Earnings during the week were mixed and the Dow Jones Industrial Average was on the verge of a close above 12,000, while the S&P 500 Index flirted with 1300 until geopolitical issues in Egypt and poor earnings from Ford Motor and Amazon reversed the market on Friday. 

On Monday the DJIA jumped 109 points on the back of positive earnings announcements the previous week which continued to propel General Electric and International Business Machines.  Technology shares were lifted by an 11% increase in Nvidia after a positive Barron’s article which helped Apple as well.  The Investment Company Institute reported that prior week’s flows into domestic equity funds was $3.8 billion which was the highest since May 2009. The bombing in Russia on Monday sent some investors to the bond market in a flight to quality, coupled with Federal Reserve purchases and the 10-year note closed at 3.410%, to start the week.

While investors waited for …

Markets started the week on a positive note Tuesday and hit multi-year highs, ignoring weakness from Apple and Citigroup.  The Dow Jones Industrial Average rose 50.55 points to close at 11837.93, representing the highest close since June of 2008.  Caterpillar and Boeing both pushed markets higher to begin the week with advances of 2.8% and 3.4%, respectively.   Boeing announced that it expects to deliver its first 787 Dreamliner in the third quarter and Caterpillar rose on predictions of stronger global economic growth. The Euro rallied Tuesday to a one-month high against the US Dollar, but hit upside resistance in its trading range. 

On Wednesday, bank stocks pressured the markets and the S&P 500 index fell 13.10 points or 1.01% which was the largest one day retreat since November 23, 2010.  The DJIA fared better with a decline of only 0.11%, supported by International Business Machine’s rise of 3.4% on a strong …

The financials led the markets higher this past week as the SNL Bank & Thrift Index rose 4.1% easily outpacing the S&P 500 which increased 1.7% and NASDAQ up by 1.9%.  The broader markets were mixed on Monday as the S&P 500 retreated 0.14% to 1,269.75 and the NASDAQ Composite Index gained 0.17% to 2,707.80.  The initial weakness on the open was due to sovereign debt concerns. On Tuesday, the Dow Jones Industrial Average gained 0.30%, while the S&P 500 rose 0.37% and the NASDAQ Composite Index climbed 0.33%.  On the U.S. economic front, the Commerce Department reported that wholesale sales were up 1.9% in November 2010 while inventories fell 0.2%. …

While most analysts and traders on Wall Street are enthusiastic about a 2011 recovery for the US economy, there is still uncertainty surrounding the banking industry. As we know, both large banks and small banks have to be healthy for a healthy economy to thrive. Foreclosure issues raised their ugly heads again last week with the Massachusetts Supreme court reinforcing a lower court ruling against Wells Fargo and US Bancorp claiming the banks had no proof that they owned the properties on which they foreclosed. It would be surprising if Massachusetts was the only state pursuing this issue, and we surmise therefore this issue will not be going away any time soon. Regulators on both side of the political aisle are likely to create new legislation around mortgage servicing as a result of the continuing foreclosure issue.

Also last week the new Republican Congress introduced a bill to repeal the Dodd/Frank bill. While some believe …