Today in the market, Monday, January 26, 2009: Stocks rose in choppy trade on Monday, lifted by optimism over a $68 billion takeover in the drug industry that offset a grim warning about the year ahead from Caterpillar and worries over the state of the financial sector.
A rare piece of good news for the recession-hit economy also helped sentiment, as sales of existing U.S. homes unexpectedly jumped 6.5 percent in December. The Dow Jones index of home builders’ stocks rose 2.7 percent. Pfizer Inc (PFE.N), the world’s biggest drug maker, said it would buy rival Wyeth (WYE.N) for about $68 billion, suggesting that some companies are attractively valued after a dismal 2008.
“We haven’t seen any big deals in a while (so) it’s an indication that there is potential for some deals to get done,” said Kurt Brunner, portfolio manager at Swarthmore Group in Philadelphia.
Caterpillar (CAT.N) was the Dow’s top drag after the heavy equipment maker forecast its 2009 profit would drop significantly from 2008 and said it would cut nearly 20,000 jobs. Caterpillar shed 8.4 percent to $32.67. The Dow Jones industrial average .DJI rose 38.47 points, or 0.48 percent, to 8,116.03. The Standard & Poor’s 500 Index .SPX added 4.62 points, or 0.56 percent, to 836.57. The Nasdaq Composite Index .IXIC gained 12.17 points, or 0.82 percent, to 1,489.46. (headline & commentary courtesy of Reuters)
ETF/CEF Medium Volatility:
- FXC – Currency Shares Canadian Dollar Trust
ETF/CEF High Volatility:
- ADRE – BLDRS Emerging Markets 50 ADR Index Fund
- EWD – Sweden iShares
- EWT – Taiwan iShares
- IIF – Morgan Stanley Dean Witter India
- IJR – S&P SmCap 600 iShares
- ITB – iShares Dow Jones U.S. Home Construction
- IWN – Russell 2000 Value iShares
- IYC – Consumer iShares
- PRF – PowerShares FTSE RAFI US 1000 Portfolio
- RWX – SPDR DJ Wilshire Intl Real Estate Index
- VCR – Vanguard Consumer Discretionary VIPERs
- VWO – Vanguard Emerging Markets VIPERs
ETF/CEF Discussion: With all the gloomy news in the markets, RSI decided to do some bottom fishing. So the above candidates are for those who anticipate the market coming around at some point in the future. Let’s look at the various sectors. First there are the foreign funds. Next are the consumer funds plus the small cap sector. Lastly are the home construction and real estate arena. This is quite a conglomeration of the beaten down sectors. Strangely missing are the tech, energy and material sectors. I guess RSI expects them to lag the chosen areas. We shall see about that.
