On Wall Street, nobody's home today but a few hungry bulls

The world’s stock markets are off to a strong start in the new year, after the crash of 2008.

The Dow Jones industrial average was up 228 points, or 2.6%, to 9,004 at about 12:10 p.m. PST -- the first time the index has breached the 9,000 mark since Dec. 8. UPDATE: The Dow closed with a gain of 258.30 points, or 2.9%, to 9,034.69, its highest finish since Nov. 5.

It’s just too bad that there are so few people working on Wall Street today to enjoy this. Trading is very light, with most investors making a four-day weekend of the New Year’s holiday.

"There is no institutional presence whatsoever," said Dan McMahon, head of equity trading at Raymond James & Associates in New York.

And that means any significant market move today, up or down, would be suspect. Better to wait until Monday to see what the big money really thinks about stocks in 2009.

Still, McMahon says, "There is a lot of cautious optimism" about the new year, after last year’s collapse.

The Dow plunged 33.8% last year, its worst decline since 1931. But the blue-chip index has been working its way higher since bottoming at 7,552 on Nov. 20.

The Standard & Poor’s 500, which slumped 38.5% in 2008, was up 2.8% to 928.89 at about 12:10 p.m. PST, and closed up 3.2% to 931.80. That lifted its gain since Nov. 20 to 23.8%. Winners were outnumbering losers by about 5 to 1 on the New York Stock Exchange.

Buyers were paying no attention to the dismal report on U.S. manufacturing activity in December, which suggested the economy continued its cliff dive.

Battered foreign markets also lured investors today. The German market gained 3.4%, British stocks rallied 2.9% and Hong Kong surged 4.6%. The Brazilian market is up 7.2% so far.

Meanwhile, some investors are selling the hot asset of 2008 -- Treasury bonds. The yield on the 10-year T-note has jumped to 2.42% after ending last year at 2.25%.

All in all, it’s a far better start for stocks than what we saw at the outset of last year: The Dow tumbled 221 points, or 1.7%, to 13,043 on Jan. 2, 2008, setting the scene for the massacre that would follow.

-- Tom Petruno

Photo: Jason Decrow / Associated Press

Comments

[Mr.Bilko]

Today is like a holiday, very little business activity where I'm at. Retail stocks will drag the indexes down during the next three weeks as 4th qtr 2008 earnings come in. Lack of volatility could mean that we may have passed the trough. Investors may be interpreting the Dec'08 manufacturing report as being the low point. The indexes should drop in the next few weeks but the market bottom may have been the 3rd week of Nov'08.

[buz]

The bottom is not in. There is nothing yet that can lead the economy forward at this point. Just a bear market rally, dead cat bounce. Mix in some hype over the "Obama tooth fairy" who is going to set things right by doing what?. Printing money?

[Nick]

Obviously you can't make too much of what happened today. It's going to be a long year, and let's just hope that this one is better than the last..

[Steve Wimer]

The economy is like "Journey to the Center of the Earth" 3D, everytime you think you've hit bottom, it cracks, and you fall again. Commercial real estate is due to die. Then unpaid credit card debt should bubble. The big money is holding on to cash, and so the consumer driven economy is grinding to a halt. Next will come the stimulus, and massive inflation. No, we haven't hit bottom. But the future's uncertain and the end is always near.

[James Monachino]

Keep em Honest Rally,

It would be nice if we hit bottom and it was over. However, I think we all know that we haven't finished cycling through the pain. 2008 hit the general investment community pretty hard and 2009 will be the year the so call, "Sophisticated Investor" get's caught in the ringer.

Defining value will be the challenge because you will not be able to use previous data the same way to determine opportunity.

Happy New Year --
James Monachino