the number” on Monday, with the release of their quarterly earnings reports: 21Vianet Group (VNET), Aes Corp (AES), Armstrong World Industries (AWI), Atlas Energy (ATLS), Calgon Carbon (CCC), Career Education Corp (CECO), Charter Communications (CHTR), Cooper Tire (CPB), Cray Computer (CRAY), Dendreon (DNDN), Great Plains Energy (GXP), Human Genome Sciences (HGSI), IntraLinks Holdings (IL), Jazz Pharmaceuticals (JAZZ), Lowes Companies (LOW), Priceline.com (PCLN), Universal Health Services (UHS), URS Corp (URS), Visteon (VC) and Zagg, Inc (ZAGG). Good luck!
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